The voices of Urban Institute's researchers and staff
January 10, 2014

What Senator Rubio could learn from welfare reform

January 10, 2014

Senator Marco Rubio proposes to turn over funding for most of the existing federal antipoverty programs to the states “so they can design and fund creative initiatives that address the factors behind inequality of opportunity.” To support his proposal he says: “This worked in the 1990s with welfare reform.”

I am eager for innovative solutions to poverty and inequality; unfortunately, Senator Rubio is wrong about the lessons of welfare reform. If welfare reform gives clues about what would happen under his plan, the likely result would be that some families benefit from state innovations and many others fall deeper into poverty and hardship.

After welfare reform—that is, the implementation of the Temporary Assistance to Needy Families (TANF) program in 1997—fewer families received welfare not because there were fewer poor people but because fewer poor families received welfare.

States have no legal obligation to help the poor and not everyone who is poor gets cash assistance. Welfare is funded through a fixed block grant that does not grow with inflation or with the number of people eligible for aid. This creates incentives for states to serve fewer families. In Rubio’s Florida, just 15 percent of poor families with children received cash assistance in 2010, down from 35 percent when welfare reform was implemented. The share of poor families receiving cash assistance has fallen in all states since welfare reform, and the differences among states have grown, reflecting differences in philosophy about government’s role in helping the poor.

Differences in state efforts (or lack thereof) to alleviate poverty are reflected in the stark regional differences in the poverty rate and in the number of people stuck in deep and persistent poverty, those living at around half the poverty rate for a long time and facing tremendous personal challenges to becoming self-sufficient.

In contrast with TANF, the Supplemental Nutrition Assistance Program (or SNAP, formerly known as food stamps), has been much more consistent across states and responsive to times of hardship. In 2011, 44.7 million people received SNAP but only 4.6 million received cash assistance through TANF.  Because the federal government pays for SNAP benefits, people were able to get the assistance they needed during the recession, even as states’ own budgets were severely strained.

Differences among states are the most unsettling when we consider that an increasing share of the nation’s children are living in states that historically have shown less commitment to anti-poverty programs. These states, in the South and Southwest, not only provide the least amount of cash assistance to the smallest share of poor families, but they also spend less on education. Can we trust that these states suddenly will take a different approach and use Rubio’s “Flex Funds” to reduce poverty and inequality of opportunity for children and their parents?

We’re already seeing how states’ latitude in whether to expand Medicaid plays out in the lives of the uninsured. As of now, 6.6 million will not get health insurance because they live in one of the 25 states that have chosen to not expand the program.

The risks to poor children of allowing some states to provide less support are enormous. Childhood poverty creates lasting effects, including limitations on brain development, which hamper children’s abilities to develop to their full potential. I agree wholeheartedly with Senator Rubio that we need the dreams and talents of all of us, but the evidence shows that turning over more control to the states following the example of welfare reform is not the way to get there.

Photo from Flickr user Gage Skidmore

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