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Journal Issue: Welfare to Work Volume 7 Number 1 Spring 1997

Introduction to the AFDC Program
Stephen B. Page Mary B. Larner

The Size of AFDC

Concern that the number of families relying on AFDC was rising and that the program's budget was consuming ever more of the nation's tax dollars contributed to the impetus for welfare reform. This perception was only partially accurate, however. AFDC caseloads have grown, but so has the size of the nation's population and the overall budget. From the mid-1970s on, the program served only one in twenty Americans,12 and it did not consume more than 5% of the federal budget.13

Caseloads

The raw number of families and individuals receiving AFDC grew over the years. In 1992, 13.6 million individuals, including 9.2 million children, received AFDC nationwide. As Figure 1 shows, these numbers increased gradually from 1972 to 1989, then sharply from 1989 to 1992 during the nationwide recession.14 Despite the rising number of recipients, however, Figure 2 shows that the percentage of the total U.S. population served by the AFDC program remained level at about 5%. Children were more likely than adults to receive AFDC assistance—14% of the nation's children received benefits in 1992. Nevertheless, one-third of children living below the poverty level received no help from AFDC in 1992,12 because states set their eligibility limits so low that many poor families did not qualify for assistance.

Budgets

As the number of families receiving AFDC assistance increased, the cost of the program grew as well. Since all eligible families were entitled to AFDC, program costs depended on the number of families enrolled at any given time.15 As Figure 3 shows, total federal and state spending on AFDC benefits increased from $15.5 billion to $22.3 billion (adjusted for inflation) during the 23 years from 1970 to 1993. However, even though the number of recipients increased by 91%, costs increased by only 44%.16 The growth in costs was restrained because the grants provided to each family declined in value. In constant dollars, the average monthly AFDC benefit per family shrank by almost half between 1970 and 1992.17

Political rhetoric notwithstanding, expenditures on AFDC were a very small portion of both state and federal budgets. The pie chart in Figure 4 reveals that, in 1995, federal spending on AFDC, Supplemental Security Income for the disabled, and food stamps together constituted less than 4% of the federal budget, as it had for most of the preceding three decades.13 In 1991, states spent just over 5% of their general funds on AFDC.18 In other words, public concerns about the AFDC program reflected the program's lack of popularity and a general sense that it was not achieving desired goals, rather than disproportionate increases in demand or spending.