Welfare Reform: The Personal Responsibility Act
One of the key ingredients in the initial Contract With America has led to one of the most contentious debates in Washington: reforming the welfare state. The Personal Responsibility Act in the Contract included prohibiting welfare going to mothers under the age of 18, halting the increase of benefits for mothers each time they had additional illegitimate children, and cutting welfare spending. In 1965, President Lyndon Johnson declared a so-called War on Poverty; but 30 years later, after spending an estimated $5.4 trillion on welfare programs, it seems that poverty is winning the war. Thirty years of central government welfare programs seem only to have worsened the situation. The key problem, as my colleague at The Heritage Foundation, Robert Rector, has pointed out, is that "the welfare programs present a 'moral hazard' -- a strong tendency to increase the behaviors which are rewarded by welfare benefits." Specifically, "when welfare benefits are tied, directly or indirectly, to such behaviors as low work effort, divorce, and illegitimacy, welfare strongly promotes an increase in those behaviors." This only creates an ever-escalating cycle of more spending.
The Personal Responsibility Act of the Contract sought to fundamentally revamp the role of the state in welfare policy by developing policies to reduce teenage pregnancies and illegitimate births by prohibiting aid to mothers under 18 who give birth out of wedlock and requiring them to name the fathers of their children, who would be held accountable for their actions. Such women would be required to live at home to receive any aid and would not get housing subsidies to set up their own apartments. The Act also required that aid be cut off if recipients did not work.
The federal government provides 72 percent ($234.3 billion) of all welfare benefits, compared to 28 percent ($90 billion) by the states. This has led the Congress to set certain general standards and criteria that recipients of aid must meet to receive benefits. But beyond some general restrictions, the key reform of welfare consists of attempting to decentralize the program to the 50 states and thereby stimulate numerous creative approaches to dealing with social problems.
This reflected the general conservative philosophical view in the Contract. As Speaker Gingrich writes in his book To Renew America: "We must replace our centralized, micro-managed, Washington-based bureaucracy with a dramatically decentralized system more appropriate to a continent-wide country... 'Closer is better' would be the rule of thumb for our decision making; less power in Washington and more back home, our consistent theme."
New York Times Op-Ed ContributorPublished: August 22, 2006
Most Democrats and Republicans wanted to pass welfare legislation shifting the emphasis from dependence to empowerment. Because I had already given 45 states waivers to institute their own reform plans, we had a good idea of what would work. Still, there were philosophical gaps to bridge. The Republicans wanted to require able-bodied people to work, but were opposed to continuing the federal guarantees of food and medical care to their children and to spending enough on education, training, transportation and child care to enable people to go to work in lower-wage jobs without hurting their children.
On Aug. 22, 1996, after vetoing two earlier versions, I signed welfare reform into law. At the time, I was widely criticized by liberals who thought the work requirements too harsh and conservatives who thought the work incentives too generous. Three members of my administration ultimately resigned in protest. Thankfully, a majority of both Democrats and Republicans voted for the bill because they thought we shouldn't be satisfied with a system that had led to intergenerational dependency.
