WASHINGTON -- February 7 -- As President Bush releases his budget today proposing reductions in Medicaid among other programs, the Center for Economic and Policy Research (CEPR) is concerned that shrinking budgets for work supports shortchange working women and their families. Work supports such as Medicaid and child care subsidies are crucial in enabling low-income women to remain in the labor force after leaving welfare.

"Access to health insurance and affordable, quality child care makes the difference between mothers being able to stay on the job and not. Unfortunately, the President's budget does not recognize the importance of these supports for helping working families," says CEPR economist Heather Boushey.

Welfare reform promised those on public assistance that if they went to work, they would receive the work supports and assistance necessary to help them find and keep employment. Since the early 1990s, Congress fulfilled some of that promise through increased spending on child care subsidies and Medicaid for working families. However, the commitment to date has not been sufficient to adequately achieve the goals of welfare reform. Dr. Boushey's recent research has found that work supports are generally time-limited and phase out quickly as income rises. For the majority of working women leaving public assistance, work supports quit before the private market is able to replace health and child care needs. This limits their ability to stay employed because most mothers do not easily transition off government work supports into private-sector work supports.

Dr. Boushey has examined the role of health insurance and child care in promoting employment and wage growth for prime-age mothers. Dr. Boushey’s research clearly demonstrates that the Federal government needs to invest funds in work supports, including Medicaid and child care, in order to promote self-sufficiency and create long-term alternatives to welfare. Mothers on welfare and other low-income mothers are often eligible for Medicaid and child care subsidies but as they move up the job ladder, they lose eligibility. Few jobs providing health benefits are available to these women on the low-end of the labor market. The situation for child care is worse since there is virtually no private sector equivalent to child care subsidies and working moms must be able to afford market prices for child care once subsidies quit.

For links to Heather Boushey’s research, see http://www.cepr.net.
To schedule an interview with Heather Boushey, contact Debi Kar, kar@cepr.net or (202) 387-5080.

The Center for Economic and Policy Research is an independent, non-partisan think tank that was established to promote democratic debate on the most important economic and social issues that affect peoples lives.

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