The War on Poverty and the safety net for families with

children

Jane Waldfogel

June 13, 2012

Overview

• This chapter considers three of the major legacies of the War on Poverty’s efforts to strengthen the safety net for low-income families with children:

1) expanded food and nutrition programs, i.e. Food Stamps/SNAP, school breakfast & lunch, WIC

2) reformed cash assistance programs, i.e. AFDC/TANF & SSI

3) new income support programs tied to employment, i.e. EITC & child care subsidies

Overview (continued)

• For each program, the chapter discusses: • context at start of War on Poverty and action

taken during War on Poverty; • subsequent legislative history and status,

including trends in, and current levels of, expenditures and numbers of recipients, and adequacy with regard to reach, level and type of benefits;

• effectiveness at meeting stated program goals; • empirical evidence, where available, on how each

program affects child health and development, emphasizing studies that use rigorous methods

Overview (continued)

• I also consider the extent to which support for these programs has been eroded by:

- worry that welfare programs may act as a narcotic, inducing dependency and eroding incentives to get ahead (FDR, LBJ);

- risk that unconditional cash or near-cash assistance undermines work incentives and, if provided to unmarried families with children, creates incentives for out-of-wedlock child-bearing or family break-up (Murray, 1984);

- racialized attitudes (Gilens, 1999) and more recently concerns about immigration (Fix et al., 2009);

- rising costs.

Food & nutrition programs: Food Stamps/SNAP

• Food Stamps (now SNAP) provide help to low-income individuals and families to purchase food. Current caseload is 46.5 million Americans – 15% of population.

• Food Stamps as we know them today did not exist before War on Poverty (there were surplus food programs, and a pilot program of food coupons discontinued in 1943)

• Kennedy reinstated pilot program in 1961, Johnson pledged in his 1964 State of the Union address to establish a “broader food stamp program”, leading to 1964 Food Stamp Act

• Originally, families had to purchase coupons but purchase requirement was eliminated in 1979, and transition to EBT was completed by 2008, when program was re-named SNAP.

Food Stamps/SNAP: Assessment

• Food Stamps/SNAP play an important role in reducing poverty. Census estimates using SPM suggest that in 2010, child poverty would be 3 percentage points higher (21.2% instead of 18.2%) if SNAP were not provided (Short, 2011).

• Food Stamps/TANF also reduce food insecurity and improve nutrition (reviews by Currie).

• As counties introduced Food Stamps, families reduced out of pocket spending on food while increasing overall food expenditures (Hoynes & Schanzenbach, 2009). The roll-out also led to higher birthweights (Almond et al., 2011).

• Current studies find associations with improved child health and development (see chapter).

Food Stamps/SNAP: Assessment (continued)

• The Food Stamp program meets its original goals – to reduce poverty, combat hunger, and improve nutrition and related outcomes.

• But there is room for improvement:- Program does not reach all eligible families- Program might do more to promote good nutrition

(should soda be banned?)- Does the lump-sum aspect of the program lead to

poor eating patterns or obesity?

Food & nutrition programs: School breakfast & lunch

• School breakfast/lunch provides free or reduced cost meals for low-income children in schools (& child care), reducing food costs and possibly improving food security and nutrition.

• These programs date back to 1940s but were greatly expanded during War on Poverty. They currently serve 11.6 and 32 million children respectively.

• The programs play a small but significant role in reducing poverty. Child poverty would be 1 percentage point higher (19.0% instead of 18.2%) without school lunch (Short, 2011).

• There is also evidence that these programs may improve nutrition, attendance, and test scores (see chapter).

Food & nutrition programs: WIC

• The special supplemental nutrition program for women, infants, and children (WIC) provides vouchers that low income pregnant women and women with infants and toddlers can use to purchase nutritious food. It reduces food costs and may also have direct effects on nutrition.

• WIC was established in 1969 and formalized in 1972 through an amendment to Child Nutrition Act.

• Unlike other food and nutrition programs, WIC is not an entitlement.

• WIC currently serves about 9 million women, infants, and children -- about 60% of eligible families with children.

WIC: Assessment

• WIC has little impact on poverty, but does improve health and nutrition for women and children.

• WIC prenatally leads to higher birthweight (contemporary evidence, reviewed in chapter, as well as evidence from the War on Poverty period in Hoynes et al., 2011).

• WIC post-natally has been less studied, but evidence suggests WIC improves child nutrition, reduces anemia, and leads to higher test scores (reviews by Currie).

Food & nutrition programs: Summary assessment

• Food Stamps reach large numbers of low-income families, reduce poverty and food insecurity, and probably also improve nutrition.

• WIC has less impact on poverty but a more direct effect on nutrition.

• School breakfast and lunch have intermediate-sized effects on poverty and nutrition.

