Vice President for Budget Policy and Economic Opportunity
The Cato Institute released a report this week that argues that people on "welfare" are better off than low-income working families. In reality, that couldn't be further from the truth, as we explain in our recent commentary.
Cato's analysis makes two fundamental errors:
Moreover, due to changes to the safety net over the last few decades, these programs now do much more to promote work and support low-income working families. They help keep millions of working parents and their children out of poverty. To be sure, many working families still struggle to make ends meet, particularly if they face high child care costs, but Cato offers no policy proposals to improve these families' financial security.
The changes to the safety net haven't all been positive: contrary to the picture that Cato's report paints, these programs now do much less to help poor families in which parents are out of work. This has led to an increase in the number of children living in deep poverty, which Cato's policy recommendations would worsen.
Ultimately, the fact that so many families work to provide for their children is the real evidence that Cato's analysis is misguided. Looking at children in families below 150 percent of the poverty line in 2010, 15.7 million of them lived in working families that did not receive any TANF cash assistance that entire year. By contrast, there were only 2 million children in TANF families without significant earnings that year. These hard-working families seem to understand a lot more about the value of work than Cato does.
Click here to read our commentary.