Michigan's 2011 Family Independence Program (FIP) reform, known commonly as welfare reform, was implemented in order to reduce the number of individuals and families that became reliant on the welfare program over the years. The state was facing increasingly difficult financial challenges prior to the policy reform and, according to Governor Snyder, could no longer afford to provide long-term assistance to those who are able to work, especially those who had been receiving welfare assistance for over four years ("Snyder Signs Reform..."). The implementation of the FIP reform cut twenty percent of the people who benefitted from the cash assistance program and saved the state millions of dollars each month. The group that abruptly lost their aid were understandably upset when the policy was enacted, however, Governor Snyder believes that everything will work out in the long run and that those who lost their assistance will be better off as self-sufficient individuals.
. In the 2010 Michigan state elections the Republican Party won control of the House, maintained control in the Senate, and Republican Rick Snyder won the gubernatorial election, which effectively gave the Republicans complete control over the State Legislature heading into 2011 (Balz, 2010). The Republican takeover of the State Legislature happened at a time when Michigan was in need of some type of welfare reform. In 2010, Michigan spent 12.2 billion dollars on welfare, up 3.6 billion dollars from 2009. That 12.2 billion made up 13 percent of the total state and local budget and was the highest amount allocated to welfare in the history of the state (Chantrill, 2013).
The number of families receiving aid had drastically increased during the decade-long recession that plagued Michigan, peaking in 2011 when 1 in every 42 residents were receiving cash assistance ("Welfare Reform," 2012). According to Governor Snyder, many able-bodied individuals became accustomed to receiving state aid and were abusing the system, some of which had been doing so for nearly 15 years ("Snyder Signs Reform..."). People who were capable of working but instead chose to abuse the system were taking advantage of both the state, and the taxpayers of the state. The 2010 and 2011 annual reports done by the Office of Inspector General determined that fraudulent cases in the FIP cost Michigan a total of 2.3 million dollars (Office of Inspector General). The reform was needed in order to insure that the resources the state has are made available to those who truly need it ("Snyder Signs Reform..."). Due to the recession and the impact it had on the economy, the state government was under financial pressure and could not afford to continue spending upwards of 12 billion dollars per year on welfare. Michigan was also the only state in the country not to have a time limit or a benefits limit for beneficiaries of the FIP (Adamczyk, 2011). Governor Snyder's 2011 proposed budget called for a 48-month lifetime limit for FIP beneficiaries, which would save the state almost 78 million dollars, around 6 percent of the Michigan Department of Human Services budget ("Governor," 2011). The welfare reform policy was developed and supported primarily by the state's Republican Party, with the hope that people would seek out jobs and work towards becoming self-sufficient, instead of continuing to rely on state aid to survive (Adamczyk, 2011).
Michigan also faced potential penalties of up to 71 million dollars for not meeting its target Federal Temporary Assistance for Needy Families (TANF) work participation rate in 2007, 2008, or 2010 (Carley, 2011). The rate is set at 50 percent, meaning that 50 percent of the caseload must be working or participating in a specified job preparation activity. This 50 percent rate is then adjusted based on credits that the State is able to claim. The Department of Human Services (DHS), which provides public assistance, child and family welfare services, was notified that the State could face a 24 million, a 22 million, and a 25 million dollar fine for not meeting the requirements for those three years. Due to the possibility of continued multi-million dollar fines, the FIP reform was expanded to eliminate the hardship exemption. The hardship exemption is a federal regulation that allows states to exempt up to 20 percent of their TANF funded cases from the 60-month time limit due to hardship. By eliminating the hardship category the DHS expected more people to look for jobs and be more successful in meeting the Federal TANF work participation rate (Carley, 2011).
FIP is financed primarily with federal funds, but the state paid the cost for families that were over the federal 60-month lifetime limit, explained DHS spokesman Dave Akerly. In December 2011 the state paid out 10 million dollars less in cash assistance than it did in an average month in the year prior to the reform ("Welfare Reform," 2012). According to the State Fiscal Agency, as of December 2012, total monthly savings are estimated to be around 2.8 million dollars as a result of the cuts (French "Legislature Poised," 2012).
The introduction of House Bills 4409 and 4410 came in March of 2011, not long after the Republicans gained control of the Legislature and Governor Snyder released his proposed budget plan (Chantrill, 2013). The author and sponsor of the bills is Republican Representative Ken Horn from Frankenmuth. Republican Representative Sharon Tyler from Niles was also a sponsor and numerous other legislators were involved in introducing the bills with the hopes that the policy reform would help create a more stable state budget ("Snyder Signs Reform..."). Advocates predicted that the cuts would save the state 65 million dollars in 2012 (Adamczyk, 2011).
