In 1996, "welfare as we knew it" went through a massive overhaul, putting caps on how long welfare recipients could stay on the dole and requiring they work and/or study along the way. At the 10th anniversary marker of welfare reform, most pundits were revelling in the success of reform, while a few critics wonder if the drop in welfare roles doesn't have a dark side (see poverty). Now with a recession in full swing and jobs drying up, some wonder if a welfare system that depends on work can still hold out.

Here we only offer a brief fact backgrounder.

What is it?

“Welfare” welfare:

When someone says “welfare”, what probably jumps to mind is a government cash hand out to the non-working poor. That's the most common use of the term and refers to a program under Temporary Assistance for Needy Families (TANF), which gives federal money to poor families based on need. TANF was passed in 1996 to update an earlier law, Aid to Families with Dependent Children (AFDC); the new law set a time limit on how long a family could get assistance, requiring states push TANF recipients toward work and education, and giving states a lot of leeway on how to go about that task.

Other types of welfare:

TANF's “welfare” is only one example of ways the government provides support to the poor and out of work – and only accounts for a small percentage of that support. There are many other sources of government assistance - including unemployment benefits (for those who recently lost a job), SSI (for those who can no longer work), EITC (for families with low incomes), food stamps, child care, heating assistance, housing aid, education assistance and, most expensively, health care. Unfortunately, it's hard to find one consistent way to track all hand outs to the poor, so we instead offer our readers a few.

"Welfare" welfare

Cash assistance for "welfare" welfare (from states and feds), percent of Americans who receive welfare assistance:

sources: ACF

Income security

“Income security.” The Congressional Budget office tracks federal spending on many of the programs that prop up those down on their luck. In CBO terms, “income security” includes unemployment checks, SSI, EITC, food stamps, child nutrition programs, child care - and "welfare." (CBO)

Total income security from the feds:

  • $228 billion (2008)

Income security over the years

Public Assistance

The Census tracks cash handouts - and other assistance to the poor - at from both federal and local agencies. "Public assistance" includes food stamps, SSI, EITC, education assistance, medical care, TANF and energy assistance. It doesn't include unemployment checks. (CBO)

Public assistance over the years

Income tested benefits

“Income tested benefits.” The Congressional Research Service published a report in 2003 that gives an even larger understanding of “welfare,” that is: all federal and local assistance and aid that goes to help Americans based upon need . This includes not only the income security benefits above but also housing and education benefits and medical services for the poor. (CRS - pdf)

Total spending on "income tested benefits" (2002):

  • $522 billion, of that:

    • $373 billion is from the feds (17% of budget);

    • $149 billion is from states and localities.

What's included in income tested benefits

source: CRS
(pdf) notes: “Medical aid” is almost all Medicaid. “SSI” is
Supplemental Security Income. “TANF” includes only direct TANF cash payments – other TANF funds go toward other supports, like job training. EITC is “earned income tax credit” checks for low income workers. “Education aid” doesn't include funding for public schools.

Change in income tested benefits over the years

source: CRS (pdf) Notes on what primarily makes up the categories above: medical services (Medicaid, S-CHIP), cash aid (SSI, EITC, TANF), food aid (food stamps, school lunch), housing aid (Section 8, public housing), education aid (Pell Grants, Head Start, Stafford Loans), jobs/training (TANF, job corps), other (child care, TANF services), energy aid (LIHEAP)

Where the facts are from:

Other good sources:

  • GAO - For an excellent chart on all federal and state welfare assistance programs and who's in charge of what, see page 12 of this GAO report.

  • CBO – trends in means-tested programs

  • CRS - discussion of effects of Welfare Reform

  • Chapin Hall's study on the effects of welfare reform

  • Fed website on all government benefits: govbenefit.gov

Did we miss something, let some slant slip in, lose a link - or do you just have something to say? Drop a line below! In the spirit of open dialogue, cJ asks you keep it civil, keep it real and keep it focused on the message, not the messenger. See our policy page for more on what that all means.

Posted In