Study Warns of Welfare Reform Impact

Welfare reform legislation pending in Congress could push more than 1.1 million children into poverty and worsen conditions for millions more already below the poverty line, according to a new analysis by a research institute.

The study concludes that the legislation, expected to win final congressional approval next week, would result in one-fifth of all families with children--some 11 million families--losing an average of $1,000 in income a year, according to the report. Almost half of those families currently have members who work.

The Washington-based Urban Institute, an independent research center that regularly produces reports for Republican and Democratic administrations, conducted the analysis on its own because the Clinton administration was not willing to be involved.

The institute produced a similar analysis for the White House last year that was not made public but was leaked to the press.

The findings helped persuade many lawmakers to vote against last year’s welfare measure and influenced President Clinton’s decision to veto it. Democratic opponents of the GOP welfare effort hope that the new report will have the same effect, despite some indications that Clinton is eager to sign the current bill.

“The issue of how many children this bill puts into poverty has great concreteness for legislators,” Sen. Daniel Patrick Moynihan (D-N.Y.) said. Disclosure of last year’s analysis “changed the votes of 34 senators,” he added.

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Isabel Sawhill, a senior analyst at the Urban Institute and a former Clinton administration official, said the institute did the study because it believed there was a shortage of information about the effects of the legislation, which is nearing a final vote, probably next week.

“As a country, we should not be adopting such dramatic changes in our social welfare law without first knowing what the likely consequences will be,” Sawhill said.

The White House has rejected requests in recent weeks to provide senior members of Congress with analysis of the legislation’s impact on child poverty.

“We believe that requiring and promoting work offers great potential for lifting families out of poverty. But this impact is very difficult to estimate in a poverty analysis,” Jacob Lew, acting director of the White House Office of Management and Budget, explained in a letter to Moynihan.

The analysis of last year’s legislation showed that an estimated 1.5 million children would be pushed into poverty--400,000 more than under the current bill. Lew conceded that the difference was not great. But he, as well as many congressional Republicans, argued that the Urban Institute’s method of analysis does not account for other benefits of welfare reform.

“Children growing up in homes and communities where there is work will be far better off over the long run than children growing up in homes and communities where there is only welfare--even though a family on welfare might look better off in a poverty analysis,” he said.

The Urban Institute said that it used more conservative assumptions about the effects of the legislation on state policymakers and welfare recipients than it used in last year’s report.

Under the institute’s definition of poverty, about 10 million American children now live in poverty. Its figures indicate the number of children in poverty would increase by more than 10% under the new bill.

Most of the children who would be forced into poverty have parents who work but rely on public assistance to boost them above the poverty line, which was $12,156 for a family of three in 1995. Those who rely solely on benefits already live below the poverty line and would be made more destitute by the changes.

House and Senate representatives began meeting Thursday to resolve differences between the versions of the bill approved by each chamber. The plans would put the first-ever time limit on cash benefits, require recipients to find work within two years and give states authority to design programs for helping participants move from welfare to work.

The impact of the legislative changes is so broad because they overhaul many programs, including Aid to Families With Dependent Children, the main cash welfare program for families; food stamps; supplemental security income; housing aid; child nutrition programs; and benefits for immigrants.

“If this bill is enacted into law, it will increase child poverty more than any other piece of legislation enacted in decades,” said Bob Greenstein, director of the Center on Budget and Policy Priorities, a liberal Washington think tank.

“The tragedy is that if this is enacted a president who genuinely cares more about children and reducing child poverty than any president we’ve had in decades is likely to have as part of his legacy policy changes made under his watch that substantially increase the extent and depth of child poverty. It’s almost like an event out of a Greek tragedy.”