About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

Changes in Participation in Means-Tested Programs 1 (April 2005)

handle is hein.congrec/cbo9276 and id is 1 raw text is: A series ofissue summaries from the Congressional Budget Office APRIL 20, 2005 Changes in Participation in Means-Tested Programs In the early 1990s, the number of people receiving bene- fits from Aid to Families with Dependent Children (AFDC), a major cash assistance program for nonelderly U.S. residents, increased rapidly. Concerned about the nation's welfare system, lawmakers in 1996 replaced AFDC with a block-grant program, called Temporary Assistance for Needy Families (TANF), and made other significant changes in federal welfare policies. Since then, the number of AFDC/TANF recipients has dropped by more than 60 percent-from about 13 million to 5 mil- lion. Analysts disagree about the extent to which the new program, the robust economy of the late 1990s, or other factors played a role in that decline. The substantial drop in the number of TANF recipients raises questions about whether participation in other means-tested programs has followed similar patterns. This brief looks at trends in participation in some of the major means-tested programs for low-income nonelderly people-AFDC/TANF, the earned income tax credit (EITC), Food Stamps, Medicaid, and Supplemental Security Income (SSI)-from fiscal year 1977 to 2003 (the most recent year for which data about participation are available). Unlike the pattern with AFDC/TANF, those other four programs have generally experienced increases in partici- pation in recent decades. Moreover, as of 2003, each of those programs served more low-income nonelderly peo- ple than did TANF, the program commonly thought of as welfare. The federal government also spends more on those programs than on TANE In 2004, federal outlays for TANF totaled $18 billion, compared with $24 billion for Food Stamp benefits, $30 billion for SSI benefits for nonelderly recipients, $33 billion for the EITC, and $114 billion for the federal share of Medicaid spending on benefits for nonelderly people. Future participation in, and federal costs of, those five programs will depend on many factors, such as the level of benefits, demographic trends, labor market conditions, and health care costs. Under current law, changes in the total federal cost of those programs are likely to be domi- nated by health care costs, since Medicaid is by far the largest and fastest growing of the programs. Major Federal Means-Tested Programs The Personal Responsibility and Work Opportunity Rec- onciliation Act of 1996 (PRWORA) created the Tempo- rary Assistance for Needy Families block-grant program and eliminated the Aid to Families with Dependent Chil- dren program that had been in place. In general, under AFDC, single parents (usually mothers) who met certain income and resource restrictions-the means test-and who had a child under age 18 were eligible for cash aid. Under TANF, such parents may still be eligible for cash aid and work-related activities, including job training and child care. But typically, they must meet certain work or training requirements to receive benefits, and they can only receive aid for 60 months during their lifetime.1 Although AFDC had similar restrictions on income and assets, it did not have strict work or training requirements or a lifetime limit on benefits. Various other federal or federal/state programs provide financial support to low-income nonelderly people. The earned income tax credit is a refundable tax credit avail- able to workers with low income. If the amount of the credit exceeds the amount of federal income tax that a person owes, the excess is payable directly to the taxpayer. The Food Stamp program provides a monthly allotment of benefits to qualifying households. Recipients normally receive an electronic benefit card that they can use to buy approved food products at approved stores. Medicaid provides federal matching funds so that states can offer medical assistance to poor children and their families and 1. States are allowed to exempt up to 20 percent of their TANF recipients from that time limit, although in 2002, only about 1 percent of families had been receiving assistance for more than 60 months. See Department of Health and Human Services, Office of Family Assistance, TANF Sixth Annual Report to Congress (November 2004).

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most