How an Astounding New Right-Wing Lie About the Economy Was Born

Insensitivity to human plight taken to new extremes.

By Joshua Holland

December 27, 2012 "Information Clearing House" -  There's a new economic myth that's now being amplified by the conservative media. It demonizes vital public services and suggests that the poor are doing just fine thanks to the largesse of the country's “makers.” Conservatives are being told that the United States is now spending vast fortunes combating poverty—more than we dedicate to national defense, Social Security and Medicare.

This new spin is notable not for its mendacity—although it is completely divorced from reality—but because its origins are easily traced, allowing us to see how these kinds of distortions come to be. This one originated with the work of an analyst at the Heritage Foundation who is well known for his intellectual dishonesty. It was then picked up by Republican staffers on Capitol Hill, who lent the claim credibility by requesting a Congressional Research Service report on the analysis. They then further distorted the narrative before distributing it to friendly writers at conservative media outlets, who dutifully reported the falsehood. It will soon become conventional wisdom on the Right, further distorting conservatives' view of taxes and spending.

Several conservative outlets had the story before Daniel Halper at the Weekly Standard, but his piece is the one that's been cited by hundreds of conservative blogs, right-wing radio talkers and Fox News. Halper, citing “the minority side of the Senate Budget Committee,“ framed the story like this: “[W]elfare spending per day per household in poverty is $168, which is higher than the $137 median income per day. When broken down per hour, welfare spending per hour per household in poverty is $30.60, which is higher than the $25.03 median income per hour.”

For fiscal year 2011, CRS identified roughly 80 overlapping federal means-tested welfare programs that together represented the single largest budget item in 2011—more than the nation spends on Social Security, Medicare, or national defense. The total amount spent on these federal programs, when taken together with approximately $280 billion in state contributions, amounted to roughly $1 trillion.

Common sense should tell you that this is a ridiculous claim. Given that the United States has one of the weakest social safety nets in the world, it's pretty obvious that we're not spending more on each family in poverty than the median income—or more on the poor than we spend on defense, Social Security and Medicare. But let's dig into the details.

The first problem with this claim is mathematical rather than ideological. The story is that we spend $168 per day for each family in poverty. But the eligibility cut-offs for most of the 80 or so programs identified by Senate Republicans are higher than the poverty line; in many cases, significantly higher.

Given that there are around 600 different eligibility requirements for these programs, most determined by the states, it's difficult to calculate an average without a staff. But in Colorado, which I chose because it tends to be ideologically middle-of-the-road, the average eligibility cut-off for the 10 means-tested federal benefits listed here is $18,075, or 62 percent above the federal poverty line.

The myth can be expressed mathematically like this: Total Spending On “Welfare”/Families in poverty = $168 per day. But these services benefit many more people than those struggling under the poverty line—one may as well divide those costs by the total number of rabbits or blue cars in the U.S.

The reality, expressed mathematically, is: Total Spending On “Welfare”/Those who receive benefits = $24.77 per day. That's a lot less than $168.

Merriam-Webster's dictionary defines “welfare” like this:

a: aid in the form of money or necessities for those in need

b: an agency or program through which such aid is distributed

But that definition represents only a small share of the programs identified by the Republican staffers. Many, or most, are things no reasonable person would ever call “welfare.” There's aid to communities recovering from natural disasters; a number of job training programs; education grants—from Head Start for pre-schoolers to Pell Grants for low-income college students; money to enforce child support orders; programs that improve teachers' skills; and even screening programs to detect breast and cervical cancer in low-income communities.

Halper writes that the programs provide “direct or indirect financial support,” but “indirect” is a key sleight-of-hand. A number of the programs identified by the Republican staffers provide money to institutions and communities rather than indviduals in need. Included is a program that gives money to “eligible colleges and universities to strengthen their management and fiscal operations,” funding for Americorps—which trains and places teachers in low-income communities—and another that gives rural communities assistance upgrading their water and sewage systems.

I asked an economist and budget expert—who didn't want to be named—how a grant for community projects can be considered “means-tested.” He explained that they aren't. Instead, they're awarded according to “a variety of considerations, including the median income of a jurisdiction's residents.” He added: “If you want to call that means-testing you are welcome to do so, since in America we are all entitled to our own definitions.”

The important takeaway here is that many of the programs that serve these communities provide benefits to people who aren't poor. When the federal government helps a rural community upgrade its water system, it may well help a lot of poor people, but clean water will come out of the taps of everyone in that community, rich, poor or somewhere in between. Aid to universities that serve a lot of low-income students will also help that university's middle-income students. And when you help a town with a lot of low-income residents rebuild after a natural disaster, the richest person in town will also benefit.

Another example: according to the Congressional Research Service, a number of the education programs included on the list result in “students from relatively well-off families receiving assistance, as there is no absolute income ceiling on eligibility.”

Fifty years of political science tells us that Americans hold a very favorable view of most programs that help the poor, especially educational and job training programs which, in theory at least, help them lift themselves out of poverty. But there is one exception: Americans don't like “welfare.”

