Welfare reform doesn’t prove Republicans can cut without consequences
The Republicans have a problem: Their budget promises don’t add up. They’ve committed to new tax cuts. They’ve proposed spending more on defense. They’ve promised they won’t change retirement programs for the current generation of seniors. But they’ve also promised to cut the deficit, and fast.
That’s left them with one option: deep cuts to programs for the poor. That’s what you see in House Budget Committee Chairman Paul Ryan’s budget. It’s the basis for the Romney budget. It’s what Newt Gingrich, Ron Paul and Rick Santorum have proposed. But there’s a problem with that, too. Cutting programs for the poor isn’t popular. So Republicans have come up with a solution: Don’t call them “cuts.” Sell them as “reforms,” “repairs,” or “fixes.”
The Ryan budget’s section on these cuts is titled “Repairing the Social Safety Net.” It explains that “the welfare reforms of the 1990s, despite their success, were never extended beyond cash welfare to other means-tested programs.” It proposes to extend the welfare reform model to Medicaid, food stamps and other unnamed “low-income assistance programs.”
Romney’s proposal is almost identical. “Welfare reform showed us how well a state-led approach can work,” he said in Detroit. “Let’s extend that conservative, small-government philosophy across the entire social safety net.” In addition to Medicaid and food stamps, he also mentions “housing subsidies and job training.”
What we tend to think of as “welfare reform” includes a few distinct components. One is turning the funds for the program over to the states, called “block granting.” Another is adding requirements that beneficiaries look for work.
Romney and Ryan’s plans focus on block granting. But you can’t go to the Congressional Budget Office, say you’re going to ask states to spend money on your behalf, and walk out with a prize for deficit reduction. So in the Romney and Ryan proposals, the grants to states would grow much more slowly than the programs’ projected costs. Medicaid, for instance, would see its budget increase at the rate of inflation, not at the rate of health-care costs. The question is whether these programs can spend much less without hurting the people who depend on them.
That’s where welfare reform comes in. Conservatives see it as an example of a social-policy reform that worked. By moving beneficiaries from the dole to the workforce, the government saved money and, in breaking a “culture of dependency,” helped welfare’s beneficiaries achieve self-sufficiency. Few were hurt, many were helped.
And in the ’90s, during a strong, tight economy, there’s a good argument that welfare reform did work to push beneficiaries into a labor market that wanted them Win-win. But the more recent evidence isn’t as good.
In 1996, before welfare reform passed, 68 of 100 families living in poverty with children received welfare benefits. In 2010, two years into the worst economy since the Great Depression, only 27 of every 100 such families were receiving benefits. And that’s not because they were all holding good jobs or because states had somehow managed to make the grants go further. Quite the opposite, actually.
Liz Schott, a senior fellow at the Center on Budget and Policy Priorities, explains that states use about 30 percent of their block grants to fund basic assistance — what most of us would think of as “welfare.” An additional 15 percent goes to subsidized child care. Eleven percent goes to work supports. And the other 44 percent? Miscellaneous other things, including closing state budget holes. The end result is that fewer families get welfare. That’s not a “reform.” It’s a cut.
In Sunday’s New York Times, Jason DeParle looked at Arizona, which has cut its welfare caseloads in half since the recession. “The poor people who were dropped from cash assistance here, mostly single mothers, talk with surprising openness about the desperate, and sometimes illegal, ways they make ends meet,” DeParle reported. “They have sold food stamps, sold blood, skipped meals, shoplifted, doubled up with friends, scavenged trash bins for bottles and cans and returned to relationships with violent partners — all with children in tow.”
There’s much to admire about welfare reform. In particular, the bill’s authors were right that the safety net needed to do more to help people find and keep work. But since welfare reform, we have done much to encourage work through the safety net: the earned-income tax credit, the child tax credit and various work and child-care supports. And as our workfare system has grown more robust, the traditional welfare system for those who can’t find or keep work has eroded. The share of households living on less than $2 a day has doubled to 4 percent since the passage of welfare reform, according to a study by Luke Shaefer of the University of Michigan and Kathryn Edin of Harvard.
Which is all to say that cuts are cuts. Faced with welfare reform, states didn’t do more with less. They did less with less. Fewer people are getting help through welfare and much of the money intended for them is being diverted to plug unrelated holes in state budgets. “Somebody has to eat it,” says Ron Haskins, who helped Republicans draft the 1996 welfare reform law. “Someone’s risk has to increase. The federal government, the state government or the people who get the benefit in the future.”
You can argue that the money is better spent on other priorities, or that fewer Americans should have access to Medicaid and food stamps. But that’s the argument we’re having here, and it’s the argument Republicans need to own up to making. Their proposal is to cut services in those areas to fund tax cuts, deficit reduction and defense spending. The Democrats’ proposal is to raise taxes, cut defense spending and do somewhat less deficit reduction to protect programs for the poor and other government services. That’s the choice voters face in 2012. There are no free lunches. Just ask those single mothers in Arizona.
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