• Although each of the programs could be improved, together they have contributed to reducing poverty and improving the life chances of poor children.

Cash assistance programs: AFDC/TANF

• Expanding AFDC was not a major focus of the War on Poverty. Johnson, like Roosevelt, worried that cash welfare could lead to dependency.

• Title V of 1964 Economic Opportunity Act introduced Work Experience and Training Program, leading to 1967 Social Security Amendments’ introduction of Work Incentive (WIN) program (voluntary for single mothers, mandatory for second parents on AFDC-UP).

• Later War on Poverty reformers and Johnson’s successor Nixon endorsed a guaranteed minimum income, but this was not enacted. Instead, AFDC continued to move in a more work-oriented direction.

AFDC/TANF: Assessment

• Few families have been moved out of poverty (because benefit levels are low), but AFDC/TANF has reduced the depth of poverty and material hardship (Scholz et al., 2009).

• Critics argue AFDC fostered dependency and encouraged formation of single-parent families (Murray, 1984), but effects on family structure were small (Moffitt, 1998).

• Little/no evidence that AFDC harms child health or development vs. substantial evidence that children are harmed by growing up in poverty (Magnuson & Vrotuba-Drzal, 2009).

• Support for AFDC eroded over the years, while emphasis on work increased, culminating in replacement with TANF in 1996.

Cash assistance programs: Supplemental Security Income

• SSI was established in 1972, in aftermath of War on Poverty.

• SSI provides income support to low-income families if a child or an adult has a disability that qualifies for coverage. In contrast to AFDC/TANF, benefits are more generous, uniform across states, and not contingent on work.

• Currently 8 million recipients (including 1.3 million children).

• SSI reduces risk of poverty and depth of poverty. But there is little evidence about its effects on child health and development.

Cash assistance programs: Summary assessment

• Johnson’s insistence that welfare move in a more work-oriented direction has been borne out in subsequent reforms.

• But Johnson would not have foreseen the growth in caseloads and controversy, or the current situation where AFDC/TANF no longer functions as a major part of the safety net (as we have seen in the current recession).

• On a more positive note, SSI has proved to be a relatively robust source of support for the most vulnerable families, those with disabled children or parents.

Employment-related programs: EITC

• Earned Income Tax Credit (EITC), established in 1975, is now single largest income support program for low-income families with children.

• EITC is designed to promote work and is effective in doing so, especially for single parents.

• EITC plays an important role in reducing poverty. Child poverty would be 4 percentage points higher (22.4% instead of 18.2%) without EITC (Short, 2011).

• Higher EITCs are associated with improved maternal health and mental health (Evans & Garthwaite, 2010), birthweight (Baker, 2008; Strully et al., 2010; Hoynes et al., 2011), and test scores (Dahl & Lochner, in press).

Employment-related programs: Child care subsidies

• Child Care Development Fund (CCDF) and predecessor child care programs provide subsidies to offset child care costs for low-income families with children where parents are working or in work-related activities.

• First provisions to help welfare recipients with child care costs date from the 1964 Economic Opportunity Act.

• Currently 1.6 million children receive subsidized child care through CCDF (plus another .9 million through other programs), but an estimated 85% of eligibles are not served.

• Child care subsidies are designed to raise employment and are effective in doing so. Their effects on child health and development appear to be negative or neutral (see chapter).

Employment-related programs: Summary assessment

• EITC has become an extremely important part of the safety net – it promotes work and makes work pay, reduces poverty, and leads to improved health and mental health for mothers as well as improved outcomes for children.

• But benefits are delivered only once/year, and do not reach non-custodial parents (typically fathers).

• Child care subsidies have also become an important part of the safety net. But, unlike EITC, they are not an entitlement and many eligible families do not receive them.

• There are also issues with regard to quality of care subsidized, and need for broader set of work-family supports.

Conclusions

• Most enduring legacy of War on Poverty reforms to nation’s safety net derives from expansion of food and nutrition programs. These programs have proven fairly resilient to political pressures and backlash and have achieved a solid track record of reducing poverty and food insecurity, improving nutrition, and yielding other benefits for children.

• Legacy in terms of the major cash welfare programs is more complex. SSI has proved relatively robust, but the same is not true of AFDC/TANF, which continues to be buffeted by concerns about dependency and costs. Trend toward a more work-oriented safety net continues to this day, as witnessed by expansions in EITC and child care.

Conclusions (continued)

• Vision of some form of guaranteed minimum income for families with children still has not come to fruition.

• Child Tax Credit (CTC) provides families with children with small income supplement but is not fully refundable and thus does not reach lowest-income families (Harris, 2012).

• I can think of no better way to celebrate 50th anniversary of War on Poverty than by making CTC fully refundable – to ensure safety net reaches all poor families with children.