Legal Accountability in an Era of Privatized Welfare

Abstract

When the federal welfare system was reformed in 1996, Congress devolved much of the authority over welfare delivery to the states and gave them the option of contracting out administration of their programs to private entities. Moreover, after welfare reform, enacted as the Personal Responsibility and Work Opportunity Reconciliation Act (PRA), welfare recipients are expected to work to receive benefits. This means that front-line workers must engage in intensive interpersonal counseling rather than simply confirm objective eligibility criteria and dispense checks. As a result, front-line workers have vastly increased discretion. When privatization is layered over this discretionary scheme, issues of accountability to program beneficiaries deepen. For over thirty years, it has been a tenet of public benefits law that due process protections attach to the government's delivery of benefits. Yet when private entities deliver the same benefits, constitutional protections may fall by the wayside. This article explores the implications of welfare privatization on welfare beneficiaries' procedural rights. It explains how the Supreme Court's current state action doctrine may well insulate private welfare providers and their state contracting partners from constitutional claims. Accordingly, the Article also explores other potential federal and state bases for enforcing accountability in welfare programs in privatized jurisdictions, ranging from statutory to contractual to equitable claims. The Article concludes that the procedural rights of welfare recipients under PRA are greatly diminished after welfare reform.