Welfare reform 20 years later
A look at what has worked and what hasn’t
April McCray thought she had finally caught a break in late 2005. That’s when the state of Louisiana granted cash assistance to the single mother through the Temporary Assistance of Needy Families (TANF) program. It was her first experience with America’s welfare program.
McCray, who had been in and out of work, struggled to make ends meet. This, she hoped, would at least help soften the burden.
But a month later, the state stripped her of the benefits without a clear explanation, she said. Since then, she says Louisiana, which controls state and federally allocated TANF dollars, has denied her requests for assistance several times.
“It gets depressing,” said McCray, who in 2016 is still struggling. With three kids and rarely more than a part-time job, she says she needs help she can’t seem to get from a welfare system that was remade 20 years ago.
Overhauling welfare was a hallmark of then-President Bill Clinton’s time in office. When he signed welfare reform into law on Aug. 22, 1996, he declared at a ceremony in the White House’s Rose Garden that it would “end welfare as we know it.”
Twenty years later, few would dispute the accuracy of that prediction. Welfare is, and has been, a vastly different system than it was prior to the law, which gave states wide control over their own welfare programs by allocating to them block grants.
So, two decades later, are those changes working? It depends whom you ask.
TANF’s legacy has divided policy experts, with supporters saying it put an emphasis on work and increased employment among single mothers while also reducing poverty overall. The program’s critics say it tore a hole in the safety net for people who remained in poverty and couldn’t find steady work, like McCray.
“(TANF) did shift the emphasis toward work. I think that is something where there has been a lot of agreement,” said Heather Hahn, a senior fellow at the Urban Institute. “As far as whether people are better off, I do think they are, in some cases, worse off.”
Welfare didn’t exist in America before the Great Depression and Franklin D. Roosevelt’s New Deal. It officially came into being as a rule under the Social Security Act in 1935, offering aid to families with dependent children (AFDC).
In establishing the program, the federal government, for the first time, took responsibility for helping children with a parent who was dead, gone or otherwise incapacitated. Previously, those children most likely would have been institutionalized.
The program worked by the government giving funds to the states, which then distributed the money under federal guidelines. Over several decades, AFDC went through changes, perhaps most notably in 1961 when it expanded its definition of a “deprived child” to include one who had an unemployed parent. And, though the benefits were small, many families did end up dependent — and the criticism poured in.
Presidents Lyndon Johnson and Ronald Reagan chipped away at changes. But by the 1990s, calls were pouring in for change.
Enter Bill Clinton, who championed the most radical overhaul of America’s welfare system to date. Clinton, amid a re-election campaign, made reforming the program part of his bid to win back the White House.
The newly minted Temporary Assistance for Needy Families put an emphasis on getting people out of poverty and to work.
Under TANF, recipients in most cases are required to participate in work activities for 30 hours a week. Combined with expansions to the Earned Income Tax Credit, a tax credit for people with low- to-moderate-income jobs, TANF succeeded in getting people to work, especially during Clinton’s presidency.
From 1996 to 2000, employment rates among never-married mothers shot from 63% to 76%, according to the non-partisan Center on Budget and Policy Priorities (CBPP). Additionally, both poverty rates among families with single mothers and overall poverty rates dropped.
“The welfare reform legislation moved us in the right direction by being much more aggressive about employment for the single mother population,” said Robert Doar of the American Enterprise Institute and a former New York commissioner of welfare.
Employment and poverty rates have leveled off in the long term, which has resulted in disagreement among policy experts about just how effective TANF has been in increasing employment.
Where the law has failed, experts say, is by leaving behind those at the very bottom — the group of people in deep poverty who typically haven’t been able to find work.
Studies have found that since TANF was instituted, extreme poverty has increased. A 2011 study by the University of Michigan’s National Poverty Center found that families living on less than $2 per person a day more than doubled from 1996 to 2011.
Hahn of the Urban Institute and Liz Schott of the CBPP each attribute the rise in deep poverty to TANF. They pointed to three main flaws with the legislation: the block grants don’t adjust for inflation; states have often spent large portions of their TANF dollars on things other than basic assistance; and states sometimes have incentives to cut needy recipients loose from the program.
Not adjusting for inflation has caused the grants to erode by about a third since 1996, according to the CBPP. That has essentially reduced the benefits states can give out, as well as the number of families that receive benefits, even as the number of needy families hasn’t been going down.
Twenty years after Bill Clinton signed welfare reform, it’s his wife, Hillary Clinton, who could become the next president and have an opportunity to amend the law. In an April interview with WNYC, she said “we have to take a hard look at it” and was critical of the five-year limit that recipients can get benefits.
Her opponent, GOP nominee Donald Trump, said in a June interview with Fox’s Sean Hannity that people need even more of an incentive to work — which he would seek to create.
“Right now, they have a disincentive,” he said.