Welfare and food stamp benefits a hard bargain in the New America

Monday marked the 20th anniversary of then-President Bill Clinton’s signing of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), also known as welfare reform, which instituted the Temporary Assistance for Needy Families (TANF) program, giving the states leeway in how to spend federal block grant money and introducing work requirements and time limits for supplemental income recipients.

PRWORA significantly changed how the welfare program works in America, which serves as the federal government’s primary social safety net for families with incomes below the poverty line.  Prior to 1996, cash assistance for poor, mostly single-parent children was authorized under the Social Security Act’s Aid to Families with Dependent Children program, created in 1935.

Under the two-decade old reform, states now have discretion in how federal dollars are spent which are marked for welfare assistance. The block grants may also used for job training, childcare, safe-sex/birth control, drug abuse and anti-domestic violence programs and the Earned Income Tax Credit.

As a result, only 25 percent of total federal grants went directly to supplement the incomes of poor families in 2015, compared to 60 percent in 1998.  The percentages and total cash payouts differ dramatically by state, however.  In Arkansas, Texas, South Carolina and Illinois, for example, no more than 8 percent of TANF funds go to welfare checks, while California, Nevada, Kentucky, Alaska and Maine all disperse at least 46 percent of their grant money for that cause.

The average TANF recipient in Alaska gets $642 per month, while in Mississippi, he or she only receives $153.  Maximum monthly income eligibility also varies, as anyone making over $268 in Alabama does not qualify for TANF, while in Wisconsin the ceiling is set at $1,829 per month.

The average welfare payout in America also pales in comparison to some other first-world countries, like Canada and France, where the typical beneficiary receives around $1000 per month and there are less eligibility requirements.

courtesy BBC

courtesy BBC

More significantly, the percentage of federal and matching state TANF funds which go directly to cash payments have declined while the number of eligible recipients has increased by 12 million between 1998 and 2014 and total program funding, adjusted for inflation, has remained about the same.

In 2014, only approximately 23 percent of American families with incomes below the poverty line received supplemental income from the government, compared to 68 percent in 1996.

Statistics compiled by the Bureau of Labor, however, suggest that the increased work requirements and lifetime five-year cap to receive benefits has led to more employment, especially among single-mothers. From 1995-2000, real unemployment for this demographic declined from 51 to 34 percent.

However, “extreme” child poverty in the U.S. has increased since President Clinton signed welfare reform, with “extreme” being defined as total family income more than 50 percent below the poverty line.

In related news, according to figures recently released by the U.S. Department of Agriculture, Supplemental Nutrition Assistance Program (SNAP) food stamp recipients declined by over 2 million between May 2015 and 2016.  Down from an all-time high of 47.8 million in December 2012, there are currently 43.5 million Americans who receive federal assistance to buy food.

The reason for the decline is a combination of a slowly strengthening domestic economy following the 2008 financial crisis and an expiration of SNAP benefit work requirement waivers in 37 states, which were granted in the 2009 stimulus bill for areas of the country with exceptionally high unemployment rates.


[BBC] [FiveThirtyEight] [The Hill] [Photo courtesy Paul J. Richards/AFP/Getty Images]