Safety Net Fraying For Poorest Families

July 8, 2009

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.


Economic Recovery Package Should Include Housing Vouchers

January 13, 2009

A new report by the Center for Budget and Policy Priorities forecasts a further increase in homeless families with children. Indeed, communities across the country are already reporting significant increases.

CBPP cites data from two recent reports I’ve already written about–the U.S. Conference of Mayors’ 2008 Status Report on Hunger and Homelessness and the survey of school districts by the National Association for the Education of Homeless Children and Youth and Focus First.

To these, CBPP adds alarming new figures. For example, compared to the same periods in 2007:

  • The number of families entering homeless shelters in New York City increased by 40%.
  • In Massachusetts, the number of families in state-supported emergency shelters increased by 32%.
  • Family homeless shelters in Connecticut turned away 30% more families due to lack of bed space.

The problem is not only rising unemployment. As CBPP explains, the housing market crisis is an important factor. Foreclosures are displacing not only homeowners, but renters. They are all seeking to get into a relative few vacant rental units, unintentionally driving up rates beyond what many families can afford.

A third factor is the frayed safety net. As CBPP says, the unemployment insurance program hasn’t been updated to reflect changes in the labor market. So many laid-off low-income and part-time workers aren’t receiving UI benefits. Add to this the facts that:

  • The TANF (Temporary Assistance for Needy Families) program is serving only 40% of eligible families–a far lower percent than were assisted under the “welfare” program it replaced.
  • Most states have eliminated general assistance programs, except for severely disabled people.

A previous CBPP report recommended, among other things, expansions of the UI and TANF programs as part of the pending economic recovery package. This report focuses on another earlier CBPP recommendation–a significant increase in housing vouchers.

CBPP calls for 200,000 new vouchers, without restrictions that would disqualify most poor families, as the scant number of new 2008 vouchers do. The additional vouchers, it says, would enable state and local agencies to serve 10% more families and could be crafted to avert long-term pressures on the federal budget.

In addition, CBPP recommends an increase in the Emergency Shelter Program–something also recommended by NAEHCY and First Focus. This would fund short-term assistance to prevent families from becoming homeless.

These two measures would cost about 0.005% of the projected total economic recovery package–a very small investment with a large return for homeless families and our communities.

There’s a ton of news about the economic recovery package, little or nothing about help for homeless families. But then who is lobbying for them with anything like the clout of those who will profit most from funding for construction projects and corporate tax cuts?

Cities Report More Hunger and Homelessness Than Ever

December 21, 2008

The U.S. Conference of Mayors has released the results of its annual Hunger and Homelessness Survey. As its press release says, they show that “issues of hunger and homelessness are more prevalent than ever.”

The main cause, of course, is the economic downturn. But the results indicate other factors–particularly, the ongoing shortage of affordable housing.

The results also show that cities are struggling to keep up with increasing needs for assistance. Many have had to deny urgently-needed services. Here are a few of the “lowlights:”

Of the 25 cities reporting:

  • Most, at times, did not have enough shelter space to meet demand. “It was not uncommon to turn people away due to lack of available beds.”
  • Most had closed their waiting lists for public housing or housing vouchers because demand was so much greater than supply.
  • Demand for emergency food assistance exceeded supply in all but 5 cities.
  • Food pantries in 13 had had to turn people away, and pantries in 16 were reducing the amount of food people could receive at each visit.

These results do not reflect the full impacts of the recession because the end of the reporting period was September 30. Yet they clearly demonstrate a growing crisis that “cities, regardless of size, cannot handle alone.”

They can’t look to their state governments for much, if any help. According to the Center for Budget and Policy Priorities, 37 states, plus the District of Columbia, are facing shortfalls in their current budgets. In fact, D.C. officials  just announced a $127 million shortfall–this on top of the $131 million shortfall the City Council eliminated in November.

What’s clearly needed is a swift infusion of federal funds targeted to programs that will ease the hardships of poor and near-poor individuals and families. This should be a major focus of the new economic stimulus package that President-elect Obama and Congressional leaders have promised.

Recession Will Push Millions Into Poverty

December 13, 2008

Every day brings more dire news about our tanking economy.

A new report by the Center for Budget and Policy Priorities warns that the current recession could push as many as 10.3 million more Americans into poverty and increase the number living in deep poverty by as many as 6.3 million.

Deep poverty means having an income below 50% of the federal poverty line. For a family of four, this is an income of less than $10,600.

CBPP lists five measures that policymakers can take to help stave off severe hardship during this recession. Virtually all of them, it says, would deliver a lot of “bang for the buck,” i.e., infuse a large amount of spending into the economy relative to what they would cost.

Here are the measures:

  • A temporary increase in food stamp benefits–something also recommended by the Coalition on Human Needs, the Food Research and Action Center and a large, diverse coalition of other organizations
  • Additional rental assistance through the housing voucher program
  • Expansion and improvement of the TANF (Temporary Assistance for Needy Families) contingency fund, which provides states with more funds when recessions increase the number of poor families
  • A temporary increase in unemployment benefits and an expansion of the program to cover at least some of the many low-wage and part-time workers who can’t get unemployment benefits now
  • Significant fiscal relief to states to avert extensive budget cuts that would further weaken the economy and states’ capacities to meet rising needs for health care and other services

The new Administration and Congress are sure to act on another economic stimulus package soon. Let’s hope they listen to CBPP and other organizations that are calling for measures to meet the urgent needs of low-income individuals and families.