February 6, 2003

February 6, 2003 | Executive Summary on Welfare and Welfare Spending

Executive Summary: The Continuing Good News About Welfare Reform

Six years ago, 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 Aid to Families with Dependent Children (AFDC) program 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 bill, 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.

  • Poverty has dropped substantially
    Although liberals predicted that welfare reform would push an additional 2.6 million persons into poverty, 3.5 million fewer people live in poverty today than in 1995, according to Census Bureau figures.
  • Some 2.9 million fewer children live in poverty today than in 1995
  • Decreases in poverty have been greatest among black children
    In fact, the poverty rate for black children has fallen to the lowest point in U.S. history. There are 1.2 million fewer black children in poverty today than there were in the mid-1990s.
  • The poverty rate of children living with single mothers is at the lowest point in U.S. history
    having fallen substantially since the onset of welfare reform.
  • The poverty rate of black children and children in single-mother families has continued to fall
    even during the current recession. Historically, poverty among these groups has risen sharply during recessions; the continuing decline of child poverty among black and single-mother families is an unprecedented departure from past poverty trends.
  • Hunger among children has been cut roughly in half
    According to the U.S. Department of Agriculture, in 1995, before welfare reform was enacted, 1.3 percent of children experienced hunger; by 2001, the number had fallen to 0.6 percent.
  • The AFDC/TANF caseload has been more than cut in half
    The decreases in welfare have been greatest among disadvantaged groups with the greatest propensity for long-term intergenerational dependence: for example, younger never-married mothers with young children.
  • Employment of single mothers has increased greatly
    The largest increases in employment have been among the most disadvantaged mothers with the greatest barriers to obtaining work. Employment of young single mothers (ages 18 to 24) has nearly doubled. Employment of single mothers who are high-school dropouts has risen by two-thirds.
  • The explosive growth of out-of-wedlock childbearing has come to a virtual halt
    Since the beginning of the War on Poverty, the share of births that are outside marriage had increased relentlessly at nearly one percentage point per year. Overall, the percentage of births that were out-of-wedlock rose from 7.7 in 1965 to an astonishing 32.6 percent in 1994. However, since welfare reform, the growth in illegitimacy has slowed to a near halt. The out-of-wedlock birth rate has remained almost flat for the past five years, and among blacks it has actually dropped.
  • Marriage has been strengthened
    The share of children living in single-mother families has fallen, and the share living in married-couple families has increased, especially among black families.

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 Congressional Budget Office Director 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 this 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 byproduct 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, at least $300 million per year in future TANF funds should be earmarked for pro-marriage initiatives.

Robert Rector is Senior Research Fellow in Domestic Policy Studies, and Patrick F. Fagan is William H. G. FitzGerald Research Fellow in Family and Cultural Issues, at The Heritage Foundation.

 

About the Author

Robert Rector
DeVos Center for Religion and Civil Society