budget committee chairman Paul Ryan (R-Wis.) has lately rebranded
himself as an advocate for the poor, albeit with his own makers-versus-takers
, Ayn Randian twist. He recently issued a lengthy study
of federal anti-poverty programs and over the past year and a half he
has embarked on a "listening tour" to hear from low-income Americans. On
Tuesday, Ryan issued the House GOP's 2015 budget proposal
which would make major changes to two of the federal government's
primary anti-poverty programs, food stamps and Medicaid.
Using as his
model the supposedly successful welfare reform effort of the 1990s, Ryan
envisions turning these programs into block grants that are handed over
to the states to administer. But his plan to "help families in need
lead lives of dignity" is likely to make matters worse for America's
neediest. Here's why.
In 1996, Congress reengineered the federal program that provided cash
assistance to the poorest families. Along with imposing stiff work
requirements, Congress turned the old entitlement program, whose budget
rose and fell automatically with need, into a block grant with a fixed
budget. The grant was then distributed to the states, with few strings
attached, under the premise that they were "laboratories of innovation"
that would revolutionize the way the government helped the poor.
as welfare reform has shown, giving states this sort of flexibility in
how they spend federal money can lead to a lot of abuse that Republicans
are so keen on rooting out.
According to data crunched by the Center on Budget and Policy Priorities
states have diverted billions of dollars of welfare block grants for
uses these funds were not intended to support. In the first year of
welfare reform, about 70 percent of the Temporary Assistance for Needy
Families (TANF) block grant went to pay for basic cash assistance for
poor families. By 2012, that number had fallen to 29 percent and states
were spending just 8 percent on providing transportation, job training,
and other services intended to help people transition from welfare into
The numbers are even more dismal in some individual states. In 2012, Louisiana spent 7 percent of its $261 million in TANF funds
on basic assistance, down from 36 percent in 2001. Just 4 percent of
the funds went to programs to help welfare recipients get back into the
workforce. A mere 2 percent of the funds paid for child care, another
critical component of a reform effort that was geared toward nudging
women with small children into low-wage jobs.
What happened to the rest of the money? According to CBBP, 71 percent
of it went to other services, including "other nonassistance," a
nebulous category used to mask payments for a hodgepodge of programs
that the state didn't want to spend its own tax revenues on.
Like Louisiana, many states have used TANF money to pay for programs
that don't necessarily help America's lift neediest out of poverty in
times of crisis or during a bad recession. TANF funds have been spent on
everything from pre-K to financial aid for college students. Several
states have notably tapped into TANF funds rather than raise taxes on
their citizens after courts have ordered them to spend more money on the
poor via other programs. Georgia, for instance, has been court-ordered
to improve its child abuse and neglect system because of inadequate and
dangerous conditions. Rather than raise taxes to pay for the
improvements or free up funds in the state budget, Georgia now spends more than half of its federal TANF grant
on foster care and related services. One of the goals of TANF, of
course, is to keep children out of foster care in the first place by
relieving some financial strain from their parents.
States also have used a fair amount of creative accounting to access
federal TANF funds without spending much of their own money, as required
by the law. When it created the TANF block grant, Congress required
states to continue spending their own tax money on welfare. The
legislation's drafters wanted the states to have some skin in the game,
not use the federal windfall as an excuse to repurpose their poverty
spending to fill potholes or dole out tax breaks. But that's basically
what's happened. States have taken big liberties in defining what counts
as their contribution toward the TANF program.
Take New Jersey, which is under court order to provide pre-K for poor
children thanks to a lawsuit that found wide disparities in funding for
public schools. In 2012, the state counted as its TANF contribution more than $420 million
that it was court-ordered to spend on early childhood education and
full-day preschool. This saved the state from anteing up additional
funds to claim federal grant money.
In 2012, Louisiana similarly counted the $46 million it spent on college financial aid
as its contribution towards the welfare program. Hawaii has likewise claimed that $33 million it spent funding students at the University of Hawaii is
actually anti-poverty spending.
Other states have taken this a step further, counting private funds
already being spent by nonprofits such as Catholic Charities, the YMCA,
or Goodwill toward their own welfare contributions. Utah, for its part,
has counted volunteer services offered through one of the Mormon church's Deseret Industry
food banks as nearly half of its TANF match.
It's perhaps no surprise, then, that the number of children and families in the US living on less than $2 a day
has doubled since the welfare system was reformed. Yet under Ryan's
plan, this model would be imported into other federal anti-poverty
programs that have far larger budgets than TANF, which clocks in at $16
billion a year (an amount that has remained unchanged since 1996). Given
the way the block-granting system has diffused the impact of federal
assistance to the extreme poor, it's hard to see how expanding the model
would help fight poverty "eye to eye, soul to soul, person to person,"
as Ryan says he wants to do. In all likelihood, Ryan's proposals would
sink America's poorest deeper into poverty while creating a spending
bonanza for cash-strapped states.
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