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U.S. entitlement spending is increasingly going to the middle class, according to newly released data by the Congressional Budget Office.

Expand chart
Data: Congressional Budget Office; Chart: Chris Canipe/Axios

Why it matters: As wages have remained stagnant, more people can't afford middle-class basics, and income inequality grows, the middle class is increasingly relying on the federal safety net, according to the new report by Brookings Institutions' Future of the Middle Class Initiative. "It is a mistake, now, to think of welfare as something just for the poor," Richard Reeves, the report's author tells Axios.

The trend is most clearly seen in the second and middle income quintiles, where the average household income was $31,087 and $54,041 in 2014, according to the Tax Policy Center.

  • One of every $7 spent on social program benefits went to families in the middle quintile of the income distribution in 2014.

Federal safety net money is also making up a greater share of lower-middle class incomes, according to the report. Meaning that not only is more money going to the middle class, some middle class families depend on it more.

One key finding: Health care is a big driver. Medicaid expansion has made more lower-middle income Americans eligible for the program, and now less than half of Medicaid spending goes to the lowest quintile.

  • Medicaid spending on elderly households (65 years or older) has tripled since 1979, and around 60% of it went to the elderly in the middle class in 2014, the study found.
  • Increased subsidies for the Affordable Care Act has also contributed to the overall trend.
  • There has also been notable growth in the share of Supplemental Nutrition Assistance Program (SNAP) benefits that have gone to those lower-middle income quintiles, according to the report.

Go deeper: With Richard Reeve's full report.

Note: The welfare spending data include Medicaid and the Children’s Health Insurance Program, Supplemental Nutrition Assistance Program, Supplemental Security Income, housing assistance programs, subsidies for Medicare Part D, Temporary Assistance for Needy Families, child nutrition programs, the Affordable Care Act's cost-sharing reduction payments, state and local assistance programs and the Low Income Home Energy Assistance Program.

Go deeper

Updated 2 mins ago - World

Russia to blame for Litvinenko's killing, European Court says

The grave of Alexander Litvinenko at Highgate Cemetery in London, England. Photo: Jim Dyson/Getty Images

The European Court of Human Rights ruled Tuesday that Russia "was responsible for assassination of Aleksandr Litvinenko" in London, England.

  • Litvinenko died in 2006 after being poisoned in the city with Polonium 210, a rare radioactive isotope.

Editor's note: This a breaking news story. Please check back for updates.

The great holiday shortage

Illustration: Aïda Amer/Axios

Brace yourself: It's going to be hard to find everything — not just your favorite holiday foods and hot toys and gifts but also basic staples like coffee and footwear — because of supply chain problems that will likely persist at least through next spring.

Why it matters: Scarce resources will likely lead to more scuffles among shoppers in brick-and-mortar stores, fewer deals for Black Friday and online price wars that could threaten the livelihood of already-suffering retailers.

Updated 2 hours ago - World

Trudeau's Liberals set to form minority government after Canada election win

Canadian Prime Minister Justin Trudeau. Photo: Jeff Vinnick/Getty Images

Canadian Prime Minister Justin Trudeau's Liberal government was reelected for a third term in Monday's parliamentary elections, but preliminary results show it failed to win a majority.

Why it matters: Trudeau has governed Canada with a minority of legislative support in parliament for the past two years. Last month, he called for an election two years earlier than scheduled in the hope of forming a majority government.

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