Most US welfare dollars don’t reach the poor anymore

flowers-welfare-reform-1FiveThirtyEight has an interesting article on a little-discussed aspect of the 1996 welfare reforms in the US: whilst aggregate spending on welfare has remained relatively level, the share of money going directly to beneficiaries has dropped significantly.  In particular, many states have redirected their funding away from cash assistance and towards programs meant to reduce teen pregnancy or single parenthood.  According to Brookings, there is little evidence that many of these programs are effective.  So what this shift really represents is a type of reverse cash transfer from potential welfare beneficiaries to civil servants.

Additional interesting points from the article:

The shift in spending varies greatly from state to state. California gives close to half of its total welfare dollars directly to low-income residents in the form of cash assistance. Georgia, by contrast, spends 80 percent of its funds on programs in the “other” category, and gives just 8 percent directly to families in cash.

The level of benefits also spans a wide spectrum. In 2012, the maximum monthly amount a single parent with two children could receive varied from $770 in New York to just $170 in Mississippi. And that’s assuming they could qualify. The maximum monthly earnings for this hypothetical individual to be eligible for TANF was as high as $1,829 in Wisconsin but as low as $268 in Alabama.