ISSUE GUIDES: Poverty and Welfare

OVERVIEW

Poverty and Welfare


poverty_foodstamps.jpg

When Congress enacted sweeping changes in the way the federal government provides public assistance to the poor more than a decade ago, the goal -- in the words of former President Clinton -- was to "end welfare as we know it."

In many respects, that goal has been achieved. The days when someone could receive welfare checks indefinitely are over and welfare rolls have been cut dramatically. But significant numbers of Americans -- some 36.5 million people in 2006 -- still live below the poverty line, according to the Census Bureau. The Department of Agriculture estimates nearly 11 percent of American households suffer from "food insecurity," meaning they don't have access to enough to eat for at least part of the year.

Much of the debate over poverty centers around the ranks of the "working poor," who are employed but cannot earn enough money to lift themselves out of poverty. Those critics argue that there are insufficient support services -- such as health insurance and child care -- to help the working poor make ends meet. Low-wage workers are far more likely to go without health insurance, for example.

Revisiting reform

With public sentiment so strongly behind the concept of work in exchange for public assistance, it hardly seems likely that the U.S. will return to welfare as we used to know it.

The current approach, enacted as part of a comprehensive reform in 1996, requires many recipients to work for their benefits and also places a five-year time limit on cash assistance. Even the name of welfare changed, from Aid to Families with Dependent Children (AFDC) to Temporary Assistance for Needy Families (TANF).

The welfare plan was designed to attack one of the most troubling aspects of poverty: "welfare dependency," where living on government assistance becomes the norm instead of a temporary refuge for a family. Supporters of the reform believe that work is inherently better than welfare, and many studies have demonstrated that working boosts self-esteem among workfare participants and provides positive benefits to their families.

President Bush has proposed toughening the work requirement. Under the president's proposal, the work week for welfare participants would be increased to 40 hours, from 30, and the percentage of welfare recipients required to work in each state would be increased to 70 percent, from 50 percent. In practice, administration officials say, states typically have about 30 percent of their welfare recipients in jobs because of a provision in the 1996 law that gives them credit for each person moved off their welfare rolls. Bush's proposal calls for the elimination of that loophole, but at the same time the president would allow low-income parents to meet part of their work requirements by participating in organized activities with their children, including the Scouts, sports and education programs.

Bush also wants the workfare program to begin putting an emphasis on "healthy marriages." His plan calls for the government to subsidize experimental programs in five or six states that would provide a variety of support services for couples, including counseling. A number of studies have found that two-parent families offer more stability, in addition to higher incomes, and that children of single-parent families are more likely to struggle in school or become involved in crime. But some critics say the administration's efforts to encourage marriage among welfare recipients will prove futile. A study by Cornell University's Community and Rural Development Institute found that three-quarters of all single mothers receiving welfare had already given marriage a try.

Even as he touts the benefits of welfare reform, Bush acknowledges: "We ended welfare as we've known it, yet it is not a post-poverty America."

Making the transition

Critics of the current system say the government needs to do more to help welfare parents make a successful transition to work, including providing more funding for such things as child care. Others suggest there are ways to help the needy other than direct assistance, like the Earned Income Tax Credit, which aims to reduce the tax burden on low-income families with dependent children and to offset the work disincentives associated with welfare. Unlike most other tax credits, EITC is refundable. Studies suggest that former welfare recipients, like the ranks of other low-income families they are joining, are surviving to a large extent on recent expansions of the EITC. But a study by the General Accounting Office, the investigative arm of Congress, found that a third of all low-income people eligible for EITC are not taking advantage of it.

And there remain those who say that the best cure for poverty is a job, and that the best solution is an economic policy that fosters vibrant growth. They say, for instance, that the economic expansion of the 1990s did more to create jobs and lift people out of poverty than any other anti-poverty program. Advocates also argue for increasing the minimum wage, to put more money into the hands of low-wage workers. Others argue, however, that this would be an additional burden on business and might actually cut the number of low-wage jobs available.

The public view

Most Americans say fighting poverty should be a high priority for the government, although they rate other issues higher. But in many ways they show mixed feelings on this issue. The public also appears to make a distinction between "the poor" and "welfare recipients", and show a strong libertarian streak on homelessness.

Choicework

For more detail on how society could address this issue, visit our Discussion Guide which sets out three alternative approaches.

The points of view are drawn both from what the experts say about an issue and from what the public thinks about it, based on surveys and focus groups. We call this section "Choicework." Each point of view comes with the arguments for and against, along with some potential costs and tradeoffs - because every plan has both pros and cons, and a citizen should face both honestly.

  • One perspective holds that government efforts to reduce poverty have made the problem worse by creating a culture of dependency. The best and most compassionate solution is to phase out most welfare benefits and allow better-equipped communities and private charities help the poor.
  • Another perspective believes that in exchange for public assistance, government is entitled to make demands on recipients. Government programs must firmly guide poor people toward responsible, self-reliant, and productive lives.

  • The third perspective acknowledges that a successful anti-poverty program has to focus on the needs of the working poor--good education and jobs with livable wages and benefits-- not their behavior or values.