Literature Review

Abstract

          The welfare system in America has been a debatable topic for most Americans.  There are some that agree with it and others who don’t, but not many really understand it and its purpose.  This literature review provides information about the welfare system and its purpose in America.  It gives details as to why the welfare system is accepted by some and why it is criticized by others.  It provides methods that the government has used in the past as well as methods that it is currently trying to devise to make changes to the welfare system.

Introduction

          The Welfare System in America and Its Effect on Society: A Review of the Literature

          Welfare in America has become a controversial issue since its creation.  It was first implemented to help families in need but as time has passed the views about welfare have changed.  Some of the American public has criticized the welfare system while others think that it has been successful.  Single parents have been a target of this issue as today’s economy keeps dwindling down as unemployment and poverty have gone hand in hand with this controversial topic.  The American government has conducted welfare reforms in the past that have in part been unsuccessful.  Legislators are currently trying to devise a method to better the welfare system as Americans know it.  In order to understand the welfare system and its effect on society as well as the view of others on this issue, the following four questions will be answered:

1.What is the welfare system in the United States?

2.How much federal funds go to the welfare system and how is that used?

3.How does welfare affect/benefit families and the national economy?

4.What reforms does the federal government have planned for the welfare system?

The following section will focus on defining what the American welfare system is and how it affects society.

What is welfare system in the United States?

          Welfare is a program that has been implemented to help people in need due to financial hardships, medical conditions and employment difficulties.  The American welfare system, as Americans know it, was introduced during the Great Depression because of the increasing number of families in need.  The plan of the federal government was to fund a program that would provide assistance to those families.  Welfare dates as far back as the early days in American history.  The colonies brought with them the British Poor Laws which provided cash assistance to people that were unable to work because of their age or poor health and public service employment to people who were able to work but were unemployed at the time (The History of Welfare, 2012).  It was not until the Great Depression that the welfare system as Americans know it evolved.  The unemployment rate went up to 25% during the Great Depression which in turn led President Franklin D. Roosevelt to create the New Deal; the program that brought federal government involvement into the economy.  Different agencies that dealt with recovery, relief and reform stemmed from the New Deal.  The agency that dealt with welfare programs was the Social Security Act of 1935 (The History of Welfare, 2012).  Under this act unemployment compensation, pensions for retired persons and public assistance programs for dependent mothers, children and the physically disabled were administered.  Today the Social Security Act is America’s most expensive and domestic program.  Many of the welfare programs now fall under the United States Department of Health and Human Services, the United States Department of Agriculture, the United States Department of Housing and Urban Development and the Federal Housing Administration.

          The United States Department of Health and Human Services has agencies such as the Administration for Children and Families and the Centers for Medicare and Medicaid Services that provide different types of assistance such as the Temporary Assistance for Needy Families (TANF) and health coverage (HHS Leadership, 2012).  The United States Department of Agriculture provides food and nutrition services through the Supplemental Nutrition Assistance Program (SNAP) and Women, Infants, and Children (WIC).  The United States Department of Housing and Urban Development and the Federal Housing Administration provide rental assistance and affordable housing to low-income families, the elderly or persons with disabilities through programs such as Public Housing and Housing Choice Voucher (Section 8) (Williams, personal communication, 2012).

          Williams (2012) states that in order to qualify for welfare benefits, applicants must meet a certain criteria such as income status, family size, and any crisis situation such as medical emergencies, pregnancy, homelessness or unemployment and that all applicants must fall under 80% of the median income (personal communication).  Flores (2012) stated that only a handful of applicants earn $35,700 a year and still qualify for benefits and that applicants must be U.S. citizens or legal residents in order to qualify for government assistance.  She also mentioned that programs such as TANF are restricted to pregnant women and families with children.  There is a lifetime 60 month time limit for TANF recipients and they must find employment within 2 years of receiving benefits.  Single parents must work 30 hours a week and two parent families must work 35-55 hours a week in order to continue to receive TANF (personal communication).  If qualified, a recipient is eligible for food stamps in the amount of $200 for the first person in the household and $142 for each additional person.  WIC is available for pregnant women, infants and children up to age 5 who are considered to be at a nutritional risk (Williams, personal communication, 2012).  There is a waiting period of 2-4 years for public housing and 2-5 years for section 8 housing.  The minimum amount that an individual has to pay for public housing is $0 if unemployed and $50 for section 8 housing (Flores, personal communication, 2012).

