Spike in welfare rolls reignites debate over safety net

The almost year-long recession is finally registering in the welfare rolls.

After dropping dramatically since a landmark reform bill was passed in 1996, welfare caseloads are again on the rise in two-thirds of the nation's states. But the increases were modest: an average of only about 1 percent.

The analysis, which was done by the Center for Law and Social Policy in Washington, also found that in 14 other states, the temporary-assistance caseloads have continued to fall, despite the recession and increases in the unemployment rate.

Depending on where analysts sit ideologically, those numbers present either very good news about the success of the welfare overhaul even during difficult financial times - or they're an alarming signal that the nation's "safety net" has been severely weakened.

Overall since 1996, welfare caseloads are down an average of 50 percent across the country. As a result, an estimated 1.5 million to 2 million low-income mothers were in jobs last March. But many of those positions were entry-level - the most vulnerable when recession hits.

"We have literally no experience with having this many low-income families in the workplace during a downturn," says Ron Haskins, a welfare expert at the Brookings Institute in Washington. "We need to carefully study what happens during this recession."

Low-income advocates are already looking another set of statistics: those people whose assistance has been cut off. An analysis done by the National Campaign for Jobs and Income Support, a grass-roots advocacy group in Washington, found that 150,000 people have already had their Temporary Assistance to Needy Families (TANF) checks reduced or terminated permanently as a result of the federal five-year time limit on benefits.

While the TANF law allows states to exempt up to 20 percent of their caseloads from the time limits, not all have chosen to. Connecticut and Ohio, for instance, have made it very difficult to continue to receive benefits past the five-year limit.

"There's some early indication from those states of pretty substantial hardship for families that hit their limit," says Deepak Bhargava, director of the National Campaign.

Mr. Bhargava contends the reduction in caseloads is particularly troubling in light of the increasing unemployment numbers. Historically, there's been some correlation between the unemployment rate and welfare caseloads.

The fact that caseloads are down in some states despite the recession indicates that the safety net is broken, warns Bhargava. "The kind of work-first culture that was established in the 1996 law tends to push people away regardless of how dire their circumstances may be," he says.

But conservatives call such concerns dire and unfounded. And they say they're similar to the predictions made when the reform legislation was passed.

Then, many liberal activists contended the new system would push an additional 2.6 million people into poverty. Instead, there are 4.2 million fewer people living in poverty than in 1996, according to an analysis of Census Bureau figures by the conservative Heritage Foundation.

"These people have an almost flawless record of being completely wrong on welfare," says the Heritage's Robert Rector, one of the key architects of the 1996 reform.

Because the federal law allows each state to fashion its own system, there is a wide variety of work requirements, time limits, and sanctions across the country. For instance, in Connecticut, low-income advocates contend their state's system fails to meet a spirit of fairness and flexibility in the federal law. Connecticut's system has stringent time limits and offers few exemptions. (The state's welfare office did not respond to a request for comment.)

Connecticut is also one of the states highlighted in the report by the National Campaign. During the past year, as many people in the state lost their jobs as did during the 1991 recession. Then, welfare caseloads grew by 13 percent. In 2001, they actually fell 25 percent.

"There's been a clear increase in the number of families showing up in the homeless shelters. Food banks are also seeing unprecedented demand," says Shelley Gaballe, co-director of Connecticut Voices for Children, a New Haven-based advocacy group.

The Brookings Institution's Mr. Haskins says such situations need to be studied carefully, particularly since the federal law comes up for reauthorization this year.

"We have to take a serious look at those numbers and see what kinds of conclusions we can draw," he says. "But we have pretty good policies in place."