Wednesday, May 13, 2009

The mess of the American safety net

The New York Times has done an exhaustive study of American benefits to the poor. They find that those applying for food assistance, government health insurance, and unemployment insurance can have a difficult time receiving those benefits. Some may find they qualify for one benefit but not another.

Differences in state laws help to complicate the problem, as requirements for food stamps may be different in one state from another. So geography really becomes the determining factor on if a poor person receives help or not.

From The New York Times, reporter Jason DeParle explains some of the differences.

As a measure of the safety net, The New York Times examined state-by-state enrollment in six federal programs and found large variations in the share of needy helped.

Just 50 percent of people eligible for food stamps receive them in California, compared with 98 percent in Missouri. Nineteen percent of the unemployed get jobless benefits in South Dakota, compared with 67 percent in Idaho.

Fifteen states rank among the top 10 in providing one form of aid and the bottom 10 in another. California ranks second in distributing cash welfare but last in food stamps. South Dakota, last in jobless benefits, is first in subsidized housing.

Aid in states most hit by recession is also scattershot. Michigan’s programs reach a comparatively high share of the needy, while South Carolina’s rank in the middle and Nevada’s reach relatively few. All have double-digit unemployment rates.

“The system for helping Americans in need is very fragmented, and it confuses everyone,” said Theda Skocpol, a political scientist at Harvard. “Some people are covered and some people are not, even though they look like they’re in very similar circumstances.”

This complexity is a challenge for President Obama as he reacts to the economic crisis. The February stimulus act contains more than $100 billion in safety net provisions, but much of the aid consists of financial incentives the states are free to reject. Several governors quickly spurned grants to expand unemployment insurance, for example, saying the move would raise business taxes and kill jobs.

Aid programs spend hundreds of billions of dollars and reach tens of millions of people; the food stamp program alone covers more than one in 10 Americans. Yet the safety net leaves few camps satisfied. Liberals say programs are weak compared with other rich countries and are overly deferential to states. Conservatives fault costs and complexity and warn that aid can do harm.

With generous programs “you could be discouraging people from seeking better jobs,” said Stuart Butler of the Heritage Foundation.

Both sides, those who want more spending and those who want less, would unite under Mr. Butler’s description of the status quo. “You’ve got this kind of jigsaw puzzle that doesn’t really fit together, ” he said.

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