Thinking Through the Consequences of Welfare Reform

When we think about the division of responsibilities between state governments and the federal government, is it obvious that cash transfers for the poor should be handled primarily at the state level? I’m not sure that’s true.  At the Washington Post, Ezra Klein offers thoughts on welfare reform: In 1996, before welfare reform passed, 68 of 100 families living in poverty with children received welfare benefits. In 2010, two years into the worst economy since the Great Depression, only 27 of every 100 such families were receiving benefits. And that’s not because they were all holding good jobs or because states had somehow managed to make the grants go further. Quite the opposite, actually. Liz Schott, a senior fellow at the Center on Budget and Policy Priorities, explains that states use about 30 percent of their block grants to fund basic assistance — what most of us would think of as “welfare.” An additional 15 percent goes to subsidized child care. Eleven percent goes to work supports. And the other 44 percent? Miscellaneous other things, including closing state budget holes. The end result is that fewer families get welfare. That’s not a “reform.” It’s a cut.