Does the U.S. government spend four times as much on welfare as it would take to eliminate poverty by giving the necessary cash?

Question

According to this article by Peter Ferrara, the U.S. spends more than four times as much on welfare as it would take to simply cut every person under the poverty line a check large enough to bring them above it.

Federal and state governments spend a trillion dollars a year just on these means tested welfare programs, which does not include Social and Medicare. That is more than we spend on national defense. It adds up to roughly $17,000 per person in poverty, over $50,000 for a poor family of three. The Census Bureau estimates that our current welfare spending totals four times what would be necessary just to give all of the poor the cash to bring them up to the poverty line, eliminating all poverty in America. A recent book by Charles Murray, In These Hands, further documents that.

He cites "the Census Bureau" for both the numbers and the analysis, but I'm a poor skeptic and cannot find his sources. Does anyone else know where this came from?

Answer 1

He cites "the Census Bureau" for both the numbers and the analysis, but I'm a poor skeptic and cannot find his sources. Does anyone else know where this came from?

The US Census Bureau website provide data on poverty definitions and number of people in poverty in the United States.

See Income, Poverty and Health Insurance Coverage in the United States: 2014

The nation’s official poverty rate in 2014 was 14.8 percent, which means there were 46.7 million people in poverty.

The poverty thresholds by year are available at Poverty Thresholds

The threshold is a function of family size, number of children, and whether adults are over or under 65. For example for 2015, a single individual under 65 is in poverty if income is less than $11,367. A family of three is in poverty if income for the entire family is below $19,078 if it is a family of two adults and one child. In all cases, the $17,000 per person mentioned in the OP would significantly exceed the technical poverty line. More particularly, $12,331 per person is the maximum value in the poverty threshold table.

The remainder of the question is somewhat a matter of opinion. The trillion dollar value comes from reports like The American Welfare State: How We Spend Nearly $1 Trillion a Year Fighting Poverty—And Fail and Examining the Means-tested Welfare State: 79 Programs and $927 Billion in Annual Spending, but it depends how you define "welfare programs".

A trillion dollars is enough to give 46.7 million people $21,000 each.

However, that does not necessarily mean poverty would be eliminated, even by the technical definition of poverty. One would need to consider how the individuals would spend the trillion dollars versus how it is spent currently, as well as how many people might stop working if the money is handed out as proposed.

The trillion dollars includes the Earned Income Tax Credit, which is already giving lower-income people money, but on the condition that they work. Just handing out the money without requiring work would obviously reduce the incentive to work.