The major welfare programs of the Great Depression in the United States for able-bodied workers involved the WPA and the CCC. They were abolished when full employment returned during World War II. The states, however, continued to provide welfare for people who were unable to work; disability insurance was provided by the federal Social Security System. After the War on Poverty in the 1960s, welfare rolls grew rapidly, angering conservatives. [Katz 1986] Before 1996, welfare payments were distributed through a program known as Aid to Families with Dependent Children (AFDC). In the 1980s, the program drew heavy criticism. There were numerous stories of "welfare queens", women who cheated the welfare system, receiving multiple checks each month and growing wealthy while not working. Many critics claimed that welfare bred a poor work ethic and a self-perpetuation "culture of poverty" in which ambitions focused on staying on welfare and avoiding productive work. [Katz 1986]
The AFDC system was under constant attack in the 1980s; these continued in the 1990s, with Presidential candidate Bill Clinton vowing to "end welfare as we know it." Clinton, once elected, worked with a Democratic congress and met with considerable success in moving people from welfare to work through state waiver programs. These programs allowed states to experiment with various welfare reform measures. The system became a common target of Newt Gingrich and other Republican leaders, though changes had already been set in motion by Clinton and the Democrats. Toughening the criteria for receiving welfare was the third point (out of ten) in the Republicans' Contract with America. The tide of public opinion in favor of some change to the welfare system was considerable. The stage was already set by 1996. The welfare reform movement reached its apex on August 22, 1996, when President Clinton signed a welfare reform bill, officially titled the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. The bill was hammered out in a compromise with the Republican-controlled Congress, and many Democrats were critical of Clinton's decision to sign the bill, saying it was much the same as the two previous welfare reform bills he had vetoed. In fact, it emerged as one of the most controversial issues for Clinton within his own party.[Haskins 2006]
One of the bill's provisions was a time limit. Under the law, no person could receive welfare payments for more than five years, consecutive or nonconsecutive. Another controversial change was transferring welfare to a block grant system, i.e. one in which the federal government gives states "blocks" of money, which the states then distribute under their own legislation and criteria. Some states simply kept the federal rules, but others used the money for non-welfare programs, such as subsidized childcare (to allow parents to work) or subsidized public transportation (to allow people to travel to work without owning cars).[Haskins 2006; Blank 2002].
WASHINGTON (AllPolitics, Aug. 22) -- President Bill Clinton today signed a sweeping welfare reform bill that ends the open-ended guarantee of federal aid and shifts much of the responsibility for public assistance to the states. (288K WAV sound)
The measure, hammered out in Congress over the past several months, imposes a five-year limit on benefits, requires able-bodied recipients to go to work after two years, and gives states incentives to create jobs for people on welfare.
Clinton said it's far from perfect legislation, but will go a long way toward overcoming "the flaws of the welfare system for the people who are trapped in it."
The president told a White House gathering the legislation also should end the scapegoating and politicking that has surrounded the welfare debate for decades.
"When I sign it, we all have to start again," Clinton said. "And this becomes everybody's responsibility. After I sign my name to this bill, welfare will no longer be a political issue.
"The two parties cannot attack each other over it. Politicians cannot attack poor people over it. There are no encrusted habits, systems and failures that can be laid at the foot of someone else.
"This is not the end of welfare reform, this is the beginning, and we have to all assume responsibility," Clinton added.
In a talk that seemed aimed at liberals who have accused him of betraying poor children, the president said he and Congress can correct what's wrong with this bill, but they could not afford to miss the chance to fix a system that does not reinforce the values of work and family.
He quoted Robert F. Kennedy, who said, "Work is the meaning of what this country is all about. We need it as individuals. We need to sense it in our fellow citizens, and we need it as a society and as a people."
Said Clinton: "Today, we are taking an historic chance to make welfare what it was meant to be, a second chance, not a way of life."
"If it doesn't work now, it's everybody's fault: mine, yours and everybody else," Clinton said. "There is no longer a system in the way."
The president vetoed two earlier bills which he said contained too little protection for poor children, but said this one contains $14 billion for child care -- $4 billion more than the present law.
"I signed this bill because this is an historic chance, where Republicans and Democrats got together and said we're going to take this historic chance to try to recreate the nation's social bargain with the poor," he said. "We can change what is wrong. We should not have passed this historic opportunity to do what is right."
Clinton uged businesses, non-profit agencies and individuals -- anyone who's ever made a disparaging comment about welfare recipients, he said -- to consider what they can do to help someone move from the welfare rolls to employment rolls.
Clinton was introduced by Lillie Harden, one of those "success stories" that politicians love to surround themselves with.
A resident of Little Rock, she first meet Clinton in 1984 when he was governor. After getting benefits for two years, she enrolled in an experimental program called "the Arkansas Work Program." In 1986, at the National Governors Convention, Clinton held her up as an example of how welfare reform can work. Today she works in the deli department of a supermarket and supports her four children.
Asked about opposition to the bill, even by groups normally allied with the president, such as the National Organization for Women, White House Press Secretary Mike McCurry said: "We acknowledge there are strong feelings against this bill amongst those who are traditionally supportive of the president and president's party. But the president is determined to make welfare reform work; he promised the American people that we would reform welfare as we know when he ran in 1992."
