The Center's work on 'Welfare Reform / TANF' Issues


Data Show TANF Didn’t Respond Adequately to Need During Recession, Contrary to New Study’s Claims

September 10, 2014 at 2:56 pm

A recent study from researchers at the Brookings Institution and the University of Nevada concludes that the Temporary Assistance for Needy Families (TANF) program responded to increased need during the Great Recession in the majority of states as a good safety net program would.  This conclusion, however, is based on seriously flawed analysis, as we explain in a new paper.

A number of assertions made by the authors — Ron Haskins and Kimberly Howard of the Brookings Institution and Vicky Albert of the University of Nevada — wilt under scrutiny.  Consider, for example, one such claim: that TANF responded to a greater degree in the 2000 and 2007 recessions than the Aid to Families with Dependent Children program (AFDC), TANF’s predecessor, did in previous recessions.  But this claim rests on inappropriate use of data.

The authors arrive at this conclusion by averaging the percentage increase (or decrease) in the AFDC “caseload” (families who received benefits) during the 1980, 1981, and 1990 recessions and comparing that to the average percentage change in the TANF caseload during the 2000 and 2007 recessions.  This metric produces highly skewed results, however.

The AFDC caseload at the start of all three of the early recessions was much larger than the TANF caseload at the start of the 2000 and 2007 recessions, making a percentage-change comparison highly misleading.  From the beginning to the end of the 1990 recession, the number of unemployed individuals rose by 1.7 million, while the AFDC caseload increased by 350,000 families.  From the beginning to the end of the 2007 recession, the number of unemployed individuals rose by 7 million, while the TANF caseload increased by just 124,000 families.

Put another way, during the 1990 recession, the AFDC caseload increased by 21 families for every 100 additional unemployed individuals, while the comparable figure for the TANF caseload during the 2007 recession was an increase of only two families for every additional 100 unemployed individuals (see chart).

We’ve monitored TANF carefully since the start of the recession and have a far less sanguine assessment of the program’s responsiveness to the recent recession than Haskins, Howard, and Albert do.  We conclude that the program fell well short of how we would expect such a basic safety net program to respond during tough economic times.

In spite of its shortcomings, TANF is often held up as a model for altering other safety net programs.  The Haskins, Howard, and Albert study is likely to be cited as evidence that TANF performs fine in recessions, so other programs (such as SNAP) can be changed to a similar block-grant structure.  But that would be a highly inappropriate conclusion based on flawed use of data.

Click here to read our full paper.

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 Roundup: What You Need to Know About Chairman Ryan’s Poverty Proposal

July 25, 2014 at 4:42 pm

We’ve compiled CBPP’s analyses and blog posts on House Budget Committee Chairman Paul Ryan’s new poverty proposal.  We’ll update this roundup as we issue additional analyses.

