Reforming Welfare–Take Two

Reforming Welfare–Take Two

As Congress revisits the welfare debate, it’s time to look at what the law has wrought.


In a more progressive political world, the current recession would alter and even accelerate the debate over reauthorization of the 1996 welfare law, which expires this year. Far from a success in any case, the 1996 law was at best a policy designed for times when jobs are plentiful. Its drafters were heedless of what a recession would bring, perhaps thinking the business cycle, like history, was no longer operative.

Whatever they thought, the recession is here, and we entered it with a severely weakened safety net. Our unemployment compensation system has been deteriorating for decades. It will reach slightly more than a third of those who lose their jobs and replace only about a third, on average, of the wages of those who do qualify for help. Welfare, with its time limits and complete freedom for states to offer as little help as they like, will not fill the gap. People who go to the welfare office for cash help, food stamps and Medicaid will often be turned away, legally or illegally, because of restrictions on benefits for immigrants, a “work first” welfare office culture that will be slow to change even when there are no jobs available, and lawless practices that divert families away from the help they need.

It’s possible the new year will bring a readiness to think a little more carefully–as governors contemplating declining revenues come to Washington with palms outstretched, but also as people mobilize to demand better policy. A wave of organizing in low-income communities over the past five years–now joined by labor, children’s, women’s, faith and civil rights organizations–has strengthened the constituency for action [see sidebar, page 18]. Polls show a renewed trust in government, and there has been an outpouring of community concern for the victims of terror and its economic aftershocks. Even President Bush has suggested that legal immigrants should be entitled to food stamps.

Public opinion about welfare has changed, too. The 1996 law did at least end the debate over the decrepit system that no one–least of all low-income parents–liked. The resentment and anger that surrounded the old system have largely dissipated, and the public is surprisingly supportive of positive policy. A recent survey conducted by the (admittedly liberal) Washington pollster Diane Feldman found wide support for expanded education and training, assisting families who are working but still poor, focusing welfare policy on poverty reduction and reducing or eliminating work requirements for families with young children.

Of course, the issues go far beyond reauthorizing Temporary Assistance to Needy Families (TANF), the program created in 1996. The challenges include making up for a labor market that fails to provide millions of workers with a living wage, health insurance or the possibility of advancement; addressing the ever-increasing shortage and skyrocketing cost of rental housing; ameliorating the struggles that low-income parents go through to hold jobs and nurture their children at the same time; making sure that both women and men have full opportunities for job success; rectifying the exclusion of immigrants from access to supports that other Americans enjoy; and repairing unemployment insurance so that adequate benefits are available to a greater proportion of the jobless. But welfare reauthorization is coming, and it is important, both intrinsically and because the welfare system is in many ways the “canary in the coal mine” that signals the quality of our national commitment to low-income families.

The aim in TANF reauthorization should be to transform the program nationally into what it has become in a handful of places: a ladder of opportunity for all low-income families, and a safety net for children in families who have lost jobs or have other problems that keep them from success in the job market. Welfare should be one part of a set of policies that promote a living income, grounded in the realities and limitations of low-wage jobs in America today. Viewed in this way, welfare policy would build on ideas emerging from the grassroots that reflect a value base more broadly shared than previous visions of welfare and antipoverty policy. This in turn would, at least relatively, create more political space for advocacy efforts.

Welfare Reform As We Know It

There is some good news, which has been trumpeted by politicians, and much bad news, about which we have heard far less. Welfare caseloads are still down dramatically, although with the recession they have begun to climb back up. Low-income single mothers are still in the labor market in unprecedented numbers. Poverty is down somewhat, at least through the year 2000. That’s the good news.

For the poorest families life actually got worse even before the recession hit. From 1995 to 1999, roughly 2 million families, with average incomes of about $7,500, lost about 8 percent of their income. This happened because they lost more in benefits, both welfare and food stamps, than they gained in earnings from work.

Most of those who are working are far from out of the woods. Their median income is about $7 an hour, and their median hours of work are about forty a week. The earned-income tax credit and other benefits will lift a full-time minimum-wage worker with two children over the poverty line, but the large number of part-time workers and those with larger families don’t even get that far (assuming a poverty line of $14,600 for a family of three has any meaning anyway).

Many families face hard choices between work and their children, but low-income families feel this tension most acutely. Obtaining safe and reliable childcare is a major struggle. And low-wage jobs aren’t family friendly–you generally can’t take time off to care for a sick child. An important new study by Jody Heymann and others at Harvard shows that mothers who receive welfare for more than two years have children with chronic health problems at twice the rate of mothers who have never been on welfare–41 percent versus 21 percent. But poor parents are far less likely than other parents to have benefits at their jobs that help to meet those greater needs. Thus, “work first,” the mantra of TANF, often means that work trumps parental responsibilities.

