Through a convergence of factors - a president who vowed in his 1992 campaign to "end welfare as we know it," a majority Republican Congress who pledged to reform welfare in its policy manifesto Contract with America (Gingrich, Armey, & the House Republicans, 1994), and an impending November 1996 election creating pressure for candidates from both parties to make good on those earlier promises - the federal government will soon enact the most sweeping revision of social welfare policy since the New Deal. President Clinton has signed the Personal Responsibility anti Work Opportunity Act of 1996, ending Aid to Families with Dependent Children (AFDC) and instituting far-reaching changes in aid to needy people and immigrants in this country.
This new law is one thread in a far-reaching change in the federal policy fabric, that of "devolution" of policy making to states. Devolution means that the federal government will give more discretion to the states and will maintain less oversight of social policy as implemented by states. Devolution could lead to great variations in social policy the likes of which we have not seen in this century. Although health care, Medicaid, and child welfare policy, especially foster care, have yet to see major federal legislative changes, numerous bills have been considered at the federal and state levels.
Although many of these changes are not described in terms of children's policy, they will affect children disproportionately. These policy revisions are aimed at the poor population, and children are the majority of the poor population in the United States. Analysts have estimated that two of every three people affected by welfare reform will be children (Center on Budget and Policy Priorities, 1996).
Devolution Revolution and Welfare Reform
If the "devolution revolution" (Nathan, 1996) proceeds as outlined, welfare and other major federal programs will be delegated to the states. Nathan, McGrath, and O'Heaney (1996), in a concise and cogent history of federalism in the 20th century, credited Presidents Lyndon Johnson and Richard Nixon with instituting federalist policies in the first "block grant" programs such as Johnson's Law Assistance Block Grant in 1967 and Nixon's State and Local Fiscal Assistance Act of 1972 (which expired in 1986), the Community Development Block Grant, and Title XX of the Social Security Act. According to Nathan et al., the philosophy behind the Johnson-Nixon brand of federalism was that greater flexibility for states and localities would allow them to reform government-sponsored social services in ways that would improve coordination and efficiency and allow the local community to determine needs and set priorities in selected areas of social policy. President Nixon felt strongly that certain public-sector responsibilities should remain centralized, including health, welfare, and the environment. Under Nixon's new federalism, funding was increased to states and localities while categorical programs and restrictions were relaxed or eliminated in the new block grant programs.
The late-1990s brand of federalism differs from its precursors in several ways. First, the welfare and health programs considered sacred by earlier federalists are now the objects of devolution, breaking down a national standard for support of poor people, including health care. Second, today's devolution of power in matters of social policy is combined with drastic reductions in federal revenues to support the states' new discretion. States will be freer to devise and implement welfare and health programs for poor people, but they will have up to 20 percent less federal support to do so, pushing the burden to state and local taxes or resulting in dramatically reduced programs for poor families.
It is not coincidental that these changes are taking place at a time when economic forces and the power base in this country are shifting. Conservative states in the South and West are booming economically, whereas the eastern and western coastal states are struggling to restructure their economies to promote technological and service industries. …