Oregon’s Cash Assistance Program Helps Far Fewer Needy Families Than 15 Years Ago

On the eve of Governor John Kitzhaber’s release of a budget proposal that may call for deep cuts to the state’s largest cash assistance and job training program for destitute families with children, a national think tank reports that as a result of welfare reform 15 years ago, Oregon is helping far fewer poor families than it once did.

The analysis by the Washington, D.C.-based Center on Budget and Policy Priorities (CBPP) found that in the years just prior to the 1996 welfare reform legislation, the Aid to Families with Dependent Children program helped 60 families for every 100 Oregon families in poverty. By 2008-2009, the program — now named Temporary Assistance for Needy Families (TANF) — helped only 35 out of every 100 poor families, even when factoring in a significant caseload increase following the recession.

“A strong TANF program helps keeps Oregon families safe and stable during hard economic times, but unfortunately we have allowed this important safety net to wither,” said Chuck Sheketoff, executive director of the Oregon Center for Public Policy.

The joint state-federal program now reaches fewer eligible Oregonians than it once did. According to CBPP, in 1995-96 the program served an estimated 85 percent of eligible persons, while in 2005-06, the latest years with available data, TANF served only an estimated 31 percent of eligible Oregonians.

State caseload data bears out this decline. According to OCPP, in fiscal year 1994-95 Oregon’s program helped 40,131 families, while only 25,795 families received help in fiscal year 2009-10.

“Oregon families have to be much poorer to qualify for TANF compared to when the program came into being, and the benefits don’t go as far in meeting basic needs as they once did,” Sheketoff said.

To qualify for TANF cash or job training assistance, an Oregon family of three can earn no more than $616 a month, the same as in 1996, according to Sheketoff. Because of inflation’s effect in eroding the purchasing power of earnings, families today must be significantly poorer in real terms to qualify for assistance than 15 years ago. If the eligibility amount had kept pace with inflation, that family of three could have earned about $850 a month in 2010 and still qualified for assistance.

The sharp contraction in the welfare system is largely due to the fact that welfare reform made TANF a “block grant” program, one in which states receive a set amount of money regardless of economic conditions and the number of families in need of cash assistance. Previously, states received matching funds under a formula similar to that used in the Medicaid program. So, when more families needed TANF due to a bad economy the federal government provided extra funds accordingly.

Tomorrow’s release of Governor Kitzhaber’s budget may bring more bad news for TANF. OCPP said they expect that the Governor will call for deep cuts to the program.

Sheketoff said that the legislature must resist going down that path.

“Cutting off cash and job training help to desperately poor families with children makes it that much harder for Oregon to be a place where everyone enjoys economic opportunity,” he said.

The Oregon Center for Public Policy is a non-partisan research institute that does in-depth research and analysis on budget, tax and economic issues. The Center’s goal is to improve decision making and generate more opportunities for all Oregonians.