Remarks on the anniversary of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996

Weekly Compilation of Presidential Documents, August 10, 1998

Thank you. Thank you very much, Vesta Kimble, for that fine statement and for the good work you do. And I welcome your colleagues and co-workers from Maryland here. I thank Congressman Levin and Congressman Roemer for coming, There was a vote in the House of Representatives which was concluded literally 2 minutes before we started this ceremony, and they got here as quick as they could, We welcome you and thank you for your role in welfare reform.

I'd like to thank Secretary Herman and Secretary Shalala for the terrific job they have done and welcome all of you in the audience, including my good friend, Eli Segal, who founded our partnership with the business community, about which I'll say more later. The First Lady was recently - just a few moments ago meeting with members and, I think, maybe some former members of the DC control board. I know that some of them are here, and I welcome them as well.

Two years ago I stood with many of you in the Rose Garden and made the following statement: "From now on, our Nation's answer to the problems of poverty will no longer be a never-ending cycle of welfare; it will be the dignity, the power, and the ethic of work. . . . We are taking an historic chance to make welfare what it was meant to be: a second chance, not a way of life."

As those of us who have been working for years and years to change the system know all too well, welfare had in too many ways failed our society and, more important, failed the millions of families it was designed to help. So in the Rose Garden we came together 2 years ago to restore our basic bargain of providing opportunity to all those willing to exercise responsibility in turn. We ended welfare as we knew it and made way for a system based on the dignity of independence and the value of work.

But I would also like to reiterate something Secretary Shalala said. We did not want to put poor people moving from welfare to work in the exact same position too many people who've always been in the work force find themselves, of having to choose between being a good worker and a good parent. So we said, "Okay, we will require people who have to move from welfare to work, if they're able-bodied, to go to work. But we will leave their children with food assistance and guaranteed medical coverage, and we will invest more in child care and other family supports."

Today we come here not only to observe this anniversary but to lay to rest the last vestige of the old system, an anti-work, anti-family provision that has deprived some two-parent families of their Medicaid coverage when a parent secures a full-time job.

But first, on this important anniversary, I think it's important to recognize that this new strategy, this great new experiment that we launched 2 years ago, has already shown remarkable signs of success. Two years ago we said welfare reform would spark a race to independence, not a race to the bottom, and this prediction is coming true.

According to the National Governors' Association, State investments in helping former welfare parents succeed at work have gone up by one-third, and spending on child care has increased by one-half, And let me remind you, I believe this has happened partly because the Congress in the balanced budget amendment appropriated $3 billion for child care, but partly because there was a little-noticed provision in the welfare reform law which lets States keep the amount of money they were receiving for the welfare caseload in February of '94, when it had reached an all-time high. So as the caseloads go down, they can keep the money as long as they reinvest it in the potential of the families involved. And I think that was a very good thing to do.

We also said back then that work should pay more than welfare. Last week the Urban Institute reported that family income goes up more than 50 percent, on average, when parents move form welfare to part-time entry-level jobs and significantly more when they move up to full-time work. And I must say, I was especially pleased to note how helpful the earned-income tax credit is for families making this transition. In several States, it accounts for almost half the income gains.

For those of you who may not know it, the earned-income tax credit is a tax cut to lower income working people that is especially generous to working families with children. We doubled it in 1993. And because of that provision, today it's worth a tax cut of approximately $1,000 a year to a family of four with an income of under $30,000 a year. Obviously, for people working for more modest wages than that, it means a very great deal.

Today we have more good news. In a few moments, I will release our first annual report to Congress on welfare reform, precisely the kind of report we had hoped for 2 years ago. It shows that the number of welfare recipients entering the work force rose by nearly 30 percent in a single year. It reports that States are spending more per person on welfare-to-work efforts than they did 2 years ago, including health care, job training, job placement, child care, and job retention.