Barack Obama came to the presidency promising to be America’s first post-partisan president. It is, therefore, ironic that one of his signature achievements has been to roll back one of the great bipartisan triumphs of the last two decades.
Under the guise of helping unemployed Americans in a tough economy, the Obama administration and its congressional allies are reversing the 1996 welfare reforms that have been lauded as an overwhelming success by Republicans and Democrats alike for lifting millions of Americans from poverty.
Before welfare reform, under the federal assistance program called Aid to Families with Dependent Children (AFDC), the federal government gave the states more money for every family they added to their welfare rolls. Not surprisingly, this system gave states a disincentive to help people transition from unemployment and dependence on government to work and independence.
AFDC came under heavy criticism across the ideological spectrum for producing perverse incentives. These included out-of-wedlock births and perpetual unemployment. Recipients had little incentive to get off welfare; in fact, they had a disincentive to do so, because they could get paid indefinitely for not working.
Reforming the broken federal welfare system became a cornerstone of the Contract with America, which helped Republicans recapture Congress in 1994. Premised on reducing dependency on government, the federal Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) passed Congress and was signed by President Clinton in 1996.
PRWORA replaced AFDC with Temporary Assistance for Needy Families (TANF), which drew on successful state-level innovations and emphasized, as the name suggests, time-limited financial aid. Under TANF, states got a block grant from the federal government, which gave states an incentive to cut their welfare rolls and get people into jobs.
The reforms included requiring work after two years of benefits, implementing a lifetime limit of five years on benefits, encouraging two-parent families and married childbearing, and enhancing enforcement of child support.
Several further reforms have been made since 1996. Conditions for receiving welfare have been tightened, and states now enroll more welfare recipients with physical or mental disabilities. Some states even require welfare applicants to participate in employment counseling or job training as a prerequisite to receiving benefits. PRWORA was reauthorized in the Deficit Reduction Act of 2005.
Welfare reform has been an overwhelming success. Since 1996, welfare caseloads have decreased 70 percent, which translates into 8.8 million fewer people dependent on government. Child-poverty rates dropped, particularly among blacks and Hispanics. Teen pregnancies have (until recently) decreased, and child-support collections have increased.
Despite its success, or perhaps because of it, President Obama and his allies are doing all they can to destroy welfare reform. Mr. Obama’s $862 billion stimulus package last February essentially abolished welfare reform by subsidizing the expansion of welfare rolls. The federal government now pays states 80 percent of the cost for each new family they add to their welfare rolls, a move that eliminates states’ incentive to push welfare recipients into the job force.
Partly as a consequence of the infusion of federal welfare funds, welfare rolls increased in 2009 for the first time since PRWORA was enacted, growing 5 percent as 200,000 more Americans were added.
Welfare encompasses not just cash assistance, but also food stamps, housing, Medicaid and scores of other programs across more than a dozen federal agencies. And Mr. Obama is committed to expanding them all.
According to a September study from the Heritage Foundation:
“In his first two years in office, President Barack Obama will increase annual federal [welfare] spending by one-third from $522 billion to $697 billion. The combined two-year increase will equal almost $263 billion. After adjusting for inflation, this increase is 2 1/2 times greater than any previous increase in federal welfare spending in U.S. history.”
Mr. Obama’s welfare increases are not temporary. In fact, over the next decade, Mr. Obama will spend $10.3 trillion on welfare. That equals, according to the study, “approximately $250,000 for each person currently living in poverty in the U.S., or $1 million for a poor family of four.”View Entire Story
By Elaine Donnelly
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