In our day to day life, it is easy to see individuals who have found ways to cheat the system, and claim social welfare sources that are above and beyond that which they are entitled to, or who find ways to misappropriate the funds that they are given, and we are incensed by the waste of public dollars. However, in contrast we rarely get to see the results of corporate welfare, provided through government subsidies, or how the use of those funds are abused. In reality, though public disgust of corporate subsidies is far less prominent, they cost tax payers substantial more, and are far more abused. If Americans are going to stand against welfare, as part of the nation’s growing incense over government insolvency, corporate welfare, and abuse of those subsidies, must be controlled or eliminated.
Defining Welfare
Welfare, or public aid, can be defined as the “provision of minimal level of well-being and social support for all citizens” (Cram 101 247). It is important to focus on the fact that welfare is supposed to provide only a minimum level of wellbeing. This means providing different things when providing welfare to individuals or families than it does when providing welfare to corporate citizens. At current, The best estimate of the cost of the 185 federal means tested Welfare programs for 2010 for the federal government alone is nearly $700 billion” (Forbes 1).
Social welfare, or welfare designed to protect individuals and families should provide access to resources that meet basic needs related to food, water, and shelter, and health. The United States supports a very large number of social welfare programs, but the most prominent include Medicaid Social Security, including both age based and disability based benefits, the Social Food and Nutrition Program (SNAP), also commonly referred to as food stamps, and housing assistance all fall under the larger umbrella of social welfare. This programs are, notably, intended to provide temporary support, rather than ongoing or paternalistic support (Deparle 1). However, many argue that these funds are being misused by recipients, and that more is provided than is necessary to provide minimum well-being.
In contrast, this means that at the corporate level, welfare, if provided, should be used to prevent job loss, bankruptcy, or other adverse business actions, which could result in damage to the corporation’s greater well-being, or its ability to maintain the current level of employment that it provides in a community. These can include monies, grants, tax breaks, and other means of financial support provided to corporate citizens by the government (Kristoff 1). However, the question remains, are the funds being provided going to corporate citizens that really need them, and being used in accordance with the concept of minimum well-being?
Cost of Social Welfare
Research indicates that 51% of people believe that the government is mis-using their tax dollars, and one of the programs which is currently paying out unnecessary is social welfare programs. It is important to understanding what specific monies are currently invested in social welfare related funding, and how they are being used.
Today, there are a total of 109,631,000 receiving some kind of support from federally funded “means-tested” support programs. That is equal to roughly 35% of the federal population (Jeffrey 1). Of these individuals, 82,679,000 were on Medicaid, 51,471,000 were using the SNAP program, 22,526,000 were using WIC, 20,355,000 were collecting SSI, 12,267,000 were living in government supplemented housing, or receiving a housing subsidy to offset the cost of their current housing, 5,442,000 were collecting TANF (Temporary Assistance for Needy Familys), and 4.517.000 were receiving other forms of cash assistance, like assistance with childcare, in order to meet their basic needs (Jeffrey 1). Most of the funding that goes into social welfare programs goes into just nine programs. Together, in 2013, the cost of operation for all social welfare programs totaled around $152 billion a year in combined state and federal funds for these basic social programs, $59 billion of which comes from the federal budget (Elliot 1; Sandage 1). The average household benefit for multiple types of government support combined is $404 per month (Elliot 1).
Time should also be taken to consider who is receiving those funds. Public perception often focuses on the unemployed, when considering who receives benefits, but the reality is that it is the infirm and the underemployed, not the unemployed, that receive funding. More than half of funding is provided for families who are members of the labor force (Elliot 1). The reality is that 39% of Americans are receiving funds from programs they paid into, including Medicare, Social Security, and Unemployment insurance. Together these three programs also account for roughly 60% of the funds paid out by the federal government in support (Moses 1). Further, 36% of homes receiving SNAP, and 65% of those on Medicaid have either elderly, blind, or disabled persons in the home (Moses 1). Knowing who is receiving federal financial aid provides a firm basic foundation for understanding the abuse of aid.
