By Sawhill, Isabel
Brookings Review , Vol. 19, No. 3
Making Welfare a Way Station, Not a Way of Life
In 1996 Congress reformed a welfare system that was deeply unpopular with the American public. Although Republicans pushed hard for reform, many Democrats--led by former President Bill Clinton--went along, and in the end both parties took credit for the new law. The system was transformed from one that handed out cash to one that required work and penalized with a loss of benefits those who failed to comply with the requirement. What had been called Aid to Families with Dependent Children (AFDC) became Temporary Assistance for Needy Families (TANF). The use of the word" temporary" was noteworthy. Welfare was to be a way station, not a way of life.
Although most politicians supported these changes, many scholars and advocates for the poor complained that the new law was a voyage into uncharted waters--an experiment with the lives of some of the nation's most vulnerable citizens and their children. Noncitizens who were legal residents of the United States were dealt an even bigger blow, as they and their children lost many benefits previously available to them. In this special issue of the Brookings Review, our contributors assess the results of the experiment to date and reflect on next steps, including what modifications may be needed when Congress reauthorizes the law in 2002 and what directions all this suggests for antipoverty policy in the United States. This introductory essay builds on their insights but contains my own assessment as well.
Is Welfare Reform Working?
Not surprisingly, the answer to the question of whether welfare reform is working depends on whom you ask. That said, even the law's critics point to at least some successes while its supporters acknowledge some limitations.
All our contributors agree that caseloads have declined far more than expected (from 5 million families in 1994 to 2.2 million in June 2000), that about 60 percent of those who have left welfare are working, that employment rates among single mothers have increased dramatically, and that child poverty has declined. They also agree that a substantial minority of mothers who have left the rolls are not working and that many of those who remain on the rolls may have difficulty finding or keeping jobs because of poor schooling, substance abuse, depression, or other barriers to employment. Finally, those who are working tend to earn low wages (about $7.00 an hour on average) making it hard for them to support their families.
Another concern, noted by Wendell Primus, Mark Greenberg, and Tom Downey in particular, is that the poverty rate has not fallen as much as the caseload. Fewer poor children are receiving assistance. In addition, the incomes of the poorest one-fifth of single-parent families have continued to fall, many families remain in deep poverty, and according to some reports, requests for emergency assistance have grown. Overall, 700,000 families were significantly worse off in 1999 than their counterparts in 1995.
Because welfare reform was implemented during an unprecedented economic expansion, questions also must be raised about how much of the good news should be attributed to the 1996 law and how much to a strong economy or to the growth of other programs such as the earned income tax credit (EITC) over this same period. Research on this question doesn't permit firm answers, but almost everyone agrees that all three have been important. In his essay, Ron Haskins compares the 1990s with the 1980s, when employment also expanded strongly but without comparable declines in caseloads. The data he cites suggest that welfare reform played an important, and probably a critical, role.
Still, many people remain uneasy about what will happen should the economy sink into a prolonged recession. An economic downturn would not only swell the caseload, according to this view, but strain state budgets, perhaps forcing some states to cut benefits. …