Ending Welfare as We Know it: A Reform Still in Progress

Abstract

In August 1996, President William Jefferson Clinton signed the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) (H.R. 3734) into law. This law ended the entitlement status of cash assistance to poor families with children, called Aid to Families with Dependent Children (AFDC), which began in 1935 with the passage of the original Social Security Act. Between 1996 and 1999, there occurred a massive drop of over five million or 40 percent from some twelve-and-a-half million in the average monthly number of cash assistance recipients.1 Based on such statistics, most political leaders on the federal and state levels of government including both the Democratic and Republican candidates for president in 2000 called the 1996 changes or welfare reforms, a success. Yet just looking at the macronumbers of the millions who dropped from the cash assistance rolls doesn't tell the whole story. We do not know how many of these recipients would have left the rolls anyway during four years of unprecedented economic boom, even if PRWORA and Temporary Assistance for Needy Families (TANF) hadn't been enacted, and how many will return in a recessionary economy. The gross numbers also do not reveal how many of these welfare leavers2 have new jobs and have been able to reach financial