The welfare system in the United States would be a doubtful model for anyone designing a welfare system from scratch. The numerous U.S. welfare programs that make up the “system” have overlapping beneficiary categories, conflicting (and occasionally at odds with one another) rules, and various purposes.
The administration of the numerous programs is divided among many U.S. congressional committees and the executive department of the federal government. The governments of the state, the county, and the city, who provide the services and provide financing, are also given responsibility-sharing rights.
Temporary Assistance for Needy Families (TANF), the Food Stamp Program (FSP), Supplemental Security Income (SSI), Medicaid, housing assistance, and the Earned Income Tax Credit (EITC) are the six U.S. welfare programs most frequently linked to the “social safety net.”
The federal government primarily funds all six U.S. welfare programs; however, TANF and Medicaid each call for a 25–50% state spending match. While the EITC functions as a component of the regular federal tax system, the first five programs are managed locally (by the states, counties, or local federal agencies).
The Special Supplemental Food Program for Women, Infants, and Children [WIC]; general assistance [GA]; school-based food programs; and Low-Income Home Energy Assistance Program [LIHEAP] are just a few examples of the numerous smaller government assistance programs that exist outside of the six major programs. These programs have large participant populations but offer only modest benefits.
Table of Contents
6 Important U.S. Welfare Programs Are:
Temporary Assistance for Needy Families (TANF)
Although the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996, which was responsible for bringing about welfare reform, was primarily focused on one program, it drastically changed the conditions by providing income support. Aid to Families with Dependent Children (AFDC) and TANF was swapped out under the 1996 statute. A far smaller degree of impact was felt on SSI and food stamps.
The Social Security Act of 1935, which created the Aid to Dependent Children (ADP) program, is where TANF got its start. ADP made it possible for state governments to assist widowed or abandoned single moms. With monetary rewards for the bare necessities of food, shelter, and clothes, it was originally intended to assist women in staying home and caring for their children.
In the 1950s and 1960s, the program was expanded to offer cash help to destitute families and children regardless of the cause of parental absence. The program was renamed Aid to Families with Dependent Children at the same time as this expansion.
Even though AFDC was primarily a federal initiative controlled by the Department of Health and Human Services, it was carried out by state-operated welfare agencies. In fact, it was up to the states to run the program, decide on benefits, set income and resource caps, and decide on the actual benefit payments.
Aside from variances in the maximum amount each state paid to a family for help, an AFDC program in New York City and Reno, Nevada, looked quite similar and had little variation. Federal and state governments contributed equally to the cost of AFDC benefits, with the federal government paying a larger percentage of those expenditures in states with lower per capita incomes. The costs of AFDC were not regulated because it was an “entitlement,” which meant that qualified families could not be turned away from financial aid.
Many officials were looking for alternatives to AFDC at the beginning of the 1990s. Even though the average monthly payment in 1995 was only $132.64 and $376.70 for each beneficiary, 40% of applicants received welfare for at least two years.
President Bill Clinton signed the Personal Responsibility and Work Opportunity Reconciliation Act in 1996 as a response to this dependency, which replaced AFDC with TANF. The federal government withdrew the right to receive cash aid under the new scheme, set time limits on how long families could get benefits, and added job requirements.
A family is only permitted to receive TANF payments for a total lifetime period of five years, which is calculated over all welfare periods. A minimum of 50% of TANF users were required to engage in “work” activities by 2002, including employment, on-the-job training, vocational education, job searching, and community service. For a single parent, these tasks must be completed in a total of thirty hours per week. Recipients who refuse to engage in work-related activities must be disciplined, which reduces cash benefits.
In order to enforce sanctions, it may be necessary to immediately halt all cash payments, stop support only after several instances of noncompliance, or just partially reduce grants to non-compliant families. States can, and often do, impose stricter requirements on how much time families must spend working or attending school in order to qualify for cash assistance. The main focus on placing welfare users in work was solidified by TANF.
Food Stamp Program
Low-income families can get assistance through the Food Stamp Program, authorized as a permanent program in 1964, to purchase affordable, nutrient-rich food. Congress mandated that all states offer the program beginning in 1974. In order to purchase food at licensed retail facilities, recipients use coupons and electronic benefits transfer (EBT) cards.
