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Authors: David Hilfiker,Marian Wright Edelman
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BOOK: Urban Injustice: How Ghettos Happen
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Still to be felt are the effects of the five-year time limits, which began to be enforced for some families in 2001. Even more ominous is what will happen in the immediate future as the economic recession makes jobs harder to get and reduces state tax funds, while federal funding fails to expand to fill the gap.
How do we make sense of these confusing and seemingly contradictory bits of evaluation data? Many of us on the left predicted catastrophic results, with increasing poverty, state competition (a “race to the bottom”) to reduce benefits to avoid becoming magnets for welfare recipients, and generalized destitution. Clearly, this has not happened—at least not yet. Why?
Three answers to this question stand out. First, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 removed the anti-work disincentives in AFDC and added significant positive incentives to work. Mothers could go to work and still keep Medicaid, mothers could get childcare
only
by going to work, and in many states mothers could continue to get TANF benefits during their first years on the job. Surprising many people, most states strengthened these positive incentives with their own funds. In that sense, TANF is a much better program than AFDC.
only
by going to work, and in many states mothers could continue to get TANF benefits during their first years on the job. Surprising many people, most states strengthened these positive incentives with their own funds. In that sense, TANF is a much better program than AFDC.
Second, the strong economy and constant TANF funding provided the states with much more money per recipient than under AFDC. Because of this, the effects of welfare reform have been just the opposite of what almost everyone expected: benefits became more generous. TANF money was then used to maintain (and in some cases increase) monthly benefits, but, more important, it was used in many states to create substantial work supports that made it possible for the first time for low-income single parents to move off welfare.
Finally, welfare reform has not yet met either of its primary challenges: time limits and economic recession. What will happen when women who really cannot get or hold jobs run past their sixty-month limit? We don’t know. For people whose time limits have run out, states are
allowed
to continue welfare benefits in two ways. First, up to 20 percent of the state caseload may comprise families that have been on welfare past the sixty-month time limit. Second, states may use their
own
funds (as opposed to federal TANF grant funds) to provide these extended benefits. Clearly some states will choose to continue benefits past the cut-off point. Others clearly will not (since some states have already sanctioned large numbers of people and simply stopped following them). We also don’t know what will happen during recession. And because evaluation takes time, the likelihood is that we will not know what has really happened until years after these changes take place.
allowed
to continue welfare benefits in two ways. First, up to 20 percent of the state caseload may comprise families that have been on welfare past the sixty-month time limit. Second, states may use their
own
funds (as opposed to federal TANF grant funds) to provide these extended benefits. Clearly some states will choose to continue benefits past the cut-off point. Others clearly will not (since some states have already sanctioned large numbers of people and simply stopped following them). We also don’t know what will happen during recession. And because evaluation takes time, the likelihood is that we will not know what has really happened until years after these changes take place.
In states with active work support programs, welfare reform has clearly been a force toward self-sufficiency for parents who have been able to get and keep a full-time job. Although wages have been modest (averaging $7.15 an hour) for women coming off welfare, if a person took advantage of the Earned Income Tax Credit, was able to maintain Medicaid coverage, stayed on food stamps, was able to secure state-funded childcare, and in addition was able—through earned income disregards—to maintain a small welfare check, TANF has provided a boost. The combination of earnings and work supports has made low-income children and single mothers (taken as a single group) economically better off than they were under AFDC.
28
Research shows that if income in a poor family goes up, children do better, even if the mother has to go out to work, so the children have benefited as well. For these families welfare reform has been a good thing.
28
Research shows that if income in a poor family goes up, children do better, even if the mother has to go out to work, so the children have benefited as well. For these families welfare reform has been a good thing.
Because states have had excess funds, considerably more money is being spent per recipient than in AFDC. The work support programs so conspicuously absent in AFDC (childcare, transportation, Medicaid for those working) have been the cornerstone of TANF, and that has been a very good thing.
For immigrants (who essentially lost all forms of social insurance), for people who lost Medicaid, food stamps, and funded childcare, for those living in states without active programs, and for those who have not been able for whatever reason to get or maintain a full-time job, welfare reform has had very different effects. For these people, income has dropped significantly, and the non-cash supports that helped them keep their heads above water have disappeared. Indeed, they are drowning.
