Academic journal article Fordham Urban Law Journal

Contractual Welfare: Non-Accountability and Diminished Democracy in Local Government Contracts for Welfare-to-Work Services

Academic journal article Fordham Urban Law Journal

Contractual Welfare: Non-Accountability and Diminished Democracy in Local Government Contracts for Welfare-to-Work Services

Article excerpt


The Welfare State of the mid-twentieth century has been supplanted by the rise of the Contractual State, miring welfare reform in the United States in this worldwide reinvention of government. Moving people from welfare to work became a primary goal of federal welfare policy with the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (the "Act"), (1) and the Temporary Assistance for Needy Families ("TANF") program it created. (2) The Act restructured welfare administration by replacing the prior entitlement-based program with fixed block grants to the states, thereby devolving significant control over welfare policy from the federal to the state level. This new structure also expressly permits states to devolve welfare policy and operations further still, to the county and city levels, and even to private vendors. (3)

As the "devolution revolution" manifests itself in the administration of welfare benefits, new issues of accountability--and indeed, democracy--arise. Accountability problems multiply because familiar rules of administrative law do not clearly constrain the new regime of the Contractual State. Moreover, devolution insulates agency decisions from public input and judicial review, masking whether welfare reform generally promotes permanent employment for recipients.

The erosion of administrative law structures diminishes democracy in three respects. First, the rules of the new contractual regime are not generated by processes that require or invite public participation, even those analogous to the imperfect models of administrative rulemaking. Second, the new contractual regime lacks the transparency we have come to expect of rule-bound welfare administration. (4) The Contractual Welfare State's core features--its actors, powers, points of influence and access, and opportunities for remedy--are downright opaque to the very citizens in whose name welfare purports to be reformed. Third, there is no effective method, and scant tools, by which citizens can obtain needed information to judge the efficacy of the new system. The opacity of the new regime compounds this information need because it disperses the sources and accountability for collecting and dispensing relevant information. For example, local governments need not produce information in a manner that institutionalizes or supports the public's evaluation of the operations and outcomes of Contractual Welfare. (5)

Part I of this article probes the deficits of Contractual Welfare and canvasses potential solutions. Part II includes a case study of Baltimore's own implementation--under a strong "work first" philosophy, and in substantial reliance upon public and private vendors for the delivery of work-related services--of the TANF program. (6) Part III offers some direction as to where this process can and should go from here. (7)

The case study illustrates key features of the nation's massive shift from public to private provision of social services, long the province of government. (8) This rapid and remarkable change has been accompanied by dramatic declines in welfare caseloads, a national average of forty-two percent between 1993 and 1998. (9) These declines most likely reflect multiple factors such as the booming economy, increases in the minimum wage, and certain structural changes within the system. (10) Presumably, decreased benefits and state work requirements have influenced this decline as well. (11) The government's ongoing use of private contracts in this rapid change, however, raises troubling issues of accountability and efficacy.

Whether welfare agencies and their contractors are in fact aiding TANF recipients to find employment, on penalty of sanctions and the deepening poverty of their children, is a question of great public concern. Only an accounting from public officials can reveal whether families who leave the welfare rolls are swimming along in the swirling new economy, or are sinking out of sight into unemployment and child-risking poverty. …

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