The Massive Policy Failure That Paul Ryan Wants To Emulate

Rep. Paul Ryan (R-WI) on Monday released a sweeping audit of the country’s anti-poverty programs, seeking to put his stamp on a second round of welfare reform. In detailing the history of these programs, he looked back fondly on the last time a welfare reform law passed: 1996. That was when the Aid to Families with Dependent Children (AFDC) cash assistance program was turned into what it is today, Temporary Assistance for Needy Families (TANF). “The creation of the Temporary Assistance for Needy Families program,” Ryan wrote, “is widely seen as the most successful reform of a welfare program.” He described the “revolutionary” changes it made: the transformation from a program where the federal government shares the costs of assistance to one where the government gives states a fixed block grant, the addition of stringent work requirements, the imposition of a five-year lifetime limit on receiving benefits, and the elimination of “the entitlement to federal cash assistance.”

The idea that this transformation is a huge success would surprise many of today’s poor families. But it depends on how one defines success.

“If they just threw everyone off the rolls, we could say no one needs cash assistance anymore, wow, what a success,” Greg Kaufmann, a senior fellow with Half in Ten, noted.

And in fact, that’s the trajectory we’re on. Today, the number of people who receive cash assistance through TANF is way down. At its peak, AFDC served 5.1 million households, according to Ryan’s report. By 2010, just 1.9 million households were enrolled in TANF. That doesn’t mean the need has dissipated. In 1996, cash assistance reached 72 percent of poor families with children. By 2012, that figure dropped to 26 percent. Just 9 percent of children in single parent homes received TANF in 2012.

We can chalk this up to the fact that states are explicitly and implicitly incentivized to reduce the number of people on TANF. “One of the big problems with the program is that its goal is not poverty reduction, but caseload reduction,” said Melissa Boteach, vice president of Half in Ten and the Poverty and Prosperity Program at the Center for American Progress. States get a credit from the federal government when they keep their caseloads down. But the block grant structure also means that they get a fixed amount of federal money for welfare programs—funded at $16.5 billion in 1996, which hasn’t been increased or updated for inflation and therefore has lost 28 percent of its value—no matter whether population or need grows. 

“If they spend less on cash assistance, they can use those other resources for anything they want,” LaDonna Pavetti, vice president for family income support policy at the Center on Budget and Policy Priorities, pointed out. And they do. That system creates “a huge incentive for states not to allow caseloads to increase.” It also hurts when they’re getting close to hitting their maximum. If numbers increase too much, states will be in big trouble. “Fundamentally, a block grant means if states let caseloads rise, they need to cut somewhere else, which is really politically hard for a state legislature,” Elizabeth Lower-Basch, policy coordinator and senior policy analyst at CLASP, added.

In his report, Ryan credits reform with reducing poverty in spite of these incentives. He points out that the poverty rate for single mothers fell from 55.4 percent in 1991 to 39.3 percent in 2001. Conservatives often boast about the drop in poverty up until that year. “All of a sudden, conservatives stop talking about it after 2001, when a recession hit and the story ends,” Boteach pointed out. “If we did that with other programs, I don’t think we’d find that to be completely intellectually honest.”

While poverty may have declined after welfare reform, it’s climbed back up in recent years. By 2012, two-fifths of families headed by a single mother lived in poverty. Meanwhile, TANF has failed to help families avoid deep poverty: the number of families whose incomes are below half the poverty line (less than $12,000 a year for a family of four) is higher now than in 1996. Worse, in a recent study sociologists Kathryn Edin and Luke Shaefer found that extreme poverty, or the number of families who live on $2 or less for each person per day, “has risen sharply since 1996, particularly among those most impacted by the 1996 welfare reform.” By the middle of 2011 the number of households living on such a small budget had risen by 159 percent.

The coincidence of rising poverty with the start of the 2001 recession makes sense. The block granting system took away TANF’s ability to respond when need goes up. Even though unemployment spiked between 2007 and 2011 thanks to the Great Recession, in nearly a third of states TANF caseloads actually dropped. The rolls didn’t start growing until seven months into the recession and only ever rose 16 percent before beginning a decline in December of 2010, despite the fact that the number of unemployed workers jumped 88 percent over the same time period and that during that same period the number of people using the Supplemental Nutrition Assistance Program (SNAP), or food stamps, rose by 45 percent. Unlike TANF, SNAP isn’t a block grant; federal funding automatically rises as need grows.

After President Bill Clinton (D) signed welfare reform into law, in a radio address, he said that it would no longer “trap so many families in a cycle of dependency, but instead will now help people to move from welfare to work.” He promised that “as we give welfare funds back to the states, we will protect the guarantees of health care, nutrition, and child care, all of which are critical to helping families move from welfare to work.”

Those promises—that recipients would be given the support they needed to get and keep a job, including child care—have mostly been broken.

