Fewer than 4,000 adults in the southern state receive welfare, even as poverty is soaring. How Georgia declared war on its poorest citizens—leaving them to fight for themselves.

Even for those lucky few who do manage to receive TANF, the increasingly meager grant levels—which haven't been raised in Georgia since 1996, leading to a 30 percent drop in spending power relative to inflation—are hardly meeting people’s most basic needs."Two hundred and thirty-five dollars, what the hell is that supposed to pay?" wonders Renea Buck, a Savannah grandmother caring for her daughter's two children. Buck recently fought her way onto TANF with the help of a local antipoverty group, Step Up Savannah. "I see these people on TV, and they say people are just living off the welfare system. There might be a lot of people on food stamps because they need help. And they might have Medicaid so their kids can have medical. But they're crazy if anybody's milking the damn system for that $235 a month."

Private aid groups like the Community Action Mission Program have tried to fill the gap with "emergency aid"—basically a private welfare grant for those below 125 percent of the poverty line—but in a county that features 16 percent unemployment and where 1,600 schoolkids are homeless, they now turn away half of all applicants, says Pierce. The number of people coming to her organization for help has tripled in the last five years, she notes.

"These days, it seems like almost everyone needs financial aid for either rent or other expenses," Pierce sighs. "Everyone who walks through that door has a legitimate emergency.”

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Despite its dwindling welfare rolls, the state of Georgia is still allotted $330 million a year in federal money via the TANF block grant program. But there are signs that less and less of it actually makes it to the state’s poor.

Instead, according to a September 2012 study by the nonprofit Georgia Budget & Policy Institute, the state has found ways to use TANF money to paper over other program budgets, with more than half of Georgia's welfare funds being siphoned off to pay for the state's unrelated child welfare program. This maneuver, which is allowed under federal law, has effectively saved the state hundreds of millions of dollars that it would otherwise have to cover with tax revenues.

"There was all this extra federal money sitting around," explains Clare Richie, a policy analyst at the institute, "so it was easy to use that to fill other holes." (A state DHS spokesperson responded that because TANF is a federal block grant, "this allows state policymakers to use TANF funds in ways that fit both Georgia's program needs and the different needs of other states.")

To ensure that states didn't just cash their federal TANF checks without spending anything on the poor, Congress added another requirement, the so-called "maintenance of effort" requirements that would cut funds to states that didn't devote enough money to anti-poverty programs. Earlier this year, a study by the federal General Accountability Office revealed that Georgia was counting private spending by nonprofit food banks and similar private charities to account for nearly half of the state's own required welfare spending targets—more than double the percentage of almost any other state.

According to poverty experts, the way that the 1996 law changed the mechanics of federal welfare spending is a big reason why many states have been generous with food stamps—Georgia recently began allowing residents to apply for food aid online, with only a telephone verification interview—while cracking down on cash assistance. Food stamps remain a federal entitlement, meaning if more people in your state get food stamps, Washington foots the bill. But if more people get TANF, that comes out of a flat amount of federal cash that your state gets to help those in need—creating a huge incentive to slash the rolls and siphon off the money for other uses.

It's a form of creative bookkeeping, says Democratic state representative and minority leader Stacey Abrams, that's especially alluring to a state like Georgia, which features not just a Republican-controlled state house and governor's office but an exceptionally high number of state leaders who belong to the American Legislative Exchange Council, the conservative policy group that has recently attracted attention for drafting hundreds of bills on behalf of corporate lobbyists. Georgia, she says, was a perfect match for those looking to eliminate the welfare rolls, along with a Republican-controlled legislature that takes its cues from an interest group like ALEC—"We have become a laboratory for their policies."