Abuse of Social Welfare
Abuse of social welfare, legally known as welfare fraud, is the act of knowing misleading program decision makers in order to wrongfully obtain funds, or using funds in a way that is noncompliant, or inconsistent with its intended purpose. The social program most under fire, publically, as it relates to fund misuse, and fraud, is the SNAP program. Anecdotes of food stamp recipients living on stake and seafood, trading food stamps for other goods, and otherwise abusing the system abound. U.S. Senate candidate, Dr. Annette Bosworth, publically shared derogatory Meme’s on her Facebook page, accusing the SNAP program of allowing abusers to be dependent on federal funds (Lachman 1). Further, an ongoing public movement has called for drug testing for welfare recipients in an effort to avoid abuse. Legislation has successfully passed in at least 15 states, to require drug screening for all public assistance (NCSL, 2016).
However, anecdotal evidence and public outrage are founded on very little fact. In states that have enacted mandatory drug testing, an overall rate of .2% have tested positive for drug use (Pyke 1). Further the rate of SNAP trafficking, or illegally selling SNAP benefits, accounts for less than .5% of the total purchases made, in a study of major supermarkets (FNS 1).
Further evidence indicates that those that are using SNAP, and other federal, benefits, are truly using the funds just to get by. Families receiving public assistance statistically spend 30 to 60% less on food, housing, clothing, transportation, healthcare, entertainment, retirement and insurance, and other budgeting factors than families who are not on public assistance (Couch 1). Further, the claim that they become dependent, and stay on financial assistance forever, is also a misnomer, given that 87% of those receiving benefits are employed within a year of their application for benefits (Stone 1).
While there will always be some recipients who are gaming the system, evidence consistently demonstrates that most recipients of federal and state aid are using the funds they receive appropriately, to meet their family’s minimum needs for well-being, and to reestablish their family’s stability in a time of need. Most, have little or no desire to remain on federal aid long term, and very few are defrauding the government in order to gain funds, or misusing funds after they are received.
Cost of Corporate Welfare
In addition to funding social welfare, the government similarly funds economic, or corporate welfare. These are monies intended to stabilize economic performance in the nation by increasing the stability of businesses that provide important jobs, or generate important products for the national economy. In theory these are designed to balance the strain of competativism in much needed areas of industry, but in reality, they are funding the creation private planes, yachts, private equity funds, big banks, the energy sector, and major corporations (Kristof 1).
The government pays out an estimated $92 billion a year in federal subsidies to big business (Sandage 1). These come in the form of tax breaks, direct investment, grants, and more. It is impossible to begin to define the spending, without discussing the abuse of American dollars, because, in reality only a fraction of the government subsidies intended to generate economic growth are being used in a meaningful way.
Abuse of Corporate Welfare
It is important, to immediately define who is receiving federal corporate welfare funds, in order to understand why it is a problem. Research demonstrates that 16,000 subsidies, totaling a value of $63 billion have been paid out to Fortune 500 companies (Brunori 1). This means that the largest, and most financially stable businesses in the world are receiving the bulk of the resources available to stabilize struggling businesses within the economy. More specifically, for example, Bershire- Hathaway, a company with $485 billion in assets, and $20 billion in profits, received $1billion in federal aid (Brunori 1).
It could be asked, however, what these breaks are being provided for. That is also of keen interest, and demonstrates a major abuse of tax payer’s dollars. Currently, there is a loophole that allows companies to pay CEO bonuses, and deduct it from their taxes. Each year $7 billion in tax breaks are paid out based on write offs related to executive bonus pay (Cahill 1). Similarly, $300 million a year in subsidies are tax write offs related to luxury transportation, including luxury private planes, luxury cars, payment for chauffeurs, and more.
Another major area of subsidy for already lucrative businesses to get bigger. The government spends between $10 and $50 billion a year subsidizing fossil fuel, both through production and exploration based subsidies (Cahill 1). Similarly, the top 10 banks in the United States receive $83 billion in subsidies annually (Kristof 1).
