Welfare Overhaul's Impact On America's Poorest
The welfare program that operated in the United States between the Franklin Roosevelt administration and the Clinton administration offered poor families assistance with few requirements or time frames. States could enroll as many people as they wanted in the program, and the federal government would match their funds.
That changed in 1996, when President Clinton signed legislation overhauling the nation's welfare system. The new law — referred to as the push "to end welfare as we know it" — took away federal matching funds from states, giving them little incentive to bring new people onto the cash welfare rolls.
That's affected growing numbers of poor people across America. Sixteen states have decreased the number of people receiving welfare benefits since the recession hit. And most states are using their allotment of federal welfare dollars to make up for budget deficits in other areas.
"States are getting the same amount of money that they did 15 years ago, even though their caseloads are down by two-thirds," says New York Times reporter Jason DeParle. "So on a case-by-case basis they have much more money than they used to, but under the federal law, they're allowed to transfer almost unlimited amounts of that money to other programs that have some connection to the needy. Some of these programs are, in fact, worthy services for the poor. The point is, it wasn't what this program was intended to do, which was to provide income support for poor mothers and their children."
On Thursday's Fresh Air, DeParle talks about his recent article examining how restructuring the welfare program has affected the poor — and particularly poor women — during the recession. He notes that the number of Americans receiving cash welfare payments has sharply decreased, while the number of Americans receiving food stamps has grown rapidly.
"A big part of the reason is because the federal government pays the entire cost of that program," he tells Fresh Air's Terry Gross. "And states take positive steps to discourage people from getting cash assistance, and they do broad outreach programs to help people getting on food stamps. When the federal government pays the bill, the states act in a very different way."
DeParle recently traveled to Arizona, where the unemployment rate is one of the highest in the country, and the welfare caseload is half of what it was before the recession. Advocates of the current welfare system point to states' reduced caseloads as a sign that welfare changes have worked. U.S. Rep. Paul Ryan, R-Wis., chairman of the House Budget Committee, has called the welfare program an "unprecedented success." He and other Republican leaders now want to apply the changes made to the welfare program to other aspects of the social safety net, such as Medicaid and food stamps.
"That's why the fate of the welfare bill ... has a much larger importance right now, because it is being seen as a model for remaking much, much larger parts of the federal government," says DeParle.
While in Arizona, DeParle met with many single mothers who have been dropped from the welfare rolls. Many were desperate to make ends meet. They told him that they were selling blood, returning to abusive homes — and even selling their food stamps. DeParle says selling food stamps is a common practice, but he doesn't want to give the impression that the food stamp program is being used or abused.
"In my travels through low-income America, I have — over a period of many years — repeatedly been struck by how often and how hard people struggle to keep food on the table throughout the month," he says. "For those of us who never think twice about having enough food, it's hard to imagine what a daily struggle it is for some needy families. So the fact that desperate people are monetizing their food stamp benefit to some degree or other, I think is more of a comment on the restriction of cash aid than it is on the need for food stamps."
On the response to his article
"Some were of the 'why should I care about these people?' variety. [For example] 'Why should my tax dollars go to help these people who are not working, who have not worked in the past, who are here illegally?' And the short answer is that they have kids. The cash welfare program has always been for families with children. We don't provide cash aid to single adults. So everything these women have been through ... they were all doing with children in tow."
On why poor women have not gotten a lot of attention
"I think one of the reasons this group of people hasn't drawn more attention in the downturn is that they tend to have a lot of problems that would make them politically unpopular. Some have addictions. Many have violent boyfriends. A great many have mental health problems. They can be a hard group of people for the general public to feel sympathetic toward, particularly during economic downturns. Throughout the past four years, we keep hearing about the impact of this economy on the middle class, which of course is important. But it's having a great impact on these people, too. They can resort to strategies that make them seem unsympathetic. That's what's been missing from this debate. This recession aftermath has been so framed in terms of an impact on the middle class that the poor have largely been pushed out of the spotlight ... and they're really in political oblivion right now."
On people who cannot get on the welfare rolls
"One of the costs is that people who do not or can not or for whatever reason don't make that transition [from welfare to working] — they might be addicted, they might just live in a place of terribly high unemployment — there's much less left for them. They can fall further, much further, under the new system, than they could under the old."
TERRY GROSS, HOST:
This is FRESH AIR. I'm Terry Gross. How secure is America's safety net for the poor? In 1996, President Clinton pledged to end welfare as we know it when he signed a new law reforming the welfare system. The economy was in good shape then, but the recession is testing those reforms. Recent studies have found that as many as one out of every four low-income single mothers is jobless and without cash aid. That's roughly four million women and children.
My guest, New York Times reporter Jason DeParle, tracked down some of those women for an article that was published earlier this month. He chose Phoenix as the location for this report because Arizona is one of 16 states that have reduced its welfare caseload even further since the start of the recession. Arizona cut its caseload by half.
