Progress Illinois

Over the past few months, we've been chronicling the holes in Illinois' safety net created by the short-sighted welfare reforms instituted in the mid-Nineties. Regular readers know that the work requirements attached to the Temporary Assistance for Needy Families (TANF) program were pitched at the time as a way to empower people to reenter the workforce. But as the booming job market went bust, many of the Prairie State's poorest families failed to find steady work and have since been tipped toward deep poverty with no hope for aid.

Not surprisingly, the same scenario is playing out in states across the country.

In its latest round of research on the effectiveness of public assistance programs, the Center of Budget and Policy Priorities (CBPP) found that 1.3 million fewer children would be living in extreme poverty had the safety net been as sturdy in 2005 as it was in 1995. 

The report explains:

The erosion of the safety net’s antipoverty effectiveness was concentrated at the very bottom of the income scale ... for children whose non-safety-net income was below 50 percent of the poverty line, the share lifted above half of the poverty line dropped from 88 percent to 76 percent, a decline of 12 percentage points.

With the economy skidding further into a recession and statewide unemployment now pushing past 10 percent, even the bright spot in the TANF reform -- success in dragging more working-poor people across the poverty line by supplementing their meager wages -- has been dim here in Illinois. Heartland Alliance's Tim Klein explained in a recent blog post:

Compared to the rest of the country, Illinois is woefully underachieving in making sure eligible families are accessing the program. Illinois only provides TANF cash assistance to nine percent of all children in the state who are eligible for those services - the very services that provide the most important safe guards in keeping children out of poverty.

Fortunately, supplemental spending under the stimulus plan has provided a buffer for millions of struggling households. By boosting food stamp benefits, expanding the Earned Income Tax and Child Tax credits, and creating incentives for states to modernize their unemployment insurance rules and reform TANF (both of which Illinois has taken advantage of), CPBB estimates that 1 million additional children were spared from poverty this year. But, as the New York Times notes, it's only a short-term fix:

Even after growth resumes, all signs are that the recession’s impacts will be protracted, said Harry J. Holzer, a labor economist at Georgetown University. “We’ll not only see an increase in poverty and unemployment, but those numbers are not going to improve quickly,” Mr. Holzer said.  [...]

“It’s a good thing we have the stimulus package,” [CBPP researcher Arloc] Sherman said. “But what happens to the most vulnerable families in two years, when most of the provisions expire?

That's a question other economists have been asking as well. University of Michigan economist Sheldon Danziger told the Times that the lack of resilience during an economic downturn brings “a new focus on the need for expanding and modernizing the social safety net.” Considering the growing body of evidence on the efficacy of these investments -- look no further than the 14 million people (noted in the CBPP graph above) who were lifted out poverty in 2005 --  bolstering the safety net to catch more of those in need is clearly good public policy. As TANF comes up for federal reauthorization next year, that would be a good place to start.