First Results of Welfare Overhaul Emerge In 1999
By Clare Nolan, Senior Writer
Architects of the nation's new welfare policies declared victory this year.
In May, Republican leaders of the U.S. House of Representatives held a news conference on Capitol Hill to proclaim welfare 'reform' an overwhelming success.
Not to be outdone, President Clinton, who propelled the welfare overhaul with his 1992 campaign pledge to end it 'as we know it,' celebrated the third anniversary of the law in Chicago in August with an assembly of former welfare recipients and their employers.
1999 brought the first full-year of data since all the states revised their welfare systems. For those who view public assistance as an obstacle to independence and prosperity, as many government leaders do, much of the news is good.
- More parents are leaving welfare for work.
- More adults on welfare are working.
- The number of people on welfare is lower than in any year since 1969.
- Fewer Americans are living in poverty.
In the states, lawmakers, seemingly content with their programs, made few changes this year. Arkansas did revamp the structure of its welfare program and at least eight states, North Carolina, Delaware, Hawaii, Missouri, Tennessee, Texas, West Virginia and Wisconsin, modified their rules. For the most part, they made them more generous for families.
Michigan passed a law requiring drug testing of new welfare applicants in a few counties, but a judge halted that program in November while she reviews its legality.
But, critics of the 1996 welfare law have not yet conceded defeat. And reporters who have fanned out across the country to document the reforms are finding a much more mixed picture than governors, Congressional leaders or even the President like to admit.
Many recipients do express feelings of hope, particularly if the state is fulfilling promises to provide child care and transportation. But many also say they are overwhelmed. Meeting the state's new demands often compounds old problems. For many, work alone -- often for little more than minimum wage -- cannot guarantee a ticket out of despair.
Take the case of Dalphine Moore of Camden, Delaware. A 36-year-old mother of two, Moore has been working at the same job for more than a year. On paper, she is one of the many welfare success stories touted by politicians.
Moore has held on to her job, but her household is in turmoil. On sick leave in early November, she seemed close to defeat as she sat in her living room and described her problems to a reporter.
Although Moore had worked at the same factory for 20 months, she was still just a temporary employee. Her temp agency had given her sick leave and vacation time, but it paid her little more than the minimum wage and rarely hired her for a full 40-hour work week.
Because she was working, the state doubled the rent on her subsidized apartment. In the three months after the increase, she paid late twice.
Her 13-year old son's teachers were complaining about his unruliness. Moore's neighbors were angry about noise from friends and relatives who hung out at her apartment. Her daughter had left to live with her father.
If Moore were to lose her lease, which she feared was imminent, she said she had nowhere to go. Her only family -- a sister and a grandmother -- have no resources to help her.
Other statistics and studies released this year point to thousands of women facing hardships similar to and, in many cases, worse than Dalphine Moore's.
- The poorest single mothers and their children have lost ground since welfare reform.
- Caseloads have fallen much faster than the poverty rate.
- Fewer families are receiving other government supports that they are still entitled to: food stamps and Medicaid.
- Emergency food and shelter requests have increased.
With the highlights listed first, here is a synopsis of this year's major findings about the consequences -- so far -- of the overhaul of the nation's welfare system:
More parents are leaving welfare for work
Surveys or analyses of employment records conducted by nearly half the states found unexpectedly high rates of employment among adults who have left welfare. At their May 1999 press conference, the House leaders released a review by the General Accounting Office of data from seven states. The GAO found 61 to 87 percent of former recipients had worked at some point since leaving welfare.
In a broader review of the state reports, Jack Tweedie of the National Conference of State Legislatures found 50 to 70 percent were working after leaving welfare. Mississippi was an exception, with employment at 35 percent.
In August, the Urban Institute released a study comparing the rates of employment of former welfare recipients with those of other low-income mothers. In Families Who Left Welfare: Who Are They and How Are They Doing, researcher Pamela Loprest found that 61 percent of former welfare recipients were working when they were interviewed in 1997. Their employment rates surpassed those of other low-income mothers, about 54 percent of whom worked. Their average wage, of $6.61/hour, was also higher. Low-income mothers who have not relied on welfare, however, are twice as likely to be married.
More parents on welfare are working
In an August, 1999 report to Congress, the Department of Health and Human Services noted that the percentage of welfare recipients who were working nearly doubled in 1998. Employment among adults who collect welfare reached an all-time high of 23 percent in 1998, up from 13 percent in 1997. The steep drop in caseloads, however, has helped states increase these rates.
Under the law, all states are required each year to place a higher percentage of welfare recipients into jobs or 'work activities.' In 1998, all the states met the mark for single-parent families. With credits for caseload declines, the states were expected to meet the 1999 requirement that 35 percent of single parents on welfare work. Fourteen states failed to move at least 75 percent of two-parent households into jobs as the law requires, but these families make up a very small percentage of the total caseload. See the HHS Press Release on 1998 work participation rates.
The number of people relying on welfare is lower than in any year since 1969
Earlier this month, the Clinton administration released welfare caseload figures for all the states. Since the law's enactment, to June 1999, the states cut their welfare rolls by 44 percent, from 12.2 million to 6.9 million. These dramatic caseload declines combined with post-welfare employment rates of at least 50 percent mean more women are leaving welfare for work than ever before.
Poverty continues to fall
Many critics of the 1996 welfare law had predicted widespread homelessness and soaring child poverty rates. In fact, despite the caseload declines, more than two million fewer Americans lived in poverty in 1998 than in 1996. The Census Bureau reported in September that the national poverty rate was 12.7 percent last year, down from 13.7 percent in 1996. Child poverty, at 18.9 percent, also fell. One million fewer children were poor in 1998 than in 1996.
