Yesterday was the 15th anniversary of the Clinton welfare reform package, which “ended welfare as we know it.” In a sense, we didn’t really know how that would turn out until a time of stress. Unfortunately, for the group of low-income Americans who need welfare, that stress has been part of their lives for almost a decade. Jake Blumgart has a look back at welfare reform, and how we can assess it 15 years later.
By almost any measure, Temporary Assistance for Needy Families (TANF), the program created by the 1996 law, has failed to cushion the neediest through recessions. While in 2009 the food-stamp program responded to the increased need for government assistance, growing by 57 percent, the number of TANF caseloads merely inched upward. (It was the first time rolls increased since the law was enacted.) Six states continued to shed recipients and the actual number of families in need of assistance rose rapidly. At the heart of the worst recession in 80 years, TANF funds only reached 4.5 million families, or 28 percent of those living in poverty. By contrast, in 1995, the old welfare system covered 13.5 million families, or 75 percent of those living in poverty […]
Federal money is distributed in a block grant that provides an annual lump sum of $16.6 billion, with no allotted increases for recession, population growth, or rises in the cost of living. Even in the best of times, this federal funding suffers the persistent grind of inflation (the real value of TANF has fallen by 28 percent since 1996). In the old system, funds increased in response to greater need.
I’ll go one further. To the extent that there was any success from TANF during the Lesser Depression, it came from the TANF Emergency Fund, which allowed states to run direct job creation programs and put 240,000 people to work. But the fund, part of the 2009 stimulus package, was not extended after it expired last September, despite being a low-cost, high bang-for-the-buck jobs program that fit with the alleged promise of welfare to work.
The Center for Budget and Policy Priorities has more evidence of how welfare is just not working to provide income support for poor families. Even as poverty has increased, TANF caseloads have gone down. And of course, that was the design. Welfare reform put onerous requirements on families seeking help and turned the program into a block grant that individual states could transform and shape at their leisure. Predictably, the states decided for the most part to grind the program down to almost nothing, particularly in the more conservative sections of the country. As as example, Blumgart cites Georgia, where prior to reform, 98 out of 100 families in poverty received some form of welfare aid. Now it’s 8 out of 100. In Wyoming it’s 1 out of 100, literally 306 families in the entire state on welfare. The average number of families receiving welfare per 100 in poverty in 1996 was 68. Now it’s 27. And the funds available are smaller even for the drastically reduced portion of families getting help. The CBPP report has all the details.
This was seen as a great political achievement back in 1996, a way for Clinton to triangulate and steal issues from his opponents. In the short-term, with a booming economy, it worked decently enough. After a decade of zero job growth, wage stagnation and a painful near-depression, welfare has just drowned in the bathtub. What has seemed to happen is that a lot of the benefits of welfare have shifted to food stamps, with 46 million Americans receiving benefits. Food stamp funding that was elevated as part of the stimulus has already been cut back twice; it won’t be long before the same group of “reformers” will demand that food stamps are block granted or changed or ended as we know it, too. And then they’ll move to Medicaid.