	Introduction

More than 80 benefit programs provide cash and noncash aid that is directedprimarily to persons with limited income. These benefit programs cost $522.2 billionin FY2002, a record high. This sum was up $45.3 billion (9.5%) from the previouspeak of FY2001, and it equaled 5% of the gross domestic product (GDP). Higher medical spending accounted for $32.8billion of the year's net increase, and 54 cents out of every welfare dollar went formedical benefits. That is, they transfer income, in the form of cash, goods, or services, to persons whomake no payment and render no service in return. However, in the case of the joband training programs and some educational benefits, recipients must work or studyfor wages, training allowances, stipends, grants, or loans. Further, the TANF blockgrant program requires adults to commence work (defined by the state) after a periodof enrollment, the Food Stamp program imposes work and training requirements,and public housing programs require recipients to engage in "self-sufficiency"activities or to perform community service. Finally, the Earned Income Tax Credit(EITC.) is available only to workers. Table 1. Expenditures of Major Need-Tested Benefit Programs,by Form of Benefit and Level of Government,FY2000-FY2002 (millions of current dollars)
Source: Table prepared by the Congressional Research Service (CRS). Table 2. Spending Trends by Level ofGovernment. State-local welfare spending (constant dollars) rose from $24.5billion to $149 billion over the same period, an increase of 508%. Both federal and state-local outlays set successive new record highs inFY1998-FY2002. Aid Received by Poor Families With Children

The Census Bureau reports that 7.2 million families (including 5.4 million withchildren) in 2002 had total pre-tax money income -- after counting any cash from thewelfare programs of TANF, Supplemental Security Income (SSI), and GeneralAssistance (GA) -- that was below their poverty threshold. Figure 3 depicts income-tested aid provided to families with children who were poor before receiving any cash aid from TANF, GA, or the EITC. In 2002, thesefamilies totaled 5.7 million (compared with 5.1 million in 2000): 3.4 million witha female householder and 2.3 million with a male householder (chiefly two-parentfamilies). Medical Aid

	1. 9. Federal SSI spending represented 1.7% of all federaloutlays. 19. Educational Assistance

	50. 53. 71. In FY2002, expenditures for TANF work programs and activities were reported at $2.7 billion, $2.1 billion (78%) from federal funds and $ 0.6 billion fromstate-local funds. WIA defines a low-income person as one who (a) receives cash welfare or is a member of a family that receives cash welfare, (b) receives food stamps or is amember of family that was eligible to receive food stamps in the previous 6 months;(c) had family income (359) for the preceding 6months no higher than the federal povertyguideline (a limit in 2003 throughout the 48 contiguous states and the District ofColumbia (360) of $ 18,400 for a family of fourpersons and $8,980 for a single person)or no higher than 70% of the lower living standard income level (LLSIL) (a ceilingthat ranged, effective on May 30, 2003, for a four-person family from $18,270 innon-metropolitan areas of the South to $22,230 in metropolitan areas of the Northeast -- and higher in Alaska, Hawaii and Guam); (d) is homeless, as defined in theStewart McKinney Homeless Assistance Act; (e) is a foster child on behalf of whomstate or local government payments are made; or (f) is a disabled person whose ownincome meets the program limit, but whose family income exceeds it. Number ever enrolled during the year. States may spend more,but data are not available. 2002 is an estimate. JOBS AND TRAINING
a.
More than 80 benefit programs provide aid -- in cash and noncash form -- that is directed primarily to persons with limited income. Such programs constitute thepublic "welfare" system, if welfare is defined as income-tested or need-basedbenefits. This definition omits social insurance programs like Social Security andMedicare.
Income-tested benefit programs in FY2002 cost $522.2 billion: $373.2 billion in federal funds and $149 billion in state-local funds (Table 1) . Welfare spendingrepresented almost 19% of all federal outlays, with medical aid accounting for 8%of the budget. Total welfare spending equaled 5% of the gross domestic product andset a new record high, up $45.3 billion (9.5%) from the previous peak of FY2001. In current dollars, spending increased during the year for all forms of aid except jobsand training. Higher medical spending accounted for $32.8 billion of the netincrease, and 54 cents of every welfare dollar went for medical assistance. Expressedin constant FY2002 dollars ( Table 2) , welfare spending increased by 7.9% from the2001 level.
The composition of welfare spending differed by level of government ( Tables 3 and 4 ). Medical aid consumed 80% of state-local welfare funds, but 43.9% offederal welfare dollars.
Most income-tested programs provide benefits, in the form of cash, goods, or services, to persons who make no payment and render no service in return. However,in the case of the job and training programs and some educational benefits, recipientsmust work or study. Further, the block grant program of Temporary Assistance forNeedy Families (TANF) requires adults to start work after a period of enrollment, thefood stamp program imposes work and training requirements, and public housingrequires residents to engage in "self-sufficiency" activities or perform communityservice. Finally, the Earned Income Tax Credit (EITC) is available only to workers.
An unduplicated count of welfare beneficiaries is not available. Enrollment in TANF and food stamps remained far below 1994/1995 peak levels during2000-2002, but Medicaid enrollment set a new record high. Average 2002 monthlynumbers: Food stamps, 20.2 million; TANF, 5.1 million; and Supplemental SecurityIncome (SSI), 6.9 million. During the year 50.9 million persons received Medicaidservices, and in 2001, EITC payments went to an estimated 16.8 million tax filers. Census Bureau data indicate that 5.4 million families with children were poor in2002 before receiving cash aid from TANF, General Assistance (GA) or the EITC,compared with 6.7 million in 1996 (last full year of the pre-TANF welfare program). Among these families, the EITC was received by 53.7% of those with a female headand by 71.7% of those with a male present ( Figure 3) .