Welfare Reform: TANF During Welfare Reform: TANF During the Recession and into the Future

Ron Haskins

August 9 2011August 9, 2011

2

Major Topics

• Unsustainable Federal Debt

• Recession Unemployment Poverty• Recession, Unemployment, Poverty

• Temporary Assistance for Needy Families:

- Effects of 1996 Reforms

TANF and the Great Recession- TANF and the Great Recession

- The Future of TANF

3

The Unsustainable Fiscal Path

60

70

40

50

nt o

f GD

P

Medicare Medicaid

Net InterestAverage Federal Revenue, 1970-2009

20

30

Perc

e

Social Security

Medicare, Medicaid, Exchange Subsidies, and

CHIP

0

10

2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080

Source: Congressional Budget Office, “Supplemental Data for the Congressional Budget Office's Long-Term Budget Outlook (June 2010),” available at http://www.cbo.gov/ftpdocs/115xx/doc11579/LTBO-2010data.xlsNote: Based on the Alternative Fiscal Scenario

2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080Year

4

Employment-Population Ratio in SelectEmployment-Population Ratio in Select Countries, 1984-2009

80

70

75

60

65

Perc

ent

Netherlands

55

60 Netherlands

Germany

UK

45

50

984

985

986

987

988

989

990

991

992

993

994

995

996

997

998

999

000

001

002

003

004

005

006

007

008

009

USA

19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 20 20 20

Year

Source: OECD Stat Extracts (http://stats.oecd.org/Index.aspx?DatasetCode=LFS_D)

5

Average Monthly Job Creation by Best SingleAverage Monthly Job Creation by Best Single Year of Decade and after the Great Recession

321350

321

268

250

300

eati

on

200

250

hly

Net

Job

Cre

ousa

nds)

127

100

150

vera

ge M

onth

(Tho

0

50Av

1990s 2000s Dec 2009 ‐ Mar 2011Best Year by Decade

Source: Brookings tabulations of Bureau of Labor Statistics data.

6

Median Duration of Unemployment,Median Duration of Unemployment, 1980-2011

20

25

15

s un

empl

oyed

5

10Wee

ks

0

5

980

981

982

983

984

985

986

987

988

989

990

991

992

993

994

995

996

997

998

999

000

001

002

003

004

005

006

007

008

009

010

011

19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 20 20 20 20 20

Year

Sources: FRED2 (http://research.stlouisfed.org) compiled from Bureau of Labor Statistics data; National Bureau of Economic Research, US Business Cycle Expansions and Contractions (http://www.nber.org/cycles/cyclesmain.html)

7

Unemployed Workers per Job Opening,Unemployed Workers per Job Opening, 2000-2010

17

6.1

4.7 1

1

1

5

6

ning

s

0

1

1

3

4

oym

ent/O

pen

1.1

0

0

0

1

2

Unem

pl

0

0

0

Dec

-00

Jun-

01

Dec

-01

Jun-

02

Dec

-02

Jun-

03

Dec

-03

Jun-

04

Dec

-04

Jun-

05

Dec

-05

Jun-

06

Dec

-06

Jun-

07

Dec

-07

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

Dec

-10

May

-11

Sources: Bureau of Labor Statistics, Job Openings and Labor Turnover Survey (http://data.bls.gov/); Bureau of Labor Statistics, Labor Force Statistics from the Current Population Survey (http://data.bls.gov)

Year

8

Poverty and Deep Poverty in Female-HeadedPoverty and Deep Poverty in Female Headed Households with Children, 1975-2009

5043 7

40

rty

43.7

38.5

30

nt in

Pov

e

Official Poverty Rate

D P

10

20

Perc

en Deep Poverty

6 3

0

10

75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09

3.7

6.3

197

197

197

198

198

198

198

198

199

199

199

199

199

200

200

200

200

200

YearSource: U.S. Census Bureau, “Table 4: Poverty Status of Families , by Type of Family, Presence of Related Children, Race, and Hispanic Origin: 1959 to 2009,” available at http://www.census.gov/hhes/www/poverty/data/historical/families.html.

