This story closes out a series, published in The Reader and on omahajobs.com from September 2021 — June 2022 that spotlights the experiences of low-income, working families in Omaha. This is also part of a larger series about inequity in Omaha, titled “(Dis)Invested.”
In 2010, Melinda Jacobs was a 20-year-old single mom struggling to make ends meet as a certified nursing assistant. Working night shifts to boost her wages wasn’t enough to support her family, said Jacobs, whose story was featured in the April 2022 edition of The Reader, so she applied for Aid to Dependent Children (ADC), a public benefit program providing cash assistance to low-income families with kids.
Jacobs was denied because her income was over the state cutoff level, which, as of July 2021, was $741 per month, or $8,892 per year, for a family of two. Despite inflation, that amount has increased by only $74 in six years.
More than a decade after being denied assistance, Jacobs learned she was permanently disqualified from ADC, this time because, she said, she’d been to prison on drug offenses; anyone convicted of possessing, using or distributing a controlled substance is permanently ineligible for assistance, according to the Nebraska Department of Health and Human Services (DHHS).
“It was hard, being a single mom … having the weight on my shoulders and being by myself,” said Jacobs, who told The Reader she still can’t get ADC despite completing drug treatment and getting sober. “[When I was disqualified] … I felt like giving up, [going] back to the streets and selling drugs … But I took a step back and realized I’m pregnant. I need to be healthy and sober for this baby. I need to get my kids back.”
It’s not uncommon for public benefit denials to perpetuate poverty and crime, according to state Sen. Machaela Cavanaugh, who said people turn to crime to support their — and their children’s — basic needs. Aditi Shrivastava, a senior policy analyst at the Center on Budget and Policy Priorities (CBPP) in Washington, D.C., told The Reader the drug felony ban is counterproductive.
“When we see families struggling … that tells us they need more help, not less,” she said.
Stories like Jacobs’ are common in Nebraska, where being denied ADC is the norm for families that apply to the program. In 2020, around 90% of families that applied for ADC were denied, according to federal data — Nebraska’s denial rate for applications to get direct cash assistance surpasses that of all but three states in the nation. Denials happen because of a drug conviction, income slightly above the ultra-low cutoff, time on the program exceeding the lifetime limit of 60 months, or because applicants just didn’t cross their T’s and dot their I’s when filling out the 23-page application, according to Jenaime Besley, who works with underserved families at the Child Saving Institute.
But the rules and red tape don’t mean Nebraska is strapped for ADC cash to distribute. ADC money comes from Temporary Assistance for Needy Families (TANF), an annual federal block grant given to each state to support low-income families. The state can use the money for programs such as Jobs for America’s Graduates (JAG), which helps young people secure quality jobs, or for direct cash assistance via ADC — or the state can decide to allocate the money to a rainy day fund.
The balance of Nebraska’s rainy day fund was more than $108 million as of September 2021, according to the state’s Legislative Fiscal Office. By September 2022, the amount is projected to exceed $110 million. The balance decreased between 2013 and 2017, when it was around $52 million — but since then, it’s ballooned upward by an average of $14 million each year.
As of 2020, Nebraska was one of just 11 states with a TANF rainy day fund that contains more money than its annual TANF grant of around $57 million, according to the CBPP. Advocates and legislators on both sides of the political aisle are concerned about the bloated balance — and the families that aren’t being served.
“The level [to which the fund has] grown year after year is just inappropriate when people are struggling,” said James Goddard, senior director of programs at Nebraska Appleseed, a social justice nonprofit in Lincoln. “[We need to get] the dollars in the hands of low-income folks in Nebraska ... instead of sitting on the funds.”
Goddard said he can only speculate as to why the number has ballooned. But he believes part of the reason is fewer families are being served due to strict eligibility rules and work requirements. In 2021, Nebraska served an average of 3,451 families per month; in 2000, it served nearly three times as many, according to federal data.
That doesn’t mean the need isn’t there though. According to the CBPP, Nebraska has experienced the fourth-steepest drop of any state in the number of families receiving cash assistance. Fifty-two families out of every 100 living in poverty got assistance from 2005-2006; by 2019-2020 — the year 90% of ADC applicants were denied — it dropped to just 20 out of 100.
“Nebraska is in a position to provide so much more with those reserves. This is a policy choice the state could make,” Shrivastava said. “The fact that 90% of families are being turned away is also an active policy choice ... Many more families [should be] served.”
Nebraska isn’t the only state not spending hundreds of millions intended for underserved families. According to a ProPublica article published in December 2021, states aren’t using $5.2 billion worth of TANF money. And not using more of the money is a fiscal fiasco for Nebraska, Cavanaugh said.
“When we don't utilize these programs and [people] commit crimes to get the essentials they need, it's costing the state money to the tune of increased incarceration, [and it] takes people out of the workforce because they are incarcerated. It's this very illogical circle we as a state are perpetuating by not using these dollars,” she said, also noting that people quit work to apply for benefits full-time because the process is so time-intensive and their incomes are slightly above the ultra-low cutoff.
