The American Way of Poverty: How the Other Half Still Lives (33 page)

So why, despite all of that, did Obama’s administration find it so difficult to stem poverty’s floodwater?

In part, the failure to get a true handle on surging poverty represented a lack of willingness on the part of Obama’s inner circle, many of whom were avowed moderates who had cut their teeth during the Clinton years, to expend precious political capital on a group of people with almost no political clout that could be tapped in return to replenish the well. In part, because poverty has, however wrongly, long been seen by many primarily as an affliction of the African American community, Obama’s advisers likely feared that the country’s first African American president would come to be seen by whites as having a “black” agenda if he made poverty as much a priority as had Lyndon Johnson. In part, however, even when their impulses were good, they were hamstrung by reforms signed off on by the president’s Democratic predecessor, Bill Clinton, twelve years before Obama was elected.

From the 1930s through the mid-1990s, the central cash component of America’s welfare system had been the federal aid distributed through the Aid to Families with Dependent Children (AFDC) program. Then, in 1996, under pressure from a conservative Congress to slash welfare, President Clinton pushed for welfare reform. AFDC
was replaced with a block grant to the states, and women’s ability to access welfare was limited; from now on, Temporary Aid to Needy Families (TANF) would be the norm—aid would be tied to the search for work, it would be strictly time-limited, and how it was distributed would be largely at the discretion of states. The result? Plummeting welfare enrollment.

Out of the gates, this was touted as a grand success: A booming economy meant that rolls could fall, and at the same time, the nation’s poverty rate could also decline. But from the start, critics such as the Urban Institute’s Harry Holzer were concerned that in a prolonged downturn the poor would be hit hardest, as states raided TANF funds and as soaring need levels and increasingly scarce work opportunities both pushed more families into poverty and made it that much harder for those at the bottom of the economy to find work. In urging the federal government to make more TANF money available to states and to develop an emergency contingency fund that would be “uncapped” and would increase in size to meet growing need, in April 2001 Holzer wrote, “If a recession occurs, job availability for those seeking employment will decline.” While unemployment would increase amongst all demographics, Holzer worried that it would be particularly pronounced vis-à-vis “those with limited skills or labor market experience.”

He was, it turned out, right to be concerned. In many ways, TANF is now an irrelevance when it comes to counter-cyclical anti-poverty strategies. When the Harvard sociologist Kathryn Edin did immersion-based investigations into the life of the poor in Philadelphia and Camden, New Jersey, in the early years of the century, she found that few young people even viewed TANF as an option.

WHEN THE GOING GETS TOUGH . . . THE TOUGH TAKE IT OUT ON THE VULNERABLE

“Welfare reform has worked very well, then, if receiving welfare is a bad thing,” wrote University of Massachusetts at Boston economics
professor Randy Albelda, in the 2012
Dollars and Sense
report “Different Anti-Poverty Programs, Same Single-Mother Poverty.”
¹
“Indeed, advocates of the new regime tout the rapid and steep decline in welfare use as their main indicator of its success.” But, Albelda cautioned, “fewer families using anti-poverty programs does not mean less poverty, more personal responsibility, or greater self-sufficiency.”

“AFDC used to be counter-cyclical,” said Jim Ziliak. “And it’s no longer so at all. There’s no automatic stabilizer component to TANF.” Immediately after the recession hit, there
was
a $2 billion federal contingency fund that states with unemployment 2 percent or more above the national average could access; but they didn’t have to, and so many didn’t. Moreover, by December 2009 that fund was used up. Congress added $5 billion to the fund as a part of the American Recovery and Reinvestment Act, but by mid-2011 that was gone too. In June 2011, the Center on Budget and Policy Priorities (CBPP) reported that “
no
additional resources are available from the federal government for the first time since TANF’s creation in 1996, despite today’s hard economic times.” To counter this, the CBPP proposed that states receive additional TANF funds as soon as they reach an unemployment rate of 6.5 percent or more, and that they have to spend those extra dollars on helping more people rather than simply replenishing their existing funds.

“Here we are, worst recession of our lives, and we didn’t suspend the lifetime limit, or exempt households who’ve met the lifetime limit,” Jessica Bartholow said, in amazement. Worse, many states had actually
decreased
the number of months a woman could access welfare: California, for example, took it from sixty months to forty-eight, and during budget negotiations in late 2011 Governor Jerry Brown tried (though failed) to reduce it still further, to a mere twenty-four months.

Bartholow recalled a 40-year-old woman she had recently encountered who had been laid off from her job of nine years, who lacked any financial assets and had just had a new baby. But because of the fact that she’d been on welfare for a few years more than a decade
earlier, when her first son was a child, she had run up against the lifetime limits and couldn’t qualify for aid. She and her baby became homeless, and her elder son ended up having to drop out of college to try to find work and support his mother and half-sibling.