This was the week's third bill signing, part of the White House's effort to generate momentum going into the Democratic convention, which starts Monday in Chicago. Earlier, Clinton signed legislation boosting the minimum wage and guaranteeing the portability of health insurance, when workers change or lose jobs.
Welfare's Changing Face
By Dan Froomkin
Washingtonpost.com Staff
Updated July 23, 1998
Welfare as we knew it no longer exists.
The 61-year American tradition of guaranteeing cash assistance to the poor came to an end with the signing of legislation in August 1996.
Under the old system, founded during the Great Depression, the federal government provided fairly uniform benefits to the nation's poor – mostly mothers and children – without regard to the details of their personal circumstances, and with no time limit.
But over time, the system became increasingly unpopular. Political opinion turned against the idea of anyone getting rewarded for being idle. Social critics said welfare was responsible for a permanent underclass of people living off government checks because the incentives to go to work were so weak.
Now, a federal system that was once fairly consistent has been turned over to the states, where programs are diverging widely. And it is far from clear whether the poor will be better or worse off
The New System
The welfare "reform" of the Clinton era consists of two major elements: a revolutionary change in the basic goals set by the federal government; and a dramatic "devolution" of responsibility – turning what used to be a federal, centralized system over to the states. Reflecting the new federal mission, welfare rules now: The devolution to the states is in some ways even more dramatic. Traditionally, the federal government set eligibility guidelines on a national basis, then parceled out money to the states to fund specific programs at certain levels. But now, the federal money allocated for public assistance is sent to the states in block grants. The federal role is limited to setting goals, financial penalties and rewards. States and even counties are designing their own programs for the poor, picking and choosing from approaches they hope will get results. Many of the new approaches require subjective judgements. A human being has to decide when individual recipients are, say, ready for work and should be cut off from assistance. By and large, those responsibilities are falling to welfare caseworkers – who in the past did little more than hand over checks. As a result, assistance to the poor, which used to be pretty recognizable anywhere you went in the United States, now differs dramatically from state to state, from county to county, and even from caseworker to caseworker. 
Some Examples Some states and counties are adopting tactics that are much more assertive than the federal guidelines suggest. Wisconsin is widely considered on the cutting edge. The state is pursuing an aggressive course that combines strict work requirements with an unrivaled support system. For instance, welfare mothers considered able to work will soon lose their checks, regardless of whether they have a job. But at the same time, community service jobs are being enormously expanded, as is spending on child care. In New York City, some welfare recipients are working off their monthly checks by sweeping streets, cleaning parks and doing other municipal chores. Twenty-five states are instituting "diversion" programs, one-time payments meant to keep families from ever coming onto the welfare rolls. In some states, including Virginia, families who accept a lump sum for staying off the rolls are barred from receiving welfare for a certain period of time. Numerous states are requiring individualized "personal responsibility" contracts, spelling out when adults must go to work and the length and type of training they will receive.
The Concerns The old system was often criticized for granting benefits to people who didn't deserve them – and should instead have been working. But the new system creates the distinct possibility that people who do deserve assistance will be denied it. And because most public assistance goes to families, many of the victims would inevitably be children. Standardization, for all its drawbacks, also ensured a certain kind of blind fairness. In the new system, there is so much discretion involved that civil-rights activists wonder whether minorities and people with drug problems will be dealt with fairly, and whether people with legitimate reasons for not being able to work will nevertheless be cut off from assistance. All the variation in public assistance could lead to migrations of welfare recipients to places where benefits are more generous. And some worry that the result could be a "race to the bottom" as local governments reduce benefits in an attempt to avoid attracting more poor people – or even drive them out entirely.
