Where Does Welfare $$$$ Come From?

[amwilson615]

My friend and I have extremely divergent views on those who receive public welfare in this country. Central to her argument is the fact that she pays for it, but can't get any assistance; so, she is essentially paying for people to use the system while they sit on their butts. At any rate, this got me to thinking where exactly does the funding come from for programs that are in place to benefit public welfare (Food Stamps, Cash Assistance, Utility Assitance, Rent Assistance, etc)?

TIA!

[sea74]

The vast majority of it is through taxes. a sliver of it is through charities.

[kedzieb]

Well, you can tell it comes from taxes, but it may help her out more than she knows. In a wealthy country such as ours, it benefits all of us to take care of our neighbors who have less. Just like paying taxes to go to schools when you don't have kids in school benefits us all by making sure the next generation is educated. It's very short-sighted to think that her money is wasted.

I mean, there are tons of things our taxes go to that I disagree with (war, faith-based programs, abstinence-only sex ed), but I can take that up with my leaders when I vote. Welfare, food stamps and other anti-poverty programs exist because we decided as a society that the wealthiest country in the world should help out its poorest citizens.

[dionysia]

If she found herself eligible for such assistance, of course she could use it!

[jajacobsen]

It's like taxes for fire departments and police protection. Most of us will never have the need of these services, but all of us pay taxes and are eligible for benefits should we demonstarte need.

[amwilson615]

sea--I knew it came from taxes, just wondering which ones exactly. Is it from Federal and State withholdings or what?

And Kedzie--I agree with what you're saying.

I do think that there are those that abuse the system and all that jazz. With any program, it does not work 100%. I guess I am just really frustrated with a sense of entitlement to such assistance and an attitude that those on the assistance somehow are non-deserving/lazy/pathetic/etc.

Di--And, therein lies something my friend and I agree on: that guidelines and income caps need some tweaking, as they are a bit unrealistic, or out of touch with the real cost of living in these days and times.

FWIW, my friend has a wellpaying job, but lives in an area where there is a high cost of living. Therefore, her good pay has not elevated her financial situation in the slightest. She does not meet income guidelines, but, in reality, struggles just to provide necessities for herself and her children. And, while I appreciate the struggle and the fact that I *know* her income barely covers life, I hate the bitter, entitled attitude.

[kedzieb]

Well, I think a bitter entitled attitude transcends income.

Some people will never have enough money and think they deserve more no matter what. Just look at embezzlers at high paying jobs or CEO's robbing their employees.

Of course there are people on welfare who cheat, but I don't think that's a reason to discard the whole system. And I don't think it's common.

[dionysia]

Am- "welfare" isn't just one program; there are many programs on the local, state, and federal level that provide assistance. So it could be taxes you pay to all levels.

[bug]

I must preface my response by saying that I am in NO WAY well-versed on-, or an expert in this field, but have some limited knowledge on this topic so I thought I'd share.

The Personal Responsibility and Work Opportunity Reform Act of 1996 revamped the Welfare/Aid to Families with Dependent Children/TANF/Work First Family Assistance programs with the goal that more funds would be sent to families, but that families would have specific time limits during which they are allowed to receive benefits. There are also requirements and penalties for recipients not properly completing the programs. Changes to the program over the years have resulted in people having to do strict job searches and have put caps on the amount of money that a family can receive, i.e. if you are on welfare and have a new baby, you don't get more money. (FYI, the Deficit Reduction Act of 2005 slashed some of the ways that states can use the money that the feds give back to the states, really placing a burden on states to be able to fund child support programs).

I believe that AFDC is funded by matching funds from the feds and states. In my state, one way that money is recouped is that if a person (let's say woman) receives public assistance benefits that would include: a check, Medicaid, & likely Food Stamps, then she is REQUIRED to participate with her local child support office which sets up a child support order to recoup all or some of the money (depending on the father's income) that the state paid out. In my state, this money is paid back to the state, but this varies by state and some states give both the welfare check and the child support to the mother, or only retain a set amount for the state. It also requires the father to obtain health insurance. The Federal gov't reimburses the states at a rate of about 2/3 (I think) depending on the states's success in certain measurable areas. The states then allocate that money to counties. Another means to collect money back for the federal government is to intercept delinquent parents' federal (and in some states) state tax refunds.
So ultimately, like others have said, our federal and state taxes supplement these programs; however, there are some steps to recoup some of those funds.
I believe that emergency assistance funds (like for heat, etc.) are locally funded by the County (I think that is the case in my state).

As to eligibility, there are strict income limit requirements based on poverty level, etc., for most of these programs, but it is a program that if you meet the criteria, you get the benefit.

One thing to note: The cost of paying out AFDC benefits to people PALES in comparison to the costs of providing MEDICAID to people. I would think most of our tax dollars that are spent on social assistance programs are spent on medicaid.

As to your friend, she is probably out of luck for anything but possibly some emergency assistance or perhaps food stamps based on her income.

[bookworm]

FWIW, my friend has a wellpaying job, but lives in an area where there is a high cost of living.

A bit off topic, but I can understand this frustration. I believe some social programs have state/local thresholds, but others have national caps. That just doesn't make sense to me given the vast differences in cost of living in different areas. Corporations manage to deal with this all the time--different regions have different wage thresholds. I don't know why the government can't do something similar.

(And this actually extends to the middle-class as well--marginal tax rates, caps on student loan deductions, etc.)

