Create Jobs Through Economic Stability, Not Expanding the Safety Net

By Jason Stverak

On Tuesday, President Barack Obama warned of damaging job losses if Congress doesn't act to prevent the sequester.

"These cuts are not smart, they are not fair, they will add hundreds of thousands of people to the unemployment rolls," Obama said. "This is not an abstraction. People will lose their jobs. The unemployment rate might tick up again."

But the president's rhetoric has not translated into results. Obama has failed to put forth his own budget this year, missing the legal deadline to do so for the fourth time in five years. Last year, Obama’s budget received zero votes in the Senate. If the president is really serious about saving jobs, he should start by establishing a clear allocation of resources, rather than relying on Congress to pass piecemeal legislation to keep the government running. 

House Budget Committee Chair Paul Ryan promised Sunday that the House would pass a budget this year that actually balances the budget – in the next 10 years. “We need to start thinking about doing our jobs after these elections than thinking about the next election,” Ryan said.

Unfortunately, many of our leaders have placed much of their attention on expanding the social safety net instead of working to solve the underlying problems facing our country. At the beginning of February, with unemployment rising to 7.9 percent – and with actual unemployment remaining at 14.4 percent – the Department of Commerce announced that the U.S. economy shrank in the 4th quarter of 2012. This continued the four-year trend of floundering economic recovery and less economic empowerment for those who need relief the most.

In 2011, over $900 billion was spent on means-tested welfare programs between the federal government and the states, with the federal government spending more than $100 billion, about 2.6 percent of the federal budget, on food assistance programs alone. The Supplemental Nutrition Assistance Program (SNAP), more commonly known as food stamps, has grown to cost over $80 billion per year. According to a report from the U.S. Department of Agriculture, the number of people enrolled in the food stamps program has risen in 2012 to just under 48 million, indicating that an additional 14.7 million people have signed up for assistance since January 2009.

Although food stamps are intended to give eligible recipients the means to purchase nutritious meals, numerous cases of fraud and abuse have been reported in New York and New Mexico. Investigations found electronic benefit transfer (EBT) cards were used to obtain large amounts of cash through large purchases at stores or, in the case of New Mexico, large withdrawals made at out of state ATM machines—sometimes totaling $500 or more. These transactions hindered any attempt to trace how the cash was actually spent but at times were found to take have taken place inside casinos, liquor stores, and strip clubs.

As these cases illustrate, the billions of dollars spent by federal and state governments on welfare programs fall subject to abuse that ends up costing taxpayers year after year. Not only are these violations an affront to the public trust, they underscore the larger problems of a fundamentally flawed social welfare system. Instead of focusing on promoting small business and individual potential, the government spends the majority of its resources expanding a social safety net that is wrought with abuse.

As the economy continues to slump along, the free market principles commonly derided as uncompassionate by welfare proponents actually present a lifeline for our excessive state and federal budgets and the taxpayers’ wallets—not to mention the poor themselves. It may seem like common sense to help alleviate this economic disparity by promoting small business, but unfortunately, for many it's more politically expedient to villainize job creators and stick them with the bill for another short term solution.

"The fact is we've had plenty of spending cuts," House Minority Leader Nancy Pelosi recently said in an interview. "So, it is almost a false argument to say we have a spending problem."

Sadly, it's that type of thinking that got us here in the first place. A society in which 1 in 6 people live a subsidized, taxpayer-funded way of life simply isn't sustainable. The short-term safety net originally envisioned has turned into hammock supported by the middle class. If we want to turn our economy around and foster job creation, we need to focus on long term solutions and spend less on temporary measures that slap a Band-Aid on the problem while stalling job creation.

Jason Stverak is the President of the Franklin Center for Government and Public Integrity.

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