At the beginning of July, a new restriction will go into effect for recipients of welfare in Kansas that will only allow them to withdraw $25 in benefits a day. As Max Ehrenfreund pointed out, given that ATM withdrawals come with a fee and are usually limited to multiples of 20, families will end up losing much of the money they normally receive to paying those charges — money that will go to financial institutions instead. It also restricts where they can withdraw that money, barring transactions at places like pools, liquor stores, and cruises. The restrictions are so harsh that the state is at risk of losing its federal funding.
But it’s not the only state that has been looking for ways to make life harder on the poorest. Others have imposed drug tests and harsh limits without evidence that the policy changes would do much good.
Drug testing
Drug tests for people who apply for benefits in the Temporary Assistance for Needy Families (TANF) program, better known as welfare, have become increasingly popular. States screen applicants with a questionnaire on drug use and test those who answer in the positive; if they fail the test, they and their families can eventually lose the benefits. Maine and Michigan are some of the newest states to start drug testing regimes, joining seven states that were already doing it. But the lesson from those states is that the testing costs money — they’ve spent nearly $1 million collectively — but doesn’t uncover widespread drug abuse. In fact, while 9.4 percent of Americans use illegal drugs, all states but one had a positive drug test rate of less than 1 percent and none were as much as that national rate.
That evidence hasn’t stopped some from going even further. Wisconsin Gov. Scott Walker (R) has put forward a plan to drug test everyone who receives food stamps and unemployment insurance, which the state senate advanced this week. But while states have a lot of power to set the parameters of TANF, the same is not true for these two programs, and Walker would need approval from the Obama administration for the plan to become reality. It would also come with a price tag, costing at least $1 million a year to drug test unemployed people alone.
Lifetime caps
Kansas’s bill also imposed a shorter lifetime limit on receiving TANF, kicking people out of the program after 36 months unless they could prove extraordinary hardship and get an extension. Arizona decided to go much further than that this week, cutting people off at 12 months without exemptions or extending benefits for children, as many states do. It’s the harshest cap in the country; the only other state that ends benefits at 12 months is Texas, but it has a variety of exemptions.
After welfare reform in the 1990s gave states wide leeway in designing their programs, many instituted caps, although there were some holdouts. But in recent years all have imposed limits of five years or less and the trend has been for states to restrict them further. In any given year, about 51,000 families lose benefits because they hit a time limit. Various studies of what happens to families when they are dropped from the program this way finds that they have much lower incomes and very few job prospects, leading to severe financial hardship.
Grocery store restrictions
Kansas’s move to restrict where benefits can be used is popular among states when it comes to food stamps. In Wisconsin and Maine, lawmakers this year have looked at trying to restrict what recipients of the Supplemental Nutrition Assistance program (SNAP), or food stamps, can buy with their benefit cards at the grocery store, which are just over $4 a day on average. The idea of banning food stamp recipients from buying “junk food” began in 2003 with then-Minnesota Gov. Tim Pawlenty (R), and has since been proposed in California, Delaware, Florida, Iowa, Mississippi, South Carolina, and Texas, although no state has actually gone all the way through with it.
Given that the federal government sets most of the rules on SNAP, any state that wants to keep food stamp users from buying whatever food they may decide to buy would need to be granted a waiver. And the idea is incredibly complicated to implement. There are no actual standards as to what constitutes junk food, so states have to make up their own standards. In Maine, users would be barred from buying bottled water and “prepared food.” In Wisconsin, shellfish would be barred and it would be harder for families to buy spaghetti sauce, spices, and dried beans. Meanwhile, there’s no reason to believe people on food stamps are making worse decisions at the grocery store.
Family limits
Sixteen states cap welfare assistance that a family receives so that after the family has a certain number of children, it won’t get any extra money for new babies. These policies were explicitly adopted to try to dissuade low-income women from having more children out of wedlock. But beyond the questionable nature of that motivation, there isn’t any evidence they work anyway. Meanwhile, people who use public benefits have the same average family size as people who don’t. All that the caps do is push poor families deeper into poverty.
The good news is that the trend is to move away from family caps. Six states have repealed them in recent years, and California has been working on a proposal to do the same.