Examining the Growth of the Welfare State, Part I

Benefits Fraud and Improper PaymentsHouse Oversight and Government Reform Subcommittee on Health Care and Financial Services · February 11, 2025 · 119th Congress
The House Oversight Subcommittee on Health Care and Financial Services held this hearing, the first in a planned series titled "Examining the Growth of the Welfare State," to review how the roughly 90 federal means-tested welfare programs have expanded since the 1960s and whether their benefit-phaseout structures discourage marriage and work. Begins at ▶ 0:00:00
Transcript
Highlights

Title

House hearing examines marriage penalties and growth of federal welfare programs

Purpose

The House Oversight Subcommittee on Health Care and Financial Services held this hearing, the first in a planned series titled "Examining the Growth of the Welfare State," to review how the roughly 90 federal means-tested welfare programs have expanded since the 1960s and whether their benefit-phaseout structures discourage marriage and work. Witnesses Robert Rector (Heritage Foundation), Patrice Onwuka (Independent Women's Forum), and Michael Linden (Washington Center for Equitable Growth) testified on marriage penalties, program costs, fraud, and proposed Medicaid cuts. Members also debated corporate tax subsidies, immigrant eligibility for benefits, and inspector general oversight. Begins at▶ 0:00:00

Who spoke

• Chairman Glenn Grothman (R-WI)▶ 0:00:00: Opened by arguing the current welfare system penalizes marriage, citing a rise in non-marital births from ~5% in 1960 to ~40% today▶ 0:00:00; said $23 billion was spent on health care for illegal immigrants and $11.6 trillion on food stamps/child nutrition in 2023, plus over $100 billion in improper payments last year▶ 0:01:31; closed by reiterating that welfare's structure, not its cost, is the core problem▶ 1:59:17.

• Ranking Member Raja Krishnamoorthi (D-IL)▶ 0:03:32: Described his family's reliance on food stamps and public housing after his father lost income in 1973▶ 0:04:33; warned of reported ~$2 trillion in proposed Medicaid cuts▶ 0:06:34 and cited a USDA finding that each additional SNAP dollar raises GDP by $1.54 in a downturn▶ 0:07:04; later cross-examined Rector on prior statements questioning whether poverty harms children▶ 1:08:14 and pressed Linden on the impact of a $2 trillion Medicaid cut▶ 1:11:16.

• Robert Rector, Heritage Foundation▶ 0:42:33: Testified that all 90 major welfare programs impose steep "marginal tax rates on marriage," using an example where a cohabiting couple loses roughly $28,000 in combined benefits by marrying▶ 0:46:04; cited a ~30% fraud rate in the EITC and said work requirements imposed in the 1990s cut non-marital teen pregnancy by 70-80%▶ 0:47:35.

• Patrice Onwuka, Independent Women's Forum▶ 0:48:05: Said welfare spending is projected to grow 34% over 10 years, from $1.2 trillion to $1.6 trillion, spread across 15 food-aid agencies, 13 housing agencies, and 12 health agencies▶ 0:49:36; cited a GAO estimate of $2.7 trillion in fraudulent payments over the past decade▶ 0:52:37 and said 60% or more of non-disabled adults on some programs are not working▶ 0:51:37.

• Michael Linden, Washington Center for Equitable Growth▶ 0:53:37: Argued federal investments in health, nutrition, and housing are moral and economic necessities and that the tax code, not welfare, is "rife with loopholes"▶ 0:54:38; said the 2017 corporate tax cut has cost roughly $1 trillion to date▶ 0:58:10 and that federal income-support spending fell to 1.3% of GDP in 2024 from 1.8% a decade earlier▶ 0:56:39.

• Rep. Paul Gosar (R-AZ)▶ 1:12:17: Questioned Rector on Arizona's Medicaid "access" waiver and argued capping Medicaid growth to inflation would push savings toward tax cuts rather than cuts to care▶ 1:13:48; asked Onwuka about pandemic-era continuous Medicaid enrollment fueling waste▶ 1:14:48.

• Rep. Randle (D-WA)▶ 1:17:50: Described her disabled sister's survival via Washington's early Medicaid expansion and her family's use of SNAP after her parents' divorce▶ 1:18:20; argued benefit "cliffs" and marriage penalties keep disabled parents from marrying for fear of losing coverage▶ 1:20:21.

