Much Progress Toward Reducing Poverty, But Much More to Do

March 23, 2017

So many news reports, analyses, blog posts, etc. on how the House Republicans’ repeal-replace bill and/or Trump’s budget would harm poor people. I thought I should clear my mind and purge anger, however briefly.

So I reread a fleshed-out speech that Jason Furman, Obama’s Chairman of the White House Council of Economic Advisors—gave a few days before Trump’s inauguration.

It seems even more timely now, as we learn more about what the new administration and Republican House leaders have in mind. But it’s relevant also to what state — and in some cases, local — policymakers have done and can do.

So a brief summary of the hefty, research-based framework and then the agenda Furman lays out.

What Accounts for Poverty

“Poverty is shaped by market forces and government policies and programs,” Furman says. Market forces are basically those that determine what people earn by working, investments and profits from sales. Furman focuses solely on the first.

Government policies and programs include other pre-tax income, e.g., Social Security benefits, post-tax cash transfers like refunds from the Earned Income Tax Credit and cash-equivalent transfers like SNAP (food stamp) benefits.

Significant Progress Toward Reducing Poverty

Forget all that rhetoric about throwing trillions at the problem with no impact on poverty rates. The poverty rate, as measured by a back-looking version of the Census Bureau’s Supplemental Poverty Measure was 41% lower in 2015 than in 1967, as the War on Poverty was setting in.

But the news here is that government anti-poverty programs account for the drop. Market-income poverty has remained essentially flat — and its deep poverty rate risen by nearly 3%.

Why No Progress From Market-Income Poverty

Furman identifies three market-income factors that could lift poor workers and their families over the poverty line — productivity growth, i.e., output per worker per hour, where the income generated flows and labor force participation, i.e., the percent of the population over 16 years old that’s working or actively looking for work.

Productivity growth slowed about 20 years ago, though it recently ticked up. The big difference from the prime period the CEA identified is that most of the income flows to the top — very large salaries for top management, corporate decisions to boost stock prices by buying back shares and maximizing dividends.

So productivity growth and average worker pay, plus benefits no longer closely track. The gap has, in fact, steadily widened, as the Economic Policy Institute’s graphs show.

Meanwhile, the labor force participation rate has trended down, recently reaching a 38-year low. Many reasons for this—retirement of baby boomers, for example, more young people going to college, more people (mainly women deciding to stay home with the kids because child care costs more than they’d earn.

But that still leaves a contingent of discouraged workers — those who looked, but gave up, those who decided it was futile to try — in many cases because they’ve found or have reasons to believe that they don’t have the knowledge and/or skills employers demand.

What the participation rate means, of course, is less household income — and less pressure on employers to offer higher wages.

Where to Go From Here

Furman’s agenda for further progress follows logically from his analysis. It has four major items.

Do no harm. Evidence shows that the safety net works — not only in the short term during recessions, but in the long term because the benefits it delivers have lasting effects on children’s prospects for moving up the income scale. So we should avoid policies that make it less effective, including block grants. (Told you this was timely.)

Focus on raising market incomes. This will involve policies to boost economic growth, but also changes to shift more of the gains to lower-income workers. Measures would raising minimum wages, as 22 states, the District of Columbia and more than 60 local communities have.

Furman also names expanded unions — presumably mostly in the private sector. This would also require repealing laws in half the states that allow workers to benefit from union bargaining without joining — and laws in three that have weakened public-sector union bargaining.

For individual workers and prospective workers, we need better programs to connect workers to jobs. Also more and better formal education.

On the more side, Furman cites research showing that low-income children fared better as adults when they participated in early childhood education programs. On the better, everything from that to college and beyond.

Rounding out this part, Furman looks to unspecified steps to reduce monopsony, i.e., cases where only one employer or a few control the labor market, thus enabling them to keep wages low..

Take further steps to improve the safety net. We need, for example, to increase funding for programs that egregiously fail to serve people who are or ought to eligible, e.g., for Temporary Assistance for Needy Families, housing assistance.

We need to expand the EITC so that it’s a work incentive for childless adults, whom we still tax into poverty or deeper poverty.

