People from opposite ends of the political spectrum have agreed that welfare needs reform, but they differed sharply in how to pull it off.
The recent changes in South Carolina's welfare package are sweeping. The most important change is that welfare will no longer be an automatic entitlement based on need. Instead, families will be taken off the program after two years unless they can meet certain criterion.
The Department of Social Services is supposed to help place welfare recipients in job training programs, and employers who hire welfare recipients will receive a tax credit. Welfare recipients who cannot find work within two years may receive an extension by county administrators on a case-by-case basis.
Criticism of the welfare package has focused on two major points: the process by which extensions are granted and the $3.1 million, which some say is low, allocated towards job training.
Rep. Joe Neal (R-Richland) said, "My fear is that county administrators, being employed by the director of DSS, who is appointed by the governor, may not find it politically expedient to extend benefits to people who truly need them."
Sue Berkowitz, a lawyer with Palmetto Legal Services, said about 40,000 families receive AFDC, Aid to Families with Dependent Children. "There are not going to be jobs for all of those people," she said. "Supposedly, they're going to give all of these services - an innovative program for people to become self-sufficient - with $3.1 million. You've got to spend money to make money." An assessment by the welfare reform taks force last year estimated that a realistic job training program would cost about $12 million.
While Rep. Neal acknowledged the need for reform, he was skeptical of the package passed by the Republican majority. "What they came up with is a program that is vastly short of what's really needed to place welfare recipients in jobs," Neal said. "I think that significant numbers of these people, through no fault of their own, will not be able to find jobs."
Berkowitz noted some of the positive changes. Before, welfare recipients had a $1,500 limit on the amounts of assets they could own, which encouraged them to spend all of their money to continue to qualify for assistance. "They took away the asset and resources rule," Berkowitz said. "Now you can have $2,500 in liquid assets and a $10,000 car."
There is also a provision for an Individual Development Account, whereby welfare recipients may have more assets allocated towards education, health, home or to start a business.
"It's a much better bill than I though we would get," Berkowitz said, but added, "I think, unfortunately, there's going to be a lot of people kicked off [welfare] with no jobs. I don't think the safety net is enough, and I don't know if it's going to adequately protect children."
Sen. Holly Cork thinks the changes are positive, but notes that only time will tell whether it was good reform. "We'll have to see whether they stand the test of time and whether their implementation will acheive the desired results."
Welfare is an attractive lifestyle.
Together, AFDC and food stamps brought a family of three in the median state in 1994 monthly benefits that averaged $366 in cash and $295 in food stamps. The buying power of AFDC benefits and food stamps have declined 27 percent since 1972.
A full-time job at or near minimum wage, which is the most likely alternative for welfare recipients, would provide sightly more cash income than AFDC and food stamps, but because AFDC families are eligible for Medicaid, in most states leaving AFDC for a low-paying job without medical coverage is an irrational economic choice.
Welfare rolls keep expanding.
As a proportion of poor families, AFDC recipients have declined. Between 1973 and 1990, the number of people on welfare stayed roughly constant, between 10.3 and 11.4 million. The number of people in poverty, however, has risen from 25 million in 1970 to 39 million in 1993. In 1973, 84 percent of poor children received AFDC; in 1992, only 63 percent received aid.
Welfare creates dependency
Most families on welfare are anxious to get off, do get off and stay off. A 1988 study found that four out of five daughters from families highly dependent on welfare did not go on to receive AFDC as adults.
Welfare increases the
number of single-parent families.
The increase in single parent families in recent decades has contributed to greater poverty among women and children, but single-parent families have increased among all income groups. In fact, the increase in single-parent homes has been slightly faster in non-poor families, and birth rates to unmarried mothers are high in states with lower AFDC benefits, both contrary to the argument that welfare leads to more out of wedlock births.
The long-term increase in single-parent families is related to other changes: more women doing paid work; increased violence against women and children; higher divorce rates; and reduced stigma against not being married.
Welfare reform will
help balance the budget
Potential savings from welfare reform are slight. In 1993, total AFDC costs were $25.2 billion. The federal share was $13.8 billion, less than 1 percent of the total budget. Any short-term savings are likely to increase long-term societal costs, since poor children are even less well-prepared for the world they face.
"5 Welfare Myths" Reprinted from Bread for the World background paper #133, May 1995.
© Copyright by POINT, 1995
Last modified 7/9/95
