The number of American adults on the most expensive program for the poor, Medicaid, has tripled since 1990. The average amount spent per working-age adult has fallen 12 percent, even as medical costs have soared. States have a say over who is eligible. In Indiana, working parents have to earn less than 24 percent of the federal poverty level to qualify - currently, no more than $5,532 a year for a family of four. That's the strictest level in the country, along with Alabama. Indiana is one of 41 states that don't cover childless adults.
The food-stamp program also has expanded dramatically, both nationally and in Indiana. In 1999, only half of poor Indiana households got food stamps. By 2011, just under 90 percent of a much-bigger number of impoverished households were covered. Each on average received $300 a month, an amount unchanged since 1999 when adjusted for inflation.
Another growing program is the Earned Income Tax Credit, which increased nearly sixfold amid the welfare-to-work overhauls. But it's a payment that comes just once a year. And it's meant to top up the incomes of people with jobs, who make up to twice the poverty level. People without earned income don't qualify.
As lean as the times are, Americans are conflicted about expanding poverty assistance - even poor Americans.
On a recent Thursday afternoon, Tanya Jones was among a hundred men, women and children waiting for free groceries at a cavernous former printing plant in Indianapolis that's now one of the largest food pantries in the Midwest. Asked what she would change about public assistance, she said the government should stop benefits from going to those who don't deserve them.
"You got all these people who can work, who won't," said Jones, a 28-year-old mother of two, whose $12.75-an-hour job as a caterer isn't enough to feed herself, her two children and her mother. "I feel the help should be there for the people who need it, not the people who don't want to work."
That ambivalence about helping the poor is widespread. A Reuters/Ipsos poll of Americans in October and November found that 52 percent of respondents said the government isn't doing enough to help the poor. Yet 40 percent said that most people who receive aid don't deserve it, a follow-up survey found.
Respondents overwhelmingly opposed aiding non-disabled adults. Sixty-six percent of respondents felt the elderly deserve cash assistance, and 40 percent said children do. Just 14 percent supported cash help for able-bodied poor adults without dependent kids. (Because these polls are collected online, accuracy is measured using a credibility interval. For these questions, the interval was 1 percent to 1.5 percent.)
Those values are reflected in poverty policy. In a 2011 paper, economists Yonatan Ben-Shalom, Robert Moffitt and John Karl Scholz found that families in which no one is continuously working and which have no elderly or disabled members are the "most underserved" by U.S. antipoverty programs of any group.
Their poverty rate, the authors calculated, was 67 percent after factoring in government aid. For the elderly, it was 9 percent.
That's because the elderly enjoy the two largest federal entitlement programs, Social Security pensions and Medicare health insurance. These are aimed at all seniors, not just poor ones. The two spent a combined $1.2 trillion last year - more than the entire federal budget aimed specifically at the poor.
Suspicion of the able-bodied poor runs deep. Policy makers for centuries have gone through phases in which they view welfare through the concept of the "deserving and undeserving poor." Sheila Suess Kennedy, a professor of law and public policy at Indiana University, said the concept harkens back to 15th-century England, where statutes banned charity for people who appeared able to work. They were called "sturdy beggars."
The United States is in such a phase now. When President Lyndon Johnson launched the "War on Poverty" in 1964, the prevailing view was that the poor were victims of circumstances beyond their control. That changed in the 1980s and 1990s. Conservative critiques of the welfare state as a source of debilitating dependency, as well as widespread claims of fraud, eroded support for cash assistance and paved the way for the 1996 overhaul.
Some economists say the effort to incentivize worthiness has created an incoherent system of relief for the poor. Some households get the panoply of means-tested benefits - food stamps, Medicaid, TANF, housing subsidies and tax credits. Others get little or nothing.
"We have a kind of patchwork set of programs," said Robert Moffitt, professor of economics at Johns Hopkins University in Maryland, "where some families fall through the cracks, and some other families get more than maybe they would under a better-designed system."
Gov. Daniels agrees the system isn't working. He say it's "well-intentioned" - but has become convoluted with programs "stacked on top of each other for two generations now." Smarter spending, not more spending, is the answer. "The money it wastes is the second-biggest problem," he said in an interview. The first is "the undermining if not destruction of human dignity and the ethic of personal responsibility."
A DIFFICULT DECISION
Brandi Burnau, a round-faced 22-year-old with brown eyes, said she has been struggling on her own since she aged out of the foster-care system four years ago. Single and unemployed, Burnau recently had a baby daughter, Ava. Eight months ago she made a hard decision: She gave Ava up for adoption.
At the time, she was working in a warehouse outside Indianapolis stocking shelves, and she burst into tears every time she saw baby books. She left work early a couple of times, she said, and was let go. Having been on the job just three months, she was ineligible for unemployment benefits.
Burnau took to sleeping in her car, in homeless shelters and at the homes of strangers she met at the bus stop. Last month, Burnau was asleep in the car, which bore a sign that read "homeless and desperate." An older woman knocked on the window and gave her food, and invited Burnau to stay at her house for as long as she needs. "We now go to church together," she said. "She's helped me a lot."
But her future is uncertain, and Burnau is mystified by the incentives the welfare system presented her. A simple financial calculus, she said, would favor keeping Ava. She received $3,000 for living and medical expenses from the adoptive family during pregnancy, the cap under state law.
As a single parent, Burnau said, she could have soon received much more than that in additional welfare benefits: TANF cash aid for mothers, more money in food stamps, free Medicaid coverage and preferential treatment at homeless shelters. Today, she said, she gets $180 a month in food stamps, but no other government aid.
"When you're single, they don't care," she said. "If I had kept my baby, I would have benefited, but I didn't want to be selfish."
Jeremy Toler, 36, is also puzzled by the welfare state, and he used to work for it.
After serving in the army reserves and graduating from Ball State University with an associate's degree, Toler got a state job processing claims in a child-care program for the poor. When the state automated the system, he and the rest of his office were laid off.