Welfare rolls cut despite recession

18 states slash caseloads; alarm raised about system

By Jason DeParle
NEW YORK TIMES NEWS SERVICE 2:00 a.m. February 2, 2009

WASHINGTON – Despite soaring unemployment and the worst economic crisis in decades, 18 states cut their welfare rolls last year, and nationally the number of people receiving cash assistance remained at or near the lowest in more than 40 years.

The trends, based on an analysis of state data collected by The New York Times, raise questions about how well a revamped welfare system with great state discretion is responding to growing hardships.

Michigan cut its welfare rolls 13 percent, though it was one of two states whose October unemployment rate topped 9 percent. Rhode Island, the other, had the nation's largest welfare decline, 17 percent.

Of the 12 states where joblessness grew most rapidly, eight reduced or kept constant the number of people receiving Temporary Assistance for Needy Families, the main cash welfare program for families with children. Nationally, for the 12 months ending October 2008, the rolls inched up a fraction of 1 percent.

In California, one of those 12 states with the largest increases in unemployment, officials expressed ambivalence about a 6 percent rise in the cash welfare rolls at a time when the state is facing a massive budget deficit.

“There's some fine-tuning of the program that needs to occur, to incentivize work,â€