And we should redesign the unemployment insurance program so that recessions automatically trigger more weeks of benefits or bigger benefits, rather than depending on what Congress decides at any given moment to do..

Think harder about people who fall through the cracks. Furman has no specific suggestions here, just notes the Edin-Shaefer findings on families living on $2 or less per day.

Worth noting, however, that the team attributes the sharp rise in such extreme poverty to the virtual end of cash assistance for non-working families when TANF replaced welfare as we knew it. Furman too zeroes in on TANF in a lengthy boxed insert.

So as we martial our defenses of safety net programs and protections for under-paid (and unpaid) workers, it’s still worth holding onto a vision and speaking out for a better day and better ways. And worth not losing sight of the policy-driven progress we’ve already made.


What to Ask About New Safety Net Work Requirements

March 6, 2017

As I said last week, we’ve reasons to expect that more work requirements imposed on “work-able” adults who have — or need to have — safety net benefits. So it’s worth considering how we might assess what state governors and legislatures propose.

We have two major models for work requirements — Temporary Assistance for Needy Families and SNAP (the food stamp program), as applicable to able-bodied adults without dependents.

Both permit not only work for pay, but participation in a program that prepares for such work. Participation counts only if for a minimum numbers of hours. generally averaged over some period of time.

Assuming, as I think one can, that proposed new work requirements will include a broader range of permissible activities than work for pay, we thus have some experience to assess them. Some questions then.

Will the state ensure that all unemployed or under-employed adults who are otherwise eligible for the safety net program can get a slot in a job training program for the requisite number of hours?

Very few states do for the ABAWDs, the Center on Budget and Policy Priorities reports. The federal government provides states with some funds expressly for SNAP-related employment and training. But most states use most of those funds to move adults with children into the workforce.

Experience with TANF also makes this a relevant question. I haven’t seen a comprehensive account of slot shortages. This much we know. States spend, on average, 7% of their federal funds, plus those they must spend to get them on work activities.

The District of Columbia’s TANF program reflected a similar priority in the not-too-distant past. In 2014, parents waited up to 11 months for access to a job training program. And the clock kept ticking, so to speak, toward the date when they and their children could never have TANF benefits again.

Will the state provide the other resources many of the adults will need to work or participate in a job training program for the required number of hours?

The adults, by definition, have little, if any income. And such as they have, must often pay for rent, food (even with SNAP benefits) and other basic needs, e.g., supplies and handfuls of coins for laundry, telecommunications of some sort.

Will the state provide transportation and/or a transportation subsidy, e.g., an auto fuel allowance for those with a car, a bus pass and/or subway fare card for those on a public transit route?

And what about the adults with children not old enough to be in school during all the hours they’re supposed to work or prepare for same? They’ll need free or nearly-free child care. And it’s unrealistic, as well as potentially unsafe for the kids to expect parents to count on friends or relatives.

The affordable childcare record generally indicates a gap to fill. Last year, for example, 20 states had waiting lists for childcare assistance or had closed them, the National Women’s Law Center reports.

Virtually all states require parents to chip in some money of their own, as a co-pay. It’s generally small as a percent of income for those below the poverty line.

But in at least four states, it’s at least 10% — $250 a month for a single parent with just one child. (Some exceptions here that wouldn’t apply to every parent subject to a new work requirement.)

How will state identify adults who aren’t work-able?

SNAP rules exclude from the ABAWD requirement adults who are medically certified as unemployable due to a mental or physical condition, pregnant or otherwise already exempt, presumably because they’ve qualified for SSDI (Social Security Disability Income) or SSI (Supplemental Security Income).

The bar here is very high. Someone, for example, may be employable, i.e., able to work and get a job, but not for an average of 20 hours a week or for months at a time. One or both are common enough for people with certain chronic conditions.

So what standard will the state set? Will it ensure that all adults potentially unable to work can have the requisite medical review — and, if necessary, the legal help to surmount to notorious barriers to gaining federal disability benefits?

Consider too that adults who’ve no disabilities may have compelling, related reasons not to work — a child with severe disabilities who needs constant care, for example, or a frail, aged parent.

