[Poverty at Issue]
A Newsletter for Individuals Concerned About Poverty in Missouri

Fall 1996

In this issue:

The New Welfare Law

Food Bank Wish List

Stretching that Food Dollar a Little Farther

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 affects most major low-income programs, including Aid for Families with Dependent Children (AFDC), Medicaid, Supplemental Security Income (SSI), child welfare and child support. The Congressional Budget Office estimates that, as the law is fully implemented over the next six years, $55 billion will be cut.

This "Poverty At Issue" summarizes some major changes brought by the new legislation and gives particular attention to the Food Stamp program, which is experiencing large cuts. In this particular season of giving, donations to local food banks and food pantries are especially important. A "food pantry wish list" is provided to help individuals and groups decide what to include for food pantry donations at the holidays and the year round. For those affected by the cuts, some ideas for stretching that food dollar a little farther are provided as well. Special thanks to Melinda Hemmelgarn and Barbara Willenberg, nutrition specialists with University Extension, for all the information they provided for this issue.

I hope you find the information helpful. I wish everyone a peaceful holiday and ask that we all remember those for whom the holidays may be particularly stressful by committing random acts of kindness, sharing and giving.

Brenda Procter
Consumer and Family Economics Specialist

The New Welfare Law

In August 1996 Congress enacted, and the President signed, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Its provisions bring the most sweeping changes to the welfare system in 30 years. It combines what was formerly Aid for Families with Dependent Children (AFDC), emergency assistance, and work programs into a single block grant with essentially fixed funding.

Temporary Assistance for Needy Families

The new combined program is called Temporary Assistance for Needy Families (TANF). States will receive a fixed level of TANF funding based on what they spent on its three component programs in 1994-regardless of changes in a state's level of need since then. The Congressional Budget Office (CBO) estimates that federal funding will fall $1.2 billion short of what states would have otherwise received over the next six years.

One of the most significant aspects of the legislation is that it ends a 30-year history of entitlement to these programs. Poor children no longer have assurance of getting basic cash assistance even if parents meet all eligibility requirements and are prepared to work. If states run out of block grant funds before a year ends, they now have the option of placing new applicants on a waiting list. States are only required to contribute 75 percent of what they spent on these programs in 1994-this is called maintenance of effort.

The legislation also prevents states from using TANF funds to provide cash aid, work slots or noncash aid like rent vouchers, to most families who have received any form of block grant assistance for a total of five years. States have the option of imposing stricter time limits. A state may provide a hardship exemption to up to 20% of its caseload.

The law also converts two currently open-ended funding streams-child care for AFDC recipients who work or participate in work programs, and transitional child care for those in the first year of work after leaving the welfare system-into a block grant with capped funding. Families are no longer entitled to such assistance and states are no longer entitled to federal matching funds for spending on such programs.

Legal Immigrants to Lose Many Benefits

Legal immigrants will lose more than $22 billion in benefits (illegal immigrants were already ineligible for most major entitlement programs). Legal immigrants are now ineligible for most forms of assistance, including Medicaid, Food Stamps and SSI for the elderly and disabled poor. Food Stamps and SSI will be denied them until legal immigrants become U.S. citizens. For the elderly and infirm who are unable to learn what they need to become citizens, this will mean denial of benefits for the rest of their lives. Medicaid benefits will be denied many new legal immigrants for five years (or longer if states so opt) and TANF benefits will be denied to all new legal immigrants. States can also opt to deny Medicaid benefits to legal immigrants already in the country and declare them ineligible for TANF for as long as they choose. States may also declare legal immigrants ineligible for WIC. When poor elderly and disabled persons are cut from SSI, they will also lose Medicaid eligibility. The CBO estimates that by 2002, some 260,000 elderly, 65,000 disabled, 175,000 other adults and 140,000 children, all legal immigrants, will lose Medicaid benefits. Most will have no other health insurance.

Some Medicaid Cuts Spared

Some of the cuts in Medicaid which were originally projected were averted in the last minute debates over the new law. States are required to provide Medicaid coverage to all families who meet their own state's July 1996 AFDC income and asset requirements. Medicaid eligibility is not linked to eligibility for TANF.

