In his 1992 campaign for president, Bill Clinton pledged to "end welfare as we know it." Four years later, President Clinton signed the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, which did indeed usher in a new approach to welfare for the most prominent of all welfare programs, Aid to Families with Dependent Children--the familiar AFDC. Since 1935, welfare had been primarily a system of open- ended government payments to single mothers with dependent children. In the 1960s, the welfare program was expanded as part of Lyndon Johnson's War on Poverty and for the first time was referred to as an "entitlement." Federal welfare programs spent $5.4 trillion between 1965 and 1994.
The bill Clinton signed, over the outspoken opposition of many of his liberal supporters, changed the welfare system into one focused on putting people to work. Responsibility has been shifted to the states. The AFDC of the previous 61 years has given way to fixed block grants to the states to provide temporary assistance to needy families (TANF). Families are no longer entitled to assistance. The emphasis is on work over welfare, self-reliance over dependency.
Just what were the changes initiated by the 1996 reform? What has happened to the welfare rolls since they took effect? How are people who were on welfare faring? And, on the whole, is the new approach to welfare a success or failure?
Although it doesn't end welfare, the 1996 act attempts to change its focus. Washington is supposed to pretty much leave the states alone as long they meet certain requirements. With some exceptions, welfare recipients must go to work within two years. The percentage in each state required to work is increased each year, to at least 50 percent by fiscal year 2002. There's a lifetime limit of five years on welfare--less if a state so chooses. (But a state can also exempt 20 percent of its recipients from the five-year limit.)
In an effort to reduce the number of out-of-wedlock births in the United States (now about one out of every three new births), the welfare reform bill requires each state to set numerical goals for reducing them over the next decade. In addition to their fixed block grants, states can get performance bonuses for reducing out-of-wedlock births and abortions.
Unlike the old system, where the more people a state enrolled in AFDC, the more money it got, states now get a fixed dollar amount (increased from year to year) whether their welfare rolls go up or down.
What is happening to welfare rolls?
The statistics demonstrate that the new approach is successfully reducing the welfare rolls. The number of people on welfare had been declining since early 1994, but the decrease has been much more rapid since the end of 1996. Between then and the end of 1998, the number of families receiving welfare dropped by about one-third--from about 4.2 million families to 2.7 million. (The welfare caseloads are measured in families, so the figure may include as many as 8 million adults and children.)
The reduction in welfare cases has been far from uniform from state to state. For example, according to the Department of Health and Human Services, in 1998 alone West Virginia, Wisconsin, Delaware, Wyoming, Mississippi, Colorado, and Montana all reduced their caseloads by more than 30 percent. Twenty-three states in all had caseload reductions of 20 percent or more during 1998. On the other hand, New Mexico and Tennessee actually added cases, New Hampshire's caseload level didn't change, and Minnesota, Rhode Island, Louisiana, and North Dakota all reduced their caseloads by less than 7 percent.
Putting welfare recipients to work quickly seems to be the key, says the General Accounting Office. On the basis of five different evaluations, the GAO reported that "programs focusing on rapid employment and job search activities combined with education and training activities more often increased employment and earnings and reduced welfare payments, compared with programs that focused solely on job search activities or those that place the greatest emphasis on education. …