One of the secrets to the “success” of declining welfare rolls, meanwhile, is shrinking eligibility. Immigrants make up about 20 percent of the low-wage work force today, and our economy gains heavily from their labor and the taxes they pay. But even legal immigrants are barred by TANF from receiving federally financed cash assistance for the first five years they are in the country, and eligibility after that is completely up to the states. More than 60 percent of poor children get no welfare help, and the number of ineligible families is going to rise as more people use up their lifetime eligibility with each passing year (in all but a handful of states the lifetime limit is five years, or even less).

Still, eligibility doesn’t mean much. The red tape (multiple appointments, complicated forms, interminable waiting, worker rudeness and murky rules) discourages even the most desperate from seeking help. In many states, the official policy is “diversion”–if the applicant looks fit she is told to seek work.

Benefit levels have gone up a little in some states but are below the poverty line everywhere and below half the poverty line in many states. The price of assistance in some places–such as New York City–is to go to a “workfare” program that teaches no skills, provides no help in finding a job, pays no wage (and therefore allows no access to the earned-income tax credit), often denies necessary safety equipment and applies sanctions for the slightest infraction, real or alleged.

A Ladder of Opportunity

It doesn’t have to be this way. Welfare can be transformed from a punitive system cycling people in and out of the low-wage labor market into a ladder of opportunity for all low-income families–low-wage workers, unemployed parents, two-parent families and immigrants. If low-income people had access to the supports they need, most could lift and keep themselves out of poverty and take better care of their families.

Some states have adopted innovative policies that suggest a new vision for TANF nationally. Many of these changes have come about at least partly as a result of impressive organizing. Typically, low-income people develop an agenda and then work closely with others to advance it, including organized labor, faith-based groups and public-interest lawyers. Tactics have ranged from applying direct pressure at welfare centers, to exposing what is happening to families, to direct action and mobilization of large numbers of people. State legislatures have in the past been a tough sell for progressive antipoverty policies, but greater sophistication among grassroots groups and stronger alliances with other sectors have opened up more possibilities. Recent successes fall into three main areas:

§ Opening up access. In a few states you can receive TANF services if you are poor whether you get cash assistance or not. Some provide support to both single and two-parent families. Others have used state funds to replace benefits that immigrants lost under the 1996 law. Still others apply no time limits to people unable to find a job or otherwise not in a position to work.

§ Increasing family incomes and providing opportunity. The Minnesota Family Investment Program, among others, has shown that supplementing low wages pays off in family and child well-being. The Parents as Scholars program in Maine and equivalent efforts in Maryland and elsewhere have invested in the long-term prospects of low-income parents by allowing education and training to “count” as a work activity. Pennsylvania provides wage-paying jobs and training opportunities to unemployed parents. Some states and cities have adopted higher minimum wages and enacted living-wage ordinances. “Self-sufficiency standards” that measure the real cost of living for families of various sizes in different parts of states are now routinely used by some policy-makers.

§ Supporting family and child well-being. Montana’s at-home infant care program allows low-income parents to care for their own young children. A number of states have torn down barriers to enrollment in food stamps. Some states and cities have provided health insurance to both parents and children at levels well above the poverty line, expanded childcare availability and quality, and extended family leave and unemployment insurance coverage to low-wage workers. Michigan has no time limit for families that comply with program requirements, thereby rewarding families trying to get out of poverty.

We have learned from these experiences, but only the federal government can build on these examples with leverage and send positive signals about the goals of TANF to welfare offices across the country. With a souring economy and state retrenchment likely, the need for such signals is more urgent than ever.

To begin with, the federal government could draw attention to important precedents in health insurance and childcare policies embraced by some states. These changes accommodate the reality of low-income people’s lives by making benefits more seamless, less tied to their immediate circumstances. Because of the nature of the low-wage job market and the fragility of childcare and transportation arrangements, low-income people move in and out of jobs with frequent bouts of unemployment. To take this into account, some states are basing health coverage solely on income–for example, giving coverage to all children or parents below some multiple of the poverty line. Similar (although less sweeping) changes have been made in childcare programs. Overall, this means these benefits are more widely accessible to low-income people, instead of being designated for either “welfare families” or “working families”–a distinction that makes little sense given the constantly shifting status of low-income families.

