The End of Welfare as we Know it

The board of commissioners of each county (shall) MAY annually levy taxes and fix a rate sufficient to produce (the full) AN amount (required) for poor relief, general assistance, aid to dependent children, (sufficient to produce the full amount necessary for each such item) for the ensuing year (and any commissioner who shall fail to comply herewith shall be guilty of a gross misdemeanor and shall be immediately removed from office by the governor).

You wouldn't have heard about this in the news, but on April 9 the Minnesota Legislature did something extraordinary. In a vote that took all of two minutes, with no debate to speak of, it abolished a legal tradition going back some 500 years: the requirement, known as the Poor Law, that government make sure that people survive.

Of course, you could argue that the change amounts to little more than legislative housecleaning. It was only one of a series of steps that soon will affect one in every eight American families. And then, the fallout will get to the rest.

Welfare reform won't hit all at once--in fact, as far as most of us will be able to tell, it won't "hit" in any noticeable way at all. The bill Congress passed and President Clinton signed last year was carefully crafted that way. No two of its changes would take effect at the same time; no one would hit huge numbers of people in the same way; and everything has to make its way through layers of bureaucratic implementation and individual adaptation, ensuring that by the time the effects are felt, any backlash will be muted and partial. It's no easy task to put your arms around what has already happened, or what's to come.

"Marv" is in his 40s, kind of frail-looking and quick with a joke. It isn't until you've been around him for a while that you realize that something is not quite right about his internal wiring. He was never diagnosed with brain damage, though he had been beaten up a lot and ended up in the hospital a few times. All he really had was an official piece of paper showing he was addicted to alcohol. That got him federal Supplemental Security Income (SSI), a monthly benefit of $470. The checks would be sent to the Alliance of the Streets, a church-basement agency in downtown Minneapolis. Caseworker Tom Logeland then would pay Marv's rent and utilities, and hand him whatever cash was left.

In November, Marv and the other 1,500 or so people in Hennepin County who received SSI because of a drug or alcohol addiction got a letter informing them that the next check would be their last. Jan. 1 was the date on which Congress had decreed all benefits to people like them would cease. After that, they were on their own.

Marv was lucky: He was diagnosed with cancer recently, and that has prevented the elimination of his benefits. A few weeks ago, though, Logeland checked on the fate of the 100-or-so other people whose benefits he used to administer. Only about 40 are still coming to see him every month; like Marv, they have been diagnosed with another disability and have kept their benefits. Some of the remainder got on their feet economically. Others ended up in Hennepin County's "warm waiting space," where, says Logeland, "It looks like Calcutta these days." (The warm waiting space is what Hennepin County came up with after it stopped its guarantee of emergency shelter for everyone who needed it. Some 300 people now line up every night at a building on Currie Avenue to reserve a 30-by-80 inch piece of floor space to sleep on.)

Folks like Marv were the first group to see the results of the new welfare law--perhaps not coincidentally. Next on the list was another "undeserving" group, people considered able-bodied who don't have a job and get food stamps. Starting Jan. 1, they can only get the grocery subsidy--an average of $65 a month--for three months every three years unless they participate in a work program. Most places don't have such a program and those that do, like Hennepin County, aren't equipped to handle large caseloads.

The next target of welfare reform is disabled seniors and children. By August 1, many elderly immigrants, mostly the parents and grandparents of U.S. citizens, will be cut off from SSI or food stamps, usually their only source of income. Statewide, some 5,400 people are affected, most living in Hennepin and Ramsey counties.

In addition, SSI benefits will stop to all children--citizens or not--whose disabilities Congress has deemed not appropriately severe. Mostly, that means kids who have not one disastrous condition, but several milder ones; for example, a child with an IQ of 75, moderate cerebral palsy, and speech difficulties no longer qualifies. Nationally, the Congressional Budget Office estimates, some 300,000 children will be cut off this way. In Hennepin County, almost 1,500 cases are being reviewed, and at least half are expected to lose their benefits. All the children live in families with incomes under $30,000.  