[miel]

WIW, my friend has a wellpaying job, but lives in an area where there is a high cost of living. Therefore, her good pay has not elevated her financial situation in the slightest.

I think this general squeezing of the middle class causes some people to resent welfare more. Basically, there is this low threshold and then this slightly higher one and if you are below the low one you get things like food stamps, vouchers for child care (in some places) but if you are below it, you get none of those things. So it may seem like it is possible for people to be slightly better off due to public assistance than those who are not receiving public assistance. But this is not actually the case (I think) because the income cut off for pubic assistance is extremely low. But if you can't afford to buy enough food and then you see someone paying for food with food stamps you might get angry about that.

However, you could understand how someone who was working and making $30,000 for a family of three would resent the person who makes $12,000 and gets health insurance and food stamps. Or even housing assistance. Health care is a big thing. Some of the projects in my city are really nice. I cannot afford to live in the area anymore that the projects are in so I admit I feel some envy--like 'how do I get into the projects?' There's a ginormous waiting list so those people in the projects are kind of 'privileged' in a way.

It's kind of funny-- these projects were next door to my house. They turned out apt. into condos and we could not afford any other place in that neighborhood. But that is absolutely where I want to live. Now I live out in the boonies. And we have a friend in that project from when we lived over there and I think 'dang, lucky you living in those great, centrally located projects!'

Tough problem. Lots of people are slowly sliding down the economic ladder due to the high cost of housing and other things. Depends on where you live, also.

[ladybug777]

I think it comes from state taxes, as welfare programs are administered through each state. Then I would assume that each stated receives some federal funding for their individual programs.

[isign]

I can certainly understand the frustration over gov't assistance in any form - food stamps, medicaid, WIC, gov't housing. When I got pg in dec '06 I didn't have maternity coverage (stopped trying), only a small basic policy that covered major emergencies. I lost my job 2 the day before my new insurance was to kick in. Luckily I was able to get on DH's policy which, between the two of us, cost $500 (small business). That on top of pre-paying what we would owe the Dr left us really strapped for cash. Add DS to the mix and we were paying out almost more than our house note. As a result, I don't have insurance now. We just barely don't qualify for any gov't medical plans. We have over 5k in hospital bills due to DS's birth and another situation with him. We usually have to pay out in taxes at the end of the year, and this year are barely breaking even because of DS.

We know several girls who got pg, we able to get on Medicaid right away, and now have no medical bills. One of them was even TTC and said she knew she'd have medicaid. A few of these girls work maybe 30 hours a week, at a job making $7 instead of going even to McDonalds where they can get more hours and much better pay. They are able to take advantage of every program out there from gov't support to faith based programs. They qualify for the EIC, along with several other things and got back over a thousand dollars in taxes each. That is the point where people, myself included, get frustrated with the welfare system. We struggle to make ends meet at times because of the insurance costs, but if DH were to take a lower paying job, we'd qualify for these programs and wouldn't be where we are.

[amwilson615]

Di, bug, and Ladybug--Thanks. I knew there were several different funding sources at all kinds of different levels. As a matter of fact, I have had to depend on several of these assistance types to live at different points in my life. I have been extremely thankful that the programs existed during these times, as well. As a matter of fact, the things bug put forth about child support and health insurance is true. My DD's father's child support and tax refunds went straight to the State of WV to repay them for the cash assistance I received for a few months after DD's birth. Then, I started getting my child support, after his debt to the state was paid. He was required to get DD health insurance, but that never happened (he claims he got "fired." he's a winner, of course). I also know, from personal experience, that the welfare reform has had MAJOR impacts on my family. I grew up watching the majority of my aunts and uncles not work, and just live off the system. And, I can say that, because I KNOW it is true. My parents worked extremely hard and we were just over the income guidelines and could get no assistance. We ate deer meat and potatoes 4-5 nights a week for dinner--and other sorts of money-saving tactics. I vividly remember going to my aunt's house and thinking it just crazy that they had Little Debbie Swiss Cake Rolls and Pepsi in their house--and, that I was allowed to eat them when it wasn't even a special occasion. :eek: All the while, said aunt and her husband did not work for YEARS. So, I do know, firsthand, how much change has taken place. With the reforms, I have seen several of these family members return to the workforce, and several of them are doing very well for themselves, and have a new sense of pride in their incomes and what they have to show for it. :) At any rate, if someone gets a full/majority refund of all Federal and State income taxes paid, would it be fair to say (in the mindset of said friend) that no, she didn't "pay for it" since she got her money back? Maybe it is futile, but I'm trying to do something to reage against the frustration and entitlement that irks me so.

bookworm--VERY good point, and something I have often wondered.

miel and isign--Yes, it is such a problem. I really don't know the solution. And, as I shared earlier in this post, I have experienced it firsthand, and continue to experience it. I definitely see both sides of the coin. I agree that healthcare is a BIG issue and and BIG $$$. I was fortunate (of course, this can be looked at two ways) to have Medicaid for both of my pregnancies and deliveries, and I thank God for that. Of course it meant that I had NO or NEXT TO NO income, which trickled down to every other aspect of life, but I am of an extremely humble and thankful spirit that I *did* have Medicaid, and, therefore, was able to have prenatal care, safe labors and deliveries, and aftercare. Without Medicaid, I really don't know what I would've done. I guess, in short, is that I understand and have live both sides of this story. It is a HUGE HUGE HUGE problem, and I just don't have a clue what the solution may be.

Thanks ladies for all of your responses and input.