August 05, 2001

This week marks the fifth anniversary of the signing of the 1996 welfare reform law, the Personal Responsibility and Work Reconciliation Act (PRWORA), legislation which has had an enormous impact on the Latino community, particularly among legal immigrants and the poor. The National Council of La Raza (NCLR) believes that, on the eve of Congressional reauthorization of this law, we should examine and learn from the legacy of welfare reform.

As NCLR has been actively engaged in anti-poverty and welfare reform policy for over two decades, we have closely monitored the implementation of the main income-support program under the law, Temporary Assistance to Needy Families (TANF). Over the past five years, the implementation of the law has had mixed results. In some cases, the law's provisions, coupled with strong state supports and a booming economy, have facilitated economic mobility for some low-income families. In other cases, the law has resulted in deeper poverty, inadequate nutrition, and lack of health care for some segments of America's children and families.

Overall, while there is a smaller number of Latino families and children on the TANF rolls today, Hispanics now constitute a larger proportion of those participating in the TANF program, both nationwide and in some states, compared to five years ago. Data from the 50 states show that:

The number of Latino families on the TANF rolls declined between 1995-96 and 1998-99, but at a slower rate than for White and Black families. Between 1995-96 and 1998-99, the number of Hispanic families on TANF nationwide dropped by almost 300,000, a decline of 31.5%. However, in comparison, during the same period, the number of White and Black families declined by 50.6% and 39.6%, respectively. In addition, a recent study of welfare "leavers" revealed that Hispanics only constituted 13.1% of former recipients who left the TANF rolls during the study period (between 1995 and 1997) while more than half (52.2%) were White non-Hispanic.
The share of all families receiving TANF/AFDC which is Hispanic increased by 17.7% between 1995-96 and 1998-99. Between October 1998 and September 1999, 24.5% of all families receiving TANF were Hispanic, whereas 38.3% were Black and 30.5% were White. However, between 1995 and 1996 Hispanics constituted 20.8% of all families receiving AFDC, while 36.9% were Black and 35.9% were White.
The segment of all children receiving TANF/AFDC which is Latino grew by 16.1% between 1995-96 and 1998-99. Between October 1998 and September 1999, 26.0% of all children on TANF were Hispanic, while 39.5% were Black and 25.8% were White. However, between 1995 and 1996 Hispanic children constituted 22.4% of the AFDC caseload, while 38.4% were Black and 31.6% were White.

The research suggests that families who were able to make a successful transition from welfare to paid work were those headed by adults with some work experience and networks for support, such as daycare. In addition, they tended to live in areas with low unemployment. At the same time, those who remain on the rolls tend to be those with low levels of education, inadequate work experience, and limited English proficiency, and live in high-unemployment or economically-depressed areas.

The largest single piece of welfare reform legislation enacted in 1996 was a budget cut in services to immigrants who are legally in this country, of whom Latinos are a significant proportion. Forty-four percent of the net "savings" of welfare reform - used to finance the program - occurred by severely cutting benefits to tax-paying, long-term, working poor, legal permanent residents. In addition, one in ten children in the U.S. lives in a household with a legal immigrant parent. As a result of welfare reform, as many as 600,000 U.S. citizen children lost access to Food Stamps by virtue of their parents' status. While the federal government apparently recognized the life-threatening nature of many of the cuts and has since restored eligibility for some benefits from which immigrants were originally barred, the job is far from finished.

There is a range of legal immigrants who still are not allowed basic health and nutrition supports. These include pregnant women who are ineligible for prenatal care, children who are barred from basic health care, working poor families who lack access to food programs, and victims of domestic violence who are barred from the assistance they need to escape.

In Puerto Rico, the less-than-favorable economy relative to the states means that welfare reform implementation has occurred at a time of double-digit unemployment. A new NCLR research report shows that, similar to what is happening in the states, Puerto Rico has experienced declines in welfare caseloads since the 1996 welfare law was passed. While the number of recipients receiving welfare declined by 17% from 1990 to 1996, the number of recipients receiving public assistance declined by 38% in the three-year period after the law was passed.

In addition, data compiled by the Puerto Rico Department of the Family show that more than one-third of families (36.7%) left the welfare rolls in Puerto Rico in 1999 because of "failure to comply with program rules" while only 15% reported "employment or excess of earnings" as the reason for leaving. As on the mainland, welfare recipients in Puerto Rico face barriers that affect their employment options, including low educational attainment and few choices for child care, as well as lack of transportation, especially in rural or mountain areas of the island. Moreover, Puerto Rico low-wage workers do not have the benefit of the Earned Income Tax Credit, which many states have used to help cushion the transition of welfare recipients into low-wage jobs.

Next Steps for Policy and Reauthorization

The Congress and the Administration have an opportunity now - and as the 2002 Welfare Reform Reauthorization process unfolds - to ameliorate the harsh effects of the law and include new provisions to help low-income children and families in America gain economic security.


Reauthorization should center on policies that reduce poverty and enhance economic status, not solely reduce caseloads. Declines in caseloads across the country have not necessarily been accompanied by increases in economic well-being. Reauthorization should, in particular, focus on child well-being and promote policies that enhance economic security of children.

For some areas of the country and Puerto Rico, policies that foster economic development and job creation need to be implemented, especially as the economy weakens. The movement of many welfare recipients into the workforce was significantly boosted by the nation's strong economy. However, with the onset of economic downturns, rising unemployment, and job losses, even TANF recipients with adequate preparation and experience will face difficulty in the job market. Broader efforts to spur economic growth are needed to accompany further implementation of the "work-first" approach.
Implementation benchmarks should be adjusted to the economic realities of different geographic regions. Given that supplemental policies that function as work supports to TANF recipients, such as the EITC, do not exist in Puerto Rico, and that unemployment is three times higher on the island than in the states, specific TANF provisions with harsh consequences or penalties should be flexible and take into account the different circumstances of recipients.
Greater collaboration is needed among government agencies to provide a network of supports to TANF recipients. State Departments of Social Services and Labor, both on the mainland and in Puerto Rico, must better coordinate their services to low-income families. In some cases, there is a disconnect between expectations placed on the TANF recipients and services provided to them.

Policies should help, not hinder, the ability of fathers to play a greater role in supporting their families, since welfare reform is a family issue and directly affects the well-being of children.

Policies that encourage the involvement of the private sector and other institutions in anti-poverty policy should be fostered. Economic mobility for all American families, and the success of welfare reform implementation, cannot occur with public policy alone. The private sector must strengthen its efforts to provide employment and workforce training opportunities to low-wage workers. In addition, roles for community-based organizations and local institutions with resources, such as universities and community development financial institutions, also need to be identified and incorporated into efforts to assist poor families.

The Farm Bill, soon to be considered in the Senate, allows a unique opportunity to include a provision to restore legal immigrant eligibility to food stamps. As included in the widely supported "Nutrition Assistance for Working Families and Seniors Act," such a provision would restore justice to low-income legal immigrants who are playing by the rules, working hard, and paying taxes that support the very programs from which they are barred.
Congressional efforts to address health care and lack of health insurance should include language at least to restore health access to pregnant women and children, as outlined by the popular and bipartisan Legal Immigrant Children's Health Improvement Act.

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