The American Social Safety Net Does Not Exist
By Monica Potts
In 1996, Aid to Families With Dependent Children—that is, welfare as we knew it—ended. The Republican Party, which had dominated the federal government since the Reagan Revolution, had had welfare in its sights ever since Lyndon Johnson’s Great Society expanded antipoverty programs. Liberals and progressives labeled welfare reform one of the worst things President Bill Clinton did, and rightly blamed it for the increase in child poverty that followed. For the right, though, shrinking welfare was part of a larger effort to decrease the size of government and appeal to working-class whites who had come to believe—erroneously—that AFDC largely benefited urban black recipients who didn’t want to work. Antipoverty advocates on the right argued that work was a better way out of poverty, and in the booming 1990s, this was partly true.
Welfare before reform, it’s worth remembering, was an old-fashioned program, established when men were expected to earn wages and women to care for the children. In the early 1900s, progressive reformers in Illinois and a few other states started some of America’s first cash-payment programs for poor widows, who, if they worked, were often deemed unfit mothers and had their children taken away. These programs were nationalized during the Great Depression, and the assumptions underpinning them—that women should be caretakers and men breadwinners—remained in place. Thus, by the 1990s, it wasn’t just conservatives who thought the program needed an overhaul. In limiting women’s employment potential and ignoring the nonmonetary contributions a father could make to his children’s well-being, welfare butted against the widespread societal shifts the second-wave feminist movement brought about. Prominent feminists, many of them white, were divided on how to address the needs of the poorest women, who were often of color. But almost everyone on the right and left alike agreed that AFDC’s payments were too low, locking mothers and their children into a cycle of intergenerational poverty and keeping recipients out of the workforce.
The push for reform culminated in Clinton signing the Personal Responsibility and Work Opportunity Reconciliation Act, a law that celebrated its 20th anniversary this summer. In its earliest conceptions, the program it created, Temporary Assistance to Needy Families (TANF), was meant to better connect women to educational opportunities and jobs that would enable them to earn more money than they’d ever receive from entitlement programs. “The best antipoverty program is still a job,” Clinton said when he signed the bill into law. But the biggest changes the act introduced were not the work requirements. For the first time, recipients faced a five-year lifetime limit on receiving benefits; in addition, the federal government gave states wide leeway with welfare funds, allowing them to be diverted to non-cash-payment programs. The intent was to allow states to fund workforce training, higher education, affordable child care, and other supports that would help women find employment. But in reality, there were almost no standards regarding what states could do—as president, George W. Bush allowed these funds to be used for classes that urged women to get married. Most significant, though, was that the dollar amount given to the states by the federal government, and the amount states were required to contribute themselves, was set at 1996 funding levels, with no mechanism for increasing it. That meant states could run out of money and refuse aid to qualifying families simply because they no longer had the funds. It also meant the cash amounts given to each individual family were eroded by inflation. In July 2015, the highest average cash payment for a single parent with three children was only about $704 a month in California. In two states, Mississippi and Tennessee, benefits are less than $2 per person per day, and in 27 more states the program provides less than $5 per person per day.
Despite these low payments, families must meet onerous requirements. Some states require recipients to apply for 20 jobs a week, and many require people to participate in “work activities” for 20 to 35 hours per week, often for an hourly rate that is well below the minimum wage. Full-time enrollment in college or work-training courses can’t be used to meet the work requirement for longer than 12 months, which means recipients can’t earn an associate’s degree, for example, without also working an almost full-time job. This limits earning potential and pushes recipients into low-paying work. And it means families aren’t particularly eager to enroll unless they’re desperate. In 1996, when the law was enacted, 68 percent of families with children living in poverty received welfare.; today, only 23 percent do. The sociologists Kathryn Edin and H. Luke Shaefer, who havedocumented the rise of extreme poverty in the United States since welfare reform, found that before the income from government programs like food stamps is taken into account, the number of US families living in extreme poverty has increased by 35 percent.
These changes have outraged advocates for the poor. While many progressives supported the idea of reform, most objected vociferously to the bill that Clinton ended up signing. They warned that the bill that had emerged from the Republican-controlled Congress would devastate poor families, especially those who faced significant barriers to working. Clinton had vetoed two previous versions of the bill, and they urged him to do so again. Instead, he signed the Personal Responsibility and Work Opportunity Reconciliation Act into law, promising to return to it later to address its flaws. Many were skeptical: “What crystal ball does he have that he knows he can fix it?” asked Deborah Weinstein, an official at the Children’s Defense Fund, speaking to The Washington Post. “What powerful constituency would be treated that way?”
