Several of the key pieces of federal legislation that weave the safety net for low-wage families—the welfare-to-work Temporary Assistance for Needy Families block grants, Food Stamps, the Child Care Development Block Grant and the Individuals with Disabilities Education Act —will be up for reauthorization in 2002.

At the same time, the federal government will be facing severe budget constraints and most states will be making hard decisions affecting their education and social services budgets that serve vulnerable families.

Add to this a hot election year, and the year 2002 looks primed for a heated debate on government's role in helping low and moderate-wage families. Since the majority of America's children live in these families, Connect for Kids will be paying attention to this debate, and its consequences for children and families.

A Different Climate for Kids' Issues
In early 2001 child advocates were preparing to put children at the forefront of debates over how to spend the federal surplus. With a growing federal surplus and robust state revenues, the major challenge seemed to be political—to convince a political majority committed to shrinking the role of government to use the surplus to fully fund government programs dedicated to improving children's well-being.

What a difference a year makes! The economy has stalled, unemployment is rising, and federal deficit projections keep increasing, as do demands on government resources to combat terrorism and counter an economic downturn.

At the same time, the heightened sense of purpose and vulnerability in the wake of the September 11 attacks has turned people's attention to what government can do. Government priorities have shifted dramatically to a more activist federal government and higher spending, but primarily for defense and security, not for children.

This creates a dilemma for child advocates: public confidence in government action is at its highest level since 1966—but the ability to translate that into improved public policies and services will be limited by these new fiscal constraints. Child advocates are back on the defensive to "find the money" for fully funding nutrition programs for young children or education programs for disabled students. And now the children's agenda is in competition for scarce resources with antiterrorism and national security efforts.

Tax Cuts—Back on the Table?
When the economic outlook was rosy, Congress passed President Bush's trillion-plus dollar tax cut package, with most benefits accruing to the biggest taxpayers, the wealthy. At the time the argument that the surplus belonged to the taxpayer—and that the best government is the least government—trumped any calls for saving the surplus for education, prescription discounts for the elderly or other ordinarily popular uses.

In the spring of 2001, the White House and a majority in Congress said we could have it all—cutting tax rates, protecting the Social Security surplus, paying down the national debt and adequate spending on needed government programs.

In the tax cut debate, child advocates succeeded in making the case for a refundable child tax credit so that low-wage families would be entitled to a refund. But they did not succeed in limiting the tilt or enormous cost of the tax cuts overall.

Child advocates may want to see the tax cut legislation back on the table in 2002, especially those cuts for affluent families that have not yet taken effect. While political analysts argue an attempt to rescind the tax cuts would be political suicide, many child advocates argue that these tax cuts now threaten to drain public dollars sorely needed to serve low-wage parents in times of dramatically rising unemployment.

In the spring of 2001, for example, child advocates applauded President Bush's promise of a $200 million increase in Safe and Stable Families funding to protect abused and neglected children and help foster kids go to college. In the fall, child advocates were disappointed to find that when the budget surplus projections disappeared, so did the $200 million.

Child advocates will also be watching the FY03 budget process carefully to see that funding promises made to families and children are promises kept.

A Frayed Safety Net
Late into December 2001 lawmakers in Washington struggled to make a deal on an economic recovery package, but fundamental differences caused a stalemate in Congress. The House and Senate leaderships were divided over whether the package should provide temporary help for the unemployed and working families or permanent tax cuts for corporations and affluent households. Fights over how to structure expanded health coverage for dislocated workers further stymied the negotiations.

Child advocates are keenly aware that recessions hurt kids the most. According to Children's Defense Fund analyses, child poverty rates tend to rise disproportionately during recession, and are slowest to recover when the economy recovers. Even if current indications that the recession is ending hold true, the effects on children will linger.

The economic slowdown means hard times for families, communities and states all at the same time. The impact on low-wage families with children will test the capacities of community charities and support systems. Many food pantries are already saying the increased demand, especially from low-wage families with children, is straining their resources to the limit.

The downturn in state revenues is causing budget crises in many states, forcing cutbacks in funding for education, social services, and other programs serving working families.

Low and moderate-income parents struggling to maintain shelter, food, and health coverage during lay-offs are finding that decades-old safety nets have been weakened. The majority of low-wage workers are no longer eligible for unemployment compensation. Many welfare-to-work families who need government benefits to supplement poverty earnings may be running up against their lifetime time limits for eligibility.

Low-wage legal immigrants and their children face deeper problems. Many immigrant parents in the low-wage workforce are ineligible for the benefits their taxes pay for—food stamps, child care subsidies or welfare cash assistance.

Safety Net Revisions: A 2002 Priority
This is the first recession we've had since federal welfare reform legislation in 1996 transformed the financial safety net for low-income families with children. After several years of decline, welfare caseloads appear to be rising in many states.

The welfare reform legislation eliminated the guarantee of cash assistance under AFDC to a "work-first" policy environment under the Temporary Assistance for Needy Families (TANF) block grant.

While welfare reformers spoke of improving the lives of poor families and their children, what we have learned about welfare reform in a period of unprecedented economic growth indicates that reality fell far short of this goal. Even during the boom, welfare-to-work families typically failed to find jobs that paid enough to make ends meet without continued income supports. We have learned that many former welfare families are living in deeper poverty than ever. And we have learned that states' choices to do a lot, or a little, to help working poor families "make it" can make a difference for children.

Over the next year the reauthorization of the TANF welfare block grant, along with Food Stamps and the Child Care block grant, offer a crucial opportunity to make welfare policy match the rhetoric. Child advocates will argue that we may have changed "welfare as we know it" but we have not yet succeeded in lifting welfare-to-work families out of poverty.

Building on what we've learned from welfare reform so far, child advocates will be working to build public and policy makers' support for policies and programs that improve opportunities for the low-wage workforce and low-wage families—making poverty reduction, not caseload reduction, the ultimate goal for welfare policies.

Big Questions on Education
David Broder called it a revolution. Richard Rothstein called it a "breathtaking intrusion of the federal government over states' control of education." Call it big.

Congress ended the year 2001 by reauthorizing the Elementary and Secondary Education Act with sweeping legislation that firmly establishes the federal government as a key player in what happens in schools across the country. The bill requires states for the first time to test students in grades 3 – 8 every year, increases the federal share of education spending by $4 billion, more closely targets funds to needy schools, provides more information to parents and gives struggling students new options for tutoring and after-school programs.

No one really knows what impact such sweeping legislation will have on the quality of teaching and learning in the classroom. Nonprofits, religious groups and other service providers will be gearing up for the additional funding that should begin this fall to support after-school tutoring and programs for struggling students.

The law's impact on the system of education will take longer to see, and will play out differently in every state. At a time when bleak state budget outlooks are jeopardizing state education spending on public schools, early childhood education, and higher education in many states, the intentions and promise of this federal legislation will be put to a quick test.

For a quick Q and A on the new education legislation, check out CNN.