In addition, other positive trends that began before the enactment of welfare reform have continued. According to the Centers for Disease Control, all the states saw births to women ages 15 to 19 decline between 1991 and 1997. Children born to teenagers are much more likely to grow up in poverty and to depend on welfare. Child support collections have also climbed.
To Texas Congressman Bill Archer, the Republican chairman of the powerful House Ways and Means Committee, this new data means vindication.
"The Congress did truly reform welfare and the results are astonishing," he declared at the Capitol Hill press conference last May.
"We were called mean-spirited. We were called insensitive to children. But we plowed through that. And today there are no children on the sewer grates. There are none of those types of things that were rhetorically thrown at us," he said.
"There was an expectation of catastrophe," said Dan Lewis of Northwestern University's Institute for Policy Research. "There is no face validity to the kind of assumptions that were made."
Critics of the law, chief among them Wendell Primus of the Center on Budget and Policy Priorities in Washington, remain opposed to many of the law's toughest provisions, particularly the rule that limits recipients to five years of welfare benefits over their lifetimes. Advocates for the poor have long argued that many families will become utterly destitute without cash assistance.
After Clinton signed the welfare law in 1996, Primus resigned in protest from the U.S. Department of Health and Human Services.
"Some families have been hurt by welfare reform. I think no matter how you cut the data that will stand up," he told a Congressional subcommittee in May. "It is way too early to pronounce welfare reform an unqualified success."
Although most states will not begin imposing time limits until 2001, analyses by Primus and others indicate many families -- albeit a much smaller number than initially predicted -- are facing increasing hardship.
The poorest of the poor -- the bottom fifth of single mothers and their children -- have lost ground since welfare reform
In a study released in August, the Center on Budget and Policy Priorities reported that the poorest 20 percent of families headed by women saw their total incomes -- including food stamps and tax credits -- shrink by almost $600 between 1995 and 1997. The poorest tenth of families suffered even greater losses.
According to the Children's Defense Fund, the number of extremely poor children, those in families with incomes below 50 percent of poverty, has risen since the states overhauled their welfare systems. In 1997, almost 420,000 more children lived in extreme poverty, less than $6,401 for a mother with two children.
Caseloads have fallen much faster than the poverty rate
While poverty has dropped by one percentage point since 1996, caseloads have dropped more than 40 percent. Five million people have left welfare since 1996, but fewer than half that number are no longer poor.
According to a Center on Budget and Policy Priorities report, Welfare Recipients Who Find Jobs, most parents remain one crisis away from returning to cash assistance. Their jobs -- primarily in the retail and service sectors of the economy -- do not offer vacation time, sick leave or health insurance benefits.
Fewer families are receiving other government supports to which they are still entitled: food stamps and Medicaid
Since 1996, food stamp enrollment has tumbled 27 percent, from 25.5 million people to 18.5 million. As with welfare, that decline has far outpaced the drop in poverty. In July, the GAO attributed the fall to a combination of the robust economy, tighter eligibility rules for food stamps and new welfare policies. The GAO reported that some states, notably New York and Michigan, erected barriers to food stamp applicants that federal courts subsequently ruled illegal.
According to an Urban Institute report , former welfare recipients abandoned the food stamp program at higher rates than other families. Among the poorest of the poor, former welfare families stopped receiving food stamps at twice the rate of other families. Two-thirds of all families who have left are still eligible.
The discontinuation of food stamps and welfare accounts for the income lost by the poorest families, the Center on Budget and Policy Priorities says.
Similarly, Medicaid enrollment has also declined -- 7.4 percent between 1995 and 1997, from 23.6 million to 21.8 million. According to Families USA, 675,000 low-income people lost their Medicaid in 1997 as a direct result of welfare reform. More than 400,000 of them, or 62 percent, were children. Half the children who lost Medicaid coverage in 1997 should not have under federal law.
Charities are reporting dramatic increases in demand for food
A Catholic Charities' survey of its dioceses in January 1999 found that 73 percent reported an increase in requests for emergency food, down slightly from 79 percent in January 1998. The average reported increase was 38 percent.
In its 1998 report on hunger and homelessness , the U.S. Conference of Mayors found demand for emergency food assistance by families with children increased an average of 14 percent in 21 out of 30 major American cities. Requests for emergency shelter by homeless families increased 15 percent. In 1999, emergency requests for food increased another 15 percent in 22 out of 26 cities.
States have made no progress in curbing out-of-wedlock births
One of the principal goals of the 1996 welfare law is to decrease the number of births to unmarried women. Children of single mothers are much more likely to be poor and much more likely to rely on welfare. In September, the U.S. Department of Health and Human Services awarded bonuses to the five states which showed the most progress in reducing out-of-wedlock births. In 1996 and 1997, 11 states showed improvement. Those gains, however, were completely offset in the other 39 states, which saw their illegitimacy rates rise. Thirty-two of every 100 births in the United States are to unmarried women.
Finally, two findings emerged this year which hold enormous political implications for the welfare program. The Associated Press reported in March that whites were leaving welfare much more quickly than blacks, Hispanics and Native Americans. In 33 of 42 states, the AP found, the proportion of whites on welfare has fallen.
Those who remain are also increasingly likely to live in the inner-city. According to a study by the Brookings Institution, American urban counties saw their share of their state's welfare caseload climb from 45 to 53 percent from 1994 to 1998. Thus, families on welfare are increasingly concentrating in those areas where poverty and unemployment are the most entrenched.