The statistics describing the “average welfare recipient” have looked good. But these favorable numbers mask substantial subgroups of people whom society has once again abandoned. PRWORA fails to provide for those members of our society who, while not technically disabled, are unlikely ever to support themselves fully in a competitive work world. People have cognitive limitations, emotional disorders, psychiatric disorders, and physical disabilities or illnesses that render them unable to work in the usual jobs. There are people whom society needs to support—either temporarily while they get back on their feet or permanently—if they are not to sink into destitution. It’s not always clear who these people are, determining what is appropriate help is neither an easy nor a straightforward process. But the tools for such sophisticated evaluation do exist—cognitive and psychological testing, interviews by professionals, medical evaluation. To help the poor, however, we need to be willing to apply them in a nuanced way. We have designed our system to make sure that no “undeserving poor” get public assistance. This is the essential heartlessness and destructiveness of welfare reform. We consign hundreds of thousands of families to extreme poverty and close the door behind us. It is the old “deserving” versus “undeserving” struggle once again. We help those who can get and maintain jobs (the “deserving”) while the rest are left to their own resources.
Finally, there is the unknown. In addition to time limits and economic recession, there are some states that are simply not evaluating the results of their programs. Since this process is not easy, it will be difficult for independent monitors to keep track of more than fifty state programs. We simply don’t know what will happen.
Welfare reform, then, has been very good for some, very bad for others, and a very dangerous experiment in the unknown for still others.
So, what’s left? What are the major elements of American social welfare in 2002?
In the United States, much of social welfare is actually private and employer-based, especially private health insurance and pensions. In the last twenty years the trend has been for employers either to eliminate or reduce some of these benefits. Particularly troublesome for low-wage workers is the increasing tendency of employers to hire workers part time, making them ineligible for employer-based benefits. Nevertheless, the majority of people with health insurance or pensions still get them through their jobs. Although both unemployment insurance and Workers’ Compensation are legislatively mandated, they, too, are employer-based. While we usually do not think of these job benefits as part of our country’s social welfare policy they are, in fact, critical aspects of it.
Probably the most important, and certainly the most overlooked, government-run anti-poverty program is the Earned Income Tax Credit (EITC). An idea backed and turned into legislation by the Republican administrations of Richard Nixon and Gerald Ford, then expanded significantly under the Democratic administration of Bill Clinton, the EITC offers low-income working people a maximum of $4,008 in yearly tax credits in order to “make work pay.” The credit varies with family size and with income. For very-low-income families with two children, the credit gradually increases to its maximum when income rises to $10,000, providing an extra financial incentive to go to work. For incomes over $13,100, the tax credit gradually decreases until it phases out entirely at $32,121. It is important that these credits are “refundable,” meaning that if they are more than the federal tax due, a family receives the balance as a cash refund.
The credit can have as much value as a two-dollars-per-hour raise, and studies have shown the EITC to be very effective at helping to raise people out of poverty and encouraging low-income parents to get jobs. Recent census data show that among working families, the EITC lifts substantially more children out of poverty than any other current government program or category of programs. Although there has recently been more criticism of the cost of the program, it has remained politically popular, presumably because it provides no disincentive to work. Indeed, it is only available to working people.
In July 2001, the federal child tax credit was increased from $500 to $1,000 and made partially refundable. Although the refundable credit is only available to families with incomes between $10,000 and $110,000 (and thus does not help extremely poor families at all), it will eventually be, in effect, a stipend of up to $1,000 per year per child to families with poverty-level incomes.
While Social Security benefits the poor and non-poor alike, it is an extraordinarily important and effective anti-poverty program primarily because it ensures that everyone will have some retirement income, but also because low-income workers receive a higher percentage of their lifetime earnings than do high-income workers.