  • Blog Post: Why the Ryan Plan Should Worry Those Concerned About the Affordable Housing Crisis, Part 2
    August 5, 2014
    House Budget Committee Chairman Paul Ryan’s proposal to consolidate 11 safety net and related programs, including the four largest federal rental assistance programs, into a single block grant to states risks significant funding cuts to housing assistance that helps 4.7 million low-income families.  The combination of those cuts, and the possible elimination under Ryan’s plan of program rules that ensure housing stability and affordable rents, could undercut rental assistance programs’ effectiveness and put substantial numbers of vulnerable families at risk for homelessness.
  • Blog Post: Why the Ryan Plan Should Worry Those Who Are Concerned About the Affordable Housing Crisis, Part 1
    July 31, 2014
    A centerpiece of House Budget Committee Chairman Paul Ryan’s poverty plan is the proposal to consolidate 11 safety net programs — including four housing assistance programs — into a single, flexible block grant to states.  Among its downsides, this proposal threatens to lead to reductions in funding that provides housing assistance to millions of low-income families and individuals.
  • Blog Post: What Difference Would Ryan’s EITC Expansion Make for Childless Workers?
    July 29, 2014
    We’ve explained that House Budget Committee Chairman Paul Ryan’s proposed expansion of the Earned Income Tax Credit (EITC) for childless adults, including non-custodial parents, would encourage work and reduce poverty.  Our interactive chart allows you to compare the EITC that childless workers at different income levels would earn under current law and under the Ryan expansion, which mirrors a proposal from President Obama.
  • Blog Post: Ryan’s “Opportunity Grant” Would Likely Force Cuts in Food and Housing Assistance
    July 29, 2014
    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.
  • Blog Post: History Suggests Ryan Block Grant Would Be Susceptible to Cuts
    July 28, 2014
    Ryan says that the block grant would maintain the same overall funding as the current programs.  But even if one thought that current-law funding levels were adequate, they likely wouldn’t be sustained over time under the Ryan proposal:  history shows that block grants that consolidate a number of programs or may be used for a wide array of purposes typically shrink — often very substantially — over time.
  • Blog Post:  Why Ryan’s Proposed Work Requirements Are Cause for Concern
    July 25, 2014
    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.  We have four key concerns about this proposal.
  • Blog Post:  Dean: SNAP Is a Successful, Influential Component of the Safety Net
    July 25, 2014
    SNAP is not only one of the most efficient and effective safety net programs, but it’s also helping improve other programs, CBPP’s Stacy Dean told a House Agriculture subcommittee.
  • Commentary:  Ryan “Opportunity Grant” Proposal Would Likely Increase Poverty and Shrink Resources for Poverty Programs Over Time
    July 24, 2014
    A centerpiece of House Budget Committee Chairman Paul Ryan’s new poverty plan would consolidate 11 safety-net and related programs — from food stamps to housing vouchers, child care, and the Community Development Block Grant (CDBG) — into a single block grant to states.  This new “Opportunity Grant” would operate initially in an unspecified number of states.  While some other elements of the Ryan poverty plan deserve serious consideration, such as those relating to the Earned Income Tax Credit and criminal justice reform, his “Opportunity Grant” would likely increase poverty and hardship, and is therefore ill-advised, for several reasons.
  • Blog Post:  Ryan Adds Momentum to Expanding EITC for Childless Workers
    July 24, 2014
    House Budget Committee Chairman Paul Ryan highlighted the Earned Income Tax Credit as one of the most effective anti-poverty programs and joined growing bipartisan calls to expand it for childless adults (including non-custodial parents), the lone group that the federal tax system taxes into poverty.  We applaud this step, though we encourage him to reconsider some of his proposals to offset the cost — which would hit vulnerable families — and his opposition to a much-needed increase in the minimum wage.
  • Blog Post:  Ryan’s Rhetoric Doesn’t Match His Proposal’s Reality
    July 24, 2014
    House Budget Committee Chairman Paul Ryan left the impression 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.

We also issued several pieces ahead of Chairman Ryan’s announcement of his proposal:

  • Analysis:  Deep Poverty Among Children Worsened in Welfare Law’s First Decade
    July 23, 2014
    Since the mid-1990s, when policymakers made major changes in the public assistance system, the proportion of children living in poverty has declined, but the harshest extremes of child poverty have increased.  After correcting for the well-known underreporting of safety net benefits in the Census data, we estimate that the share of children in deep poverty — with family income below half of the poverty line — rose from 2.1 percent to 3.0 percent between 1995 and 2005.  The number of children in deep poverty climbed from 1.5 million to 2.2 million.Blog Post:  Fewer Poor Children Under Welfare Law, But More Very Poor Children
  • Blog Post: CLASP: State Experiences Show Safety Net Programs Don’t Need Massive Overhaul to Work Better
    July 23, 2014
    Olivia Golden of the Center for Law and Social Policy (CLASP) took a closer look at the experiences of six states to debunk common myths about the delivery of safety net programs. . . . Golden explained that the experiences of the six states involved in the Work Support Strategies (WSS) initiative — a project coordinated by CBPP, CLASP, and the Urban Institute that is designing, testing, and implementing more effective, streamlined, and integrated approaches to delivering key supports for low-income working families — offer lessons for how to improve safety net programs.
  • Blog Post:  Why the 1996 Welfare Law Is Not a Model for Other Safety Net Programs
    July 22, 2014
    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.
  • Commentary:  Policymakers Often Overstate Marginal Tax Rates — and Understate Trade-Offs In Reducing Them
    July 22, 2014
    Some Washington policymakers are increasingly focused on whether government benefits for low- and moderate-income people create disincentives to work — in particular, when these benefits phase down as the earnings of beneficiaries rise.That phase-down rate is often called the “marginal tax rate” because it resembles a tax — benefits fall as earnings rise.  The relationship between marginal tax rates and disincentives to work is an important issue, one worthy of serious debate.  Some policymakers, however, often overstate the size of marginal tax rates and their impacts on work, and understate the trade-offs in trying to lower these rates.Blog Post:  Understanding Marginal Tax Rates and Government Benefits

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.

