States are Hoarding Welfare from the Needy

Tax season has just ended. While nobody likes the hassle that filing taxes creates, the underlying philosophy behind them is simple and shared: we pay taxes so that the child down the street gets an education, or so the single mother of three gets the support she needs.

Despite widespread support for public assistance programs themselves, polls conducted by Data for Progress and Vox report that a rising number of Americans are concerned about the ways in which welfare can be abused.

So Americans are concerned about welfare hoarders. But there’s an even worse scandal happening– one happening on a much larger scale, one with much deeper ramifications, and one that’s happening right under our noses: welfare hoarding by state governments.

In late December of 2021, ProPublica released damning evidence of states withholding a total of $5.2 billion in public assistance. The funds, issued by the federal government, are part of the Temporary Assistance for Needy Families program, or TANF*. The program is designed to finance state efforts towards job preparation, work assistance, child care assistance, and others. 

*(To be eligible, one has to be underemployed or unemployed, have low or very low income, and meet one of the following criteria: (1) have a child 18 years of age or younger, (2) be pregnant, or (3) be 18 years of age or younger and the head of your household.)

It should be established that this behavior is not illegal. TANF is part of a Clinton-era welfare reform law called the 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), and its funds are issued via block grants– this ensures that the states have broad discretion over their welfare eligibility requirements. The one condition–yes, just one–laid on the states is that the funds are applied to meet some of the basic needs of recipients, such as food, gas, or diapers, but these weren’t strings attached by any means. The states reserve overwhelming authority on who gets the funds and why.

A senator from President Clinton’s own party, then-Sen. Carol Moseley Braun (D-Illinois), predicted this quite perceptively:

“If we send the states this money in a block grant, there is nothing to prohibit that state from saying we do not want to have assistance for poor children … We are not going to address the issue of job creation. We are not going to train people to go back to work. We are not going to provide the children with any assistance. We are just going to further squeeze the amount of resources devoted to the whole issue of poverty in our state and we are going to take the money we get from the federal government and use that to go from year to year and not maintain our own effort. I think that would be a real tragedy.”

Braun’s “race-to-the-bottom amendment,” drafted to hold states accountable before they “underbid one another” in delivering assistance to the poor, never made it to President Clinton’s final bill in 1996.

Upon its enactment in 1996, TANF funds reached 68 out of 100 families in need of assistance. Because of the privilege and autonomy of the states, that’s since been reduced to a staggering 21 out of 100 families in 2020.

There are several layers to this misconduct: first, it should be understood that some states are more guilty than others, and second, not all are to blame. According to ProPublica’s analysis, Maine, Tennessee, Hawaii, Oklahoma, and Nebraska are chief among this affair.

Tennessee is loitering with the largest pool of funds–a whopping $790 million. Together with Hawaii and Maine, Tennessee forms a tripartite of withholding the most assistance per capita. 

Nebraska rejected 90% of its applicants, behavior that correlates with a macro-level trend of unspent TANF funds doubling yet approved applications being cut in half. See the data below from the Department of Health and Human Services.

ProPublica reports that instead of using the block grants towards their intended purpose, the states pocket them and throw them at gaps in their annual budget– completely unrelated to the needs of low-income families. 

The billions stashed away reached a peak at humanity’s worst: the COVID-19 pandemic. The national poverty rate from June to November 2020 made its widest jump since the government began monitoring it around 60 years ago, going from 9.6% to 11.7%.

This is a very broad picture, but the countless stories of low-income families suffering due to this negligence go underreported. Bonnie Bridgforth has one of those stories. See her story here.

The states have run amok with complete disregard for the plight of low-income families. They rejoice in their freedom at the expense of the poor’s. They enjoy a federal government that throws millions at them with few conditions. And the conditions that ARE there? Watered down and without teeth. Indeed, as if entering an age of austerity, we’ve seen states act in the interest of “budget balancing” and “fiscal responsibility” rather than in the interest of needy families. This is “states’ rights” in practice, and the poor are suffering because of this blatant impropriety.

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