Income Money and Poverty Status - Government Programs

Because minorities are disproportionately poor, they have long accounted for a major portion of the welfare rolls across the United States. The U.S. government offers various forms of assistance to people living with economic hardship. Some of these programs are federally run, and others are run at the state level. In many cases states run federally mandated government programs, which can make tracking them complicated.

In 1996 the U.S. Congress enacted the Personal Responsibility and Work Opportunity Reconciliation Act (PL 104-193) to reform the welfare system. The primary goal of the legislation was to get as many people as possible into the paid labor force and off welfare rolls. The law set limits on how long people could receive welfare benefits. Aid to Families with Dependent Children (AFDC), a guaranteed assistance program for low-income families, was eliminated and replaced with the Temporary Assistance for Needy Families (TANF) program in 1996. The Committee on Ways and Means (February 26, 2006, http://waysandmeans.house.gov/media/pdf/welfare/022706welfare.pdf) reports that the number of TANF recipients dropped from 12.2 million TABLE 5.7 Percentage of total family income from means-tested assistance programs, by race/ethnicity and age, 2002 "Table IND 1a. Percentage of Total Annual Family Income from Means-Tested Assistance Programs by Race/Ethnicity and Age: 2002," in Indicators of Welfare Dependence: Annual Report to Congress, 2005, U.S. Department of Health and Human Services, 2005, http://aspe.hhs.gov/hsp/indicators05/report.pdf (accessed January 24, 2006)in August 1996 to 4.5 million in June 2005, a 64% decline.

TABLE 5.7
Percentage of total family income from means-tested assistance programs, by race/ethnicity and age, 2002
	0%	>0% and <= 25%	>25% and <= 50%	>50% and <= 75%	>75% and <= 100%	Total >50%
Note: Means-tested assistance includes temporary assistance for needy families (TANF), supplemental security income (SSI), and food stamps. Total 50% includes all persons with more than 50 percent of their total annual family income from these means-tested programs. Income includes cash income and the value of food stamps. Spouses are not present in the female-headed and male-headed family categories.
Persons of Hispanic ethnicity may be of any race. Beginning in 2002, estimates for whites and blacks are for persons reporting a single race only. Persons who reported more than one race are included in the total for all persons but are not shown under any race category. Due to small sample size, American Indians/Alaska Natives, Asians and Native Hawaiians/other Pacific Islanders are included in the total for all persons but are not shown separately.
SOURCE: "Table IND 1a. Percentage of Total Annual Family Income from Means-Tested Assistance Programs by Race/Ethnicity and Age: 2002," in Indicators of Welfare Dependence: Annual Report to Congress, 2005, U.S. Department of Health and Human Services, 2005, http://aspe.hhs.gov/hsp/indicators05/report.pdf (accessed January 24, 2006)
All persons	86.8	7.8	2.3	1.0	2.1	3.2
Racial/ethnic categories
Non-Hispanic white	91.2	5.6	1.3	0.5	1.3	1.8
Non-Hispanic black	72.3	13.6	5.4	3.0	5.6	8.7
Hispanic	78.3	12.5	4.3	1.6	3.2	4.9
Age categories
Children ages 0-5	78.6	10.8	4.6	2.3	3.7	6.0
Children ages 6-10	81.2	10.0	3.7	2.2	3.0	5.1
Children ages 11-15	83.2	9.7	3.1	1.4	2.5	4.0
Women ages 16-64	86.6	7.8	2.2	1.0	2.4	3.4
Men ages 16-64	89.7	6.8	1.4	0.6	1.5	2.0
Adults ages 65 and over	90.3	5.7	2.0	0.7	1.3	2.0
Family categories
Individuals in married-couple families	92.5	5.4	1.2	0.4	0.6	1.0
Individuals in female-headed families	62.3	18.2	7.9	4.5	7.2	11.7
Individuals in male-headed families	78.8	13.9	3.5	1.6	2.2	3.8
Unrelated individuals	88.5	6.2	1.2	0.4	3.6	4.1

According to the U.S. Department of Health and Human Services, in 2002, 27.7% of all African-Americans received some portion of their total annual family income from means-tested assistance programs, which include TANF, Supplementary Security Income (SSI), and food stamps, while only 8.8% of non-Hispanic whites and 21.7% of Hispanics received means-tested assistance. Moreover, 8.7% of African-Americans received more than half of their total annual family income from means-tested assistance programs, compared with 4.9% of Hispanics and only 1.8% of non-Hispanic whites. (See Table 5.7.)

Therefore, African-Americans are most likely to receive means-tested assistance. The high number of female-headed families in the African-American community may be part of the explanation. More than a third (37.7%) of individuals in female-headed families received means-tested assistance in 2002, compared with only 7.5% of individuals in married-couple families. In addition, individuals in female-headed families were most likely to receive more than half of the annual family income from these programs-more than one in ten (11.7%) did so. (See Table 5.7.) These numbers suggest that it is particularly difficult for single women with children to make ends meet without turning to government programs for assistance.

The TANF program has been criticized since its inception in 1996. Critics maintain that success cannot be measured by the drop in the number of recipients. Caseloads initially decreased simply because the eligibility requirements were stiffened. As a result, many immigrants, especially Hispanics who were working poor, were denied aid, adversely affecting their children, who were U.S. citizens. Moreover, the type of work available to individuals on welfare was generally low paying, offering no health insurance or other benefits and doing little to lift welfare-to-work participants above the poverty level. So, despite falling numbers of TANF recipients, rising poverty levels perhaps provide a more telling portrayal of the program's progress. (See Figure 5.4 and Table 5.4.)