Think tank: Idaho welfare benefits too attractive

The free-market Cato Institute says a complete welfare package in Idaho is on par with an entry-level job.

adutton@idahostatesman.comAugust 20, 2013 

  • YOU SAID IT ONLINE

    Here are some readers’ comments about this story at IdahoStatesman.com:

    Æ IdahoCrystal: “One thing left understated is that the vast majority of ‘welfare recipients’ do not get the full complement of benefits. They may get food stamps and/or child care assistance and/or Medicare/caid and/or cash assistance, but there are very few who get all of the above.”

    Æ reddog181: “This says more about the low wages in this poverty pocket than it does about people on welfare.”

    Æ devospud: “Here’s a novel idea. Why don’t we reduce the 72 government aid programs to 1.”

    Æ Josh_Johnston: “It is a perverse incentive to tie benefits to maintaining an empty bank account.”

  • The Cato Institute analysis applied an annual dollar value to six of the seven benefits it examined. The institute said:

    Æ Temporary Assistance for Needy Families, which provides cash benefits, is worth $3,708.

    Æ The Supplemental Nutrition Assistance Program, otherwise known as food stamps, is worth $6,312.

    Æ Medicaid, the state- and federally-funded health insurance program, is worth $6,012.

    Æ The Women, Infants and Children (WIC) program that provides nutrition funds and services is worth $884.

    Æ Utilities assistance through the Low-Income Home Energy Assistance Program is worth $550.

    Æ The Emergency Food Assistance Program is worth $300.

    Cato did not calculate the seventh benefit, housing assistance, for Idaho. The report said virtually no Idahoans who receive TANF also receive housing assistance.

A “typical welfare family” in Idaho, consisting of a single mother and two children, receiving all major forms of assistance, could receive benefits equal to the take-home income from a job that pays $11,150, according to a new report. That’s close to what a minimum-wage job would pay, at 30 hours a week, 52 weeks a year.

The report, from the Cato Institute, based in Washington, D.C., argued that some Idahoans, who are paid among the lowest wages in the country, will choose to live on welfare benefits instead of working. It also said Idaho has the fourth-lowest level of welfare benefits in the nation.

The Cato report said states could shrink the gap between welfare and work by cutting welfare benefits and tightening eligibility requirements. State legislatures and Congress also should make changes to welfare work rules, the report said.

But Rep. Fred Wood, R-Burley, who chairs the Idaho House Health and Welfare Committee, said the state’s hands are tied. For the most part, welfare programs are subject to federal — not state — laws, regulations and funding. “Typically, what Idaho has tried to do is not add anything more than just the lowest benefits,” he said.

WHO GETS WHAT?

There currently are 72 federally funded programs that provide cash or other benefits to low-income people, Cato said. The report looked at seven of those programs, including cash assistance, Medicaid and food stamps. It did not include unemployment benefits or spending on long-term care.

About 322,288 Idahoans — 20 percent of the state’s population — received cash, Medicaid, food stamps and/or child-care assistance in June 2012, according to the latest annual report from the Idaho Department of Health and Welfare.

In Idaho, some of the benefits Cato analyzed are used primarily by children, low-income elderly and people with disabilities — people who may not be able to work a full-time job. The Cato Institute did not immediately respond to questions about whether the report considered welfare recipients’ ability to work.

For example, about 15 percent of Idahoans are on Medicaid. About 75 percent of them are children. An additional 16 percent are adults with “intense needs, both for behavioral health and medical services,” or who are “elderly and also have greater needs for medical services [and] long-term care such as assisted living facilities or nursing homes,” according to Health and Welfare. Idaho allows almost no healthy adults to use Medicaid — “one of the strictest eligibility requirements in the United States,” Wood said.

Other benefits are offered to adults who can work. Food stamps — SNAP benefits — are available to low-income Idahoans with assets worth less than $5,000. Recipients must participate in a work-search program unless they receive exemptions. The average per-person food-stamp allotment in Idaho was $128 in June 2012, according to the department.

WORK VERSUS WELFARE

“One of the single best ways to climb out of poverty is taking a job, but as long as Idaho’s welfare program provides a standard of living comparable to many entry-level jobs, recipients will continue to choose it over work,” said Michael Tanner, a senior fellow for Cato who wrote the report. “Idahoans who receive welfare aren’t lazy, and they’re not stupid either. Until Boise and Washington, D.C., take serious steps to reduce welfare dependence and reward work, there will be little incentive for welfare-reliant individuals to enter the workforce.”

The inflation-adjusted dollar value of a full package of public assistance has decreased by $7,964 since 1995 — about 31 percent — the report said. The full package would be valued at $17,766 per year.

Meanwhile, the pre-tax wage income that would be needed to match those benefits has decreased by $16,048 — about 59 percent — since then.

Audrey Dutton: 377-6448, Twitter: @IDS_Audrey

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