The FIP reform passed through the House and the Senate relatively quickly and was approved by Governor Snyder on September 6, 2011 ("Snyder Signs Reform..."). Representative Horn believes that individuals will now be motivated to get a job, saying, "People begin to get serious about looking for work roughly two weeks out of losing their check entirely" (Adamczyk, 2011). Governor Rick Snyder was very pleased with the new policy and the fact that it is "returning cash assistance to its original intent as a transitional program to help families while they work toward self-sufficiency" ("Snyder Signs Reform...").
Public Acts 131 and 132 of 2011, the acts that created the FIP reform policy, placed a 48-month time limit on benefit assistance, a limit that was already part of the Social Welfare Act that was introduced in 2007. However, along with the Social Welfare Act was an attached sunset clause, a clause that says a law will cease to exist after a specific date, that would have prevented the 48-month time limit from taking effect, if not for Public Acts 131 and 132, which eliminated the clause and defined certain exemptions ("S.B. 1386," 2012). Essentially, the acts got rid of the sunset clause so that the time limit could be implemented. The start of the 48-month period dated back to October 2007, which lead to a large number of people becoming immediately ineligible as soon as the policy was scheduled to take effect on October 1, 2011 ("Snyder Signs Reform...").
Challenges and Responses
The reform was supposed to be enforced on October 1, 2011, but a lawsuit was filed against the Department of Human Services (DHS) director, Maura Corrigan, on September 30 by the Center for Civil Justice (CCJ) on behalf of a number of FIP recipients who claimed they had not been given the required ten-day notice prior to benefit termination. The lawsuit lead to a temporary injunction on October 4, one day before the next welfare payments were scheduled to be sent out, which blocked the benefit limit from taking place on October 1. Proper notice was then issued and on October 14 the injunction was lifted, allowing the benefit time limit to go into effect (Carley, 2011). However, the lifted injunction was not the end of the court proceedings dealing with the new DHS reforms.
The DHS policy changes were once again challenged in court in 2012 by a group of individuals who lost their benefits as a result of the policy reform. The Genesee County Circuit Court ruled on March 27 that the DHS over stepped its authority when it created the policy limiting cash assistance benefits to a period of no more than 60-months, the federal limit ("Michigan DHS," 2012). Then in August of 2012 both sides filed applications for Leave to Appeal in the Michigan Supreme Court, causing all rulings and orders to remain the same until the Supreme Court could review the case ("60 Month," 2012). Republican Senator Bruce Caswell from Hillsdale sponsored Senate Bill 1386 in response to the Leave to Appeal, which created a 60-month benefit time limit law and was passed before the Michigan Supreme Court had an opportunity to rule on the legality of the policy (French "Legislature," 2012 and "Advocating," 2013). The bill was signed by Governor Snyder on January 1, 2013 and is now Public Act 607 ("Michigan Senate Bill," 2013).
The FIP reform reduced the number of people receiving benefits by about twenty percent, from over 221,000 to around 180,000, and affected some 12,600 families (Adamczyk, 2011). In order to qualify for cash assistance a family of three can earn no more than 814 dollars per month, with a maximum amount of assistance of 492 dollars per month. Once a family is qualified they are able to increase their monthly income to 1164 dollars and still remain eligible for state aid ("Snyder Signs Reform..."). Permanent exemptions from the time limit are now granted only to disabled individuals and child-only cases, and temporary exemptions from the 48-month state limit are now subject to the 60-month Federal limit that was previously in place (Carley, 2011). Adults who are incapacitated for over 90 days, needed in the home to care for a disabled spouse or child, have been a victim of domestic violence, and during the duration of pregnancy plus 90 days are a few examples of circumstances that may lead to a person being eligible for a temporary exemption from the time limit (Akerly, 2012). Republican Representative Ken Horn from Frankenmuth, who is the author and sponsor of the House FIP reform bills, believes that those who are able will find work and be fine, just like the evidence from other states welfare policies shows, while those who are not able to work will be exempt from the time limit cut-off (French "Rep.," 2011).
The overall response by those affected by the policy has not been a positive one to say the least. The group of people most affected by the policy reform and the loss of government benefits are overwhelming the urban poor (French "Legislature," 2012). The main criticism that those who are opposed to the reform, specifically the Michigan League for Human Services, have is that the benefit cuts are not even across the state (Adamczyk, 2011). Of the eighty-three counties in Michigan only four have a benefit cut-off rate higher than the state average of 14 percent, Wayne (Detroit), Genesee (Flint), Muskegon (Muskegon), and Saginaw (Saginaw), all of which have a relatively large percentage of urban poor living in the counties main city (Adamczyk, 2011). The Michigan League for Human Services recently did a county-by-county breakdown showing that more than half of all welfare recipients affected by the policy reform reside in Wayne County alone (Campbell, 2011). President of the Michigan League for Human Services, Gilda Jacobs, believes that since the chronic poor are concentrated in such a small area of the state it was easier for legislators, such as Horn, Tyler, and Caswell, to implement the FIP reform. "Most of these people [the chronic poor] are not in the back yards of the legislators. They're coming from the urban areas," Said Jacobs (Adamczyk, 2011). Many state-elected Democrats also believe that the state's ongoing economic crisis is reason enough not to cut off aid to such a large percentage of people that are in need. Opponents of the bill believe that it will result in an increase in many of the negative aspects of urban life, such as a rise in both crime and in the homeless population (French "Few Jobs," 2012).