The Politics Politically, welfare reform is perhaps the most conspicuous example of how President Clinton adopted – some say co-opted – parts of the Republican agenda. Historically, Democrats had defended the old welfare system against GOP attacks. Clinton defined himself as a centrist Democrat in his 1992 campaign in part by promising to "end welfare as we know it." After the Republican takeover of Congress, he fended off certain GOP welfare provisions but ultimately signed a bill that liberal members of Congress considered much too cruel to the poor. In another notable reversal, it is generally liberals who champion social engineering – and conservatives who scoff at the idea that government should try to change individual behavior. Now it is conservatives who most strongly support certain welfare rules, including the family cap and a requirement that most teenage parents live with their own parents in order to receive benefits. When Clinton signed the welfare legislation, critics from the left berated him in particular for the provision that stripped disability and health benefits from legal immigrants. Clinton vowed to "change what is wrong" about the bill and, defying the skeptics, ultimately got Congress to restore those benefits during the balanced-budget negotiations in July 1997.
Where It Stands Supporters of the recent changes in welfare maintain that they will be good for the poor, bringing many of them out of subsidized poverty and into the world of work. Clinton has stumped hard for programs that would help welfare recipients get jobs, training, child care and medical care. He has also encouraged both the private and public sectors to go out of their way to offer jobs to welfare recipients. But the evidence suggests that getting the vast majority of welfare recipients into jobs will be difficult. While two thirds of welfare recipients are either on assistance only for a short time, or on-and-off, the remaining third have proven impervious to prior attempts to find them lasting work. For some, the problems are concrete and potentially addressable: lack of child care or transportation. For others, notably those who have never held a job, the problems are harder to tackle: poor health or lack of skills, desire or confidence. Will the new welfare system help or punish the poor? Even the results so far are in dispute. On the one hand, public assistance rolls continue to decline sharply – 12 percent in the year after the reform legislation was passed. That decline prompted Clinton to declare that "We now know that welfare reform works." But critics attribute much of the drop to a robust economy. They worry about what will happen during the next recession, when jobs become scarce and local governments are looking for ways to cut their budgets. And they wonder whether some of the decline in the rolls consists of a new underclass, this one composed of people so disenfranchised and destitute that the government no longer even knows they exist.
© Copyright 1998 The Washington Post Company |
Bill Clinton on Welfare & Poverty
President of the U.S., 1993-2001; Former Democratic Governor (AR)
Biblically-inspired social justice, especially serving poor
Clinton holds to an evangelical theology, affirms the doctrines of the Apostles' Creed, and "believes the Bible to be an infallible message from God." Clinton's commitment then and today is to biblically inspired social justice. "He is especially committed to living out the 2,000 verses of Scripture which call upon us to respond to the needs of the poor," says a pastor. "Both in the presidency and since leaving the presidency, the verses concerning serving the poor have guided his life." Source: God and Hillary Clinton, by Paul Kengor, p.173 Jul 18, 2007
Reform attacked by Christian left; but genuine middle ground
The historic 1995 welfare reform initiative between Bill Clinton and the new Republican Congress sought to decentralize the way that welfare was delivered. To this day, this remains the most genuine overture by Bill or Hillary toward a truly middle groun initiative.Marian Wright Edelman wrote to Bill: "Do you think the Old Testament prophets Isiah, Micah, & Amos--or Jesus Christ--would support such policies?" It was a display of moral arrogance by Edelman. Sure, Jesus wanted Christians to help the poor, as Christian Republicans and Democrats knew, but nowhere in the Gospel did the Messiah weigh in on whether he preferred centralizing or decentralizing Medicaid.
Bill Clinton signed the bill. In response, Edelman's husband, Peter, resigned his post in the Department of Health and Human Services saying this was "the worst thing Bill Clinton had done." Contrary to Edelman's predictions, welfare-reform proved an enormous success, maybe the greatest domestic achievement of Clinton's presidency.
Source: God and Hillary Clinton, by Paul Kengor, p.141-142 Jul 18, 2007
Help Low-income Fathers Support their Children
The Administration’s budget proposes $255 million for the first year of a new “Fathers Work/Families Win” initiative to promote responsible fatherhood and support working families, critical next steps in reforming welfare and reducing child poverty. These new competitive grants will be awarded to business-led local and state workforce investment boards who work in partnership with community and faith-based organizations, and agencies administering child support, TANF, food stamps, and Medicaid, thereby connecting low-income fathers and working families to the life-long learning and employment services created under the Workforce Investment Act and delivered through one-stop career centers.$125 million for new “Fathers Work” grants will help approximately 40,000 low-income non-custodial parents (mainly fathers) work, pay child support, and reconnect with their children.
