RECTOR/DONOVAN: Confronting the unsustainable welfare state

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ANALYSIS/OPINION:

Fourteen years ago, an energized Republican Congress voted to reform a vital part of the nation’s fast-growing welfare system. President Clinton signed the bill into law, promising that the measure would “end welfare as we know it.”

But what began as a promising era of reform has completely collapsed. Government welfare spending is climbing rapidly, and at an unsustainable rate.

The Obama administration projects that over the next 10 years the United States, at all levels of government, will spend more than $10 trillion on means-tested welfare programs for the poor. And we’re off to a galloping start.

President Obama’s budget for next fiscal year would increase spending on these programs by 42 percent compared with President Bush’s last complete budget.

Without doubt, the severe recession is to blame for some of this increase. But the Obama administration doesn’t project a decrease in welfare costs after the recession ends.

Rising spending — reaching $944 billion in combined federal and state spending in fiscal 2011 — will soar past $1.3 trillion a year by decade’s end.

Sums like this don’t represent a war “on” poverty so much as an unconditional surrender “to” poverty.

America’s welfare spending is unsustainable because the principles undergirding it are unsustainable as well. Back in 1996, when Congress replaced the failing program called Aid to Families with Dependent Children, the lawmakers installed a completely different model, Temporary Assistance for Needy Families, or TANF. They designed TANF to promote greater self-reliance.

The new model shifted incentives for welfare administrators and recipients alike. Rather than give blank checks to program managers to pass along to beneficiaries, the 1996 reform encouraged work (or preparing for work), marriage and cost containment.

The old model gave incentives to the states to add more people to the welfare rolls. TANF, however, required recipients to devote 20 to 30 hours a week to work or job preparation in exchange for their cash benefits.

Practically overnight, TANF converted welfare agencies into job-placement offices. Rather than receive federal funds for each new enrollee, agencies got their money as part of block grants with a fixed amount per state.

Adding folks to the welfare rolls no longer brought a state more federal dollars. In fact, when its job training and marriage promotion activities shortened the rolls, TANF allowed a state agency to apply the savings to other services for low-income residents.

The results were dramatic: Between 1996 and 2009, the states’ welfare caseloads dropped from 4.5 million to 1.7 million, a decrease of 60 percent. The reason: greater employment, particularly for single mothers.

It was a win-win-win situation: States reduced budgets, women developed work skills and children benefited from their families’ improved prospects.

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