The things that can be bought using food stamps are restricted (e.g., they cannot be used to purchase cigarettes or alcohol). Taxes are not applied to purchases made with food stamps by recipients. The standards and full funding of FSP benefits under the direction of the Department of Agriculture’s Food and Nutrition Service are fully the federal government’s responsibility (FNS). The administration of the Food Stamp Program is mostly the responsibility of state governments through local welfare agencies.
Welfare reform required recipients to work and gave states the opportunity to simplify administrative processes for establishing eligibility and benefits. If claimants aged 18 to 50 without children received benefits for more than three months without working, they lost their eligibility for food stamps.
Before welfare reform, the caseload percentage for the FSP followed a cyclical pattern and encompassed between 6 and 10 percent of the population of the United States. This percentage was higher during recessions. The percentage of FSP cases decreased as a result of welfare reform.
Supplemental Security Income
The Social Security Act of 1974 authorized Supplemental Security Income, which provides monthly cash benefits to low-income people whose inability to work is due to disability or blindness. Additionally, families may be compensated for supporting disabled children.
Children’s survivor benefits are not included in the SSI program since they are not permitted under Title XVI but rather Title II of the Social Security Act. Although SSI and TANF payments cannot be received simultaneously, SSI and Social Security benefits can. (In 2003, 57 percent of elderly SSI participants were also receiving Social Security benefits, making up 35% of all SSI recipients.)
In 1996–1997, legislation relating to immigration and welfare reforms aimed to address three alleged areas of SSI program misuse. First, the legislation established protocols to prevent SSI funds from going to prisoners. Second, the legislation cut benefits for kids with fewer disabilities, especially for kids who have behavioral issues rather than medical illnesses. Finally, it was decided that new immigrants were not eligible for benefits until they became citizens.
Medicaid
Under the Social Security Act, Medicaid was made a legal requirement in 1965 to help state governments meet the medical care needs of qualifying low-income people. More than 49.7 million low-income people who fall into one or more of the following categories are served by Medicaid: the elderly, blind, disabled, people with certain other children or families with dependent children, pregnant women, or members of families with dependent children.
Medicaid is the largest government program that offers health care and medical services to the poorest citizens of the country. It is also the main source of funding for nursing homes and institutions for persons with mental retardation.
Housing Assistance
Housing help refers to a wide range of initiatives by the federal and state governments to raise housing standards and minimize housing expenses for lower-income families. Most federal housing programs are managed by the Federal Housing Administration (FHA) and the Department of Housing and Urban Development (HUD). Currently, each tenant of the programs pays about 30% of their salary in rent.
Under the welfare policy, subsidies and public housing are the two main housing support programs for low-income families. The HUD Section 8 voucher program is currently funded by the federal government, which has been providing rental subsidies since the mid-1930s. Through their construction power, local governments frequently fund subsidized housing by mandating that a share of newly built homes be made accessible to low-income families at rents below market rates. Private owner-managers, not local public housing organizations (PHAs), are virtually always in charge of managing public housing (the actual providing of homes). Public housing today makes up a very modest portion of all housing aid, as opposed to the mid-1960s.
Earned Income Tax Credit
The 1975-enacted Earned Income Tax Credit provides working Americans with modest incomes with a refundable tax credit. The tax credit boosts earnings up to a predetermined amount, increasing family income. The program’s original intent was to encourage people to look for employment rather than rely on welfare assistance by reducing the burden of Social Security taxes on low-income people. Receiving benefits is discreet, inconspicuous, and stigma-free, as the EITC is a component of the standard federal income tax system. Around 18.6 million claimants received $33.1 billion from the EITC in 2004, which was much more than anticipated spending on other major programs like TANF and food stamps.
One of the few initiatives that successfully reaches the population who qualifies is EITC. According to an analysis of EITC claims from 1999, 86 percent of qualified families with children received the credit. (By contrast, in 1999, just 66% of qualified families with children received food stamp assistance.) Although the EITC is typically given as an annual return all at once, it can also be paid to employees on a weekly, bimonthly, or monthly basis.
Conclusion
U.S. Welfare Programs refer to a variety of public assistance programs for people and families who cannot financially support themselves. Various social welfare programs include housing, food, medical care, and financial support for daily living. Taxpayer-financed welfare programs assist those in need in overcoming financial stress and adversity. Food stamps, vouchers, or, in some situations, direct cash are sometimes given to welfare beneficiaries on a biweekly or monthly basis. Welfare is intended to assist families and people in need as they strive for a more stable financial future.
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