SSI for Children Rules Change

SSI income for disabled children will be cut by $7 billion over the next six years. Benefit levels will not be cut, but the types of disabilities covered under SSI will be restricted. Children most likely to lose benefits include those who suffer from multiple impairments, no one of which is severe enough to meet the stringent requirements, but from which the combined effect is substantial. CBO estimates that by 2002, 22 percent of those now qualifying will be declared ineligible (some 315,000 children).

Food Stamp Program Hardest Hit

A little over half the total cuts in the new legislation ($27.7 billion over six years) come from the Food Stamp program. The new law does not block grant food stamps, but it does contain even deeper cuts than the welfare reform bill that the president vetoed earlier in the year. When fully implemented, benefits will be cut about 20%-the equivalent of cutting the average benefit per meal from 80 cents to 66 cents per person.

Families with children will absorb about two-thirds of the food stamp reductions (about $18.4 billion over six years). By 1998, the average "food stamp" family with children will lose $435 per year. Working poor households, with and without children, will lose $5.4 billion over six years. By 1998, working poor families will lose an average of $356 per year. The hardest hit will be the poorest of the poor-those with incomes below half of the federal poverty level (or $6,250 for a family of three in 1996). By 1998, they will lose an average of $656 per year in food stamp benefits. The 1.75 million low-income elderly households receiving food stamps will lose about 20 percent of their benefits.

The unemployed between ages 18 and 50 who have no minor children are limited to three months of food stamp benefits out of each 36-month period. For this group, no hardship exemptions are allowed. The CBO estimates that in an average month, approximately one million jobless persons who are willing to work and would take a work slot if one were available would be denied food stamps under this provision.

More than 40 percent of those affected by this unemployment provision will be women. Nearly one-third of them will be over the age of 40 with limited skills and great difficulty in securing employment. For many, food stamps are already the only benefit for which they qualify since they have no children in the home. Rural areas also may be especially hard hit by this provision when a plant closes or downsizes, limiting local job opportunities. The three-month limit can be suspended by a state if a local unemployment rate exceeds 10 percent, a level few areas reach even during an economic downturn. States may waive this three-month limit for persons living in an area that does not have a sufficient number of jobs, with USDA approval. Exactly what this means is unclear.

Even though the Food Stamp program will not be block granted, states can change its structure in three ways:

These options will undoubtedly result in major differences in state Food Stamp programs. For state specific information on cuts over the next six years and for more in-depth information about the new Food Stamp program, refer to"The Depth of the Food Stamp Cuts in the Final Welfare Law," which can be ordered from the Center on Budget and Policy Priorities by calling 202-408-1080. The Center on Budget provides a variety of publications on the new welfare law and other topics.

Poverty to Increase Substantially

Overall, the new legislation is expected to result in a large increase in poverty, especially among children and legal immigrants. The number of U.S. children in poverty is projected to rise by 1.1 million and the number of poor overall is expected to rise by 2.6 million. Most of the children being pushed into poverty live with at least one working parent. According to a recent international study, the average income of poor children in the U.S. is lower than that of poor children in 15 of the 17 western nations examined.

The Missouri Department of Social Services is responsible for implementing the plan in Missouri.

Infant Formula in High Demand

Food Bank Wish List

During the holiday season, food banks and pantries see a rise in donations. What has many folks worried is what will happen the rest of the year-and in years to come. The new welfare law will reduce the amount of federal spending on the Food Stamp program by $27.7 billion over the next six years. Demand at food pantries is likely to increase significantly. Infant Formula is particularly difficult for food pantries to keep in supply.

If you wish to increase the nutritional bang for your buck when donating to food banks or food pantries, use the following "Food Bank Wish List" when shopping.

