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Welfare Aid Not Growing as Economy Drops Off

WASHINGTON � Despite soaring unemployment and the worst economic crisis in decades, 18 states cut their welfare rolls last year, and nationally the number of people receiving cash assistance remained at or near the lowest in more than 40 years.
The trends, based on an analysis of new state data collected by The New York Times, raise questions about how well a revamped welfare system with great state discretion is responding to growing hardships.

Michigan cut its welfare rolls 13 percent, though it was one of two states whose October unemployment rate topped 9 percent. Rhode Island, the other, had the nation�s largest welfare decline, 17 percent.

Of the 12 states where joblessness grew most rapidly, eight reduced or kept constant the number of people receiving Temporary Assistance for Needy Families, the main cash welfare program for families with children. Nationally, for the 12 months ending October 2008, the rolls inched up a fraction of 1 percent.

The deepening recession offers a fresh challenge to the program, which was passed by a Republican Congress and signed by President Bill Clinton in 1996 amid bitter protest and became one of the most closely watched social experiments in modern memory.

The program, which mostly serves single mothers, ended a 60-year-old entitlement to cash aid, replacing it with time limits and work requirements, and giving states latitude to discourage people from joining the welfare rolls. While it was widely praised in the boom years that followed, skeptics warned it would fail the needy when times turned tough.

Supporters of the program say the flat caseloads may reflect a lag between the loss of a job and the decision to seek help. They also say the recession may have initially spared the low-skilled jobs that many poor people take.

But critics argue that years of pressure to cut the welfare rolls has left an obstacle-ridden program that chases off the poor, even when times are difficult.

Even some of the program�s staunchest defenders are alarmed.

�There is ample reason to be concerned here,� said Ron Haskins, a former Republican Congressional aide who helped write the 1996 law overhauling the welfare system. �The overall structure is not working the way it was designed to work. We would expect, just on the face it, that when a deep recession happens, people could go back on welfare.�

�When we started this, Democratic and Republican governors alike said, �We know what�s best for our state; we�re not going to let people starve,� � said Mr. Haskins, who is now a researcher at the Brookings Institution in Washington. �And now that the chips are down, and unemployment is going up, most states are not doing enough to help families get back on the rolls.�

The program�s structure � fixed federal financing, despite caseload size � may discourage states from helping more people because the states bear all of the increased costs. By contrast, the federal government pays virtually all food-stamp costs, and last year every state expanded its food-stamp rolls; nationally, the food program grew 12 percent.

The clashing trends in some states � more food stamps, but less cash aid � suggest a safety net at odds with itself. Georgia shrank the cash welfare rolls by nearly 11 percent and expanded food stamps by 17 percent. After years of pushing reductions, Congress is now considering a rare plan that would subsidize expansions of the cash welfare rolls. The economic stimulus bills pending in Congress would provide matching grants � estimated at $2.5 billion over two years � to states with caseload expansions.

Born from Mr. Clinton�s pledge to �end welfare as we know it,� the new program brought furious protests from people who predicted the poor would suffer. Then millions of people quickly left the rolls, employment rates rose and child poverty plunged.

But the economy of the late 1990s was unusually strong, and even then critics warned that officials placed too much stress on caseload reduction. With benefits harder to get, a small but growing share of families was left with neither welfare nor work and fell deeper into destitution.

�TANF is not an especially attractive option for most people,� said Linda Blanchette, a top welfare official in Pennsylvania, which cut its rolls last year by 6 percent. �People really do view it as a last resort.� continued...

http://www.nytimes.com/2009/02/02/us/02welfare.html?partner=rss&emc=rss