BRIA 14 3 b Welfare to Work: The States Take Charge

Over the years, Congress added new programs. President Lyndon B. Johnson's "War on Poverty" provided major non-cash benefits to AFDC recipients as well as to other needy persons. In 1964, Congress approved a food stamp program for all low-income households. The next year, Congress created Medicaid, a federal and state funded health-care system for the destitute elderly, disabled persons, and AFDC families. In 1974, during the Nixon presidency, Congress established the Supplemental Security Income (SSI) program to provide aid to the needy elderly, blind, and disabled. This program made up the last major component of the federal welfare system. 

By 1994, more of the nation's needy families, elderly, and disabled received federal welfare than ever before. Aid to Families with Dependent Children alone supported more than 14 million children and their parents. But as the welfare system grew, so did criticism of it.

The Welfare Trap?

Aid to Families with Dependent Children had drawn the greatest criticism of the four major federal welfare programs. By the 1990s, AFDC supported 15 percent of all U.S. children. In most cases, these children lived at home and were cared for by a single parent, usually the mother, who otherwise did not work. This situation brought on complaints that welfare let able-bodied adults avoid work and become dependent on government handouts. 

Criticism of the AFDC program was further fueled by cases of children who grew up in families where no one ever had a paying job and who themselves became dependent on welfare as adults. Moreover, the AFDC program generated a vast bureaucracy, overlapping services, and endless regulations. All this placed an increasing burden on the nation's taxpayers (although AFDC made up less than 1 percent of the federal budget).

Some of those criticizing AFDC were recipients themselves, 70 percent of whom collected a welfare check for less than two years. For many of these people, going on welfare was a humiliating experience of struggling through a maze of bureaucratic rules in order to feed, clothe, and house themselves and their children.

Others, however, saw welfare more positively. Although the program was not perfect, AFDC provided a relatively inexpensive safety net, which prevented people from falling into extreme poverty. Many of the people helped by welfare only needed it for a limited time. Those who needed it longer were usually those with few skills or with learning disorders or other disabilities.

Welfare to Work

When Democrat Bill Clinton campaigned for president in 1992, he promised to "end welfare as we know it." Clinton wanted to help people make the transition from welfare to work. He proposed that anyone receiving welfare should go to work within two years. 

Although many Republicans favored this idea, critics in Clinton's own party saw two obstacles preventing welfare recipients from going to work. First, many on welfare could not find jobs because they didn't have skills or work experience. Second, those who could find work usually ended up in jobs that did not pay enough to support a family.

As president, Clinton worked to overcome these obstacles. He got Congress to enlarge the earned income tax credit. This allows low-wage earners who support a family to receive each year a sum of money from the Internal Revenue Service. Clinton also proposed that the government provide jobs for welfare recipients who couldn't find work. But Congress, with a new Republican majority, rejected this proposal.

Clinton and Congress continued working to find a compromise on welfare. In August 1996, after 18 months of debate, Congress passed and President Clinton signed into law the Personal Responsibility and Work Opportunity Act. This welfare reform law ended 61 years of AFDC guaranteed cash assistance to every eligible poor family with children. The new law turned over to the states the authority to design their own welfare programs and to move recipients to work. 

Under the new law, AFDC was replaced by the Temporary Assistance for Needy Families (TANF) program, funded by federal block grants and state money. States are given wide discretion in determining eligibility and the conditions under which families may receive public aid. But Congress tied a number of strict work requirements to the federal block grants:

    • Adults receiving family cash-aid benefits must go to work within two years. States may exempt a parent with a child under 1 for no more than 12 months.

    • States had to have 25 percent of their welfare caseloads at work in 1997 and 50 percent of their caseloads at work by 2002. States who fail to meet these requirements will lose 5 percent of their federal block grants.

  • Each adult is limited to no more than five years of cash assistance during his or her lifetime. But states may exempt up to 20 percent of their caseloads from this limit.
The Personal Responsibility and Work Opportunity Act went beyond just imposing work requirements for poor families with children. Although food stamps remained a federal program, Congress reduced benefits for all welfare recipients and low-income working families. Congress also made eligibility standards more difficult for disabled children receiving Supplemental Security Income (SSI). Finally, Congress eliminated all SSI, food-stamp, cash-welfare, and Medicaid benefits for most legal immigrants.

Some voiced strong objections to such a massive change in the welfare system. Two members of the Clinton administration resigned in protest. They faulted Clinton for signing a bill that made no attempt to assure that every person on welfare would have a job. A study by the Urban Institute said that the new law would cause 10 percent of all American families to lose income and predicted that the new law would send more than 1 million children into poverty. Senator Edward Kennedy called the law "legislative child abuse." Many Democrats in Congress warned that the nation's social safety net, in place since the Great Depression, was in danger of falling apart. Others argued that the welfare reform act aimed more at punishing poor people than helping them out of poverty. A report by Catholic Charities, U.S.A., said that charities could not make up for estimated $15 billion per year in welfare cuts under this law. That amount is more than the total charities currently receive in gifts in one year. Clinton himself, although thinking the law a major step in the right direction, viewed it as flawed. He promised to work to remove the flaws.

Others strongly support the new law. They think it will give those on welfare an incentive to get back to work and it gives states the means to experiment with different approaches to help people achieve this goal. 

The States Take Charge

The persistent theme throughout the Personal Responsibility and Work Opportunity Act is putting welfare recipients into jobs. But this task is not as easy as it may seem.

Moving hundreds of thousands of people from welfare to work requires hundreds of thousands of jobs to be open. When jobs aren't available, local and state governments may have to create community-service jobs like cleaning public parks. Many welfare recipients are poorly educated, have few job skills, and lack the experience and discipline of going to work on a schedule. Thus, they may need extra help and training in getting and holding on to a job. Moreover, going to work costs money. Child care has to paid for, clothing purchased, and transportation arranged.