Bread, Cereal, Rice, and Pasta



Milk, Yogurt and Cheese

Meat, Poultry, Fish, Eggs and Nuts

Fats, Oils and Sweets

Food Pantries Serve Families on the Brink

According to a June 1996 Missouri Association for Social Welfare report, Patchwork Nutrition: Missouri Families on the Brink, which surveyed 1500 families at Missouri food pantries statewide:

Of the 1424 families who were willing to report their income for the month they were interviewed:

Super Supermarket Strategies

Stretching that Food Dollar a Little Farther

Between gift buying season and winter heating bills, many of us will face even tighter budgets in the months ahead. Food costs take a major percentage of many family budgets, particularly for those in poverty. Here is a list of supermarket strategies for stretching food dollars-without sacrificing taste and nutrition.

Write up a weekly meal plan. Base your menus on foods you already have on hand, family preferences and schedules, and weekly advertised specials.

Make your shopping list from your menus. Keep a running list on the refrigerator of staple foods you need to buy as they run out. If someone else will shop for you, write down brand names and prices of advertised specials for them. Try to watch regular prices for foods you usually keep on hand-it'll be easier to recognize good specials.

Go to only one store-the one where you can save the most for what you need to buy that week. Each trip takes extra time, energy and money. Spending tends to be higher if you shop more than one store.

Watch for sales on foods in peak season. For example, winter squash, sweet potatoes and turkey will be of high quality and at low prices this time of the year.

Don't buy something just because you have a coupon for it. Use coupons only if you would have bought the food anyway-and only if no better deal is available.

Consider cutting back on nutrient-poor foods. Examples are chips, cookies, candy, and soft drinks. They can be replaced with nutritious alternatives like fruits and 100% fruit juices.

Compare brands. Many lower-priced generic or store brands are similar in quality to name brands. You may have to bend lower or reach higher for them; expensive brands tend to be at eye level.

Look at the per unit (ounces, pounds, etc.) price and buy the size that gets you the lowest price per unit. If the shelf tag doesn't have it, divide the total price by the number of units in the package and compare with other sizes. Larger sizes are not always cheaper per unit. Larger sizes or bulk purchases only save you money if you don't buy more than you can use of something before it expires or spoils. Store bulk foods safely and put the food purchased most recently to the back of the shelf so you can use up all purchases before expiration.

Beware of "hooks" that cause impulse buying. Up to 95% of consumers who take a free sample end up buying the sampled item. Items placed on the end of an aisle can also be a "hook." Be aware that items of interest to children are often placed at their eye level. Educate them about how grocery marketers tempt them by having them play detective and search for "hooks." Don't go to the store when you're hungry. It will be filled with smells to capitalize on your hunger and having a full stomach will make it easier to resist that smell of fresh bread or whatever.

Try eating smaller portions of meat and increasing the proportion of heart-healthy, low-fat grains, pastas, beans and vegetables in casseroles, soups, chili and stir-fries. Beans and eggs are inexpensive meat alternatives. Buy meats in family sizes and freeze extra portions.

Compare cost vs. time savings of convenience foods. Some convenience foods like frozen fruit juice concentrate, spaghetti sauce, and canned condensed soups, cost less to buy than prepare at home from scratch. Some more complex convenience foods contain more fat, sugars and sodium than homemade versions-and they're often more expensive. To save time and money, prepare extra amounts of food over a weekend; then freeze meal-sized portions to reheat during the more hectic week.

Pay attention to the grocery store scanner. Review your receipt for accuracy. Ask for a refund at the courtesy counter if you've been overcharged. Displays are another register hazard. Remind children that the register display is there to trick them into buying.

For more free information on nutrition and health, call the American Dietetic Association's toll-free consumer line. They have pre-recorded messages on diet and health and you can talk with a Registered Dietitian. Free fact sheets are also available. Call 1-800-366-1655. You can also call the USDA's Meat and Poultry Hotline to talk with a home economist for help with food safety. Their number is 1-800-535-4555.

Back to Poverty At Issue policy briefs

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For ADA accommodations, contact ADA project Director, Jim de Jong, 4816 Santana, Columbia, MO 65203, 1-800-949-4232.

Jeanne Bintzer, HES Extension Site Administrator

Brenda Procter, Consumer and Family Economics Specialist, Content Provider