Many perspectives, 1 simple etiquette

America's Welfare System Is Failing Those Most in Need

Author: Andrew Gripp
Created: 16 July, 2014
Updated: 21 November, 2022
5 min read
According to one comprehensive

study, the national poverty rate was approximately 27 percent in 1967: without decades of welfare programs, that rate would have risen to 29 percent by 2011 rather than dropped, as it did, to 16 percent.

Yet despite this overall improvement, significant changes in these welfare programs -- in combination with economic deterioration over the last decade -- have left three groups especially vulnerable. America's welfare system is failing the poor, single individuals without children, and the unemployed.

In 1996, in cooperation with the new Republican majority in Congress, President Bill Clinton fulfilled his 1992 campaign promise to “end welfare as we know it.” The former cash-assistance program called Aid to Families with Dependent Children (AFDC) was replaced by Temporary Assistance to Needy Families (TANF). Intent on quashing government dependency, the new program limited lifetime assistance to 5 years and required parents to find work within 2 years.

Most states, which were put in charge of administering TANF (such as by determining eligibility and benefits), saw this reform as an opportunity to reduce their caseloads. In some states, they fell by 90 percent. Nationwide, the reduction was significant. In 1996, there were 12.3 million TANF recipients; by 2010, that number fell to 4.4 million.

This number implies that the program was a success. It seems that millions of people finally got off the couch and found a job, and certainly, many people did. Indeed, the TANF reform was predicated on the assumption that the economy, which at the time was beginning to take off because of the technology boom and the dot-com bubble, would create enough jobs for everyone.

However, the rapidly changing, service-oriented economy left those with limited skills and education behind. Among those who suffered as a result of TANF were the poorest of the poor, especially those in inner cities where work opportunities dried up.

TANF differs significantly from AFDC for the simple fact that States, not the federal government, determine eligibility requirements.

One consequence of the reform is that it has prevented those who are in need of receiving aid. In 1995, when the transition from AFDC to TANF occurred, 68 percent of those who were officially poor received benefits. However, by 2014, that rate fell to 25 percent. In other words, TANF did more to mask poverty than it did to end it.

Yet even some who did receive TANF benefits remained in poverty because of

negligible assistance from states looking to cut costs. As of 2009, in 30 states, the maximum assistance available amounted to 30 percent of the federal poverty level (FPL). Mississippi, for instance, provides roughly $170 per month for a family of three – a mere 9 percent FPL.

Further figures reflect a general trend of increasing governmental neglect of the poor.

In 1983, more than half (56%) of all government welfare transfers went to those living at or below 50 percent FPL -- a sizable percentage. However, by 2004, those living at or below 50 percent FPL received just one-third (32%) of transfers.

Between 2000 and 2008, the number of people living at this rate rose by 4.5 million people -- up to 17.1 million.

Additional research confirms that the most desperate have suffered following welfare reform. The number of households living in extreme poverty -- that is, at or below 13 percent FPL -- was 409,000 the year TANF was passed. By 2011, the number of households living in extreme poverty -- even when one factors in SNAP ("food stamps"), housing subsidies, and tax credits -- jumped to 613,000, including more than 1.1 million children.

Yet TANF and other welfare reform policies have had an adverse effect on another demographic: those who are unmarried and childless.

Childless individuals obviously do not qualify for TANF, and their access to “general assistance” from states has

declined in recent decades. Since 1989, 8 states have dropped their “general assistance” to poor, childless adults. Currently, 30 states offer such assistance, but among these, only 12 offer assistance to people who are “employable,” but currently out of work. All 30 offer some kind of assistance for those who are deemed unemployable.

However, these programs offer negligible help. In New Jersey, for instance, those who are considered employable receive $140 per month, while those considered unemployable receive $210 per month.

Moreover, some measures touted as welfare exclude childless individuals. Two tax code items designed to help low-income taxpayers, the earned income tax credit (EITC) and the child and dependent care credit (CDC), offer them no relief.

However, those who have fared the worst since welfare reform are those who are unable to find work.

Since the 1990s and the passage of TANF, free trade agreements and growing trade deficits have caused the disappearance of millions of jobs. Then, the 2008 financial crisis and the ensuing recession caused another 8 million people to lose work.

While the federal government did provide increased "emergency funds" to states to help accommodate increased TANF caseloads after the recession, the unemployed -- especially those without dependents -- have turned to unemployment insurance, which is also administered by states.

The states that offer the longest coverage provide unemployment compensation for 26 weeks. However, as of May 2014, more than a third (35 percent) of Americans looking for a job have been unemployed for longer than this period, and prospects are dim: for every 1 job opening, there are 3 people looking for work.

In December 2013, Congress failed to extend federal emergency unemployment compensation, leaving 3 million long-term jobless Americans without sustainable income. In April 2014, the Senate passed a bill that would have provided retroactive compensation, but House Speaker John Boehner (R-OH) refused to schedule a vote for the bill in his own chamber.

Because of the gaping holes in America's safety net, the country's welfare system is failing those it is supposed to help.

Photo Credit: elissa1000 / Shutterstock.com

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