Five Facts on Major Social Spending Programs

Congress is currently considering the Build Back Better Act, the third major spending proposal of Joe Biden’s presidency following the American Rescue Plan Act and the bipartisan Infrastructure Investment and Jobs Act. Initially intended to include about $3.5 trillion in new spending, the size of the package has been reduced — but it would still be one of the biggest spending bills in U.S. history.

Here are five facts on the BBB and other major social spending programs.

1. The House version of the proposed Build Back Better Act is estimated by the Committee for a Responsible Federal Budget to cost about $2.4 trillion over 10 years.

This includes $555 billion for clean energy and climate change provisions, $400 billion for childcare and preschools, $200 billion for child tax and earned income tax credits, $150 billion for housing, and $130 billion for Affordable Care Act credits, among other expenditures.

2. In its first year, President Franklin Roosevelt’s Works Progress Administration cost $4.9 billion, which in today’s dollars is about $1.9 trillion.

The WPA, created as part of President Roosevelt’s New Deal in 1935, provided paid jobs to the unemployed during the Great Depression, and also included massive infrastructure investments such as the creation of the Tennessee Valley Authority.

3. Medicare and Medicaid cost about $1.4 trillion in 2020.

Medicare provides health insurance for more than 61 million Americans, while Medicaid covers more than 75 million low-income individuals. Both programs were created as part of President Lyndon Johnson’s Great Society. The $1.4 trillion represents roughly one-fifth of total federal spending.

4. The Social Security program paid out just over $1 trillion in 2020.

The program, created by President Roosevelt in 1935, is entirely funded by payroll taxes. Employers and employees each pay 6.2% of wages up to the taxable maximum of $142,800, while self-employed individuals pay 12.4%.

5. The federal government spent close to $400 billion on various social safety net and antipoverty programs last year.

These programs include Head Start, the Low Income Home Energy Assistance Program (LIHEAP), the Supplemental Nutrition Assistance Program, Temporary Assistance for Needy Families, WIC (Women, Infants and Children), and various other child nutrition and housing assistance programs.

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