How the American safety net shrank for the poorest of the poor.

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http://www.slate.com/articles/business/moneybox/2014/05/the_american_safety_net_it_s_shrinking_for_the_poorest_of_the_poor.html



Here’s a policy riddle for you: Over the past several decades, the American safety net—that vast web of benefit programs aimed at helping low-income households in the U.S.—grew briskly. And yet, by at least one economist’s measure, our spending on the very poorest families dwindled. What happened?

Bill Clinton happened, for one. Earlier this month, Johns Hopkins University professor Robert Moffitt presented new research showing how Washington has gradually shifted its anti-poverty dollars away from the most destitute Americans and toward people whom voters tend to think of as “the deserving poor”—which is to say, working parents. He found that families living far below the poverty line, who are often unemployed, now receive less money from the government than they did in 1983; meanwhile, families living just above the threshold receive significantly more. Clinton’s 1996 welfare reform legislation, Moffitt argues, is a major reason why.

Looked at as a whole, the entire safety net has clearly gotten wider, even when you remove programs like Social Security retirement benefits, Medicare, and Medicaid from the equation. Moffitt shows that per-capita spending on means-tested programs, such as food stamps, Supplemental Security Income, and the Earned Income Tax Credit, increased 89 percent between 1986 and 2007.



But Moffitt shows how that overall expansion masks key changes that have cut benefits for families with incomes that amount to less than 50 percent of the poverty line. Most important was the end of welfare as America knew it. In order to encourage more single mothers to enter the workforce, the Clinton administration eliminated the old Aid to Families With Dependent Children, which had served as an open-ended federal commitment to help poor parents. Its replacement, Temporary Assistance for Needy Families, includes work requirements, and only gives states annual grants that don’t grow with inflation. As a result, welfare spending, which traditionally reached the poorest of America’s poor, has plummeted, and has been redirected to mothers who are employed.