The sour economy, persistently-high unemployment and resulting growth of American poverty have starved states of welfare funding, forcing up to a third to turn to outside groups like the YMCA to help them meet Washington's demand that they spend almost as much as Uncle Sam to assist the poor.
A new Government Accountability Office report reveals the huge growth in the number of recession-wracked states that have desperately turned to outside groups for help. According to the GAO, 13 states tapped outside groups in 2011, a jump from just three in 2007, and 17 are warning that they'll need help in the future.
The report is just the latest that details the explosion of poverty and welfare usage due to the recession and it points to a continued funding crisis in the states socked with shrinking tax revenues and higher demands for public assistance. And it comes at a time when the president is under fire for adjusting the rules of welfare reform that demands that half of the families who receive it make some attempt to work.
The GAO said that the Temporary Assistance for Needy Families (TANF) program, a product of the 1996 welfare reform, requires states to nearly match federal spending. In fiscal 2011, states spent a total of $33 billion--$18 billion in federal TANF funds and $15 billion in state funds. But to come up with that $15 billion, some states had to rely on outside spending, some as much as 20 percent of their share, said GAO.
And the grab for help came even after the states used a multi-billion-dollar "emergency fund" set up by the Obama administration. The worst-off states were Utah, Georgia, Colorado, Hawaii and Arizona. The help needed was for food and health care services, employment assistance and "family stabilization services." Groups like the United Way, YMCA, and Shriner's Hospital for Children were cited as example of groups states have sought help from to aid their poor.
The reasons for the help were mostly economy-related, said GAO. "A few states noted that poor economic conditions have affected state budgets and employment opportunities for TANF clients. Tight state budgets may result in state and local governments cutting back in their own spending for TANF related benefits and services, making it more difficult for states," said GAO.
The agency also said that some states seek to boost their contribution to the welfare system because it cuts the requirement that half of the families on welfare have somebody working.