“We really make poverty a full-time job in Nebraska,” Cavanaugh said.
Shrivastava agrees that public benefits like ADC boost a state’s economy — just look at COVID-19 relief efforts, she said.
“The poverty rate has been ... measurably impacted because of [COVID-19] assistance going out,” said Shrivastava, who believes states should focus TANF spending on direct cash assistance programs like ADC.
“When families have their basic needs met, they are better able to plan for the future, including looking for work and participating in education and training programs that will increase their earnings in the future,” she said. “That is ... good for the state as a whole.”
It’s also good for children, according to advocates and legislators. After all, individuals with minor children get the money, which is intended to help make sure kids thrive. And when families are denied, kids don’t get their physical, social and intellectual needs met, according to Besley.
“[For example], school's out, [and] mommy may not have enough money to send them to [extracurricular activities],” she said. “[So kids] stay home all day, every day during the summer, and [don’t get] stimulation.”
It’s prudent to have some money in reserve for when disaster strikes, for example, keeping six months worth of TANF spending — which is around $28 million — in the rainy day fund, according to Goddard. But in 2020, when COVID-19 ravaged the world, the rainy day balance swelled from over $92 million to more than $108 million. Advocates asked: What kind of a rainy day is Nebraska waiting for before it draws down the funds?
Pointing Fingers and 'Gaslighting'
In February 2021, Cavanaugh called the rainy day fund a “slush fund” while testifying in support of a bill to expand eligibility for the Child Care Subsidy program.
“I'm concerned that [DHHS is] starting programs without any input or insights from ... this legislative body,” she said, “[and] that you continue to come in opposition to programs that various senators have introduced to support families and children.”
Cavanaugh and other senators wanted to use TANF to fund the Child Care Subsidy program. But Stephanie Beasley, director of the Division of Children and Family Services in DHHS, insisted the department was adding new programs for underserved families and, if the allocated amount was spent each year, the state would spend down the rainy day fund by fiscal years 2024 and 2025.
Goddard isn’t convinced the state will spend the rainy day fund anytime soon. Neither is Aubrey Mancuso, deputy director of the Women’s Fund of Omaha, who used to be executive director at Voices for Children in Nebraska, where she argued for the state to use more TANF funds during the COVID-19 crisis.
“They've been [saying they’ll use more funds] for a decade. The fund just keeps getting bigger, ” she said. “When we think about what Nebraska has been doing with [TANF] money ... item A [is] they're not spending it.”
The Reader reached out multiple times to DHHS and the governor’s office about this story but was not granted an interview. DHHS was, however, responsive to numerous records requests.
According to its TANF plan, DHHS intends to gradually increase spending on ADC, in addition to other resources and programs for underserved families. The department says it will reduce the fund to less than $97 million by September 2023; less than $79 million by September 2024, and approximately $4.5 million by September 2028.
But Goddard doesn’t think DHHS' plan for how it'll spend the money — shown on the table below — is as granular as it could be. And Cavanaugh said, despite her best efforts to get more information about the expenditures listed, she doesn’t understand what many of the expenditures mean.
“It's a circular conversation that ends with the same outcome, which is, we don't know what they're doing, we don't know what their plan is, and they insist that they've told us what their plan is,” Cavanaugh told The Reader. “Have you heard of the term ‘gaslighting’?”
Cavanaugh said lawmakers could raise the income requirement so more people are eligible for assistance and/or increase the monthly amount families receive. But they haven’t done any of that yet because, according to Cavanaugh, they don’t have the votes. A bill introduced by then-Senator Kathy Campbell in 2015 to increase the maximum ADC payment and let families continue to get some benefits even if they get a small raise, so they don't have to choose between ADC and their jobs, did get votes in the Legislature — but it was vetoed by Gov. Pete Ricketts, who called it “unsustainable,” saying it would drain the rainy day fund, and Nebraska would ultimately incur the cost. (A lower-cost version later passed as an amendment to another bill.) And in March 2021, the Heritage Foundation said “unsustainable entitlement programs” are a "primary driver" of the federal government’s failing fiscal health.
The Reader reached out to multiple senators who might vote against expanding ADC access, as well as the Platte Institute, a conservative think tank, and did not get any interviews. But conversations about TANF might be on the legislative horizon. At the end of the 2022 session, state Sen. John Arch introduced a resolution (LR407) calling for an interim study of Nebraska’s past and future use of TANF funds.
The resolution is co-sponsored by both Democratic and Republican members of the Health and Human Services committee — the state’s use of TANF funds is a bipartisan concern. In December 2014, then-State Auditor Mike Foley, who’s now lieutenant governor, wrote a report to Kerry Winterer, then-DHHS CEO, pointing out a “significant deficiency” in Nebraska’s handling of TANF cash reserve funds. At the time, the rainy day fund totaled more than $55 million, according to Foley’s report.
