Welfare Reform Initiatives
This essay presents an overview of the history of welfare and the welfare reforms enacted in the United States in 1996. With the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996, the administration of President Bill Clinton promised to "end welfare as we know it," and that promise has largely come to pass. Welfare recipients are now often required to attend training programs or perform work in order to receive benefits. The relative position of former welfare recipients to the official poverty line, however, remains a debated issue, as does the position of single parents and minority groups in the current welfare system.
Keywords Aid to Families with Dependent Children (AFDC); Earned Income Tax Credit (EITC); Guaranteed Income; Medicaid; Poverty Line; Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA); Real Income; Temporary Assistance for Needy Families (TANF)
The welfare rolls have plummeted by more than 60 percent nationally since the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) was enacted in 1996. President Bill Clinton signed the act and replaced Aid for Families with Dependent Children (AFDC) with the Temporary Assistance for Needy Families (TANF) program, providing some of the most sweeping welfare reform to date. Other benefits, such as tax cuts for low-income workers, Medicaid, and food stamp programs, have been expanded to aid those who have attempted to join the conventional workforce since 1996. The first major test of PRWORA arrived with the recession of 2001, and it seems to have passed that test adequately (Hymowitz, 2004; Wolf, 2006). The caseloads of welfare caseworkers fell from 5.1 million in 1994 to 1.9 million in 2011. The rates of those receiving funds from Aid to Families with Dependent Children (AFDC), as welfare was known before 1996, and of spending on AFDC programs, had remained relatively stable between 1972 and 1989. The economy then fell into a recession and both increased significantly. Between 1965 and 1972, both categories had also expanded substantially (Snyder, 2004).
The conventional competing explanations for issues related to poverty and welfare policy are cultural and structural. Cultural explanations tend to be politically conservative and emphasize behavioral patterns, whereas structural explanations tend to be politically liberal or left-leaning and emphasize political and economic factors. A common argument from the cultural perspective is that the ready availability of welfare benefits leads to dependence, deterioration of the work ethic, and general societal irresponsibility. An extreme version of this argument asserts that welfare creates poverty. Structural arguments can take at least two significant angles: from an economic perspective, welfare benefits are viewed as a counteractive force to drastic and largely inevitable fluctuations in the health of the economy; from a more social perspective, harsh critiques of "welfare mothers" can be said to diminish the value placed on the activity of raising children (Funiciello, 1993).
A possible third angle emphasizes the degree to which relatively minor policy changes can affect those temporarily on the economic margins of society. Zuberi (2006) takes this approach and de-emphasizes both cultural and structural approaches (p.18). An alternative approach to welfare reform, known as guaranteed income, similarly does not fall along partisan political lines. Guaranteed income is a largely theoretical plan to transform welfare payments into something comparable to respectable social insurance programs. Such programs, including pensions, unemployment insurance, and disability benefits automatically supplement the income of qualified recipients in most cases and account for inflation (or the real value of income). Welfare recipients, by contract, must undergo a humiliating and ongoing series of application updates and investigations about the absence of earned income. Welfare funding, furthermore, is almost invariably well below the poverty line. In short, a guaranteed income policy would diminish the administrative distinction between respectable social insurance programs (such as pensions and unemployment insurance) and public assistance (welfare or "cash assistance"). The funding available through a potential guaranteed income program could easily be as low as AFDC/TANF funding, but those funds would be delivered more reliably, the application process would be considerably less humiliating or eliminated entirely, and recipients would likely have stronger legally defensible rights (i.e., a lobby group) (Funiciello, 1993; Patterson, 1994). Although President Lyndon B. Johnson considered such an approach under his efforts to solidify what he termed the Great Society and complete the "War on Poverty" in the 1960s, the administration of Richard Nixon actually attempted to enact such a policy.
History of U.S. Welfare Programs
As early as 1908, some states provided cash assistance to single mothers under a program known as the "Widow's Pension," and some of the recipients had not been married (Abramovitz, 2006). The AFDC program originated in a slightly different form under President Franklin Delano Roosevelt's 1935 New Deal legislation. That program was primarily intended to allow single parents to care for dependent children. Only 2 percent of families who received funds were headed by a woman who had not been married; the other 98 percent were families headed by widows, abandoned but legally married women, or physically disabled fathers. That New Deal legislation also established unemployment insurance and Social Security (or pensions) at the national level (Shäfer, 1999; Snyder, 2004). This distinction established the later distribution of government funds along both gender-related and class-related lines.
