Car Ownership:
Policy History
and
Current Proposals
December 5, 2005
Margy Waller, Brookings Institution
Public Policy History
• TANF – 1996
• Job Access and Reverse Commute –
1998
• Food Stamps – changes to asset limit
• Proposal for Individual Development
Accounts - 2000
• Welfare-to-Work grants (IDAs only)
Recent Federal Policy
Proposals
• TANF reauthorization - Senate
proposals for demonstration
• Food stamp policy – Bush proposal and
reconciliation bill
• Creating Access to Rides (CAR) Act
TANF reauthorization
• IDAs for cars
– change TANF, add to AFIA
• Car ownership demonstration
– 25 million per year authorization
Asset Limit Policy
• After welfare reform, numerous states
changed asset tests for services eligibility,
all states raised TANF auto exemption
• Administration FY 2003 budget proposal to
exempt one car per worker from asset
limits: “allowing one vehicle per work-able
person to help them find and retain jobs”
• Reconciliation bill – Complicates changes to
food stamps asset limits
Transportation reauthorization:
Job Access and Reverse
Commute
• Prior to 2005 – Limited use for car
programs, primarily for Ways to Work
earmarks
• After 2005 – Changes to federal program:
No earmarks or national competition
• Formula grants to states and localities
Car Donation Tax Deduction
• 2004 change to tax policy
• Limits deduction to sale price, with
exceptions
• If car transferred by donee LICO
program for less than market value,
donor gets FMV for donation
• Congress recognized value of LICO
programs
Environment and Sprawl
• Anthony Downs: doubling the number
of people who take mass transit to
work would reduce drivers by less
than 5 percent
• If every car-deprived household in
the bottom half of the income scale
were to buy an automobile, it would
increase the number of vehicles on
the road by only around 3.5
percent
Is transit the answer?
• Transit - better access to public
transit had no or small effect on
employment for welfare recipients
• Scholars agree that car is better
predictor of employment than public
transit
• Invest in better service for dense,
urban areas
Margy Waller
Visiting Fellow
Brookings Institution
202-797-6466
mwaller@brookings.edu