Downsizing Blog

A new Cato Policy Analysis from Michael Tanner examines so-called “entitlement programs” – chiefly Social Security, Medicare, and Medicaid – and how they will push the government’s finances to the brink if they’re not reined in. As he notes in the introduction, if politicians continue to duck the issue, they “will condemn our children and our grandchildren to a world of mounting debt and higher taxes.”

Rep. Jim Jordan (R-OH), the chairman of the conservative House Republican Study Committee, recently introduced “The Welfare Reform Act of 2011.” The legislation’s two key components are the imposition of work requirements on food stamps recipients and the capping of total spending for 77 welfare programs at 2007 levels (adjusted for inflation going forward) when unemployment drops below 6.5 percent.

The Washington Post reports that several governors are advocating that Medicaid be converted to a block grant program. Block grants would free the states to experiment with cost-effective ways to provide health care to low-income populations by removing burdensome federal rules and regulations. Giving states a fixed lump-sum payment would also allow federal taxpayer costs to be directly controlled.

The New York Times took a look at people who voluntarily send money to Washington in order to help pay down the federal debt. Last year, the Bureau of the Public Debt received $3.1 million in such donations. Looking at the federal budget, I found a total of $241 million in “gifts and contributions” for fiscal year 2010. 

As I recently discussed, not only does the federal Head Start program have a fraud problem, it has patently failed in its mission to help children from low-income families succeed later in life.

The Washington Post recently reported on the federal government’s cash-welfare program, Temporary Assistance for Needy Families. Despite the deep recession, the TANF welfare rolls haven’t seen a dramatic increase. Meanwhile, other federal anti-poverty programs have seen the sizable increases that are to be expected in a recession:   

It’s been a tough week for the Department of Health and Human Services. As I discussed earlier, the Government Accountability Office reported on fraud problems with the Child Care and Development Fund program. Another new report from the GAO finds fraud problems with HHS’s Head Start program.

The Department of Health and Human Services’ Child Care and Development Fund is a state aid program that subsidizes child care expenses for low-income working families with children. The federal government largely leaves it to the states to provide oversight for the CCDF program, which HHS estimates loses more than 10 percent of its funding in improper payments.

The Government Accountability Office released congressional testimony this week looking at Temporary Assistance for Needy Families. TANF, which replaced unrestricted welfare in 1996, has reduced welfare rolls and encouraged recipients to obtain work. Unfortunately, TANF’s goals have been undermined.

The Low-Income Home Energy Assistance program provides $5 billion annually to the states, which distribute the funds to businesses, nonprofits, and homeowners. Unfortunately, the states do a poor job making sure the money isn’t lost to fraud and abuse.