Most states and the District exempt TANF parents with such responsibilities from work requirements. Will states do the same if they opt for new work requirements?

Will participating adults be able to find jobs — and keep them?

No job training program lasts indefinitely. And it’s very doubtful that a state would allow a work-able adult to move from one to the next and then the next until s/he could find a job.

Yet some safety net participants have what are commonly called barriers to work, e.g. mental or physical disabilities that don’t rise to the SSI/SSDI level, functional illiteracy. Just plain long-term unemployment is a barrier too, as are common consequences—credit checks, for example.

On the other hand, many adults who rely, at least for awhile on safety net benefits had jobs no longer available in the area they live in — or elsewhere.

The jobless former factory workers and coal miners that Trump appealed to would seem to need retraining tailored to employers’ needs in their area — and others projected nationally.

Will the state do the necessary market and personal assessments? How will it provide these and other services to poor people in small rural communities, if it has them?

Where will the money come from?

Well, the state shouldn’t look to the federal government for more funds — not at least for the foreseeable.

Recall that the flexibility states would gain to impose work requirements on Medicaid beneficiaries would also shift costs to them, increasingly over time — currently estimated at $560 billion over the next 10 years.

Experience with not only TANF, but SNAP E&T offers further cautions. Congress, as you probably know, has never increased funding for the former. The latest Farm Bill restored the latter to the same maximum it had in 2004 — in real dollars, about 44% less.

And the budget Trump is trumpeting would reduce total federal spending for non-defense discretionary programs by $54 billion — not a happy prospect for the grants states receive for job training, placement help and the like.

These aren’t the only questions I’d want to ask. But they must suffice for now, lest this post swell entirely out of compass. Would any of you like to add others?


Those Who Do Not Work Will Not Eat… or Have Other Basic Needs Met

March 2, 2017

Conservatives have long liked the notion of conditioning safety net benefits on work or a near equivalent, e.g., participation in a job training or education program, unpaid community service.

Work requirements are in the forefront now, due mainly. not only to what Congressional Republicans are reportedly mulling over for their Medicaid “modernization.”

Work requirements aren’t new, of course. They’re a key feature of Temporary Assistance for Needy Families.

And the law that created it also denied ongoing SNAP (food stamp) benefits to able-bodied adults without dependents who don’t work or participate in a job training program at least half-time.

So we’ve some experience with work requirements. And, as the old saying goes, “What you see depends on where you stand.” But not altogether. That experience can give us filters to assess proposals to build work requirements into more federally-funded programs.

I’m going to confine this post to the political landscape and how influential conservatives justify work requirements. Will follow up with a post on those filters.

Republican Leanings Toward More Work Requirements

The House Republicans evolving Medicaid overhaul doesn’t impose work requirements. Instead, it grants states vastly greater latitude to set eligibility standards.

We can foresee some results, including work requirements because a handful of Republican governors have jumped ahead, asking the federal administrative agency for permission to impose them.

The Obama administration’s Medicaid administrators rejected most requests. But it’s a brand new day in the executive branch. And Trump’s lead decision-maker helped develop the Kentucky governor’s still-pending request.

In short, the waiver petitions show the way the wind is blowing in some Red States — and what more states may do when granted the flexibility the House bill drafters have in mind.

Many poor and near-poor people may have to meet work requirements in other programs intended to keep them healthy and safe — or suffer the consequences.

House Speaker Paul Ryan’s blueprint for his party’s poverty agenda includes, as a principle, “Expect work-capable adults to work or prepare for work in exchange for welfare benefits.” Those benefits serve a wide range of low-income people’s basic needs, e.g., health care, food, housing, help with home heating bills.

The Heritage Foundation, which now seems to have a virtual seat at the White House policymaking table, has called for an across-the-board work requirement for able-bodied SNAP recipients.

The new Secretary for Housing and Urban Development has hinted at potential work requirements for people who live in subsidized housing. For example, he told the Senate committee vetting him that he wanted HUD’s programs to “be a Band Aid and a springboard to a better life.”

