Ten myth-busting facts about welfare
Unlike monthly jobs numbers, poverty numbers come out only once a year—and they’ll be rolling out on Tuesday. That means this is the time to talk about the 46.2 million living in poverty. And you can’t talk about poverty without talking about welfare, officially known as the Temporary Assistance for Needy Families (TANF) program.
It may come as a surprise, but TANF was never intended to be a comprehensive anti-poverty program. It was designed to be a temporary leg up, but its mission varies greatly from state to state.
Here are a few other facts that may surprise you:
- States have no legal obligation to support poor families with cash. States have a lot more freedom to do what they want with this program than people realize. In the extreme, states could even decide to get rid of TANF altogether, as Alabama budget cuts threatened to do last year.
- States are able to set their own rules about who gets TANF and how much, usually reflecting the state’s culture and philosophy about government’s role in helping the poor. Some states believe the poor shouldn’t get help from the government. Whether a family receives TANF assistance and how much they receive depends largely on the state where they live. For example, in Texas, fewer than 1 in 10 poor families receive assistance, compared with almost three out of four in California.
- Not everyone who is poor gets welfare. The official poverty line is already so low that a family of three with any income over $1,500 a month is not officially poor. And even that is not poor enough to qualify for TANF. To qualify, you typically need to have income below half the poverty line; in some states, the income limit is much lower. Cash assistance reaches fewer than one in three poor families nationally (about 1.5 percent of the total population).
- Reducing poverty is not one of TANF’s purposes. The amount families receive from TANF does not come close to lifting them out of poverty. The most a family could receive in the most generous state is still less than half the federal poverty line. A family of three would receive at most about $400 a month in the average state.
- Even though TANF was intended to assist needy families and promote work, the program devotes relatively few resources to either purpose.
- In 2010, only 28.8 percent of TANF funds nationally was spent on cash payments to needy families. Less than 8 percent goes to activities that help people find work (including job search, work subsidies, education and training, transportation, individual development accounts, and other work expenses, combined).
- A whopping 63 percent is spent on other social service programs or child care, or the other two purposes of TANF: preventing out-of-wedlock pregnancies and encouraging the formation and maintenance of two-parent families.
- The amount the federal government gives states for TANF has not changed since 1997. The federal government spends a total of $16.5 billion a year on TANF. This figure does not change with inflation, so it is worth less and less over time. States are obligated to contribute their own funds as well.
- The program was not responsive to the recession or the recent rise in poverty. During the recession, the share of needy families receiving cash assistance fell. The number of families receiving cash assistance grew, but the number of poor families grew faster.
- While unemployment rates doubled, the number of families receiving cash assistance grew by only 13 percent.
- The poverty rate increased from 11 percent in 2000 to 15 percent in 2011.
- Child poverty rose from 16 percent in 2000 to 22 percent in 2011.
- Since TANF began in 1997, the share of poor families receiving assistance has fallen in all states, and the difference among states has grown. In 1998, about half (53 percent) of poor families with children nationally received TANF cash assistance, compared with 28 percent in 2010. In 1998, poor families in California were three times more likely to receive cash assistance than families in Texas; by 2010, California poor families were 10 times more like to receive cash assistance than those in Texas, where TANF cash assistance went to just 7 out of 100 poor families with children.
- Some TANF policies discourage states from helping participants find work, in some cases giving states an incentive to drop families from their caseloads instead.
- States have incentives not to help hard-to-employ families find work. The definition of what counts as work is so narrow and the expected levels of participation so high that states have an incentive to avoid the expense of helping hard-to-employ families.
- Onerous documentation requirements mean caseworkers must spend many hours getting through red tape rather than pushing people toward employment. Federal requirements provide incentives for caseworkers to steer clients into activities that help the state meet regulatory requirements but don't help people find and keep jobs.
- Further, states can reduce their work participation rate requirement by one percentage point for each percentage point drop in the number of families receiving TANF. This creates a direct incentive for states to reduce their caseloads, regardless of whether exiting families find work.
- Almost half of TANF cases include only children, with no financial support for the adults. Many of these children (about 4 out of 10) are living with relatives other than their parents, and the rest live with parents who have been disqualified for a variety of reasons.