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The Missing Context Behind “Cuts” in Fast-Growing Welfare Programs


June 16, 2023

Official Washington just completed a heated debate on the debt limit, punctuated by intense partisan differences over strengthening work requirements for key welfare programs. On one side stood House Republicans, who on April 26 approved legislation that would have strengthened work requirements for able-bodied adults without dependents (dubbed “ABAWDs”) collecting major welfare benefits like food stamps and Medicaid. On the other side were liberal Democrats, who derided those proposed changes as an attack on poor Americans. A House floor statement by Rep. Suzanne Bonamici (D-OR) was typical: “This bill could cause millions of low-income seniors and veterans to lose access to nutrition assistance, and up to 10 million people could lose Medicaid coverage.” Rep. Danny Davis (D-IL) called the legislation “anti-American because all that it does is cut, cut, cut.”

The final debt limit agreement President Joe Biden signed into law (and which Rep. Davis but not Rep. Bonamici ultimately supported) dropped many of the work requirement proposals Republicans crafted to promote work over benefit receipt. But since some of the proposals may be revived, including as Congress considers reforms to the food stamp program in this year’s Farm Bill, lawmakers should recognize that the debt limit negotiations lacked important context. While the debate often focused on comparatively modest reductions in benefit receipt, it totally ignored significant and ongoing real increases in welfare benefit collection. Those real increases far exceed projected benefit reductions resulting from work requirement proposals, both now and in the years ahead.

The nonpartisan Congressional Budget Office (CBO) projected that the House work requirements would have resulted in 275,000 fewer ABAWDs collecting food stamps each month and some 600,000 fewer receiving Medicaid over the next decade. Meanwhile, other CBO data—specifically its baseline projections for the number of current and expected future benefit recipients—show that both food stamp and Medicaid caseloads have recently grown many times faster than those would-be reductions.

Before the pandemic started in March 2020, CBO projected that by the current fiscal year 2023 an average of 33.4 million individuals would collect food stamps each month. Yet in its latest projections issued last month, CBO now expects an average of 42.3 million to receive food stamps this year—an increase of almost 9 million compared with its 2020 estimate. That difference is more than the entire population of New York City.

Similarly, before the pandemic CBO projected there would be an average of 74 million Medicaid recipients by this fiscal year. Meanwhile, last month CBO estimated an average of 94 million would receive Medicaid this year. That 20 million difference is more than the combined population of America’s five largest cities (New York, LA, Chicago, Houston, and Phoenix).

Huge increases in benefit receipt are expected to long outlive the pandemic. Consider benefit receipt at the start of the next decade. CBO today projects that in fiscal year 2030 there will be 37.5 million food stamp recipients, or almost 7 million more than its pre-pandemic estimate of 30.7 million recipients for that year. It’s the same story with Medicaid. CBO today expects there will be 81 million Medicaid recipients in 2030—or 4 million more than the 77 million it forecast for that year before the pandemic struck.

In the end, the bipartisan debt limit legislation dropped Republicans’ proposed work requirements for able-bodied Medicaid recipients, and CBO expects its altered work requirements for able-bodied food stamp recipients will modestly increase the number collecting those benefits over the next decade. If CBO’s baseline projections are right, that means there will continue to be millions more collecting food stamps and Medicaid in the coming years than the number it projected before the pandemic.

If the nation’s unemployment rate remains near historic lows, the large increases in low-income benefit receipt will reinforce calls to do more to promote work over welfare, especially for able-bodied adults. But don’t expect liberals to admit the recent sharp growth in welfare caseloads the next time they deride comparatively modest Republican “cuts”—or insist on adding still more benefit recipients. 

About the Author

Matt Weidinger