The Real Welfare Crisis

All the political talk about state assistance for the poor and vulnerable is overshadowing a real and looming crisis in that assistance.

In October of 1996, welfare as we knew it ended in South Carolina, replaced by the state’s version of Temporary Assistance for Needy Families, or welfare to work. The new laws changed everything.

Parents now enter a time-limited program that focuses on moving families from dependence on a welfare check to dependence on a paycheck. They are trained for jobs, and go to work. Families cannot receive welfare assistance for longer than 24 months, and most no longer need it in 12. The program is a huge success in South Carolina, and the number of families on welfare quickly dropped from 50,000 to 14,000.

Part of the reason for success was the new flexibility Congress gave states. Under the old welfare program, there was no limit to the amount of money states could spend on welfare, and Congress made most of the rules. Under the reformed welfare program, states received a fixed amount of federal funds but were given flexibility to design programs that worked for their citizens.

To reassure states worried about how they might handle increased caseloads, Congress created a contingency fund, and made a one-time appropriation of $2 billion. To access the fund, a state had to have unusually high unemployment rates relative to the rest of the nation or at least a 10 percent increase in the number of families getting food stamps. From 1996 through 2008, very few states met these qualifying conditions.

However, since 2008, many states began drawing on the fund. Small states such as South Carolina that received modest help from the fund were soon overwhelmed by states with large populations such as New York, California, Michigan and Texas. By January of 2009, the entire $2 billion was depleted. As a result, the federal government recently notified South Carolina that it would receive less than 15 percent of the funds it is entitled to receive, a cut equating to more than $16 million.

Of course, this could not have happened at a worse time. With unemployment at an all-time high, state revenues declining and state agencies experiencing multiple budget cuts, South Carolina desperately needs 100 percent of the federal funds it is entitled to receive.

The Department of Social Services, in partnership with the state workforce agency, has developed a subsidized jobs program that is helping businesses get back on their feet while helping parents go back to work. To date, DSS has put more than 1,000 people in jobs, keeping them off welfare, through this program. The agency also assists parents with transportation, child care, work uniforms and required on-the-job tools to help move families off welfare and back to work. But with lack of funding, this may soon end.

Unless the federal contingency fund is replenished and replenished quickly, DSS will begin to shut these programs down. Without federal dollars, the agency cannot run this subsidized employment program after September.

We would love to see the state not need these funds, but because of the current economic condition we have more people in need than when welfare reform was passed in 1996. Without this much-needed funding, things will spiral out of control. We will see higher unemployment rates, more businesses close and an increase in the state’s poverty rate. It affects us all.

Congress made a deal with states to help them in the worst economic times, and it needs to keep its end of the bargain. This is the time when help matters the most. Congress must act quickly to replenish the contingency fund before DSS and similar agencies in other states are forced to shut down employment programs that have taken years to build. Our state’s congressional delegation needs to get behind this legislation and push hard.

The goal of the Sisters of Charity Foundation of South Carolina is for families to have the resources to live out of poverty. DSS has made great strides in changing a government handout into a job, thus creating an engine of change for needy families. It will be tragic if South Carolina is forced to put that engine in reverse.