The Chairman of the House committee that oversees HUD has been more forthcoming. “We will reform our housing programs for the poor to reflect the value of work,” he said at a forum on the issues.

How Supporters Justify Work Requirements … and Grains of Salt

We find several sorts of justifications for work requirements. Ryan and numerous other conservatives cite what happened in the first few years after parents (mostly single mothers) had to comply with work requirements to receive time-limited cash assistance for their families.

A large number did, in fact, move from welfare to work, though not only because of the new requirements. Most importantly perhaps, the labor market was very tight then. Employers sorely needed more low-skill workers.

Looking past those years, we see that single mothers have fared badly in the labor market, as have TANF families generally. But lead Republicans still cite TANF as the model safety net program.

We’re all familiar by now, I suppose, with allusions to safety net benefits as a hammock. Seems that poor people prefer lolling comfortably, at taxpayers expense, to even trying to get a job.

They must be dumped out of their hammocks, if not immediately than with imminent prospects that they will be — as indeed, TANF parents (and their children) generally are.

On a less pejorative note, we hear that work is the best way out of poverty. That’s true enough enough, if one can find a job paying more than a poverty-level wage. (The same folks who invoke this remedy generally don’t support minimum wage increases.)

“Work confers dignity …responsibility,” says Arkansas’ governor, who’d sought permission to impose a work requirement for Medicaid. One might wonder what the stay-at-home spouses of like-minded proponents think.

Snark aside, it defies common knowledge to argue that only people who work for pay feel as sense of personal responsibility.

Consider, for example, a poor mother with children, scrambling to put food on the table, find some place for the family to spend the night — even donating her plasma until she’s in danger of anemia in order to get some cash.

I’m not sure what dignity means in this context — perhaps the respect of others, though the link to responsibility suggests it’s supposed to mean respect for one’s self. Whether working bolsters self-respect would seem to depend on a number of factors, including how attuned one is to our society’s work ethic.

On the flip side, many of us know, I think, how demoralizing it is to look for a job and net nothing, month after month. Demoralizing also to settle for a job that calls for far less than what one’s qualified to do — and pays far less as well.

That’s a likely result for many work-able adults in safety net programs if they’re subject to work requirements that are either time-limited or conditioned on participating in programs geared to push them into (or back into) the workforce as quickly as possible, like the “work first” approach once common in TANF and still favored in some quarters. .

Top-flight progressive advocates adamantly oppose any further work requirements. They cite, for example, the percent of safety net beneficiaries who already work or live with some who does.–or on the other hand, the very high percent who can’t be expected to.

All this said, new work requirements seem a not unlikely result of the Republican majorities in Congress now having a like-minded executive branch — and the very high portion of states where Republicans set the agenda.

So, as promised, I’ll suggest some questions we might ask if — or should I say as — more work requirements surface.


State TANF Spending Raises Red Flags As Republicans (Again) Ponder New Block Grants

January 17, 2017

The latest reports on Temporary Assistance for Needy Family’s spending are a timely reminder of what happens when states receive insufficient federal funds and a lot of flexibility in what they can do with them.

Basically, we expect TANF to do two things — serve as a safety net for poor families with children and enable the parents to get jobs that pay enough to make them more self-sufficient. Not necessarily enough to cover all their family’s basic needs, but at least enough to make cash benefits unnecessary.

The Center on Budget and Policy Priorities, which analyzes the annual spending reports, translates these expectations into three core purposes — cash assistance, work activities and child care.

The last of these supports the second in that it frees parents to participate in a job training program and/or other activities that will prepare them for work, look for a job and, in the best of cases, actually work for pay.

The latest analysis, for 2015, gives us new numbers that tell the same old story. States, as a whole, spent barely more than half their share of the federal block grant, plus the funds they must spend to get it on these core purposes.

The remainder went for all sorts of things — some closely linked to a core purpose, e.g., Head Start and Pre-K, some to programs and services that don’t benefit only poor families, e.g., child welfare.

States may have used TANF funds to expand such programs, the Center says. In other cases, they merely used them cover rising costs — or even to replace what they’d been spending out of their own funds.

