Why welfare
reform?
By the time we're
finished with this, you should have thought about that question. What
is welfare reform, and who benefits from it?
What is cost of
welfare? Maybe $100 billion annually for the four major means tested
programs. Another $238 billion is spent on in-kind programs. Total
projected budget for the U.S. Government in 2003 is, well, difficult
to assess. Just try. The closest I could find was an estimate of $1.7
trillion, about $540 billion of which goes to human resources. This
particular website shows two different pie charts, one as we've
discussed, including the social security trust fund, the large one
excluding it. As we've discussed in class, the majority of spending
on welfare is for social insurance programs (from DiNitto, 2003):
Some authors distinguish
between 'welfare' and 'social insurance' programs. Welfare programs
are 'means-tested'--only people below a certain level of income can
qualify, in most cases.
Precursors
to welfare reform
Omnibus Budget
Reconciliation act, 1981 (Reagan)
Gave states more
authority over welfare decisions, regulations, eligibility conditions,
work requirements. AFDC became more of a state-administered (but federally
funded) program, through block
grants. It was essential a 'devolution' of responsiblity from
the federal to the state level of government.
Family support
act of 1988 (again, a product of the Reagan era)
Three underlying
assumptions:
Individuals should take more responsibility for getting
off welfare;
Work requirements must complement incentives to get welfare recipients
into workforce;
Greater mix of services more likely to be effective.
Some of the provisions
included:
-
Strengthened
child support regulations, procedures for collecting;
-
States
must establish paternity for AFDC children (to get welfare, you
gots to give it up)
-
key
theme: Responsibility for parenthood
JOBS program
Job Opportunities and Basic Skills
-
Educational/vocational
services;
-
Participation
mandatory for recipients with no children under three
-
Community
service requirements (for one parent of 2 p household, or not-yet-hired-but-trained
-
Welfare
is temporary, work is unavoidable
-
Funding
was always well below target levels
Work incentives
-- more reasons to leave welfare
-
Extended
Medicaid eligibility for one year after leaving welfare (only one
year-not indefinite) - otherwise, people wouldn't work above point
where Medicaid coverage disappears
-
Guaranteed
child care for JOBS participants or employed.
-
These
can be seen as investments in getting people back into the workforce
AFDC-UP
('unemployed parent')
-
Two-parent
families had to be included-the assumption was that excluding two-parent
families encouraged single-parent families;
-
Limits
on benefits, strict eligibility make it a small program
-
early
promotion of two-parent households (a prelude of things to come)
top
of page
The four major
means-tested programs
| Welfare
program |
background |
No.
current recipients |
Avg.
benefit / recipient / month |
Annual
outlays (1999) |
| SSI
supplemental security income |
1973
version replaced earlier versions, begun in 1930s |
6.8
(million) |
$355
($4,260/yr) |
$29
(billion) |
| TANF
temporary assistance to needy families |
replaced
AFDC in 1996; ADC in 1935 |
6.9 |
$160 ($1,920/yr) |
$22
billion |
| EITC:
earned income tax credit for working poor |
1975 |
18.6 |
$120
($1,440/yr) |
$27
billion |
| GA:
general assistance |
for
needy not fitting other categories(childless couples, individuals) |
1.4 |
$190
($2,280/yr) |
$3
billion |
| Totals |
|
33.7
million |
|
$81
billion |
SSI: Supplemental
security income
-
Serves
adults and children
-
Provides
cash for food, clothing, shelter
-
Aged,
blind, disabled-'the worthy'
-
SSI
varies by state (minimum federal baseline amounts are supplemented
by many states)
- This is the
'deserving' population . . .
TANF: temporary
assistance for needy families
-
Cash
assistance, temporary
-
5
year lifetime limit; 2
years consecutive, then you need a job
-
states
can exempt up to 20% of the population from the time limits
- focus here on
temporary--welfare as a transitory state
- officially:
provide assistance to needy families so children may be cared for
in home or homes of relatives;
- end dependency
of needy parents on govt. benefits by promoting job prep., work and
marriage
- prevent/reduce
incidence of out-of-wedlock pregnancies
- encourage formation
and maintenance of two-parent families
EITC: Earned
income tax credit
-
Payment
to working poor-subsidy of 40% on low wages-it's applied to their
tax liability-so they only get money back if the credit exceeds
the liability.
