Welfare cuts in Kansas, Missouri could be a hint of things to come

Every week, Nelson Gabriel counsels three dozen welfare recipients in Kansas City, Kan., on how to stretch their dollars to pay rent, keep up with utilities or fix the car.

He watched nervously this spring as Kansas lawmakers passed tough new limits to the state’s welfare program. Lifetime benefits were shortened. Work requirements were stiffened. Electronic withdrawals of welfare cash were capped at $25 a day.

“Every person who walks through our door,” Gabriel said, “is concerned about these cuts.”

Such worries are familiar. They surfaced after welfare was changed in the mid-1990s, when strong work requirements and time limits first passed Congress.

But advocates on the left and right now think the stiffer welfare laws in Kansas, and legislation in Missouri that also shortens lifetime welfare benefits, might actually reflect something new. They say the welfare crackdown may be the blueprint for a growing, state-based effort to refashion the entire support system for the poor, from food stamps and housing to health care.

Kansas and Missouri may be ground zero in an approaching, state-centered war on poverty programs — at least as they exist today.

“It’s all a part of undermining the safety net, and undermining support for the safety net,” said Liz Schott of the Center for Budget and Policy Priorities, a left-of-center Washington think tank. “They’re shredding it, and shredding it with impunity.”

Republicans and conservative groups working on the overhaul don’t necessarily dispute her conclusion. The states are trying to shred the social safety net, they say, because it deserves to be shredded — it’s too costly, too complicated, and hasn’t reduced poverty or dependence on government handouts.

“Giving people something for nothing harms the recipient,” said Robert Rector of the Heritage Foundation, a conservative think tank in Washington, D.C. “I really have to commend the people at the state level who are willing to take these issues on.”

Withholding welfare

States are tackling welfare first because it’s the easiest target.

Most of their attention this year focused on reforming the program known as Temporary Assistance for Needy Families, or TANF. The federal government spent $17 billion on TANF in 2014 to provide cash assistance, job training, child care and other benefits to roughly 4 million Americans who qualify, including 3 million children.

The money is sent to each state as a block grant. Subject to broad guidelines, states are free to fashion their own requirements for TANF clients. States must nearly match the federal grant money in order to get the federal cash, adding $15 billion more to the pot.

But direct TANF payments are not large. A three-member family in Missouri gets $292 a month in cash benefits, or about $23 per person per week. The cap for a three-member family in Kansas is $429 a month.

Those caps — and regulations requiring work, while limiting the time a client can get TANF help — have dramatically cut the welfare rolls in the two states. In December 2013, 18,291 Kansans received TANF help, federal figures show, while 77,551 Missourians were TANF clients. That’s half as many welfare recipients as 20 years ago.

But because benefits are limited and client lists are tight, the two states don’t save enormous amounts of money by further cutting TANF. Even supporters of the cuts say the restrictions are more about incentives for work than about saving taxpayer dollars.

Kansas state Rep. Scott Schwab, an Olathe Republican, said the TANF crackdown in his state — including prohibitions on spending welfare cash at theme parks and nail salons — teaches a necessary lesson.

“It’s not about saving money,” he said. “We’re taking measures to make sure those dollars are going to feed (children) in a healthy manner, as opposed to a parent using it to go on vacation.”

Mike Rathbone of the conservative Show Me Institute in Missouri said some people truly need taxpayer help.

“(But) you can’t have a program that’s open to everybody,” he said. “That will crowd out the people who do need help.”

Democrats see a more sinister goal: ending welfare entirely.

“It’s all ideology,” said Missouri state Rep. Brandon Ellington, a Kansas City Democrat. “They’re not worried about the long-term effects on the safety net. … It’s horrific.”

Schott of the Center for Budget and Policy Priorities called the new rules in Kansas and Missouri ugly.

“It’s responding to perceived abuses that aren’t real,” she said.

Testing ground

The new restrictions, promoted by the American Legislative Exchange Council and other conservative groups, aren’t limited to Kansas and Missouri. Lawmakers in Arizona recently capped TANF benefits at 12 months, much shorter than the 36-month cap in Kansas, the 45 months in Missouri — or the 60 months allowed under federal law.

Michigan is pondering TANF cuts for families with truant students. Maine recently capped the time welfare benefits can be collected. Wisconsin is considering tougher rules.

Yet the new laws in Kansas and Missouri have drawn national attention. Those who work with poverty programs say the two-state region might serve as a proving ground for an eventual conservative challenge to broadly available programs such as food stamps, Medicaid, unemployment insurance and tax benefits for those in poverty.

“It’s all exportable,” said the Heritage Foundation’s Rector. “A small number of states are becoming pathfinders again.”

The 2015 federal budget proposed by U.S. Rep. Paul Ryan, a Wisconsin Republican, suggests combining nearly a dozen federal safety net programs into a block grant similar to TANF.

“This budget applies the lessons of welfare reform to other federal aid programs,” the Ryan proposal says. “It gives states more flexibility to tailor programs to their people’s needs.”

Food stamps and Medicaid are among the programs Ryan would block grant to the states. Allowing states to restrict food stamps or Medicaid, as they’ve cut TANF, could save enormous amounts of money. The government spends $80 billion annually on food stamps and $440 billion Medicaid.

The food stamp program, known as SNAP, already includes some restrictions on purchases. And the 2015 TANF law in Kansas includes some new restrictions on food stamps, including a measure permanently banning drug felons from getting food stamps in the state.

Yet serious benefit reductions in food stamps or Medicaid probably would provoke a bigger political backlash than cuts to TANF, because so many people use those programs. More than 317,000 Kansans get food stamps, as do nearly 1 million Missourians.

So some Republicans who supported tougher welfare rules this year hesitate when asked whether block grants for bigger programs are in the works.

“TANF is temporary. Food stamps may not be,” said Kansas state Sen. Greg Smith, an Overland Park Republican.

Kansas state Sen. Kay Wolf, a Prairie Village Republican, voted for the TANF restrictions but called her decision difficult and not easily applied to other poverty programs.

“You want to protect the people who are deserving,” she said. “Maybe we should see how this bill works.”

There are also signs other Republicans think the recent cuts went too far.

Washington has already complained about the Kansas rule limiting TANF recipients to $25 cash withdrawals using their electronic benefits card. The law may cut too deeply into the recipients’ available funds, violating federal regulations.

Lawmakers in Kansas said last week they’re likely to fix the problem before they adjourn this year. The limit, they say, will probably be restored to $60 a day.

The state’s tax dilemma may also become entangled with welfare reform. Some Kansas lawmakers want to eliminate the earned income tax credit, a program that provides cash refunds to the working poor. The state spends $50 million on the credit each year, money that might help cover a $400 million deficit.

But Kansas counts that $50 million as part of its TANF match. If the tax credit is ended, the entire federal welfare grant could be lost.

Democrats say those complications suggest states should approach welfare reform slowly. The idea that the poor are wasting their funds on luxuries like steak or vacations, they say, is a caricature.

“That’s not what’s being purchased,” said Missouri state Rep. Gail McCann Beatty of Kansas City. “It’s like kicking someone when they’re already down.”

This story was originally published May 24, 2015 at 5:30 PM with the headline "Welfare cuts in Kansas, Missouri could be a hint of things to come."