How is spending allocated among various categories of low-income benefits and services? Medicaid is the single largest program discussed in the report, and health care is the largest category (due to the size of Medicaid). Social insurance plays a key antipoverty role but its benefits are meant to be universal and not restricted to those with low incomes. Some programs target assistance toward low-income communities, with no income eligibility test for participating individuals. By Category

Health care dominates federal spending for low-income programs, accounting for nearly half of such spending each year from FY2008 through FY2014 and more than half (52%) in FY2015 (see Table 2 ). It is important to note that only a few programs account for the vast majority of federal low-income spending (see Figure 4 ) and the dominance of these programs is growing. The single largest program—Medicaid—alone accounted for almost 45% of all low-income spending in FY2015, an increase from 38% in FY2008 (see Table 3 ). The next programs, in descending size based on FY2015 obligations, are the Medicare Part D low-income drug subsidy, which rose steadily over the period and was 43% larger in FY2015 ($26 billion) than in FY2008 ($17 billion); the Additional Child Tax Credit (ACTC), which saw spending grow by 23% over the period, from $17 billion in FY2008 to $21 billion in FY2015 (although ACTC spending actually peaked in FY2009 at $24 billion); and Section 8 Housing Choice Vouchers, which grew by 24% (from $16 billion in FY2008 to $19 billion in FY2015). The final two programs in the top 10 are Temporary Assistance for Needy Families (TANF) and Education for the Disadvantaged Grants to Local Educational Agencies (Title I-A of the Elementary and Secondary Education Act). Trends in Non-health Care Low-Income Spending, FY2008-FY2015

As the health care category has grown as a share of all low-income spending, a declining share has gone to the remaining categories of benefits and services: cash aid, food assistance, education, housing and development, social services, employment and training, and energy assistance. Conclusion

In nominal dollars, federal spending for low-income programs rose by half (51%) over the eight-year period from FY2008 through FY2015. These spending patterns do not reflect congressional decisions about the amount or composition of low-income spending that should occur in the aggregate in any given year. Their size is a function of their design and budgetary classification (mandatory, including whether open-ended or capped, versus discretionary); congressional budget and appropriations processes; external influences affecting the cost of goods and services; and numerous other economic, demographic, social, and political factors. Important distinctions among low-income programs are masked when looking at total spending. In summary, programs included in this report are extremely diverse in their purpose, design, and target population. The report tells a story—that low-income spending has grown sharply in recent years and is dominated by spending for health care—but given the diversity among programs that serve low-income people, further generalizations require additional information and should be made with care. Because the report includes only mandatory and discretionary spending programs, it does not include tax provisions except mandatory spending for the refundable portion of the Earned Income Tax Credit (EITC) and the refundable ACTC.
The Congressional Research Service (CRS) regularly receives requests about the number, size, and programmatic details of federal benefits and services targeted toward low-income populations. This report is the most recent in a series that attempts to identify and discuss such programs, focusing on aggregate spending trends. The report looks at federal low-income spending from FY2008 (at the onset of the 2007-2009 recession) through FY2015 (after implementation of the Patient Protection and Affordable Care Act, or ACA).
Programs discussed here provide health care, cash aid, food assistance, education, housing and development, social services, employment and training, and energy assistance to low-income people and communities. Despite the common feature of an explicit low-income focus, these programs are extremely diverse in their purpose, design, and target population. They do not include social insurance (e.g., Social Security, Medicare, Unemployment Compensation), which is meant to be universal, or tax provisions, with the exception of two targeted tax credits.
Key findings include the following:
In nominal dollars (not adjusted for inflation), federal spending for low-income assistance programs grew from $561 billion in FY2008 to $848 billion in FY2015, a 51% increase over the eight-year period. This increased spending occurred in two distinct episodes. First, after a sharp spike in FY2009 affecting all categories of benefits and services, low-income spending peaked at $763 billion in FY2011, largely in response to the recession. The second episode was driven almost entirely by health care. Spending growth from FY2013 ($744 billion) to FY2015 ($848 billion) was primarily due to the ACA Medicaid expansion. Most low-income spending is for noncash benefits and services; health care is the largest category and Medicaid the largest individual program. In FY2015, noncash benefits and services accounted for 82% of all low-income assistance and cash aid comprised 18%. Health care dominates federal spending for low-income programs, accounting for more than half (52%) of such spending in FY2015. Medicaid alone comprised 45% of all low-income spending that year. This report identifies a large number of programs intended to assist low-income people, but spending is concentrated among a few. The four largest programs—Medicaid, the Supplemental Nutrition Assistance Program, Supplemental Security Income, and the Earned Income Tax Credit—together accounted for 68% of all low-income spending in FY2015, and the top 10 programs comprised 83%. After the top four, these programs include (in descending size) Federal Pell Grants, the Medicare Part D Low-Income Drug Subsidy, the Additional Child Tax Credit, Section 8 Housing Choice Vouchers, Temporary Assistance for Needy Families, and Title I-A Education for the Disadvantaged grants. Spending patterns described here do not reflect congressional decisions about the aggregate size of low-income spending that should occur each year. The size of each program is a function of its design and budgetary classification (mandatory versus discretionary), congressional budget and appropriations processes, external influences affecting the cost of goods and services, and other factors. This report tells a story—that low-income spending has grown sharply in recent years and is dominated by health care—but given the diversity among programs that serve low-income people, further generalizations should be made with care.