Welfare reform—four years later

Public Interest, Summer, 2000 by Douglas J. Besharuv, Peter Germanis

FOUR years ago this August, a Republican Congress pushed a reluctant President Clinton to sign a bill that ended welfare as we had known it. But since the 1996 welfare-reform act expires on September 30, 2002, its eventual fate is not yet clear. Much will depend on how the law's impact is viewed. So far, it certainly seems to be a success. By June 1999, welfare rolls had fallen an amazing 49 percent from their historic high of five million families in March 1994. That's nearly seven and a half million fewer parents and children on welfare.

It has suited the purposes of both the Clinton administration and the Republican Congress to claim that "welfare reform" has caused this dramatic decline--and that over two million former recipients are now working because of the new law. But that's not quite true. The strong economy--and massively increased aid to the working poor--almost certainly have had more impact than welfare reform per se. Moreover, as many as 40 percent of the mothers who left welfare are not working regularly but are instead relying on support from boyfriends, family members or friends, and other government and private programs.

Both liberals and conservatives have found it convenient to ignore this reality--conservatives because it gives the "Clinton economy and the president's success in expanding aid to the working poor too much credit and Republican welfare reform too little, and liberals because it suggests that many welfare recipients didn't "really need" government benefits. But the failure to be clear about why the rolls have declined so much prevents an accurate accounting of the law's impact--and what needs to be done next.

Welfare's rise and fall

For nearly 60 years, it seemed that welfare rolls could only grow. With the exception of a few short-lived declines, the rolls grew from 147,000 families in 1936 to about 5 million in 1994, from less than 1 percent of all American families with children to about 15 percent.

Between 1963 and 1973, there was a striking 230 percent increase--not because of a bad economy (unemployment was actually quite low during most of this period) nor simply because of an increase in family breakdown (both divorce and illegitimacy were rising, though not nearly as fast as the welfare caseload). Rather, the increase was largely the result of programmatic changes that made it easier for income-eligible families to get benefits, as well as the destigmatization of being on welfare. Where once welfare agencies discouraged applicants (by pressing them to seek other means of support or by imposing a grueling eligibility process), the obstacles to enrollment were now lowered. New York City's rolls almost tripled in only five years (between 1965 and 1970) under liberal mayor John Lindsay. The same liberalization was taking place across the nation, as welfare came to be seen more as a "right" than as a temporary safety net. Some of the drive behind this national movement was undoubtedly the long-overdue repeal of Jim Crow-like rules in the South that kept African-American mothers off welfare.

After this liberalization, caseloads stayed roughly steady for almost 15 years. They rose again, by 34 percent, between 1989 and 1994, largely because of the weak economy. But there were other important causes: a spike in out-of-wedlock births among some groups; an increase in immigrants applying for means-tested benefits, either for themselves or their American-born children; half-a-decade's outreach efforts to get single mothers to sign up for Medicaid (and thence welfare benefits); and an increase in child-only cases, perhaps as a result of the spread of crack addiction among mothers and an increase in cases of parental disability.

Regardless of what caused rolls to rise in the past, they rarely fell back very far. Thus no one predicted the recent halving of welfare since 1994. Fifteen states have had declines of over 60 percent; three report declines of 85 percent or more. Indeed, almost everywhere, welfare rolls are way down and work is way up. For example, never-married mothers, the group most prone to long-term welfare dependency, were 40 percent more likely to be working in 1999 than in 1994. What's responsible for the decline in welfare and the increase in work?

The end of welfare as we know it

In 1992, Barbara Sabol, then New York City's welfare commissioner, visited two of her own welfare offices dressed in a "sweatshirt, jeans, and scarf or wig." She told the welfare workers she needed a job in order to care for her children. But try as she would, she could not get the workers to help her find a job.

The same year, candidate Bill Clinton showed that he was a New Democrat by ambiguously promising to "end welfare as we know it." After the election, his administration granted many state waivers that, among other things, toughened work requirements and imposed partial time limits on benefits--ultimately culminating in the Republican-inspired 1996 welfare-reform law.

The Republican bill bore a superficial resemblance to what Clinton proposed, so both sides were able to claim credit for reforming welfare. But the changes in welfare were largely based on the Republican plan. While both bills imposed time limits on benefits, the Clinton proposal included an entitlement to a public job afterward. The Republican bill had no such entitlement, and also transformed the program into a capped block grant, which gave states an incentive to cut caseloads because they would get to keep any unexpended funds.