California's Economic Armageddon
Welfare is the classic example of government failure. The combined federal, state and county welfare programs have had enormous destructive economic, social and moral consequences. In the absence of significant change, Heritage Foundation projects the cost will be $10.6 trillion over the next decade
The initial beneficiaries of government aid were widows and orphans left without means of support after the war. The annual cost for the program was about $1billion. The War on Poverty Act of 1964 widened the net. By 1970 the cost had risen to $27 billion. Four years after the 1986 legislation, the cost ballooned to $170 billion. By 2000, it was $228 billion.
A decade later, it was $994 billion. By 2012, it exceeded $1.3 trillion. According to Heritage, the total cost for Medicaid and welfare now amounts to 70% of the federal budget. The study warns, in the absence of cuts, welfare and interest on our national debt will consume 92 cents of every dollar of revenue by the end of the next decade.
Today, over 100 million Americans receive monthly government support.2 One-third of them live in California. The Center for Immigration found 43% of all immigrants in the United States for at least 20 years were still receiving welfare benefits. 70% of illegal immigrants and their families in California are enrolled in at least one federal and state welfare programs.
Mike Antonovich, longtime Los Angeles County Supervisor, recently announced that welfare payments for LA County's 100,000 children of 60,000 illegal parents this year will exceed $1.6 billion, excluding the hundreds of millions for education.
Welfare is a disincentive to education, work, and marriage. It is linked to illegitimacy, poverty and drug abuse. It has turned tradition, morality and civilized society on its head. An alarmed government was finally forced to reform welfare. The 1996 Welfare to Work Act signed by President Clinton included a five-year lifetime limit and a work requirement to receive aid. Caseloads in many states were halved within four years.
California, however, continues to resist these reforms. The state passed its own reforms in 1997, which were never implemented. If a parent exceeds the five-year federal limit, child-only benefits under the Safety Net Program allow the children to receive welfare until age 18. Despite the federal work mandate, only 22% of the state's welfare recipients are employed.
There are 126 separate federal and state welfare programs. The state has many overlapping and duplicate programs that award benefits to individuals who earn 200% above the federal poverty line. In California, a single mother with several young children can receive cash and in-kind tax-free benefits that are the equivalent of a $17.87 per hour job. In the face of such largesse, why on earth would a person chose to work?
The costs for welfare are unsustainable. At their current level, California faces an economic Armageddon. Without substantive reform, there can be no significant change in the social or fiscal calculus. Benefits for illegal immigrant parents and their illegal and native-born American children must be cut. Time limits for temporary aid must be shortened and enforced. So must work requirements.
Out of wedlock childbirth must not be rewarded and subsidized. Cash benefits should be given as grants and loans. Marriage should be rewarded, not penalized. The tax penalty should be abolished and marriage should be incentivized in low-income neighborhoods.
Is it possible to compel individuals who have become inured to having someone else support them to support themselves? Ask your parents and grandparents.