9

People Removed from Poverty byPeople Removed from Poverty by Various Programs, 2009Program Removed from Poverty (Millions)g y ( )

Social Security 21.2Supplemental Security Income 2.6Unemplo ment Compensation 3 5Unemployment Compensation 3.5SNAP (Food Stamps) 3.8Housing 1.5Taxes and Recovery Payments 5.2

Note: Definition of poverty is based on post‐tax, post‐transfer income (not the official poverty definition).Source: Arloc Sherman, “Despite Deep Recession and High Unemployment, Government Efforts Including the Recovery Act Prevented Poverty from Rising in 2009, New Census Data Show,” Washington, DC: Center on Budget and Policy Priorities, January 2011.

10

C l iConclusions

• The Great Recession by every measure was• The Great Recession by every measure was long and deep

• Employment fell more than in previous• Employment fell more than in previous recessions and is not recovering quicklyThe safety net kept many Americans out of• The safety net kept many Americans out of povertyTANF did t i h th f t• TANF did not increase as much as other safety net programs

11

Fi C f TANFFive Components of TANF

1 E d C h E i l1. End Cash Entitlement

2 Block Grant Funding2. Block Grant Funding

3. Work Requirements

4. Sanctions

5. 5-Year Time Limit

12

Employment-to-Population Ratios forEmployment to Population Ratios for All Men and Never-Married Mothers, 1980 - 2009

100

88.8

82.6

80

90

100

tio

61.1

50

60

70

Popu

latio

n R

at

38.730

40

Empl

oym

ent/P

Men

0

10

20

E

Never‐Married Mothers

Source: Brookings tabulations of data from the Annual Social and Economic Supplement to the Current Population Survey, 1980-2009.

Year

13

Poverty Rates for Black Children and ChildrenPoverty Rates for Black Children and Children in Female-Headed Households, 1974-2009

Source: U.S. Census Bureau, “Table 4: Poverty Status of Families , by Type of Family, Presence of Related Children, Race, and Hispanic Origin: 1959 to 2009,” available at www.census.gov/hhes/www/poverty/data/historical/hstpov4.xls and U.S. Census Bureau, “Income, Poverty, and Health Insurance Coverage in the United States: 2009,” U.S. Department of Commerce, September 2010, Table B-2, Poverty Status of People by Age, Race, and Hispanic Origin: 1959-2009.

14

Support for Working FamiliesSupport for Working Families Increases Dramatically, 1984-1999

$51.7

40

50

Child CareSCHIPChild Tax Credit

30

f 199

9 D

olla

rs

Child Tax CreditMedicaidEITC

20

Bill

ions

of

10

$5.6

0Spending in 1999 under:

1984 Law 1999 Law

Source: Congressional Budget Office, Policy Changes Affecting Mandatory Spending for Low-Income Families Not Receiving Welfare, 1998.

15

TANF and Safety Net Programs During the Great Recession

1225

10

12

20

25SNAP Caseload

Unemployment Compensation

TANF (Families)9.5

6

8

15

ent R

ate

nt)

m R

ecip

ient

sns

)

Unemployment Rate

12.2

19.4

4

6

10

Une

mpl

oym

e(P

erce

n

umbe

r of P

rogr

am(in

Mill

ion

4.7

25

Nu

1.9

1.65

3.5

1.8400

Nov

-07

Dec

-07

Jan-

08

Feb-

08

Mar

-08

Apr

-08

May

-08

Jun-

08

Jul-0

8

Aug

-08

Sep

-08

Oct

-08

Nov

-08

Dec

-08

Jan-

09

Feb-

09

Mar

-09

Apr

-09

May

-09

Jun-

09

Jul-0

9

Aug

-09

Sep

-09

Oct

-09

Nov

-09

Dec

-09

Jan-

10

Feb-

10

Mar

-10

Apr

-10

May

-10

Jun-

10

Jul-1

0

Month-Year

16

Percentage of Poor Receiving FoodPercentage of Poor Receiving Food Stamps/SNAP and AFDC/TANF, 1987-2009

Source: Thomas Gabe, Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2009 (Congressional Research Service, 2011).

17

TANF ITANF Issues

• Disconnected Mothers• Disconnected Mothers• Work Requirements

E l t d T i i• Employment and Training• Recessions• Is TANF a Safety Net Program?

18

G l NGoals Now

• Maintain emphasis on work in TANF• Maintain emphasis on work in TANF• Increase work requirements in food stamps

(SNAP) and housing programs(SNAP) and housing programs• Improve employment and training programs

H l di d• Help disconnected moms• Improve performance of TANF during

recessions