With the weakened economy and tight budgets states are desperately awaiting the funds from Obama’s $787 billion stimulus bill. While the money will go directly to the states, cities leaders are optimistic that the infusion of cash will spur job growth (or prevent more layoffs) in their urban areas.

As members of Congress and the White House were still hammering out the details of the bill, mayors across the country began laying the groundwork for how they could best spend the money to help their cities. In Newark, NJ, Mayor Cory Booker has focused on ways to help families in need, boost city revenue and cut costs long before the stimulus was a done deal:

The economic stimulus package pending in Congress could end up being a boon for Newark. But Booker said the city also must aggressively boost revenue, including fees, parking and payroll taxes.

To stem rising costs, the mayor wants to reduce fuel expenses, perform energy audits and drop car allowances for city employees. He is considering replacing hard-wired telephone lines in city offices with cell phones and won’t rule out offering city services to other towns.

City officials also believe Newark could become a city of opportunity in hard times for companies unable to locate to more expensive towns.

During his tenure as mayor, Booker, in partnership with the State of New Jersey Department of Children and families opened 11 Family Success Centers in the city. These community-based centers serve as a one stop shop for families in need, offering information about health services, tax preparation, job training, child care, housing assistance, and other opportunities. The centers have been so successful that Booker has pledged to open a “grandfamily center” to assist the specific needs of the city’s 4,000 households headed by grandparents.

The most interesting thing about Booker’s approach is his balance of providing opportunity but demanding responsibility from those who benefit:

These comprehensive services will help our caregivers, parents, and families. But our caregivers, parents and families must reach out to the Centers, and they must be willing to take the steps that the Center staff prescribe. That may require foregoing a favorite pizza for a cheaper, but more nutritious meal. It might also call upon youngsters to give up a television show to bear down on homework. But these are small demands compared to those that adult life will impose, and the alternatives of ignorance, poverty, and crime are too bitter to contemplate - for us as civic leaders seeking to build the best Newark possible, and for our children, seeking to build the best people they can be.

Today’s papers bring grim economic news: the 2009 budget deficit is projected to reach $1.2 trillion, a figure that doesn’t account for President-elect Obama’s proposed $800 billion stimulus spending; pension plans are underfunded by $409 billion; and over one million jobs were lost in November and December alone.

The bad news is that this economic crisis is going to get worse before it gets better, and many families will struggle. The good news is that Obama’s Economic Recovery Package includes increased benefits for food stamps, unemployment insurance and the Earned Income Tax Credit. And while an increase in these benefits must be a priority in any stimulus package, the government must also make sure that everyone who is eligible for current benefits can easily apply.

Some have estimated that $65 billion worth of government benefits targeted to help low-income families and individuals is unused every year. The IRS estimates that each year 20 percent of the $36 billion EITC goes unclaimed. And a study by the Food Research and Action Center (FRAC) that looked at 24 U.S. cities, found that only 66 percent of the people surveyed who were eligible for food stamps actually received them - leaving $2 billion food assistance benefits unclaimed.

Why is all this money left on the table? Well, some people just don’t know that they are eligible or that the government even provides these benefits. And for others, the process for applying can be extremely complicated, confusing and timely.

All of this brings us to the first What Works post of 2009: single stop organizations that allow people to apply for many government benefits at one location. Two organizations, SingleStop USA and the Benefit Bank, have been extremely successful in helping more people receive assistance. A study on SingleStop found:

that for every dollar invested, the program immediately returned to its clients at least $3 in benefits; $4 to $13 in legal counseling; $2 in financial counseling; and $11 in tax credits.

In 2007, the Benefit Bank helped:

more than 6,100 clients who received more than $7.7 million in tax refunds, including $3.3 million in Earned Income Tax Credits. The federal tax returns filed represent a 95 percent increase over this time last year.

Both of these organizations use technology that allows caseworkers and volunteers to tell clients exactly what they are eligible for with just a click a mouse. By streamlining government services, they help people get back on the road to self sufficiency.

