More About LaDonna Pavetti

LaDonna Pavetti

Dr. LaDonna Pavetti is the Vice President for Family Income Support Division at the Center on Budget and Policy Priorities.

Full bio and recent public appearances | Research archive at CBPP.org


TANF at 18: A Weakened Role and Not a Model for Safety Net Reform

August 22, 2014 at 10:08 am

Eighteen years ago today, President Clinton signed into law the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 — commonly known as “welfare reform.”  A key component was its creation of the Temporary Assistance for Needy Families (TANF) block grant to replace Aid to Families with Dependent Children (AFDC).

Since then, TANF has played a shrinking role as a safety net for poor families (see chart), serving a small share of poor families and lifting many fewer families out of “deep poverty” (with incomes below half the poverty line) than AFDC did, as we explain and illustrate in our revised chart book.

A close look at TANF’s track record makes it clear that the program needs retooling to ensure that a strong safety net and sufficient employment assistance is available when people need them most.

Yet some policymakers claim that welfare reform was such an extraordinary success that we should use it as a model for reforming other safety net programs.  But the facts don’t make that case.  For example, in TANF’s 18-year history, never-married mothers with a high school education or less made substantial gains in employment in only the first four years — largely due to the roaring economy of the late 1990s — and those gains have almost entirely eroded in the subsequent 14.  It is wishful thinking to assume that we could see the same employment gains we saw in TANF’s early years in today’s sluggish labor market.

The safety net (other than TANF) plays an extremely important role in reducing poverty and deep poverty in this country — a role that should be maintained.  The evidence from TANF suggests that applying TANF-like reforms to other safety net programs would likely cause more families to join the ranks of the deeply poor and cause some who are already deeply poor to become even poorer.

TANF reform is long overdue.  We should fix its problems before embarking on reforms that will repeat its failures.

Click here for the full chart book.

Ryan’s “Opportunity Grant” Would Likely Force Cuts in Food and Housing Assistance

July 29, 2014 at 11:59 am

House Budget Committee Chairman Paul Ryan maintains that consolidating 11 safety-net and related programs into a single “Opportunity Grant” would give states the flexibility to provide specialized services to low-income people.  But providing these additional services would require cutting assistance funded through the Opportunity Grant to other needy people.  And because SNAP (formerly food stamps) and housing assistance together make up more than 80 percent of the Opportunity Grant, the cuts would almost certainly reduce families’ access to these programs, which are effective at reducing poverty — particularly deep poverty.

SNAP is an entitlement, which means that anyone who qualifies under program rules can receive benefits, and is heavily focused on the poor.  Over 91 percent of SNAP benefits go to households with incomes below the poverty line, and 55 percent goes to households in deep poverty — that is, households with cash incomes below half of the poverty line (about $9,800 for a family of three in 2013).

As a result, SNAP kept 4.9 million people out of poverty in 2012, including 2.2 million children.  It also lifted 1.4 million children out of deep poverty, more than any other benefit program.

Similarly, housing vouchers and other rental assistance lifted 2.8 million people — including 1 million children — out of poverty in 2012.

Chairman Ryan’s proposal to add new work requirements and provide individualized services to recipients of Opportunity Grant-funded assistance would surely require new staff and significantly raise administrative costs.  States would likely turn to SNAP for at least some offsetting savings:  it alone makes up more than half of the resources in the Opportunity Grant, and the Ryan proposal ends SNAP as an entitlement, eliminating eligible families’ guarantee to food assistance.  Rental assistance, which makes up nearly a quarter of the Opportunity Grant, is another likely target of cuts — though even today it serves only one in four eligible low-income families due to limited funding.

Whatever merit Chairman Ryan’s proposal for personalized services has, his Opportunity Grant could not possibly reach as many families as these existing programs serve.

Cutting food and housing assistance that lifts millions of people out of poverty and is effective at reducing hunger and homelessness in order to provide additional services to a smaller number of poor households isn’t a sound way to reduce poverty.