Twenty years later, it’s clear the warnings were correct. As the Center on Budget and Policy Priorities reported in September: “A poor family relying solely on TANF to provide the basics for its children—such as during a period of joblessness, illness, or disability—is further below the poverty line today than in 1996 in every state except Maryland, Texas (which keeps benefits pegged at 17 percent of the poverty line), and Wyoming.” Clinton still maintains the law did more good than harm, but two years ago, he acknowledged: “The poorest welfare families…are worse off, and we should do something for them. And all of us who supported it should admit that.”
Proponents of welfare reform didn’t want to replace AFDC with another government program. Instead, they wanted to replace it with work, and at first it looked like the plan might succeed. In the late 1990s, the economy was booming. The gross domestic product grew continuously from 1991 until 2001, one of the longest periods of growth on record. In 1996, the unemployment rate was 5.4 percent, and it dropped thereafter until hitting a low of 4 percent in 2000.
But this trend masked a deep erosion in the quality of life. As the economy grew, incomes diverged: 90 percent of job growth came in the service sector, where jobs that pay well usually require a college degree. For everyone else, the jobs were menial and low-paying. By 1999, worker productivity had increased 12 percent over the previous decade, but the average worker’s wages went up only 1.9 percent. More recent studies have found that the trend reaches as far back as 1973 and continues to this day. When the Great Recession hit, middle-class households had $17,867 less than they would’ve had if they’d been paid properly for their rising productivity. Almost half of the jobs created during the recovery—44 percent—have been low-wage service-sector jobs. A better version of the welfare-to-work program would have served as a bridge to well-paying jobs, offering education and training. Instead, states are rewarded for kicking families off TANF whether they find jobs or not. “The whole idea behind TANF was to shift to work,” says LaDonna Pavetti, vice president of the Center on Budget and Policy Priorities, but “states don’t do much more than job searches, and even that they don’t do very well.”
Marvette Hodge, a 36-year-old Virginia native, was in high school when welfare reform was passed. She participated in a work-training program to become a certified nursing assistant when she graduated in 1998, and took her first job in the health-care field at a nursing home in Roanoke, Virginia, where she made $7.25 an hour. “Making that kind of money was pretty good for me because it was my first job,” she recalls. In her early 20s, Hodge moved to Richmond and had two daughters—she would later have a third—in a relationship that fell apart, then moved back to Roanoke to be closer to her family. But she went without work for a long time after the move, and eventually found herself in a homeless shelter.
One day, with her toddler on her hip and her infant in a stroller, Hodge walked into a Subway restaurant near the bus station downtown and got a job, starting her life as a low-income working mother. “It wasn’t the best job, but it was a job,” she says. She worked there four years before moving back into health care. In all her years working, she’s never made more than $9 an hour, and has relied on government assistance to help at various times. “I looked for any type of outside help, period,” she says, though it wounds her pride. “I hate to have to, even though I know it’s there for people in need. I’m hoping my daughters don’t have to do this when they get up in age.”
Census data released in September found that, thanks in part to an increase in the minimum wage in various cities and states and the expansion of Medicaid, incomes rose in 2015 at the fastest rate ever recorded, poverty fell by 1.2 percent, and the number of people with health insurance has grown. But one year of progress can’t undo 20 years of decline. And though low-income work provides modest benefits, it incurs enormous costs. One dilemma facing working mothers, mostly single, is that they need to put their children under school age into child care. The welfare-reform law allowed states to use money that once funded cash benefits to expand an existing child-care voucher program. But the program doesn’t provide child care to even 16 percent of low-income working mothers. It is also subject to cutbacks during downturns, and the funding has dropped steadily since 2001; 21 states now have a waiting list for the program. When she worked at Subway, Hodge relied on child-care vouchers. “Even with the help they were giving, every two weeks, I had a commitment to pay $50 every paycheck,” she says. “Even that was hard to come out of my pocket.”
Since the demise of AFDC, the food-stamp program and the earned-income tax credit have been the most robust antipoverty programs in the country. Established in 1975, the EITC, once a modest initiative, has been steadily expanded over the years—and, for the most part, enjoys bipartisan support. Thanks to the EITC, working families with children below a certain income level receive more money back at tax time than they paid in—a supersized tax refund. Families rely on this money to catch up on bills and make long-overdue purchases. (When then–GOP presidential candidate Mitt Romney infamously decried the “47 percent” of Americans who “believe that the government has a responsibility to care for them” because they don’t pay income tax, he was referring in part to the EITC, which President Obama expanded in response to the financial crisis. And both Obama and Republican Speaker of the House Paul Ryan have proposed expanding the EITC for workers without children in the home—a measure that would overwhelmingly help low-income men.)
