Welfare Numbers In Decline Reason For Improvement Is Unclear: It’s Either Good Times Or Tough Laws
The steep decline in welfare caseloads that began nearly three years ago has accelerated in recent months, offering states a larger-than-expected financial windfall and a head start in carrying out the nation’s newly restrictive welfare law.
The unprecedented exodus from the rolls follows a period of similarly explosive growth. After reaching a record high in March 1994, caseloads have dropped nearly 18 percent nationwide, and they have dropped in every state but Hawaii.
The declines have reached some of the nation’s largest cities, where concentrations of poor and single-parent families have historically made the rolls hard to reduce.
Much of the decline seems driven by the economic expansion, which has kept the country’s unemployment rate below 6 percent for 28 consecutive months. But some of it also seems to stem from the aggressive efforts many states have made in the past few years to place welfare recipients in jobs.
As the nation’s governors gathered here this weekend for their winter meeting, many are crediting their programs for the reduction in welfare caseloads. But researchers are uncertain which force is dominant: good times or tough laws.
It is also unclear whether those leaving the welfare system are mostly moving out of poverty, as many governors have said, or whether some are simply losing benefits and slipping deeper into need.
Whatever the cause, the smaller welfare rolls will make it much easier to implement the law passed last summer, which ends six decades of federal control and offers states broad new latitude in running welfare programs.
Because of the way the law is written, most states will find themselves with both a financial windfall and a bookkeeping advantage in meeting new requirements for putting recipients to work.
“We couldn’t have better timing for starting welfare reform,” said Donna Shalala, the secretary of health and human services.
Welfare rolls have fallen more than 40 percent in three states that have been among the most energetic in urging recipients to work: Oregon, Wisconsin and Indiana. And caseloads have declined by more than 25 percent in 16 other states, stretching from New Hampshire to Utah.
What is more, the rate of decline has accelerated in recent months. From August to October, national caseloads dropped 2.7 percent, as the number of welfare recipients declined by 338,000. By contrast, caseloads dropped 1.5 percent during the same period in 1995, when the rolls fell by 201,000 people.
And there appears to be considerable prospect for continued reductions, since the rolls have only recently peaked in California, where more than a fifth of the nation’s recipients live.
“These are phenomenal caseload changes,” said Wendell Primus, who resigned last year as a senior official at the Department of Health and Human Services to protest the new law.
Almost all of the decline occurred before the law passed last summer. The law imposes a five-year limit on most families’ benefits and it is only now being implemented. But Rep. Clay Shaw, R-Fla., who helped write the law, speculated that the prominence of last year’s debate had already prompted people to look for work.
“People are seeing that welfare reform is a certainty and that they had darn well better take responsibility for pulling their lives together,” he said.
“So many people have been throwing rocks at us and saying we’re going to starve kids. And quite simply, they’re wrong. The law’s working. And it’s working right from the beginning.”
But Primus cautioned that some states may be dropping people from the rolls whether they have found work or not. “Offices can do things to make life more difficult for people seeking aid,” he said, like penalizing them for missed appointments even when they lack child care or transportation.
There are 11.9 million Americans receiving benefits under the main federal welfare program, Aid to Families with Dependent Children, which is being converted to a successor program, Temporary Assistance for Needy Families. The vast majority are single women and their children. There are about 2.5 million fewer people, or about 818,000 fewer families, in the program than at the 1994 peak.
Speaking at a news conference this week, President Clinton said that the decline was “the biggest in history” and gave equal credit to economic forces and the experimental state welfare programs approved under his administration.But in a subsequent interview, Shalala described the president’s figures as only “a hunch” and declined to offer a hunch of her own.
Disentangling the forces that move families on and off the welfare rolls is a harder task than it may seem. Local economies play a role, but so do eligibility rules, population growth and changes in family size and structure. Vaguer influences may also be involved, like shifting public attitudes and the stigma some recipients may feel.
And because the sudden welfare decline follows an equally startling rise, some of the current reduction may simply represent a natural readjustment. After remaining stable for more than a decade, caseloads shot up 25 percent during and after the 1990 recession, when 3.5 million people joined the rolls.
The decline of 2.5 million people is much larger than the reductions that followed previous recessions. But there are still about a million more Americans on welfare than there were in the late 1980s.
The past four years have brought an unparalleled effort to put recipients to work. Forty-three states won federal approval to run experimental programs, some covering just a few counties and some extensive and bold. Even analysts who typically stress economics say they think the new policies are partly responsible for the declining caseloads.
Indiana and Wisconsin have experienced large reductions under governors who frequently inveighed against the welfare system. And in 1995, both states began experimenting with a two-year limit.
Oregon, by contrast, has experienced similarly dramatic reductions through an intensive case-management system that imposes no time limits as long as recipients are moving toward employability. And welfare is not a prominent political issue there.
“We aren’t trying to find fault with people who aren’t working,” said Gov. John Kitzhaber. “We’re asking ourselves why aren’t they working.”
There are also intriguing contrasts between the Indiana and Wisconsin approaches. Wisconsin has achieved much of its reduction by diverting people from welfare at the time they apply. Indiana, by contrast, has not cut the numbers coming on the rolls but has increased the number who leave each month.
The unemployment rate is 5.2 percent in Oregon, 3.3 percent in Indiana and 2.7 percent in Wisconsin.
Perhaps the place where welfare policies have had the clearest effect on caseloads is Wisconsin. The state expanded three new programs to Milwaukee last March and saw its caseloads suddenly plummet.
One is a “diversion program,” which requires applicants to perform 60 hours of job search activities as a condition of getting aid. Another is a “pay for performance” plan, which reduces grants proportionately for every hour of work or training that recipients miss. A third is a program of bureaucratic incentives that measures caseload reductions and threatens lagging offices with a loss of money.
The welfare rolls in Milwaukee have fallen by 7,235 families in the 10 months since the program began, compared with a decline of 2,753 families in the previous year. Since March, new applications have declined by about 30 percent.
Advocates fear some families may be worse off. But Jason Turner, a Wisconsin official who helped design the program, said the screening discourages those with other options from coming onto welfare. “A lot of people said: ‘The heck with it. I’ll find my own job,’ ” he said.
xxxx SHRINKING ROLLS In the past year alone, the number of people on welfare has dropped 19 percent in Milwaukee, 17 percent in Houston, 11 percent in Detroit and 9 percent in New York City.