Why Ryan’s Proposed Work Requirements Are Cause for Concern

July 25, 2014 at 3:30 pm

House Budget Committee Chairman Paul Ryan’s new poverty plan predictably showcases the 1996 welfare law, which replaced Aid to Families with Dependent Children (AFDC) with Temporary Assistance for Needy Families (TANF), as a model for reforming other safety net programs.  For example, states would have to impose work requirements on all recipients of assistance funded through the “Opportunity Grant” — the block grant that would replace 11 safety net and related programs — who are not classified as unable to work.  There are four key concerns about this proposal:

  1. It would divert funds that help families put food on the table and keep a roof over their heads to pay for programs that, at best, produce modest employment increases.  Even the most successful welfare employment programs usually don’t enable more than half of participants to get steady jobs, and the success rate for typical welfare employment programs is much lower than that.  In contrast, SNAP (food stamps) and housing assistance lift millions of people out of poverty.  As I explained yesterday, the way the Ryan plan would provide more resources to impose and monitor work requirements would largely be by cutting food and housing assistance that now goes directly to needy individuals and families.  If that assistance is taken away, poverty will rise and the long-term benefits of SNAP and housing assistance will be diminished.
  2. It ignores the realities of today’s labor market.  Low-skilled individuals looking for work today facing a daunting reality:  the economy still isn’t operating on all cylinders, and employers are increasingly looking for skills that these individuals generally don’t have.  Imposing work requirements won’t itself create new job opportunities for people who are struggling to find work.  In addition, millions of Americans work hard for little pay — 28 percent of workers in 2012 had wages too low to support a family of four at the poverty line through full-time work, the Economic Policy Institute has found.   Government assistance that helps working-poor families meet basic needs shouldn’t be diverted to pay for work programs that will be of little value to them.  Yet that’s likely what would occur under the Opportunity Grant proposal.
  3. It may reinforce the mistaken belief that most public benefit recipients don’t work.  More than half of SNAP households with at least one working-age, non-disabled adult work while receiving SNAP — and more than 80 percent work in the year before or after receiving SNAP.  Similarly, nearly three-quarters of non-elderly, non-disabled households receiving one of the major forms of rental assistance work (or recently worked) or participate in a program through which they likely face a work requirement.
  4. States haven’t shown a commitment to investing in work programs.  Although caseloads in most states’ cash assistance programs for poor families with children fell sharply in the late 1990s, states generally haven’t used much of the freed-up resources to improve the job prospects of poor parents who have barriers to employment.  Only 8 percent of state and federal dollars under TANF directly supports employment activities for cash assistance recipients.  Even when you count funds that support families with jobs, like child care assistance and the refundable part of state earned income tax credits, states spend only one-third of their federal and state TANF dollars to promote and support work.

Ryan’s Rhetoric Doesn’t Match His Proposal’s Reality

July 24, 2014 at 4:55 pm

House Budget Committee Chairman Paul Ryan left the impression today that his proposed Opportunity Grant will allow low-income individuals to get income assistance as well as help they may need to go to school, get off drugs, and succeed in the workplace.  That picture, however, doesn’t reflect the reality of his proposal.

Chairman Ryan spoke eloquently this morning about “Andrea,” a single mother who needs income assistance in the near term, help finding a job, assistance so she can go to college, and help paying for child care for her two young children while she works and attends school so she can reach her dream of becoming a teacher and climb into the middle class.  He implied that his Opportunity Grant would deliver the package of supports she needs to succeed.

In fact, under Chairman Ryan’s plan, neither Andrea nor anyone else would be guaranteed any assistance.  This means that Andrea could apply for services and be told that she cannot get any help.  Chairman Ryan doesn’t acknowledge that scenario.

To be sure, many kinds of assistance already are limited so that not everyone who’s eligible for assistance gets it — with one important exception.  Today, all eligible poor households can get help to buy groceries through SNAP (formerly food stamps), a form of income assistance that not only helps those households put food on the table but can free up resources so that families — not caseworkers — can decide how to direct their limited incomes.  Chairman Ryan’s plan would no longer guarantee that basic safety net.

And, nothing in Chairman Ryan’s proposal would make it more likely that families in Andrea’s situation would receive that full package of supports unless other needy individuals and families receive significantly less help.  Indeed, states already have flexibility to use Temporary Assistance for Needy Families (TANF, which provides basic income assistance to poor families with children) to put together precisely this package of benefits.  But TANF’s flexibility does not trump its limited resources, and that’s why many single mothers like Andrea can’t get the help they need to make ends meet, find work, go to school, and ensure that their children are safe and well cared for while they juggle work and school.

Today, just 25 of every 100 poor families receive TANF assistance, only 1 in 7 low-income children who qualify for help paying for child care receives it; and just 1 in 4 low-income households that qualify for help paying for housing get it.

