Lifesaver Job Funds at Risk for Low-Income Women

August 03, 2010 | Womens eNews |  Link to article

A federal program to create jobs for low-income people during the recession could run out if Congress doesn't extend it by Aug. 9. Leading congressional champion Jim McDermott says women in particular could be hurt if Congress doesn't act.

A $5 billion federal stimulus program that has created more than 200,000 jobs for low-income women and men struggling to support their children during the worst recession in seven decades will vanish Sept. 30, unless Congress acts to extend funding before it adjourns for its summer recess Aug. 9.

"The extension in the Temporary Assistance for Needy Families Program (TANF) has been a lifesaver for vulnerable single moms and other low-income parents who are struggling to put food on the table in an economy where there are five unemployed people for every job opening," Jan McKeel, executive director of the Columbia-based South Central Tennessee Workforce Alliance, a nonprofit organization that has administered the program in parts of Tennessee, said in a phone interview.

A one-year, $2.5 billion extension passed the House in May, but was filibustered in the Senate. The latest version, which is included in the Unemployment Compensation Extension Act, has ignited a firestorm over whether the extension is necessary.

Democrats led by Washington State Rep. Jim McDermott, chair of the Income Security and Family Support subcommittee of the House Ways and Means Committee, support the extension because 15 million Americans are still out of work. The Congressional Budget Office recently predicted that in 2011--four years after the recession began--unemployment is expected to average 9.5 percent.

Many states have used the emergency funds to operate child care programs threatened by state budget cuts.

"These subsides help parents place their children in appropriate child care settings," McDermott said in a recent phone interview. "Without them, parents may be forced to reduce their work hours or worse, quit their jobs, which might have a devastating effect on their household income and the overall economy. Other parents may have to leave their children in a potentially unsafe or low-quality setting, so that they are able to continue to go to work to put food on the table. These are prospects that no parent should have to face."

Rep. Eric Cantor of Virginia, the Republican whip, opposes the extension as it gives states "incentives to keep able-bodied people on the welfare rolls."

September May Be Too Late

Congress will return to Washington Sept. 10, but that may be too late to save the program. Unlike the federal government, all states but Vermont are required to balance their budgets. The states face a $140 billion shortfall for the year ahead--fiscal year 2011--which began July1.

"Without a continuing federal commitment to keep this program running for an extended period, many states will be unable to continue these services on their own," said McDermott. "Many low-income Americans, particularly women, may lose their jobs if they are subsidized through the program, while others are at risk of losing other important work supports such as child care assistance."

If the federal government fails to provide more funds, Arizona Gov. Jan Brewer, a Republican, has threatened to reduce the number of families receiving TANF assistance in the coming months. Republican Gov. Arnold Schwarzenegger plans to eliminate the jobs program in 2011, even though it has created positions for over 20,000 people in almost all of California's 52 counties.

In 1996, Congress passed TANF, the Clinton administration's program to "end welfare as we know it," as President Clinton called it, by providing block grants to states to move people from welfare to work. Block grants have remained constant, so states have incurred extra expenses during the recession because TANF recipients have been unable to find jobs amid high unemployment.

To soften the blow, Congress allocated $5 billion from the $789 billion American Recovery and Reinvestment Act to establish a contingency fund, which the states could tap for extra expenses in 2009 and 2010. The federal government pays 80 percent and the states 20 percent of the costs in three areas: subsidized jobs, short-term benefits and basic assistance.

Subsidies for Jobs, Cash Assistance

By Sept. 30, 34 states and the District of Columbia will have spent more than $1 billion for subsidized employment, according to the Washington-based National Women's Law Center, which studies poverty and other issues that affect women.

Thirty-eight states and the District of Columbia have used $1.68 billion for short-term grants to help poor families cope with emergencies like housing evictions or utility shutdowns by giving them one-time payments like housing vouchers.

Forty-two states in which TANF caseloads have increased during the recession have used $1.36 billion in contingency funds for basic cash assistance to families, which have enabled them to obtain child care and other necessities. States including Georgia, Texas and Rhode Island--where welfare rolls decreased during the recession--have concentrated on job subsidy programs.

"No data is available on the number of subsidized jobs that have gone to women or whether women have received more of these jobs than have men," said Elizabeth Lower-Basch, a senior policy analyst at the Center for Law and Social Policy, a Washington-based organization that advocates for policies to improve the lives of low-income people.

However, Lower-Basch, added, "anecdotal evidence suggests that the states used the program to help many low-income women, who have a difficult time making ends meet even in times of prosperity, let alone the past recession when the national unemployment rate climbed to over 10 percent."

In 2008, 69 percent of all workers age 25 and older with earnings at or below the minimum wage were women. A worker earning the minimum wage of $6.55 per hour earned $13,624 in 2008, $3,439 below the poverty threshold of $17,163 for a family of three.

Two-fifths of women on TANF have less than a high school education and little work experience, so they are often the first to lose jobs during a recession.

States are responsible for setting eligibility levels for TANF, which range from monthly incomes of 50 to 200 percent of the national poverty level. States also decide the types of jobs, pay rates and whether to target high unemployment areas.

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Sharon Johnson is a New York-based freelance writer.

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