The latest report on child poverty gets it wrong on welfare-to-work requirements

Yesterday the Board on Children, Youth, and Families of the National Academies of Sciences, Engineering, and Medicine (NASEM) released “A Roadmap to Reducing Child Poverty.” The basic purposes of the report are reviewing current levels of child poverty in the US, assessing the effectiveness of current programs and policies designed to reduce child poverty, and making recommendations for changes that would cut child poverty in half in the next 10 years.

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Needless to say, that’s an ambitious goal.  Unfortunately, the report focuses almost exclusively on new “investments” (read: more federal spending) as its method of reducing poverty in the future.  The report notes that both of the policy “packages” that “meet the ambitious goal of reducing by half the number of poor children” would “require an investment of between $90 and $110 billion per year.”  That’s well more than current spending on the earned income tax credit (EITC) or food stamps, and over five times current federal spending on the Temporary Assistance for Needy Families (TANF) program, the major cash welfare program for low-income families with children.

The policy proposals in the report are similarly discouraging.  As described in the 18-page summary of the report, the proposals largely ignore, and risk undermining, the work-based reforms that took place over the last generation and helped millions of families lift themselves out of poverty.  Indeed, the most important event in that recent history was the 1996 welfare reform law, which conditioned cash welfare benefits on low-income parents working or preparing for work. Combined with a strong economy and an expanded EITC, those reforms led to significant increases in work and earnings among low-income parents, and equally sharp declines in the number receiving welfare payments.  And those increased earnings — and continued access to important “work supports” like child care, the EITC, and Medicaid — led to sharp drops in child poverty.  For example, the poverty rate for Black children fell to the lowest levels ever recorded in 2001, after falling steadily in the years following welfare reform.

Yet despite that history, the summary of the report doesn’t even mention the 1996 welfare reform law.  Also unmentioned is the idea of applying welfare-to-work requirements to other programs.  Instead, and despite the post-1996 reform experience of plummeting poverty rates, the report suggests that “It appears that work requirements are at least as likely to increase as to decrease poverty.”

Meanwhile, the specific policy “options” included in the report, which include several proposals by current Democratic presidential candidates, have an almost shopworn feel, as they focus mostly on increasing current spending:

• “expanding the Earned Income Tax Credit”
• “expanding child care subsidies”
• “raising the federal minimum wage”
• “expanding the Supplemental Nutrition Assistance Program”
• “expanding the housing choice voucher program”
• “expanding the Supplemental Security Income (SSI) program”
• “introducing a universal child allowance (which, in the U.S. context, can also be thought of as an extension of the federal child tax credit delivered monthly instead of once a year)”
• “increasing immigrants’ access to safety net programs”

Expansions of SNAP, housing, SSI, benefits for immigrants, and a “universal child allowance” especially suggest this report could become just the latest example of how the “consensus solution” to poverty is to “hand people cash” without requiring much or even any work in exchange.

For example, the report notes: “A $3,000 per child per year child allowance policy would produce the largest poverty reduction, and it would meet the goal of reducing deep poverty (50 percent of SPM poverty) by half.”  This proposal to simply give parents more money not only ignores the key work-based lesson of welfare reform, but also the basic reality experienced by tens of millions of families in America each day: That to escape poverty one or preferably two parents need to work, generally full time.  Depending on a government check, or waiting for a bigger government check, is not enough. Unfortunately, that sort of basic logic gets short shrift in yesterday’s report.

That also points to a final problem with yesterday’s report. Its immediate mission — cutting child poverty in the next decade — might bolster the shortsighted thinking that progress in cutting poverty can only be achieved through increasing transfer payments.  That’s how experts saw things before 1996, too.  (If this report were written back then, one suspects “expanding the Aid to Families with Dependent Children program” would be high on its list of policy options.)  But as experience since then shows, there is a better way.  Indeed, the impressive gains made against poverty after 1996 continue to support promoting more work and earnings by parents as the better, and more enduring, solution to poverty.