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A Safety Net That Works: Improving federal programs for low-income families (American Enterprise Institute)

March 17, 2017
By Elizabeth Sanders

A recent AEI study titled "A Safety Net That Works" provides an overview of the issues of each of the current welfare programs and suggestions on how they should be addressed.

According to an American Enterprise Institute (AEI)/Los Angeles Times survey more than half of Americans in poverty feel the main purpose of welfare programs should be to help people move toward self-sufficiency rather than government dependency.

In order for Americans to move up the economic ladder there must be a promise of upward mobility. Unfortunately today this promise seems to be less of a reality leaving many Americans frustrated.

In a recent study titled A Safety Net That Works, AEI’s Morgridge Fellow in Poverty Studies Robert Doar and other experts, provide an overview of the issues of each of the current welfare programs and suggestions on how they should be addressed. Doar argues it is important society maintains a “safety net” that reduces material hardship, allows children to be raised in a healthy environment, and provides appropriate rewards for people who work.

Doar explains that programs targeting families with children and child development appear to be promising methods for upward mobility. The progress of the next generation of Americans is essential in maintaining economic stability. As a result, Earned Income Tax Credit, child welfare and the Supplemental Security Income Disabled Children Program are some of the current government programs suggested by AEI that need improvements in order to promise upward mobility among the younger generations. 

Earned Income Tax Credit (EITC) has become increasingly prominent among policymakers who are looking to reduce welfare dependency. The program provides an earning subsidy to families who qualify in three different areas: the family must have a wage earner, low income, and to receive significant EITC they must have resident children. More specifically the program targets homes headed by a single mother and those with many family members. “EITC raises more people above the poverty line than any other government program or tax policy except Social Security. In 2014, 7.3 million individuals were raised above poverty, more than four million of whom were children. If we believe investments in children are especially productive, then the EITC is particularly well targeted,” Doar says. Due to its potential effectiveness, House Speaker Paul Ryan and others have suggested extending EITC to the childless.

Child centered programs such as child welfare and the Supplemental Security Income Disabled Children Program are in immediate need of improvements since children that are involved in the child welfare system are the most vulnerable among our society. The important task of these programs is not for the government to protect all children from broken homes, but to prevent harm as effectively as possible. “Child welfare is one of the few policy areas in our nation that has generated bipartisan cooperation over a substantial period of time. Generally speaking, federal policymakers have tended to put aside their differences to advance legislation that they view as protecting vulnerable children,” the study says. With a mutual agreement on the importance of child welfare it is now time for policymakers to address the funding structures that will push these programs to the next level.

The Heartland Institute’s Welfare Reform Report Card provides a state-by-state analysis of anti-poverty performance and welfare reform policies and suggests, “Successful welfare reform can save lives and produce positive effects on multiple generations. It can save taxpayers billions of dollars and help address such serious social maladies as crime, alcoholism, and teenage pregnancy. And it can demonstrate that government programs can be successfully devolved from the national government to states.” This is the best way for the states to not only shift away from federal control, but will also allow for the states to take control of their own welfare issues.

In a Research and Commentary, Matthew Glans examines possibilities for welfare reform in North Carolina. “The real focus of social welfare programs must be to provide temporary or supplemental assistance while encouraging work and independence. States should reform their assistance programs, which often trap low-income Americans in poverty by disincentivizing work, using these and other reforms. By doing so, state governments would help people to become more self-sufficient and less dependent on government,” Glans says.

It is important to understand that not all issues facing low-income families can be solved by federal antipoverty programs. However, in reality these major programs will not disappear anytime soon. Therefore, policymakers need to create an agenda that aims to improve the programs so that poverty is not only reduced, but struggling Americans are able to provide for themselves. This AEI study provides valuable information into where policymakers should start when looking toward welfare reform and creating a “safety net that works”.