The U.S. Anti-poverty Safety Net Has Eroded for People Who Need it Most

That’s the alarming top-line message in a new report by the Center on Budget and Policy Priorities. People in deep poverty, i.e. at 50 percent of the poverty line and lower, get less help from public benefits programs than people in deep poverty did ten years earlier. Moreover, people in deep poverty are getting less help from public benefits as a share of their population than people with incomes closer to the poverty line or slightly above.

"In 1995, the safety net lifted above half the poverty line 88 percent of children whose family incomes were lower than that before counting safety net benefits. By 2005, this percentage had declined to 76 percent."

"Among children whose non-benefit income was between 75 percent and 99 percent of the poverty line, public programs lifted 65 percent above the poverty line in 2005, up from 51 percent in 1995."

The safety net includes means-tested programs like EITC and SNAP (former the Food Stamp Program), also housing assistance and Social Security, although the latter is used more by seniors than families with children.

These changes are due to restructuring of the safety net that has occurred in the wake of welfare reform legislation in 1996. Welfare reform was all about getting poor people off the dole and into the workforce. If you wanted government help, you had to work for it now. 

The biggest change occurred in Aid to Families with Dependent Children (AFDC), a program that had been around in mostly the same form since the Great Depression. Replace the word Families in the program with the word Mothers and you get a better picture of who the program was working for.

AFDC was renamed Temporary Aid for Needy Families (TANF) and block granted, meaning states had far more control over how the program could be administered inside their own jurisdiction, including how generous or stingy they wanted to be with cash benefits and whether to include other benefits like child care. But the biggest difference between TANF and AFDC was now there would be a time-limit for how long families could be on the program, usually five years, and once the limit was reached there was no getting back on the program, forever. 

Maybe it’s just me but I find it discomfiting to think that in the first period of really high unemployment since welfare reform was enacted we’ve now got lots of people who won’t be able to take advantage of the safety net. Some changes were made in the stimulus package passed earlier this year to loosen work requirements, but those are going to expire in a year and most economists seem to agree that even if the economy is officially growing again, we can still expect unemployment to remain high for some time after that.

TANF comes up for reauthorization next year. Maybe this is a good time to consider whether we’re due for some reform of welfare reform.