In 1998, nearly 60 percent of welfare spending was on cash benefits, categorized as “basic assistance.” By 2014, it was only about one-quarter of TANF spending. That shift has happened despite a burgeoning economics literature suggesting that direct cash transfers are in many cases the most efficient tool to fight poverty.Another way to put it, seems to me, is that the reduced per-person spending on "welfare" is going to pay people who provide services to poor people, not directly to poor people. To hear Arkansas legislators and the governor talk, you'd think the poor in Arkansas are on a gravy train — hence no tax breaks for them, just for richer people; more fees on medical services; college scholarships skewed toward the upper income, and all the other policies that arise from the myth of the lucky welfare ducks.
Some of the money that used to go to cash assistance now goes to other noncash aid programs, such as child care assistance or work-related activities, and to refundable tax credits that are essentially a different form of cash transfer. But by far the biggest increase comes in what Pavetti’s group classifies as “other,” which the center says “covers a broad range of uses, including child welfare, parenting training, substance abuse treatment, domestic violence services and early education.” Those programs might be worthwhile in their own right, but they don’t have much to do with the original goals of welfare. In 2014, about one-third of TANF spending went to “other” areas, up from 12 percent in 1998.