A key House Republican seeking significant spending cuts, House Budget Committee Chairman Jodey Arrington (R-TX), has set his sights on means-tested programs, a line of attack that could garner support from conservative critics of welfare and opposition from liberal anti-poverty advocates.
At the same time, the strategy of targeting welfare could help the GOP steer clear of proposing cuts to the popular old-age entitlement programs Social Security and Medicare. In other words, it’s an approach to the budget designed for the age of President Donald Trump, who has steered the party away from the entitlement reform efforts of the years of President George W. Bush and House Speaker Paul Ryan.
Arrington has argued that the government’s fiscal problems are attributable to “welfare,” meaning means-tested programs, such as Medicaid, food stamps, and Supplemental Security Income.
As chairman of the panel, Arrington will be responsible for writing the budget that will include instructions for reconciliation — the process that will allow Republicans to pass a major fiscal overhaul with a simple majority vote, bypassing the filibuster.
A lot of conservative hopes are riding on the GOP reconciliation bill or bills. Most significantly, Republicans aim to extend the expiring provisions of the 2017 Trump tax cuts. And Trump himself aims to follow through on his campaign promises to end the taxation of tips, Social Security benefits, and much more. Beyond those goals, others in the party aim to repeal Biden administration climate initiatives, overhaul permitting requirements, boost border security, and more.
Yet the GOP will be working against the backdrop of a deteriorating fiscal situation. The government is already running annual deficits that are extremely large by historical standards, considering that the country is not at war or suffering a business downturn. The debt held by the public is set in the next few years to hit a record high, relative to the size of the economy.
Some fiscal conservatives maintain that the GOP majority should be cutting deficits rather than adding to them. That means that any new net tax cuts would have to be offset by spending cuts.
For many years, Republican fiscal conservatives have argued that the core fiscal problem is the retirement of the baby boom generation and the rising costs of Social Security and Medicare. Ryan rose to prominence as House Budget Committee chairman with a deficit reduction plan that had, as its centerpiece, a proposal for a sweeping overhaul of Medicare to bring down spending.
But the GOP has moved on, thanks to Trump’s opposition to changes to the retirement programs. The party hasn’t shown any interest in using its majority to make changes to Social Security and Medicare. Together, those programs account for nearly 40% of federal spending and are growing, and over time, proposals to reform them have proved politically damaging.
Arrington has sought to shift the focus away from retirement programs toward welfare programs.
In an op-ed written during last year’s campaign season, Arrington wrote that it is wrong to place blame for rising deficits on Social Security and Medicare. “The real driver, the elephant in the room, is means-tested social welfare spending,” he wrote in the Wall Street Journal piece, co-authored with former Texas Republican Sen. Phil Gramm.
At the core of the argument is the claim that Social Security and Medicare are financed by payroll tax revenues. For now, the vast majority of Social Security spending and about half of Medicare spending is paid for by incoming payroll tax revenues.
The real problem, Arrington argued, is that means-tested social welfare spending totaled $1.6 trillion in 2023, soaking up the majority of revenues that are not dedicated to Social Security, Medicare, or paying interest on the debt.
Those specific numbers could not be verified by the Washington Examiner, which asked a representative for the Budget Committee for comment. But the concept of shifting focus from entitlement programs to means-tested social support programs is one that has rhetorical weight and support on the Right.
Republicans have a once-in-a-generation opportunity to reform means-tested programs via a reconciliation bill, said Hayden Dublois, the data and analytics director for the Foundation for Government Accountability, a conservative group that researches welfare policies.
Specifically, he said they are hoping for the institution of strong universal work requirements.
Most programs already have work requirements. But, generally speaking, requiring work for benefits polls well — much better than simply cutting dollar amounts from social safety net programs. Strengthening requirements and moving beneficiaries from welfare to work would aid the budget, increase tax revenues, and boost the workforce, Dublois argued, as well as “undo the vast increases in generational dependency that we’ve seen over time.”
“It would tackle several problems simultaneously if we saw meaningful changes to welfare programs” in the Republican reconciliation bill, he said.
More specifically, conservatives see a few major programs as ripe for reform.