29
Similarly, although Medicare is available to all elderly persons, it disproportionately benefits the poor, who would otherwise be unable to afford any care. Supplemental Security Income (SSI) is a federal income maintenance program for elderly or disabled people whose incomes fall below certain cutoffs. It supplements Social Security payments for those whose retirement income is inadequate, and it provides income for those whose mental or physical disabilities are significant enough to qualify them for the program. SSI benefits for a single person living alone are currently just over $500 a month and will therefore not raise even a single individual out of poverty. Nevertheless, benefits are pegged to inflation so that, in contrast to most public assistance programs, their real value remains constant.
29
Similarly, although Medicare is available to all elderly persons, it disproportionately benefits the poor, who would otherwise be unable to afford any care. Supplemental Security Income (SSI) is a federal income maintenance program for elderly or disabled people whose incomes fall below certain cutoffs. It supplements Social Security payments for those whose retirement income is inadequate, and it provides income for those whose mental or physical disabilities are significant enough to qualify them for the program. SSI benefits for a single person living alone are currently just over $500 a month and will therefore not raise even a single individual out of poverty. Nevertheless, benefits are pegged to inflation so that, in contrast to most public assistance programs, their real value remains constant.
Temporary Assistance for Needy Families (TANF) remains an important program for families with small children, as does Medicaid, which covers not only young families but also the disabled. What has largely been missed in the welfare debate is the fact that neither AFDC nor TANF was ever intended to make people self-reliant. Their purpose has always been to
alleviate
poverty through direct cash grants, rather than change the conditions in which the poor live. To call either program a failure because it has not raised people out of poverty is like calling the fire department a failure for not preventing a city’s fires. While welfare funds are a necessary bridge to keep families from utter destitution, welfare reform recognized that those funds
must
be accompanied by other programs if they are to give families the resources to escape the “surround.”
alleviate
poverty through direct cash grants, rather than change the conditions in which the poor live. To call either program a failure because it has not raised people out of poverty is like calling the fire department a failure for not preventing a city’s fires. While welfare funds are a necessary bridge to keep families from utter destitution, welfare reform recognized that those funds
must
be accompanied by other programs if they are to give families the resources to escape the “surround.”
The Food Stamp program, administered through the Department of Agriculture, has generally been credited with virtually eliminating malnutrition from hunger in the United States. Before welfare reform, food stamps were available to anyone whose income was less than 130 percent of the poverty level. While the food stamp program still remains a valuable resource for poor families, PRWORA has severely limited the availability of food stamps for single adults and childless couples, who can now receive food stamps for a total of only three months during any three-year period. Food stamps have also been severely limited for immigrants. Probably as a result of these limitations, soup kitchens and food pantries around the country have reported substantial increases in demand for food since 1996.
Despite the massive cutbacks of the early 1980s, there is still some public housing (with rents proportional to income). There are also “Section 8” vouchers, in which the federal government charges recipients one-third of their income for the vouchers and then pays landlords a government-determined fair market rent. While many poor people would be eligible for housing assistance, and while the programs are very important to the people they serve, waiting lists are long (up to ten years in the District of Columbia), so the large majority of eligible people do not, in fact, benefit at all from these programs.
At the state and local level, General Assistance, that is, public relief to anyone who is poor, has largely disappeared over the past twenty years. Most state and local assistance is now in the form of social services such as child protection, shelters for the homeless, and grants to voluntary institutions to provide particular services, rather than cash grants.
This raggedy assortment of programs is especially hard on poor children. The United States separates public assistance from social insurance and then tries to distinguish between the “deserving” and “undeserving” as it parcels out benefits that no one can live on. Even in a moment of unparalleled wealth, America responds to its poor poorly, often punitively, and in many cases harshly. The system itself telegraphs an underlying message to the poor by every means possible—and increasingly since the welfare reform of the 1990s: you are at fault for your own condition and you do not deserve even what little you get. As the richest among the rich nations, the United States maintains a population of poor people of a size and in a condition that would shame any other advanced industrial country. Among those living in poverty, for all the reasons discussed in this book, African Americans are treated worst, and are largely left to fend for themselves in impoverished, run-down ghetto areas whose rebuilding is generally on no one’s agenda.
BOOK: Urban Injustice: How Ghettos Happen
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