The Failure Of Welfare Reform Hits New Records


Welfare Reform 3x2


The percentage of poor families with children, those meant to be the primary beneficiaries of the Temporary Assistance for Needy Families program (TANF, or welfare), who don’t receive benefits has reached a record high, according to a report from Legal Momentum.

In 1996, just 28 percent of poor families with children missed out on the benefits. But that share has since soared, and in 2012 it hit a record of 74 percent.

1996 is the year President Clinton signed welfare reform into law, dramatically transforming the program. It changed from cost-sharing model, where the federal government’s contribution to fund state welfare programs increased as need increased, to a block grant, in which the government now gives states a fixed amount and they have wider discretion over how to design their programs. That amount hasn’t changed since the reforms took place, losing 30 percent of its value to inflation. Meanwhile, states have used their latitude to redirect much of the funding and took actions to shrink welfare rolls in the face of budget shortfalls.

The 1990s reforms have hampered the program from rising to meet Americans’ needs. While the number of poor families initially declined, it started increasing again in 2000 and has been growing, yet fewer and fewer families can rely on welfare to help them get by when they fall into poverty. “Over the last 16 years, the national TANF caseload has declined by 60 percent, even as poverty and deep poverty have worsened,” notes the Center on Budget and Policy Priorities.

It also failed to keep up with the spike in need from the recession. The number of unemployed people doubled between 2007 and 2009, but TANF’s rolls only rose by 13 percent, and in some states they actually fell. That’s in contrast to the Supplemental Nutrition Assistance Program (SNAP, or food stamps), which is not a block grant. It grew by 45 percent during that time period to help the larger number of struggling families get by.

SNAP continues to do more to help those in poverty than welfare does. In 2011, five times as many families with children got food stamps than got TANF, according to the Legal Momentum report. SNAP kept 5 million people out of poverty in 2012; public assistance did the same for just 641,000 people.

Legal Momentum also notes that those who do receive TANF are getting very little from it. The gap between the value of welfare benefits and what a family needs to live above the poverty line has also continued to grow since the mid-90s, reaching a record of 73 percent in 2012. The median state benefit for a family of three is now $427, just 27 percent of the $1,591 poverty guideline. That family won’t be able to meet market rent for a two-bedroom apartment in any state, and in 25 states welfare benefits cover less than half of rent. The value of benefits has been eroding, and for 99 percent of recipients, they are now worth less than in 1996 when adjusted for inflation.

This again stands in contrast to SNAP. “Although the SNAP benefit is intended to cover only food needs, while the TANF benefit is supposedly intended to cover all basic needs except health care, in 2012 the $526 SNAP benefit for a family of 3 with no income exceeded the TANF benefit for a family of 3 with no income in three-quarters of the states,” Legal Momentum notes.