Families that have been impacted the hardest have begun to share their stories publicly and there have been a number of protests both by those who lost their benefits and by groups that are opposed to the legislation, including the Michigan Welfare Rights Organization (MWRO). The MWRO have even started moving people that were kicked out of their homes into empty, bank-foreclosed homes. Maureen Taylor, who works with the MWRO, said that banks do eventually catch on, but it usually takes around 5 to 7 months for them to do so and until that time, the abandoned houses are perfect for families that have no where else to turn (Thomas, 2012). Overall, the reaction by those that have been affected by the welfare cuts has been entirely negative and the attitudes of those that lost their benefits are not likely to change anytime soon.
Evaluating and Assessing the Impact
Evaluations with regards to how the FIP reform has been doing are still difficult to establish since the policy is so new. The state has not conducted any surveys to determine former beneficiaries current economic status now that they no longer receive financial aid and overall there is a limited amount of available data, which makes a sharp assessment essentially impossible at this time (French "Welfare," 2012). Even though there is currently not clear data available, DHS Director Maura Corrigan is satisfied with the results and noted that "there hasn't been an uptick in the food banks; there hasn't been an uptick in the homeless shelters." However, Gilda Jacobs, President and CEO of the Michigan League for Human Services, said that Director Corrigan's statement is inconsistent with what she has been hearing and that at least two agencies she has spoken with report an increased demand for food and other forms of assistance. The divisional social services director for the Salvation Army Eastern Michigan Division Donald Czaplicki said in February of 2012 that he has seen an eighteen percent increase in people housed and a twelve percent increase in the number of meals served. Although, Czaplicki did say that he could not be sure of how much of the increase is a result of the welfare reform (Egan, 2012). The majority of those that were affected by the limits are eligible for other forms of assistance, including food, medical and child-care. "These wrap-around services will provide a safety net while families chart their path toward self-sufficiency," said Corrigan (Adamczyk, 2011).
Many families that lost cash assistance benefits gained some of their lost income back in the form of food stamps. Food stamp levels are based on income, and cash assistance is counted towards income, so a lower total income means a person receives more food stamps. Food stamps are also a federal program; therefore, an increase in the amount of food stamps given out is not a state budget issue ("Welfare Reform," 2012). As of right now the exact effect of the state welfare reform is all a mixed political debate that is likely only going to intensify as more clear-cut, factual data emerges. The one thing that is clear is now that the legislation has been implemented the upcoming years and the policy response is going to determine how the reform works out in the long run.
Now that the welfare reform has successfully been implemented it will face continuous pressure from those opposed to the policy. The October 2011 reform is unlike any other welfare policy change that has happened nationally. No other state has cut so many people off assistance in such a short period of time and with such little notice. At the end of December 2011, just three months after implementation, the number of FIP cases was down nearly 16,000, a drop of approximately twenty percent. Including family members, in total more than 54,000 Michigan residents lost their cash benefits in just three months ("Welfare Reform," 2012). As a result of the drastic drop off in the number of people receiving benefits there does appear to be some slight room for possible future policy changes, however, in the long run the FIP reform looks like it is here to stay.
Even though reform outcomes are never truly settled (Patashnik, 26), it seems that the Michigan welfare reform policy will be experiencing entrenchment for a significant period of time and will succeed in the long run. A reform has a much greater chance of being successful if it is enacted along with supportive shifts in its environment, which occurred with the 2011 FIP reform (Patashnik, 27). The State had been going through a recession for nearly 10 years and a change in the FIP needed to be made. Individuals were abusing the welfare system, costing the state 2.3 million dollars in 2010 and 2011, and were relying too heavily on state aid ("Snyder Signs Reform..." and Office of Inspector General). The GOP gaining control of the Michigan legislature in the 2010 election was also a major factor. The Republicans were able to enact the policy they wanted and were able to address their concerns regarding the frequent fraud and abuse of the FIP system (Mead, 2). The Republican led State legislature was able to all but cripple their opposition with the new reform as well. Individuals who lost out on their benefits challenged the ruling in the court system but ended up being defeated time and time again. In order to further solidify the sustainability of the reform, in response to the August 2012 Leave to Appeal in the Michigan Supreme Court, Senate Bill 1386 was passed while the court proceedings were still in progress, which made the 60-month benefit time limit state law (French "Legislature," 2012 and "Advocating," 2013). In this policy reform the political losers ended up being the economic losers as well, at least for now. Those who lost out on their state cash assistance benefits were largely the urban poor whose Representative's could not keep the heavily Republican legislature from enacting the welfare reform (Adamczyk, 2011).