Juell Frazier, mother of two living in Massachusetts and member of the research and advocacy project Witnesses to Hunger at Drexel University, enrolled in Springfield College’s human services department in May of last year. “I started my course, I was doing really well, I was really excited, really happy,” she told ThinkProgress. She attended college “to better myself,” she explained. “For me to get a job and be self-sufficient, get the income I need to make it for me and my family, I have to have a Bachelor’s Degree.” She is proud of being an honor roll student.

But just before her last class of the semester, she received a notice that she would have to enroll in a career readiness program recommended by her welfare agency or risk losing her TANF benefits. She completed the semester anyway, but her benefits were cut off. She was told that she had to meet work requirements and that going to school didn’t count. “My [case] worker told me if you want to go to school, that is your choice,” she said. So she dropped out and enrolled in a job readiness program. “It’s all good, but I don’t need a career readiness program. I have business cards, resumes, references,” she said.

She plans to reenroll in school and has been told she should be able to meet the requirements by doing a work/study program at her college. But the pause in her education has sparked a bout of depression. “I’ve set up appointments to talk to the dean, but once the time comes, I’m battling myself,” she said. “I’m feeling so scared, so nervous, unsure how it’s going to fall out.”

You might expect that going to college to be able to get a better, higher-paying job would be exactly what TANF should encourage recipients to do. Ryan himself writes, “The lack of affordable education—and of effective training programs—hinders skill formation, which is critical to social mobility.” But many like Frazier aren’t allowed to take part in these programs. States must meet a rigid “work participation rate” — the share of TANF recipients doing a narrow set of work activities for at least 20 to 30 hours a week. Only a year of vocational education counts toward those activities. Getting education directly related to employment, attending secondary education, or getting a GED don’t qualify.

“You see women being kicked out of college where pursuing degrees would give them living wage jobs,” Kaufmann noted. It’s all part of the “work first” mantra of 1990s welfare reform: any job is better than no job, even if no job means working toward a degree. At that time, there was the expectation that getting any low-wage job would lead to higher wages later on. “But that’s not what the research shows,” Pavetti said. “They get into low-wage jobs and stay there.”

Even those who are able to trade up—who go to career readiness programs and then are able to find a higher paying job afterward—don’t necessarily fare well either. Emily Edwards, another member of Witness to Hunger, just transitioned from her program to a job as a home health aide. While she was in the program, she was automatically given a free child care spot for her five-year-old son. “Once I got a job, it flipped on me,” she said. She’s currently in a grace period, but eventually the income from her new job will disqualify her from TANF benefits, which will also abruptly end the free childcare and require that she start paying a copayment. She still has to pay rent and other bills, so a copay will “make things tight,” she said. She’s currently trying to get another job cleaning at night. “And I still have to be a mom at the end of the day, have quality time with my son,” she pointed out.

She’s not sure whether she’ll be able to afford the copay for her son’s childcare. “It might be I have to leave one of the jobs, it just depends on where it falls,” she said.

A mother who can’t keep a higher wage job because she can’t afford childcare certainly reneges on Clinton’s promise. But many women face Edwards’s dilemma. Most states prioritize giving TANF recipients childcare assistance and helping them get a spot with a provider. But “in general, states don’t provide transitional child care so you don’t lose the subsidy immediately after you leave cash assistance,” Lower-Basch explained. And the loss of benefits can be extremely abrupt. “The child care cliff”—this very problem—“is among the most acute,” Boteach said. There is little support to help cover the cost of childcare once someone leaves TANF. Spending on assistance has recently hit a decade low. Last year, the majority of states made it harder for parents to get childcare benefits, or made those benefits more meager.

TANF used to provide other supports for people looking to get to work, too. “Case workers used to have fairly generous flex funds to make sure recipients had whatever they needed to go to work,” Lower-Basch said, whether it be money for transportation, help paying for a car payment, or even buying a uniform. “In some states, those have really gotten squeezed.” Kaufmann related a conversation with someone has run a welfare office in Appalachian Ohio since the 1970s. “He used to be able to give people transportation assistance,” he recalled. “That’s been cut. You’ve got all these people who aren’t meeting the work requirement because they can’t get there.”

Welfare reform was meant not just to “replace welfare checks with paychecks,” in Clinton’s words. It was also a political move: transforming the program was meant to change the way people viewed the poor and make it easier to pass safety net expansions in the future with greater public support. Clinton’s advisers argued that the new restrictions “would help create a political climate more favorable to the needy” and that, subsequently, “a more generous era would ensue. Harmful stereotypes would fade. New benefits would flow.” But political scientists Joe Soss and Sanford F. Schram found that welfare reform didn’t improve the public’s perception of the poor or support for expanded programs.

And we can see that in today’s political climate. Ryan’s report said the government’s anti-poverty programs create a “poverty trap” and implied that they spend too much money for too little gain.

Now, Ryan is starting a conversation about welfare and the country’s network of anti-poverty programs, choosing to pin his definition of success to the 1996 welfare reform. We’ve already seen what this variety of reform brings: deeper poverty, less support, and a shaky ladder for people to try to climb up into the middle class. If his plans are as widely embraced within his party as they have been in the past, that doesn’t bode well for the programs that still work.

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