Welfare Law's Third Anniversary No Cause for Celebration

News Release
August 22, 1999

Today marks the third anniversary of the 1996 federal welfare law and it is "no cause for celebration," according to the Oregon Center for Public Policy, a public policy research firm based in Silverton. President Clinton signed the landmark law on August 22, 1996, ending the nation's commitment to provide financial assistance to families with dependent children.

State and federal welfare officials and politicians like to point to the tremendous decline since 1996 in the number of families with children receiving public assistance as proof that welfare reform is working. "The real test is are the families better off today than they were in 1996?" said Charles Sheketoff, executive director of the Oregon Center for Public Policy. "Regrettably, Oregon officials can't document that these families are better off, and state and federal census data show no decline in the number of poor."

State data indicate that the number of families (cases) receiving cash assistance has declined by 41 percent since August, 1996. In August 1996 there were 29,917 families with dependent children receiving cash assistance. In July 1999 there were only 17,669 families receiving assistance, a decline of 12,248 or 41 percent.

Oregon does not have data showing that those who left welfare are better off financially. Oregon also cannot show that those unable to get onto the welfare roles because it has become more difficult are better off today.

In 1996 a single parent with two children could work up to 29 hours per week at minimum wage and still be considered for cash assistance for her dependent children. "Because the Governor and the legislature have once again failed to increase the eligibility limit, they have made it more difficult to get cash aid," said Sheketoff.

Today, a single-parent with two children working 22 hours per week at minimum wage is turned away at the door of the welfare office. In 1985 the gross income limit was the same as working full-time at minimum wage, and was approximately 75 percent of poverty. "Now it is equal to about 22 hours per week at minimum wage, and is approximately 53 percent of poverty. You have to be much poorer today to get help," said Sheketoff.

Last year the Oregon Center for Public Policy released a study showing that, while caseloads are lower than in 1969, there are likely one-third more poor in Oregon. The study also demonstrated that caseload decline does not mean a similar decline in the number of poor. Sheketoff noted that, one year after that study, Oregon still cannot point to economic or poverty data to show that their welfare system is working.

"What we do know," said Sheketoff, "is that the state has made it more difficult to get help, and 12,000 fewer families each month are having their incomes lifted with cash assistance."

"The safety net is getting smaller and other programs do not fill the gap between the falling caseload and the need for help," said Sheketoff. While there are 12,000 fewer families receiving assistance each month, there only 1,000 more families utilizing the state's child care subsidy program each month. "If the decline in caseload were solely attributable to work, then the child care subsidy program would have seen its caseload increase by more than 1,000 families," said Sheketoff.

There are two other indicators that welfare reform is not lifting people out of poverty: the Oregon Health Plan and food bank demand. "Oregon Health Plan officials recently announced that the number of new eligibles in July exceeded their expectations by 16,000. Many advocates believe welfare reform is to blame, as people no longer on assistance are still below poverty and without health insurance," said Sheketoff.

Data from the Oregon Food Bank has repeatedly shown that the demand for emergency food boxes has increased significantly since the 1996 welfare law. "Those who provide the social safety net in our communities are not celebrating the third anniversary of federal welfare reform," said Sheketoff. "Only those who calculate the budget savings from the reduced caseload can celebrate, but their cause for celebration is misplaced. We shouldn't be celebrating the fact that we are spending less on welfare while the number of poor families in need of assistance has not declined."

A study released last year by the Manpower Demonstration Research Corporation (MDRC) found that a small portion of welfare-to-work participants were moved out of poverty, while there was a simultaneous increase in the percentage of recipients with combined income under half the poverty level. In late September the U.S. Census Bureau is scheduled to release new data on the number of poor.

The Oregon Center for Public Policy is a Silverton-based nonpartisan research group that analyzes budget and tax issues and government programs, and their impacts on low to moderate-income Oregonians.