Elizabeth Lower-Basch, director of the income and work-supports team at the Center for Law and Social Policy, says that in some ways, the EITC works like a forced-savings program: The influx of money helps families make big purchases they may have been putting off. In 2012, I met a single mom living in a hotel who was waiting for her EITC refund so that she could get necessary car repairs and update her expired vehicle registration. Part of the problem, though, is that the EITC refund comes only once a year, at tax time. “If you have an emergency, it doesn’t help if you’re getting a payment in nine months,” Lower-Basch says. The EITC can represent as much as a third of a family’s income. Hodge, who recently went back to work as a home health aide and returned to Richmond with her daughters, now 15, 12, and 8, says she makes about $12,000 a year because the work is so sporadic. She can count on an EITC payment at tax time as high as $9,000. “That’s when I’ve had to catch up with things like rent or—shoot, it can be a number of things,” she says. If there’s any money left over, she budgets it out for the near term. But she’d much rather have more money through steady, better-paying work than a big payment once a year.
Food stamps, formally known as the Supplemental Nutrition Assistance Program, or SNAP, remain a bulwark against hunger for the families of the working poor. Slashed in 1996 as part of the welfare-reform package, SNAP is nonetheless one of America’s last real entitlement programs. Food-stamp funding increases to meet the need, reaching 85 percent of the families who qualify for it, including about three-quarters of the working poor. Food stamps often provide the only regular income that single adult men who aren’t the custodial parents of their children have. But the program faces cuts during recessions, when families need it most, and conservatives in Congress have routinely worked to limit the food stamps that recipients who don’t have children in the home can receive. And in most states, the amount of money provided every week falls well short of what shopping for a healthy diet requires.
Though SNAP has become more valuable for families living below the poverty line, it can impose its own difficulties on the lives of the working poor. Like most federal antipoverty programs, SNAP hasn’t adapted to the fact that more single mothers are working, and it often requires in-person appointments to renew eligibility—appointments that don’t necessarily coincide with reapplication appointments for other programs. This means that families have to go to a social-services agency as many as six times a year, and as many as 17 to 28 percent of eligible families are kicked off benefit programs as a result of missing appointments.
One of the biggest problems with the welfare-to-work program was that it didn’t take into consideration the fact that some people are simply not able to work. Now, those who can’t work often make disability claims, which have grown by almost a third since 2001. The United States spends $260 billion in disability payments, and it spends even more on the disabled because they qualify for Medicaid. The increase corresponds, to some extent, to the shrinking of the welfare rolls.
Terry Garrett, 48 and living in Alexandria, Virginia, collects disability when she might have been eligible for welfare before reform because she’s unable to work. Garrett’s history is complicated: She was the victim of sexual abuse as a child; her mother was murdered when she was 17; and she was a teenage mom. Garrett’s parents were both alcoholics, and she started drinking as a kid. Soon after her fourth child, she started smoking crack cocaine. Throughout, Garrett pieced together work, legal and illegal. Most of her legitimate jobs were at fast-food restaurants and low-cost retailers. In 2005, she stole a cash register from a Kinko’s and was sentenced to seven months in jail. She got clean, and has stayed that way since she got out a decade ago. But a constellation of mental-health issues made it difficult for her to stay focused on the job, so Garrett applied for disability. After three denials over three years, she was finally granted it. She now collects about $600 a month, and that, plus food stamps and the occasional fee for her work as a motivational speaker, comprise the majority of her income.
There are other factors responsible for the increase in disability claims, including greater recognition of learning and mental disabilities, gravely injured veterans returning from our long wars in Iraq and Afghanistan, and the incentive that states have to encourage qualifying individuals to apply for disability, which is funded by the federal government. Still, despite critics’ claims of widespread fraud in the disability program, the truth is that about 65 percent of initial claims are denied. And the system poses other problems: “Disability”—a loaded term in any case—is an either/or designation; people are labeled either able to work or not. We don’t have a social safety net that allows for the fact that someone might not be able to work right now but could work later, or that someone who is physically unable to do a job they’re currently qualified for might be able to take a higher-skilled job with the proper training.
This is the conundrum of the current welfare state: For the most part, there isn’t one. And that’s not likely to change. Donald Trump has criticized social-safety-net programs (other than Social Security) as rife with fraud—and, like many Republicans, he would extend the devastating block-grant funding method to Medicaid. The only plan Trump has proposed for the poor is a vague one to increase jobs, mostly by rolling back trade deals and government regulations. Hillary Clinton’s plans include a bevy of proposals that would help working families at the bottom, including raising the minimum wage, increasing access to child care, and making public higher education debt-free. But other than saying we need to take a “hard look” at welfare reform, Clinton hasn’t fully walked back her support for the bill her husband signed, blaming its flaws on the way it was implemented. To really change TANF, the federal government would need to be tougher on states about the way they spend welfare funds and hold them accountable for getting recipients into jobs that pay an actual living wage. For the most part, though, Clinton’s attentions—along with the rest of Washington’s—are elsewhere.