‘You can only stretch so far’: how inflation has gutted welfare

Each month, Mayra Del Toro counts every penny of the $403 she receives from the state of Pennsylvania. It is the majority of her income - but, with inflation at the highest level since 1981, more difficult to stretch than ever before.

"I only have [what is] necessary for the kids," said the 38-year-old mother of five. "Every single cent that I take, I just keep in the pocket for only the necessary - the bills, the gas and the stuff that my kids need."

Even for a naturally industrious woman like Del Toro - who worked 12 hours a day and six days week at a furniture manufacturing plant and earned the nickname "the monster" for her work ethic - making ends meet has become an all-consuming task. When the pandemic hit, she drove for DoorDash while nursing a newborn, but the work was boom and bust and she had to rely on her children to help with deliveries.

So Del Toro joined a dwindling number of Americans reliant on the only national cash assistance program left in the US, Temporary Assistance for Needy Families (Tanf), colloquially known as welfare. But, even before inflation reached an astronomical 8.5% in February 2022, decades of moderate price growth had eroded what Tanf payments could buy.

Pennsylvania is a particularly good example of how lawmakers have allowed the program to languish. The maximum welfare payment of $403 - the amount that Del Toro receives - has not increased since 1990.

Over that time, it has lost more than half its purchasing power to inflation, according to the Coalition for Low-Income Pennsylvanians.

Now, families living in deep poverty face the fastest rise in prices seen in generations - with little or no support. The Childhood Tax Credit, part of pandemic relief measures, temporarily halved the US child poverty rate by distributing $3,600 tax credits in monthly installments, including to very low-income families, but Democrats were unable to agree on terms to renew it and the program lapsed at the beginning of 2022.

"Tanf grants are, in most states, not adequate for people to meet their basic needs - [and] were inadequate before inflation started to be as big an issue as it is now," said Donna Pavetti of the Center for Budget and Policy Priorities. Recipients, she said, "are being asked to stretch dollars that were already stretched - and you can only stretch things so far."

Rent, gas and food prices are particularly volatile - but "basic necessities" such as clothes, shelter, energy and medical care were already rising faster than inflation, according to a 2014 report by the Bureau of Labor Statistics.

"We see our families not being able to get by on this amount of money, and it gets worse and worse and worse," said Louise Hayes, supervising attorney at Community Legal Services of Philadelphia (CLS).

"Rental assistance programs in Philly have run out of money. There are no programs for diapers or sanitary products, [food stamps are] inadequate to pay for food." Pandemic unemployment assistance, which provided an additional few hundred dollars a week, ran out last September.

"Without this income families may be forced to stay with abusive men," said Hayes, noting that Tanf recipients are overwhelmingly likely to be households headed by single women - a large proportion of whom are domestic violence survivors.

CLS wants to increase welfare payments in Pennsylvania for the first time in 33 years. They have been fighting for decades, Hayes said, and recently joined a diverse group of direct aid organizations to push lawmakers. "This is a rock we've been pushing up a hill for a very long time."

The effort dates back almost to 1996, when President Bill Clinton created the Tanf program by totally restructuring welfare. States were given control over most aspects of cash assistance programs and, as a tradeoff, federal funds were changed from open-ended aid programs to fixed annual amounts, called block grants.

The amount of federal aid has not changed since 1996 - in part because the program was never pegged to inflation. And state control meant the programs were vulnerable to the local political climate. This is evident in the conservative south, which has the most punitive and low-paying programs in the country. In Arkansas, for example, a family of three can receive a maximum of just $204 a month.

The low payments and invasive eligibility criteria - including drug tests - have driven away applicants over the decades. Nationally, Tanf now reaches only 21 families with children for every 100 living in poverty, compared with its predecessor program, which reached 68 for every 100, according to the Center for Budget and Policy Priorities.

Some states don't even spend the money they're given. Pennsylvania, for example, has stashed away millions in unspent Tanf aid: as of 2020, Pennsylvania had $410m in unobligated Tanf reserves, according to the Congressional Research Service.

"I have constituents that need these benefits, but this program has not modernized in a way that has allowed it to actually meet the needs people have right now," said Democratic Pennsylvania state representative Malcolm Kenyatta, who represents parts of Philadelphia. "My family was one of the working poor families that would benefit from this program. I know in a very intimate way what would happen when the government doesn't work - in an intimate way."

Kenyatta is sponsoring a bill to increase maximum Tanf grant amounts, tie them to inflation and release unspent dollars to those in need. Meanwhile, cash assistance has come under renewed attack by conservatives and at least one powerful Democrat, Senator Joe Manchin. Senator Rick Scott, the chair of Senate Republicans' campaign arm, has criticized government income supports while also promoting a tax increase for 80% of families earning less than $54,000 a year, the New York Times reported.

Speaking to a recent Heritage Foundation event, Scott said, "I'm focused on the people that can go to work and decided to be on a government program and not participate in this," wrongly arguing that most recipients of government benefits do not work.

Cash aid programs have, in fact, had work requirements for decades. Del Toro is one of the rare recipients who has been allowed to attend school while receiving benefits. She is studying for a two-year degree in social work at a community college in Reading, Pennsylvania, and expects to graduate next year. Meanwhile, she encourages other people on Tanf.

"Sometimes, they just cry, and don't know what they can do," she said. She tells them, "They can have anything that they want. Just wait and believe. Work for that."