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Factsheet #82

March 17, 2011

Welfare Reform The Next Steps

Welfare Reform’s Recent History

  • Franklin Delano Roosevelt: In 1935, President Roosevelt (D) said: “Continued dependence upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fibre. To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit.”
  • The Failed “War on Poverty”: Since President Johnson (D) launched the “War on Poverty” in 1964, federal means-tested welfare spending has increased exponentially. Today, the U.S. spends 13 times the amount it spent on welfare in the 1960s—or about four times the amount needed to pull every poor family out of poverty. However, welfare programs have failed to address the causes of poverty, and the federal poverty rate remains nearly unchanged.
  • The First Steps in Welfare Reform: In 1996, Congress reformed the largest cash assistance program, Aid to Families with Dependent Children. The new law instituted work requirements and renamed the program Temporary Assistance for Needy Families. As a result of these changes, welfare roles decreased dramatically, as did child poverty rates.

Since the War on Poverty Began in 1964 Welfare Spending has Skyrocketed

The Unsustainable Growth of Welfare

  • “The End of Welfare as We Know It”? While the 1996 welfare reforms successfully moved people from welfare into work, it did not, as some believe, “end welfare as we know it.” In fact, these reforms restructured only one of the more than 70 federal means-tested programs. Today, these programs are spread over 13 government agencies and amount to almost $900 billion in spending per year.
  • Out-Of-Control Spending: The growth of welfare spending is unsustainable and will drive the U.S. into bankruptcy if allowed to continue unreformed. Since the 1960s, the U.S. has spent approximately $16 trillion on welfare. Over the next 10 years, welfare spending is projected to cost taxpayers $10.3 trillion. Today, means-tested assistance is the fastest-growing part of government, with our nation spending more on welfare than on national defense.

The Next Steps in Welfare Reform

  • Account for Welfare Spending: Congress should require the President’s annual budget to detail current and future aggregate federal means-tested welfare spending. The budget should also provide estimates of state contributions to federal welfare programs.
  • Get Costs Under Control: The next step in welfare reform is to control the explosive growth in spending. Once the current recession ends (when unemployment reaches 6.5%), aggregate welfare funding should be capped at pre-recession (FY 2007) levels plus inflation. This would force Congress to determine whether or not these programs further the goal of alleviating poverty.
  • Promote Work, Not Government Dependence: Building on the successful 1996 model, welfare reform today should continue to promote personal responsibility by encouraging work. For example, food stamps, one of the largest means-tested programs, should be restructured to require recipients to work or prepare for work to be eligible to receive benefits.
  • Policymakers Must Act: Congressmen Jim Jordan (R–OH), Tim Scott (R–SC), and Scott Garrett (R–NJ) are leading efforts to account for spending, control costs, and promote work. Policymakers should put welfare reform front and center as they tackle our nation’s fiscal crisis.

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