• Embed Doc
  • Copy Link
  • Readcast
  • Collections
  • CommentGo Back
Download
 
Fours year ago, President Clinton signed intolaw the Personal Responsibility and Work Opportunity Reconciliation Act, promising to putan end to dependence on welfare by requiringwork and responsibility and encouraging two-par-ent families. The conversion of the old entitle-ments-based Aid to Families with DependentChildren program into the new work-orientedTemporary Assistance for Needy Families pro-gram has brought about some of the most talked-about public policy phenomena of the last decade,including dramatically reduced caseloads and aninflux of single mothers into the labor market.Welfare reform is generally regarded as a great suc-cess, and policymakers today are talking aboutincremental add-ons to the 1996 legislation.A closer review of the research, however, revealsthat the celebration of welfare reform has been pre-mature and that the new law, in fact, merits funda-mental restructuring. A survey of welfare reform’sprogress to date suggests that the 1996 legislation,although moderately successful in reducing the dis-incentive to leave welfare, has produced few gains inself-sufficiency and done little to discouragewomen from making the choices that cause themto enter the welfare rolls in the first place:
•
Welfare reform has been largely unsuccessfulin moving long-term unemployed, difficult-to-place individuals off cash assistance.
•
Welfare reform is failing to make individu-als self-sufficient..
•
Welfare reform has failed to significantlycurb out-of-wedlock births to youngwomen.Overall, the new welfare law is a second-bestsolution to welfare dependence. Until policy-makers take a preventive approach and makewelfare no longer available to, or an attractiveoption for, women considering making unten-able life choices, the country will continue tospend endless taxpayer dollars trying to clean upits dependence problem.
Four Years of Welfare Reform
 A Progress Report 
by Lisa E. Oliphant
_____________________________________________________________________________________________________
 Lisa E. Oliphant is an entitlements policy analyst at the Cato Institute.
Executive Summary
No. 378August 22, 2000
 
Introduction
Nearly four years after the “end of welfareas we know it,” weaning the nation’s poorfrom the dole no longer rates as a top priori-ty among policymakers. Since enactment of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA)in 1996, caseloads throughout the countryhave plummeted and employment of singlemothers has surged beyond policymakers’expectations. Proclaiming victory last year,President Clinton announced: “The welfarerolls have been cut in half; they’re at theirlowest level in 32 years. And those who are onwelfare today are four times as likely to work as when I took office.”
1
The evidence after nearly four years sug-gests that proponents of the new law havebegun to uncork their champagne bottlesprematurely. Although caseloads, forinstance, have fallen more rapidly than everbefore, most people who have left the rollshave been short-term recipients who havebenefited from the nation’s hot economy.Furthermore, the mass movement off cashassistance has not actually resulted inreduced dependence. A majority of individu-als who have stopped receiving welfare sinceenactment of the new law continue todepend on noncash assistance from the gov-ernment to meet their health care, food,housing, and child care needs.Although welfare reform is not succeed-ing in making former recipients self-suffi-cient, it would be inappropriate to declarethe new law a total failure. Critics’ fears thatin their race to cut caseloads the states wouldspawn an outbreak of poverty, hunger,homelessness, and domestic violence simplyhave not been justified. The lives of mostindividuals who have substituted paychecksfor benefit checks have stayed the same orimproved.When the data are put together, the pic-ture that emerges four years into welfarereform is one of positive, but very limited,change. Long-term dependence—largely theresult of out-of-wedlock childbearing—andcontinued reliance on noncash benefits areproblems that work requirements, time lim-its, and new training programs are failing toaddress. Keeping people out of the welfaresystem would prove a far more effective wayof reducing dependence than simply, as thecurrent law does, altering the terms underwhich benefits are offered.
Out with the Old,In with the New
As a result of bipartisan effort, PRWORAwas signed into law on August 22, 1996, end-ing the historic federal entitlement to assis-tance. Under the new law, the JobOpportunities and Basic Skills Training(JOBS) and Aid to Families with DependentChildren (AFDC) programs were replacedwith a time-limited assistance and work-requirement program, Temporary Assistancefor Needy Families (TANF).The new welfare law aims to increase self-sufficiency and well-being through a systemthat emphasizes work and responsibility—“ahand up, not a hand out.” The legislationoutlines a four-pronged attack on depen-dence: labor-market attachment, marriage,two-parent families, and supplemental sup-ports to aid in the transition from welfare towork.Under PRWORA, states, territories, andtribes receive federal block grant allocationstotaling $16.8 billion each year until fiscalyear 2002. Each state is permitted the flexi-bility to determine eligibility and benefit lev-els, as well as services provided to needy fam-ilies. This so-called new federalism allowsstates to use TANF funding in any manner“reasonably calculated to accomplish thepurposes of TANF,” so long as they maintainhistorical levels of spending, known as“maintenance of effort.” To continue receiv-ing their full federal TANF allotments, statesmust also conform to specific requirementsregarding current recipients’ work participa-tion rates and length of time on the rolls.
2
When the dataare put together,the picture thatemerges fouryears into welfarereform is one of positive, but verylimited, change.
 
