Thursday, August 25, 2016

Debunking the welfare myth: Most help doesn't go directly to poor

Posted By on Thu, Aug 25, 2016 at 9:59 AM

538.COM
  • 538.com
Here's some myth-busting for Arkansas Republicans on welfare, courtesy of fivethirtyeight.

The key point: Far less money goes directly to needy families. States have taken over most programs and funding has been flat, while the number of people eligible has risen sharply. The way the money is spent has changed, too.

In 1998, nearly 60 percent of welfare spending was on cash benefits, categorized as “basic assistance.” By 2014, it was only about one-quarter of TANF spending. That shift has happened despite a burgeoning economics literature suggesting that direct cash transfers are in many cases the most efficient tool to fight poverty.

Some of the money that used to go to cash assistance now goes to other noncash aid programs, such as child care assistance or work-related activities, and to refundable tax credits that are essentially a different form of cash transfer. But by far the biggest increase comes in what Pavetti’s group classifies as “other,” which the center says “covers a broad range of uses, including child welfare, parenting training, substance abuse treatment, domestic violence services and early education.” Those programs might be worthwhile in their own right, but they don’t have much to do with the original goals of welfare. In 2014, about one-third of TANF spending went to “other” areas, up from 12 percent in 1998.
Another way to put it, seems to me, is that the reduced per-person spending on "welfare" is going to pay people who provide services to poor people, not directly to poor people. To hear Arkansas legislators and the governor talk, you'd think the poor in Arkansas are on a gravy train — hence no tax breaks for them, just for richer people; more fees on medical services; college scholarships skewed toward the upper income, and all the other policies that arise from the myth of the lucky welfare ducks.

Arkansas is particularly miserly. It spends 7.9 percent of its welfare money on cash assistance, a lower percentage than any state except Illinois. The national average is 26.5 percent. And you could be asked to pee in a cup to get what little is handed out.

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