Ronald Reagan’s “welfare queen” myth: How the Gipper kickstarted the war on the working poor

Some 1.5 million households live on less than $2 a day. Welfare would help, but it's gone -- and this is why

Excerpted from "$2 a Day: Living on Almost Nothing in America"

Welfare’s virtual extinction has gone all but unnoticed by the American public and the press. But also unnoticed by many has been the expansion of other types of help for the poor. Thanks in part to changes made by the George W. Bush administration, more poor individuals claim SNAP than ever before. The State Children’s Health Insurance Program (now called CHIP, minus the “State”) was created in 1997 to expand the availability of public health insurance to millions of lower-income children. More recently, the Affordable Care Act has made health care coverage even more accessible to lower-income adults with and without children.

Perhaps most important, a system of tax credits aimed at the working poor, especially those with dependent children, has grown considerably. The most important of these is the Earned Income Tax Credit (EITC). The EITC is refundable, which means that if the amount for which low-income workers are eligible is more than they owe in taxes, they will get a refund for the difference. Low-income working parents often get tax refunds that are far greater than the income taxes withheld from their paychecks during the year. These tax credits provide a significant income boost to low-income parents working a formal job (parents are not eligible if they’re working off the books). Because tax credits like the EITC are viewed by many as being pro-work, they have long enjoyed support from Democrats and Republicans alike. But here’s the catch: only those who are working can claim them.

These expansions of aid for the working poor mean that even after a watershed welfare reform, we, as a country, aren’t spending less on poor families than we once did. In fact, we now spend much more. Yet for all this spending, these programs, except for SNAP, have offered little to help two people like Modonna and Brianna during their roughest spells, when Modonna has had no work.