And finally, there are the reform's subtlest and hardest cuts--across-the-board reductions in programs like food stamps, child nutrition, and the so-called Social Services Block Grant. (In a rather Machiavellian move, the block grant--which funds a lot of popular programs serving low-to-middle-income families--was cut by 10 percent, but states were given the option of transferring some of their welfare money back into it.) There is no more money, for example, to serve a snack to low-income kids who spend eight hours or more in child care. And food stamps--used by one in 10 American households, the majority of them headed by workers who can't make ends meet--are cut 20 percent, or an average of $355 per family per year. Most of these reductions have barely registered in the headlines, failing as they do to produce any immediate, dramatic changes. All they do is make life a bit more miserable.

One little-known fact about welfare reform is that these cuts to immigrants, disabled children, and food stamps actually make up 90 percent of the bill's projected savings. But they weren't what got most of the attention. When Clinton started talking about "ending welfare as we know it," everyone knew who he was referring to: single parents, mostly women, raising children on AFDC.

While AFDC took up most of the federal bill's 1,000-plus pages, the result was remarkably unspecific. Many of the key details--just how long to give people assistance (as few as two years in a lifetime), how much cash to give them (as little as zero), and so on--were left up to states and counties. The results so far are both wildly different and remarkably similar. In some states, the hammer is coming down hard and fast; in others, it's coming down just as hard, but wrapped in a bit of velvet.

Minnesota has a reputation as a velvet state; its welfare-reform effort has been touted as kind, generous, and nationally precedent-setting. But behind the benevolent smile there are sharp teeth. When the Legislature was debating the welfare bill that finally passed Monday, it spent a great deal of time talking about how to punish recipients for any number of offenses. People convicted of drug felonies, for example, will now have to submit to random drug testing. (Under the federal law, they may be terminated altogether; murderers, rapists, and other felons still qualify.) Women who don't "cooperate" in tracking down their child's father will get their grants cut. The House almost adopted a provision to take money from families where children regularly skip school. And while the federal bill allows states to collect and spend as much on welfare as they did in 1994, Minnesota seems poised to cut back to 80 percent--exactly as far as the feds will allow.

The model for the new system, to be implemented by the end of this year, is the Minnesota Family Investment Plan. Kicked off in 1994, it offers parents child care, health coverage, and even a cash subsidy until their total income reaches 140 percent of the federal poverty level, or just over $18,000 for a family of three. Eighteen months after it started, state officials proudly reported that 52 percent of the participants were working.

That figure, while statistically significant, turns out to be not exactly overwhelming. Among the "control group" of families who didn't get any special services, 37.5 percent had found jobs on their own. And 44 percent of MFIP families still lived in poverty after those 18 months--less than the 60 percent among regular recipients, but still a lot. Three years into the program, no new data--on, say, how many of the people who originally got jobs have lost them since and gone back on welfare--are available.

But welfare reform, as most of those involved will admit, isn't just about data and results; it's also about symbols and atmosphere. Nowhere is this better understood than at the Hennepin County welfare office, which a few years ago moved from its dingy headquarters near City Hall to a converted vocational high school across from the Convention Center. City politicians nearly freaked when they heard that; they calmed down only when the county promised that its most unsightly clients, the adults on General Assistance, would enter the building through a back door. Besides, the county promised, Century Plaza wouldn't really be a welfare office; it would become a "workforce center" with a whole new attitude.  

What they have in mind, says program manger Joe Gaspard, is eventually to make job-finding activities the core of the office's mission, while "traditional welfare services" move behind the scenes: "We'll have people here who deal with re-employment insurance, which is what used to be called unemployment, from the state Department of Economic Security, which used to be called the Department of Jobs and Training." In other words, they'll merge what used to be the welfare office with what used to be the unemployment office.

Under Minnesota's new welfare system, all clients will be interviewed by a job counselor to see if they're "suitable" for work (chances are, if they breathe, they will be). Then they'll have to start seeking employment, 30 hours a week for a couple of months. If they don't succeed, more intensive "case management" kicks in. Recipients must develop an "employability plan," which could mean any number of things, including education--but no more than 12 months' worth.

