Word: afdc
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Second, it is underfunded: the job-training programs necessary to get recipients back into the work force are costly, but Congress provided only a billion dollars a year over a five-year period, which works out to just $250 annually per adult AFDC recipient. Challenging the Bush Administration "to put up or, please, to shut up," Senator Moynihan last month introduced a bill to increase federal funding to $5 billion a year -- a nonstarter in the current fiscal climate. Meanwhile, many financially strapped states have been backing out of the deal, preferring to forfeit their share of federal matching grants...
...growing consensus among policy experts that tinkering with the existing system will not fix its fundamental problems. Some, like conservative Charles Murray, say the solution is to abolish welfare altogether and force its clients to fend for themselves. In his influential 1984 book, Losing Ground, Murray claimed that AFDC actually increases poverty by serving as a disincentive to work and encouraging women to have illegitimate children they cannot support. Others argue that the dole should give way to an entirely new system based on social insurance and jobs...
...ENFORCE CHILD SUPPORT. AFDC could be drastically reduced if absent fathers were forced to support their children. Of the $16.3 billion in annual child support ordered by courts in 1989, only $11.2 billion was paid and only 11% of those receiving support were AFDC mothers. Under current law, welfare recipients are allowed to keep only $50 in child support. The Family Support Act bolstered efforts to collect the money by requiring automatic withholding from the wages of absent parents. A plan proposed by Ellwood would expand those efforts and add a new twist: collection insurance. In cases in which...
...MAKE WORK PAY. Even for those who want to work, the current welfare system is full of perverse disincentives. In most states, a single mother who earns, say, $700 a month has that amount deducted from AFDC benefits; she also loses Medicaid and food stamps and often has to pay for child care as well as payroll taxes. In many cases, her increased income is so marginal that it literally does not pay for her to work. "For a very large proportion of single mothers, it's impossible to find a job that pays as well as being on welfare...
...poor working parents with combinations of refundable tax credits, medical benefits, housing allowances and food stamps -- what Gary Burtless of the Washington-based Brookings Institution calls "aid to breadwinners with dependent children." Some of this is being done already. New Jersey's reform, for example, would allow working AFDC parents to earn up to 50% of their grant levels without losing benefits. In 1975 Congress enacted the Earned Income Tax Credit (EIC), which currently offers cash supplements of up to $1,192 to working parents with incomes under $21,250. A number of recent congressional initiatives would vastly expand such...