October 13, 2003


Welfare Spending Shows Huge Shift (ROBERT PEAR, October 13, 2003, NY Times)

New government figures show a profound change in welfare spending, shifting money from cash assistance into child care, education, training and other services intended to help poor people get jobs and stay off welfare.

Cash assistance payments now account for less than half of all spending under the nation's main welfare program, Temporary Assistance for Needy Families, federal officials say.

The proportion has been declining steadily since 1996, when Congress revamped welfare and abolished the guarantee of cash assistance for the nation's poorest children. The 1996 law required most adults to work within two years of receiving aid and gave states sweeping authority to run their welfare and work programs with lump sums of federal money.

"Welfare" used to mean a monthly check that could be immediately converted to cash. But statistics tabulated by the Department of Health and Human Services, at the request of The New York Times, show that the proportion of federal and state welfare money spent on cash assistance declined to 44 percent in 2002, from 77 percent in 1997. The proportion allocated to various types of noncash assistance shot up to 56 percent, from 23 percent in 1997.

"The program has been fundamentally transformed," said Wade F. Horn, assistant secretary of health and human services in charge of welfare policy.

For the most part, Newt Gingrich was an illustration of the Peter Principle in action. But there's one debt that all Americans owe him: he deserves the entire credit for the only serious reform of an entitlement program ever undertaken in the United States. It's been a fantastic success and has held up far better than expected even during a period of economic slowdown.

Posted by Orrin Judd at October 13, 2003 9:07 AM

Once started, the momentum for this was unstoppable, because it created a new class of government bureaucrats whose employment depended on government providing services rather than cash.

Ordinarily, I would oppose this, for the same reason I dislike taxation; a presumption that private citzens can spend money on themselves better than the government can. This would seem to be an exception; perhaps because the hope is for the payments to end, perhaps because welfare recepients are not, by and large, astute investors...

Posted by: Mike Earl at October 13, 2003 9:53 AM

Mr. Earl:

I'd say more like they spend it like they didn't earn it. Which is true.

Posted by: Buttercup at October 13, 2003 3:36 PM