How could TANF be made more responsive to downturns? By bulking up federal aid to the states, by replacing the block grant system with a nationally mandated baseline eligibility system akin to Medicaid enrollment, and by automatically suspending lifetime limits during economic downturns that last beyond a certain number of months. How much would it cost to boost TANF rolls by 50 percent? Elizabeth Lower-Basch, a senior policy analyst at the D.C.-based Center for Law and Social Policy (CLASP), estimated that it would be somewhere in the region of $7 billion, a not-insignificant amount of money, but, to put it in perspective, less than 1 percent of the cost of bailing out the financial industry following the 2008 meltdown. Or what America was spending every week or two in Iraq during the height of that war.
²
In fact, in 2008
New York Times
columnist Nicholas Kristof calculated that the United States was spending $5,000
per second
in Iraq.
³

Could these expansions of the welfare system be enforced? Yes, but probably not without restructuring the federal-state responsibilities for the delivery of assistance to the poor. Currently, the federal government mandates that states provide certain benefits and services, but doesn’t mandate
how
the states fund these requirements. As a result, in many more conservative states legislators simply adopted deeply regressive tax systems—such as imposing sales taxes on food to fund social services or, in the case of Alabama, calculating higher state tax liabilities for the poor if the poor have been given a federal subsidy such as the EITC—to cover their increased obligations. These are pure examples of robbing Peter to feed Paul, and they are particularly ironic given how vocally anti-tax most of the political leaders in states such as Alabama are. Any rational anti-poverty strategy would immediately alter such tax codes so as to make them more responsive to the needs of the poorest of taxpayers.
Failure to do so would only stoke the suspicion that when conservative southern politicians proclaim their hostility to taxes, what they really mean is a hostility to the sorts of taxes paid by the sorts of affluent voters who tend to make up their electoral bases and a reluctance to fund the sorts of programs generally used by people who aren’t part of that base.

Because so many states have proven themselves so unenthusiastic about funding federally required safety net programs with progressive taxes, Katherine Newman and coauthor Rourke O’Brien conclude in their book
Taxing the Poor
that many of these programs ought to be federalized, funded by increasing federal taxes on affluent individuals and on big business, and bypassing the states entirely.

Absent such a fundamental reform of TANF, the central counter-cyclical institution propping up the welfare system these days is, and will likely continue to be, SNAP (colloquially known as food stamps), which, as of 2012, was helping to feed about 46 million Americans. These men, women, and children received on average $133.80 per person, and $283.65 per family, per month in food assistance.

Since SNAP is available to anybody below a certain income threshold, it ends up being used in recessions—as well as in periods of collapsing wages for the working poor—by far more people than can use TANF or general cash assistance programs. To gauge the true scale of the discrepancy, witness the following numbers: Between 2000 and 2012, the number of Americans on food stamps increased from 17.2 million to 46 million; meanwhile, the number of Americans on welfare stood at only a little over 4 million.
⁴
Food stamps are available to people with a gross income of 134 percent (and in some states 200 percent) of the poverty level, but to access them, one’s net income, after high housing and healthcare costs have been deducted, cannot exceed 100 percent of the poverty line. And even then, the benefits available are fairly meager. To qualify for a “high” level of
benefits you have to be at about 50 percent of the poverty line. In other words, tens of millions of families qualify for some food assistance, but dig below the headlines, and one finds that for many of these families the assistance is small indeed.

We last encountered Vicenta Delgada waiting on a food line in North Philadelphia, on a chilly late fall morning in 2011.

Vicenta’s husband received a little more than $1,000 a month from Social Security; she qualified, she said, for $27 a month in SSI, and the couple received an additional $34 in food stamps. With copays for her medications eating up her limited income, and with the food stamps covering almost none of her and her husband’s nutritional needs, she ended up on a food pantry line each Saturday morning, waiting for charity food that would keep her from going hungry.

Raising the food stamp aid thresholds, and letting benefits kick in for the working poor as well as the deep poor, would instantly make the plan more counter-cyclical, better compensating for lost earnings as hours worked and hourly wages decline. And making it more available would also stimulate local economies, thus boosting tax revenues and allowing the expanded government program to at least partly fund itself.

Additionally, there are glaring holes that need to be fixed in SNAP—holes that wouldn’t be so important except for the fact that the program has now become
the
central component of America’s welfare system. During normal economic times, able-bodied adults can only access food stamps if they can prove that they are actively looking for work. This provision can be suspended regionally when local unemployment rises a certain amount above the national average. And in 2009, recognizing the severity of the need, and the unavailability of jobs at the depth of the recession, the authors of the American Recovery and Reinvestment Act (ARRA) suspended this requirement for most recipients of SNAP nationwide. Yet two groups weren’t exempted from the work requirement: the first was students. Thus a working-class student trying to better him- or herself by
enrolling in college after being laid off would still have to work twenty hours a week to get food stamps. If that person couldn’t find work, he or she would lose the benefits. But if he dropped out of college, he’d qualify even without finding work. It’s a catch-22 poverty trap.

The second group was made up of those on TANF whose food stamps were tied to their welfare checks, which in turn were only available to those in a welfare-to-work program. Waivers could be granted at a county level, at the discretion first of the state and then of the county, but when there’s a low unemployment county such as Alameda, California, with a high unemployment urban core like Oakland, there’s precious little guarantee that the big-city residents won’t get shortchanged.

In the country’s largest city, New York, welfare recipients, even at the height of the recession, were having to work for their welfare
and
food stamps, even while others were able to access SNAP simply by proving their newfound poverty. In an October 2011
City Limits
article titled “Workfare for Food Stamps?” journalist Neil DiMause wrote that New York City’s Human Resources Administration was ratcheting up its enforcement efforts of these workfare requirements. DiMause reported that, “Late in 2010, according to the low-income membership group Community Voices Heard, people receiving food stamps began receiving letters reminding them that they could be asked to work for their benefits. Ken Stephens of the Legal Aid Society says that in the following months, he started hearing from clients receiving food stamps who had lost their benefits for as small a violation as missing one job-search appointment.”
⁵