Monday, June 15, 2009

Recession Driving Benefit Spending to Record High


(USA Today, June 3, 2009)


One out of every six dollars of Americans' income is in the form of federal or state funds - SNAP/Food Stamps, Social Security, unemployment compensation, or health care - due to the recession, notes a report by the Bureau of Economic Analysis.


According to federal data, , government spending on benefits will be more than $2 trillion in 2009, an average of $17,000 per household. In the first quarter of 2009, benefit spending increased at an annual rate of 19 percent, compared to the last quarter of 2008. While half the increase is due to the recession - unemployment has nearly tripled - policies set in place during George Bush's first term of office make up the other half; increased spending for the Medicare drug benefit, children's health insurance expansion, and SNAP/Food Stamps followed the 2001 recession.


These days, "[w]e're not seeing the hunger we saw in the 1930s because the food stamp program is doing what it's supposed to do," said Jennifer Lange, Florida's food stamp director. While advocates are saying the safety net is working, "[t]he increase in social spending is still relatively modest given the severity of the downturn," said Dean Baker, an economist with the Center for Economic and Policy Research.

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