In his classic book, Why Americans Hate Welfare, sociologist Martin Gilens found that significant majorities of Americans told pollsters that they wanted to increase public spending to fight poverty at the same time that majorities said they were opposed to welfare. Gilens concluded that this disconnect was driven by a widespread belief that “most welfare recipients don't really need it,” and by racial animus – “perceptions that welfare recipients are undeserving and blacks are lazy.”

This is all very well understood by everyone who had a hand in creating and amplifying this new falsehood. If you take programs that offer low-income people job training or adult literacy or legal services—or programs that fund community health centers and improvements in public works—and call them “welfare,” you can instantly turn very popular programs into something else: handouts for the “undeserving” poor. And that's just what they're trying to do.

A great deal of conservative economic views are shaped by myths. Think about the fact-free narrative that slashing tax rates for the wealthy will result in more revenues coming into the government's coffers, the common claim that half of the country pays no taxes, or the idea that increasing domestic oil production can lower global oil prices enough to bring down the price of a gallon of gas here at home.

So it will be with the idea that the federal government spends a trillion on “welfare.” But this particular myth is interesting in that we can trace its provenance, see where it came from, how it was amplified, and how it was shaped along the way.

In May, Robert Rector, the Heritage Foundation's “senior research fellow on family and welfare studies,” testified before the House Budget Committee. He identified 79 of what he described as “means-tested welfare” programs, with a total price tag of $927 billion (in combined costs to the federal government and the states).

Who is Robert Rector? He's an analyst with a long and storied history of suggesting that the poorest Americans are living quite well. Andy Kroll profiled him for Mother Jones when it was reported that Rector had been the source of Mitt Romney's universally debunked claim that Obama had “gutted” the work requirements of Bill Clinton's welfare “reforms.”

Rector, wrote Kroll, is “a man who holds controversial, and in some cases inaccurate, views of poverty and economics. Rector has claimed that poverty doesn't impact children, that you're not really poor if you have air conditioning or a car, and that the very idea of welfare lifting Americans out of poverty is 'idiotic.'” In 2011, “he questioned the government's assertion that more than 30 million people were poor by pointing to different 'modern amenities' they owned. The people the government calls poor, he wrote, 'are not poor in any ordinary sense of the term,' while the real poor 'are a minority within the overall poverty population.'”

In calling all manner of programs “welfare,” Rector's testimony was intellectually dishonest. But his math was accurate. Instead of dividing the money spent on these programs by the number of families living in poverty, Rector noted that “some means-tested assistance goes to individuals who are low-income but not poor.”

The result of doing the math right is that, rather than spending $61,320 per year for every family living under the poverty line, as Senate Republicans claim—and Daniel Halper and others parrot—the real number is, according to Rector's own testimony, “$9,040 for each lower-income American (i.e., persons in the lowest-income third of the population).”

Regardless of the number, at this point the claim was being made only by a Heritage Foundation fellow of dubious distinction. But Rector's testimony before the House Budget Committee so impressed Jeff Sessions' staff, that they asked the Congressional Research Service to prepare a report examining the total cost of programs that help low-income Americans, either directly or indirectly.

The report they got back from CRS—which identified four more programs than Rector had—gave added credibility to Rector's original claim. But the authors were was careful to note that their analysis didn't look only at “welfare.” And they noted that it included programs that aren't in fact means-tested at all. Programs were included, according to the report, if “they (1) had provisions that base an individual’s eligibility or priority for service on a measure (or proxy) of low or limited income; or (2) target resources in some way (e.g., through allocation formulas, variable matching rates) using a measure (or proxy) of low or limited income.”

The authors added: “A few programs without an explicit low-income provision were included because either their target population is disproportionately poor or their purpose clearly indicates a presumption that participants will be low-income.”

The CRS report looked only at federal spending. Jeff Sessions' staff added the states' contributions as well as a big lie—iit seems they decided to divide total spending on what they call “welfare” by the number of families in poverty rather than the number of people who benefit from these programs, in the process turning $9,000 in spending per household into $61,000.

The CRS report is dated October 16. The National Review ran an item two days later, when Jeff Sessions issued a press release, and Fox News amplified the claim two days after that. Both reports mentioned the total price tag for these programs—close to $1 trillion—but neither cited the $168 per day claimed by Sessions' staffers. It was that framing, featured in the headline of Daniel Halper's Weekly Standard piece, that appears to have driven the myth to the larger conservative media.

The end result is that a lot of Americans are woefully misinformed about what we spend on anti-poverty programs, and what those programs look like. Traditional welfare—now known as Temporary Assistance for Needy Families—costs the federal government just $16.5 billion, a fraction of what's now claimed by the Right. According to the Center for Budget and Policy Priorities, even when one uses a very expansive definition of “welfare,” only “13 percent of the federal budget in 2011, or $466 billion, went to support programs that provide aid (other than health insurance or Social Security benefits) to individuals and families facing hardship.”

So we have another gap between what is “true” in the conservative media bubble and the objective facts. In the real world, we spend about $25 per day on the needy. But, according to Fox News, the figure is $168.

Joshua Holland is an editor and senior writer at AlterNet. He's the author of The 15 Biggest Lies About the Economy.