Major Acts of Congress | Personal Responsibility and Work Opportunity Reconciliation Act (1996)

Michele Estrin Gilman

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Excerpt from the Personal Responsibility and Work Opportunity Reconciliation Act

The purpose of this [act] is to increase the flexibility of States in operating a program designed to—

1. provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives;
2. end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage;
3. prevent and reduce the incidence of out-of-wedlock pregnancies and establish annual numerical goals for preventing and reducing the incidence of these pregnancies; and
4. encourage the formation and maintenance of two-parent families.

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On August 22, 1996, President William Jefferson Clinton signed the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) (P.L. 104-193, 110 Stat. 2105) into law, thus fulfilling his campaign promise to "end welfare as we know it." The PRWORA changed both the substance and administration of the national welfare system. The act eliminated the prior welfare system, which had been attacked for decades by policy-makers, the press, and the public for increasing government spending while making the poor dependent on government charity.

The stated purposes of the PRWORA were to reduce welfare dependency and out-of-wedlock births and to encourage the formation of two-parent families. In line with these goals, the PRWORA required welfare recipients to work within two years of receiving assistance, and it put a five-year lifetime limit on the receipt of benefits. It also ended the entitlement status of welfare benefits. In addition, the act made other, less publicized changes to several social welfare programs, both restricting the availability of benefits (making it harder for disabled children to qualify for assistance, limiting eligibility for food stamps, denying welfare benefits to most legal immigrants) and strengthening programs that aid children (reorganizing and increasing funding for child care, toughening the enforcement of rules for child support).

In addition to the act's primary emphasis on putting welfare recipients to work, the PRWORA also radically altered the way government delivers welfare benefits in three important ways:

(1) Increased role of states. To fund welfare the PRWORA provided the states with fixed block grants called Temporary Assistance to Needy Families (TANF) to fund welfare, totaling $16.5 billion annually over six years. Congress also included a provision in the act that would result in TANF funding cuts if the states failed to move a required percentage of recipients into the workforce and off welfare. Nevertheless, TANF gave states extensive discretion to design and operate their own programs. This transfer of authority from the federal government to the states is called "devolution." Under devolution, states have many choices to make in shaping their welfare policies—including being more stringent than federal law requires. For instance, some states have chosen to limit the receipt of benefits to less than five years, to cut benefits to families with truant children, or to mandate that parents take parenting classes.

(2) Increased role of local entities. The PRWORA allowed states to devolve their authority even further to counties, local governments, or even private entities. The private entities involved in welfare administration include a wide range of for-profit companies, nonprofit companies, and religious groups. As a result, welfare programs vary widely not only from state to state but also within local jurisdictions.

This transfer of authority to private providers, an approach called "privatization," has raised questions about accountability. In other words, some critics argue that PWROWA has made it more difficult for the government to oversee programs so as to ensure quality service to recipients. The accountability of for-profit entities is of particular concern, because the incentive to earn profits can lessen the quality of services provided.

Critics also charge that privatization may cause private providers to lose their independent character as they become increasingly bureaucratic and reliant on government funding. In addition, there has been sharp debate over whether religious groups should receive government funding for delivering social services. Opponents charge that this violates the separation between church and state. Proponents hold that a spiritual approach to the delivery of social services is more effective than secular approaches.

(3) Changes in the role of welfare workers. The work-first emphasis of the PRWORA has dramatically changed the role of front-line workers, those low-level welfare office workers who interact directly with welfare clients. Before the PRWORA, front-line workers focused on two tasks: (1) verifying whether applicants met objective criteria to become eligible for assistance, and (2) issuing checks in a timely manner. By contrast, under the PRWORA these front-line workers must perform a variety of tasks, including evaluation and counseling, designed to put people to work. As a result, they have a much bigger say in decisions affecting applicants than they had previously.

WELFARE HISTORY

The PRWORA eliminated the existing welfare program, Aid to Families with Dependent Children (AFDC). AFDC was begun in 1935 as part of the New Deal response to the Great Depression. Under AFDC, welfare benefits were an entitlement. In other words, families who met objective eligibility criteria had a right to receive benefits for as long as they needed them. Moreover, the federal share of funding for AFDC rose and fell with caseload levels. Initially, federal welfare benefits were seen as a way to help impoverished, "deserving" widows stay home and raise their children. However, as time passed, critics attacked AFDC for encouraging dependency among a growing class of unmarried mothers, as well as creating a bloated and inefficient bureaucracy.

By the 1970s women had entered the workforce in large numbers. Americans were becoming increasingly hostile to aid for single mothers, who were no longer viewed as "deserving." In addition, the welfare rolls had grown dramatically, as had the cost of the program. Racial issues also played into the debate over welfare, as politicians and the media inaccurately stereotyped welfare mothers as predominantly African-American.

