Greatest Expansion of Social Programs in U.S. History

The expansion of benefit programs since 2000 has led to the greatest increase in social spending in American history - with entitlement programs now accounting for more than half of all federal spending, a new report shows.

A USA Today analysis released Tuesday of 25 major government programs - including health care, college aid and food stamps - revealed that enrollment surged an average of 17 percent from 2000 to 2005, while the nation's population increased by only 5 percent.

It marked the largest 5-year growth in enrollment since Medicare, Medicaid and other social programs were created during Lyndon Johnson's "Great Society" movement in the 1960s.

Spending on social programs was $1.3 trillion last year, an inflation-adjusted increase of 22 percent since 2000, according to the USA Today report.
Enrollment growth accounted for most of the spending increase:

Medicaid added 18 million beneficiaries - a 50 percent increase since 2000 - and is now the nation's largest entitlement program, costing the federal government $198 billion last year. Once a program for Americans on welfare, Medicaid has been expanded to include the working poor and now has an enrollment of 53.4 million.

The number of Americans receiving food stamps rose 49.6 percent in the past five years and now stands at 25.7 million. Expanded eligibility led to much of the increase and helped put the 2005 tab at $33 billion.

The number of college students receiving Pell grants increased 41 percent over five years, to 5.3 million. The program cost $13 billion in 2005.

The 5-year period also saw enrollment increases in child nutrition programs, unemployment compensation, veterans benefits and other programs.
The worse may be yet to come: The nation's 79 million Baby Boomers will begin to qualify for Social Security in 2008, and for Medicare in 2011.

The Nightmare of Medicaid

As NewsMax reported last year, the extension of taxpayer-funded Medicaid to the working poor has been the single largest factor in the greatest expansion of government entitlements since the Great Society was launched in the 1960s.

The soaring costs of Medicaid - which more than doubled last year to close to $330 billion since 1999 - is largely due to legislation that extended Medicaid coverage to many Americans who have low-paying jobs.

The government's free health care offering swelled Medicaid's numbers as many low-income workers are choosing Medicaid rather than insurance from their employer because it is free or nearly free and often provides more benefits.

The result has been a staggering growth in the welfare state - as the federal government has become the health insurer of 100 million Americans - about one of every three citizens.

The growth of the health entitlement program - which critics say has become national health care by stealth - has been embraced by both Republicans and Democrats.

President Bush has even proposed $1 billion in spending for the next two years "to encourage eligible families to sign up for Medicaid," USA Today noted.

Some experts blame the growth of Medicaid on 1996's landmark welfare reform legislation, which moved millions of welfare recipients off the welfare rolls and into low paying jobs.

To make sure these newly employed didn't lose free health benefits, the federal government enacted legislation to extend Medicaid to lower-incomed workers.
"Health coverage has been a costly side effect of welfare reform," the newspaper disclosed.

Now a great number of workers - many who were never on welfare - can also sign on for free health care.

Under federal rules, a family of four can earn as much as $40,000 a year in most states and still get government health insurance for children.

The Medicaid program has grown from covering 34 million individuals in 1999 to 47 million last year, and Medicaid costs have soared from $159 billion in 1997 to $295 billion in 2004 - an increase of 85 percent.

This year Medicaid spending is projected to hit $329 billion. Added to the staggering costs are new rules that provide Medicaid to illegal aliens - tacking on another $2.5 billion to annual costs. Critics say Medicaid's expansion is adding to the crushing Federal deficit and luring workers from insurance plans offered by employers.

Supporters, on the other hand, maintain that Medicaid will prevent higher costs in the future by reducing emergency room visits by the uninsured.

But the expansion of benefits to low-income workers has made federal and state taxpayers "the health insurance provider for millions of workers at Wal-Mart, McDonald's and other low-wage employers," USA TODAY reports.

The federal government pays 59 percent of Medicaid costs; the states pay the rest. The rising costs are crushing many states, who say rising health costs are contributing to deficits.

Medicaid enrollment now even outpaces enrollment in Medicare, and many states are spending more on Medicaid than on anything else, including education. Said Michael Cannon, director of health care studies at the Cato Institute: "Shame on us for creating perverse incentives that cause people to give up private coverage for Medicaid."