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By the end of this section, you will be able to:
  • Identify the antipoverty government programs that compose the safety net
  • Explain the primary goals of the safety net programs and how these programs have changed over time
  • Discuss the complexities of these safety net programs and why they can be controversial

The U.S. government has implemented a number of programs to assist those below the poverty line and those who have incomes just above the poverty line, who are referred to as the near-poor    . Such programs are called the safety net    , in recognition of the fact that they offer some protection for those who find themselves without jobs or income.

Temporary assistance for needy families

From the Great Depression of the 1930s until 1996, the United States’ most visible antipoverty program was Aid to Families with Dependent Children (AFDC) , which provided cash payments to mothers with children who were below the poverty line. This program was often just called “welfare.” In 1996, Congress passed and President Bill Clinton signed into law the Personal Responsibility and Work Opportunity Reconciliation Act, more commonly called the “welfare reform act.” The new law replaced AFDC with Temporary Assistance for Needy Families (TANF) .

Visit this website to watch a video of President Bill Clinton’s Welfare Reform speech.

TANF brought several dramatic changes in how welfare operated. Under the old AFDC program, states set the level of welfare benefits that they would pay to the poor, and the federal government guaranteed it would chip in some of the money as well. The federal government’s welfare spending would rise or fall depending on the number of poor people, and on how each state set its own welfare contribution.

Under TANF, however, the federal government gives a fixed amount of money to each state. The state can then use the money for almost any program with an antipoverty component: for example, the state might use the money to give cash to poor families, or to reduce teenage pregnancy, or even to raise the high school graduation rate. However, the federal government imposed two key requirements. First, if states are to keep receiving the TANF grants, they must impose work requirements so that most of those receiving TANF benefits are working (or attending school). Second, no one can receive TANF benefits with federal money for more than a total of five years over his or her lifetime. The old AFDC program had no such work requirements or time limits.

TANF attempts to avoid the poverty trap by requiring that welfare recipients work and by limiting the length of time they can receive benefits. In its first few years, the program was quite successful. The number of families receiving payments in 1995, the last year of AFDC, was 4.8 million. By 2012, according to the Congressional Research Service, the average number of families receiving payments under TANF was 1.8 million—a decline of more than half.

TANF benefits to poor families vary considerably across states. For example, again according to the Congressional Research Service, in 2011 the highest monthly payment in Alaska to a single mother with two children was $923, while in Mississippi the highest monthly payment to that family was $170. These payments reflect differences in states’ cost of living. Total spending on TANF was approximately $16.6 billion in 1997. As of 2012, spending was at $12 billion, an almost 28% decrease, split about evenly between the federal and state governments. When you take into account the effects of inflation, the decline is even greater. Moreover, there seemed little evidence that poor families were suffering a reduced standard of living as a result of TANF—although, on the other side, there was not much evidence that poor families had greatly improved their total levels of income, either.

Questions & Answers

What are the basic concepts of economic
Taye Reply
With the aid of appropriate diagram differentiate between change in demand
Jones Reply
explain demand
Alaka Reply
Demand is a quantity of goods and services a consumer is willing to buy at given price in a period of time.
Aliado
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Alaka
what is demands and it law
matthew Reply
Demands, is the quantity of agoods a consumer is willing to buy at given price in a give period of time where as the law of demand states that, the higher the price, the lower the quantity demanded and the lower the price, the higher the quantity demanded by consumers
Aliado
what is division of labour
Sunday Reply
Demand is set to be enlastic when its what
bohvy Reply
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SHADAB
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john
a little
Tith
I do speak English.. the question is Demand is set to be elasticity went the dash *2
bohvy
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Tith
hi
muhammed
if both %^ Increase in input & %^ increase in output, then it is elastic and = to 1.
Rowda
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SHADAB
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Vuyai
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john
How are you all doing rumies
john
why is scarcity a fundamental problem in economic
Abubakar Reply
what is demand curve
Takyi Reply
xplain
Ubong
thanks for your help with the same....
SHADAB
What is elasticity of demand
Karim
what is unemployment
Alaka
what is opportunity cost
Samuel Reply
Opportunity cost which also mean real cost it is a term used for foregone alternatives
john
what is demand
ikea Reply
Demand may simply be define as the total quantity of good or service a consumer are willing to buy at a specific price within a period of time.
john
your language is tough
techy Reply
How economics is related to other subjects?
Mikateko Reply
It is social science related subjects
john
How ? explain
Mikateko
and something else help me about business cycle
Mikateko
s classified as a social science. This view makes eco­nomics an academic relative of political science, sociology, psychology and anthropology. All of these disciplines study the behaviour of human beings individually and in groups.
john
The business cycle describes the rise and fall in production output of goods and services in an economy. Business cycles are generally measured using the rise and fall in the real gross domestic product (GDP) or the GDP.
john
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Selena
hii
Yes
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Yes
How are you doing every one
john
hello Selena
Yes
hi
NONSO
yes
NONSO
What Is Economic Growth?
Saviour Reply
is the increase of quantity of goods ans services
Hashi
what is economic
Yomina Reply
Economic may be define as the science which studies human behaviour in relationship with end and scarce which have alternative use. This definition was drafted by Lionel robbin
john
good
Tith
it is science of wealth.
SHADAB
if I want some documents from you ,Are you ok?
Tith
it is not only wealth as well as welfare also.as well as scarce means of ends,for human satisfaction for alternative uses.
Avijit
economics applications
techy
who should study economics
Mary Reply
hi
Adu
How are you doing
john
finr
Tith
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Tith
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Tith
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Adu
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Tith
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Source:  OpenStax, Principles of economics. OpenStax CNX. Sep 19, 2014 Download for free at http://legacy.cnx.org/content/col11613/1.11
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