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Unformatted text preview: American Poverty and Welfare Reform Reform The Evolution of Welfare The America followed a very cautious approach to the development of a welfare system Much later than most of the other democracies, the federal government in 1911 provided some grants to the states to help their poor. The Social Security Act of 1935 provided the foundation for a welfare system. It was passed in response to the Great Depression. Roosevelt wanted the ablebodied to work. He convinced Congress to pass the SSA of 1935 and the WPA program. The WPA put millions of people to work in public sector jobs. Social Security Act of 1935 Social Established the Social Security program Provided grants to the states to assist the aged, blind and disabled Provided grants to help states set up unemployment compensation programs Established Aid to Dependent Children The SSA was profoundly important, but still a conservative approach. Not until 1950 were half of retired workers covered by SS. States were given a lot of control over ADC and benefits for the aged and disabled. The SSA did not include health insurance. Still very conservative by European standards Welfare Expansion Welfare In 1950 ADC changed to Aid to Families with Dependent Children. 1961 ADFC amended to allow aid to some twoparent families Food Stamp program established in 1964, expanded in 1974 Medicaid and Medicare established in 1965 SSI established in 1974. By the late 1950s it was clear that AFDC had become exactly the type of program that Roosevelt and his supporters had hoped to avoid. Johnson—Great Society—A Hand up, Not a Hand Out. Nixon wanted to base reform on a Negative Income Tax Carter—a Negative Income Tax and a Guaranteed Income for the disabled. Reagan—Mandatory work programs and cutbacks/more control by the states. Family Support Act of 1988 Family 1990 all states had to set up systems to garnish wages of nonpaying absent parents. States required to set up job training programs States were required to provide support services for welfare or lowincome adults trying to work. Allowed demonstration projects FSA of 1988 FSA Act was badly underfunded and mostly served as an example of where Congress was headed with reform. Demonstration projects in some states were important. The DPs provided some evidence about the impact of innovative ways of dealing with the poor. Major Reform Major The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 Twice Vetoed by Clinton Twice Clinton wanted: Work to pay Improvements in childsupport enforcement Pregnancy Prevention Job assistance Time Limits on benefits Public Service and Subsidized Jobs Republican Plan Republican Cap welfare spending Turn Welfare over to the states Time limits, sanctions, family caps Employment requirements Elimination of aid to most immigrants Cap food stamp expenditures Tighten rules for SSI Enforce Child Support Orders Bill Passed is Mostly a Republican Victory Illegal aliens and legal aliens are generally ineligible for aid. Legal aliens: no assistance for first five years If they need assistance after first five, their sponsors must pay. They become eligible after working 40 quarters, or when they become citizens. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 Reconciliation As passed: Based on a contractual relationship between recipient and state PWORA shifts welfare from cash assistance to helping people PWORA shifts welfare from cash assistance to helping people become viable members of the workforce. Basically a supportedwork program. a. Turns welfare over to the states. b. Caps expenditures for some welfare programs. c. Limits the time period that most recipients can receive welfare paid by the federal government (2/5 rule). d. Restricts the ability of legal immigrants to receive welfare assistance. e. Gives the states the right to strongly sanction clients who are uncooperative, including banning them from welfare. f. States must meet yearly employment goals for welfare f. States must meet yearly employment goals for welfare recipients. g. States are required to establish a central case registry to track all child support orders in the state and this information must be shared with the federal government. h. States are required to establish a new hire registry, coordinate this with their child support data, and share this information with the federal registry. Also designed to reduce future generations of poor Also designed to reduce future generations of poor by: Funding programs to reduce outofwedlock births Requiring both parents of children to accept financial responsibility for their support. Providing states with funds that can be used to improve childcare, afterschool care, and other supervised programs for millions of low income children. Basic Philosophy Basic Improving poor people Teaching the poor the right habits of mind. An Example of A Rather Sophisticated Plan Sophisticated The Wisconsin W2 Plan IX. Wisconsin W2 IX. Wisconsin W2 1. No Entitlement to Welfare a. Anyone willing to work is placed in a job, or given help in finding employment. b. W2 is available to all adults with income below 115% of their poverty level. c. Designed to treat clients the same as people who are working in the private sector. 2. Mutual Obligation Contracts a. Financial and Employment Planner (FEP) helps applicants develop an Employment Plan (EP). Designed to discourage those who will not cooperate. Lay out ground rules. Set goals for those who can be helped. b. Applicants may be enrolled in several weeks of supervised job b. Applicants may be enrolled in several weeks of supervised job search. Includes dressing for success, time management, instructions on how to take directions, how to get along with coworkers, transportation options. c. Develop a list of goals and a plan of action. 