U.S. Income Security System Needs Leadership, Policy, and Effective Management

Over the past 10 years, Federal income security spending has risen by nearly 250 percent to become the largest part of the budget. The 37 officially labeled income security and related programs in the 1979 Federal budget cost about $215 billion, or about 43 percent of the President's $500 billion budget. Income security tax expenditures, resulting from provisions of the income tax system which allow retention of income that otherwise would be taken through taxes, totaled about $30 billion. State and local programs usually supplement Federal programs or provide assistance to persons not eligible for Federal aid. Along with private sector and charitable activities, these programs account for billions of dollars in additional expenditures. Individually the programs serve worthwhile, necessary goals, and collectively they have done much to prevent or eliminate poverty and lessen tax burdens for millions of Americans. Still there is widespread criticism of the system; the programs are too profuse, too complex, and seem unmanageable. Unmet needs, inequities, inefficiencies, strong work disincentives, and questions about the Nation's continuing ability to meet income security needs and stay within acceptable spending levels remain. Since 1935, the system has expanded substantially in a fragmented, incremental way. Old programs have been liberalized and new and specialized programs have been enacted. For working purposes, GAO defined income security as the whole of government and nongovernment programs and policies aimed at insuring that basic consumption needs are satisfied for all individuals not fully able or not expected to satisfy such needs for themselves through current employment. Four types of programs are included in this definition: public and private insurance, public assistance, public service employment, and market intervention or regulation.

Over the past 10 years, system studies have repeatedly documented income security program problems. The following situations tend to recur. The programs contribute to common goals, often serve the same individuals, and interact substantially with one another. There is a failure to view income security programs as a coherent whole or system within a well-defined policy framework. The fragmented and uncoordinated nature of the system complicates policymaking, management, and evaluation. The comprehensive knowledge and information needed to evaluate the system do not exist. Despite these findings, each program or set of related programs continues to be managed as a single entity with little deliberate planning of the relationship of the programs to one another. Because of data and measurement deficiencies, there is no way to determine who benefits, how often, with what degree of accuracy, and by what measure of social or economic need. Reform efforts cannot be measured for the extent of their improvement over existing programs. The reliability of traditional indices is questionable. At the program level, information is not consistent and is not readily available to compare programs. At the operating level, recent legislation has made exchanges of information difficult and sometimes untimely. Because the income security system affects virtually all individuals and sectors, all proposals for change will encounter some opposition. Lack of central leadership for the programs underlies many of the problems found.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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