States' welfare caseloads starting to rise

from USA Today

By Richard Wolf, USA TODAY
WASHINGTON — State welfare rolls, which declined for more than a decade after a 1996 overhaul of the nation's cash-assistance program, are beginning to rise, due in part to the struggling economy.

Federal data for the last half of 2007 show welfare rolls rose about 0.6%, and 27 states reported increases. That follows a decline of 68% since the federal law imposed work requirements, time limits and penalties for recipients who don't follow the rules.

"When the economy starts to tank, that's when our business starts growing," says Jeff Brenn, chief of eligibility for Nevada's welfare agency.

The reversal of a downward trend that began in 1994 reflects a hard reality facing the Temporary Assistance for Needy Families program: The 3.9 million people who remain on welfare are mostly adults with physical, mental or emotional barriers to employment, as well as children being raised by someone other than their parents — often grandparents, who are not expected to get jobs.

"Some states have reached a portion of their caseload that are truly the harder to serve," says Russell Sykes of New York, who chairs the national association of state welfare administrators.

The welfare overhaul in 1996 was viewed by proponents as an incentive to get many of the more than 12 million recipients into jobs and off the dole. States got $16.5 billion per year regardless of caseloads — a bonanza in good times but a risky deal in a recession.

Caseloads plummeted in the late 1990s, and while the 2001 recession caused some increases, they continued to drop through 2007. All but five states have cut caseloads by more than 50%. Wyoming leads with a 95% reduction; fewer than 500 recipients remain.

Opponents of the law worried whether the program, which pays an average benefit of about $350 a month, would help families weather economic downturns. Evidence so far is mixed: While some welfare rolls have risen, the program serves just 42% of those eligible, a smaller percentage than food stamps or Social Security disability programs.

Many potential recipients have stayed away because of the extensive work rules.

"It needs to expand when there are more poor people. Clearly in some states, that is happening," says Sharon Parrott of the liberal Center on Budget and Policy Priorities. "What we haven't yet seen are whether more people are going to be let on the program."

Some states are seeing their first welfare increases since the mid-1990s:

•In Florida and Nevada, the tourism industry was first to feel the pinch. "This is the first time that we've really seen several consecutive months of increase," says Don Winstead, deputy secretary of Florida's Department of Children and Families. "People are having more difficulty finding jobs as the economy softens."

•Even wealthy states are experiencing increases as welfare recipients find it harder to land jobs and new applicants are deemed eligible. "The safety net is still here," says Kevin McGuire, executive director of Maryland's Family Investment Administration. "We're probably going to see more business during the next year."

Other states, including Ohio and Wisconsin, have yet to see substantial increases. Says Jeanne Carroll, deputy director of Ohio's Office of Family Stability: "We're kind of bracing ourselves in case that happens."