What they invested in core purposes varied enormously. For example, seven states spent less than 10% of their TANF funds on cash assistance, while eleven spent more than 30%.

Twenty-eight states spent less than 10% on work activities and related supports, e.g., transportation. Only five topped 20%. And twenty states spent less than 10% on child care. while nine spent more than 30%.

One might think that states spent less on one core purpose so they could spend more on another. Not altogether so. Two states — Arizona and Texas — spent less than 10% on each of the core activities.

We know how Arizona managed to free up so much of its TANF funds for other purposes. By 2015 it had cut its TANF time limit three times, kicking families out of its program after they’d participated for 24 months. That’s 36 months less than the time limit on their using federal funds for all participating families.

Arizona has since cut its time limit to a mere 12 months, gaining even more funds to cover budget shortfalls — a predictable need because the state has been cutting taxes for years.

The state realized further savings by reducing cash benefits below the low level paid when TANF replaced welfare as we knew it. The maximum a parent with two children can get now is $202 a month — about 12% of the federal poverty line.

An extreme case perhaps, but not altogether unique. The Center reports that Louisiana spent only 11% of its TANF funds on core purposes. Its very low cash benefits — $230 a month for a three-person family — went to only four of every one hundred poor families in the state.

Tempting as it is to trash on these states (and some others), the fault lies with the federal law, which permits states to economize at the expense of their very poor residents.

In a way, it virtually forces them to do this by holding the block grant at the same funding level as when TANF was created in 1996. It’s lost more than a third of its real-dollar value since. So states that want to do the right thing would have to spend far more of their own funds than the partial match the law requires.

We don’t see that in the spending figures. We instead see that states have used TANF as a slush fund — the term that a prolific conservative critic of the program recently used to rebut claims that welfare reform succeeded.

That claim is hardly new. It’s survived a barrage of evidence to the contrary. That’s because proponents in our Congress don’t actually seek to strengthen the safety net and put very poor people on a pathway to steady, decent-paying work.

Nor, for that matter, do they aim to give states flexibility so that they can develop more effective ways to do this. One need only recall the outcries from the right when the Department of Health and Human Services invited states to request waivers in order to test alternatives to the regular TANF work activity rules.

The House Republicans’ block-granting plans are all about cutting federal spending on non-defense programs, especially those that make up our safety net.

This is why we’re bracing for legislation to block grant SNAP and/or Medicaid. Republicans need to find significant savings as offsets for the tax cuts they’ve promised, plus those they’ll achieve by eliminating the Affordable Care Act.

TANF is a harbinger of things to come — unless supporters can galvanize grassroots opposition. This seems to me doable, though difficult.


House Agriculture Committee Finds a Lot to Like in SNAP

January 12, 2017

When I learned that the House Agriculture Committee planned a top-to-bottom review of SNAP (the food stamp program), I thought it was a setup for legislation along the lines the right-wing majority had already teed up.

But the report the Committee recently issued is remarkably even-handed—and very informative. It does flag problems, including some that right-wingers have cited in attacks on our safety net generally. But they don’t support a major overhaul.

In fact, they bolster arguments against the sort that House Speaker Paul Ryan and fellow travelers have proposed. Here are a few of examples.

SNAP Gives States a Lot  of Flexibility

The report details the many choices SNAP affords state agencies. Most have to do with administration—how often they’ll require beneficiaries to prove they’re still eligible, how swiftly they’ll adjust benefits when income changes, etc.

But some are choices that can make more low-income people eligible, within the confines set by federal law. States may, for example, opt for so-called broad-based categorical eligibility, which opens the door to families whose incomes, before allowable deductions (but not after) exceed the standard cut-offs.

This, says the report, is the most significant of all state options. It does, however, note that states may also opt to exclude the value of certain assets that would otherwise disqualify them—the value of a car, for example, money in the bank.

This too makes more people eligible — and more able to both weather emergencies and achieve greater economic independence.

SNAP Affords Ample Room for Civil Society Organizations

Ryan says that the federal government has “crowded out civil society,” discouraging community-level organizations from engaging in efforts to help the poor.

