Is This the End of Welfare as We Know It?

The overnight success of the new child tax credit has experts and parents taking a hard look at traditional welfare.

An illustration of two people—an adult and a child—cut out of a dollar bill
Adam Maida / The Atlantic

About the author: Annie Lowrey is a staff writer at The Atlantic, where she covers economic policy.

Chaka Pruitt is a Los Angeles–based single mother caring for two kids and two grandkids while she completes a nursing program. The family lives on a penny-pinched, deliberate budget. Bills sometimes go unpaid; necessary purchases sometimes do not get made.

But receiving welfare has helped: To offset her educational expenses, Pruitt gets a few hundred dollars a month from the local Temporary Assistance for Needy Families program. “There are benefits to it,” she told me. “They help you with transportation. They help you with books. They help you get the other things you need for school, like a parking pass. Just the little things.” President Joe Biden’s new child allowance, a centerpiece of the American Rescue Plan, has helped too. The expanded, monthly child-tax-credit payments began in July and provide Pruitt with $250 a month per kid. “It has dramatically changed our lives,” she said. “I paid everything up.”

The sudden and unexpected arrival of this new program has thrown the future of the old one into question. The two share the same goals: eliminating child poverty and many of its miserable consequences. They offer much the same benefits, providing cash to low-income parents. But the child allowance is so much bigger, simpler, and more effective that politicians, policy experts, and parents are wondering whether the old welfare program needs to—or should, or will—continue to exist. Is this finally the end of welfare as we know it?

There’s a valid argument to be made that it should be. Social-policy experts and the families who use these programs are rapturous about the new child allowance, whereas welfare has a not-undeserved reputation as an ineffective, Kafkaesque, and racist nightmare.

The child allowance—as a technical point, an expansion and reform of a Bill Clinton–era child tax credit—is as straightforward a benefit program as exists in American life. Single parents earning less than $75,000 a year or couples earning less than $150,000 a year get $300 a month per child under the age of 6 and $250 a month per child up to the age of 18. The money is distributed by the IRS, generally by direct deposit. It comes with no strings attached; it does not affect families’ eligibility for other programs; and most parents do not need to do anything to get it. Pruitt, for instance, told me that her child-allowance money just showed up one day.

Welfare, however, is a morass. It is a $16.5 billion pool of money distributed to “needy families” through a hodgepodge of state and local workfare, training, and child-care initiatives. Less than half of the money is ultimately used for cash transfers, and those cash-transfer programs tend to come with onerous applications and strict maintenance requirements. A sheaf of up-to-date paperwork and routine visits to a caseworker are needed to maintain a family’s benefits from TANF, which turned 25 years old this week with little fanfare. If Pruitt were to mess up the paperwork or miss those visits, she said, the payments would stop.

Racism is the central reason TANF is complicated to the point that many people find it unusable. When more Black families, particularly single mothers, began using welfare, Washington responded by transforming it into a reform program—a punitive one, at that. The federal government capped TANF benefits so that not all qualified families would receive payments, and states added strict limits on how long people could remain on the program, stringent work requirements, and sanctions for noncompliant participants. TANF’s design flows from “a century of false and harmful narratives” that cast Black women as unfit mothers, a recent Center on Budget and Policy Priorities report argues, and seeks to “control Black women’s behavior and compel their labor.”

All for naught. TANF has had a modest effect on the employment of low-income women, unlike, say, the earned-income tax credit. It has failed to end poverty, and welfare reform actually increased deep-poverty rates. Already, the child allowance, just a month old, is a more effective initiative. In July, it lifted 3 million kids above the poverty line, cutting the child-poverty rate by 25 percent.

With the child-tax-credit money flowing monthly, state TANF administrators expect fewer and fewer poor parents to bother applying for welfare. That raises the prospect that the program might wither away. Some politicians on the Hill—most notably Senator Mitt Romney of Utah—have proposed killing TANF entirely and using the money for other child-welfare initiatives.

That seems unlikely at the moment. The Biden administration has shown little interest in TANF—the program wasn’t even mentioned in its budget proposal—and the budget and infrastructure package working its way through Congress seems unlikely to make significant changes to the program. But there is growing support on the left for reforming TANF, improving it rather than letting it fade away, particularly in light of the new child allowance’s success. Experts have long pushed for making it more effective and evidence-based—standardizing its benefits, streamlining its application processes, and getting rid of its work requirements, asset tests, and drug tests. Even with the child allowance in place, the United States will still leave millions of kids in poverty each and every year. Why not use TANF to give them more support, and get every child above the poverty line? “Three hundred dollars a month is a huge boon to families, but it is still not enough to raise a child on,” Ife Floyd, a TANF expert at the Center on Budget and Policy Priorities, told me.

Pruitt agrees. The child allowance is more help that comes with fewer strings attached. But the assistance from welfare still matters, given how tight the family’s budget feels. “If you’re trying to do something for yourself, then it is a program that will be beneficial,” she said. “For me, it is beneficial.”