          It has now become more common to see people on welfare benefits because of the current American economy at hand.  More and more people have lost their jobs and are now considered “the new poor” (CBSNEWS, America’s New Poor Fending for Food, 2011).  Some people are skeptical and even embarrassed to apply for benefits even though they need them but there is no shame in asking for help.

How much federal funds go to the welfare system and how is that used?

          The federal government has an annual budget for the welfare programs that is funded by revenue from the taxes that are paid by the nation’s citizens.  Twelve percent of the United States government budget goes toward welfare.  In fact, the 2011 total spending on welfare was .7 trillion dollars (Flores, personal communication, 2012).  The Department of Agriculture received 68 billion dollars in 2010 for the agency’s Supplemental Nutrition Assistance Program.  This is double the amount for 2007 (Khan, 2011).  The spending levels for the WIC program in 2009 were at 6,658 million dollars (Williams, personal communication, 2012).

           Welfare has become more and more attractive for Americans as the economy has plummeted.  Records show that the amount of people on welfare in America has doubled in the past 15 years.  Even though the number of recipients has doubled it has also been cut by half in some of the welfare programs.  TANF is one of these programs that have been cut in half in the number of recipients.  The average amount of TANF recipients for 2011 was 4,675,837 with 1,043,032 of those recipients being single parents (Williams, personal communication, 2012).  Williams (2012) also stated that TANF has been credited as being a successful program given the fact that the number of TANF recipients in 1996 was 12,320,970 compared to the present number (personal communication).  On the average there were about 40 million people on SNAP (food stamps) in 2008 and it was expected to reach 43.3 million for the fiscal year of 2011 setting records across America (Abbott, 2010).  The number of WIC recipients has shown a sharp increase since the time it was permanently authorized in 1974.  The first wave of participants in WIC was an estimated 88,000 people and from there rising to an average of about 8.7 million in 2008.  Children have always been the largest category of WIC participants.  In fiscal year 2006, approximately 25 percent of WIC participants were women, another 25 percent were infants and 50 percent were children between the ages of 1 thru 5.  Despite the many health benefits that are associated with the WIC program many eligible women do not participate during pregnancy and many households exit WIC when a participating child turns 1 year old. (Jacknowitz & Tiehen, 2010, pg. 6-8).

How does welfare affect/benefit families and the national economy?

          With divorce being as common as it is in modern America and the recent economic downturn have led more and more single parents to apply for welfare benefits.  Some believe that single parents receive welfare as a temporary solution to their financial problems while others believe that single parents abuse the welfare benefits.  The benefits of single parents being on welfare are very beneficial to them and their household members; especially the children.  Single parents might find themselves in a struggle to provide for their children.  Sometimes child support might not come in when expected and the help that that income provides is not met.  Sometimes parents can fall ill and as a result of their illness they might lose their job.  They might have to apply for benefits while waiting for disability qualification.  In some cases, their family is not able to help them financially and they might feel as if they are cornered.  Another reason why many apply for welfare is that the United States is currently in a healthcare crisis and the medical care might just be too high for single parents to afford it.