Greenstein on Ryan’s “Opportunity Grant”

July 24, 2014 at 4:52 pm

CBPP President Robert Greenstein just issued a commentary on House Budget Committee Chairman Paul Ryan’s “Opportunity Grant” proposal, part of his new poverty plan.  Here’s the opening:

A centerpiece of House Budget Committee Chairman Paul Ryan’s new poverty plan would consolidate 11 safety-net and related programs — from food stamps to housing vouchers, child care, and the Community Development Block Grant (CDBG) — into a single block grant to states.  This new “Opportunity Grant” would operate initially in an unspecified number of states.  While some other elements of the Ryan poverty plan deserve serious consideration, such as those relating to the Earned Income Tax Credit and criminal justice reform, his “Opportunity Grant” would likely increase poverty and hardship, and is therefore ill-advised, for several reasons.

Click here for the full commentary.

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.

2009 Recovery Act Kept Millions out of Poverty

February 18, 2014 at 3:06 pm

The Washington Post points out that the 2009 Recovery Act, signed five years ago yesterday, accomplished much more than its critics acknowledge.  When it comes to using the safety net to keep people out of poverty, for example, the Recovery Act was probably the most effective piece of legislation since the 1935 Social Security Act, as our 2011 analysis explained.

Six Recovery Act provisions — three new or expanded tax credits, two expansions of unemployment insurance, and a SNAP (food stamp) benefit expansion — kept 6.9 million Americans out of poverty in 2010.  This estimate uses an alternative poverty measure based on National Academy of Sciences recommendations (a forerunner to the Supplemental Poverty Measure that the federal government now regularly reports) that considers the effect of government benefit programs and tax credits as well as cash income.

As the graph shows:

  • Expansions in the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) kept 1.6 million people out of poverty.
  • The Making Work Pay tax credit, which expired at the end of 2010, kept another 1.5 million people out of poverty.
  • Expansions in unemployment insurance benefits kept 3.4 million people out of poverty.
  • Expansions in SNAP benefits kept 1 million people out of poverty.

These figures total more than 6.9 million in part because some people were kept above the poverty line by more than one program.  The 6.9 million total, though, counts each person only once.

And, as the graph shows, existing (pre-2009) policies to promote family income also kept millions of Americans out of poverty in 2010.

Moreover, these are just the initial effects of government assistance on recipient households.  They don’t show the ripple effect across the economy as government assistance allowed struggling consumers to continue to buy goods and services, despite the crippling recession, contributing to economic growth.

To be sure, these figures don’t mean that government assistance staved off all, or even most, recession-related hardship.  But they show that government assistance kept millions of Americans above the poverty line during the worst economic downturn since the Great Depression.  That’s no small accomplishment.

With Federal Funds Gone, States Take the Lead on Subsidized Jobs

January 30, 2014 at 3:09 pm

I highlighted yesterday the success of a 2009 Recovery Act program through which 39 states and the District of Columbia placed 260,000 low-income parents and young people in subsidized jobs, mostly in the private sector.  The federal funding for that program dried up a few years ago.  But several states — recognizing that these programs hold huge promise for the long-term unemployed and others who often have great difficulty getting hired — have decided to use their own funds to create or expand subsidized jobs programs.  Here are some examples:

  • Connecticut Governor Dannel Malloy this week proposed a $3.6 million initiative, targeted to the long-term unemployed, that will combine a job-readiness program, supportive services, financial coaching, and an eight-week paid work program.  He also proposed expanding a program that offers two incentives to employers to hire additional employees:  a six-month wage subsidy and grants to small manufacturers to train new workers.
  • Colorado is implementing a two-year, $2.4 million subsidized jobs program targeted to non-custodial parents, veterans, and displaced workers aged 50 years or older who are below 150 percent of the poverty line.
  • Nebraska, Minnesota, and California are starting or expanding subsidized programs for recipients of Temporary Assistance for Needy Families (TANF).  Nebraska plans to spend $1.1 million per year to operate a two-year pilot program.  Minnesota plans to spend $2.2 million each year over the next two years on a new program to encourage employers to hire long-term TANF recipients.  And California’s Governor Jerry Brown has proposed boosting funding for subsidized jobs by almost $100 million this year, to $134 million.

As their budgets rebound, states will have resources to make new investments.  More states should follow the lead of these states and some other local communities that have decided that providing subsidized jobs is a winning proposition for the unemployed, employers, and local communities.

Subsidized Jobs Work

January 29, 2014 at 3:04 pm

Eduardo Porter’s New York Times piece today on government investment to boost jobs and demand cites the success of a 2009 Recovery Act program through which 39 states plus the District of Columbia (see map) placed 260,000 low-income parents and young people in subsidized jobs, mostly in the private sector.  In House Budget Committee testimony this week on poverty and the safety net, CBPP President Robert Greenstein discussed that temporary initiative and recommended building on it.  Here are some excerpts:

[T]he Economic Mobility Corporation (EMC) studied what happened to participants in these subsidized jobs programs and found the programs did exactly what they were supposed to do — help disadvantaged jobless individuals find work during hard economic times.  The study also provides evidence that the jobs programs improved some participants’ chances of finding unsubsidized jobs when their time in the subsidized job position came to an end.  And the study indicated that the long-term unemployed benefitted most.

