March 15, 2023

Biden’s Budget: A Future That’s Built on Government Dependence

Instead of addressing record inflation, encouraging work, and preventing a recession, Biden’s Budget expands welfare without work incentives trapping a new generation of Americans in poverty and dependence.

$2.6 Trillion in New Entitlement Program Spending

In fiscal year 2022, the federal government spent $1.19 trillion on more than 80 different welfare programs. That represents almost 20% of total federal spending and a quarter of tax revenues in 2022 or $9,000 spent per American household. The Biden Budget proposes more than $2.6 trillion in new entitlement program spending, 3% of total spending and 4% of revenues, adding to the already unsustainable debt trajectory and further fueling inflation. Biden’s massive entitlement expansion will add trillions to CBO’s current baseline, which projects $12.7 trillion in spending on these programs over the FY 2024-2033 budget window.

Biden Budget Expands Entitlements (outlays in billions of dollars)
Child Tax Credit Expansion for Three Years $469.9
Government Child Care $424.3
Government Paid Family Leave $325.0
Government Preschool $200.0
Force States to Expand Medicaid $200.0
Expand Indian Health Service $185.3
Medicaid Home and Community-Based Care Services $150.0
Expand EITC $136.7
Expand Obamacare Subsidies $130.0
Double Pell Grant $96.1
“Free” Community College $90.0
Expand Housing Subsidies $60.0
Public Health $43.3
Behavioral Health $41.1
"Equity"-Based Tuition Subsidies $30.5
Expand School Meal Subsidies $14.6
Extend Trade Adjustment Assistance $2.0
Medicaid Nutrition Coverage $1.7
Total $2,600.5

Millions Added to the Welfare Roll

11.1 Million More People on Medicaid

  • Since President Biden took office in January of 2021, Medicaid enrollment has grown by 11.1 million individuals, while annual Medicaid spending has increased by $69 billion or 13%.
  • The Biden Administration has extended the Public Health Emergency six times despite COVID-19 infection rates dramatically dropping. The Biden Administration estimated that 9.5 percent of Medicaid enrollees (8.2 million) are currently enrolled but do not meet eligibility requirements.
  • Biden’s FY2024 Budget proposes more than $200 billion in new spending to expand Medicaid, with no improvements, and no flexibility for states to meet the needs of their Medicare populations.  
6.6 Million More People on Obamacare
  • Since President Biden took office in January of 2021, Obamacare enrollment has grown by 6.6 million individuals, including people whose income exceeds Obamacare’s original limits.
  • Biden’s 2021 partisan American Rescue Plan (ARP) spent nearly $35 billion to temporarily expand Obamacare subsidies of which $22.5 billion went to individuals who already had subsidized Obamacare coverage and $13 billion went to new Obamacare enrollees, including our nation’s highest earners with income well over 400% of the Federal poverty level (FPL).
    • Biden’s 2022 so-called Inflation Reduction Act extended these Obamacare subsidies for three years, at the cost of $64 billion. Just 4.6% of previously uninsured Americans are estimated to gain coverage from the expanded Obamacare subsidies.
  • Biden’s FY2024 Budget proposes to make permanent these increased Obamacare subsidies, doubling down on a government run health care system that failed to lower costs, increase access, and improve outcomes - costing taxpayers over $183 billion, and further fueling inflation. 
  • Additionally, Biden’s unlawful reinterpretation of the original Affordable Care Act statute incentivizes employers to reduce or eliminate their contributions to dependent coverage.
    • CBO projected that Biden’s regulatory action would increase the deficit by $34 billion and transition 600,000 individuals who already have employer-sponsored coverage onto Obamacare.
Expanding Welfare Without Work 
  • President Biden’s 2024 budget continues his Administration’s disturbing trend of discouraging work. The Biden Budget proposes resurrecting the expanded Child Tax Credit spending program from the ARP, radically changing the long-standing, bipartisan Child Tax Credit by removing work requirementsand turning it into an unconditional cash payment per child.
  • This policy would cost taxpayers an astonishing cost of $429 billion despite only expanding for just three years. However, the removal of work requirements would be permanent policy.
  • If the policy was made permanent, Joint Committee on Taxation (JCT) analysis projects, over the next decade, this expanded entitlement programs would:
    • Cost taxpayers $1.4 trillion over the next decade,
    • Shrink the economy by $50 billion,
    • Lead to a $19 billion loss of private-sector investment,
    • Sideline 300,000 workers, pushing more Americans on welfare dependence.
  • Biden discourages work at precisely the wrong time:
Billions of Taxpayer Dollars Wasted on Fraud and Abuse

In 2021, according to the Government Accountability Office, the government spent at least $279 billion in known improper payments – an 8.6% improper payment rate – equivalent to more than $2,000 per household. The vast majority of those improper payments are concentrated in welfare programs.

  • According to the Centers for Medicare and Medicaid Services (CMS), The 2022 Medicaid improper payment rate was 15.62%, or $80.57 billion (it was over 21.7% in 2021). In addition, for CHIP, the 2022 improper payment rate was 26.75%, or $4.30 billion (it was over 31.8% in 2021).
  • As for Food Stamps, a 2019 report by the Governmental Accountability Office estimates fraud could cost taxpayers anywhere from “$960 million to 4.7 billion.”
  • In 2021, the Child Tax Credit cash grants had a 13% improper payment rate, costing taxpayers more than $5.2 billion. The IRS projects that 28 percent of Earned Income Tax Credits are improperly paid.
  • A January 2023 Government Accountability Office report suggested at least $60 billion was lost to fraudulent Unemployment Insurance payments since the start of the pandemic. Some estimates by outside experts say as much as $400 billion, or nearly half, of unemployment benefits paid during the pandemic may have been stolen.
  • Improper payment rates by program:
    • Medicaid: 15.6% - $81 billion
    • CHIP: 27% - $4.3 billion
    • Child Tax Credit: 13% - $5.2 billion
    • COVID Unemployment Insurance: nearly 50% - $400 billion
    • Food Stamps: 6.18% - $960 million - $4.7 billion