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:
- 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.
- 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.
- 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.
- 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.