Welfare Spending Shows Huge Shift

Let's get real here. Welfare reform is creating such poverty, demands
on time, and lack of childcare that many kids are having to be raised
by relatives or foster care, in the "zero-parent" family. (NY Times,
7-29-02)  Studies show families leaving welfare are frequently
unemployed, or if employed, continue at or near poverty, with periods
of not eating or being housed. These figures came from periods of high
employment. (NY Times, 4-25-02)

This article, implying that welfare money is being used to supply
needed services, is running while the government is planning to freeze
welfare spending and child care expenses over the next five years. (NY
Times and Washington Post, 1-15-03)


New York Times, October 13, 2003

Welfare Spending Shows Huge Shift

By ROBERT PEAR

WASHINGTON, Oct. 12 - New government figures show a profound change in
welfare spending, shifting money from cash assistance into child care,
education, training and other services intended to help poor people
get jobs and stay off welfare.

Cash assistance payments now account for less than half of all
spending under the nation's main welfare program, Temporary Assistance
for Needy Families, federal officials say.

The proportion has been declining steadily since 1996, when Congress
revamped welfare and abolished the guarantee of cash assistance for
the nation's poorest children. The 1996 law required most adults to
work within two years of receiving aid and gave states sweeping
authority to run their welfare and work programs with lump sums of
federal money.

"Welfare" used to mean a monthly check that could be immediately
converted to cash. But statistics tabulated by the Department of
Health and Human Services, at the request of The New York Times, show
that the proportion of federal and state welfare money spent on cash
assistance declined to 44 percent in 2002, from 77 percent in 1997.
The proportion allocated to various types of noncash assistance shot
up to 56 percent, from 23 percent in 1997.

"The program has been fundamentally transformed," said Wade F. Horn,
assistant secretary of health and human services in charge of welfare
policy.

The federal and state money is used not only to provide a minimal
income to single mothers, but also to help them move from welfare to
work, hold onto low-wage jobs and move into better-paying jobs.

The money is being used to pay for transportation from home to work,
to treat drug abuse and mental health problems and to provide
temporary shelter for women who have suffered domestic violence. The
money is also used for one-time payments - for example, for car
repairs - to alleviate immediate financial needs, so people never go
on the welfare rolls.

Temporary Assistance for Needy Families is financed jointly by the
federal government and the states. Of the total of $25.4 billion spent
in 2002, about $11.2 billion was for cash assistance and $14.2 billion
was for noncash benefits.

Joel Potts, the welfare director in Ohio, said that nearly 75 percent
of Ohio's welfare money was spent on cash assistance before 1996. Now,
Mr. Potts said, only 30 percent goes for cash assistance, while 31
percent is spent on child care, and 39 percent goes for job training,
vocational education, transportation, housing and counseling.

"This is a fundamental and significant shift in social policy," he
said.

Wisconsin says it spent $217 million on cash assistance in 1997 and
$72 million on child care subsidies. In 2002, it spent $40 million on
cash assistance and $266 million on child care.

In Ohio, Wisconsin and other states, much of the child care money goes
to people who are not receiving monthly welfare checks - families who
have left welfare or never been on it.

Mark H. Greenberg, a lawyer at the Center for Law and Social Policy, a
research and advocacy group, said that by directing money from the
welfare block grant to child care, job training and other services,
states had been able to "hold down welfare caseloads." Indeed, Mr.
Greenberg said, a large share of the welfare block grant is being used
to help families who do not receive welfare in the traditional sense.

The official federal tally of welfare recipients counts only people
who are receiving monthly cash assistance.

Since the welfare law was signed in 1996, the number of people on
welfare has plunged, to 5 million from 12.2 million, a 59 percent
decline. The federal government provides a fixed amount to the states,
$16.5 billion a year, regardless of how many people are on the rolls.

Representative Benjamin L. Cardin of Maryland, the senior Democrat on
the Ways and Means subcommittee responsible for welfare policy, said:
"The welfare caseload is changing more than it is shrinking. There are
certainly fewer people receiving cash assistance, but there are also
more people receiving child care, employment services, vocational
training and other assistance designed to promote work."

Cynthia M. Fagnoni of the General Accounting Office, an investigative
arm of Congress, said: "Prior to welfare reform, states focused their
welfare spending on providing monthly cash payments. Since welfare
reform, states are spending a smaller proportion of welfare dollars on
monthly cash payments and a larger share on services."

The federal government does not have comprehensive data showing the
number of people who receive noncash benefits and services subsidized
by the main federal-state welfare program.

But the trend is clear. "While cash assistance caseloads were falling
by half," Mr. Greenberg said, "state child care caseloads were
doubling, to about two million. Politically, there is much more
support for child care than for cash assistance."

Mr. Potts, the Ohio official, said the new strategy was no less
expensive than the old one.

"The cheapest thing to do is to pay a woman to stay home and raise
kids in extreme poverty," he said. "We did that for 60 years. We found
that cash assistance, by itself, leads to nothing."

Robin Arnold-Williams, director of the Utah Department of Human
Services, said: "The old traditional welfare program is now an
employment program. But it requires an upfront investment that may
cost more in the short run. Child care alone may be more expensive
than handing out a cash grant."

Sharon Parrott, a policy analyst at the Center on Budget and Policy
Priorities, a research and advocacy group, said that child care,
transportation and other services had been "an enormous help to
low-income families, enabling them to stay off welfare and to make the
transition from welfare to work." But she added, "Falling caseloads
amid rising poverty are cause for concern."

The number of people in poverty rose to 34.6 million in 2002, from
31.6 million in 2000, the Census Bureau reported last month. But the
number of people on welfare continued to decline, to 5 million in
2002, from 5.8 million in 2000.

Many states use welfare money to aid victims of domestic violence.
Welfare officials say that at least 20 percent of welfare recipients
have suffered such abuse in the last year, often at the hands of men
who discourage them from working.

"Safety is a paramount issue for many welfare recipients," said David
A. Berns, director of the Arizona Department of Economic Security. "A
woman will never be economically self-sufficient if she is afraid to
go out of the house for fear of what might happen to her."