The blog series “Is the US a land of mirage for the poor?” aims to explore the existing social protection programs in the US. The article below is the first post (Part 1) of the blog series, which will provide a brief overview of a few current social protection programs in different areas in the US. The subsequent blog posts will analyze in more details some of the most popular social protection programs such as Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for needy Families (TANF) and Housing Choice Vouchers, corroborating them with personal interviews with the recipients of the program. 

 

FUNDAMENTAL SOCIAL PROTECTION PROGRAMS IN THE US

Growing up in India, I have always remembered people’s perception about the United States of America (USA) as a fantasy land with absolutely no poverty. It was unfathomable to imagine that an American citizen, especially an American child, would go hungry or even exist on the street with no housing.  After all, the USA is the largest economy in the world with a GDP of USD 22.74 trillion, and a median household income of $67,521  in 2020 (US Census Bureau 2021a).

As a resident of Chicago city in the USA, I have encountered homeless people living in tents under the bridges or, occasionally, begging along traffic lights. The Southside of Chicago sadly has become synonymous with gun violence, racial disparity, poor education and people living in challenging circumstances. The scenes from New York City or Los Angeles or any other may not seem very different. The Census Bureau statistics show that the official poverty rate in the US in 2020 (US Census Bureau 2021a) is 11.4 per cent. Although the country has managed to shift the poverty rates from 22 per cent in 1959 to 11.4 per cent today, the absolute numbers of poverty has not changed much from 40 million in 1959 to 37.2 million in 2020 (Refer Fig. 1).

 

Figure 1: Number of Poverty and Poverty rates from 1959 - 2020

Source: US Census Bureau (2021b)

 

The US Office of Management and Budget (OMB) has defined the poverty line or the average poverty threshold for a family size of four as USD 26,496 (US Census Bureau 2021a). Ever since President Lyndon Johnson declared a “War on Poverty” in 1964, the US government created many anti-poverty social protection programs to support low-income families at the federal level and State level. The major ongoing federal programs are Food Assistance programs such as Supplemental Nutrition Assistance Program (SNAP) and other child nutrition programs, direct cash transfers such as Temporary Assistance for needy Families (TANF), Health insurance through Medicaid and Children's Health Insurance Program (CHIP), Housing Assistance Programs like Housing Choice Vouchers, Stimulus Payments and Refundable Tax Credits.

Let us take a quick look at some of these major social protection programs that addresses the basic needs of food security, housing, health and others.

 

1. DIRECT CASH TRANSFERS

Temporary Assistance for Needy Families (TANF)

TANF is a cash transfer program by the US federal government that aims to facilitate economic self-sufficiency to low incomes families with children. The federal government does not pay out these funds directly to the public. States are funded with TANF grants, which then pays it out directly to the public, meaning they are given the flexibility to identify the target population or programs that they choose to benefit from the direct cash transfers. The States may decide to use their TANF grants to either fund monthly cash assistance to low-income families with children or address the four goals of the program namely The Office of Family Assistance (para. 3):

  • "Provide assistance to needy families so that children can be cared for in their own homes or in the homes of relatives
  • End the dependence of needy parents on government benefits by promoting job preparation, work, and marriage
  • Prevent and reduce the incidence of out-of-wedlock pregnancies
  • Encourage the formation and maintenance of two-parent families”

 

The Office of Family Assistance (OFA) administers the TANF and tribal TANF programs at the federal level. OFA operates within the Administration for Children and Families (ACF), an agency of the U.S. Department of Health and Human Services (HHS) (Office of Family Assistance 2019).

In 2020, a total of USD 31.6 billion was spent on combined federal TANF and state maintenance-of-effort (MOE) expenditures and transfers (Office of Family Assistance 2021a). More than 2 million people have been assisted with TANF (Office of Family Assistance 2021b). The total amount was spent across the US as follows:

  • 22.3 percent of TANF and MOE funds was used for basic assistance.
  • 9.7 percent was used for work, education, and training activities.
  • 16.6 percent was used for child care (including funds transferred to the Child Care Development Fund).

 

Figure 2: National Pie Chart on TANF & MOE Spending and Transfers, FY 2020

Source: Office of Family Assistance (2021c)

 

2.  FOOD ASSISTANCE PROGRAMS

The US federal government has various food assistance programs to support families and individuals with food insecurity.

 

Figure 3: A snapshot of Federal Food Assistance Programs in the US

Source: Feeding America (n.d.)

 

Supplemental Nutrition Assistance Program (SNAP)

SNAP is a major federal food assistance program that aims to supplement the food budget of families, which they can use at stores to purchase food. The goal is to ensure a healthy and balanced nutrition to low-income families and help them towards self-sufficiency (USDA n.d.). The program is administered by the USDA Food and Nutrition Service (FNS) through its nationwide network of FNS field offices (USDA, 2013). In 2020, the federal spending on food programs was on a record high of USD 122 billion (USDA, 2021).

 

Figure 4: Federal Spending on USDA Food Assistance Programs

Source: USDA (2021).

