New Welfare Plan Said To Deal Blow To Single Mothers

By Ori Nir

Published April 25, 2003, issue of April 25, 2003.
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WASHINGTON — Republican efforts to tighten America’s chief welfare plan could drive poor single mothers deeper into poverty, according to a new report.

The current welfare plan, Temporary Assistance for Needy Families, or TANF, was enacted as part of the celebrated welfare reform legislation passed by the Clinton administration in 1996. It ended nearly six decades of guaranteed assistance to poor families under the Aid to Families with Dependent Children program. The new law imposed work requirements on welfare recipients, gave states greater flexibility in doling out federal dollars and opened the way to programs encouraging marriage.

The latest changes, introduced in a House of Representatives bill, would toughen the work requirements and step up efforts to promote marriage. States will be required to increase work requirements by 2008 to 40 hours per week from the current 20 to 35 hours and to ensure that 70% of recipients are working, while money for education and training is frozen.

Liberal activists argue that the 1996 welfare rules, crafted at the height of an economic boom, already are failing to provide an adequate safety net for those most hurt by the economy’s current three-year slump. The House’s changes would simply drive more needy families off welfare and deeper into poverty, according to a new study released by the Economic Policy Institute, a liberal Washington think tank.

“Instead of fixing the holes in the safety net that have become apparent in the recession, the bill raises the barriers to participation in TANF and provides inadequate funding to meet the growing need for income support,” said the study, “Falling Through the Safety Net,” authored by economists Jeff Chapman and Jared Bernstein.

The study found that the unemployment rate of low-income single mothers — now 12.3% — rose faster during the last two years than the rate in the overall population and is now more than twice as high.

“Rather than focusing reauthorization efforts on ratcheting up work requirements, the debate should focus on fixing the holes in the safety net and ensuring that those who need help the most have access to public assistance,” the report said.

The new rules are included in the House version of a bill to reauthorize the 1996 law, which expired last September and is now operating on stopgap funding. The Senate’s version of the bill is expected to emerge from the Senate Finance Committee by the end of the month. Whether it will include the House changes is the subject of a fierce battle between liberals and conservatives, with a handful of Republican moderates holding the key.

Several women’s advocacy organizations, including the National Council of Jewish Women, are calling on their supporters to lobby the Senate to oppose the House bill. The Jewish women’s council is calling on lawmakers to support a welfare program that “focuses on moving families out of poverty, not just off of welfare.”

Defenders of the House’s toughened work requirements counter that even in difficult economic times, the best strategy for pulling families out of poverty is to provide greater economic incentives for people to find jobs.

“Republicans understand that people who need a hand up still aspire to pursue their American dream,” House Majority Leader Rep. Tom Delay said during House debate on the bill in February. “Democrats still don’t trust people to make this vital transition to independence themselves.”

In the end, the fight may come down to two Republican members of the Senate Finance Committee who supported the 1996 law, Olympia Snowe of Maine and Orrin Hatch of Utah. Their objections, observers say, could prevent the House version from coming out of the finance committee.

A third Republican moderate, Charles Grassley of Iowa, who chairs the committee, has already upset fellow GOP leaders by declaring that the 1996 law, and not the recently passed House version, would serve as the starting point for formulating a bill to reauthorize the welfare law.

All three moderates seem to be siding with Democrats in opposition to the stiffer work requirements included in the House bill. Grassley, who also has called on the White House to compromise on its tax-cut plan, said he is aiming to maintain a 30-hour workweek requirement. In addition, Grassley is attempting to craft a bill that makes it easier for mothers to work by allocating $5.5 billion over the next five years for child care. It also gives states the option of restoring federal cash benefits to legal immigrants. Both items, child-care and immigrant benefits, were excluded from the House bill, despite positive signals from the White House.

Grassley is also seeking a provision that would allow some participants, including children and pregnant women, to receive health insurance coverage under Medicaid and the State Children’s Health Insurance Program, known as S-CHIP, at a cost of $660 million over five years.

The 1996 law has been widely hailed both for its success in spawning new approaches to welfare and for reducing welfare caseloads. The plan seemed to work particularly well for single mothers. Between 1995 and 2000, the rate of low-income single mothers who were working rose from 59.1% to 68.5%. Their unemployment rate — always higher than that of the overall population — dropped from 13.6% in 1996 to 9.8% in 2000. Over the same period, unemployment within the overall population dropped by just 1.4 percentage points.

But, critics note, the welfare reform bill was passed while the country was enjoying the strongest labor market in decades. When the economic boom ended and the labor market became less accommodating, unemployment among single mothers jumped to 12.3%, undoing much of the progress achieved during the late 1990s. As unemployment increased and the real earnings of poor single mothers declined, the safety net that was supposed to assist them “failed to adequately respond,” according to the Economic Policy Institute.

The institute report argues that the sorts of changes supported by the Bush administration and approved by the House to the federal assistance program will put single mothers in an even more precarious economic situation.

As requested by President Bush, the House legislation freezes the program’s annual funding at its current $16.6 billion and provides a $1 billion increase in mandatory child-care grants to states. The House bill fails to act, however, on indications from the White House that it would support expanding education and training opportunities for assistance recipients, extend time limits for those who are working beyond the current four-year limit and restore benefits to legal immigrants.

House GOP leaders argue that state welfare administrators were not being rigorous enough in pushing recipients to work and that recipients were not trying hard enough to find jobs.

Both premises have been rejected by liberal economists, who argue that much of the success of the welfare-to-work programs during the late 1990s should be attributed to the abundant availability of decent-paying jobs, rather than to radical reforms in state welfare delivery.

Few predict a significant short-term recovery in the economy or the job market. The politically neutral Office of Management and Budget predicts a national unemployment rate of more than 5% through 2008.

If during the booming labor market of the late 1990s, unemployment among single mothers barely dropped below the 10% mark, “it is highly unlikely that even the most stringent work requirements will lead to lower unemployment, especially in a weaker economy,” the Economic Policy Institute argued in its report.

The report argued that even as holes in the current safety net for single mothers grew in the last two years, other components of the federal government’s assistance program for the poor failed to adequately compensate. During the same period, the average value of food stamps, child-support payments and the Earned Income Tax Credit decreased. Although unemployment-insurance compensation increased, the rise could not compensate for the drop in other sources of relief. Housing subsidies remained the same.






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