-
Average
credit for yr 2000 was about $1,500
-
19
million households received EITCs in 2000
-
Above
$12,500, the credit begins to decrease (disappears into 21% base
tax rate)
- encouraging
people to work--here's a question for you: is it a subsidy for
workeres, or employers?
-
A
welfare program of last resort-a safety net for the safety net
-
Cash
and in-kind assistance programs, administered entirely by state,
county, municipality, etc.
-
Designed
to catch people ineligible for TANF or SSI
-
35
states have GA programs; 24 have standard eligibility rules
-
Only
13 states provide GA to able-bodied adults without children
-
Who
are these people? Some include children living with unrelated adult;
disabled individuals; elderly who are not eligible for SSI (or are
waiting to hear);
-
Most
states give GA only to the severely poor (for most states, monthly
income eligibility range is $100 - $400 for individuals, 300-600
for family of 3);
-
According
to Schiller, benefits for GA are 'low and falling'
In-kind programs
These include food
stamps, Medicaid, housing assistance, and nutrition programs like the
federally subsidized programs we've talked about in the hunger project).
Here are some data on these (from Schiller):
| program |
no.
recipients
|
avg.
benefit / recipient / month
|
total
annual cost
|
| food
stamps |
20
(million)
|
$92
|
$22
billion
|
| medicaid |
42
|
$367
|
$185
billion
|
| housing
assistance |
11
|
159
|
$21
billion
|
| school
lunch |
26
|
$26
|
$6
billion
|
| WIC
(women, infants and children) |
8
|
$31
|
$4
billion
|
| totals |
|
|
$238
billion
|
source:
U.S. Census Bureau, Office of Management and Budget
Food
stamps
is a federal program we should all be pretty familiar with. Medicaid
(called Oregon Health Plan here) is federally funded, but state-administered.
As one of the brushes articles notes, there is a stigma associated with the use of Medicaid, and some physicians simply
don't accept Medicaid patients. Federal
housing assistance is designed to reduce rent payments for people
with low incomes. The in-kind programs often involve being put on waiting
lists, and this can be one of the longer waits. There are public housing
projects, public-assisted housing, and tenant-based assistance (tenant
can choose his/her own place, provided
the landlord will take the money--another 'brushes' experience).
There are also federally-funded
nutrition programs, which include WIC, for pregnant women and mothers
of children under one year. There are food voucher programs, which we've
discussed, school lunch programs, and commodity programs (where local
food banks get much of their food, along with food drive contributions).
top
of page
PRWORA (personal
responsibility and work opportunity reconciliation act of 1996): Some
provisions, key points
- Drafted and passed
by Republican-controlled House of Representatives; signed by President
Clinton;
- Gave more power
to states ('devolution'); designed to keep more children in their
own homes or with relatives (why?); focus on job preparation, work,
and marriage; discouraged out of wedlock pregnancies (as opposed to,
say, births?); encouraged formation of two-parent families
- Current funding of marriage promotion (more than $1 billion and counting) is an effort to apply funding to what
was an unfunded part of the 1996 legislation;
- Block grants
are federal funds administered by states; TANF is block grant-again,
more devolution (further 'federalizing' AFDC);
- Time limits:
60 months on cash assistance (states may reduce this); states can
exempt up to 20% of recipients, and can continue beyond limits with
their own funds (few reportedly do, however--have you checked out
state budgets lately?);
- Work requirements:
after two years of cash assistance; states face financial penalties
for not moving a certain percentage off of welfare--the key measure
is reducing welfare rolls;
- Family cap: families
already receiving assistance will not gain new benefits with additional
children--the underlying assumption being . . . ?
Restrictions
for immigrants for SSI, food stamps; states can restrict immigrants'
eligibility for TANF, Medicaid as well
Child care-from an entitlement program rolled into block grants;
Medicaid-delinked from welfare? All family members can get
coverage (CHIPs is a newer program--children's health insurance program--that
many states have tried to fund)
Child support-beefed up regulation, to collect more from fathers
(see one
horror story)
Food stamps-reductions in maximum benefits (how would this
jive with inflation?)
SSI-narrower standards of what counts as disability; more frequent
review of disability status;
Sources:
DiNitto, Diana. 2003. Social Welfare: Politics and Public Policy (5th
edition). Boston: Allyn and Bacon.
|