The federal government devotes roughly one-sixth of its spending to 10 major means-tested programs and tax credits, which provide cash payments or assistance in obtaining health care, food, housing, or education to people with relatively low income or few assets according to a report by the CBO (Congressional Budget Office)
In 2012, federal spending on the 10 major means-tested programs and tax credits totaled $588 billion. Social Security and Medicare, are not considered means-tested programs because they are not limited to people with specific amounts of income or assets.
Total federal spending on those 10 programs, which were adjusted to exclude the effects of inflation, rose more than tenfold—or by an average of about 6 percent a year—in the four decades since 1972 when only half of the programs existed.
As a share of the economy, federal spending on those programs grew from 1 percent to almost 4 percent of gross domestic product (GDP) over that period.
The CBO projects that the cost of the federal programs will continue to rise due in part to the new federal health-care subsidies enacted in Obamacare.
“Spending on means-tested health care programs is projected to more than double, from $272 billion in 2012 to $624 billion in 2023 (adjusted for inflation), an average annual increase of 8 percent above the rate of inflation,” according to the CBO report.
The report noted that the ‘rise reflects expected growth in the cost of providing medical care; it also reflects expanded eligibility for assistance and new types of assistance to be provided under the Affordable Care Act (Obamacare). The ACA (Obamacare) will not only make more people eligible for Medicaid but also allow many low and moderate-income people who do not qualify for Medicaid to purchase federally subsidized health care coverage.”
Among the findings; the federal government paid an average of $4,000 in means-tested benefits and refundable tax credits to Americans living in households with an average income of $35,500.
Major means-tested programs and tax credits:
• Medicaid,
• The low-income subsidy (LIS) for Part D of Medicare (the part of Medicare that provides prescription drug benefits),
• The refundable portion of the earned income tax credit (EITC),
• The refundable portion of the child tax credit (CTC),
• Supplemental Security Income (SSI),
• Temporary Assistance for Needy Families (TANF),
• The Supplemental Nutrition Assistance Program (SNAP, formerly called the Food Stamp program),
• Child nutrition programs,
• Housing assistance programs, and
• Federal Pell Grant Program