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Research & Commentary: Pennsylvania Tackles Welfare Reform

January 10, 2018

In this Research & Commentary, Matthew Glans examines Pennsylvania's efforts to reform its welfare system.

More than 20 years after the Personal Responsibility and Work Opportunity Reconciliation Act was first enacted, many states have seized the opportunities offered by the law, developing thoughtful policies and integrating services needed to help recipients move into the workplace. However, in other states, the current mix of welfare and anti-poverty programs is acting as a disincentive for work, trapping welfare recipients in a cycle of long-term poverty.

Pennsylvania has taken several major steps toward enhancing its welfare programs, but much remains in need of improvement. According to Elizabeth Stelle of the Commonwealth Foundation, spending on Human Services has now reached $12.6 billion, or 40 percent of the general fund, and is growing by 6.7 percent annually. Stelle argues this is pulling tax dollars away from other important programs such as education, transportation, and public safety.

In 2008 and 2015, The Heartland Institute released two studies analyzing each state’s welfare program and identifying the strengths and weaknesses of each. The report also provides a roadmap for reform that governors and legislators can use to promote a reform agenda. Between 2008 and 2015, Pennsylvania improved 25 spots in Heartland’s state rankings, moving from 39 to 14, due primarily to its improved integration of welfare systems and its increased use of cash diversion programs, which help to keep recipients from depending on welfare for long periods.

In the 2015, Heartland made two vital recommendations for what Pennsylvania should do to continue to improve its welfare system: tightening the state’s lifetime eligibility limits and do more to enforce eligibility requirements. A new bill recently introduced by Pennsylvania House Majority Policy Committee Chairman Kerry Benninghoff (R-Centre/Mifflin) would do just that. If passed, the bill would eliminate the extended Temporary Assistance for Needy Families (TANF) program and reduce the state’s lifetime limit from five years to a cumulative 48-month limit. Time limits can be an effective reform tool for states; they allow them to manage welfare costs and encourage recipients to take control of their own financial wellbeing.

Kansas’ recently reduced lifetime limit is just one example of what successful state-based reforms look like. In 2015, Kansas implemented a three-year lifetime limit on the time people can spend on welfare, with some exceptions made for emergencies. In a new study from the Foundation for Government Accountability, Nic Horton and Jonathan Ingram examine Kansas’ welfare reforms, which they say caused individuals to reenter the labor force. Horton and Ingram also argue the incomes of Kansas families exiting TANF increased substantially because of the reforms, more than doubling in the first year alone. According to the study, families who left TANF are as of 2017 earning $48 million more per year than they had while receiving cash assistance. The new incomes of those leaving the welfare system increased 104 percent in one year, $20 million more than they had while on welfare. Four years after the reforms, the individual incomes for these same people increased by 247 percent.

The real focus of welfare programs must be to provide temporary or supplemental assistance while encouraging work and independence. States should also reform assistance programs that trap low-income Americans in poverty by disincentivizing work. Pennsylvania’s efforts are a clear step in the right direction and, along with Kansas, can serve as a model for other states to follow.

The following documents examine welfare reform in greater detail.
 

Welfare Reform Report Card: A State-by-State Analysis of Anti-Poverty Performance and Welfare Reform Policies
https://www.heartland.org/publications-resources/publications/2015-welfare-reform-report-card   
In 2015, The Heartland Institute published an updated version of its Welfare Reform Report Card. This report card compiles extensive data on five “inputs” and five “outputs” of state welfare and anti-poverty programs and assigns a final grade to each state for its welfare policies.

Welfare Rules Database
http://anfdata.urban.org/wrd/Query/query.cfm 
The Urban Institute’s Welfare Rules Database provides a “comprehensive, sophisticated resource for comparing cash assistance programs between states” and for researching changes in cash assistance rules between states.

The Work Versus Welfare Tradeoff: 2013
https://www.cato.org/publications/white-paper/work-versus-welfare-trade
In this study, the Cato Institute estimates the value of the full package of welfare benefits available to a typical recipient in each of the 50 states and the District of Columbia. The study found the increase in welfare benefits outpaced the increase in income most recipients can expect to earn from an entry-level job; the income gap between welfare and work may actually have grown worse in recent years.

Comparing Program Participation of TANF and Non-TANF Families Before and During a Time of Recession
https://www.heartland.org/publications-resources/publications/comparing-program-participation-of-tanf-and-non-tanf-families-before-and-during-a-time-of-recession?source=policybot
Shelley K. Irving examines whether participation in the Temporary Assistance for Needy Families program has increased and whether employment has decreased during the economic recession beginning in 2008. The study also compares participation in other assistance programs based on welfare and poverty status before and during the recession.

Implementing Welfare Reform: A State Report Card
http://heartland.org/policy-documents/implementing-welfare-reform-state-report-card
This 2004 study by Jenifer Zeigler of the Cato Institute offers an analysis of state welfare reform implementation in the present and can serve as a baseline for tracking welfare reauthorization program changes in the future.

Blueprint for a Prosperous Pennsylvania
https://www.commonwealthfoundation.org/policyblog/detail/a-blueprint-for-a-prosperous-pennsylvania-welfare-reform
In this 2014 report, the Commonwealth Foundation suggests a variety of spending reductions and reforms to keep Pennsylvania fiscally solvent while creating conditions for future prosperity. One significant focus of the study, which the authors argue is contributing to the state’s cycle of poverty many of its residents are trapped in, is welfare spending.

Work Requirements are Working for Kansas Families: How Welfare Reform Increases Incomes and Improves Lives
https://thefga.org/wp-content/uploads/2017/07/Work-Requirements-are-Working-for-Kansas-Families.pdf
In this study, Nic Horton and Jonathan Ingram of the Foundation for Government Accountability examine Kansas’ welfare reforms and how recipients fared after leaving the program. Their results found the reforms have led to more employment, higher incomes, and less dependency.

The Power of Work: How Kansas’ Welfare Reform is Lifting Americans out of Poverty
https://thefga.org/wp-content/uploads/2016/02/PowerOfWork-KansasWelfareReform.pdf
In this study, Nic Horton and Jonathan Ingram of the Foundation for Government Accountability examine Kansas’ welfare reforms and the effect on food stamp enrollment. “With no welfare work requirement or time limit, just one in five able-bodied adults on food stamps worked. Nearly 93 percent of them were in poverty, most in severe poverty. Since implementing work requirements and time limits, the number of able-bodied adults on food stamps has dropped by 75 percent,” the authors wrote.

 

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other topics, visit the Budget & Tax News website, The Heartland Institute’s website, and PolicyBot, Heartland’s free online research database.

The Heartland Institute can send an expert to your state to testify or brief your caucus; host an event in your state, or send you further information on a topic. Please don’t hesitate to contact us if we can be of assistance! If you have any questions or comments, contact John Nothdurft, Heartland’s director of government relations, at jnothdurft@heartland.org or 312/377-4000.

Author
Matthew Glans joined the staff of The Heartland Institute in November 2007 as legislative specialist for insurance and finance. In 2012, Glans was named senior policy analyst.
mglans@heartland.org @HeartlandGR