          Sometimes welfare can affect single parents and their families by making it even harder to transition from welfare to work.  As long as parents are able to find a job and still meet the income requirements they are still eligible for benefits.  The problem is that if they get a raise then possibly their welfare benefits could be reduced or even terminated.  Their raise still doesn’t get them out of poverty but they no longer qualify for benefits.  In the end, single parents might be more hurt than helped.  By finding work single parents might also be worse off in their well-being because of time taken away to raise their children which in turn can lead to neglection and children growing up in a deviant manner due to the absence of the only care provider (Bauman, 2000).  Sometimes it might seem as if single parents are better off on welfare than working.  Williams (2012) stated that single mothers are the primary applicants as wells as recipients of welfare benefits.  It is considered that welfare affects marriage and childbearing decisions by providing a clear financial incentive for early non-marital childbearing, postponement of marriage, divorce, postponement of remarriage and other behaviors that make eligibility for welfare benefits more likely or that avoid the loss of eligibility after it has been achieved (Moffitt, 2000, pg. 393). Another problem with welfare that can affect single parents is that it can also encourage dependency.  They can get comfortable with the current situation of receiving welfare benefits and the optimism of finding work soon fades away.  Generational welfare can also stem from this lack of motivation to succeed.  Another problem is recent situations in different cities across America that gave out section 8 housing voucher applications on a first-come-first-served basis.  One event in Atlanta, GA that was expecting 10,000 people had a turnout of 30,000.  There was chaos and even 62 people required medical attention due to upper respiratory issues and heat related issues throughout the event.  The event was considered to be successful according to housing authority officials (YouTube, Thousands Line Up in Atlanta for Section 8 Housing Applications (Welfare) and All Hell Broke Loose, 2010).  Events like this clearly demonstrate the peoples’ level of desperation and willingness to do whatever it takes in order to get a portion of the welfare benefits.

          The national economy was positively impacted when welfare was implemented during the Great Depression because its primary goal was to assist needy families and reduce poverty therefore improving the economy.  It was deemed successful all through the welfare reform under the Clinton administration when poverty levels dropped to a record low of 11.3 percent from 15.1 percent.  Political leaders stated that welfare was a success when many people got off welfare during the Welfare Reform of 1996 due to the Welfare to Work program while critics claim that it was the booming economy of the 90’s that set these changes in motion (McKernan & Ratcliffe, 2006).

          Just like the national economy has been positively impacted it has also been negatively impacted.  In this time of economic recession welfare spending has been getting lots of attention by legislators and the American public.  The American government spent nearly 1 trillion dollars in 2011 on welfare programs.  With more and more people getting on welfare the funding for other agencies or programs is reduced (Flores, personal communication, 2012).

What reforms does the federal government have planned for the welfare system?

          During the Clinton Administration, President Clinton signed the TANF into effect; also known as the Welfare Reform of 1996.  Under this reform, the Personal Responsibility and Work Opportunity Reconciliation Act would aim at moving families off the welfare rolls and into work.  President Clinton claimed that the welfare reform would change welfare as Americans know it.  Welfare was taken off the hands of the federal government and was given to be controlled by the states.  Each state would set their own criteria and policies regarding welfare benefits and eligibility.  In fact, the welfare reform is considered by many to have been a failure.  Of course, it got families off of welfare and into work but it did not reduce poverty.

          Legislators are now considering a welfare reform which would once again reduce the number of families on welfare.  There are four strategies that should be taken into consideration for conducting a successful welfare reform in modern America.  Job training is first on the list, followed by post-secondary education, self-employment and financial asset building (Bellis, 2005, p. 10).  Many states are also considering to drug test applicants as well as recipients of welfare benefits in order to ensure proper usage of tax dollars and diminish drug usage.  Opponents have said that this would create stereotypes of people on welfare (Conan, 2011).  The Housing Authority of El Paso, TX has created a program called Higher Opportunities Thrive Youth Conference which partners up with UTEP and Foster Medical Center to work with middle and high school students to promote further education to try to break the cycle of generational welfare (Flores, personal communication, 2012).  There are also government hotlines and investigator in place to denounce and discover people committing welfare fraud.  The United States government has had a difficult time implementing a reform that will do away with poverty in America therefore leading to more people on welfare, especially food stamps.  Due to the economic recession the poverty level has increased to the highest level since 1993.  The Census Bureau released data indicating that the overall poverty rate in 2010 was 15.1 percent which represents 46.2 million people living in poverty.  Figure 1 depicts this data by demonstrating the percentage of people living in poverty annually from 2000-2010.

Source: U.S. Census Bureau 2011.