The report emphatically argues that combating hunger in our country requires the participation of federal programs, as well as a range of local and state-level organizations.

It cites examples of the ways that charitable organizations and federal safety net programs work together, e.g., nonprofit food banks, supported in part by the Emergency Food Assistance Program.

And it quotes testimony from a food bank CEO on the need to keep federal nutrition programs strong so that the dollars from private donations can support innovations.

SNAP Is Not a Hammock

The report embraces the unobjectionable view that work is the best pathway out of poverty. But it cites data showing that nearly two-thirds of SNAP participants can’t be expected to work—because they’re too young, too old or too disabled.

Household-level data do suggest that more of the remaining participants could work, but didn’t during an average month in 2015—or rather, could work if the labor market had enough jobs available and they the skills to qualify.

The report could have veered into time limits at this point. It instead finds two areas where states could improve their programs within the law as-is.

First, some need to do a better job of enforcing SNAP work requirements, it says. The requirements it refers to aren’t those that have caused many thousands of able-bodied adults without dependents to lose their benefits.

They’re applicable to all unemployed adults who aren’t exempt for various reasons, e.g., because they’re responsible for caring for a disabled family member.

These presumptively employable adults must register for work, accept a job if offered and not quit voluntarily without good cause or reduce their working hours below 30 per week. So there’s no penalty if they can’t find a job offering a set minimum number of hours.

The report also strongly suggests that some states — or counties within states — don’t have SNAP employment and training programs, though all receive E&T funds.

“Most,” it says, quoting testimony, “have consisted of a referral to a job search program.” So it’s agencies that need to shape up, not SNAP beneficiaries.

The report provides examples of effective programs and hopefully cites pilots the current Farm Bill is funding.

It strongly implies that effective programs combined with “reasonable requirements, strongly enforced” will suffice to engage SNAP participants in activities leading to gainful employment.

“There is little evidence that harsh provisions are necessary,” it says, again quoting testimony.

On the other hand, the report does suggest that SNAP, combined with other safety net programs can discourage participants from working their way up the income scale because what they gain in pay is offset by what they lose in benefits.

To this extent then, it adopts Ryan’s view that the multiplicity of “welfare” programs, each operating under its own rules creates what’s often referred to as a cliff. For him, this proves that they’re a “poverty trap.”

The report instead notes that states may convert the cliff into downward slope by providing transitional SNAP benefits when families leave Temporary Assistance for Needy Families because they’ve found paying work.

And it includes one important data point that argues against the view that SNAP participants choose to remain poor or near-poor rather than lose their benefits. Specifically, most participants remain in the program for, at most, two years.

The Ag Committee Chair clearly aimed to build bridges between his conservative and progressive colleagues in preparation for the next reauthorization of SNAP.

“You will find nothing in this report that suggests gutting SNAP or getting rid of a program that does so much for so many people,” he and the chair of the Nutrition Subcommittee tell us in their prefatory statement.

At least some of us won’t find everything we’d like to have seen. For example, the report touches only tangentially on the adequacy of SNAP benefits, though it includes a section on promoting healthful eating.

But it does, as the statement says, show “there is common ground to be found both in understanding the needs of the population SNAP serves, and in working collaboratively to improve SNAP.”

 


New Census Report Proves Again That Anti-Poverty Programs Work

September 19, 2016

Only so much number crunching a lone blogger like me can do. So I’m behind the curve on the Census Bureau’s Supplemental Poverty Measure report, issued the same day as the report using the official measure.

As in the past, the SPM shifts poverty rates up and down. The overall poverty rate, for example, is higher — 14.3%, as compared to the official 13.5%. The child poverty rate drops from 19.7% to 16.1%, while the senior poverty rate rises from 8.8% to 14.3%.

These differences, as well as others derive from numerous differences between the measures. For example, the SPM includes the children who aren’t part of the official measure’s poverty universe.*

This is relatively minor, compared to other differences — thresholds among them. Instead of those I’ve nattered about, the SPM begins with consumer spending on four basic needs, plus a small additional for others.