The EMC study looked at subsidized jobs programs established in five sites — Los Angeles, San Francisco, Wisconsin, Mississippi, and Florida — and produced the following findings:

  • . . . Participants in four of the five programs studied were much more likely to have an unsubsidized job in the year after working in a subsidized job than in the year before joining the program. . . .
  • The programs were especially effective for the long-term unemployed. . . .
  • Employers reported hiring more workers than they would otherwise have hired and hiring workers with less experience than their usual hires.
  • Most participating employers reported multiple benefits from the program, including expanding their workforces, serving more customers, and improving their productivity.

Because of its success, state policymakers from across the political spectrum praised the program.  For example, Governor Haley Barbour of Mississippi noted that [his state’s program provided] “much-needed aid during this recession by enabling businesses to hire new workers, thus enhancing the economic engines of our local communities.” . . .

I recommend creating a subsidized employment program of this nature that would provide modest funding to states to create ongoing programs targeted on groups that face particular difficulties finding jobs.  Such a program could be structured to target hard-to-employ low-income individuals, such as long-term jobless workers and disadvantaged young adults.  It could provide funding for subsidized jobs for people who have difficulty finding employment and getting a toehold in the labor market even during good economic times — which could help them to overcome those barriers and get on a path to increased labor-market success.  Funding for these jobs could then be increased during recessions in order to temporarily increase the number of subsidized jobs that are created during periods when the economy is shedding jobs in large numbers.

Any such ongoing program should be coupled with an evaluation to identify its overall impact and, in particular, the approaches that are most successful. . . .

For more on the Recovery Act initiative, known as the TANF Emergency Fund, see this report.

Tomorrow, I will highlight actions that states are taking to build on the success of the TANF Emergency Fund.

Simplifying the Child Care Eligibility “Maze”

December 17, 2013 at 11:58 am

An important way to help low-income working families meet their basic needs and improve their lives is to make sure they receive the work supports for which they qualify, such as health coverage, food assistance, and child care assistance.  A new report from the Urban Institute and the Center for Law and Social Policy (CLASP) explains how states can simplify their child care subsidy programs — which help cover low-income families’ child care costs so the parents can get and keep jobs — to better serve families.

The report is part of the foundation-funded initiative Work Support Strategies, through which CBPP, the Urban Institute, and CLASP work with selected states to streamline the delivery of health and human services to low-income working families.

The report outlines an approach in which eligible parents applying for child care assistance give their information once, are then connected not only to child care assistance but also other benefits for which they are eligible, and can keep the full package of benefits as long as they are eligible — all of it with minimal red tape.  That reduces burdens on low-income families and the state.

The report will be an important resource for states seeking to simplify and streamline their child care programs as well as facilitate connections between child care and other key work supports, such as SNAP (food stamps), Medicaid, and TANF (Temporary Assistance for Needy Families).

For more general information on why it’s so vital to deliver work supports more efficiently, the improvements made in recent years, and the steps that states can take, see this CBPP report.

Next Week’s SNAP Cut Will Worsen Struggles for Many TANF Families

October 23, 2013 at 4:18 pm

The cash assistance benefits that some poor families receive through the Temporary Assistance for Needy Families (TANF) program are already low, as states have allowed inflation to erode their value over time.  Now, other support that many of these same families receive is poised to fall, too, when a temporary increase in SNAP (Supplemental Nutrition Assistance Program, formerly food stamps) benefits ends next week.

As we explain in our updated analysis of state TANF programs, TANF’s benefits are worth at least 20 percent less than they were in 1996 in 37 states, after adjusting for inflation.  In every state, a family of three with no other cash income other than TANF falls below 50 percent of the federal poverty line.

Many TANF families — about 81 percent — receive SNAP benefits, which provide them with critical nutrition support.  But even the combination of the two programs doesn’t lift these families above the poverty line (see chart).


The coming SNAP cut will make it even harder for these families to meet their basic needs.  The 2009 Recovery Act’s temporary boost to SNAP benefits, which will end on November 1, will cut benefits for every SNAP household.  For a family of three, the cut will be $29 a month — or $319 over the remaining 11 months of the fiscal year.

That cut will more than wipe out even the small TANF benefit gains that seven states have already implemented this year.  (Maryland is implementing a TANF increase of $48 for a family of three as of November 1.)  These are serious losses, especially in light of the already very low basic SNAP — and TANF — benefits.