Welfare reform, in times of both boom and bust

Vandy Griffin is known as a "welfare leaver." As a result, she's known some of the best of times, such as when she got her first job, and experienced a renewed sense of independence and excitement about the future.

But she's also known some of the worst of times, such as when she was laid off and couldn't get another steady job, fueling fear that she couldn't feed her kids.

Her experience illustrates two main facets that are emerging on the seventh anniversary of the launch of one of the biggest social experiments in the past decade.

By the numbers, welfare reform is an unqualified success. Caseloads that were bulging at more than 5 million back in 1996 have been cut in half. The child poverty rate, which peaked at more than 22 percent, has plummeted to 16 percent, allowing more than 2.9 million children to move out of poverty.

And the number of poor single mothers who are able to work at some time during the year, such as Ms. Griffin, jumped from about 44 percent in 1992 to a high of 64 percent in prerecession 1999.

The vast majority of welfare leavers, however, are working at low-wage jobs that still don't provide enough income to pull them out of poverty and off all forms of public assistance. And depending on the state, as many as one-third of welfare leavers are unemployed and struggling to feed their families.

There's also been a dramatic increase in the number of people who qualify for help, but aren't getting it. In 1995, 84 percent of people eligible for welfare received it. By 2000, that number had dropped to 51 percent, meaning that almost half of the families with children poor enough to qualify for cash assistance weren't getting it.

Still, even skeptics who worried seven years ago that the reforms would force millions more women into poverty now see it as an example of the good that government can do.

"This shows that given appropriate resources, the public sector can really help families and children," says Barbara Blum, director of the Research Forum on Children, Families, and the New Federalism at Columbia University in New York. "This is a real example of where people stepped up to the plate, worked hard, and did a really good job."

Most experts also agree that the timing of the reform - during the country's longest economic expansion - couldn't have been better. It allowed leavers to take advantage of a booming job market, and gave employers short on employees extra incentives to train and provide extra supports to the welfare leavers. At the same time, states were flush with cash and as their welfare caseloads shrank, they were able to use money that once went to income support to provide job training, child care, transportation, and health insurance for the leavers.

But since the recession hit, vulnerabilities in the much-heralded reform are beginning to show. And as Congress debates the reauthorization of the welfare bill, which must be complete by the end of September, critics are working to close gaps they fear will undermine successes so far.

For conservatives, there's concern that some state programs still allow too many people to get cash assistance without working for it in some way. They're in favor of increasing sanctions for those that fail to meet work requirements, as well as expanding the percentage of welfare recipients required to work from 50 percent to about 70 percent. They also want to increase the amount of hours from 30 to 40 a week. These changes are included in a bill that was passed by the House last February.

"The declines in child poverty were the greatest in the states that had the strongest sanctions and more immediate work requirements," says Robert Rector of the Heritage Foundation, one of the key architects of the reform.

But many liberals fear the current work requirements are strict enough, particularly in a sagging economy. They note that the number of welfare leavers able to stay steadily employed dropped from 50 percent in 1999 to 42 percent in 2002, according to a study done by the Urban Institute in Washington. And the number of leavers with no source of income at all jumped nationally from 10 to 14 percent in the same period.

"This is just a wake-up call, a reminder that this is a complex process and a very diverse group of people, many of whom need different interventions in order to succeed in the labor market," says Sheila Zedlewski, director of the Income and Benefits Policy Center at the Urban Institute.

Studies of the welfare population have consistently found that those with the most barriers to employment, from physical or mental disabilities to literacy or language problems, are the ones least likely to get jobs. They also need more support than the average welfare leaver.

This is the majority of the welfare population that most states are now dealing with. And they're doing so at a time of dwindling resources and increasing caseloads. The block grants that states receive from the federal government have stayed the same since 1996. With inflation, they're currently worth about 12 percent less. And because of huge state deficits, more than half of the states have already cut job training, child care, and other support programs designed to help keep welfare leavers in the workforce.

"When those supports start to unravel, it makes it very difficult for those families to maintain their employment," says Sharon Parrott, director of welfare reform and income support policy at the Center for Budget and Policy Priorities. As a result, low- income advocates want Congress to increase the amount of money in the state grants for child care.

For Griffin, who is currently unemployed, help with child care for her three kids would make it easier to find another job. But she was told she's not eligible for it, or any kind of help from welfare now, although she never got a clear explanation why.

"I'm not the type to go begging," she says. "I don't ask for help unless I really need it."