This chart is brought by the Center on Budget and Policy Priorities; essentially it shows how many families with children in poverty receive assistance from the Temporary Assistance for Needy Families program since 1979. This means that in 1979….if you had 100 families – 82% of families would receive assistance. In 2010….it’s now 27% of all qualifying families. Now – it’s important to note what changed the dynamic of the social safety net. A much celebrated welfare reform bill – The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 – was signed into law by President Clinton. This bill is frequently touted as evidence of successful conservative policies.
House Republicans passed a budget in in 2011 where they proposed making significant cuts over time to Medicare and Medicaid using the same “premium support” and “block grant” structure they used with welfare reform.
The basic structure to the 1996 Welfare Reform bill…and there are many moving parts – is that the federal government gives a firm amount to be spent on the TANF program each year – and that budget doesn’t change. The TANF block grant is 16.6 billion each year and has been since 1996. Over time due to inflation – the program loses significant value; in fact – the program has lost 30% of it’s value since 1996.
When you hear Republicans talking about “Block Grants” and “Premium Support” with Medicare and Medicaid – they’re really just putting their hand in your pocket. You PAY for those Medicare, Medicaid and Social Security benefits and now they want to apply their “success” with TANF to other “entitlement” programs”
Now – this chart gives you a pretty good idea of what “success” looks like to the Republican party. Remember – people can’t get access to TANF unless they have kids…so we’re talking about children in poverty here. And now as TANF support goes down each year due to “block grants” – families in poverty and deep poverty are increasing; there is a very clear correlation…it means more people are in poverty.
What makes the block grant program worse…is the incentive that states now have to cut their caseload i.e. kick people off welfare rolls – as the CBPP explains:
States’ primary performance measure under TANF, the work participation rate (WPR), is another key program feature that discourages states from assisting families in need. In order to avoid a financial penalty equal to as much as 5 percent of their TANF block grant, states must meet a WPR of 50 percent for all families.
States can offset the 50 percent WPR, however, with a “caseload reduction credit” — a one-percentage-point reduction in a state’s WPR for every percentage point by which the state’s TANF caseload has declined since 2005. Since the credit applies regardless of recipients’ employment status when they leave TANF, states have little incentive to ensure that families have jobs before they exit or are pushed out of the program.
As Fareed Zakaria points out regarding the U.S. problem with income inequality:
We rank 31st of the 34 countries that make up the OECD in terms of the percentage of our population that qualifies as poor. Of the 34 member states, only Mexico, Chile and Israel are worse off than we are.
The U.S. Congress Joint Economic Committee reported to a Senate committee in September 2010:
Severe income inequality may make the economy more vulnerable to a deep recession. In the case of the Great Recession, income inequality fueled economic instability in two ways.
This is about the Republican party continuing to water down the “Social Safety Net” for the people who need it and next up is Medicare and Medicaid. We’ve already written about the Republican plan to eliminate other social safety nets below:
Ezra Klein explains the Republican plan to disable the Social Safety Net:
Paul Ryan’s plan for Medicare and Paul Ryan’s plan for Medicaid rely on the same bait-and-switch: They use a reform to disguise a cut.
In Medicare’s case, the reform is privatization. The current Medicare program would be dissolved and the next generation of seniors would choose from Medicare-certified private plans on an exchange. But that wouldn’t save money. In fact, it would cost money. As the Congressional Budget Office has said (pdf), since Medicare is cheaper than private insurance, beneficiaries will see “higher premiums in the private market for a package of benefits similar to that currently provided by Medicare.”
In Medicaid’s case, the reform is block-granting. Right now, the federal government shares Medicaid costs with the states. That means their payments increase or decrease with Medicaid’s actual rate of spending. Under a block grant system, that’d stop. They’d simply give states a lump sum at the beginning of the year and that’d have to suffice. And if a recession hits and more people need Medicaid or a nasty flu descends and lots of disabled beneficiaries end up in the hospital with pneumonia? Too bad.
Democracy Now explains the Republican proposal to make Medicare a “voucher plan” and Medicaid a “block grant” program just like TANF:
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