Time to invest in poor children and their families

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Time to invest in poor children and their families

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Last year, Congress significantly changed the federal rules that govern how states must operate the Temporary Assistance for Needy Families program.

Time to invest in poor children and their families

Last year, Congress significantly changed the federal rules that govern how states must operate the Temporary Assistance for Needy Families program. This program provides job training and temporary cash assistance to poor families with dependent children. Oregon must adapt its program to meet the new rules, but retains substantial flexibility in how the state program will be structured.

Let’s hope state legislators turn the need to reform our program into an opportunity to strengthen how Oregon helps very low-income children and their families.

The new federal rules passed by Congress require Oregon to increase the share of program recipients who are employed. To do so, Oregon will need to allow more low-wage workers to qualify for job training and cash assistance.

It has never been more difficult for Oregon families to qualify for the program. A family of three living below half the poverty line is now considered too well-off to take advantage of the job training and readiness services the program provides. Only two states make it tougher to qualify.

If a mother of two children earns just $617 a month, she’s too rich for help. Put another way, a mother of two children who works 19 hours a week at minimum wage is ineligible because she earns too much money. In the early 1990s, the same mother could work nearly 30 hours a week at minimum wage and still be eligible for assistance.

Not only is it hard to qualify in Oregon, but once accepted the cash assistance doesn’t help as much as it used to because the assistance families receive has not kept up with inflation. In the last 15 years, the assistance available has lost nearly a third of its value.

The Legislature has the opportunity now to increase both the income limit and the assistance amount. These increases are long overdue.

Legislators also have an opportunity to restore a policy of allowing families benefiting from the program to receive at least some child support. Since welfare reform, Oregon has required families receiving temporary cash assistance to hand over to the State all of their child support. Prior to welfare reform, Oregon allowed families to keep $50 a month in child support; the State kept the rest.

Wisconsin allows families to keep all child support. Research on this approach has concluded that the policy makes economic sense for the State because families seek less public assistance when they are allowed to receive all of their child support payments than when they are allowed to receive only some of these payments. Moreover, non-custodial parents – typically fathers – increase their child support, presumably because they know more of the money is reaching their children.

For more than a decade of welfare reform, Oregon’s Temporary Assistance for Needy Families program has been focused on reducing the number of families receiving assistance. But a family that is ineligible for assistance is not necessarily self-sufficient. Oregon’s caseload of families with dependent children is less than half its early 1990s size, but the state’s poverty rate among families with children has not changed.

The Temporary Assistance for Needy Families program is a children’s program. It should help the parents of children living in poverty stabilize their lives, find and keep a decent job, and escape poverty. The current program fails to do this, and that is costly to Oregon and the U.S. in the long run. A careful study released earlier this year estimated that child poverty in the U.S. is costing the nation about $500 billion each year, in part because of reduced productivity and higher health costs.

Oregon legislators have a chance to do better. It’s time for a Temporary Assistance for Needy Families program that seeks a lower caseload only because we have a lower poverty rate among Oregon families with children. In the long run, we’ll be glad we made the investment.


OCPP

OCPP

Written by staff at the Oregon Center for Public Policy.
Michael Leachman

Michael Leachman

Michael Leachman is a former policy analyst at the Oregon Center for Public Policy.

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