DeParle writes: Even as it turned away the needy, Arizona spent most of its federal welfare dollars on other programs, using permissive rules to plug state budget gaps, unquote. Now there's a movement to apply the same approach used in welfare reform to food stamps and Medicaid. Those changes are advocated by Mitt Romney and Paul Ryan, chair of the House Budget Committee.
Jason DeParle has reported on poverty for the New York Times for more than 20 years. Jason DeParle, welcome back to FRESH AIR.
JASON DEPARLE: Thank you.
GROSS: So before we assess how ending welfare as we know it has worked when it's been needed most, in economic hard times, let's describe the changes that the law Clinton signed into effect put into place. What's the difference between welfare now and welfare before the 1996 bill?
DEPARLE: Well, there's two sets of differences. One is what it requires of the poor people themselves. Under the old law, they had few requirements. Under the new law, there are work rules and time limits. But perhaps even more important for the current context, there was a change in the financing structure of the program.
Under the old law, states could enroll as many people as they wanted, and the federal government would pay a large part, a large share of the increased cost for every new person that came on the rolls. There was a cost-sharing arrangement.
Under the new law, states get a flat amount of money no matter how many people they enroll. So in a sense every new person they enroll comes out of their allotment. They have a strong financial incentive to keep the rolls low. And I think that's played a large part in the state's behavior during the recession. They had a financial interest in keeping people off of welfare.
GROSS: If states are only getting a finite amount of money, no matter how many people are poor and need welfare in their state, how is that affecting how the states are using the money?
DEPARLE: Well, you can see a dramatic difference between two programs. One is the cash welfare program, where in essence every new person the state puts on the rolls comes out of the state's own pocket. Those rolls have stayed a near-historic lows. When it's the state's own money that's at stake, very few people get on the rolls.
By contrast, look at the food stamp program, which has nearly doubled since the economy went into a tailspin four years ago. We have a record number of people on food stamps. A big part of the reason is that the federal government pays the entire cost of that program, and states take positive steps to discourage people from getting on cash assistance, and they do broad outreach programs to help people getting on food stamps.
When the federal government pays the bill, the states act in a very different way.
GROSS: One of the things you found is that since states are just getting a finite amount of money from the federal government for welfare, some states are using some of that money, money intended for the poor, and using it to plug other budget holes. What are some of the ways the money for welfare is getting re-apportioned by states?
DEPARLE: Right. States are getting the same amount of money that they did 15 years ago, even though their caseloads are down by two-thirds. So on a per-case basis, they have much more money than they used to, but under the federal law, they're allowed to transfer, in effect, almost unlimited amounts of that money to other programs that have some connection to the needy.
So most states have real problems with their foster care systems. A lot of them are under court order. They can take this federal money that was meant to pay cash benefits and put poor women to work and use it to plug holes in their foster care systems, which is what many are doing.
In Arizona, about 60 percent of the money goes to that.
GROSS: And a lot of it's going to adoption services too, you say.
DEPARLE: Adoption services, foster care, right, both of those under the broad rubric of child welfare systems. But it can go to other things too. It can go to child care. It can go to early education. It can go to tax supports for low-income families. It can go to a lot of things, and any of those things might be thought of, might be, in fact, worthy services for the poor.
The question, the point is, it wasn't what that program - what this program was intended to do, which was to provide income support for poor mothers and their children. And by transferring it to other programs, in effect what states are doing is backing out the state dollars from those programs. They can pay for those programs with federal dollars, take out the state dollars, and then that leaves poor families with children with less support.
GROSS: So how many states do you think are diverting money like this?
DEPARLE: Oh, probably all.
GROSS: So if caseloads are down in some states, is that a sign that the welfare reforms have worked because fewer people are on welfare?
DEPARLE: Everyone has a different definition of worked. So if your goal was to cut caseloads, then the 1996 law has been a success beyond imagining. If your goal was to increase the work effort of poor mothers, poor single mothers, then you'd have to say the law was pretty successful in that regard too, even in this economy, bad as it is. Similar shares of - about as many low-income single mothers are working as 15, 20 years ago.
So it has cut caseloads, it has promoted work. If your goal was to reduce poverty, it's been much - or raise incomes, it's been much less successful. It's not clear that people are substantially better off when they get off welfare for a low-income job.
And if your goal was to change the trajectory of the children's lives - you know, early on there was a lot of talk about mothers being role models, kids would see mom getting up, going to work, they would raise their aspirations, they would work harder in school, they would avoid crime, avoid pregnancy, you know, put kids on a different life path - I think there's been no evidence of that. If anything, maybe even on the margin it's been bad for kids because - or at least adolescent kids, because it means their mothers are away more often.
