Welfare Benefits Flat Despite Worsening Economy

Despite the worst economic climate in decades, welfare aid is not growing as one might expect.

Even though the number of people seeking unemployment benefits continues to rise, the number of people receiving cash assistance via a government welfare program was the lowest in more than 40 years.

From the NYT:

Michigan cut its welfare rolls 13 percent, though it was one of two states whose October unemployment rate topped 9 percent. Rhode Island, the other, had the nation’s largest welfare decline, 17 percent.

Of the 12 states where joblessness grew most rapidly, eight reduced or kept constant the number of people receiving Temporary Assistance for Needy Families, the main cash welfare program for families with children. Nationally, for the 12 months ending October 2008, the rolls inched up a fraction of 1 percent.

Back in 1996, when President Bill Clinton signed into law the Temporary Assistance for Needy Families (TANF) program, critics suggested that the new time limits and work requirements for welfare assistance would discourage people from seeking government help when they needed it most. During the boom economy that followed, the program received much praise, but the lower caseloads now may prove that the obstacle-ridden program may indeed be discouraging poor people from getting help.

Others suggest that low-paying jobs have initially been spared as the economy has turned south. Other hypothesize that despite job losses, the country may be experiencing lag time before people hit hard by the economy turn to the government for help.

More from the NYT:

“There is ample reason to be concerned here,” said Ron Haskins, a former Republican Congressional aide who helped write the 1996 law overhauling the welfare system. “The overall structure is not working the way it was designed to work. We would expect, just on the face it, that when a deep recession happens, people could go back on welfare.”

“When we started this, Democratic and Republican governors alike said, ‘We know what’s best for our state; we’re not going to let people starve,’ ” said Mr. Haskins, who is now a researcher at the Brookings Institution in Washington. “And now that the chips are down, and unemployment is going up, most states are not doing enough to help families get back on the rolls.”