The Ohio Senate Republican budget passed last week put forth a new vision for social safety net spending in Ohio.
The proposal suggests reduced spending on food banks, housing for pregnant women, affordable housing, and school meals for poor children. It also proposes making it harder for low-income people to get access to Medicaid, SNAP (formerly known as “food stamps”), and other public benefits.
These changes to the budget are used to fund income and commercial activity tax cuts.
When Senate President Matt Huffman was asked about this range of cuts to social services, his explanation was that he is trying to “stimulate” a conversation about sustainability of the Temporary Assistance for Needy Families fund. He expressed worry that the fund would be insolvent in five years if spending and revenue continues at current levels for years into the future.
So let’s talk about it.
Temporary Assistance for Needy Families (often shortened to “TANF”) is a relatively small program that mainly provides income to very poor Ohioans. It is the successor to the Aid for Families with Dependent Children (AFDC) program. This was the program that had gained the dreaded label of “welfare” in the early 90s.
Many politicians did not like AFDC because it gave cash to low-income families. It became a massive dog whistle punching bag for the Reagan administration, who was able to vilify it to such effect that it was ultimately the Clinton administration that finished the program, following up on a campaign promise to “end welfare as we know it.”
And he did. The new TANF program was a block grant given out to states to not only provide cash assistance, but also to pilot a range of different programs focused on getting people to work.
Early on, this change was seen as a success. Poverty abated and employment, especially among single mothers, increased. But this was the 90s–a period of economic expansion.
The subsequent recession of the early 00s followed by the Great Recession of 2007 to 2009 exposed how these changes to the social safety net had made it less resilient and kicked out many of the supports previously in place to hold struggling families up.
While new programs from the 90s like the earned income tax credit are a good tool for supporting families who have work, they fail when structural problems make work unavailable on a massive scale.
All this is to say Huffman has a little bit of a point here. Block granting TANF took one of the most straightforward and effective income support programs in U.S. history and capped it, limiting its potential effectiveness greatly. Now the dollars available for supporting low-income families need to come from somewhere else.
Is the answer to this problem to cut social spending left and right and use that as a tool to fund income tax cuts and cuts to commercial activity? Probably not. If the plan put forth in the Senate is adopted, it will represent a massive transfer of income from the most needy Ohioans to those with the most resources already. Seems like a big cost to try to make a point.
Rob Moore is the principal for Scioto Analysis, a public policy analysis firm based in Columbus. Moore has worked as an analyst in the public and nonprofit sectors and has analyzed diverse issue areas such as economic development, environment, education, and public health. He holds a Master of Public Policy from the University of California Berkeley’s Goldman School of Public Policy and a Bachelor of Arts in Philosophy from Denison University.
This commentary was republished from the Ohio Capital Journal under a Creative Commons license.