States Cut Welfare Benefits -- Again

Welfare, once again, is ending as we know it. Largely because of their dire budget situations, states are making serious cuts to benefits offered under the federal-state welfare program, known as Temporary Assistance for Needy Families, or TANF.

States such as New Mexico, South Carolina and Washington have slashed cash payments by 15 to 20 percent. Other states are tightening work requirements, or lowering payments to those who also receive federal disability assistance.

And many states are limiting the amount of time people can spend on welfare. “We need to encourage people to say this is truly a temporary program,” says Brian Rooney, director of policy and compliance at the Michigan Department of Human Services.

Michigan, which had been one of the few states without a time limit on benefits, imposed a four-year lifetime limit on recipients last month. In addition to the desire to push people off the rolls and into the workforce, the state simply could not afford to keep paying benefits indefinitely, according to officials. The federal block grant for TANF has not budged for the past 15 years.

“The fiscal reality is that we cannot afford to provide lifetime cash assistance benefits to recipients who are able to work,” says Maura Corrigan, the state’s Human Services director.

Michigan’s budget troubles are among the worst in the nation. Obviously, a lot of that has to do with the weakness in its economy. Given the state’s growing poverty rates and higher-than-average unemployment, kicking people off welfare due to retroactively applied limits strikes many people as unfair or even callous.

“We don’t like the fact that families are being cut off at a time when we have the third-highest unemployment rate in the country,” says Judy Putnam, spokeswoman for the Michigan League for Human Services, an advocacy group.

Rooney argues that job placement is “reasonable” to expect within a four-year time frame. Others say that now is not the time to test that theory. Some states do allow extensions based on unemployment levels. For the most part, though, states are cutting back just at the time when many people could most use the help.

“[It was] one thing to say it’s time to transition to a job in the late 1990s, when there were other jobs,” says Liz Schott, an analyst with the Center on Budget and Policy Priorities, a liberal think tank. “This is the end of the line when there are no jobs.”