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New Study Shows Federal Programs Trap People in Poverty

New Study Shows Federal Programs Trap People in Poverty

Working Americans Need Jobs and Opportunity – Not Handouts and Pity


(Washington, D.C.)A new study by the CATO Institute paints a disturbing picture of American anti-poverty programs.  According to CATO's research, our welfare system actually provides a disincentive to work, given the high level of benefits provided. Currently, welfare benefits continue to outpace the income that most recipients can expect to earn from an entry-level job, and the balance between welfare and work may have actually grown worse in the past few years. 

CATO reports the following findings:

  1. There are currently 126 separate federal anti-poverty programs. 
  2. Overall, these programs cost roughly $668.2 billion annually.
  3. Welfare currently pays more than a minimum wage job in 35 states.
  4. In 11 states, welfare pays more than the average pre-tax first year wage for a teacher.
  5. Far from condemning welfare recipients to a life of poverty, welfare actually exceeds the Federal Poverty Level in 42 states and D.C.

Daniel Garza, Executive Director of The LIBRE Initiative released the following statement:

"These findings call for Congressional attention. While most Americans would agree that taxpayer-funded welfare should be a tool to tide those in real need over until they get back on their feet, it should never be more attractive than a paying job. The abuse by the able-bodied at the expense of hard working Americans is objectionable. Incentivizing people to depend on the government through programs like this without a path to finding employment is detrimental to society and a betrayal of the American Dream. Is this the legacy the current Administration wants history to remember?

Millions of Americans are desperate for opportunity – but job creation continues to lag behind due to bad economic policies and regulations that stifle job creation. Instead, the government has added millions to the food stamps program, expanded unemployment benefits, and increased welfare handouts. People are currently trapped in a culture of dependency with no way to improve their lives or build a future for their family. America needs leadership that will change this course."

For interviews with a LIBRE representative, please contact: Judy Pino, 202-578-6424 or Brian Faughnan, 571-257-3309.