It then deducts for work-related expenses, e.g., transportation, child care, and for child support payments and medical costs that individuals themselves must pay. (Those medical out-of-pockets largely explain the higher senior poverty rate.)

The annual threshold adjustments differ too — and in a way that may make yearly changes in the SPM poverty rates “confusing,” the Center on Budget and Policy Priorities says. It specifically cautions against comparing the new SPM figures to last year’s.

I’ll confine myself then to what we can glean from another major difference. For the official measure, only pre-tax cash income counts in determining whether a household and the members it recognizes were poor.

The SPM deducts for taxes. It also includes income derived from the refundable tax credits and the cash-equivalent value of a some safety net benefits that the federal government funds either entirely or in combination with states.

What we can see, because of an analysis the Bureau provides, is what poverty rates would have been without one or another of the safety net benefits — both cash and cash-equivalent. It folds in Social Security retirement and disability benefits, though they’re not for low-income people only.

As always, Social Security proves the most effective anti-poverty measure we’ve got. Without the benefits it provided, about 26.6 million more people would have been part of the poverty rate, boosting it to over 22.6%.

Well over a third of all seniors would have been poor — nearly triple the rate with those benefits factored in.

The Earned Income Tax Credit and Child Tax Credit again come in second. They lifted about 9.2 million workers and their dependents over the poverty threshold, including 4.8 million children. Their already-high poverty rate would have been 22.6% without the credits.

Not all low-income workers benefited, however. Current law denies the federal EITC to both young and elderly workers. And the credit is very small for age-eligible adults who don’t have children — or who do, but not in their homes for more than half the year.

In short, an anti-poverty measure that works, but could work better. One could say the same for other safety net benefits the SPM report accounts for.

SNAP (the food stamp program), for example, as I’ve often said. Yet even with its current limits, it lifted roughly 4.6 million people, including nearly 2 million children out of poverty last year.

Results for Temporary Assistance for Needy Families, which I’ve also often gone on about, were pathetic — a 0.2% nick in the poverty rate.

An even more pathetic impact from the Low Income Home Energy Assistance Program, which neither the administration nor Congress seems much interested in funding.

We don’t see a large boost over the poverty thresholds from federally-funded housing subsidies either — a generously rounded up 2.5 million fewer poor because of it. In this case, we do have an actively interested administration — and what seems moderate support from majorities in Congress.

But the SPM thresholds take account of what people must spend for housing. And, as everyone knows, housing costs have been rising virtually everywhere.

So federal budgets would need to do more to keep those costs from driving up poverty rates than merely ensure that as many households have vouchers as they do now — or the same chance to live in public housing.

The Census Bureau reports each of the anti-poverty programs separately. So we can’t see how many people were lifted out of poverty by, say, SNAP plus a housing subsidy.

The Center on Budget rolls all the programs together and concludes that they cut the poverty rate almost in half last year.

It also notes, as have other analysts, that households surveyed tend to under-report the benefits they’ve received — mainly just because it’s hard to recall exactly how much one gets, perhaps from multiple sources and usually over some period of time.

At a minimum then, the safety net benefits, plus Social Security lifted about 38.1 million people over their poverty threshold — more seniors than younger people, but still about 7.9 million children.

CBPP warns that cuts in the programs would plunge more people into poverty. That’s, I think, what any fair-minded person would conclude from the SPM analysis.

It shows, with hard numbers, that our major anti-poverty programs work, notwithstanding the constant drumbeat from the right about how they’ve failed. It also shows they could work better — some perhaps if just more amply funded, some surely if also reformed.

* The SPM report adjusts the official rates to include the missing children. So one finds a higher overall poverty rate and higher child poverty rate there.


Making TANF More Than Very Temporary Assistance for Some Very Needy Families

September 1, 2016

My last post dove into the thorny thicket of the work participation requirements that the Temporary Assistance for Needy Families law and rules impose on states.

Both the WPRs and the escape hatch for states that don’t meet them help explain why TANF has generally failed to do more than very temporarily assist some very needy families.

Both the House draft bill and the Senate bill I’ve focused on would address these and some other problems. But they’d leave one untouched (or virtually so). Here then is more about what they’d do — and not.

