Reject proposal to end welfare
Olivia Golden, Sheila R. Zedlewski
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Document date: June 14, 2009
Released online: June 16, 2009
Abstract
In this commentary for The Press-Enterprise (Riverside, Calif.), Olivia Golden and Sheila Zedlewski advise
states to grab the federal dollars offered by the economic stimulus package to help pay for recession-driven
increases in the demand for welfare.
Facing a traumatic budget shortfall, California has proposed eliminating its welfare program, CalWORKS. But
this is the worst possible time for any state to consider cutting benefits to poor children.
Welfare dollars stimulate state economies, tide families over during spells of unemployment, and spare many
children economic deprivation's harshest effects. Instead of cutting benefits, states should be grabbing new
federal dollars offered to help pay for recession-driven increases in the demand for welfare.
CalWORKS is California's version of the welfare overhaul ushered in by Congress in the mid-1990s.
Experiments in Riverside County shaped CalWORKS' job-focused design and became a model for the nation.
The program helps unemployed parents find work, underwrites child care as parents move into jobs, and pays
cash benefits while parents try to move to self-sufficiency. Cash support from CalWORKS and similar
programs play an especially crucial role during a recession, when many parents can't find work and don't
qualify for unemployment insurance.
For children, eight of every 10 ten CalWORKS recipients, CalWORKS is a veritable lifeline. Two years ago, 17
percent of all California children lived in poverty – 4 points higher than the national average.
Hundreds of studies document the links between poverty and school failure, poor physical and mental health,
and delinquent behavior. Children and teens growing up in deep poverty are especially vulnerable. And
society pays part of neglect's price in huge criminal justice and health care costs and in productivity losses.
Our colleague Harry Holzer places poverty's annual cost at $500 billion.
Compared with other states' welfare programs, California's has offered a wider, more generous safety net for
children. True, such generosity is difficult to maintain, especially during periods of rising caseloads. But
recessions that cost parents their jobs and income invite a slide into ever deeper poverty so that when the
recession ends, its impacts on children don't.
Its high cost aside, welfare isn't to blame for California's fiscal crisis. In 2007, the state spent about $7 billion
on this program (and the federal government paid 51 percent of this cost), not much more than it spent in
1998. Adjusting for inflation, California's welfare costs have dropped by 17 percent in the past decade. But
the state expects the recession to drive these costs up in the next two years. Precisely to ease these
pressures, the American Recovery and Reinvestment Act of 2009 offers up to $5 billion in emergency funds
for welfare in the next two years, but states must put up $1 for every $5 they get.
Eliminating or even trimming welfare amid today's recession is a penny-wise and pound-foolish solution to a
state's budget problems. Forfeiting short-term benefits from the federal government and the stimulus means
losing out on the well-established multiplier effects that cash payments to poor families spawn.
Most important, the state will lose in the long run as poverty's scars register in its courts, prisons, hospitals
and productivity rates. What's good for California's children in this case is good for California's economy.
Olivia Golden is an institute fellow at the Urban Institute in Washington, D.C. Sheila Zedlewski directs the
institute's Income and Benefits Policy Center.
The views expressed are those of the authors and should not be attributed to the Urban Institute, its
sponsors, staff, or trustees.
Other Publications by the Authors
Olivia Golden
Sheila R. Zedlewski
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