Peter Edelman and Barbara Ehrenreich -- Why welfare reform has failed
We all like to imagine that there'll be something to stop our fall if we hit hard times. Mulugeta Yimer, for example, is a 56-year-old Alexandria cabdriver who escaped poverty and persecution in Ethiopia 20 years ago only to be clobbered by the recession. Business is way down, and he's facing possible foreclosure on his home. He says he is averse to government handouts, but when he contemplates what might be in store for his wife, who works part-time at a convenience store, and their two young children, he muses wistfully, "There's always welfare, isn't there?"
Actually, no. When President Bill Clinton signed welfare reform into law, he didn't just end welfare as we knew it. For all practical purposes, it turned out, he brought an end to cash help of any kind for families with children in much of the country. While welfare reform was long ago declared a success in some quarters, it was deeply flawed from the beginning. The recession has shown how seriously unprepared it left us for hard times.
Conservatives had been attacking the old welfare system for decades, claiming that it fostered dependency. Many liberals found it unsatisfactory as well. Welfare checks weren't big enough to lift families out of poverty, and the system did little to help recipients get or keep jobs. When Republicans gained control of Congress and welfare rolls swelled in the early 1990s, these attacks gained momentum, and in 1996, Clinton ended the legal right to cash assistance and imposed a five-year limit on federally financed help to any given family.
Welfare reform also provided the states with nearly complete discretion over how to administer benefits. Most states responded with gusto, reducing welfare rolls nationally by two-thirds in just a few years.
So when the Great Recession came along, the government safety net for families with children was in tatters. The United States was no more prepared for massive unemployment than New Orleans had been prepared for its levees to fail. Some important government programs, including unemployment insurance and food stamps, have started to rise to the challenge and have even begun to lose their stigma among former members of the middle class. Unemployment insurance now covers 57 percent of those who have lost their jobs, as opposed to less than 40 percent before the recession -- although their benefits amount to less half their former wages. Reliance on food stamps has expanded even more dramatically. While the average benefit still isn't enough to meet people's basic nutritional needs, the program now serves 36 million people, double the number when Clinton left office and up by a quarter in the past year.
By contrast, the caseload for TANF (Temporary Assistance for Needy Families, the name we now give welfare) is about 5 million people. This number is up by about 1 million since the beginning of the recession, but it's still just a little over a third of what it was 15 years ago, before welfare reform.
Why the huge difference between unemployment insurance and food stamp usage and welfare caseloads? People have a legal right to food stamps if they meet the statutory requirements, but since 1996 there has been no legal right to cash assistance. And so welfare, generally speaking, has not cushioned the impact of the recession.
We can see the results: According to the National Law Center on Homelessness & Poverty, the number of homeless Americans is up by 61 percent since the recession began in December 2007. That figure will only continue to rise. The number of people living in poverty increased by 2.5 million during the first year of the recession, and it has surely risen further in 2009. The government reported recently that nearly 50 million Americans are experiencing what it delicately calls "food insecurity."
We are among the co-authors of a forthcoming report from the Institute for Policy Studies titled "Battered by the Storm," which documents the government's inadequate response to the human suffering caused by the recession and describes the excruciating choices people now face between feeding their families and paying the rent.
Both of us were critical of the new approach to welfare when it was enacted in 1996. One of us resigned from the government in protest of the law; the other helped organize opposition to it from within the women's movement. We argued that the low-wage jobs available to former welfare recipients would not pay the bills. We warned that the legislation didn't provide adequate child care for single mothers thrown off welfare. And we cautioned that many welfare recipients faced serious barriers to success in the job market.
But some advocates of welfare reform seemed to consider poverty a voluntary condition, one curable with a quick kick in the pants and the opportunity to work for minimum wage. There were not enough jobs even then, but, blinded by the economic boom of the 1990s, the authors of TANF seemed to think that the business cycle had been abolished and that prosperity would take us only onward and upward.
In the rapidly expanding service economy of the 1990s, many former welfare recipients did find jobs, but most did not escape poverty, and a significant number were pushed off the rolls without finding work. Research showed that one in five former recipients ultimately became disconnected from any means of support: They no longer had welfare, but they didn't have jobs. They hadn't married or moved in with a partner or family, and they weren't getting disability benefits. And so, after a decline in the late 1990s, the number of people living in extreme poverty (with an income less than half the poverty line, or below about $9,100 for a family of three) shot up by more than a third, from 12.6 million in 2000 to 17.1 million in 2008.