The 1935 legislation that established most welfare programs at the national level made a sharp distinction between social insurance and public assistance. This distinction has been described as separate and unequal programs for "employables" and "unemployables" respectively (Patterson, 1994, p. 206). Not surprisingly, those respectable social programs provide greater financial benefits and legal rights that can be asserted in court. Whereas the Social Security lobby has considerable influence on government policy, welfare recipients tend to vote at a low rate (Abramovitz, 2006, p. 350). In 1970 the Supreme Court determined that individual states were required to declare an "actual standard of need" for welfare recipients, but states were not required to pay that amount (Funiciello, 1993, p. 268).
The Nixon administration expanded Supplemental Security Income (which accounts for inflation) for the disabled, blind, and elderly in 1972. A few years later, the national poverty rate fell to 11 percent, down from 21 percent in 1962 (Patterson, 1994, p. 224). By the mid-1970s, an anti-welfare coalition had organized. That group was central in the drafting and enactment of PRWORA once Republicans had achieved the difficult task of controlling both Congress and the Senate simultaneously (Shäfer, 1999). In the 1980s Congress effectively halved the cuts the Reagan administration attempted to make to welfare and other social programs, particularly to disability benefits. However, many former recipients of disability benefits were able to regain their former levels of funding through the courts (Patterson, 1994, p. 212).
Nixon's 1970 speech about guaranteed income in the proposed Family Assistance Plan (FAP) during the White House Conference on Children made an impassioned plea to provide adequate funding to poor families that would eliminate the humiliating policing of personal habits and finances; it also evoked Nixon's personal experience of poverty during the Depression. The FAP was defeated after intensive policy debates on both sides of the political spectrum, but both potential Democratic candidates for the 1972 national election favored a form of guaranteed income for poor parents (Funiciello, 1993, pp. 278-80, 294). If the FAP had been enacted, the Democratic Party's extensive political organization through welfare offices would have been seriously disabled (Funiciello, 1993, p. 281). The international oil crisis and domestic economic crisis in the 1970s probably ended any chance of extending guaranteed income to poor families (Quadagno & Street, 2006, p. 303).
In the 1970s, economist Milton Friedman argued that the problem of welfare could be dealt with through a negative income tax (Funiciello, 1993, p. 277; Patterson, 1994, p. 206). That is essentially what has happened. The 1996 version of the Earned Income Tax Credit (EITC) allowed low-income earners with two children to keep an extra 40 percent (or up to $4,400) of their income (Shäfer, 1999). The EITC was enacted in 1975 and expanded in 1986, 1990, 1993, and 1996, when those tax credits were worth $25 billion to 20 million people. The average annual expenditure on AFDC/TANF has been about half that amount. This element of the 1996 welfare reforms is probably more responsible for decreases in poverty rates than any other single factor (Quadagno & Street, 2006, p. 306).
Welfare Reform Today
Senator Edward Kennedy termed PRWORA "legislative child abuse" when it was proposed, and three prominent Clinton appointees resigned in protest after it was enacted. Their predicted "race to the bottom" in terms of benefits and living conditions for welfare recipients, however, did not materialize. In 1996, the economy was extremely healthy and unemployment was at a thirty-year low. Temporary Assistance for Needy Families (TANF) replaced AFDC. The poverty rate for single mothers fell from 42 percent in 1996 to 30 percent in 2012. Child poverty among African American families hit an all-time low before the 2001 recession, and teen violence and pregnancy have declined since the early 1990s (Hymowitz, 2004).
Those receiving TANF benefits have been required to take some sort of academic courses, receive work training, or perform work-for-welfare such as raking leaves in parks, working in municipal offices, or performing unskilled tasks for nonprofit organizations (Abramovitz, 2006). Benefits for parents on TANF rolls are now limited to two consecutive years and five years over a lifetime. Single able-bodied adults can only receive benefits for three months every three years without participation in education or training programs. Many legal immigrants cannot receive TANF benefits for five years, and illegal immigrants are only eligible for emergency medical services. About a million people were forcefully removed from TANF rolls after 1996 for exhausting their benefits or violating regulations (Wolf, 2006).
The most discussed and most contentious issue related to contemporary welfare reform is the large number of inner-city single mothers (or "lone mothers") who have been long-term welfare recipients. Although both the majority of those who live below the poverty line and those on welfare are white, African American single mothers form a large percentage of long-term welfare recipients and of their own demographic group (Funiciello, 1993, p. 269).
Many single mothers formerly on AFDC rolls worked with or through TANF programs (Fremstad, 2004). UPS and CVS/pharmacy cooperated with the government and hired about a combined 100,000 former welfare recipients. About 60 percent of the people CVS/pharmacy...
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