The major limitation of the reform was that it applied to only one of 70 federal means-tested welfare programs.
And within the past two years, the gains under TANF have come to a screeching halt. Last year’s “stimulus” package included a little-noticed provision depositing $5 billion in a TANF Emergency Fund. This fund once again incentivized the states to enlarge their welfare rolls, with little or no emphasis on job acquisition.
Less than 16 percent of the “emergency” spending has gone to support work strategies.
The situation is untenable. With the nation facing massive deficits, spending cuts are unavoidable. But policy reforms must guide the surgeon’s hand.
Congress should restore the TANF work requirements of 1996. What’s more, lawmakers should apply those requirements to food stamps, housing assistance and other welfare programs — which were supposed to help the poor, not make them dependent on government.
Once the recession ends, Congress also should restore aggregate spending for the 70 welfare programs to pre-recession levels and then cap total spending increases at the inflation rate.
Promoting healthy marriage also needs to become a centerpiece of welfare policy. Children born to and raised by single parents are seven times more likely to live in poverty than children born to and raised by married couples.
Congress can address this crisis with two vital first steps:
First, reduce the marriage penalty inherent in means-tested welfare programs; one way to do this is by increasing the earned income tax credit for married families with children. Second, provide information on the benefits of marriage to low-income neighborhoods, which have high rates of childbearing outside marriage.
If lawmakers are serious about welfare reform, they also should consider establishing a new principle of “reciprocal obligation.”
Why not treat a portion of welfare assistance to able-bodied adults as a loan to be repaid, rather than as a free gift from the taxpayers? Such a policy change would reduce the moral hazard associated with dependency, while providing temporary help to those in need.
Clearly, welfare as we knew it did not end, as so many of us had hoped 14 years ago.
Adjusting for inflation, total welfare spending is nearly twice what it was before 1996. Hard-won experience and exploding deficits demand that we rebuild our anti-poverty policies on sustainable principles.
The good news is that stronger working families and sounder fiscal policies will go hand in hand.
• Robert Rector and Charles A. Donovan are senior research fellows at the Heritage Foundation (www.heritage.org).
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