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Regional Aspects of Welfare Spending

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Any attempt to balance the federal budget must confront the problem of burgeoning welfare payments. Means-tested entitlements, which include Medicaid and other welfare-type programs, have grown at a 12% average annual clip since 1962, increasing from 4% to 12% of total outlays. Non-means-tested entitlements, which cover Social Security, Medicare, and unemployment compensation, have grown at a 10% annual rate over the same period, rising from 26% to 42% of government outlays. Discretionary spending, on the other hand, is up only 6.4%, shrinking from 70% to 37% of total federal outlays. The current congressional proposal for limiting welfare payments would give states more control over welfare programs, require recipients to work, and limit the duration of benefits.

Suggested citation: “Regional Aspects of Welfare Spending,” Federal Reserve Bank of Cleveland, Economic Trends, no. 95-12, pp. 13-14, 12.01.1995.

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