 

3.  RENTAL ASSISTANCE PROGRAMS IN HOUSING 

The US federal government provides various rental assistance programs to ensure access to housing (Center on Budget and Policy Priorities 2022, para. 2) such as

  • “Public Housing
  • Section 8 Housing Choice Vouchers
  • Section 8 Project-Based Rental Assistance (including Moderate Rehabilitation)
  • Supportive Housing for the Elderly (Section 202)
  • Supportive Housing for People with Disabilities (Section 811)
  • McKinney-Vento Permanent Supportive Housing, Transitional Housing, Safe Havens, and Other Permanent Housing units and beds
  • Housing Opportunities for Persons with AIDS (HOPWA) tenant-based rental assistance”

 

Figure 5: US Federal Rental Assistance Programs

Source: Center on Budget and Policy Priorities (2022).

 

The objective of most Housing Assistance programs shared above are evident from its name. However, the Housing Choice Vouchers, as the largest and most representative program, is presented and discussed in more details below.

 

Housing choice vouchers

The Housing Choice Voucher (HUD, n.d.) program is the largest federal government effort to provide safe housing access to very low-income families, senior citizens, and people with disabilities. The US Department of Housing and Urban Development (HUD) administer the Housing Choice voucher program through the local public housing agencies (PHAs). PHAs receive federal grants to implement the voucher program.

The beneficiaries are given leasing assistance to find housing of their choice that meets the requirements of the program. They are not limited to units located in subsidized housing projects, but have access to privately owned housing market through this program. The owner of the rental unit will be directly paid a housing subsidy by the PHA on behalf of the family who was issued the housing choice voucher. The family with the voucher will pay the rental difference between the original rent amount of the unit and the housing subsidy received by the landlord. There is also an option to use the voucher towards purchasing a home, if PHA authorizes it.

 

4. HEALTH COVERAGE 

In the US, 66.5 per cent of the population relies on private health insurance coverage. Only 34.8 per cent are supported by public insurance coverage (US Census Bureau 2021a). Employment based insurance remains the most common type of health insurance covering 54.4 per cent of the population at some or all times annually (US Census Bureau 2021a). In 2020, 8.6% of people, or 28.0 million, did not have health insurance at any point during the year.

A public health insurance program, Medicaid, provides access to healthcare to low-income adults, senior citizens, people with disabilities, and other eligible groups. States administer Medicaid to millions of Americans under federal regulations. Medicaid is funded collectively by the federal government and the States (Medicaid n.d. a).

Another federal program known as Children’s Health Insurance Program (CHIP) (Medicaid n.d. b) provides comprehensive health coverage for children. It is a federal program implemented through States that has the flexibility to customize CHIP. So, it could be part of an expanded Medicaid program or a separate CHIP or a hybrid program depending on how each State would design it.

More than 83 million individuals were enrolled in Medicaid and CHIP as of July 2021. About 76 million individuals were enrolled in Medicaid an almost 7 million individuals were enrolled in CHIP (Medicaid n.d. c). In 2017, the total expenditure of Medicaid and CHIP was about USD 600 billion (CMS 2020).

In a nutshell, the US has rolled out various programs to guarantee social protection for its citizens. In the subsequent blogs of the series, we will analyze SNAP, TANF and Housing choice vouchers, which are the largest and most popular social protection programs and will discuss their effectiveness. We shall listen to a few voices of the recipients and stakeholders to understand the realities at the grassroots level.

 

REFERENCES

  • Center on Budget and Policy Priorities (2022). “2022 Federal Rental Assistance Factsheets Sources and Methodology”. Access HERE
  • Centers for Medicare & Medicaid Services (2020). “Medicaid Facts and Figures”. Access HERE.
  • Feeding America (n.d.) “Federal Food Assistance Programs”. Access HERE
  • HUD (n.d.). “Housing Choice Voucher Program Section 8”. Access HERE
  • Medicaid (n.d. a) “Medicaid”. Access HERE
  • Medicaid (n.d. b). “Children's Health Insurance Program’ (CHIP) Benefits”. Access HERE
  • Medicaid (n.d. c). “July 2021 Medicaid & CHIP Enrollment Data Highlights”. Access HERE
  • Office of Family Assistance (2019). “About TANF”. Access HERE.
  • Office of Family Assistance (2021a). “TANF and MOE Spending and Transfers by Activity, FY 2020: US”. Access HERE.
  • Office of Family Assistance (2021b). “Temporary Assistance for Needy Families (TANF): Fiscal and Calendar Year 2020, Total Recipients”. Access HERE.
  • Office of Family Assistance (2021c). “TANF and MOE Spending and Transfers by Activity, FY 2020: US”. State Pie Charts pdf. Access HERE.
  • US Census Bureau (2021a). “Income, Poverty and Health Insurance Coverage in the United States: 2020”. Access HERE.
  • US Census Bureau (2021b). “Income and Poverty in the United States: 2020”. Access HERE
  • USDA (2013). “SNAP Frequently Asked Questions”. Access HERE
  • USDA (2021). “Federal spending on food assistance reached record high of $122.1 billion in 2020”. Economic Research Service. Access HERE
  • USDA (n.d.). “Supplemental Nutrition Assistance Program” (SNAP). Access HERE