Budget Cuts No Longer “Abstract”

August 22, 2011 at 3:28 pm

The enormous numbers tossed about in debates over how to reduce deficits are hard to put in everyday terms.  Finally, though, we’re beginning to see some specific examples of the ways, both big and small, in which recent and proposed cuts in federal discretionary spending will affect all of us.

The Washington Post reports today that funding cuts for the National Oceanic and Atmospheric Administration will contribute to a gap in weather satellite coverage by delaying the replacement of a key satellite.  The gap, which will start in about 2016, could last a year or more and could reduce the accuracy of near-term weather forecasts, including early warnings of tornado conditions and massive snowfalls — potentially putting public safety at risk.

Also in today’s Post, columnist Robert Samuelson bemoans the pending demise of the Census Bureau’s annual Statistical Abstract of the United States.  For over a century, journalists, researchers, students, and others have relied on the Statistical Abstract for authoritative information about the U.S. economy, society, and government.  But the Census Bureau, facing a funding cut next year, plans to eliminate the Abstract to focus its limited resources on maintaining the quality of the data it collects.

Funding to implement major legislation Congress passed last year to improve food safety is also at risk.  Reports of contaminated products continue to make headlines, and House-approved cuts to the Food Safety and Inspection Service would make the situation worse.

Also, the Social Security Administration (SSA) is eliminating the Social Security Statement, an annual summary it sends future beneficiaries explaining what they can expect to receive in Social Security and Medicare benefits.  SSA has dropped this helpful tool for retirement planning to save money and enable it to continue to process benefit applications in a timely fashion.

Unfortunately, many more examples like these will appear in the coming months.  Bottom line:  The United States can’t have a 21st century government unless we’re willing to pay for one.

TANF at 15, Part I: How Well Does It Provide Income Support for Poor Families?

August 22, 2011 at 3:02 pm

President Clinton signed the 1996 welfare law 15 years ago today, creating the Temporary Assistance for Needy Families (TANF) block grant to replace the Aid to Families with Dependent Children (AFDC) program. We’ll present a series of posts this week that provide a closer look at how welfare reform has played out over the last 15 years. Today’s post focuses on TANF as a source of income support for poor families.

TANF’s early years witnessed unprecedented declines in the number of families receiving cash assistance — and unprecedented increases in the share of single mothers working, especially those with less than a high school education. But since then, nearly all of the employment gains have disappeared, and TANF caseloads have responded only modestly to increased need during this deep and long downturn.

As the following charts make clear, TANF remains an important source of income support for a small, but vulnerable group of families. However, because relatively few families receive TANF and benefits are very low, TANF plays a much more limited role in helping families escape poverty or deep poverty (i.e., income below half the poverty line) today than AFDC did.

TANF’s role in providing income support to poor families has declined dramatically.

Over the last 15 years, the national TANF caseload has declined by 60 percent, even as poverty and deep poverty have worsened.

While the poverty rate among families declined in the early years of welfare reform, when the economy was booming and unemployment was extremely low, it started increasing in 2000 and now exceeds its 1996 level. The increase in deep poverty has been especially large. The number of families in deep poverty rose by 13 percent between 1996 and 2009, from 2.7 million to 3 million.

These opposing trends — TANF caseloads going down while poverty is going up — mean that a much smaller share of poor families receive cash assistance from TANF than they did prior to welfare reform. In 1996, 68 families received TANF for every 100 families in poverty; in 2009, only 27 families received TANF for every 100 families in poverty.

TANF cash benefits have not kept pace with inflation and are below half the poverty line in all states.

Not only are fewer needy families receiving TANF cash benefits, but benefit levels for those who are on TANF are extremely modest. In the median state in 2010, a family of three received $429 per month; in 14 states, such a family received less than $300. In all but three states, the real (inflation-adjusted) value of TANF cash benefits has declined since welfare reform’s enactment.

TANF benefits are a fraction of the estimated costs of housing for a family, and housing is only one of the basic needs that a family must meet with the TANF grant. In 2010, the monthly TANF benefit level for a family of three was less than the estimated cost of a two-bedroom apartment (based on the Department of Housing and Urban Development’s “Fair Market Rent”) in all states, and less than half of the Fair Market Rent in 24 states.