Of all the states, Wisconsin is probably the most advanced in moving welfare recipients to work. Before Congress acted in 1996, the state had already begun major welfare reforms on its own. Wisconsin's Republican governor, Tommy Thompson, together with Democrats in the state legislature, vowed to abolish welfare by 1999. 

Wisconsin's welfare reform effort, called "Wisconsin Works," has the nation's strictest work requirements for adults receiving public aid. By the end of 1997, all adult welfare recipients had to be involved in some work-related activity. Even so-called "unemployables," like the mentally ill and drug addicts, had to report to therapy or rehabilitation sessions to try to make themselves job-ready. Only mothers with newborns under 3 months old were temporarily exempted from going to work. New welfare applicants had to first look for a job before collecting any cash aid. As a result of these requirements, Wisconsin succeeded in cutting 60 percent its welfare caseload by the end of 1997.

The success so far of "Wisconsin Works" relies not only on requiring welfare recipients to go to work, but also providing them with support as they make the transition from dependency to independence. Wisconsin pays for both child care and medical services for all low-income working families. The state also provides job training, helps pay the wages of certain workers in "trial jobs," and places those who cannot get hired into community-service work.

Because of all the support services, moving people from welfare to work in Wisconsin is expensive. The state's welfare budget is currently running 40 percent higher than it did under the old AFDC program despite the steep drop in the welfare caseload. Typically, a mother with two children who now works at a minimum wage job and also receives food stamps, child care, health insurance, and tax credits from the government earns the equivalent of about $16,500. Under AFDC she would have earned $9,500. The current U.S. poverty level income for a family of three is $13,330.

Like Wisconsin, the other states are creating their own pathways to try to get more people on welfare into jobs. Some, like Connecticut, allow a person to keep receiving a welfare check while also collecting a paycheck until the work income rises above the national poverty level. Other states impose severe penalties. For example, Mississippi is experimenting with cutting off all cash and food stamp benefits to families who do not comply with the new work requirements.

Key Issues Remain

A year after Congress passed the welfare reform act, the nation's welfare caseload had fallen almost 25 percent. But a number of key issues remained. One issue was resolved when President Clinton and Congress reached a federal budget agreement that restored SSI and Medicaid benefits to legal immigrants who had been in the country before the new welfare reform act became law. Here are some other welfare reform issues that are still being debated:

Should there be lifetime limits of five years or less on the welfare benefits families may receive?

Some people argue against lifetime limits. They say some parents and their children may need more than five years of benefits because of unforeseen events beyond their control (like a divorce, serious illness, or an economic recession). Others argue for lifetime limits. They say limits will prevent people from staying on welfare too long or going on and off throughout their lives.

Should able-bodied adults who don't have minor children and who are not working at least 20 hours a week be limited to no more than three months of food stamps in any three-year period?

No, say those who argue that this limitation mainly affects persons with no income other than food stamps who often take longer to find work because they have few employable skills or have minor physical or mental disabilities. Yes, say those who argue that this requirement is needed to motivate able-bodied adults to get a job.

Should it be harder for children with certain disabilities to qualify for SSI benefits?

An estimated 315,000 children, mainly with learning disabilities and behavior problems such as attention deficit disorder, will probably lose their SSI benefits because they will not meet the new eligibility standard. To get SSI benefits, children must now have "marked and severe functional limitations." This stricter standard resulted from claims that many of these children were not seriously impaired and that some parents were coaching their children to fake disabilities in order to collect from SSI.

Should welfare recipients who are assigned to community-service work be compensated at a rate at least equal to the minimum wage?

Unions and others say community-service workers deserve to be paid according to the same rules that apply to workers in private employment. The Clinton administration has ruled that the minimum wage rate for community-service workers is required by U.S. labor law. Many states, however, argue that hard-to-employ persons placed in community-service jobs are being adequately compensated by learning job skills while also collecting welfare benefits. They say that requiring the minimum wage for such jobs would significantly increase the cost of welfare reform in the states.

For Writing and Discussion

1. Do you think needy single mothers with preschool children should be required to get a job? Why or why not?

2. Why does it appear to be costing more to move welfare recipients into jobs than to maintain the old AFDC system that did not require work?

3. Do you think that the nationwide welfare reform effort is generally too harsh on poor people, too lenient, or just about right? Give reasons for your answer.

For Further Reading

DeParle, Jason. "Getting Opal Caples to Work." New York Times Magazine. Aug. 24, 1997:33+. [This concerns welfare reform in Wisconsin.]

Katz, Jeffrey. "After 60 Years, Most Control Is Passing to States." Congressional Quarterly Weekly Report. Aug. 3, 1996:2190-2196. 
 ACTIVITY: Welfare Reform Issues

1. Divide the class into four groups. Each group will be responsible for discussing one of the welfare reform issue questions listed at the end of the article.

2. Each student in a group should prepare to take a position on the group's issue question. But students might change their minds as the discussion takes place.

3. Each group will, in turn, discuss its welfare reform issue question while the rest of the class observes. One student in the group should introduce the question by explaining what it is about. This student should also have a number of questions prepared to help the discussion proceed. All members of the group should contribute to the discussion at least once.

4. During a discussion, one chair will be designated the "hot seat," which any student outside the group may take to contribute his or her ideas. This student must give up the "hot seat" when another student from outside the group wishes to participate.

5. The purpose of these discussions is to try to reach consensus on welfare reform issues. If consensus is not reached on a question, the class should vote on it after the discussion has concluded.



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