If they do find work, welfare recipients will still get some of the things they got under MFIP--child care, medical coverage, and a cash subsidy. Their total income, however, will be smaller in most cases, and of course subject to cutting if they don't "cooperate" properly. Perhaps most significantly, the bill allots almost no new money for training and education: Where the old MFIP spent an average of $3,600 on such services per recipient, the new figure will be closer to $1,300. By way of comparison, Twin Cities RISE, a nonprofit that works mostly with unemployed men, spends about $8,000 for each welfare-to-work client. Marriott Corp., which runs a program training welfare recipients to work in its hotels, averages $5,000.

The lawmakers are operating on the theory that it shouldn't take much to move welfare recipients into work: After all, business groups regularly complain that jobs are going begging in the metro area.

The actual figures, though, are more complex. According to the state Department of Economic Security, there are some 46,000 job openings during an average month in Minnesota. During the same month, 148,000 people are looking for work, making for an approximate ratio of 3:1. And that's before you throw in any of those welfare-to-workers.

Then there is the matter of wages. To raise two kids in anything resembling decency, the group Jobs Now has calculated, a single parent in the metro area would need to make about $12.66 an hour, or almost $23,000 a year. To live just above the federal poverty line, the same parent would need at least $7.21 an hour. But of those 46,000 available jobs, the majority show up under descriptions like "cashier" (average salary $5.50 an hour); "fast-food server" ($5.25); and "housekeeper" ($6.50). When you count only jobs paying more than $7.50 an hour, the number of jobseekers per opening jumps to six.

And competition turns ferocious for those with a high school diploma or less--the education level of fully 60 percent of job seekers, and 85 percent of welfare recipients. At least 10 high school graduates compete for each job paying more than $7.50; those without a diploma have to battle 67 others for each such job.

What will happen to those who fail to secure a foothold in the labor market is something few politicians want to talk about. Privately, a lot of them say they hope that Congress will go back and change the five-year limit. But not all believe it. "It took 66 years to get to this point," says one Hennepin County official. "I think a lot of cities can burn before they go back."

The most immediate effects won't be on the scale of cities burning. Programs for poor people have been cut for the past two decades without causing riots; and even a growing misery index--the famous 1 million children the Congressional Budget Office estimates welfare reform will push into poverty--won't show up for everyone to see. Reformers often note how a few years ago the state all but eliminated the Work Readiness program that provided cash assistance to adults without children, and "nothing happened." (Of course, plenty happened; witness the skyrocketing demand for homeless shelter space.)

But dig a little deeper and you find a surprising amount of specifics on welfare reform's likely ripple effects. Hennepin County, for one, has produced a remarkable document spelling out the potential impact right down to the need for increased security for staff. In essence, officials recognize that the reform amounts to a giant experiment with live subjects. "It is impossible to predict the behavior of people," the report notes, "whether they will move into jobs or lose their housing."  

Those unknowns noted, here's some of what planners figure will happen.

* On housing: "1,500 people in Hennepin County are expected to lose all sources of income support and another 3,000 will see their income cut by more than half. A portion of these 4,500 are expected to be homeless, at least temporarily, unless they can immediately find a job." That, the report notes, is only counting the most drastic cases, not the tens of thousands whose incomes take smaller, more gradual hits.

Even for those who do have stable incomes, the chances aren't very good. Twin Cities rental vacancy rates are still near a record low of 2 percent; the average one-bedroom apartment costs nearly $500 a month, and landlord blacklisting has made it almost impossible for people with crimes or evictions in their past to find a place to rent. In the past, public and subsidized housing provided something of a safety net. But it, too, has been eroding for almost two decades, with a particularly massive hit in the last round of Congressional appropriations.

