The Deeply Flawed Sessions Report on Safety Net Spending

February 25, 2013 at 3:37 pm

With both parties seeking more deficit reduction, the safety net remains a potential target for cuts.  The Washington Post’s Glenn Kessler in recent days analyzed a report from Senator Jeff Sessions comparing safety net benefits to middle-class incomes.  We issued our own analysis of the Sessions report today.  Here’s the opening:

Senator Jeff Sessions (R-AL) recently posted to the Senate Budget Committee website a document that implies that programs targeted to low-income people provide lavish benefits that raise the typical poor household’s standard-of-living above that of the typical middle-income household.  The Sessions release, however, is deeply flawed; it substantially overstates the assistance that poor households receive.  Means-tested programs do not raise poor households anywhere close to a typical middle-income household’s standard of living.

The Sessions document derives its numbers by adding up the cost of a large number of programs that are targeted on low- and moderate-income households — or on schools and communities with large numbers of low- and moderate-income students or residents — and dividing the total cost of these programs (all of which it labels “welfare”) by the number of households below the official poverty line.  It claims this shows that we spend the equivalent of $168 per poor household per day — or more than $60,000 per poor household annually.  It then compares this per-household amount to median household income.

This comparison rests, however, on a series of serious manipulations of the data that violate basic analytic standards and are used to produce a potentially inflammatory result.  To produce its claims, the document Senator Sessions posted does the following:

  • Counts payments to hospitals, doctors, nursing homes, and other medical providers — including payments for care for sick elderly people at the end of their lives and for people with serious disabilities who are institutionalized — as though these payments are akin to cash income that is going to poor families to live on. . . .
  • Counts, as spending on poor people, benefits and services that go to families and individuals who are above the poverty line. . . .
  • Counts the value of health coverage for low-income households but not for middle-income households. . . . .

Census data paint a very different picture.  The Census Bureau’s Supplemental Poverty Measure (SPM) — which counts non-cash and tax-based benefits as income, including the Supplemental Nutrition Assistance Program (SNAP, formerly Food Stamps), refundable tax credits, housing subsidies and the like, but not medical care — shows that:

  • In 2011, the typical person in a family whose income was below the poverty line before means-tested benefits are counted remained 12 percent below the poverty line after the means-tested benefits are counted.  Moreover, the Supplemental Poverty Measure shows that even with these benefits, the typical poor person’s standard of living is 57 percent below that of the typical middle-income American.
  • The SPM also shows that means-tested benefits lifted 20 million people out of poverty in 2011, but that the typical individual lifted out of poverty had income only 16 percent above the poverty line, far below the income level of the typical middle-class person.

Click here for the full report.

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