C'mon, Dan. You know better than that. There is a place in historical comparisons for constant dollars (dollars adjusted for inflation; it doesn't matter what year you use as a base), and current dollars (actual dollars paid in or paid out at the time the payment occurred). Unless you're talking specifically about inflation itself, and trying to isolate it from any meaning about what we earn or what we pay out, there's little use for current dollars. That's why you seldom see it in economic discussions.
If we priced these things in terms of a market basket of food, or clothing, or whatever, it would be equivalent to pricing them in constant dollars. Think of constant dollars as the equivalent of barter for equivalent goods.
There's the advantage of using constant dollars. If the graph was horizontal and flat, it would mean that the actual dollar amounts paid out exactly kept pace with inflation. Since the curve goes down after 1980, it means that the welfare payments went *down* after 1980 -- they didn't keep pace with inflation.