* On child care: Both federal and state reform laws prohibit government from cutting benefits to parents with children under six who want to work but can't find child care. (Those with school-age children are on their own.) The feds did appropriate extra money to pay for child care; it falls an estimated $1 billion short of the need. Hennepin County planners say they can find money--though not, at least right now, the facilities--to serve all the welfare recipients who will be required to work. What they don't have is funding for the Basic Sliding Fee child-care program, under which working families who aren't on welfare can get inexpensive care. The county figures that there's enough money for 900 additional families--welfare and nonwelfare combined--but some 5,500 families need the service. If all welfare parents were to go to work, that figure would double.

Welfare families thus are pitted against those barely above them on the income ladder. People moving off public assistance will have precedence for the sliding-fee program, taking up slots other families have been waiting for (currently, the backup is about 18 months). It's not hard to envision working families having to go on welfare so they can get child care, then losing it after a few years--and so on, until their five-year clock runs out. "Conflicting goals," the document judiciously concludes, "could arise."

* On family breakups: Right now, when children are taken away from their parents, one of two things usually happens: They end up in foster care, or their custody is legally transferred to someone else, usually a relative. But, notes the county report, people who accept responsibility for relatives' children are often forced to quit working to care for them, especially if the children also have behavioral problems or are disabled.

In those cases, until now, AFDC and SSI have provided some source of support. But SSI will be eliminated for many children, and AFDC (now to be called Temporary Assistance to Needy Families, or TANF) won't last more than five years. The likely upshot is that a number of children who might have stayed with an aunt or a grandparent will now end up on the foster-home circuit--at a much greater cost to taxpayers.

* On medical care: Under the federal legislation, all of the people cut from public assistance--SSI children, immigrants, and TANF families whose clock has run out--will also be dropped from Medical Assistance, for a total of 400,000 people nationally. States have the option of providing medical coverage from their own money, and right now it looks as if Minnesota will do that. But General Assistance Medical Care, as the state program is called, has fewer benefits and lower reimbursement rates; some doctors and clinics won't want to treat those patients, and those who do will face a financial squeeze. And everybody knows where those who can't get service will eventually end up: at the county medical centers, the last public institutions that must serve all in need.

* On neighborhoods: One of the biggest unknowns of welfare reform is how it will hit already-teetering local economies. In Minneapolis as of the 1990 census, public assistance accounted for more than 5 percent of the income in seven neighborhoods: Phillips, Near North, Harrison, Central, Hawthorne, Elliot Park, and Sumner-Glenwood. Local grocery stores are likely to be among the first to see the impact; some small corner markets are expected to go belly-up, and large chains will reconsider inner-city locations. Mortgage companies are bracing for more home foreclosures. And landlords foresee evictions as families double up, leading to citations for overcrowding.  

* On the "community sector": For a long time now, private charities have functioned as the "safety net below the safety net," catching people who fall through the cracks further up. Most of them are neither willing nor equipped to deal with the wave that's coming at them now. At the same time as needs are increasing at soup kitchens and foodshelves, resources are shrinking. The foodshelf at Pilot City Health Center in North Minneapolis served 50,000 people last year, 8,000 more than the year before. Donations during the same period dropped by 10,000 pounds. The problem is about to get incalculably worse: Total cuts in the federal food-stamp program amount to exactly four times the total amount of groceries on all the nation's foodshelves last year.

The list could go on, but the point is clear: For the next years or decades, expect that no matter which rock you turn, you'll find some piece of welfare reform. Some of it will be so far removed from the reform itself it will be hard to spy a connection. What goes on in neighborhoods where property values fall as homes are foreclosed and landlords can't find paying renters? Just what do the cops figure will happen as, in the words of the Hennepin County report, "people resort to extreme measures to feed their families"?

Some of the fallout, however, comes in images so crisp and clear they're hard to ignore. Last winter, when it became clear that even the latest, biggest version of the "warm waiting space" was overflowing, Hennepin County sent a staffer out to investigate other places where people might sleep on the floor. In addition to a variety of government-building lobbies, the spots he checked out included the parking garage underneath the Government Center. It didn't ultimately make the list, but there's still time.

News Intern Margaret Delahanty contributed to this story.

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