Limbaugh dramatically overstated administrative costs of welfare

On his September 16 show, nationally syndicated radio host Rush Limbaugh repeated his frequent but false claim that administrative costs account for 78 cents of every dollar of welfare spending. Media Matters for America was unable to determine the origin of Limbaugh's wildly inaccurate figure, but Government Accountability Office (GAO) reports reveal that actual costs are far lower, with combined federal and state administrative expenses for most of the welfare programs studied remaining below 20 percent of total expenditures.

A June 30 GAO study reported total federal and state expenditures as well as federal and state administrative costs for several means-tested government programs for FY 2004. Dividing “administrative expenditures” by “total expenditures,” Media Matters for America determined that administrative costs for Medicaid -- by far the country's largest means-tested welfare program -- were 4.9 percent of total costs. For the food stamp program, administrative costs were higher: 17.1 percent. Administrative costs were 4.5 percent for the State Children's Health Insurance Program (SCHIP) and 2.1 percent for the Child Care and Development Fund (CCDF). The report notes that "[t]he specific types of expenditures that are considered administrative differ considerably across the programs."

In addition, the Office of Family Assistance recently reported to Congress that combined federal and state administrative costs for the Temporary Assistance for Needy Families (TANF) program were 10.3 percent of total expenditures in fiscal year 2002.

Using FY 1998 data, a November 2001 GAO report examined federal costs for a broader collection of 11 means-tested welfare programs. The report included total federal expenditures and an "administrative cost estimate" for six programs not included in the 2005 report. Four of these programs are funded entirely with federal dollars, and Media Matters determined that none of them had administrative costs anywhere near 78 percent, the level Limbaugh claimed:

  • Special Supplemental Nutrition Program for Women, Infants, and Children (WIC): 9.0 percent
  • Housing Choice Voucher (Section 8): 5.2 percent
  • The Department of Housing and Urban Development's public housing program: 22.5 percent
  • Low-Income Home Energy Assistance Program (LIHEAP): 9.1 percent

Two other programs included in the 2001 report, Supplemental Security Income (SSI) and the School Meals Program, received a small portion of their funding (less than 10 percent) from state governments in FY 1998. The GAO report reveals that in that year, administrative costs accounted for an estimated 7.7 percent of federal SSI expenditures and 8.0 percent of federal spending on school meals. Even if the entirety of the state portion went to the administration of these programs, combined federal and state administrative costs would still be below 20 percent of total expenditures. Finally, the report estimated that the federal administrative costs amounted to $12,452,000,000 for the 11 programs studied -- 6.4 percent of total federal expenditures on these programs.*

From the September 16 broadcast of The Rush Limbaugh Show:

LIMBAUGH: For example, I don't think it's -- it may still be this way. I'm sure it is because we're spending more on poverty in the Bush years than we did in the Clinton years. But the administrative cost on a dollar of welfare, last I checked, which was some years ago, was 78 cents. Meaning that 22 cents of every dollar is what got to the recipient. Well, that's because it goes through layers and layers and layers of bureaucracy, and who knows how many pockets it ends up in before it gets to where it's headed or intended? So, in this case, make sure as much of this [Hurricane Katrina relief funding] gets directly to people -- the end users, the recipients -- as possible. And that would really improve the efficiency of this.

Limbaugh has made similar statements at least four other times since the beginning of 2004. On April 8, 2004, and April 16, 2004, Limbaugh claimed that administrative costs account for 72 percent of welfare spending. He revised his figure upward to 78 percent in two shows earllier this year, on January 17 and September 8.

* The 2001 GAO report provides a “10-program total” -- $194.7 billion -- for federal expenditures on the programs it studied. The GAO omits federal expenditures for SCHIP, which were apparently not available in FY 1998, the first year it was funded. In a footnote, the GAO notes that $4.3 billion was appropriated for SCHIP in FY 1998. If SCHIP appropriations are included in the federal expenditures total, the administrative cost estimate for the 11 programs actually falls to 6.2 percent.