All four posts in the series:

In Case You Missed It…

August 19, 2011 at 5:05 pm

This week on Off the Charts, we talked about the debt-limit deal, taxes, health reform, welfare reform, and housing.

  • On the debt-limit deal, Nick Johnson explained that the large cuts in federal spending it entails will hurt states and localities.  Paul Van de Water outlined two important facts that the new congressional deficit-reduction committee must remember when it considers cutting Medicare.
  • On taxes, Michael Mazerov explained why a bill before Congress to restrict state and local taxing authority is unnecessary and counterproductive.  Chuck Marr showed that raising taxes on the nation’s wealthiest households would make a significant contribution to deficit reduction.
  • On health reform, January Angeles detailed proposed regulations that will improve access to health care coverage.  However, Judy Solomon explained why one piece of the new regulations may leave many people uninsured if left unchanged.
  • On welfare reform, LaDonna Pavetti presented some charts on the Temporary Assistance for Needy Families (TANF) program ahead of its 15th anniversary Monday.
  • On housing, Barbara Sard explained that the voucher program is helping, not hurting, neighborhoods hit hard by the foreclosure crisis.

In other news, we showed how the potential across-the-board spending cuts in the debt-limit deal would occur and spelled out six ways that states and school districts can make it easier for foster children to obtain free school meals. We also rebutted the arguments for a bill to regulate state and local taxation of digital goods and services and explained why the bill would likely do more harm than good.  Finally, we updated our backgrounder on unemployment insurance.

TANF at 15: A Weak Safety Net Getting Weaker

August 19, 2011 at 5:01 pm

Monday will mark the 15th anniversary of the Temporary Assistance for Needy Families (TANF) block grant (i.e., “welfare reform”).  Here are some highlights of TANF as we know it today.  On Monday, we’ll provide more information on how TANF has changed over time.

TANF’s role in providing income support to poor families has declined dramatically

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Most of the employment gains realized in the early years of TANF have disappeared

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TANF has failed to provide an adequate safety net to needy families during this long and difficult recession

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Housing Vouchers Help, Not Hurt, Neighborhoods Hurt by Foreclosures

August 19, 2011 at 12:32 pm

Recent anecdotal reports suggest that some newly developed suburbs hit hard by the foreclosure crisis have seen an increase in the number of homes occupied by renters rather than owners, and that some of these renters are low-income families using federal housing vouchers.  Critics accuse voucher holders of causing neighborhood decline, but the charge is inaccurate and unfair.

Here’s the background.  Roughly 2 million low-income families use vouchers from the “Section 8” Housing Choice Voucher program to help pay for rental housing that they find in the private market.  Independent studies have found vouchers to be a highly cost-effective way to lift families out of poverty and protect children from homelessness and housing instability.

Vouchers can also help families move out of high-poverty neighborhoods and into communities with more jobs, less crime, and better schools.  It’s worth noting, though, that families with vouchers live in only slightly “better” communities — as measured by neighborhood poverty rates — than families with similar incomes who don’t have housing assistance.

Blaming vouchers for neighborhood decline isn’t new.  Critics charged that the program contributed to changes in parts of Boston in the late 1980s, Philadelphia and Baltimore a decade later, Memphis a few years ago, and recently the suburbs of Los Angeles and San Francisco.  But careful investigations have shown that families with vouchers typically represent a very small share of new movers into an area, and that their moves tend to follow, not cause, declines in local property values.

Nor is there evidence that new residents with vouchers cause an increase in neighborhood crime rates.  In fact, families responsible for drug-related or violent criminal acts lose their housing assistance.

Given the continuing high rates of foreclosures and declining number of families willing and able to buy their homes, the fact that some families are using vouchers to move to hard-hit neighborhoods should be good news, not a cause for alarm.  Under federal rules, properties that receive assistance under the voucher program must receive regular inspections and be well-maintained, making these homes an asset to the neighborhood.  In contrast, vacant homes are often an eyesore and attract vandalism, and unsubsidized rental properties are rarely subject to government enforcement of housing standards.

There’s another benefit, too.  If moving into such homes gives low-income families more opportunities to build a better future for themselves and their children, both they and society as a whole will be better off.