SingleStop USA and The Benefit Bank provide an invaluable service, but they don’t have to be in business. As the federal government looks to expand benefits for low-income Americans through an economic recovery stimulus package, leaders should simplify the application process. Finding jobs may get harder, feeding your family may get harder, but getting federal assistance shouldn’t be.

This month welfare reform turns twelve years old. Bill Clinton’s Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 changed the way we approach and talk about poverty and social policy in the United States. No longer stuck in the quagmire of big government handouts versus fend for yourself mindsets, this new brand of governing strikes a covenant with American citizens that demands responsibility in exchange for expanded opportunity from the government.

PRWORA replaced the Aid to Families with Dependent Children (AFDC) with the Temporary Assistance for Needy Families (TANF). This new federal assistance model placed a greater focus on moving recipients to the labor market through time limits that gave families only 60 months of TANF aid. The time limit provision proved to be the most controversial piece of welfare reform. Now, twelve years later, MDRC released a new report that shows time limits have not had the disastrous effects some expected:

Overall, it appears that time limits have not generated as much attention or caused as much harm to the typical family on TANF as critics feared. This is due, in part, to the fact that many of the states that serve the largest TANF caseloads - namely, California, Michigan, New York, and Pennsylvania - had not implemented strict termination time limits. In addition, most states have implemented stricter work participation requirements since welfare reform was enacted and tougher sanctioning policies. Perhaps as a result, families are not reaching state and federal time limits in large numbers. It is worth noting that the percentage of families eligible for state TANF assistance who actually receive TANF benefits has dropped sharply in the past decade, though it is difficult to determine whether time limits have contributed to this trend.

Following welfare reform, scholars have learned that a full-time job is the number one anti-poverty program. In fact, Brookings scholars Isabel Sawhill and Ron Haskins created a simulation using Census data that predicted the poverty rate assuming that one non-elderly and non-disabled family head of household worked at least full-time. They found that full-time work decreased poverty by almost a half.

The results from their second simulation might surprise some: aside from a job the next biggest poverty reduction agent is marriage. Furthermore, the authors note:

Work, marriage, education, and family size are all more powerful determinants of the incidence of poverty than the amount of cash assistance received from the government.

These lessons from the past decade can guide us as we move forward in helping all Americans scale the economic ladder. A job is critically important to climbing out of poverty. However, policy leaders must recognize that not all entry level-jobs pay enough to help families obtain a minimally decent standard of living. Also, some of our current income support policies contain a perverse disincentive for marriage, actually causing a loss of total benefits for couples who marry.

The next steps in poverty reduction must include policies that get people into the workforce, make work pay and strengthen families, such as:

• Expanding the Earned Income Tax Credit and reducing its marriage penalties
• Expanding child care options for low-income families
• Increasing access to family leave, including paid family leave
• Strengthening effective programs that encourage delayed childbearing
• And tying other government benefits to a work requirement.

This post was written by Jon Cardinal, an intern for the Progressive Policy Institute and Freedman Consulting, LLC. Jon graduated from St. Lawrence University this spring and is a 2007 Harry S. Truman Scholar.

The long-overdue minimum wage law passed by Congress last summer goes into effect today, marking the first pay hike for low-wage workers since 1997.

During the last decade while the minimum wage remained the same, milk and bread prices increased by 25%, the cost of a degree from a 4-year public college grew by 96%, the cost of health insurance swelled by 97% and gas prices spiked by 149%. The 3.5 million full-time workers earning less than poverty-level wages are clearly due for a break, but is this wage increase enough?

In a column on Wednesday, Holly Sklar compares the purchasing power of the new minimum wage to the most recent hike in 1997 and to the increase in 1968. She notes:

The new $6.55 minimum wage is lower than the 1997 minimum wage, which is worth $6.88 in 2008 dollars, and way lower than the inflation-adjusted $9.86 minimum wage of 1968. For full-time workers that translates into $20,509 a year at the 1968 rate, compared with just $13,624 at the hourly rate of $6.55.

