US Welfare 101

Reminder: I wrote this back in 2005 or 2006, so some of the information could be out of date. I'll get to that evenutally.

It's been my experience that during some kind of informal political discussion, the subject of welfare often comes up. People will say things like, "I shouldn't have to pay for people sitting around doing nothing! People waste their entire lives on welfare, why should we even have such a program" and things of that sort. I'll hear, "We should put a limit on welfare, and we should make them work while they're on it!" Great idea. That's why the US did such a thing in 1996. So because it seems like many people don't understand Welfare in America, here is a basic run-down of how the U.S. helps the poor: Welfare is the name we give to a program that used to be comprised of the AFDC (Aid to Families with Dependent Children) and JOBS (Job Opportunities and Basic Skills Training). However, in 1996, this system was replaced by the welfare reform act of 1996. It replaced those two programs with another program called TANF (Temporary Assistance for Needy Families). Amoung the highlights of TANF:

* Recipients (with few exceptions) must work as soon as they are job ready or no later than two years after coming on assistance.
* Single parents must work at least 30 hours a week, two-parent families a minimum of 35.
* Failure to participate in work requirements can result in a reduction or termination of benefits to the family.
* States cannot penalize single parents with a child under six for failing to meet work requirements if they cannot find adequate child care.

What "work" means:
* unsubsidized or subsidized employment
* on-the-job training
* work experience
* community service
* job search - not to exceed 6 total weeks and no more than 4 consecutive weeks
* vocational training - not to exceed 12 months
* job skills training related to work
* satisfactory secondary school attendance
* providing child care services to individuals who are participating in community service.
* Update: Bush is now pushing for reforms that will help redefine what work is.
Other:
* You cannot receive benefits for more than 5 years in your entire life. States can set this level lower.
* Unmarried minor parents must participate in educational and training activities and live with a responsible adult or in an adult-supervised setting in order to receive assistance.
* States that do not enforce above limits will be punished by having money taken away from their programs.

What is really interesting is that if you think 5 years is too short a time to be receiving benefits, the Republicans agree with you. So next time someone complains about mothers who sit around and get Welfare their whole life, or that Welfare encourages people not to work, remind them that their argument is 10 years old.

Under this system, the number of welfare recipients from 1993 to 2000 has decrease by 59%. That's half all welfare recipients, and it gets lower every year. 5% of the population used to be on welfare - now it's below 1%. That's 8,334,000 fewer recipients and 2,755,000 fewer families. Where are these people getting their money?

Part of it is the economy, but people below or near the poverty line get another bonus: a tax break called EITC (Earned Income Tax Credit). This is actually the biggest welfare (although it's not technically welfare) system in the country in terms of money. Basically, if you don't earn much money, you get a dollar-for-dollar tax break. "Some" of the break is actually refundable, so you might get a refund. How much "some" is I was not able to find out. However, it works on a sliding scale so that if you are really poor, you get increasing credit as you earn more money. There is a middle scale where you will get the same credit as you earn more, and the final scale you get less credit as you earn more to phase out the program. Wikipedia (see link below) has a nice little graph showing the indifference curve being affected by normal welfare and EITC (for those of you with an Economics or even Common Core background). So I hadn't heard of this before today. What gives?

The average amount received per family in 2003 was $1,772.48. 17.01% of tax returns claimed an EITC. You got no EITC if you made more than $11,000 with no children, $29,670 with one child ($30,670 if married), and $33,690 with two or more kids ($34,690 if married). However, the IRS indicates that somewhere between 15-25% of eligible families do not claim an EITC. And I guess I can't blame them - I've certainly never heard of this. That's around 6 to 12 million edit: BILLION dollars that are not going to needy families. Tax education in this country needs to improve a great deal. The conspiracy theorist in me though says that the government doesn't want it to.

This doesn't say much about the big issues, except that it shows that education must get better. Someone making $17,500 that has two kids will get about $3,730 in EITC, but is that enough to raise two kids on? Probably not. But this is certainly something good that the government is doing, even if no one knows about it. Another interesting fact is that welfare recipients do not seem to correspond with urban areas. Let's take a look at the states with the most welfare recipients.


1. California
2. New York. Here it might be interesting to point out that California has almost 4 times as many.
3. Texas. No surprises yet.
4. Pennsylvania??
5. Michigan
6. Ohio??
7. Tennessee WTF?
8. Washington state
9. Indiana Ok maybe Gary, but...
10. Georgia
11. Florida
12. Arizona
13. Missouri ??
14. Massachusetts
15. New Jersey
16. Illinois

That's right, the home of Chicago is AVERAGE. (Ok, technically median.)


But really, I think that helping reduce poverty needs to start with education, and figuring out a way to STOP POOR PEOPLE FROM HAVING BABIES. I think if you could get people below or near the poverty line to have 1 or less kids, then those people would be doing better, and our country would be doing better. The only way to do this (legally and humanely) is to teach people that it's a bad idea. And I don't know how to make that stick. But seriously, if you don't have money, I don't want to say you can't breed, but at least keep it to one, ya?

(PS maybe I'll do a post about Medicaid someday, the client-side of which I know nothing about, but the server-side provider-side I know plenty about.)


http://www.acf.hhs.gov/news/stats/newstat2.shtml - Gobs of stats on welfare recipient volume
http://www.acf.hhs.gov/news/facts/tanf.html - Fact sheet about TANF
http://www.acf.hhs.gov/opa/fact_sheets/tanf_factsheet.html - Highlights of above in tasty bullet form
http://www.acf.hhs.gov/programs/ofa/ - Gov't office that runs TANF
ObWikipedia:
http://en.wikipedia.org/wiki/Temporary_Assistance_for_Needy_Families
http://en.wikipedia.org/wiki/Earned_Income_Tax_Credit
http://en.wikipedia.org/wiki/Aid_to_Families_with_Dependent_Children
http://en.wikipedia.org/wiki/Welfare_%28financial_aid%29
http://en.wikipedia.org/wiki/Welfare_reform