WASHINGTON, Oct. 12 -- New government figures show a profound change in welfare spending, shifting money from cash assistance into child care, education, training and other services intended to help poor people get jobs and stay off welfare.
Cash assistance payments now account for less than half of all spending under the nation's main welfare program, Temporary Assistance for Needy Families, federal officials say.
The proportion has been declining steadily since 1996, when Congress revamped welfare and abolished the guarantee of cash assistance for the nation's poorest children. The 1996 law required most adults to work within two years of receiving aid and gave states sweeping authority to run their welfare and work programs with lump sums of federal money.
"Welfare" used to mean a monthly check that could be immediately converted to cash. But statistics tabulated by the Department of Health and Human Services, at the request of The New York Times, show that the proportion of federal and state welfare money spent on cash assistance declined to 44 percent in 2002, from 77 percent in 1997. The proportion allocated to various types of noncash assistance shot up to 56 percent, from 23 percent in 1997.
"The program has been fundamentally transformed," said Wade F. Horn, assistant secretary of health and human services in charge of welfare policy.
The federal and state money is used not only to provide a minimal income to single mothers, but also to help them move from welfare to work, hold onto low-wage jobs and move into better-paying jobs.
The money is being used to pay for transportation from home to work, to treat drug abuse and mental health problems and to provide temporary shelter for women who have suffered domestic violence. The money is also used for one-time payments for example, for car repairs to alleviate immediate financial needs, so people never go on the welfare rolls.
Temporary Assistance for Needy Families is financed jointly by the federal government and the states. Of the total of $25.4 billion spent in 2002, about $11.2 billion was for cash assistance and $14.2 billion was for noncash benefits.
Joel Potts, the welfare director in Ohio, said that nearly 75 percent of Ohio's welfare money was spent on cash assistance before 1996. Now, Mr. Potts said, only 30 percent goes for cash assistance, while 31 percent is spent on child care, and 39 percent goes for job training, vocational education, transportation, housing and counseling.
"This is a fundamental and significant shift in social policy," he said.
Wisconsin says it spent $217 million on cash assistance in 1997 and $72 million on child care subsidies. In 2002, it spent $40 million on cash assistance and $266 million on child care.
In Ohio, Wisconsin and other states, much of the child care money goes to people who are not receiving monthly welfare checks families who have left welfare or never been on it.
Mark H. Greenberg, a lawyer at the Center for Law and Social Policy, a research and advocacy group, said that by directing money from the welfare block grant to child care, job training and other services, states had been able to "hold down welfare caseloads." Indeed, Mr. Greenberg said, a large share of the welfare block grant is being used to help families who do not receive welfare in the traditional sense.
The official federal tally of welfare recipients counts only people who are receiving monthly cash assistance.
Since the welfare law was signed in 1996, the number of people on welfare has plunged, to 5 million from 12.2 million, a 59 percent decline. The federal government provides a fixed amount to the states, $16.5 billion a year, regardless of how many people are on the rolls.
Representative Benjamin L. Cardin of Maryland, the senior Democrat on the Ways and Means subcommittee responsible for welfare policy, said: "The welfare caseload is changing more than it is shrinking. There are certainly fewer people receiving cash assistance, but there are also more people receiving child care, employment services, vocational training and other assistance designed to promote work."
Cynthia M. Fagnoni of the General Accounting Office, an investigative arm of Congress, said: "Prior to welfare reform, states focused their welfare spending on providing monthly cash payments. Since welfare reform, states are spending a smaller proportion of welfare dollars on monthly cash payments and a larger share on services."
The federal government does not have comprehensive data showing the number of people who receive noncash benefits and services subsidized by the main federal-state welfare program.
But the trend is clear. "While cash assistance caseloads were falling by half," Mr. Greenberg said, "state child care caseloads were doubling, to about two million. Politically, there is much more support for child care than for cash assistance."
Mr. Potts, the Ohio official, said the new strategy was no less expensive than the old one.
"The cheapest thing to do is to pay a woman to stay home and raise kids in extreme poverty," he said. "We did that for 60 years. We found that cash assistance, by itself, leads to nothing."
Robin Arnold-Williams, director of the Utah Department of Human Services, said: "The old traditional welfare program is now an employment program. But it requires an upfront investment that may cost more in the short run. Child care alone may be more expensive than handing out a cash grant."
Sharon Parrott, a policy analyst at the Center on Budget and Policy Priorities, a research and advocacy group, said that child care, transportation and other services had been "an enormous help to low-income families, enabling them to stay off welfare and to make the transition from welfare to work." But she added, "Falling caseloads amid rising poverty are cause for concern."
The number of people in poverty rose to 34.6 million in 2002, from 31.6 million in 2000, the Census Bureau reported last month. But the number of people on welfare continued to decline, to 5 million in 2002, from 5.8 million in 2000.
Many states use welfare money to aid victims of domestic violence. Welfare officials say that at least 20 percent of welfare recipients have suffered such abuse in the last year, often at the hands of men who discourage them from working.
"Safety is a paramount issue for many welfare recipients," said David A. Berns, director of the Arizona Department of Economic Security. "A woman will never be economically self-sufficient if she is afraid to go out of the house for fear of what might happen to her."
By ROBERT PEAR
The New York Times
Published: October 13, 2003