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...computer, consulting earnestly her stepbrother, Veder Velarde. Between slurps Coke, Milagros and Veder, who works in accounting, focused on the task at hand: painstakingly inputting figures from the receipts and 1099s generated by the child-care business she was running out of her living room. It was a late start for Milagros: She had hoped to finish her taxes months before, but now April 15 loomed just two weeks away, and she was anxious to dispense with the paperwork. "I try to do it in early January, so I can get the refund back," she later explained with a sheepish smile. "I didn't have all my receipts ready."
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Like an overachieving high schooler prepping for college, Milagros keeps everything neatly filed and labeled, and can produce the most obscure documents with a swift fluttering of fingers over the file drawer. Milagros had been eyeballing her receipts and she was expecting this year to be a good one; she was right. At $18,664, her annual income was just shy of the federal poverty line, enabling her to collect the full $4,300 possible under the federal Earned Income Tax Credit (EITC). There was more to come: a state EITC, then a city one, and a chunk from the state for child care. By the time Veder and Milagros finished tabbing through the accounting software, they had racked up more than $5,700 in tax credits, bumping Milagros' take-home income above the official poverty line of $19,307 for a family of four.
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Most Americans pay their taxes, so perhaps Milagros' annual journey appears unremarkable. It's not. The hefty refund she claimed was emblematic of a reconstituting of America's safety net, begun in the 1970s and blown to full scale with welfare reform. Even as the Great Society has withered, a flurry of programs designed to "make work pay" has sprouted up in its place. Commonly referred to as "work supports," this web of initiatives has extended traditional antipoverty efforts, like Medicaid and food stamps to workers, offering them free health care and assistance with buying groceries. There have also been new initiatives, most noticeably in expanded public child care and refundable tax credits for low-income workers. In proportional terms, it marks one of the most dramatic increases in social spending undertaken by the American government in recent memory: By 1999, the most recent year for which numbers were available, more than $51 billion in health care, child care and tax credits went to the working poor. That's nearly 10 times what the feds offered struggling workers in 1984 (in 1999 dollars). Spending on welfare checks plummeted over the same time period, dropping by 60 percent.
The need for such programs is a telling indicator of just how poorly work in post-welfare America pays, yet work supports aren't reaching all who need them. In 1999, only one in eight children eligible for public child care nationwide received that assistance, despite a child care budget approaching $7 billion. In New York City, food stamps and Medicaid both miss two out of every five persons who qualify for them. The most successful program, the EITC, reaches 82 percent of eligible New Yorkers. The result is a burgeoning, if patchwork, array of options, for which many qualify but few manage to use. Nationwide, just 5 percent of families making less than twice the federal poverty line--a common threshold for aid--receive assistance from all four sources, according to a forthcoming study from the Urban Institute, a leading research group on work and welfare issues. For families below the poverty line, the figure creeps up to 7 percent.
Work supports are poised to do more than supplement the safety net stitched under FDR's New Deal and LBJ's War on Poverty. They could replace it entirely. Done right, posit some observers, they would slot people into precisely the program they need: new jobs for the jobless, training for those who wanted to move up in the workforce, unemployment assistance for those between jobs, disability for those too sick to work. Public initiatives would solve the problems that kept people from working; and, no longer assailable as handouts, they would be far more defensible from conservative attack than their predecessor. In 2003, Isabel Sawhill and Ron Haskins, two welfare experts at the Brookings Institute, put it simply: If work supports were properly funded and efficiently managed, they wrote, "Welfare as we know it would wither away. It would not be needed."
A FEW MONTHS AFTER FILING HER TAXES, Milagros sat in the kitchen of a...
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