Welfare Rolls See First Climb in Years
Job Losses Bring Applicants From Middle Class, Test New Focus on Finding Work

By Amy Goldstein
Washington Post Staff Writer
Wednesday, December 17, 2008

FORT MYERS, Fla. -- For the first time since welfare was redefined a dozen years ago, weaning millions of poor Americans from monthly government checks, the deteriorating economy is causing a surge in welfare rolls in a growing number of states.

The swelling caseloads pose the first hard test of the premise behind transforming the old system of welfare, once considered an open-ended right, into a finite program built to provide short-term cash assistance and steer people quickly into jobs.

Though still a fraction of the size they were at their height in the mid-1990s, welfare rolls recently have begun to climb again in at least a dozen states, according to interviews with state officials. In other states, applications are rising, foreshadowing more people on welfare soon. The trend has spread across the District, Maryland and Virginia.

More striking is who is coming onto welfare and why. Here in Florida, as elsewhere, the new face of welfare includes people who have tumbled from the middle class -- and higher -- after losing jobs, savings and self-reliance. And some are returning to welfare years after they thought they had found permanent work and independence. In the county that includes Fort Myers, nearly 40 percent of the 812 people who applied for welfare in October had never before asked for help.

"I got to do what I got to do to get by," Toni Robinette, 33 and five months pregnant, said as she sat in front of a black computer terminal in Room 110 of Fort Myers's Regional Service Center, typing an application for cash assistance. She and her husband, Jason, opened Tip Top Tile in Cape Coral in 1996, and most years they earned about $50,000. The business failed three years ago as southwestern Florida's building boom collapsed. Toni and her husband have applied for dozens of jobs. She got interviews at Walgreens and Wendy's but no offers.

Such an environment revives a debate that swirled in the early years after Congress abolished Aid to Families With Dependent Children, as welfare used to be known, and replaced it with Temporary Assistance for Needy Families (TANF), with its strict time limits for benefits and work requirements. Caseloads nationwide dropped far beyond expectations. How much of that decline, politicians and social scientists debated, was due to the program's tough new rules -- and how much to the good economic times?

The job-centric nature of welfare remains popular in principle across the political spectrum -- but harder to put into practice. "If there is no employment out there to get, then what?" asked Shery Bader, employment services manager for Goodwill Industries of Southwest Florida.

Many people coming onto welfare "shouldn't be receiving assistance if there [were] jobs out there," said Kevin McGuire, the Maryland Department of Human Resources' executive director of family investment. "The problem is, what we are seeing here is something that looks more like 1936 than 1996."

The rise in cases is notable because welfare rolls have until now proved less sensitive to economic changes than other government help, such as food stamps and Medicaid. Caseloads rose slightly in a few states during the milder recession of 2001, but the increases were less widespread and pronounced.

Moreover, the new upswing has come just two years after a Republican-led Congress and the Bush administration tightened welfare rules, triggering further caseload reductions in much of the country. The rules narrowed the list of acceptable "work activities" for welfare recipients, and they compelled states to require that more of the adults on welfare prepare for or go to work.

In the altered economic climate, experts predict that welfare will awaken from years as a political issue so sleepy that President-elect Barack Obama did not mention it during his campaign. An Obama spokesman said his staff will not prejudge the issue before his administration moves into power next month.

With the welfare law scheduled to be renewed in 2010, the Democratic majorities in Congress almost certainly will rethink whether the program should put more emphasis on education and child care and less on quickly finding a job, the experts say.

Peter Edelman, a Georgetown University law professor who left a senior Clinton administration position in protest of the 1996 law, said the Obama administration and Congress should adopt emergency legislation to suspend work requirements and time limits on cash assistance. "The whole construct [of TANF] is to go out and find jobs," he said. "So it's a Catch-22. It's kind of an impossibility."

For now, lawmakers are considering whether to add to a welfare contingency fund, likely to run out for the first time this year, in an economic stimulus bill.

For some states, the predicament is immediate. The 1996 law replaced a limitless federal stream of welfare money to states, giving instead a fixed amount -- $16.5 billion a year nationally -- and significant spending freedom. In the years when people were leaving the rolls, less of that money went for cash assistance, and virtually all states shifted much of their grants to other help for poor people: child care, transportation, training programs, child welfare.

Now that welfare rolls are surging again, "the flaw is the states did not save enough money," said Ron Haskins, a Brookings Institution senior scholar who worked as a welfare adviser in the Bush White House and in Congress. "They have used the TANF block grant for everything under the sun. . . . That leaves them in the lurch."

Florida is a hub of the problem, particularly Fort Myers, where the number of people getting cash assistance has soared by 50 percent in the past 1 1/2 years. Across the state, rolls have swollen by 20 percent in the past year, including by 4 percent in October. "Pretty unprecedented," said Don Winstead, deputy secretary of Florida's Department of Children and Families. And adults on welfare are staying longer than they used to, with jobs so hard to find.

Florida's legislators have been warned that the state will have an $8.6 million welfare deficit for the fiscal year that ends in July and a $33 million shortfall the next year. "We already know those estimates are low," Winstead said.

The help Florida offers is slim -- $303 a month for a family of three, a benefit unchanged since 1993. Even so, applicants pour in. "Some of them, if you ask them if you ever thought they would be here, they look at you like you've lost your mind," Winstead said.

After Tip Top Tile failed in 2005, Toni and Jason Robinette lost their three-bedroom stucco house to foreclosure, and their black Ford four-wheel-drive truck was repossessed. They've been living with relatives.

The day before Thanksgiving, things got worse. Jason Robinette was driving their 11-year-old car when police pulled him over for expired tags. After officers asked for his license, they told him it was invalid because he had stopped paying to keep up his car insurance.

