Working From Poverty to Promise

Lynette Engelhardt Stott and Julie Brewerr

Thirty years ago, even though she was working, Lynn Woolsey was forced to go on public assistance to make ends meet and raise her three small children. Eventually she worked her way off welfare. Today she is the first former welfare mom to serve in Congress, as a representative from California.

Washington, DC, police officer Elizabeth Jones is struggling to find that same sort of success in overcoming poverty. In the New Yorker, she recounted her struggle to leave welfare, care for three children and work two jobs. She noted that her transition had not been easy.

"But I make the tradeoff because I want my children to grow up with dignity and a sense of security. I want them to know in their hearts that their mom is not going back to welfare, that we are going to keep struggling and working to make a better life than the one we started with."

Moving from poverty to self-sufficiency is not easy. People who are working hard to leave poverty behind them should have the support they need to make that difficult transition. Today, about 5.5 million people in the United States - 72 percent of whom are children - participate in Temporary Assistance for Needy Families (TANF), the nation's safety net program for low- or no-income families.

The federal TANF law expires September 30, 2002, which means that Congress must reauthorize, or renew, TANF by that date. Bread for the World's 2002 Offering of Letters, Working From Poverty to Promise, seeks to strengthen TANF so that low-income families have access to the support they need to move from public assistance to self-sufficiency, from poverty to promise.

Why is an anti-hunger organization working on TANF? Low-income households are more than 15 times as likely to experience hunger. When families do not have enough money to pay all of their expenses, they are forced to choose between paying the rent and the very things that make work possible: childcare and transportation. Often there is not enough money left to purchase the food that the family needs.

Families should not be forced to make such painful choices. Strengthening TANF to reduce poverty will reduce hunger.

What happened in 1996

In 1996, the Personal Responsibility and Work Opportunity Reconciliation Act established TANF, replacing Aid to Families with Dependent Children (AFDC). This law ended a federal commitment to guarantee a safety net for families living in poverty.

The federal law imposes lifetime time limits for cash assistance, requires that adult recipients work in order to receive TANF, and sets work participation rates that states must meet. The states, within limits, can now design their own programs, including setting benefit levels and determining who receives assistance. The 50 state plans vary greatly.

How are the changes working?

Many have said that TANF has been a tremendous success, noting that caseloads have declined by more than 50 percent and work participation rates have increased. However, the economic situation for most former recipients is precarious at best.

Despite the caseload declines and increases in employment, by 2000 nearly half of adults who had lost cash assistance had not found jobs. Those who did find work were often stuck in unsteady, limited and low-paying jobs, earning on average $6.75 an hour, and receiving no benefits. Work also adds additional expenses to low-income families, especially childcare and transportation, that can actually leave some families worse off than they were while receiving public assistance, and inhibit their ability to put food on the table.

The TANF law also emphasizes promoting marriage and reducing out-of-wedlock births. While laudable goals, there is simply no consensus on how best to implement them through TANF. States have attempted to meet these goals through a variety of policies but there is little knowledge of what leads to success.

Poverty Reduction

The primary goal of TANF must be to reduce poverty, not simply to reduce caseloads. A decline in caseloads matters little if TANF families' situations have not improved. Working From Poverty to Promise will urge Congress to focus on poverty reduction by:

• Allowing adults to gain the education and training necessary to move successfully into the workforce;
• Providing critical supports for working poor families;
• Easing time limits; and Providing sufficient federal funding.

TANF reauthorization comes at a turning point in the U.S. economy. This revamped social safety net was created and implemented in an economic boom time the likes of which the United States had never seen before. Most states with their new TANF programs have yet to face a recession. But now, people are meeting their lifetime limits just as an economic downturn begins. How the system and the people will fare in less prosperous times is yet to be determined.

Education and training

State TANF programs are designed to move people into the workforce at any opportunity, even though numerous studies document the effectiveness of higher education and training in preparing low-income parents to attain stable employment at wages that support a family. Once a participant becomes employed, they are considered a success for the program, regardless of the quality of the work. Long-term employability and upward mobility are rarely considered when placing TANF clients into the workforce.

Most people strive for a career in a field in which they have skills or interests. Julia, a woman in Salt Lake City, wants to work with deaf children. TANF has been a barrier to that dream. Julia was forced to drop out of college to take a secretarial job when faced with the loss of TANF funded childcare. Recently, Julia lost that job when the business closed. She is again seeking assistance.

As a primary tool to employment, advancement and self-sufficiency, education and training are crucial. If people are put to work in low-skill, low-wage sectors of the work force, many will cycle back into welfare.

Critical supports for working poor families

Many TANF participants transitioning to work lack access to vital assistance that would make low-wage work a viable option to welfare. Once at work, TANF clients see a dramatic decline in benefits. Sometimes those who lose cash assistance are not informed that they are still eligible for other benefits such as childcare assistance, Medicaid and food stamps.

Some states choose not to provide transitional benefits for families that leave welfare for work. Others provide transitional benefits only at the request of the participant. Many states have severe funding shortages for supportive services. For example, many states have seen such dramatic increases in demand for childcare assistance that they have lengthy waiting lists, leaving working parents with difficult choices about how to care for their children and provide for them at the same time.

Time limits

Federal law limits the amount of time a person can receive cash assistance in their lifetime to five years. States can chose to be more even stringent, and eight have enacted even shorter time limits. Conversely, states also have the option to use their own funding to provide benefits to people who have reached their federal time limit or who are not eligible for federal assistance.

Dramatic decreases in caseloads suggest that those who can enter the workforce have already done so. Some people, though, will never be able to work consistently in a way that will allow them to support themselves, due to mental, emotional or physical conditions. But these barriers to employment are seldom considered in the administration of TANF.

The biggest concern over time limits is the effect on the children of parents who have permanently lost their eligibility. Nearly three quarters of all TANF recipients are children who are neither able nor expected to comply with the work requirements. Yet they are still subject to the time limits of any adult in their household. Easing TANF time limits will ensure that children are not suffering needlessly in our country when the adults in their families have used up their lifetime limit of benefits.

Sufficient funding

The federal government contributes $16.5 billion for TANF each year in the form of block grants to states. As Congress reauthorizes TANF, some will argue that funding should be cut since fewer people now receive assistance. Even though caseloads have declined sharply, those who remain on TANF often have multiple barriers to employment. The types of services they need to become self-sufficient are more expensive than simple cash benefits. As the economy slows and unemployment continues to increase, TANF caseloads will also increase, as they have already begun to do in one-third of states.

Congress must provide adequate levels of funding and require states to maintain efforts to ensure that the basic safety net exists.

TANF is not only a safety net. If properly funded and targeted toward poverty reduction, it can also be a foundation upon which low-income people work to lift themselves from poverty to a better life.

Working From Poverty to Promise will ask Congress to strengthen TANF in order to ensure that low-income people have the supports they need to achieve the promise of a life without hunger or poverty.

Poverty in the midst of plenty continues to be a reality in the United States. Although unprecedented prosperity has brought the nation to the lowest poverty and unemployment rates since the 1970s, there are two measures of well-being for which the statistics reveal alarming trends-- the number of people needing food assistance and the number who do not have health insurance and are not enrolled in any government health program.

Lynette Engelhardt Stott and Julie Brewer are domestic policy analysts for Bread for the World.  Bread for the World is a 46,000 member Christian citizens' movement against hunger.  Founded in 1974, Bread for the World's members lobby Congress and the administration to bring about public policy changes that address the causes of hunger and poverty in the world and in the United States.

Reprinted by permission

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