3. Employment Ladder a. Unsubsidized Employmentno cash assistance, but often qualify for EITC, food stamps, medical coverage, child care, and job access loans. b. Trial Jobs (Subsidized Employment)employer is subsidized (maximum of about $300 a month) for up to six months. Expectation is that employer will them provide a fulltime job. Employee is paid at least the minimum wage, and may be eligible for EITC, food stamps, medical coverage, childcare and job access loans. C. Community Service Jobs (CSJs)designed to allow applicants to learn job skills and work habits. Receive up to $673 a month, and may be eligible for food stamps, medical coverage, childcare and job access loans. d. W2 TransitionA combination of supervised work, education and training. Monthly salary (up to $628) and may be eligible for food stamps, medical coverage, childcare and job access loans. Employees in the three lowest rungs are restricted to 24 months in any one category, and 60 months in the various work options. IV. Grants in CSJs and W2 do not vary by family size. IV. Grants in CSJs and W2 do not vary by family size. V. Support Services a. One Stop Job Centers b. Job access loans c. Transportation Services d. Child Care no time limit on eligibility. All families below 165% of poverty level are eligible. e. Child Support all collections to custodial parent. f. Health Care g. Local Children’s Services Networks h. Community Steering Committees mostly focus on jobs, childcare and transportation. i. Education and Training VI. Problems with W2 VI. Problems with W2 a. Between 50 and 70% of those who have left the rolls are working, but rarely fulltime. Most work 20 or fewer hours per week. Earning generally leave clients close to or below the poverty level. Many clients will not cooperate with program requirements. b. The private firms hired to run the program have often been incompetent. c. Poor data collection and monitoring of clients. d. Sanctions – Often used to just dismiss clients and reduce the rolls. Wisconsin’s plan is more sophisticated than most, but it has run into a lot of problems. The following chart ranks states in their response to PRWORA. State Welfare Reform Classifications State Welfare Reform Classifications Ranked on generosity of benefits, inclusion of the poor, quality of state support programs. Adequacy: the generosity of benefits received by program participants. Inclusion: the percentage of poor people receiving benefits. Policy commitment: the availability, accessibility, extent and quality of government assistant to poor and low income families. Rankings Rankings Minimal: Alabama, Arkansas, Kentucky, Louisiana, Mississippi, South Carolina, Tennessee, Texas, West Virginia Limited: Delaware, Florida, Georgia, Missouri, North Carolina, New Mexico, Nevada, Oklahoma, and Virginia. Conservative: Idaho, Indiana, Kansas, Montana, North Dakota, Nebraska, South Dakota, Utah, and Wyoming. Generous: California, Colorado, Connecticut, Iowa, Illinois, Massachusetts, Rhode Island, Washington, Maine, Michigan, New York, Oregon, Pennsylvania. Integrated: Maryland, Minnesota, New Hampshire, New Jersey, Ohio, Vermont, and Wisconsin. Administration: In almost all the states, welfare programs are now administered by state and private corporations. A business model is used The agencies (particularly the private agencies) must meet contractual goals— often statistical benchmarks. Understanding Federalism Understanding State Welfare Benefits (Figure 3.3) Employee benefits, Welfare Use, and Services Employee benefits, Welfare Use, and Services a. A quarter to onethird of families who left have returned to TANF at some point in the first year after exit. b. About half of all working leavers are offered employersponsored health insurance through their jobs, but only about onethird actually have this coverage. c. About half of leaver families receive food stamps in the first quarter after exit and about twothirds receive these benefits at some point in the year after exit. d. About three out of five leaver families have an adult enrolled in Medicaid in the first quarter after exit. Medicaid coverage of children is generally higher, ranging from 60 to 90 percent after exit. e. States are still struggling to provide enough childcare. f. Most states are not using subsidies that are available to help the working poor or near poor. g. Little emphasis on human capital development (WorkFirst). Material Hardship Material Hardship a. A quarter or more of leaver families experience food hardships at some point after exiting TANF—and similar percentages experience trouble paying rent and utilities. b. The level of hardship experienced by the family is often similar to the problems they suffered while on welfare. c. Leavers who are working have fewer hardship problems. d. Sanctioned families tend to have more problems. 3. Outofwedlock births: a. No impact on adult women b. Teen births rates declined between 1999 and 2004, but have been increasing since 2005. 4. Child Support Collections 4. Child Support Collections 2003 there were 8 million cases with collections. This is about a 50% collection rate. $22 billion collected in 2003, a 51% increase over 1997. Average about $2600 collected. Over 4 million delinquent parents identified by the New Hire Computer System in 2004. 5. Impact on Families A. Some evidence that marriage rates, divorce rates, domestic violence, child school achievement, and child school behavior have improved in families enrolled in some of the best designed programs. These programs helped the parents get jobs, provided services to help them keep the jobs, and allowed the parents to make a decent income working one job 40 hours a week. ...
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- Spring '09