These figures together make it clear that the funds provided for economic welfare, through taxpayer dollars are not being used in an efficient, or meaningful, way. While it cannot be said that business’s are truly abusing the funds, they are taking advantage of laws that are written in a way that allows them to legally access huge subsidies. It can be said, however, that the current political arena is grossly abusing tax payer’s rights by allowing these subsidies to be expended, unchecked, and without concern to restructure the legal elements of the tax subsidies that allow this abuse to continue.
Rightful Indignation, and Solving our Insolvency
While these facts are certainly startling, the question may remain, how indignant should American taxpayers be over these subsidies? It can be deceiving when the numbers are so large to understand the real impact of the corporate welfare on individual households. However a breakdown of how tax dollars are collected, and spent, can simply our understanding of the issue.
An average taxpayer, paying federal taxes on an income of $50,000 per year, pays roughly $36 annually to the federal SNAP program, and $6 a year to all other federal social welfare (Hartmann 1). In contrast, that same American family is paying $6,000 a year in funding corporate welfare through subsidies (Hartmann 1).
This kind of waste should absolutely raise public indignation, and encourage individuals to demand change. Further, the fact that the SNAP program has been defunded, by varying degrees, multiple times in an effort to “balance the federal budget” with threatened additional cuts of more than $20 billion, when there is no talk decreasing federal subsidies, should have conservatives and liberals alike up-in-arms.
Conclusion
It is clear that something needs to change within the current economic policy in the nation, and perhaps more specifically in the public opinion which has allowed these trends to develop. The reality is that we can, as a nation, afford to continue supporting those in need, and to provide them with the basic funds necessary to provide minimum access to the resources needed to preserve their well-being. After all, it can be statistically proven that families are using these funds in a meaningful way, and that the average family will remain on federal and state aid for a period of no more than five years, with most showing improvement in condition in just one year. However, there is no way to justify spending at the corporate level, which is allowing gross overpayment of already rich executives at the expense of the average taxpayer. The public has to demand change for the allotment of funds for corporate welfare needs to end and the public support for more meaningful programs must increase, to ensure that no more cuts are made to funds given to America’s poor and deserving, when billions are being spent on the rich and undeserving, because though public disgust of corporate subsidies is far less prominent, they cost tax payers substantial more, and are far more abused. If Americans are going to stand against welfare, as part of the nation’s growing incense over government insolvency, corporate welfare, and abuse of those subsidies, must be controlled or eliminated.
Works Cited.
Brunori, David. Where is the Outrage Over Corporate Welfare. Forbes Magazine. 2014. Web.
Cahill, Tom. 10 Taxpayer Handouts to the Super Rich that Will Make Your Blood Boil. US Uncut. 2015. Web.
Couch, Robbie. Think Welfare Recipients Abuse The System? You Should See This Chart. Huffington Post. 2014. Web.
Cram 101 Textbook. Social Policy for Effective Practice, A Strengths Approach. New York: Cram 101 Textbooks,2016.Print.
Elliot, Megan. Who’s on Welfare? 9 Shocking Stats About Public Assistance. Cheat Sheet. 2016. Web.
FNS. USDA Releases New Report on Trafficking and Announces Additional Measures to Improve Integrity in the Supplemental Nutrition Assistance Program. USDA. 2013. Web.
Hartmann, Thom. Food Stamps Are Affordable; Corporate Welfare is Not. Truth Out. 2013. Web.
Jefferey, Terence P. The 35.4 Percent: 109,631,000 on Welfare. CNS News. 2014. Web.
Lachman, Samantha. GOP Senate Candidate Likens Food Stamp Recipients To Wild Animals. Huffington Post. 2014. Web.
Kristof, N. A Nation of Takers. The New York Times. 2014. Web.
Moses, Joy. The Facts About Americans Who Receive Public Benefits. American Progress. 2011. Web.
NCSL. Drug Testing For Welfare Recipients and Public Assistance. 2016. Web.
Pyke, Alan. Tennessee’s Drug Tests Of Welfare Recipients Find 37 Drug Users. Think Progress. 2015. Web.
Sandage, Sonya. Corporate Welfare is Almost Double Social Welfare. Truth In Media. 2013. Web.
Stone, Chad. The Facts About Food Stamps Conservatives Don't Want You to Hear. USA News. 2013. Web.
