Reform Welfare Reform

Families still poor and experiencing homelessness

Welfare to What? provides an overview of problems that continue to affect low-income families’ stability, economic viability, health and well-being. It covers employment and wages, housing and homelessness, education and job skills, loss of income, transportation, health and childcare, domestic violence, income supports, and privatization of services.

The report is based on 4,988 surveys completed by low-income families seeking help from 188 service providers between January and December 1999. The NWMAP survey is not a random sample, and does not claim to directly correlate family hardship with welfare reform, but it does give important snapshots of the conditions faced by poor families in the era of welfare reform.

As many Americans prosper and politicians revel in dramatic declines in the welfare rolls, families are struggling to provide both housing and food for their children. Almost 50 percent of survey respondents had experienced homelessness in some form, and 34 percent had gone to a shelter for help. Forty-seven percent of those surveyed reported that they were not receiving food stamps to which they were entitled, and 28 percent said they could not buy food at certain times during the previous six months. Nearly half of the surveyed families who received welfare indicated that they had their benefits reduced and/or stopped. Sixty-five percent of respondents were unemployed. For those who were employed, the average wage was $7.20 an hour, and over two-thirds did not receive health insurance from their employers.

Not addressing conditions like these will threaten the potentially positive outcomes of welfare reform. The goal of the TANF reauthorizing legislation should be to ensure the economic viability, long-term stability, health, and well-being of all the involved parents and their children. Welfare to What? presents numerous recommendations at both the federal and state level.

Give Reform Time to Work
To start with, Congress should reauthorize TANF at current federal funding levels, and states should spend all unspent federal TANF dollars. As of 3/31/00, a total of $8.3 billion in obligated and unobligated federal TANF funds was still available. States should spend these resources on outcome-effective programs and services.

The goal of welfare reform should be success, not an arbitrary time limit. Reauthorization should remove time limits from cash assistance benefits for families complying with welfare-to-work activities and reform sanction policies to help families avoid sanctions and ensure that they do not become homeless as a result of sanctions. Full family sanctions should be eliminated. Because those remaining on welfare face many barriers to economic independence, states alone will not be able to assume responsibility for their assistance. Therefore, Congress should expand the federal exemption rule beyond the established 20 percent exemption limit, to be consistent with current caseloads. This will allow States to use federal dollars for cash benefits to recipients who have exceeded the time limit but are still complying with welfare-to-work activities.

In keeping with a focus on success, Congress should change or eliminate the caseload reduction credit, which rewards states merely for reducing the numbers of people on the welfare rolls no matter where they go. States should be rewarded for reductions in the number of families living in poverty, not in state caseloads alone.

Support Work
Low-income families face many legitimate obstacles to work. Lack of stable housing is a big one. Any serious welfare reform effort should increase affordable housing stock and subsidies. As one way of doing this, Congress should establish the National Affordable Housing Trust Fund to develop 1.5 million units of housing primarily for households whose annual incomes are at or below 30 percent of median income. Also, states should define housing subsidies as work supports so they can use TANF and related funds to get TANF families into stable housing on a quick timetable. In the meantime, as long as available housing assistance is as limited as it is, reauthorization should include the cost of housing in TANF, SSI and SSDI cash assistance and food stamp determination formulas.

Federal and state governments should also increase other supportive services for low-income families, including: subsidized child care for families not receiving TANF cash assistance benefits; transportation options for all low-wage workers; targeted case management, education, training, and job/vocational placement for families with special needs such as a mental health or physical health disability; fatherhood programs to promote fathers’ involvement with their children; and Medicaid, which should be expanded to cover working parents up to 200 percent of the federal poverty level.

Support Education for Better Work
Rather than shunting welfare recipients into a different dead-end cycle, welfare reform focused on success should redefine “work activity” to include some educational activities. States could put greater emphasis on comprehensive assessments of the skills and current challenges of TANF parents as they develop their plans to move from welfare to work, and focus those plans on needed basic and post-secondary education, training relevant to both the involved individuals and the market’s needs, and retention services. Programs should be developed to support non-custodial parents and TANF recipients who lose their first job.

Reward Work
To make work truly rewarding for those coming off the rolls, Congress should establish a federal minimum wage that is a living wage, indexed to the cost of housing, using the housing affordability standard (30 percent of a household’s annual income) and the fair market rents determined annually by HUD. States could create their own version of one of the most successful anti-poverty programs, the Earned Income Tax Credit (EITC). And employers receiving subsidies or tax credits should be required to provide benefits (health, paid leave, unemployment insurance) for families moving from welfare to work.

In this time of federal surplus and prosperity, we should be able to reform welfare reform so that it actually moves people out of poverty.