In some states TANF virtually disappeared -- perhaps not surprisingly, given the states' new discretion and pressure from Washington to slash the rolls. Nationally, the fraction of poor children getting help plummeted from almost two-thirds to less than a third. A number of states reduced their welfare rolls by 90 percent.
Perversely, many observers welcomed these huge declines as proof that welfare reform was working. They didn't bother to follow these families as they moved into ever more crowded living situations, pieced together patchworks of part-time jobs or left their children alone while they went to work.
With the recession that began at the end of 2001, thousands of women who'd been removed from the rolls found themselves without jobs or welfare. Beverly Ransom, for example -- a Miami welfare reform "success story" -- had found well-paying work in the catering business, until the recession took her job away and left her without employment prospects and unable to pay rent for herself and her two children on the meager assistance available to her. She eventually found help from a community organization fighting for welfare rights.
If 2001 and the months thereafter revealed holes in the safety net, the current crisis shows even more vividly that TANF is essentially irrelevant in large parts of the country. If the real purpose of welfare reform was simply to reduce the rolls, it's been a smashing success. Some states have been more responsive to economic conditions, but they are the exception. Even now, in the face of high unemployment, caseloads in many states are tiny. At the end of last year, Wyoming had 281 families on its rolls -- about 550 people. Idaho had 1,600 families, Oklahoma had 8,639, and Arkansas had 8,664. The share of poor families receiving TANF was 4 percent in Wyoming, 5 percent in Idaho, 9 percent in Illinois, 9 percent in Louisiana and 9 percent in Texas. Caseloads fell in 20 states during 2008.
Benefits are tiny, too, with 30 states paying a maximum benefit that's less than 30 percent of the federal poverty line. Mississippi skimps by offering its TANF recipients $170 a month for a family of three, about 9 percent of the poverty line and barely enough to cover the utility bills.
Nationwide, there has been no increase in federal welfare funding since the 1996 law was enacted, so thanks to inflation, the value of that funding has eroded by about a third. There is an emergency fund for TANF in the stimulus package Congress passed in February, but little of it has been spent, primarily because it requires a match that fiscally strapped states are unable to put on the table.
Most states in effect adopted a welfare policy of ignoring the recession. Fourteen of 24 states that responded to an Urban Institute survey this fall said they had not changed any of their TANF policies or practices in response to higher unemployment.
There are two techniques that allowed states to radically reduce welfare rolls over the past decade, and they are being used to keep the rolls down now, even as need escalates. The first is to shut the front door almost completely through a process called "diversion" -- essentially telling someone: "You look able-bodied. Go out and look for a job." The Urban Institute's analysis showed that 42 states have rules that discourage enrollment, such as requiring an extensive job search, even when there are obviously no jobs to be found. For a person without a car or access to public transportation, a requirement to apply for dozens of jobs before an application for welfare will even be considered, as some states and counties mandate, can be a deal-breaker.
In some states, according to Kaaryn Gustafson of the University of Connecticut law school, "applying for welfare is a lot like being booked for a crime." There may be a mug shot, fingerprinting and lengthy interrogations as to the true paternity of one's children. Word gets around, and, even in the face of destitution, many people will not undergo such indignities.
The other technique for keeping the rolls down is to staff the back door with the equivalent of a nightclub bouncer. The practice is called "sanctioning" -- kicking people off the rolls because they were late to a work assignment (no excuses accepted, whether for sick children, late buses or car trouble) or didn't show up for an appointment at the welfare office (no dispensation for failure to receive notice of an appointment or inability to understand English). In some states multiple infractions of this sort can result in lifetime disqualification.
It's time to acknowledge that America's 1996 experiment with welfare reform was based on reckless assumptions about the economy, as well as a callous disregard for the realities of sustaining a family. We need a massive emergency relief package not only to fund new jobs but to repair the grievous holes in our national safety net. Fifty million people need help now -- not in three months or six months, but today.
Peter Edelman is a professor at Georgetown Law Center and served as an assistant secretary of Health and Human Services in the Clinton administration. Barbara Ehrenreich's most recent book is "Bright-Sided: How the Relentless Promotion of Positive Thinking Has Undermined America." They are among the co-authors of "Battered by the Storm," a report to be released Monday by the Institute for Policy Studies.