Newspaper article The Christian Science Monitor

Slump Will Test a More Porous Safety Net ; among Challenges: Welfare Recipients Hit Five-Year Limit. States Have Less for Needy

Newspaper article The Christian Science Monitor

Slump Will Test a More Porous Safety Net ; among Challenges: Welfare Recipients Hit Five-Year Limit. States Have Less for Needy

Article excerpt

With unemployment in the United States headed toward 6 percent, perhaps higher, concerns are growing about the adequacy of the government's safety net for the jobless and the poor.

Layoffs are rising as the economy sputters - probably into a recession. It is unclear how deep the slump will be, but even a mild downturn would be the first hard-times test of a dramatically altered system of aid for the needy.

Among the developments that poverty experts find worrisome:

* For the first time since the launch of federal welfare in 1935, some people will be ineligible because they have hit a five-year limit, set by Congress in 1996.

* Already, some states are running short of funds for assisting the newly jobless. All states but one must balance their budgets, so the problem could deepen as rising unemployment coincides with falling tax revenue.

* Since the last recession, in 1990-91, the scope of the food- stamp program has been narrowed. Since 1996, eligibility has been limited for legal immigrants and childless 18- to 50-year-olds. Benefit levels were also trimmed.

"The safety net is not as strong as it was in the recession of the early 1990s," says Heather Boushey, a labor economist at the liberal-leaning Economic Policy Institute in Washington.

The programs collectively known as the safety net - which are generally administered by states using a mix of federal and state funds - are meant to bolster the income of the jobless.

But the safety net also serves a broader function that benefits the whole economy, not just the poor: It can help maintain enough consumer spending to prevent hard times from growing worse. If the jobless cut back sharply on spending, businesses may have to lay off more workers.

Despite the acknowledged benefits, some of the programs have been controversial. Critics have lamented a culture of dependency and government disincentives for single mothers to marry and work.

Changes in the 1990s and 1980s constrained safety-net programs such as unemployment insurance and welfare.

To date, welfare reform has been largely hailed as a success. Welfare rolls have fallen in half as recipients - mostly single mothers - went to work.

But the 1996 act's five-year time limit is only now beginning to kick in, with formulas varying from state to state. And it has yet to be tested by recession.

Now, with the economy faltering, leaders in both parties have taken some steps to close perceived safety-net gaps. President Bush has proposed extending unemployment insurance by 13 weeks in certain circumstances, on top of the usual 26 weeks.

To some Democrats, his plan is not generous enough.

"Unfortunately, the president's proposal lacks the resources to help all the people who need it," House Democratic leader Richard Gephardt said Oct. …

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