• Rep. Sessions (R-TX)▶ 1:22:53: Proposed a hypothetical flat benefit cap—suggesting $100,000 total for a married family of four—so benefits would not phase out and penalize marriage▶ 1:24:24.

• Rep. Simon▶ 1:29:58: Shared her experience as a teen mother receiving $28 a month in food stamps and being humiliated buying groceries with WIC▶ 1:31:29; later described touring a children's hospital reliant on the 340B drug pricing program and asked Linden about the effects of proposed $2 trillion Medicaid cuts▶ 1:33:00▶ 1:34:30.

• Rep. Gil (R-TX)▶ 1:35:30: Argued welfare incentivizes illegal immigration, listing over a dozen programs immigrants can access▶ 1:36:31 and citing roughly $50 billion in federal and $100 billion in state spending annually on illegal immigrants and their families▶ 1:39:33.

• Rep. Bell (D-MO)▶ 1:40:34: Said Trump fired agency inspectors general in his first week and cited a finding that IGs recovered $93 billion in fiscal 2023, or $26 saved per $1 invested in oversight▶ 1:43:06; asked Linden about the impact of firing the HHS Inspector General on Medicare/Medicaid fraud▶ 1:43:37.

• Rep. Maguire (R-VA)▶ 1:47:40: Called it "immoral and indefensible" to spend $1.6 trillion with no clear accounting of where funds go▶ 1:48:41; pressed Onwuka on work requirements and cited a figure of 24.6 million able-bodied Medicaid adults reporting no earned income▶ 1:51:12.

Key moments

• Rector said a cohabiting couple earning $20,000 and $30,000 would lose about $28,000 in combined welfare benefits if they married, calling it "an absolutely nutty system"▶ 0:46:04▶ 1:01:41.

• Onwuka cited a GAO estimate that taxpayers lost between $200-500 billion annually, totaling roughly $2.7 trillion, in fraudulent welfare payments over the past decade▶ 0:52:37.

• Linden said the 2017 corporate tax cut has cost about $1 trillion to date and will cost trillions more, while corporations "did not raise wages or create more jobs"▶ 0:58:10.

• Krishnamoorthi repeatedly asked Rector to confirm past statements questioning whether poverty harms children and whether he is a nutritionist or doctor, an exchange Rector called "grandstanding"▶ 1:08:14▶ 1:09:45.

• Krishnamoorthi and Linden warned that a $2 trillion Medicaid cut, described as one-third of federal Medicaid spending, could cause "tens of millions" to lose coverage, citing one proposal estimated at 36 million losing coverage▶ 1:11:16▶ 1:11:46.

• Sessions proposed capping total benefits for a married family of four at a flat figure like $100,000 rather than phasing benefits out, to remove marriage penalties▶ 1:24:24.

• Simon described receiving $28 a month in food stamps as a teen mother and being asked to put back milk exceeding her WIC allotment▶ 1:31:29▶ 1:31:59.

• Gil said the federal government spends roughly $50 billion and state governments roughly $100 billion annually on benefits for illegal immigrants and their families, listing over a dozen programs they can access▶ 1:36:31▶ 1:39:33.

• Bell said Trump's firing of agency inspectors general, including at HHS, removes oversight worth $26 saved per $1 invested based on $93 billion recovered in fiscal 2023▶ 1:43:06▶ 1:43:37.

• Grothman's closing statement said non-marital births rose from 4-7% in the 1950s-60s to over 40% today, attributing the change largely to marriage penalties across the roughly 90 welfare programs▶ 2:01:19▶ 2:01:49.

Metadata

CommitteeHouse Oversight and Government Reform Subcommittee on Health Care and Financial Services
Chamber / CongressHouse · 119th Congress
DateFebruary 11, 2025
TypeHearing
Witnesses
Ms. Patrice Onwuka — Director / Center for Economic Opportunity, Independent Women's Forum
Mr. Robert Rector — Senior Research Fellow / Center for Health and Welfare, The Heritage Foundation
Mr. Michael Linden — Senior Policy Fellow, Washington Center for Equitable Growth
Videoyoutube
Transcript190 caption blocks · 15,354 words · 2:05:53 runtime
EventCongress.gov 117879