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This Week in Poverty: Welfare Reform—From Bad to Worse

Ohanian Comment: Living on less than $2 per person a day is one World Bank definition of poverty for developing nations. Read on to find out how many Americans fit in this category. . . and how it is increasing for children.

Extreme poverty has doubled in the past 15 years.

And there is no political discussion of these issues whatsoever.

The Vital Statistics

US poverty (less than $22,300 for a family of four): 46 million people, 15.1 percent.

Kids in poverty: 16.4 million, 22 percent of all kids.

Deep poverty (less than $11,157 for a family of four): 20.5 million people, 6.7 percent of population.

Impact of public policy, 2010: without government assistance, poverty twice as highânearly 30 percent.

Impact of public policy, 1964â1973: poverty rate fell by 43 percent.

Number of Americans "deep poor," "poor" or "near poor": 100 million, or 1 in 3.

by Greg Kaufmann

A stunning report released by the University of Michigan's National Poverty Center reveals that the number of US households living on less than $2 per person per day--a standard used by the World Bank to measure poverty in developing nations--rose by 130 percent between 1996 and 2011, from 636,000 to 1.46 million. The number of children living in these extreme conditions also doubled, from 1.4 million to 2.8 million.

The reason? In short: welfare reform, 1996--still touted by both parties as a smashing success.

The report concludes that the growth in extreme poverty "has been concentrated among those groups that were most affected by the 1996 welfare reform." The law created the Temporary Assistance for Needy Families (TANF) block grant, replacing Aid to Families with Dependent Children (AFDC), which had guaranteed cash assistance to eligible families since 1935. Prior to welfare reform, 68 of every 100 poor families with children received cash assistance through AFDC. By 2010, just 27 of every 100 poor families received TANF assistance.

States were given wide discretion to determine eligibility, benefit levels and time limits, and the TANF block grant was also frozen at the 1996 level without being indexed to inflation so those dollars donât go as far now. A majority of states now provide benefits at less than 30 percent of the poverty line (about $5,200 annually for a family of three), and benefits are below half the poverty line in every state.

Arloc Sherman, senior researcher at the Center on Budget and Policy Priorities (CBPP), provides an excellent analysis of the National Poverty Center report here. He notes that while extreme poverty doubled, "it nearly tripled for female-headed households, which make up the bulk of the TANF caseload."

There was an opportunity recently in Congress to address, or partially addressâor at the very least debateâthe TANF debacle of sub-poverty benefits and declining caseloads. It wasnât widely reported, but along with the payroll tax cut and unemployment insurance extensions, TANF was also up for reauthorization.

Congress not only took a pass on any serious debate, it threw a little gasoline on the fire.

It extended the TANF block grant through September 2012 but denied funding for the Supplemental Grants which go to seventeen mostly poor states. Dr. LaDonna Pavetti, vice president for family income support division at CBPP, notes that these supplements were created in 1996 because welfare reform resulted in poor states receiving âless than half as much federal funding per poor child as other states.â

âThis wasnât about money,â Pavetti told me. âThe moneyâs already there in the TANF Contingency Fund. Congress could have done the exact same thing it did last year and redirected funds from the Contingency Fund to the Supplemental Grants. Total federal funding for TANF wouldnât have changed a bit.â

Pavetti said some Democrats sought the redirected funding for the supplemental grants in the final bill but Republicans said it was outside the scope of the agreement. (Not that Democrats seemed to put up much of a fight, if any.)

âThese supplemental states have this extra pressure now, but itâs just part of a bigger problem: you have a 1996 block grant thatâs eroded in value, you have increased need, and you have no way to adjust for that increased need,â said Pavetti. âAdd to that whatâs going on with state budgets and the supplemental grants denial just makes it worse.â

According to Pavetti, these are some of the cuts supplemental states are already making: Florida is planning to cut its employment services for jobless workers despite a 9.9 percent unemployment rate; Georgia is reducing funding for child welfare services, child care assistance and substance abuse services; Louisiana has eliminated funding for Individual Development Accounts, which help low-income families build assets.

And hereâs a true sign of the times: Alabama is considering ending its participation in TANF entirely, which would cost the state upwards of $141 million in federal funding, and over 54,000 peopleâincluding 39,000 childrenâwould lose their monthly assistance. Many of these children would absorb a double hit because the child support enforcement program would also be shut down, and it currently helps 218,000 Alabama families collect about $315 million a year. Presumably Alabama doesnât want to comply with the TANF requirement that a state spend some of its own dollars on programs for needy families or face fiscal penalties.

But itâs not just the poorer states where the TANF situation is going from bad to worse. âYou see cuts that are harmful to very poor families happening in the wealthier states too,â said Pavetti.

With three Democrats crossing over to vote with Republicans, Washington Stateâs Senate passed a budget that includes $202 million in cuts in the TANF program, an additional 2 percent cut to benefits, lowering the lifetime time limit to forty-eight months, and a loss of 4,000 child care slots. This comes on top of huge cuts last year, including a 15 percent benefits reduction and lowering of time limits, and a consequent 25 percent caseload reductionâmeaning people were kicked off. Adjusted for inflation, Washington Stateâs benefits are worth 40 percent less than they were in 1996 and the maximum monthly assistance for a family of three is currently just $478.

âPolicymakers are trying to balance the state budget by taking money directly from low-income families,â Kim Justice, policy analyst for the Washington State Budget and Policy Center, told me. âThis is no way to balance a budget in tough times.â

So how does this rise in extreme poverty and gutting of benefits look on the ground?

Jack Frech, director of the Athens County Department of Job and Family Services in Appalachian Ohio, where he has been doing this work since 1973, told me that the state has cracked down on people who fail to meet their thirty-hour weekly work requirement âand in the last six months or so theyâve driven at least 30,000 people off of assistance. The welfare caseload in Ohio is dropping rapidly. â

Heâs traveled throughout the county of late to see how conditions are changing.

âThereâs a growing number of families out thereâthrough the combination of time limits and sanctionsâwho have no cash whatsoever, theyâre just surviving on food stamps,â he said. âThe housing conditionsâpeople are doubling, tripling up even in little trailers. These kids are hungry, theyâre sleeping in chairs, or makeshift beds, crammed together. They canât afford transportationâtheyâre stuck out in these communities with no way to go anywhere or do anything.â

Frech used to have funding to help with car repairs and transportation, but thatâs mostly been cut. There is some gas money but that doesnât help with the vehicle or insurance which few clients can afford after covering the basics. But if they canât make their thirty-hour-a-week job cleaning the dog shelter, or maintaining roads or gravesites, or doing some cleaning for a government agencyââjobs that do very little to prepare them for better jobs out there,â according to Frechâthey are cut from TANF.

But what disturbs Frech as much as anything is the fact that there is no political discussion of these issues whatsoever.

"Neither political party is showing any interest in tackling this problem because both parties have hung their hat on this whole idea that welfare reform was a success. You can't have millions of children living in extreme poverty and call your family support income system a success," he said. âThe TANF program is only for families who have children, and yet you intentionally give them an income that you know is at best half of what they need just to live at the poverty line. I can't think of any other public policy in America that is more intentionally harmful to children than the TANF program, and I run the program here.â

Crystal S., a single mother of three in Philadelphia and a participant in Witnesses to Hunger, would probably agree with Frech's assessment.

"It seems like they give you just enough to let you know that you're 'less than,'" she said. "Just enough for you to realize that life sucks. Just enough for you to hang yourself."

— Greg Kaufmann
The Nation blog





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