The Ladder

A Blog from New America's Asset Building Program

Mitt Romney Needs a Tutorial on How Well the Safety Net Works for Poor People

Published:  February 1, 2012

Conditional clauses are very important. Mitt Romney's statement yesterday that he's "not worried about the very poor" is based on the supposition that "there's a safety net there," an "ample" safety net at that. This is similar to my saying that I'm not worried about whether my husband will starve to death when I leave town because he knows how to order a pizza. If taken out of context, saying that I don't worry about whether my husband will starve to death might seem insensitive or even cruel. BUT, in this case, the conditional clause rings true because he does, in fact, know how to order a pizza, and therefore, will not starve to death. Romney has argued that his statement has not been considered similarly. In his case, however, the condition that he believes redeems the potentially alienating one it is hollow. And this is "ample" reason to worry.

The recession created substantial demand for public assistance programs, which revealed both the strengths and weaknesses. Recent analysis by the Center on Budget and Policy Priorities reveals that around 7 million people were kept out of poverty by programs like SNAP and the EITC in 2010. For sure, these programs create a lifeline for families that are struggling to make ends meet. But, as research that I have conducted demonstrates, there are critical failings within and among programs that limit how well they meet the needs of the families they were designed to serve.

First, programs can be inaccessible when families need them. Lack of awareness, as well as a maze of different requirements for different programs creating confusion and frustration can lead many families who might be eligible not to apply. In fact, about 25% of families below the poverty line don't receive any form of assistance. Families may also encounter physical barriers to receiving benefits. A GAO report estimates that families attempting to participate in the 11 major public assistance programs would have to fill out 6-8 applications and visit 6 offices.

Second, programs aren't sufficiently funded to serve all families and at adequate benefit levels. Families receiving SNAP for food assistance frequently run out benefits by the third week of the month. But, since SNAP is an entitlement, all eligible families who apply receive benefits. The same is not true for programs like TANF and child care subsidies that are funded by block grants, which do not increase funding in response to increased need. As a result, only 40% of eligible families receive TANF and only 1 out of 6 families receive child care subsidies. It's important to note that these are programs that are intended to facilitate work by subsidizing job training, education, transportation, or a safe place for kids to go so a parent to work or look for work. These are prime examples of anti-dependency programs and why investing to make them work better for more people achieve the self-sufficiency goal that is extolled by Republican candidates.

Finally, programs fail to provide for a smooth transition off of them. In many programs, families are penalized for taking actions that increase their financial stability like increasing their earnings and saving. A family in Iowa, for instance is as well off earning $12 an hour as $18 due to the loss of benefits. This creates an unnecessary trade-off between a future financial advantage and supporting your family today. The loss of child care subsidies for that Iowa family can mean the difference between just getting by and $7,000 in expenses they cannot afford. It can also compromise a parent's ability to secure and maintain work. Similarly, public assistance programs restrict the amount of savings a family can have and receive assistance. Savings have a demonstrated impact on the ability of families to gain financial traction so that minor events don't become destabilizing. Requiring families to spend down what they have or prohibit them from saving can mean making a temporary need a sustained need.

To his credit, Governor Romney did say that "if there are cracks [in the safety net], I'll fix them." But, considering he's made policy proposals that would actually result in the opposite outcome, it seems unlikely that this conditional statement will have any more resonance than the first. Even if his stated focus is on the middle class, that should also be inclusive of people who have fallen out or have never been able to break in. Fixing the safety net and creating pathways for families in poverty to move up should be part of his middle-class agenda.

For a more entertaining way to digest this information, please try your hand at The Safety Net Game: Chutes but no Ladders.

 

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