	Introduction

More than 80 benefit programs provide cash and noncash aid that is directed primarily to persons with limited income. These benefit programs cost approximately $583 billion in FY2004, a record high. This sum was up $34 billion (6.2%) from the previous peak of FY2003, and it equaled 5% of the gross domestic product (GDP). Higher medical spending accounted for $26 billion of the net increase in FY2004, and 55 cents out of every dollar spent on persons with limited income went for medical benefits. Federal low-income spending represented 18.6% of the federal budget, with 9% attributed to medical assistance. That is, they transfer income 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, recipients must work or study for wages, training allowances, stipends, grants, or loans. Further, the TANF block grant program requires adults to commence work (defined by the state) after a period of 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. Spending Trends by Level of Government

Tables 3, 4, and 5 present 1968-2004 spending on low-income programs in constant 2004 dollars, by form of benefit; Table 3 displays federal spending; Table 4 , corresponding state-local data; and Table 5 , total low-income spending amounts. State-local spending (constant dollars) rose from $26 billion to $156 billion during the same period, an increase of 502%. Federal spending set successive new record highs during FY1998-FY2004. Aid Received by Poor Families With Children

The Census Bureau reports that 7.6 million families (including 5.8 million with children) in 2003 had total pre-tax money income—after counting any cash from the programs of TANF, Supplemental Security Income (SSI), and General Assistance (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 2003, these families totaled 6.1 million (compared with 5.1 million in 2000): 3.7 million with a female householder and 2.4 million with a male householder (chiefly two-parent families). Specified Low-Income Medicare Beneficiaries (SLMB) . Temporary Assistance for Needy Families (TANF)

Note: This entry describes use of TANF block grant funds for cash aid. 1). Food Aid

	19. 56. Appropriations for social services were $152.2 million in FY2004. 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 a member of family that was eligible to receive food stamps in the previous six months; (c) had family income for the preceding six months no higher than the federal poverty guideline (a limit in 2003 throughout the 48 contiguous states and the District of Columbia of $ 18,400 for a family of four persons and $8,980 for a single person) or no higher than 70% of the lower living standard income level (LLSIL) (a ceiling that ranged, effective on May 30, 2003, for a four-person family from $18,270 in non-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 the Stewart McKinney Homeless Assistance Act; (e) is a foster child on behalf of whom state or local government payments are made; or (f) is a disabled person whose own income meets the program limit, but whose family income exceeds it.
More than 80 benefit programs provide aid—in cash and noncash form—that is directed primarily to persons with limited or low income. Such programs constitute the public "welfare" system, if welfare is defined as income-tested or need-based benefits. This definition omits social insurance programs like Social Security and Medicare.
Income-tested benefit programs in FY2004 cost approximately $583 billion: $427 billion in federal funds and $156 billion in state-local funds (Table 1). Spending on these programs represented 18.6% of all federal spending, with medical aid accounting for 9% of the budget. Total low-income spending in FY2004 equaled 5% of the gross domestic product and set a record high, up $34 billion (6.2%) from the previous peak of FY2003. In current dollars, spending on income-tested programs increased during the year for all forms of aid except jobs, training, services, and energy aid. Higher medical spending accounted for $26 billion of the net increase in FY2004, and 55 cents of every low-income dollar went for medical assistance. Expressed in constant FY2004 dollars (Table 2), income-tested spending increased by 3.8% from the 2003 level.
The composition of low-income spending differed by level of government (Tables 3 and 4). Medical aid consumed nearly 82% of state-local funds, but 46% of federal low-income 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, recipients must work or study for wages, grants, or loans. Further, the block grant program of Temporary Assistance for Needy Families (TANF) requires adults to start work after a period of enrollment, the food stamp program imposes work and training requirements, and public housing requires residents to engage in "self-sufficiency" activities or perform community service. Finally, the Earned Income Tax Credit (EITC) is available only to workers.
An unduplicated count of beneficiaries of income-tested programs is not available. Enrollment in TANF and food stamps remained below 1994-1995 peak levels during 2002-2004 (although food stamp enrollment rose from the 2000-2002 period), while Medicaid enrollment set a record high. Average 2004 monthly numbers: food stamps, 24.9 million; TANF, 4.7 million; and Supplemental Security Income (SSI), 7.1 million. During the year, 56.1 million persons received Medicaid services, and in calendar year 2004, EITC payments went to an estimated 19.2 million tax filers. Census Bureau data indicate that 5.8 million families with children were poor in 2003 before receiving cash aid from TANF, General Assistance (GA), or the EITC, compared with 6.7 million in 1996 (the last full year of the pre-TANF welfare program). Among these families, the EITC was received by 43.8% of those with a female head, and by 67.8% of those with a male present (Figure 3).