So it depends what you mean by works.
GROSS: So the welfare reform era has meant more restrictions for people who are on welfare. What are some of those increased restrictions?
DEPARLE: Well, there's two main categories. One is time limits. Under the federal law, most recipients are supposed to be limited to just five years of cash assistance in their lifetimes. But states are allowed to reduce those as much as they want.
Arizona, in the midst of the worst economy in memory, cut their caseloads down from five years to two years and in essence reduced half the caseloads. So just with a vote of the legislature, you can cut the caseload in half just by reducing the time limits.
GROSS: Can I just stop you for a second? Doesn't that make it seem - so you're basically, like, saying time's up, you're off welfare. But if you just look at the statistics, it could look like, wow, what a success, fewer people on welfare, that must mean that they don't need it anymore. But it doesn't necessarily mean that.
DEPARLE: Yes, it goes back to what you asked, did it work. It worked in cutting caseloads. But right, those - with a stroke of the pen, Arizona could cut its caseloads in half, but it doesn't mean that those families that lost their cash aid are any better able to support themselves.
States are pretty much free to run their programs however they want and to impose any kind of administrative barriers that they choose. So just by changing your administrative procedures, making someone come in twice to sign up, say, instead of once, you can have a big impact on the caseload. And I think a lot of women have - not all, but a lot of women have decided the system has just gotten to be more hassle than it's worth, you know, on a cost-benefit basis.
The cash amounts, the benefits have dwindled to such a low amount, and the amount of time that the program requires has gone up. A lot of women have just walked away from it.
GROSS: Now, you write about single mothers who have been dropped from the welfare rolls and what they're trying to do to make ends meet. What are some of the stories that you've heard?
DEPARLE: You know, Terry, I've been interviewing poor single mothers for more than 20 years, and I can't remember a time when I heard people talk so openly about desperate or even illegal things that they were doing in order to make ends meet. They were selling food stamps. They were selling blood. Women talked openly about shoplifting.
One woman was quite up front on that she'd been engaging in muggings of illegal immigrants. A lot of women are going back to relationships with - that they had with violent men and were open in saying they were only doing it because they didn't have any other choice. Lots of doubling up. Lots of going to churches, food pantries.
GROSS: I thought one of the most unusual stories that you heard was told by the mother who sold her child's Social Security number.
DEPARLE: Some women are able to raise money by letting friends or relatives use their children's Social Security numbers to claim tax credits, and this woman, her sister, I think it was, had promised her $3,000 - had promised her a share of the $3,000 tax credit if she could lend her the Social Security numbers of the kids, and the woman did it but was complaining she didn't get the full sum that she was owed.
GROSS: One of the things that welfare reform was supposed to do was promote a work ethic. Can you evaluate whether that has succeeded?
DEPARLE: Well, I would say it has succeeded, because low-income since mothers went to work in much greater shares than they ever had before. It was partly the great economy of the late 1990s. It was partly the provision of extra benefits like tax credits and child care that helped people take low-wage jobs. But certainly when you have less access to cash aid, it did prompt more people to go to work.
And even now in the bad economy that we're in, low-income single mothers are working as much, or by some measures more, than they used to. So if it helped - if the question is merely did it make people work more than they otherwise would have, the answer is yes.
If the question is what are the costs of that, then the answer gets more complicated because one of the costs is that people who either cannot or do not or for whatever reason don't make that transition - they might be depressed, they might be addicted, they might just live in a place of terrible high unemployment - there's much less left for them and there's - they can fall farther, much farther under the new system than they could under the old.
GROSS: Well, if you're just joining us, my guest is Jason DeParle, and he writes about poverty for the New York Times, and he's been covering poverty for years for the Times. Let's take a short break here, and then we'll talk some more. This is FRESH AIR.
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GROSS: If you're just joining us, my guest is Jason DeParle. He's a reporter for the New York Times who's covered poverty for many years, and he recently wrote about how the welfare reform bill that President Clinton signed in 1996 has been working, you know, during this period of recession and economic hard times.
Let's talk about what some of the politicians have to say. Paul Ryan, the Republican congressman from Wisconsin, who is the chair of the House Budget Committee, calls the welfare program, quote, an unprecedented success. And he wants to do what he describes as repairing the social safety net. Does he want to apply the changes to welfare to other aspects of the social safety net?
DEPARLE: Oh, yes, very much, in two ways. One is to do the same capped funding to turn what are so-called entitlements, where the federal government will provide as much aid as needed into a so-called block grant, where the federal government says this is as much as you get, states, and you manage as you want.
So I think the current, virtually all the Republican leaders now want to turn Medicaid and food stamps, two programs that are much, much bigger than cash welfare ever was, into block grants. Mitt Romney supported that, Paul Ryan supported that.