Welfare Reform’s Success:A Hasty Call?
Over the past four years, welfare reformhas too often been evaluated on the basis of caseload decline and work participation fig-ures. That simplistic approach evades someof the most critical questions that need to beasked:
•
Is welfare reform succeeding in movinglong-term recipients off the rolls?
•
Are former recipients better off work-ing than they were when on welfare?
•
Are families that leave welfare for work becoming self-supporting and upward-ly mobile in the labor market?
•
Is the new law encouraging potentialnew recipients to make wiser choices orlook for alternative means of support?Misleading coverage and scarce follow-updata on former and potential recipients haveleft many observers confused about just howmuch positive change has been wrought bythe 1996 law. To get a clearer sense of the leg-islation’s impact, as well as insights into howwelfare reform should proceed in the nextCongress, a comprehensive progress reportthat assesses the nature of the caseloaddecline, gains in the well-being and self-suffi-ciency of former recipients (frequently called“leavers”), and progress in stopping depen-dence before it starts is in order.
Shorter Welfare Rolls
Extent of Caseload Decline
The most talked-about public policy phe-nomenon in recent years has been thenation’s plummeting welfare rolls. Between1993, when states began experimenting withwelfare reform, and 1999, the country’s case-load fell by 53 percent—or, as Cato Institutescholars calculate, a decline of nearly 6,000welfare families per day.
2
The caseload nowstands at its lowest level in 30 years.Despite the nation’s progress in cuttingits welfare rolls under the new law, recentslowing of that trend in a number of statessuggests that welfare reform may have begunto exhaust its potential. The most rapiddeclines took place in the first two years afterenactment of the new welfare law, duringwhich the nation’s rolls fell by 32 percent. By1998, however, drops in the welfare rolls inmany states had started to slow or had begunto increase. Figure 1 shows some of the morenotable examples. After nearly cutting itsrolls in half, for instance, New Mexico saw a40 percent increase in 1998. Hawaii, Indiana,and Wisconsin also experienced growth intheir caseloads that year. Louisiana experi-enced no increase but did have a substantialslowing of its decrease. That reversal of for-tune is largely linked to difficulties in movinglong-term welfare recipients, who now makeup a larger fraction of the caseload, off therolls.
Reasons for Caseload Decline
Cutting the nation’s rolls nearly in half isimpressive but not sufficient to constitutesuccess. If, for instance, individuals are leav-ing welfare without jobs, or are merely trans-ferring to other government cash-assistanceprograms, then the figures may mask pro-longed dependence.Rooting out from the welfare rolls thesmall number of fraudulent claimants withalternative sources of income is an importantfirst step in the “cleaning up” process. The
Washington Post 
reported in 1997 that crack-ing down on fraud had accounted for asmuch as 20 percent of the decline in the case-load.
3
Most fraudulent claimants fell off thecaseload during the early days of welfarereform when they were effectively “weededout” by new regulations requiring recipientsto spend 20 hours a week in a job or per-forming community service. Though mostfraudulent claimants have by now left therolls, the new work requirements are effectivein deterring such individuals from signingup in the first place.Although a sizable 63 to 87 percent of for-
3
Despite thenation’s progressin cutting its wel-fare rolls, recentslowing of thattrend suggeststhat welfarereform may havebegun to exhaustits potential.
of 00

Leave a Comment

You must be to leave a comment.
Submit
Characters: ...
You must be to leave a comment.
Submit
Characters: ...