Welfare reform: the bad, the ugly, and the maybe not too awful.

Abstract

Every reform, however necessary will. . . be carried to an excess, that itself will need reforming. --Samuel Taylor Coleridge No one can deny the need for welfare reform. The current U.S. welfare system discourages work and independence, replaces pride with stigma, and exiles poor people from community life. However, the reform embodied in the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193) goes too far. Rather than invest another $10 billion in America's welfare program, which the Clinton administration pledged in 1994, the new law cuts nearly $55 billion in federal dollars over the next six years. Nearly all of the savings will come from reductions in the Food Stamp program, Supplemental Security Income (SSI), and assistance to legal immigrants. Scheduled to go into effect next year, P.L. 104-193 introduces several major changes that almost certainly will harm people in need of public assistance. At the same time, the new law ushers in a few changes that could make parts of the system work for the better. FEDERAL BLOCK GRANT One major change in the welfare system will be the shift from categorical funding to a federal block grant. Aid to Families with Dependent Children (AFDC), emergency assistance, and the Job Opportunities and Basic Skills Training program will be replaced with the Temporary Assistance for Needy Families (TANF) block grant. TANF will give states broad authority to create and manage their own welfare programs. In congressional testimony governors argued that states know better than Washington how to put people to work and get them off welfare. Several impressive reforms that originated in the states backed up their argument. However, TANF will probably slow down rather than speed up welfare reform. Before the new law states could design their own welfare programs only if Washington approved a waiver to federal requirements. This approach began to pay off in the Clinton administration when the federal government got more flexible with waivers, and states were treated as partners in welfare reform. Stalemates between the two levels of government gave way to compromise, which resulted in some meaningful reforms. This sort of compromise will be difficult now. As written, the new law nearly eliminates the federal government as a partner in welfare reform. Hence, the U.S. welfare system may soon become a hodgepodge of funding levels and eligibility requirements--50 states all doing different things--with national chaos outpacing reform. States also post a poor track record with federal block grants, falling far short of the mark in community-based mental health care and struggling now with the federal block grant for child welfare (nearly half of the states are under court supervision for not taking proper care of children who had been abused or neglected) (Some Look at the Welfare Plan, 1996). This track record will likely get worse with the welfare block grant. The federal government now pays 55 percent of all AFDC benefits, with no cap on the number of recipients. Under the new law, states will receive a fixed sum from the federal government regardless of the number of recipients. Over the next six years, this cost-saving measure will cut by one-third the total amount of federal funding that would have been used to support state welfare programs under current law (NASW, 1996). Another impediment to reform is the provision that permits states to cut their own welfare spending up to 25 percent without suffering any federal penalty. In the past, if states reduced such spending, they lost as much or more ill federal support. The new law gives states an open invitation to take money out of their welfare programs. Not all states will bend to this temptation, but sonic will. It is much easier for states to cut welfare benefits than to raise taxes for welfare reform. WORK AND POVERTY Replacing guaranteed cash payments with strings-attached assistance may prove the most significant change ushered in by the new law. …