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20 years after welfare reform, has it worked? Depends on who you ask.

Aug 22, 2016

Twenty years ago, President Bill Clinton signed a welfare reform bill he said would "end welfare as we know it."

The goal of the bill was to get poor families off welfare and into the workforce.

Clinton ended the traditional welfare system, called Aid to Families with Dependent Children, and started a new program, known as Temporary Assistance for Needy Families.

TANF brought stricter requirements and limits for welfare benefits – requirements that vary by state.

In most cases, benefit recipients are required to participate in work activities for 30 hours a week, like volunteering, looking for a job, working, or participating in skills training.

The program also put a five-year lifetime limit on benefits. In some states it's even lower. Arizona has a one-year limit.

The way states are required to spend welfare money also changed. States can use TANF funds for services other than welfare, including early childhood education, college scholarships, and programs that promote marriage as a way to prevent poverty.

Today, Louisiana only uses 8% of its welfare money on cash benefits for the poor, and only 1% on programs to help them find jobs, according to NPR.

Credit Center on Budget and Policy Priorities

So what has happened in the past two decades? Opinions about whether TANF has helped or hurt are mixed. According to USA TODAY:

TANF’s legacy has divided policy experts, with supporters saying it put an emphasis on work and increased employment among single mothers in the process while also reducing poverty overall. The program's critics say it tore a hole in the safety net for people who remained in poverty and couldn’t find steady work.

Since TANF was implemented, fewer families are on welfare. Between 1996 and 2000, employment for never-married mothers went from 63% to 76%. According to The Washington Post:

Proponents of reform argue that the restrictions Clinton enacted encouraged many people to work and end their dependency on help from the government. At the same time, the robust economy might have drawn more workers into the labor force, and the expansion of the Earned Income Tax Credit — a bonus for poor workers that rewards them financially for working and earning more — provided another reason for people to find jobs.

Poverty rates among families with single mothers, and overall poverty rates among children have also declined. And families are less dependent on welfare benefits. But there is more reliance on food stamps and disability than in the past.

The idea was that people would be encouraged to find work if they knew their monthly checks would end, but instead, some have been left high and dry.

Critics of welfare reform say it failed in that it left behind those in at the bottom who haven't been able to find work. According to The Washington Post, deep poverty has increased among families with unemployed adults.

Critics of welfare reform say the law put these people and their families in dire straits. If they could not satisfy the law's new requirements for employment or training, they could no longer receive welfare payments from the government. If they did not have a job, the Earned Income Tax Credit would not help them either. The rate of deep poverty — defined as the share living on a household income less than half of the official poverty level — increased among this group following reform, from 32% in 1996 to 39% in 2000.

And it seems that most families who could benefit from welfare aren't getting it. Today, the Center on Budget and Policy Priorities estimates only about 23% of families with kids living in poverty actually receive welfare. According to NPR:

The new program did work for millions of families, but not all. Many of the most disadvantaged people have been unable to get or keep jobs, and they're worse off than they were before, in part because there's now a five-year lifetime limit on welfare benefits — and in some states, it's lower. The idea was that people would be encouraged to find work if they knew their monthly checks would end, but instead, some have been left high and dry.

As we prepare to elect a new president, I guess we can wait and see what the future holds for welfare programs.

You can listen to an NPR story about how welfare reform affects the lives of families 20 years later here.

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