The second area in which they want to use the welfare law as a model is to instill some sort of either time limits or work requirements, some obligations, on the recipients themselves. So that's why the fate of the welfare bill is - I mean, it would be important even if it only affected the people who are using it.
But it has a much larger importance right now because it is being seen as a model for remaking much, much larger parts of the federal government.
GROSS: So he would like to apply it to the food stamp program what's been done to welfare. Now, even though the welfare rolls have decreased a lot, in part because of states adding restrictions that basically throw people off the welfare rolls, food stamps, the number of people using them has doubled recently, hasn't it?
DEPARLE: Yes, the food stamp rolls have nearly doubled since the economy went south in 2007. Republicans tend to see that as an example of federal spending out of control. The Democrats tend to see that as the one part of the safety net that has responded vigorously, as a safety net should, an essential benefit that's keeping the destitute from even worse hardship.
GROSS: Yes, and one of the ways it's keeping the destitute from worse hardship, you describe some people as selling their food stamps because it's the only - food stamps is the only income they have. So if the mother doesn't eat, she can sell some of the food stamps to have more money to support her children.
DEPARLE: With the limits on cash aid, I think a lot of women have gotten some cash income from their food stamps. I think that's a common phenomenon. But I wouldn't want to leave the impression that I think the food stamp program is being widely abused, misused, isn't needed.
In my travels through low-income America, I have, over a period of many years, repeatedly been struck by how often and how hard people struggle to keep food on the table throughout the month.
For those of us who never think twice about having enough food, it's hard to imagine what a daily struggle it is for some needy families. So the fact that people are - desperate people are monetizing their food stamp benefit to some degree or other I think is more of a comment on the restrictions of cash aid than it is on the need for food stamps.
GROSS: The story that we've been talking about, about people who represent the people who have fallen through the cracks since welfare reform and since the economic recession, what kind of reaction have you gotten to that story?
DEPARLE: We got hundreds of comments on the story, and as always, some were of the why-should-I-care-about-these-people variety. They - you know, why should my tax dollars go to help these people who are not working, who haven't worked in the past, who are here illegally, who whatever.
You know, the short answer is that they have kids. The program, the cash welfare program, has always been for families with children. It used to be called Aid to Families with Dependent Children. We don't provide cash aid to single adults. So everything these women have been through, whether it was doubling up with relatives or moving back in with violent boyfriends or selling blood, they were all doing with children in tow.
I think one reason this group of people hasn't drawn more attention in the downturn is that they tend to have a lot of problems that would make them politically unpopular. Some have addictions. Many have violent boyfriends. A great many have mental health problems.
They can be a hard group of people, at least as adults, to feel - for the general public to feel sympathetic toward, particularly during an economic downturn. You know, throughout the past four years we keep hearing about the impact of this economy on the middle class, which of course is important, but it's having a great impact on these people too.
As you can see in this piece, they can resort to strategies that make them seem unsympathetic. This recession has been - and aftermath has been so framed in terms of its impact on the middle class that the poor have largely been pushed out of the spotlight, and you know, the chronically poor, the destitute, the deeply disadvantaged, poor single mothers with mental health problems and homeless problems and addiction problems, I mean they're really in, I think, political oblivion right now.
GROSS: If the welfare reform restrictions are applied to food stamps and Medicaid, do you think that more people who need things like Medicaid and food stamps won't have access to it because they'll risk - the risks are that states would diver the money to other programs or that states would just limit the number of people on the rolls through - by adding certain restrictions that don't exist now?
DEPARLE: Oh, absolutely, but there's a trade-off, OK? I mean, there's a legitimate debate about that. If you have 100 people on aid, and you make the aid harder to get, if 50 percent of if 50 of them do better, and 50 of them do worse, is that a success?
Well, you know, some people would say yeah, look, 50 people are better off, and it's costing less government money, and they're now in the private economy, and they can move up over time. And somebody else would say, ah, but look at the most disadvantaged, look how far they've fallen.
I mean, these are - there's a tension in those values, you know, how much you push people and what degree of hardship you're willing to accept as a result. So the harder you make it to get aid, the more the most disadvantaged may suffer.
There may be - if the suffering is confined to a small enough group of people and is modest enough, it may be worth it if it helps other people. But obviously there's a tradeoff in those two things.
GROSS: And you have to acknowledge both sides to really assess.
DEPARLE: Exactly, yes. I think there's been an absolute refusal to acknowledge the downside by most of the supporters of the welfare law.
GROSS: Jason DeParle, it's really good to talk with you again. Thank you so much.
DEPARLE: Thank you, Terry.
GROSS: Jason DeParle reports on issues related to poverty for the New York Times. I'm Terry Gross, and this is FRESH AIR. Transcript provided by NPR, Copyright National Public Radio.