The Undeserving Poor

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The American welfare state has grown, but so have the ranks of the poor. As the U.S. tries to focus help on those deemed most worthy, millions of adults are getting squeezed.

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Reuters

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"THE UNEQUAL STATE OF AMERICA"
A Reuters 3-part series.

The U.S. federal government spends hundreds of billions of dollars a year on aid to the poor. There isn't enough to go around for Shaun Case.

The 34-year-old Indiana native has learning disabilities and endured a childhood of abuse. Relatives say he was thrown through a plate-glass window by his grandmother when he was a teen, leaving him with a permanently numb left hand. Social workers consider him well enough to work, though, and he never qualified for disability benefits.

So, in the past decade Case has scraped by in temporary jobs, never making more than $10 an hour. Now, he's out of work again. He gets no unemployment benefits; he wasn't in his last gig long enough. He can't get Medicaid because he has no dependent children at home. Until October, his only help was $200 a month in food stamps. Because of a paperwork error, the government cut him off. With or without food stamps, he has to scrounge for cash, selling plasma at a blood center twice a week for $30 a pop.

"What's out there for people like me?" said Case. "There's nothing."

The reasons are complex, but it boils down to this: American society has decided that people like Shaun Case, the able-bodied poor, don't deserve much help. As a result, and despite record spending, a growing number are falling through the gaps in America's patchwork of welfare programs.

Case is one of 12.2 million adults of working age, with no children at home, who were living below the poverty level in 2011. That's up nearly double from two decades ago. And of those, 5.6 million received no assistance from any of the major five federal programs, a Reuters analysis of Current Population Survey data found. That's the highest number since 1992, the first year for which comparable records are available. Then, there were 4.3 million unaided poor adults.

Another 1.4 million able-bodied adults received only food stamps, up from 732,000 in 1992. That program keeps people from going hungry, but doesn't help pay for other necessities such as rent, heat or dental care.

The population of unassisted poor adults is growing at a time when the United States is grinding through a prolonged stretch of rising poverty and income inequality.

MORE POVERTY, MORE SPENDING

The number of Americans below the federal poverty level - $22,350 a year for a family of four - hit 48 million in 2011, 17 million more than in 1989. Indiana has seen the second-largest increase in poverty of any state in that time, according to a Reuters analysis of Census data. Sixteen percent of the Hoosier State was poor in 2011, up from 11 percent.

The prime reason for the latest surge in the number of poor people has been the weak economy, not a stingy government. Antipoverty spending has actually increased overall.

Nationally, the federal government put a record $506 billion last year into its five major means-tested programs for low-income, able-bodied Americans. Outlays on these programs - food stamps, Medicaid, cash welfare, housing assistance and tax credits - were up more than triple since 1989, adjusted for inflation. The 50 states spend tens of billions more.

For able-bodied adults, there is limited help in lean times.

If it weren't for such assistance, the poverty rate would be much worse. Some economists say the rate is somewhat overstated, too, because it doesn't count non-cash aid such as food vouchers.

Today, the elderly, the disabled and the working poor get most means-tested assistance. Higher Medicaid spending - driven by expanding rolls but also by soaring healthcare costs - eats up a growing piece of the overall budget. Part of this shift toward the elderly and disabled is no doubt due to the aging baby boomer population.

Still, people who don't fall into favored categories are getting pinched, especially jobless adults such as Case.

Brandi Burnau faced a perverse welfare incentive as she weighed whether to raise her baby daughter in poverty or put her up for adoption. Jobless construction worker Jeremy Toler, befuddled by the system, passed up benefits his large family may be eligible for. Alexsandria Elliott, a former hotel housekeeper, fell so completely through the cracks that she was unable to get treatment for a debilitating dental disease.

INDIANA'S INNOVATIONS

Their home state of Indiana has put in place some particularly stringent limits on poor individuals and families as part of a decades-long effort to revamp welfare.

In 1994, then-Governor Evan Bayh, a conservative Democrat, created work requirements for Hoosiers who received welfare benefits. And if a woman on welfare got pregnant, she'd receive no extra assistance for the newborn.

Thumbnail image for reuters-the-unassisted.png"The bottom line was trying to make someone self-sufficient," Bayh said in an interview. "We were trying to achieve two values - one was the notion of community, and also responsibility."

Two years later, President Bill Clinton and House Speaker Newt Gingrich replaced a federal cash program for poor families dating from the 1930s with a new program, Temporary Assistance for Needy Families, that required adult recipients to seek work. Clinton, a Democrat, called the overhaul "ending welfare as we know it."

Republican Mitch Daniels, Indiana's current governor, took it a step beyond. He outsourced management of the TANF system and the intake of Medicaid and food-stamp applicants to IBM. He set a strict lifetime limit of 24 months for cash welfare compared with a federal guideline of five years. Enforcement of work requirements was toughened. Recipients who fail to find work in six weeks must perform community service, such as street sweeping.

That provision was designed to shoo people off the rolls, said Mitch Roob, who implemented the changes as head of Indiana's social-services agency.

"It was so unpleasant," Roob said in an interview, "that people would think, 'I'm just going to get a job instead.'"

Daniels tightened in other areas, too. Parents now have to prove they are seeking child support before getting welfare. If the other parent fails to pay $2,000 in child support for more than three months, his or her drivers license is suspended.

CASH AID DRIES UP

Since Indiana began revamping its system, the share of poor Indianans getting cash welfare has plummeted, even as the number of households in poverty grew by more than half.

In 1999, an average of 38,000 families per month received basic cash assistance from the TANF program, according to Indiana's Family and Social Services Administration. By 2011, just 22,400 did - a 41 percent decrease. The average monthly amount each family gets also dropped, from $253 to $205.

Overall federal and state spending on TANF in Indiana has actually increased 10 percent since 1998, according to figures from the U.S. Department of Health and Human Services. But only a fraction now goes to cash assistance - $72 million out of $292 million. That is down 50 percent from 1998. The rest goes toward intangible programs like job training or education about marriage and pregnancy-prevention.

It's a national trend: America has slashed the number of people on cash welfare by two-thirds since 1996, to 1.4 percent of the populace.

Housing aid also hasn't kept up with the growth in poverty. From 1999 to 2011, the number of Hoosier households in poverty grew by more than half. But in 2011, the number receiving either public housing or federal rent subsidies was just 5 percent higher than a decade earlier. Today, just 16 percent of poor households get federal housing help.

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Presented by

Kristina Cooke, David Rohde, and Ryan McNeill

Kristina Cooke is an award-winning investigative reporter at Reuters. David Rohde is a columnist and reporter for Reuters, two-time winner of the Pulitzer Prize, and a former reporter for The New York Times. Ryan McNeill is a reporter on the Reuters global data team in New York.

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