Even when Nebraska puts some TANF money to use, however, community members, legislators and advocates say it doesn’t necessarily help — and sometimes perpetuates poverty.
'Kind of an insult'
During the first winter of COVID-19, Jen Miller, whose name has been changed for this story to protect her identity, spent 30 hours a week taking resume-writing courses on LinkedIn and attending Zoom meetings about local job opportunities. “I just have to finish some classes,” the single mother told her then-9-year-old son, who was in remote schooling.
Miller never mentioned to her son that those classes were required for her to stay on Aid to Dependent Children.
“I was embarrassed,” said Miller, who said she previously earned $27 per hour at Facebook, where she installed and terminated fiber optics, before being laid off in December 2020 and applying for every public benefit program she could.
“There was a feeling you were a bit looked down upon by the people running the programs,” she said. “A stigma.”
Miller also felt uncomfortable with the 30-hours-per-week work requirements for single-parent families (35 hours per week for two-parent families). Struggling parents must meet these federal mandates to earn just $408 per month for a two-person family. Although $77 is added for every additional family member, for a two-person family like Miller and her son, $408 per month, which is the current level as of July 2021, translates to about $3.13 an hour — well below Nebraska’s $9 per hour minimum wage.
A CBPP report titled “TANF Policies Reflect Racist Legacy of Cash Assistance” recommends prohibiting mandatory work requirements altogether, arguing they’re based on harmful stereotypes about public benefit recipients not wanting to work.
The CBPP report also suggests TANF isn’t helping participants secure jobs with liveable wages.
“TANF policies have done more to limit access to the program than to help parents find quality jobs,” the report reads. “Most parents end up returning to the unstable, low-paid jobs that led them to TANF in the first place.”
Miller said employers joined Zoom calls with participants and promoted low-wage opportunities, such as factory worker and cleaning jobs.
“That's kind of an insult,” Miller said. “They [seem to] feel as if the people they're speaking to would only be eligible for these lower-paying jobs.”
According to Mancuso, DHHS’ spending plan doesn’t take into account how work requirements have caused Nebraska’s ADC caseloads to decline.
“Every time they come up with a plan they estimate caseloads are going to grow,” she said, “[but] the program has become so inaccessible and unworkable for families that caseloads have consistently gone down. Estimating that caseloads will continue to grow is not actually based on ... [how] the program has been trending for a couple decades.”
TANF also makes assumptions about what a family should look like, according to Cavanaugh, affecting the non-ADC programs offered via TANF. Two of TANF’s core purposes at the federal level are promoting two-parent families and discouraging out-of-wedlock pregnancies.
“It's judgmental that you can only thrive in a certain way,” said Cavanaugh, who wants Nebraska to ensure its TANF-funded programs serve a range of family types. “Every family looks different [and] has different needs. We should be adaptable [to] that, [not] trying to fit people into some sort of normative view of what a family should be.”
Morghan Price, a 40-year-old single mom who’s been on ADC in the past, believes opportunities for upward mobility are limited in the program.
Today, Price is the director of her own substance abuse recovery business, having herself overcome addiction, and said she is preparing to pursue a bachelor’s degree in psychology at the University of Nebraska at Omaha. Price acknowledges that ADC helped her to an extent, but she believes it’s ultimately her own drive, fueled by her mother’s “warrior” spirit, that got her to this place. ADC, she said, didn’t open career paths or educational opportunities.
“[They want us] to understand the rhythm of the hamster wheel so we can make everybody else's machine function,” Price said. “There’s no ladder there ... They say it's supposed to be to pull yourself up by your bootstraps ... [but] what can a person with multiple children do with $300 or $400 a month?”
Price loves policy reconstruction and advocates for Nebraska to make the most of its bountiful funds. She believes ADC should offer coursework on saving and investing money, and provide grants for ADC recipients to attend Nebraska colleges. And she thinks the people who are creating policy have never experienced poverty.
“They're making ... decisions based on their assumptions,” said Price, who recalls getting smirks when, growing up, her family pulled out their benefits card at the grocery store.
Cavanaugh agrees Nebraska hasn’t stepped up to the plate to help families like Price’s, Miller’s and Jacobs’.
She said she’s currently looking for ways to use TANF money as productively as possible, given the rising costs Nebraskans are incurring with inflation.
“[TANF could be] a great way to combat intergenerational poverty and break down systems of poverty if we start using these federal programs that are meant to lift people out of poverty,” Cavanaugh said, “not just perpetuate poverty by making it hard to be poor.”
Price believes poverty can feel all-consuming, describing the stress, anxiety, depression and sense of hopelessness that can be part and parcel of life as a low-income mother. But Nebraska has the money to change that, Price said — the state just needs to act.
“Poverty is not simply a financial state. It is a mental, emotional and spiritual [state] ... You know you are destined for more, but opportunities keep getting closed in your face ... Policies maintain this lower-class mentality,” she said. “If this money is there [to help people], utilize it.”