Safety Net Fraying For Poorest Families

A new report from the Center on Budget and Policy Priorities presents a half-full, half-empty picture of our nation’s safety net programs.

On the half-full side, the report finds that, in 2005, the safety net, as a whole:

  • Reduced the number of Americans living in poverty by 44%–or nearly 31 million.
  • Increased the average disposable income of those who remained poor from 29% to 64% of the poverty line.
  • Lifted 76% of very poor children–7.3 million–to above half the poverty line.

But this safety net includes programs that aren’t for low-income people only–notably, Social Security, unemployment insurance and the child tax credit.

Looking only at means-tested benefits, i.e., those we ordinary think of as parts of the safety net, CBPP finds that, in 2005, they lifted 14 million Americans above the poverty line.

The half-empty side is that safety net programs have become much less effective at shielding children from deep poverty, i.e., living in households with incomes below half the poverty line. For example, in 1995:

  • Aid to Families with Dependent Children lifted 76% of children above half the poverty line. The 2005 figure for TANF, which replaced AFDC, was just 21%.
  • Food stamps lifted 61% of children above half the poverty line. By 2005, the figure had dropped to 42%.

If the means-tested benefits had been as effective as they were in 1995, 1.2 million fewer children–more than half the total–wouldn’t have been below half the poverty line.

And half the poverty line is poor indeed. In 2005, it was just $10,698 for a family of four, according to the measure CBPP used. (This measure adopts changes to the official poverty measure that were recommended by the National Academy of Sciences and are, once again, pending in Congress.)

The single largest factor in fraying the safety net was the replacement of AFDC with TANF, combined with state-level TANF rules and practices that have significantly reduced participation rates. In the early 1990s, about 80% of families eligible for cash assistance through AFDC were receiving it. In 2005, TANF cash assistance was going to just 40%.

Meanwhile, parts of the safety net for childless adults were eliminated or cut back. At the federal level, the same law that established TANF barred out-of-work childless adults from receiving food stamps for more than three months in any 36-month period. By then, state-level general assistance programs, which were once their last resort, had all but disappeared.

Much has happened since 2005. The unemployment rate in June of that year was 5%. It’s now at 9.5%. Twenty-nine states and the District of Columbia have slashed key safety net programs, and the budget-balancing isn’t over.

The economic recovery package includes a number of measures that boost safety net supports, but they’ll expire by the end of 2010–at least a year (probably more) before the unemployment rate turns around. So the first order of business is to extend these measures–or, better yet, strengthen and make them permanent.

But even when the recession ends, we’re still going to have a safety net that fails to protect the poorest families. So the programs that comprise it should be revisited. The Food Research and Action Center has ideas for food stamps and other nutrition assistance. TANF is due for reauthorization next year and is clearly another prime candidate.


One Response to Safety Net Fraying For Poorest Families

  1. It’s amazing to me that more people aren’t outraged that changes in TANF have cut rates of participation among those eligible in half! We desperately need an overhaul of our anti-poverty programs, especially as demand for them grows.

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