A Welfare State: More Americans Rely Upon Government Assistance Despite Welfare Reform

Remember when former House Speaker Newt Gigrich gave us the “Contract With America” back in 1994?  According to a recent article written by Associated Press reporter, Stephen Ohlemacher, the welfare state in America is larger than ever, despite 11 years of federal “welfare to work” policies. 

Although the number of cash payments to welfare recipients has plunged, non-cash benefits (e.g. Medicaid, food stamps, etc.) have exploded.  While the amount of cash disbursements from Temporary Assistance for Needy Families has dropped 25.2% in the last decade, Medicaid disbursements have risen 59%, and Supplemental Security Income or “SSI” has increased 10.5%. 

Basically, America has replaced “the poor” with “the working poor.”  Proponents of this shift argue that the result was expected because programs that once discouraged work now offer assistance to people in low-paying jobs.  Others argue that career training is the missing ingredient.   According to Vivyan Adair, a former welfare recipient and current assistant professor at Hamilton College, “If the goal was to reduce poverty and give people economic and job stability, [welfare reform] was not a success.”

Is there any coincidence that bankruptcy filings have risen along with the growth of “working poor”?  All too often, over-reliance on credit becomes a “gap filler” for many middle class families who make too much money for government assistance but not enough money to support their families.  The same U.S. Congress that brought you “welfare reform” even recognized it’s shortcomings because it made sure that bankruptcy remained intact to provide the safety net for the middle class.

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