Even after this much needed increase in the minimum wage, hardworking Americans will still find it near impossible to live decently. As Sklar explains, even with a minimum wage increase, low-wage workers will continue to struggle in keeping up with the exploding costs of living and will find themselves choosing “what to go without - heat or eat, child care or health care.”

Clearly, support is needed where the minimum wage fails to offer a fair handshake with American workers. As a result, we need to expand the Earned Income Tax Credit (EITC) so that work pays for all Americans as outlined here by Tom Freedman in the a Washington Post op-ed and here by Will Marshall and Katie Campbell in their PPI policy report.

The EITC is one of the government’s most successful anti-poverty programs, as it rewards work and provides the necessary support for many low-wage earners to make the climb out of poverty. However, there are shortcomings with the program that have real consequences. For example, many workers are unaware of the credit and do not file for it at tax time. Also, the EITC currently does not cover childless workers under the age of 25 and does not help meet the costs of raising more than 2 children.

In addition to the hike in the minimum wage, the federal government should increase the EITC for families with 3 or more children, rid it of the marriage penalties currently built into the program and expand outreach efforts. These reforms would help an estimated 3 million families and millions of low-earning individuals. It is time for our country to once again restore the fundamental promise that through hard work you can achieve a decent living for yourself and your family.

I have previously written (here, here and here) that the next step in welfare reform and poverty reduction must focus on low-income men. We know from numerous studies, like those of Harry Holzer and Paul Offner, that low-income men have been dropping out of the labor market at a rapid pace and that the absence of working men creates a host of social problems for families, children and communities at large.

However, a report released by Congress’s Joint Economic Committee yesterday shows that women are also withdrawing from the labor market - and not because they have decided to stay home and raise a family, but for the same reasons as men: layoffs, stagnant wages and pay cuts. During recessions in the 20^th century many families relied on the wages of women to keep households afloat if men faced unemployment. Yet, during the 2001 recession, women lost jobs at the same rate as men and those who took other jobs did so at a lower pay rate.

When women lose their jobs, families, particularly low-income families, suffer as the JEC report noted:

Women’s increased vulnerability to recession can wreck havoc on family economic well-being. The typical wife brings home over a third of her family’s income and the one quarter of children being raised in single-mother families have only their mother’s salary to rely upon….The only families who have seen any increase in real income over the past three decades are those with a working wife.

If we needed any more proof that the federal government must make expanding work supports a priority, this is it. In order to successfully build social policies around work, we must make sure that it pays by expanding the Earned Income Tax Credit and reducing its marriage penalties so that no family with a full-time worker lives in poverty.

Today the Democratic Leadership Council named Rep. Rahm Emanuel (D-IL) and Sen. Charles Schumer (D-NY) their New Democrats of the Week for introducing the Earned Income Tax Credit Information Act of 2008. This reform-minded bill would require employers to notify their employees of their potential eligibility for the EITC.

Those who regularly read Moving Up will soon learn that the EITC is one of our favorite policies. That’s because it is the country’s largest and most effective anti-poverty programs. It supplements the wages of 22 million low-income, working Americans and lifts more than 4 million people out of poverty each year. In effect, it “makes work pay” and moves us closer to PPI’s long held proposition: No American family with a full-time worker should live in poverty.

At PPI, we have long advocated for the reform and expansion of the EITC. Most recently we called for tripling the benefits for low-income, single workers including non-custodial fathers. Expanding the EITC must be a priority for the next administration.

However, in addition to expanding the EITC, we must also make sure that all people who are eligible for EITC benefits know they are eligible. A General Accountability Office report notes that 25 percent of eligible people do not claim their benefits.

In addition to putting more money into the hands of low-income, working Americans, the EITC Information Act of 2008 has an added bonus. It is likely to add no extra costs to the American taxpayers. In a time of budget deficits, these revenue neutral bills are a lawmaker’s dream.