Welfare Reform May Need to be Reformed

When the main US welfare program (Assistance to Families with Dependent Children–AFDC) was transformed into Temporary Assistance for Needy Families in the 1990s, it was hailed a a great success. The intent of the reform was to make it a last-resort “safety net” rather than an income support program. The last decade has been a key test for welfare reform to see how well it provided that safety net during the extended recession of the Obama years. Is it an effective safety net? A new report by the Center on Budget and Policy Priorities says, “not so much:”

The official poverty rate among families declined in the early years of welfare reform, when the economy was booming and unemployment was extremely low, but it started increasing in 2000 and now exceeds its 1996 level.  The official poverty rate among single mothers reached its lowest point since the start of TANF — 34.8 percent — somewhat later, in 2002.  In 2012, it stood at 43 percent, just a half a percentage point below where it was when TANF was created in 1996.   

These opposing trends — TANF caseloads going down while poverty is going up — mean that TANF reaches a much smaller share of poor families than AFDC did.  When TANF was enacted, nationally, 68 families received assistance for every 100 families in poverty; that number has since fallen to just 25 families receiving assistance for every 100 families in poverty.  And, in a number of states, TANF provides cash assistance to a much smaller share of poor families than the national data suggests.  In eight states, fewer than 10 families receive cash assistance for every 100 families in poverty.  [emphasis added.]

The economy has changed dramatically in the almost 20 years since welfare form was enacted.  It may be time to revisit the whole question.  The report is here.  Via Kevin Drum.

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