The first is Medicaid, which is by far the largest federal program that could be considered welfare, accounting for over $600 billion in total spending in the past fiscal year.
Medicaid enrollment has grown from 33 million in 1996, the year President Bill Clinton signed a major welfare reform bill, to just under 80 million. Much of that growth, conservatives argue, has been driven by the Medicaid expansion authorized by Obamacare, which allowed states greater ability to offer coverage to able-bodied adults.
Another major feature of the safety net criticized by conservatives is the Supplemental Nutrition Assistance Program, often referred to as food stamps.
Food stamp enrollment has grown from 26 million participants in 1996 to 42 million in 2024. The program’s cost, in inflation-adjusted terms, has roughly doubled, to $100 billion. By law, able-bodied adults without dependents face work requirements. But Dublois’s group has claimed that the majority of adults receiving food stamps do not work, thanks to waivers from requirements granted by states and other exemptions.
Since the reform of the 1990s that limited cash welfare, Dublois argued, other welfare programs have grown in size and scope to replace it.
Besides Medicaid and food stamps, the list of federal means-tested programs includes SSI, family support and foster care, child nutrition, housing, Obamacare exchange subsidies, the Children’s Health Insurance Program, subsidies for prescription drugs under Medicare Part D, Pell Grants, and more.
The first Trump administration saw efforts to curb welfare, including by granting states greater discretion to tighten work requirements. Most of those attempts faltered, though. Meanwhile, Democrats criticized them as taking benefits from needy families to finance tax cuts for the rich. Where work requirements were imposed — for instance, in Arkansas, which added a work requirement for Medicaid — the number of beneficiaries dropped. Liberals argued that deserving people lost coverage because they couldn’t perform the paperwork necessary to comply with the work requirement.
Whatever the merits of work requirements and reforming means-tested programs, though, the idea that welfare programs are to blame for rising deficits is one that faces skepticism on both the Right and Left.
Andrew Biggs, a scholar at the conservative American Enterprise Institute who has advocated reforming Social Security, said he did not necessarily disagree with Arrington’s argument that welfare spending has driven deficits. Instead, he told the Washington Examiner, the problem is that the projected increase in deficits and debt is attributable to Social Security and Medicare.
The Congressional Budget Office projections show that the large projected deficits “are pretty much all driven by Social Security and Medicare: Those programs’ costs increase as a share of GDP while costs for everything shrink a tiny bit,” he said.
Any growth in welfare spending would only come on top of the mismatch in revenues and spending created by the growth in entitlement programs, he argued.
Spending on means-tested programs is not expected to rise. It is projected to continue falling from a peak reached in the pandemic, when it topped out at around 10% of spending, according to Office of Management and Budget data collected by Bobby Kogan, a budget expert at the liberal Center for American Progress.
Kogan recreated Arrington’s measure of welfare spending, using a best guess as to which numbers the chairman included in the total count of means-tested spending. Although the exact numbers might differ, based on what programs were counted and which were excluded, Kogan stressed, the trends would not be affected.
Total welfare spending was about 4% of GDP in the mid-1990s, before welfare reform. It rose to about 4.7% in the years before the pandemic and then soared as the government eased access to the safety net to limit the fallout from the disruptions. It fell back to 5.5% as of 2023, according to OMB data, and is projected by the CBO to drift back down to 4.6% in the years ahead.
“These parts of the budget simply aren’t growing,” Kogan told the Washington Examiner. “Arrington’s message is fundamentally and horrendously misleading.”
Ben Ritz, a budget analyst at the Progressive Policy Institute, said that “the growing cost of Social Security and Medicare has contributed two times as much to the unbalancing of our budget since 2001 as the growth in all nonemergency welfare spending combined. And 20 years from now, current projections show that ratio will double to four.”
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“The math is clear: Welfare spending is not the primary driver of our debt problem,” he said.
A spokesman for Arrington declined to comment. But whatever is undermining the government’s finances, it is becoming increasingly urgent. The deficit hit $1.8 trillion in fiscal 2024, or 6.4% of gross domestic product — the largest post-World War II shortfall not associated with the Great Recession or the pandemic.
Joseph Lawler is the policy editor of the Washington Examiner.
This article was originally published at www.washingtonexaminer.com