In the 1980s the federal government began to grant waivers, or exceptions, from AFDC requirements to states that wanted to experiment with their welfare programs. These states imposed work requirements and time limits, and they attempted to shape the behavior of welfare recipients by awarding or withholding benefits in line with the particular goals of their programs. During this time, influential conservative intellectuals such as Charles Murray argued that welfare not only failed to help poor people but also increased poverty by encouraging a culture of dependency.

After his election in 1992, President Clinton, eager to prove that he was tough on social policy issues, continued to grant states waivers from AFDC. In 1994 Republicans took control of Congress and proposed a legislative agenda called the Contract with America, which promised to enact conservative values into law. This put increased pressure on President Clinton to pass substantial welfare reform legislation and to demonstrate his credentials as a centrist politician.

Nevertheless, in 1995 President Clinton vetoed two Republican welfare reform bills that he deemed too harsh. In 1996 both political parties were under pressure to seize the initiative on welfare reform and to show results on the issue before the upcoming national elections. As a compromise, Congress presented President Clinton with the PRWORA, and the President signed it into law despite his concerns over some of its provisions. Several high-ranking administration officials subsequently resigned in protest, fearing that the PRWORA would increase poverty, homelessness, and hunger, especially in times of recession.

HAS WELFARE REFORM WORKED?

Before 1996 the number of people on welfare was already falling. After the PRWORA's enactment, the number continued to drop dramatically. Between 1996 and 2000, the number of people receiving welfare dropped by half, although caseloads in most states started to rise again slightly by 2001 and then to continue to fluctuate mildly. In addition, poverty rates fell to their lowest recorded levels (from 22 percent in 1994 to 19 percent in 1999), although the poverty rate never fell as dramatically as the number of welfare recipients. The dire consequences predicted by many welfare advocates did not come to pass, in part because of a robust economy and low unemployment throughout the period.

Despite the encouraging numbers, it was less clear whether welfare families were better off under the PRWORA. By the end of 2002, many former welfare recipients were working in low-wage jobs with few benefits and were no longer receiving food stamps or Medicaid coverage, even where eligible. Often, income gains from employment were reduced by the loss of public benefits. Many former welfare recipients thus remained below the poverty line. Up to a third of those who left welfare for work were back on welfare within a year, unable to obtain steady work or reliable child care.

Moreover, about 40 percent of families who left welfare were not working at all. Some of these families were discouraged from applying for benefits, many had their benefits reduced or eliminated for failing to meet program requirements, and others simply disappeared from the system. In addition, a core of TANF recipients had severe barriers to work, such as illiteracy, lack of education, health problems, or drug or alcohol dependency. Although the PWRORA offered no clear policy approaches to help families and individuals cope with or overcome such barriers, these recipients faced set time limits on assistance.

LEGAL CHALLENGES

Given the breadth of the changes wrought by the PRWORA, it is not surprising that the law and its implementation have faced numerous legal challenges. The Supreme Court has heard one case arising out of the PRWORA. In Saenz v. Roe (2001), the Court ruled that it was unconstitutional for a state to provide lower TANF benefits to new state residents, because such provisions violated the constitutional right to travel between states.

In addition, several lawsuits have successfully challenged welfare offices that engaged in unfair practices, such as discouraging and deterring needy persons from applying for benefits, denying welfare beneficiaries fair hearings after their benefits were terminated or reduced, or imposing excessive sanctions on families who failed to comply with work requirements. However, other challenges have been less successful. For instance, there are court rulings upholding drug testing of welfare applicants, barring client advocates from welfare offices, and denying employment discrimination protections for employees who are working as a condition of receiving benefits.

Other lawsuits have challenged aspects of Charitable Choice, the PRWORA's requirement that states choosing to contract out welfare administration must include religious groups in the process. In 2002 a federal district court in Wisconsin struck down state funding of a faith-based, long-term residential alcohol and drug rehabilitation program, although the court did not address the constitutionality of the PRWORA.

REAUTHORIZATION

The PRWORA required that Congress reauthorize the legislation in October 2002 or it would expire altogether. In May 2002, President George W. Bush proposed to increase the minimum work hours required of adult recipients. In addition, under his plan states would have to increase the number of recipients in the workforce from 50 percent to 70 percent by 2007. Also, President Bush proposed to fund state programs that promote marriage and encourage unwed teenagers to abstain from sex. In May 2002 the Republican-controlled House passed President Bush's proposal.

In June 2002 the Senate Finance Committee passed a more generous bill that increased child care spending, expanded the definition of work activities, and permitted states to give welfare to legal immigrants. However, the full Senate never voted on that bill. Unable to come to a consensus on these issues, Congress passed a continuing resolution to maintain TANF until March 2003, thus leaving it to the 108th Congress to bridge the divide.

See also: AID TO DEPENDENT CHILDREN.