TANF programs have not yet followed suit. In most states, a family must still have virtually no income or resources to qualify for cash assistance or TANF-funded education and training. Families that have been receiving TANF payments do sometimes qualify for cash supplements and services once they find employment (although in nearly all states time clocks continue to tick). But working families that never received TANF are excluded from those benefits and services. Thus, while parents receiving welfare are given support when they work, those who have remained off the rolls are not accorded the same treatment.

Framing the Coming Debate

As Congress revisits the welfare debate in 2002, three principles underlie a meaningful agenda for reform: Income support, education and training should be more widely available to low-income families; families and the government should both be responsible; and the well-being of families matters most.

The old system divided the welfare poor from the working poor, splitting the constituency for such programs. With the rolls now so small, the safety net of cash assistance has even fewer defenders. Emphasizing TANF’s relevance to a broader segment of the working poor makes sense not only as policy but as political strategy. The recession accentuates the point. TANF is an integral part of the panoply of protections for the unemployed, distinguishable only in technical details from the rest of the anti-recession toolbox (unemployment insurance, food stamps, energy and housing assistance, and so on). One crisis, one people, one safety net. The politics and the policy can go hand in hand.

Moreover, advocates will command moral authority by exposing how the current system consigns even rule-abiding TANF recipients to continuing poverty. Not applying time limits to families who “play by the rules” is a matter of fairness. So is making sure that two-parent families qualify for benefits, and assuring that child-support payments actually go to the children they are supposed to support instead of being kept by the state to offset past welfare payments. It is both better policy and better politics to offer TANF benefits to low-income workers–including cash supplements as well as education and training–regardless of whether a family received TANF before a member got a job.

Political force also inheres in the idea that families and the government should both be responsible. When people take responsibility for themselves but need support to achieve an income they can live on, they should get it. When the economy falters either nationally or locally, and when people with limited work experience and capacity cannot find work, time limits should be suspended and public jobs programs should offer work, training and placement assistance. Sufficient assistance should be guaranteed as the economy sours and joblessness continues to rise.

Family well-being is another idea that represents both policy truth and political saliency. Especially to protect children, an adequate cash safety net needs to be in place at all times. Requiring states to measure and report on the sufficiency of their cash grant levels against a fair standard is a minimum step to be taken. Requiring states and localities to follow their own rules is another. The federal government should penalize states that create a lawless culture in the welfare office, that inappropriately divert or arbitrarily sanction families, or that fail to screen and serve families in crisis, including domestic violence survivors. The meanest states need to be reined in–by, for example, requiring face-to-face interviews before anyone is cut off. Accommodating parents with sick, disabled or very young children, or infirm relatives, by reducing work requirements and suspending time limits would also promote family well-being, as would requiring employers to expand family-friendly policies and offering states incentives to establish paid family leave. At the end of the day, state performance should be measured against outcomes that matter, including the reduction of family and child poverty. States should be required to collect and publicly report data on their performance, broken down by race and ethnicity to insure that services are provided equitably.

A new vision for welfare will require many changes in perspective. Policy-makers and political elites will have to acknowledge that TANF needs to accommodate the realities facing low-income families today. States and welfare administrators will have to change the orientation of the system from “beat them down” and “get them off” to “lift them up.” Federal and state resources must be sufficient to meet the scale of the need.

Low-income people and their allies will have to articulate a bold new vision for poverty reduction and create the public will to realize it. This is a daunting task. Good antipoverty policy has never been a hallmark of the American social fabric.

But elements auguring positive movement are in play. People are in motion at the grassroots level. The public seems more receptive. The convergence of recession, time limits and brewing state fiscal crises creates an opening for change. In this context, a new vision for welfare may gain broader support than one might initially suppose. Certainly the price of inaction–for low-income people and for our society–is far too high.

Dear reader,

I hope you enjoyed the article you just read. It’s just one of the many deeply reported and boundary-pushing stories we publish every day at The Nation. In a time of continued erosion of our fundamental rights and urgent global struggles for peace, independent journalism is now more vital than ever.

As a Nation reader, you are likely an engaged progressive who is passionate about bold ideas. I know I can count on you to help sustain our mission-driven journalism.

This month, we’re kicking off an ambitious Summer Fundraising Campaign with the goal of raising $15,000. With your support, we can continue to produce the hard-hitting journalism you rely on to cut through the noise of conservative, corporate media. Please, donate today.

A better world is out there—and we need your support to reach it.


Katrina vanden Heuvel
Editorial Director and Publisher, The Nation

Ad Policy