In the long-term, reform sustainability and continued entrenchment in the system is likely going to continue even when the Democrats are able to retake control of the legislature. The cash assistance program is designed to provide short-term relief to families while they work towards self-sufficiency, not to support them for the long haul ("Snyder Signs Reform..."). Also, Michigan was the last state to have neither a time limit nor benefit limit on cash assistance, making it unlikely that the state would return to such a time, even with a Democratic led legislature (Adamczyk, 2011). Evidence from the 1980s and 1990s suggests that enforcing work on those who are able can actually help keep a person motivated, lead to self-sustainability, and achieve financial independence (Mead, 2). Current legislators are hopeful that such is the case in Michigan and even when the economy turns around and the state is less financially restricted, fewer people will require cash assistance. As long as Michigan is able to avoid another recession there should be at minimum a slight increase in the amount of available jobs, specifically for the urban poor who have less educational experience, which will take further pressure off of the demand for state aid and cash assistance. There may be room for slight adjustments to specific parts of the policy reform when the economy improves, such as the hardship and exemption categories, but overall it is doubtful that the reform will be overturned or undergo major reconstruction, even with a Democratic led legislature.
Policy feedback, as soon as it is available, will ultimately determine how well the FIP reform will do in the long run. Policies function as institutions, imposing particular norms and rules on those affected, and consequently reshape politics (Mettler, 2). Individuals who relied on cash assistance for years were abruptly notified that their benefits would be ending in October 2011 if they had been receiving them for over 48-months, dating back to October 2007 (Carley, 2011). The cognitive mindsets of those who were affected and how well they are able to thrive in the situation will play a role in determining the long-term success of the reform. Policies can shape a beneficiaries' subjective experience of what it means to be a citizen, providing them with a sense of what their role, place, and value is within society (Mettler, 2). The expectant scenario is that everything will work out and those who are able to work will go out and find jobs in order to provide for themselves and their families, and those who can not will be exempt from the benefit time limit (French "Rep.," 2011). Policies have the capability to "reshape the identities, interests, and goals of individuals and constituency groups, allocate political resources, encourage or discourage political mobilization, and create - or fail to create - expectations...that make it difficult" for political leaders to completely reverse course (Patashnik, 29).
Policy feedback is especially important with regards to state welfare reform because the policies have such a profound impact on so many people. As long as there are no extremely drastic increases in the level of crime or homelessness it is expected that the FIP reform will undergo no major alterations anytime soon. There are exemptions available to those who truly need them and the loss of cash assistance is somewhat replaced by an increase in the amount of food stamps received. So far the small amount of policy feedback that is available is mainly the short-term success of the reform. Total monthly savings are around 2.8 million dollars as a result of the cuts, as of December 2012 (French "Legislature," 2012), and the state was projected to save 65 million in 2012 alone (Adamczyk, 2011). New, cohesive constituencies have not, and are not likely to, emerge and put pressure on the government to change the policy back either. Gilda Jacobs, president of the Michigan League for Human Services stated, "Most of these people are not in the back yards of the legislators." Jacobs believes that the concentration of the chronic poor in small portions of the state made it easier for legislators to vote for the reform and will make it easier for them to keep the reform in place (Adamczyk, 2011).
Michigan's 2011 FIP reform was implemented in order to reduce state spending on welfare and to try and reduce the number of individuals reliant on the program. The GOP took control of the Michigan legislature and at the same time a welfare reform policy window opened. The state government could no longer continue to give cash benefits to individuals that are able to work and who had been receiving aid for over four years. Although the policy has a negative image in the heavily urban areas of the state, those most responsible for the reform believe that it will cause many individuals to no longer have the need to rely on the state for support. Those who lost their benefits are expected to go out and find a job and become a contributing member of society. The state cannot afford to continuously take care of such a large portion of the urban population, especially after a near decade long recession. Michigan was the only remaining state that did not have a time limit or a benefit limit, another reason why the policy is likely going to remain intact for the long haul. Although those directly affected by the policy have publicly displayed their displeasure, there does not appear to be strong enough opposition to overturn the relatively new reform. The legislation seems to be taking hold nicely and will likely continue on towards a period of entrenchment with few amendments for an extended amount of time.
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