Rising Welfare Costs

September 28, 2010

The Government Accountability Office (GAO) released Congressional testimony last week looking at Temporary Assistance for Needy Families (TANF).  TANF, which replaced unrestricted welfare in 1996, has reduced welfare rolls and encouraged recipients to obtain work.  Unfortunately, TANF's goals have been undermined, says Tad DeHaven, a budget analyst with the Cato Institute.

The GAO notes that "work participation rates...do not appear to be achieving the intended purpose of encouraging states to engage specified proportions of TANF adults in work activities."

  • States are required to have at least 50 percent of eligible TANF recipients from single parent families participating in work activities.
  • However, states are given various credits and exemptions that significantly reduce the number of recipients required to work.
  • As a result, only about 30 percent of TANF recipients engage in "work activities," which is often liberally defined.

Moreover, while TANF has successfully reduced the budgetary cost of cash welfare, overall federal spending on antipoverty programs has increased dramatically -- 89 percent over the present decade, after adjusting for inflation.

With so many Americans currently in need of assistance, now is actually a good time to discuss the role of government in taking care of the less fortunate, says DeHaven.

Source: Tad DeHaven, "Rising Welfare Costs," Cato-at-Liberty.org, September 22, 2010.

For text:

http://www.cato-at-liberty.org/rising-welfare-costs/#utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Cato-at-liberty+%28Cato+at+Liberty%29&utm_content=Google+Reader

For testimony:

http://www.gao.gov/new.items/d10815t.pdf

 

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