Economy & Budget

How welfare vanished as a political issue

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Twenty years ago this month, President Bill Clinton signed a landmark bill fulfilling his pledge to “end welfare as we know it.” It was the biggest change Clinton made in national policy, and it lanced a political boil that had vexed Americans for a generation.

{mosads}Both accomplishments, substantive and political, are worth celebrating today as we witness the most bizarre U.S. presidential election ever. If the rise of GOP nominee Donald Trump shows us democracy at its worst, welfare reform offers an inspiring example of how the system can work.

The summer of 1996 was one of those rare moments when political adversaries come together to make radical alterations in the status quo, rather than incremental nips and tucks. The bill Clinton signed replaced the 61-year-old federal entitlement to cash benefits with a new program, Temporary Assistance to Needy Families (TANF), designed to require and reward work.

It marked the culmination of decades of mounting public dissatisfaction with a welfare system that seemed to entrench poverty and dependence rather than help people escape from them. Welfare was a favorite whipping boy of Republicans, who made it a symbol of the liberal entitlement state run amuck. They used its unpopularity to drive a wedge between Democrats’ working-class and poor and minority supporters.

“The present welfare system has become a monstrous, consuming outrage — an outrage against the community, against the taxpayer, and particularly against the children it is supposed to help,” President Richard Nixon told Congress in his 1971 State of the Union Address.

Ronald Reagan, running for president later that decade, regaled audiences with outrageous stories about “welfare queens” collecting handouts while hardworking taxpayers watched inflation eat away at their paychecks. In 1988, the Reagan administration joined with Democrats to pass the Family Support Act, which created a mandatory education and training program in a bid to force welfare recipients to work.

By the early ’90s, however, a growing body of research showed that the “train first, find jobs later” approach wasn’t working. Meanwhile, both teen pregnancy rates and welfare rolls seemed to be rising inexorably, feeding a pervasive sense that America had lost the initiative in the war on poverty, if not the war itself, as Reagan frequently jibed.

Along came Clinton with a more radical offer: stop trying to reform the old system and get rid of it altogether. He called for putting a two-year limit on cash benefits to make welfare a way station to work rather than a way of life. Crucially, Clinton also linked recipients’ individual responsibility to work to government’s collective responsibility to “make work pay.” One of his first acts as president was to shepherd through Congress in 1993 a $22 billion expansion of tax credits for low-wage workers that strongly increased incentives for work.

During the summer of 1996, Clinton and the GOP’s combative House Speaker, Newt Gingrich (R-Ga.), dueled repeatedly over competing visions of what should replace the old welfare entitlement. After rejecting two GOP bills as unduly harsh and stingy, Clinton, after much agonizing, signed a third version he said was flawed but fixable.

It was a courageous decision that incensed many liberals, welfare activists and academic social scientists. Sen. Daniel Moynihan (D-N.Y.), a key architect of the 1988 welfare bill, predicted U.S. streets would soon be littered with Calcutta-like scenes of human misery.

That’s not what happened. For the remaining four years of Clinton’s presidency, the welfare rolls plummeted, millions of low-income mothers went to work, poverty rates among black children hit an all-time low and teen pregnancy rates even started to fall. Three main factors drove these social gains: the red-hot job market of the late ’90s, Clinton’s generous tax credits and higher work rates among welfare recipients.

Since 2000, the picture has gotten murkier. Two recessions and a long spell of slow economic growth have hit poor Americans hard. While those able to find jobs are better off, women who face multiple barriers to work and their children appear to be sinking deeper into poverty.

On the plus side, TANF has succeeded in a core mission. Work rates among never-married mothers have climbed back up to 60 percent, nearly 30 percent higher than before the 1996 reform.

Gauging reform’s impact on poverty is trickier. The official poverty rate is just above 15 percent, about a point larger than it was in 1996. But that measure is misleading, because it doesn’t take into account non-cash benefits and tax subsidies. According to Harvard University’s Christopher Jencks, the absolute poverty rate falls to under 5 percent when adjusted for food and housing, the earned income and children’s tax credit, and a more accurate measure of inflation.

Nonetheless, Jencks and other social policy researchers are concerned about the rise of “deep poverty” — an increase in the percentage of families whose income is less than 50 percent of the official poverty line.

Some liberal analysts blame welfare reform for gouging a huge hole in the social safety net. Even as unemployment soared during the Great Recession, they note, TANF caseloads stayed down. That mean fewer needy families were getting cash assistance when they needed it most.

That’s true, but it’s not the whole story. As cash assistance has shrunk, other forms of social support have grown and become more generous. These include unemployment insurance, food stamps (now called the Supplemental Nutrition Assistance Program, or SNAP) and disability programs. In fact, some conservatives complain that welfare reform hasn’t made poor single-parent families less dependent on government; it just transferred their dependence to other programs that lack TANF’s strong work requirements.

Nonetheless, analysts who support the work-based approach acknowledge that TANF has real shortcomings that need fixing. It doesn’t do enough for the neediest families, especially the hard-to-employ mothers who receive neither earnings or cash welfare. The number of these “disconnected” mothers has more than doubled since 1996. Also, many states are spending TANF dollars on activities not directly related to work.

Since TANF is overdue for reauthorization anyway, the next administration and Congress should strengthen it by:

  • Bumping up the TANF block grant, which is stuck at its 1996 level of $16.7 billon.
  • Requiring states to spend more of their TANF funds on work-related activities and decent cash benefits.  
  • Creating a federal innovation fund to support state experiments in helping connect hard-to-employ welfare recipients to jobs.

As they update and refine TANF, political leaders should defend the conceptual underpinnings of a social policy based on work and mutual responsibility. By emphasizing work, family and personal responsibility as well as the need for more public support for needy families, Clinton realigned U.S. social policy with broadly shared American values and laid the basis for bipartisan agreement on welfare reform.

As a result, public antagonism toward welfare has abated, so much so that the issue has virtually disappeared from U.S. political debate. The emphasis on work and individual initiative has unlocked Americans’ empathy toward the less fortunate as well as their wallets: per capital spending on low-income families has risen, not fallen, since 1996.

Finally, welfare reform offers an instructive lesson in making policy based on rigorous social research and honest evaluation, rather than ideological abstractions and reflexive partisanship. That’s something to hold onto as the farcical election of 2016 unfolds.

Marshall is president of the Progressive Policy Institute.

This piece was revised on Aug. 29, 2016 at 11:15 a.m.

The views expressed by contributors are their own and not the views of The Hill.

Tags Bill Clinton Donald Trump Food Stamps Snap Supplemental Nutrition Assistance Program TANF Temporary Assistance for Needy Families Welfare Welfare reform
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