Also of note, the service provider structure that Ryan envisions almost surely would require more staff and, thus, would generate higher administrative costs, leaving less funding for assistance and services.

In short, the only way that Chairman Ryan’s plan can provide more assistance, targeted or not, to families like Andrea’s is if some poor households receive significantly less help, with cuts likely coming in help to pay for food and housing — the two largest programs that Ryan would consolidate under the Opportunity Grant.

The case of “Steven,” whom Ryan also highlights, makes the point as well.  A single 19-year-old non-custodial father, Steven is jobless and needs help to get off drugs.  Ryan’s proposal indicates that the Opportunity Grant would help him get drug treatment, move him into transitional housing (a form of subsidized housing), and get him help with attending parenting classes, finding work, and pursuing further education.

These are all needed services, and limited funding keeps many people, particularly adults not living with children and who have the same needs as Steven, from obtaining that help.  But the Opportunity Grant structure would not provide additional resources (and as my colleague Robert Greenstein points out, could well provide fewer resources), so the only way to provide this richer set of supports for Steven is to cut the help that other families receive.

Chairman Ryan skirts this fundamental math.  Consolidating funding streams into a single “opportunity” grant allows him to say that individuals like Andrea and Steven will get a better-targeted suite of supports without saying which families will get less help and how that will affect them.

Why the 1996 Welfare Law Is Not a Model for Other Safety-Net Programs

July 22, 2014 at 2:25 pm

House Budget Committee Chairman Paul Ryan’s upcoming poverty plan will likely showcase the 1996 welfare law, which replaced Aid to Families with Dependent Children (AFDC) with Temporary Assistance for Needy Families (TANF) — a block grant with fixed federal funding but broad state flexibility — as a model for reforming other safety net programs.  A careful examination of the record, however, indicates that the 1996 law’s results were mixed and that if the goal is to reduce poverty, especially among the most disadvantaged families and children, there are serious downsides to embracing the 1996 law as a model.  The record shows:

  1. A booming economy contributed far more than welfare reform to the gains in single mothers’ employment in the 1990s, and many of those gains have since disappeared.  A highly regarded study by University of Chicago economist Jeffrey Grogger found that welfare reform accounted for just 13 percent of the rise in employment among single mothers in the 1990s.  The Earned Income Tax Credit (which policymakers expanded in 1990 and 1993) and the strong economy were bigger factors, accounting for 34 percent and 21 percent of the increase, respectively.While the booming economy helped many families move from welfare to work during the 1990s, the labor market situation is much weaker today.  The share of single mothers without a high school degree with earnings rose from 49 percent to 64 percent between 1995 and 2000 but has since fallen or remained constant almost every year since then.  At 55 percent, it’s now just slightly above its level in 1997, the first full year of welfare reform (see first graph).
     

  2. TANF provides a safety net for very few families and failed to respond to increased need during the Great Recession.  The welfare law’s relatively modest contribution to raising employment among single mothers came at a substantial price.  TANF now serves only 25 of every 100 families with children that live below the poverty line, down from AFDC’s 68 of every 100 such families before the welfare law (see second graph).  The Great Recession provided the ultimate test of whether states could do better than the federal government in providing a safety net for poor families, as the welfare law’s proponents had claimed, and the results are very unsettling.  As the number of unemployed Americans doubled in the downturn’s early years, TANF caseloads rose by just 13 percent nationally; in 22 states, the number of assisted families rose little or not at all.  In the face of rising need, many states scaled back their TANF programs to save money — tightening time limits and cutting already low benefit levels despite the lack of available jobs — leaving the poorest families poorer.  As a result, TANF emerged from the downturn an even weaker safety net.
     

  3. TANF does little to help recipients succeed in today’s labor market.  Chairman Ryan has spoken of the importance of helping people get the skills they need to move out of poverty.  Yet TANF’s extensive restrictions on what are considered acceptable work activities discourage states from providing TANF recipients with opportunities to increase their education and job skills.  Restrictions on participation in vocational education and GED or high school completion programs leave many recipients unable to compete in today’s labor market.  And although most states’ cash assistance caseloads fell substantially in the late 1990s, states generally haven’t used much of the freed-up resources to improve the job prospects of poor parents with barriers to employment.  Only 8 percent of state and federal TANF dollars directly support work activities for cash assistance recipients.  Even when you add in funds that support working families like child care assistance and the refundable part of state earned income tax credits, states spend only one-third of their federal and state TANF dollars to promote and support work.