September 3, 2002

September 3, 2002 | Executive Summary on Welfare and Welfare Spending

Executive Summary: The Baucus "WORK" Act of 2002: Repealing Welfare Reform

The welfare reform law of 1996 has been an enormous success. Since the reform, the welfare caseload in the Temporary Assistance to Needy Families (TANF) program has been cut in half. Among disadvantaged single mothers who had the greatest tendency to become long-term welfare dependents, the employment rate has soared by 50 percent to 100 percent. As employment sharply increased, the poverty rate of single mothers dropped by nearly a third and is now at the lowest point in U.S. history.

These dramatic successes came after a quarter century of failure of a liberal welfare system. For example, from 1970 to the mid-1990s, while liberals were running the welfare system, the black child poverty rate in the United States actually increased. In contrast, since the mid-1990s, black child poverty has dropped by a third and is now at the lowest point in U.S. history.

In the mid-1990s, Congress passed major welfare-reform legislation entitled the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA). The act replaced the discredited Aid to Families with Dependent Children (AFDC) program with a new program named Temporary Assistance to Needy Families. This reform (1) ended the old entitlement funding system that gave states more federal funds as dependence increased; (2) established a five-year time limit on receipt of aid; (3) moved away from "one-way handouts" and toward a system of reciprocal obligation that required recipients to engage in constructive activities as a condition of receiving aid; (4) promoted a "work first" system with incentives for states to reduce welfare caseloads and move recipients quickly into employment; and (5) set national goals to reduce out-of-wedlock childbearing and promote two-parent families.

During the welfare reform debate throughout 1994-1996, liberals in Congress initially opposed every element of reform outlined above. Ultimately, some liberals accepted reform with reluctance; others remained steadfast
in opposition. It should come as no great surprise, therefore, that liberals are now trying to overturn the reform almost completely.

Reauthorization and Risks. Welfare reform is now six years old. Technically, Congress should now "reauthorize" the TANF program. The process of reauthorization has given liberals in Congress the opportunity to attempt to roll back nearly all of the 1996 reform. The centerpiece of the liberal counterattack against welfare reform is the Work, Opportunity, and Responsibility for Kids Act (WORK act), sponsored by Senator Max Baucus (D-MT). The WORK act, which was passed in June 2002 by the Senate Finance Committee, overturns or undermines nearly every element of the 1996 welfare reform. Specifically, the WORK act:

  • Expands the size and scope of the welfare state, adding at least $10 billion in new spending over five years ($23 billion over 10 years);
  • Effectively eliminates the five-year time limit on receipt of TANF benefits;
  • Partially restores the principle of entitlement funding, giving states more funds when their welfare caseloads increase;
  • Permits recipients who consistently refuse to work or prepare for work to continue receiving TANF benefits indefinitely;
  • Effectively eliminates the reduction of welfare dependence as a goal of welfare reform;
  • Contains weak to non-existent "activity" requirements. (Few, if any, welfare recipients would be required to work or even to prepare for work under the bill, and the activity requirements that it does contain are so lax as to be almost meaningless);
  • Undermines the concept that welfare recipients should be required to "earn" benefits through constructive behavior and, instead, moves back toward an entitlement or "one-way handout" system;
  • Abandons the successful "work first" orientation of the 1996 reform and places its emphasis on pre-reform education programs;
  • Effectively prohibits highly successful Wisconsin-style workfare programs;
  • Has a strong emphasis on paying welfare recipients to go to college;
  • Authorizes public-sector unions to organize and represent welfare recipients; and
  • Eliminates the responsibility of immigrants' sponsors to support individuals they bring to the United States, transferring the burden to the taxpayers.

The WORK bill's authors deliberately refused to include encouragement of healthy, married, two-parent families as a goal of welfare reform. The bill's so-called marriage-promotion grant program is cynically designed so that it has little or nothing to do with marriage. The bill does little or nothing to reduce (and may actually intensify) the anti-marriage penalties in the welfare system. In fact, the bill contains numerous provisions that are designed to encourage and reward out-of-wedlock childbearing and single-parenthood. Finally, the bill creates a new safe-sex/condom-promotion program for the schools, despite the fact that the federal government already spends over $1.1 billion a year on safe-sex and family-planning programs.

President George W. Bush and the House of Representatives should refuse to compromise with liberals in the Senate in their efforts to kill welfare reform. Rather than pursuing a "reauthorization" of welfare reform legislation that would, in reality, end reform, Congress should simply appropriate funding for TANF, on a yearly basis, under the existing law.

--Robert Rector is a Senior Research Fellow at The Heritage Foundation.

About the Author

Robert Rector
DeVos Center for Religion and Civil Society