He is in the Lee County Jail waiting for a court hearing for that -- and another charge that caught up with him -- because the couple can't afford to post a $2,000 bond.

Toni Robinette hadn't planned to be pregnant, out of work, out of a house, with a husband in jail, sitting at a social services office trying to get government help. "I've always, since I was young, had money, babysitting and everything," she said. "People came to me to borrow money. Now it's the other way around."

Two Decembers ago, the unemployment rate here in the City of Palms was 2.5 percent, tied for third-lowest in the country. By October, it had soared to 9.5 percent, far above the average, giving this stretch of southwestern Florida coast one of the nation's most dramatic reversals of economic fortune.

A few local judges have just begun working full time to reduce a backlog of 25,000 home-foreclosure cases. The News-Press, the Fort Myers newspaper, regularly reports the deaths of restaurants and stores.

The Monday after Thanksgiving, the Regional Service Center reopened to find 500 online applications sent over the holiday weekend for food stamps and Medicaid, as well as welfare. By 5 p.m., 250 more had arrived.

Welfare success stories, when they happen, come more slowly than before. When her cash assistance began in July, Marilyn Prather went to the Career and Service Centers of Southwest Florida for job training and help. She had been a waitress at Denny's but quit to work at Sisters Eatery, a North Fort Myers restaurant where she had worked part time. Before the new job even started, Sisters Eatery shut down.

It was five months before Prather, a 41-year-old mother of two, was hired in mid-November by the Florida Department of Veterans Affairs. For now, she works 40 hours a week preparing desserts and meal trays, but she has been warned that her hours will soon be cut in half.

Lori Lamson also went to the career center and, following Florida's rules, did an upfront blitz of 80 hours of job-hunting with other new welfare arrivals. "None of us found jobs," she said. "I have applied for, and I'm not kidding you, probably 150 jobs."

Lamson had been a medical technician for two decades, specializing in nerve and muscle tests, when she and her boyfriend moved to Cape Coral last year. She found a job with a sleep-study lab that paid $22 an hour, but, after 94 days, she was laid off. Eight days later, she went to an emergency room with piercing back pain. At 43, it turned out, she was pregnant for the first time.

She'd worked here too briefly to get unemployment benefits. Her boyfriend, 49, had been diagnosed with a heart condition and was fighting for disability benefits. "I'm someone who's owned two homes, had a perfect credit rating, had a Jet Ski, savings, Starbucks two or three times a week," Lamson said. "You sit and wonder how it all got lost."

A month before her daughter, Megan, was born, Lamson qualified for welfare. Unable to pay their $900 rent, she and her boyfriend moved in with his mother until he won disability payments; they have now found a $600-a-month place of their own. Still, she said, "it is tight, tight, tight. . . . Things like aluminum foil, laundry soap, trash bags, you take for granted. Shampoo, conditioner -- that's on the luxury side now." To keep her cash assistance -- $241 a month in Florida for a family of two -- she sorts clothing three days a week at a Goodwill outlet, "just kind of trying to keep busy."

Goodwill Industries of Southwest Florida has long helped find jobs for people on welfare. Now, "the door revolving in is much greater than the door revolving out," said Bob Haenggi, the vice president of career development. Last year, his staff placed 292 people. This year, it will be less than two-thirds that many.

Goodwill's half-dozen "employment consultants" have become so upset that they can't generate jobs for people, Haenggi is sponsoring a coping seminar for them.

Will McDaniel, a roofing company supervisor who had a $47,000 salary until his entire department was eliminated in June, keeps a legal pad listing all his job applications -- 73 so far. He has applied for food stamps and Medicaid, and he plans to apply for cash assistance, too, if no work comes through by the time his unemployment checks -- $550 every two weeks -- run out.

Yet he worries about a welfare system built around people getting jobs. That idea "has failed," he said. "You can't take the policy that was applied 12 years ago and use it in this day and time."

In this environment, few have fallen as far as a couple named Roberto and Camille, who seven years ago looked online for lists of the 10 best places in the country to live. They were drawn to Fort Myers's weather and water, its housing costs, the schools for their three children, and the thriving employment picture -- for him, a commodities investor and mortgage broker, and for her, a postal worker who was eager to use her real estate license again.

Roberto, who asked that the couple's last name not be disclosed because only one of his 10 siblings knows of their circumstances, made his first million in the commodities market when he was 25. By the time the family arrived in Cape Coral, he had $4.5 million in about 50 commodities accounts. The assets kept swelling, to $7.2 million.

They chose a $647,000 lakeside house in a gated community, with four bedrooms and bathrooms, a media room and a pool. They bought nine more houses as investments. And in 2005, they incorporated a business, blending his mortgage brokerage with her real estate work.

But her last house sale was in December 2006, and they've had no salary for more than 1 1/2 years. Their commodities accounts collapsed. "Every single bit of my savings is gone," Roberto said.

They've lost five of their rental houses, and four are vacant and in foreclosure. They owe $80,000 in income taxes, Camille said, "and real estate taxes, forget it, that's more." Their Cadillac was repossessed, and the water in their home was turned off until they worked out a cash-only payment plan. She held a garage sale this month but made just $45.

Camille is waiting on a license to run a day-care center. "I am usually the hopeful one," she said, ". . . but sometimes hope doesn't pay the bills." Roberto is in New Jersey, where the couple met in high school, getting computer training and contemplating a move back.

When he talked about applying for welfare, she didn't want to hear it. "I don't want the benefits," she said, "even though I need it."

So when he came home a few days before Thanksgiving, she stayed away from the kitchen when he got out his computer. He filled out the welfare application online, his laptop perched on their gleaming granite counter.

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