Welfare reform - is it working?

16 YEARS OF TANF

Welfare as we knew it ended 16 years ago when President Clinton signed Temporary Assistance to Needy Families (TANF) into law.  In those 16 years, TANF has come to play a much more limited role in helping families escape poverty or deep poverty (i.e., income below half the poverty line) today than did its predecessor, Aid to Families with Dependent Children (AFDC). The national TANF caseload has declined by 60%, even as poverty and deep poverty have worsened.  

While the official poverty rate among families declined in the early years of welfare reform, when the economy was booming and unemployment was extremely low, it started increasing in 2000 and now exceeds its 1996 level. These opposing trends — TANF caseloads going down while poverty rises — mean that a much smaller share of poor families receive cash assistance from TANF than they did before welfare reform. And, because the $16.6 billion annual federal TANF block grant has not been adjusted for inflation, it has lost significant value over time.  States receive 30% less in real (inflation-adjusted) dollars than they did in 1997.

Source: Center for Budget and Policy Priorities, 8/22/12, TANF ChartBook

FOOD STAMPS REPLACE WELFARE IN THE SAFETY NET

TANF “proved a total disaster” in the recession that started in 2008, according to journalist Sasha Abramsky. As unemployment doubled in many states, the number of TANF recipients decreased or only marginally increased. Now, “[t]he severity of the means tests, work requirements, and other conditions some states impose, such as drug tests, has reduced the applicant and beneficiary pools.” And for those who manage to receive TANF, benefits amounts have decreased.

These days, SNAP is the “central counter-cyclical institution,” with 46 million recipients. The program ends up being the main form of assistance during recessions because anyone below a certain income line is automatically eligible. “Raising the food-stamp aid thresholds and letting benefits kick in for the working poor as well as the very poor would instantly make the plan more counter-cyclical, better compensating for lost earnings as hours worked and hourly wages decline,” “Abramsky avers.

Source:  American Prospect, 7/23/12, creating-countercyclical-welfare-system