September 5, 2001 | Executive Summary on Welfare and Welfare Spending
Five years ago last month, President Bill Clinton signed legislation overhauling part of the nation's welfare system. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193) replaced the failed social program known as Aid to Families with Dependent Children (AFDC) with a new program called Temporary Assistance to Needy Families (TANF). The reform legislation had three goals: 1) to reduce welfare dependence and increase employment; 2) to reduce child poverty; and 3) to reduce illegitimacy and strengthen marriage.
At the time of its enactment, liberal groups passionately denounced the welfare reform legislation, predicting that it would result in substantial increases in poverty, hunger, and other social ills. Contrary to these alarming forecasts, welfare reform has been effective in meeting each of its goals.
Some incorrectly attribute these positive trends to the strong economy in the late 1990s. Although a strong economy contributed to some of these trends, most of the positive changes greatly exceed shifts that occurred during prior economic expansions. The difference is due to welfare reform. A recent analysis by former Director of the Congressional Budget Office Dr. June O'Neill finds that welfare reform has been responsible for three-quarters of the increase in employment of single mothers and three-quarters of the drop in welfare caseload. By contrast, good economic conditions were responsible for only one-quarter of the changes in these variables. The increase in employment of single mothers, in turn, is a major factor behind the drop in child poverty.
The Future of Reform. Notwithstanding this record of accomplishment, far more needs to be done. When TANF is reauthorized next year, federal work requirements should be strengthened to ensure that all able-bodied parents engage in supervised job search, community service work, or skills training as a condition of receiving aid. Even more important, Congress must recognize that the most effective way to reduce child poverty and increase child well-being is to increase the number of stable, productive marriages. In reauthorizing TANF, Congress must greatly strengthen the pro-marriage aspects of welfare reform.
The 1996 TANF law established the formal goals of reducing out-of-wedlock childbearing and increasing marriage, but despite nearly $100 billion in TANF spending over the past five years, the states have spent virtually nothing on specific pro-marriage programs. The slowdown in the growth of illegitimacy and the increases in marriage, noted above, have occurred as the incidental by-product of work-related reforms and not as the result of positive pro-marriage initiatives.
This neglect of marriage by state welfare bureaucracies is scandalous and deeply injurious to the well-being of children. Current welfare policy sharply penalizes marriage between low-income men and women. In future years, welfare's disincentives to marriage should be significantly reduced. In addition, 5 percent to 10 percent of future federal TANF funds should be earmarked for pro-marriage initiatives.