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The Federal Safety Net : Effective but Vulnerable Programs by

The fight over the reauthorization of the State Children’s Health Insurance Program (SCHIP) in Summer/Fall 2007 highlights the fragility of the U.S. safety net. Ballooning federal deficits threaten all social spending in this country, but programs for vulnerable women and children may be most at risk. Unlike Social Security, most of these programs must be periodically reauthorized in order to continue to exist. Most Americans do not realize that the majority of aid to poor families is offered in the form of in-kind programs such as SCHIP, rather than in cash. Currently, less than 10 percent of the support received by poor families is in the form of traditional cash welfare, while over 30 million people participate in in-kind safety net programs including Medicaid, school nutrition programs (the National School Lunch and the School Breakfast programs), WIC (Special Supplemental Nutrition Program for Women, Infants, and Children), Head Start, and child care subsidy programs. In recent years, safety net programs have been systematically attacked as they have come up for renewal. The attacks are remarkably similar and hinge on three fallacious arguments: (1) the programs don’t work, (2) they are riddled with fraud and abuse, and (3) support for the poor would be better handled by the states. As I will argue below, each of these arguments is incorrect. Take the argument that in-kind antipoverty programs don’t work. SCHIP is the latest in a series of social programs that have, in fact, worked remarkably well. Indeed, it is thanks to them that the war on poverty, contrary to widespread belief, has not failed. Instead, we have redefined what it means to be poor—for the most part, poverty in America no longer means starving in a slum without medical care. One reason for the perception of failure in the war on poverty is a statistical artifact: Official poverty statistics do not include in-kind benefits, so no matter how much aid is given to a family in this form, it will never raise them above the poverty line. In fact, families do effectively rise above the poverty line—or at least, linger much less far below it—as the result of inkind programs. More substantively, many commentators focus on the wrong question. If we see, for example, that children who attended Head Start are still more likely to drop out of school than the average child, this tends to confirm our worst suspicions about the futility of intervention to break the cycle of poverty. However, the more relevant question is: Are these particular children less likely to drop out than they would have been without Head Start? That is, a sensible analysis of the effects of government antipoverty programs has to take account of the fact that these programs typically serve the most disadvantaged families and target children who would be expected to have the worst outcomes in the absence of any intervention. Sensible analyses do find significant positive effects of in-kind antipoverty programs (see Currie, 2006 for an in-depth discussion of the evidence). Head Start has lasting effects on the prospects of many children, increasing the probability of graduating from high school and attending college, and reducing the probability of being involved in crime. Expansions of Medicaid to low-income children and pregnant women have reduced infant mortality and improved access to medical care for millions of children. In 1960, more than 25 children out of every 1,000 born died before their first birthday; those who died were disproportionately poor and African American. By 2004, this rate had dropped to fewer than seven deaths per 1,000 live births. Much of this improvement was driven by improved access to medical care, paid for by