New Purpose(s)

You’d think that a work-focused program for needy families would have poverty reduction as a purpose. But TANF doesn’t. The closest the law comes, as I remarked before, is reducing dependency.

The House draft would make reducing poverty a purpose — not generally, but by moving more parents into the workforce, with better prospects there than has often been the case. The Senate bill would add something similar, but link it to reducing both child poverty and deep child poverty, i.e., the percent of children in families with incomes below 50% of the federal poverty line.

Both new purposes provide a partial basis for the outcome measures and related reports the bills would require. They also serve as a rationale of sorts for the tighter limits on state spending that both impose.

Shift in Success Measures

The current law holds states accountable for having their enrolled TANF parents engaged in work-related activities. And it effectively rewards them for getting families out of their programs. They needn’t concern themselves with results.

And the fact that we know very little about what happens to families after they leave TANF, however they leave, shows that most don’t. They’ve no compelling reason to invest in the tracking and analyses that would require.

Both the House draft and the Senate bill would give them one. They’d have to develop outcome measures and publicly report results.

Both bills specify the employment rates and earnings of former TANF parents. The Senate bill includes indicators related to the rest of the new program purpose it would establish. States would also have to track and report child food insecurity.

They’d still have some flexibility. So we might lack comparable data. And some outcome measures could give states another incentive to “cream” their caseloads, as CLASP experts have warned.

But what we don’t know can — and does — hurt poor families with children. So we do clearly need outcome measures reflecting what our welfare program ought to do.

Curbs on State Spending

States have enormous flexibility in how they may use their share of the TANF block grant, plus their maintenance of effort, i.e., funds they must spend to get their share. We see the results in the annual reports they must file with the federal agency that administers TANF.

They all spend some money for cash benefits, programs to get parents into the workforce and child care, which both parents preparing for work and those who’ve found it need. But nearly half spend less than 50% of their combined TANF funds on these. Ten spend less than 25%.

Major advocacy organizations have recommended a minimum spending level for the aforementioned three items — commonly referred to as core activities. The House drafters left the question of minimum spending open. The Senate bill sets a 60% minimum level, phased in over a five years. So still a lot of flexibility, but considerably less.

The bill also restricts block grant spending to aid for families with incomes no greater than 200% of the federal poverty line. The House draft does something similar. Tells us something about where this anti-poverty money is going.

Federal Funding Shortage

Neither the House draft nor the Senate bill remedies a problem that’s partly responsible for others — the continually shrinking value of the block grant.* It’s been flat-funded ever since Congress created it.

This, as I (and many others) have said, means it’s worth about a third less now. Likewise states’ required MOEs. At the same time, many have more needy families.

Not, however, in their TANF caseloads. Even states that resist other perverse incentives, understandably feel they can’t afford to provide all poor families with the benefits and services that would even just lift them out of poverty.

Nor to pay all the caseworkers truly individualized plans would require, though both the House draft and the Senate bill set new standards for these.

The President’s proposed budget — DOA, of course — would increase the block grant by $8 million over the next five years. That would require states to increase their MOE spending.

The block grant increase, however, would only “partially address its erosion in value,” the Department of Health and Human services says. And we’ve got about 5.2 million more poor families now than in 1996.

But even a fully restored block grant, with all funds channeled to families below the poverty line would seem less than needed. How much less is hard to say because we can’t know how much inflation will again erode it. Nor how many families will need assistance in upcoming years.

The proposed budget does, however, look ahead to the next recession — or recessions. It would build a reserve for infusions during economic downturns, with a trigger to release them.

So extra help for states and the needy families they should serve would no longer depend entirely on the whims of Congress. The premature demise of the Recovery Act’s Emergency Contingency Fund shows why an automatic, economy-sensitive alternative is preferable.

In not-so-short, the next Congress and President will have proposals to work with if they decide, at long last, to reauthorize TANF. They’re fairly modest proposals, but they’d give us a much better “welfare” program than what we’ve got.

* The House draft would increase the block grant by $25 million for each of the five years it covers. This is a fraction of the real-dollar loss to date.