         The poverty rate for 2000 was at 11.3 percent of the American population.  It increased slightly for the following 4 years at an average of about .3 percent per year.  Poverty reached 12.7 percent in 2004 and from the decreased slightly at an average of .2 percent for 2 years.  It started increasing once again in 2007 at much higher rate than the prior 7 years.  Poverty’s major increase was 2010 hitting 15.1 percent of the population from 14.3 percent in 2009.  It rose by 1.1 percent in just one year (ASPE Issue Brief, 2011).

Conclusion

          Welfare has been deemed by many as an opportunity to overcome a financial, medical, or unemployment crisis.  Many do not agree with the current form of welfare in America because it is too expensive to maintain through tax dollars.  It also does not reduce poverty as expected by the American public and can also create a sense of dependency among its recipients.  Fraud and abuse of the welfare benefits have also been frowned upon by the public.  Due to this the American public has demanded some type of welfare reform which would toughen the guidelines and screening for welfare applicants.  On the other hand single parents, especially single mothers which are the ones that are struggling the most with the economy at hand and the welfare system is there only means to a possible end.  The national economy has been even more hurt because of more federal spending on the welfare system as unemployment and poverty in America continue to rise.  Eventually, welfare will once again be changed as Americans know it just as it did during the welfare reform of 1996.

References

Thousands Line Up In Atlanta For Section 8 Housing Applications (Welfare) And All Hell Broke Lose. (2010, August 11). Atlanta, Georgia, United States. Retrieved February 7, 2012, from http://www.youtube.com/watch?v=epr8Otfstr4

ASPE Issue Brief. (2011, September 13). Retrieved February 27, 2012, from U.S. Department of Health and Human Services: http://aspe.hhs.gov/poverty/11/ib.shtml

HHS Leadership. (2012, February 20). Retrieved February 20, 2012, from U.S. Department of Health and Human Services: http://www.hhs.gov/open/contacts/index.html#od

The History of Welfare. (2012). Retrieved February 20, 2012, from Welfare Information: http://www.welfareinfo.org/history/

Abbott, C. (2010, May 7). Food-stamp Tally Nears 40 million, Sets Record. Reuters, p. 1.

Bauman, K. J. (2000, August). The Effect of Work and Welfare on Living Conditions in Single Parent Households. Washington D.C.: Census Bureau.

Bellis, D. D. (2005). Welfare Reform: More Information Needed to Assess Promising Strategies to Increase Parents' Income. Diane Publishing Co.

CBSNEWS. (2011, November 20). America's New Poor Fending for Food. Atlanta, Georgia, United States. Retrieved February 16, 2012, from http://www.cbsnews.com/video/watch/?id=7388986n

Conan, N. (2011, October 11). Governing. Retrieved January 20, 2012, from NPR: http://www.npr.org/2011/10/11/141240653/states-consider-drug-test-requirement-for-benefits

Flores, M. (2012, January 20). El Paso Housing Authority Supervisor. (D. Robledo, Interviewer)

Jacknowitz, A., & Tiehen, L. (2010). WIC Participation Patterns: An Investigation of Delayed Entry and Early Exit.

Khan, H. (2011, May 31). Congress Mulls Cuts to Food Stamps Program Amid Record Number of Recipients. ABC News, p. 1.

Mckernan, S.-M., & Ratcliffe, C. (2006). The Effect of Specific Welfare Policies on Poverty. The Urban Institute, 3.

Moffitt, R. A. (2000). Welfare Benefits and Female Headship in the U.S. Time Series. The American Economic Review, 393.

Williams, V. (2012, January 24). Texas Department of Human Resources Supervisor. (David, Interviewer)

Interview Questions

1.What programs fall under the welfare system?

2.What criteria do applicants have to meet in order to qualify for benefits?

3.What legal status must applicants hold when applying for benefits?

4.About how many recipients of welfare are there in America?

5.Has there been an increase or decrease in welfare recipients?

6.How much money is spent on welfare?

7.Does your agency have any programs designed to educate people on generational welfare?