Welfare reform

The Event US president Bill Clinton signs the Personal Responsibility and Work Opportunity Reconciliation Act of 1996

Date August 22, 1996

The new welfare law embodied practical and philosophical shifts in the nation’s approach to economic assistance.

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) stopped open-ended federal funding of Aid to Families with Dependent Children (AFDC) and created Temporary Assistance for Needy Families (TANF), a time-limited program whose provisions also addressed teenage pregnancy, out-of-wedlock births and child rearing, and immigration.

Title I: Block Grants, Mandatory Work

States received a fixed amount of federal money each year in the form of block grants giving states discretion in how they spent it. In addition to job training, child care, and cash assistance, block grants were also to be used for promoting healthy marriages and responsible fatherhood. Charitable choice provisions allowed faith-based organizations to compete for public funding to provide social services.

Families receiving federally funded assistance for five cumulative years (or less at state option) were no longer eligible for federally funded cash aid. States had to move increasing percentages of cash recipients into work, with penalties for not meeting specified rates. They could penalize participants for failure to comply with work-related requirements, which included subsidized or unsubsidized employment, on-the-job training, community service, up to six weeks of job search, and job skills training or education directly related to employment.

To receive federal assistance, unmarried minor parents had to live with an adult or in an adult-supervised setting and to participate in educational and training activities. States could deny eligibility for medical assistance under the Medicaid program for adults terminated from TANF for failure to work.

Title II: Supplemental Security Income

Children were deemed disabled and therefore eligible for Supplemental Security Income (SSI) if they had a medically determinable physical or mental impairment resulting in marked and severe functional limitations, expected to result in death or having lasted or being expected to last for at least twelve months. Maladaptive behavior was removed from the list of medical impairment criteria.

Title III: Child Support

States were required to operate a Child Support Enforcement Program. TANF recipients were required to assign rights to child support and cooperate with paternity establishment records. A Federal Case Registry and National Directory of New Hires were established to track delinquent parents across state lines. Employers had to report all new hires to state agencies, and new hire information was to be transmitted to the National Directory.

Title IV: Immigrants

Most current and future legal immigrants were ineligible for SSI until citizenship. States were permitted to retain legal immigrants already enrolled in Medicaid, TANF block grants, Title XX social services, and state-funded assistance.

Title V: Child Protection

PRWORA authorized states to make foster care maintenance payments on behalf of children in for-profit institutions and required states to consider giving preference for kinship placements if relatives met state child protection standards.

Title VI: Child Care

The law authorized $13.6 billion in mandatory funding for child care for fiscal years 1997 to 2002. Single parents with children under six years old who could not find child care were not to be penalized for failure to engage in work activities.

Title VII: Child Nutrition Programs

Individuals eligible for free public education benefits under state or local law were also eligible for school meal benefits under the National School Lunch Act and the Child Nutrition Act of 1966, regardless of citizenship or immigrant status.

Title VIII: Food Stamps

Most current and future legal immigrants were ineligible for food stamps until citizenship, except refugees and asylees for their first five years in the United States, veterans, and people with forty qualifying quarters of work. Nonexempt eighteen- to fifty-year-olds without responsibility for dependent children were ineligible to continue to receive food stamps after three months in a thirty-six-month period unless they were working or participating in workfare, work, or employment and training programs.

Title IX: Miscellaneous

Nothing in the law prohibited states from performing drug tests on recipients or from sanctioning recipients who test positive for controlled substances. Allocated funds enabled states to provide abstinence education with the option of targeting funds to high-risk groups such as those most likely to bear children out of wedlock.

Impact

Public assistance caseloads dramatically dropped after the law was passed. From an average of 4.1 million families per month in 1990 (7.9 million children, 11.7 million total recipients), the AFDC monthly caseload climbed to 4.8 million in 1995 (9.1 million children, 13.4 million total recipients). In 1999, the TANF average monthly caseload was 2.6 million families (5.1 million children, 7.2 million total recipients), a 45.8 percent decline in the number of families (a 44 percent decline in the number of children, and a 46.3 percent decline in the number of total recipients). Such percentage declines dwarfed the accompanying 5.4 percent (0.8 million people) decline in the percent of people in female-headed families whose pre-welfare incomes were below poverty between 1995 and 1997. Further, the average disposable income of the poorest 20 percent of single mothers fell by 7.6 percent between 1995 and 1997, while that of the poorest 10 percent fell by 15.2 percent.

The employment rates of unmarried single mothers increased from 58.5 percent in March 1994 to 62.9 percent in March 1998, and economic well-being increased with the extent of work involvement, especially when other factors such as food stamps and the earned-income tax credit are taken into account. Child care and other work-related expenses such as transportation and clothes offset part of the economic gains associated with increased work effort among low-income single mothers. There were no immediate increases in homelessness or foster-care placement among recipients and their children.

In 2016, after twenty years of the implimentation of TANF, experts had mixed views about whether the new program had actually been beneficial overall or not. Supporters point to the fact that the national TANF caseload fell by 60 percent between 1997 and 2015, according to the Center on Budget and Policy Priorities, meaning that TANF has reduced the number of welfare recipients. However, critics emphasize that even if the caseload has declined, poverty levels have remained high. According to the US Census Bureau in 2016, the official poverty rate was 13.5 percent in 2015. Critics of the program argue that the number of people receiving welfare benefits was reduced only because people in need were not eligible for TANF due to complications that render them unable to meet their state's employment requirements, such as disabilities or problems with child care. The Center on Budget and Policy Priorities reports that while the number of families in deep poverty increased to three million in 2013, only twenty-six families out of every one hundred families in poverty received TANF. Additionally, experts have disagreed about just how much impact TANF has had on employment rates, particularly that of single mothers.

Subsequent Events

On February 8, 2006, President George W. Bush signed the Deficit Reduction Act of 2005 reauthorizing TANF through September 2010. Following 2010, Congress opted for short-term extensions of TANF, and the grant had not been fully reauthorized as of 2016.

Bibliography

Burke, Michael. "Welfare Reform 20 Years Later: What Worked, What Didn't." USA Today, 21 Aug. 2016, www.usatoday.com/story/news/2016/08/21/welfare-reform-20-years-later/88389666/. Accessed 23 Nov. 2016.

Caputo, Richard K. “Working and Poor: A Study of Maturing Adults in the U.S.” Families in Society, vol. 88, no. 3, 2007, pp. 351–59.

Danziger, Sandra, et al. “Work, Income, and Marital Hardship After Welfare Reform.” Journal of Consumer Affairs, vol. 34, no. 1, 2000, pp. 6–30.

Mead, Lawrence M., and Christopher Beem, editors. Welfare Reform and Political Theory. Russell Sage Foundation, 2005.

Mink, Gwendolyn, and Rickie Solinger, editors. Welfare: A Documentary History of U.S. Policy and Politics. New York UP, 2003.

“Policy Basics: An Introduction to TANF.” Center on Budget and Policy Priorities. Center on Budget and Policy Priorities, 15 June 2015, www.cbpp.org/research/policy-basics-an-introduction-to-tanf. Accessed 23 Nov. 2016.