From The High Cost of Good Intentions: A History of U.S. Federal Entitlement Programs by John F Cogan (pp. 381-382). Stanford University Press. Kindle Edition:
The data reveal just how far entitlements have departed from their original purpose of providing a measure of security from economic destitution among the elderly, the disabled, and the unemployed and to alleviate poverty among the general population. In 2015, 62 percent of recipient households, encompassing over 100 million U.S. residents, had incomes that were above the poverty line prior to the receipt of assistance. Thirty-one percent, nearly 60 million persons, were in the upper half of the U.S. income distribution. The distribution of entitlement dollars is similarly striking. Nonpoor households received 48 percent of the $2.4 trillion that was distributed in federal cash and in-kind entitlement benefits. Households in the upper half of the income distribution received $725 billion of this assistance; households in the top fifth received $225 billion.7
Most entitlement spending serves purposes other than reducing the degree of poverty among the poor. The degree is best measured by the percentage of assistance needed to bring the income of the nation’s poor households up to the poverty line. This number excludes the portion of assistance to poor households that raises their income over and above the poverty line. In 2015, only 26 percent of all cash entitlement assistance was spent to reduce the extent of poverty. Including the market value of in-kind benefits, only 21 percent of entitlement assistance went to alleviating poverty.8 Sixty-three percent of all cash and in-kind benefits distributed to poor persons was over and above the amount necessary to lift them from poverty.
The main reason that such a large percentage of entitlement spending is received by nonpoor households is that the vast majority of assistance is delivered through social insurance programs. These programs, which by design provide assistance largely independent of financial need, distribute four dollars of assistance for every dollar of entitlement aid delivered through means-tested programs. Over 90 percent of social insurance assistance consists of cash.
This is the most important book of the year on policy. Entitlements are seductive to expand, and nearly impossible to cut. Prepare for the demagoguery when Congress starts to address this issue.