Source: WhiteHouse.gov web site Sep 6, 2000
End welfare as we know it
On August 22, 1996, President Clinton signed the Personal Responsibility and Work Opportunity Reconciliation Act, fulfilling his longtime commitment to ‘end welfare as we know it.’ As the President said upon signing, “... this legislation provides an historic opportunity to end welfare as we know it and transform our broken welfare system by promoting the fundamental values of work, responsibility, and family.” The law contains strong work requirements, performance bonuses to reward states for moving welfare recipients into jobs and reducing illegitimacy, state maintenance of effort requirements, comprehensive child support enforcement, and supports for families moving from welfare to work -- including increased funding for child care. In May 1999, the Department of Health and Human Services released guidance on how states and local governments can use welfare block grant funds to help families move from welfare to work.
Source: WhiteHouse.gov web site Sep 6, 2000
Address Homelessness via federal, state, & county govt
President Clinton and Vice President Gore have been committed to helping homeless Americans become more self-sufficient. HUD alone has invested nearly $5 billion in programs to help homeless people since 1993 -- more than three times the investment of the previous Administration. The Continuum of Care approach has helped more than 300,000 homeless people get housing and jobs to become self-sufficient. The Continuum of Care made clear that homelessness was more than simply a housing problem, and focused attention on long-term solutions which included housing as well as job training, drug treatment, mental health services, and domestic violence counseling. The Administration is also proposing to expand access to mainstream health, social services, and employment programs for which the homeless may be eligible through a new $10 million program administered by the Department of Health and Human Services, States, and large counties. Source: HUD Statement before House Veteran’s Affairs Subcommittee Jun 24, 1999
Welfare-to-work, instead of welfare as a way of life
For 15 years, going back to my service as governor of Arkansas, I have worked to reform welfare, to make it a second chance and not a way of life. As a result, Arkansas became a national leader in reforming a wide range of family and welfare programs. I helped write the 1988 federal welfare reform bill. [As president], we cut welfare red-tape and approved welfare-to-work programs for 40 states. And it has worked. There are 1.3 million fewer people on welfare today than there were when I took office. Food stamp rolls are down by more than 2 million.
In 1991, I said we needed to end welfare as we know it. Now, with the passage of new welfare reform legislation, we have an opportunity to establish a new system based on the following principles:- It should be about moving people from welfare to work.
- It should impose time limits of welfare benefits.
- It should give people the child care and health care assistance they need to move from welfare to work without hurting their children.
Source: Between Hope and History, by Bill Clinton, p. 66-68 Jan 1, 1996
Welfare reform includes states, communities, & businesses
[My proposed welfare reform law] gives states and communities the chance to move people from dependence to independence and greater dignity. But the real work is still to be done. States and communities have to make sure that jobs and child care are there. They can use money that used to go to welfare checks to pay for community service jobs or to give employers wage supplements for several months to encourage them to hire welfare recipients. They should also provide education and training when appropriate and must take care of those who, through no fault of their own, cannot find or do work. These are important new responsibilities not just for welfare recipients, but for states, communities, and businesses. But is welfare reform is to work, all must shoulder their responsibilities. This reform is just a beginning. We must implement this legislation in a way that truly moves people from welfare to work, and that is good for children. We will be refining this reform for some time to come.
Source: Between Hope and History, by Bill Clinton, p. 69-70 Jan 1, 1996
The election of Barack Obama as 44th President of the United States was the fulfillment of the drream of Abraham Lincoln and Fredrick Douglas, who himself ran for the Republican nomination for President. Obama kicked off his campaing in Springfield, Illinois Lincolns home. His politics of unity, his sweep in the polls showing America is neither Blue nor Red but purple; his politics as I have pointed out here before are those of classic 19th century liberalism. He appeals to the old Republican party, the progressive, labour party of Lincoln not the later nativist, neo-con party of Reagan. And he made that clear in his victory speech....
