To call welfare reform a "striking public policy success" would
overstate its impact significantly. Let's see what happens during a recession
and when more families reach the five-year time limit imposed by the 1996
law. Welfare reform is publicly perceived as successful because of dramatically
reduced caseloads, increased employment of single mothers, declining child
poverty, and even some increase in the percentage of children living in
two-parent families. But these developments are not just due to welfare
reform but also to the strong economy of the 1990s, which was able to
raise real wages at the
bottom of the scale and reduce unemployment to its lowest levels in 30
years. It was also the result of new and expanded policies to make work
pay, such as the increases in funding for the Earned Income Tax Credit
(EITC) and work supports such as health insurance and child care.
But not everything is rosy; there were also some disturbing trends. Despite
the strong economy of the past decade, studies based on two different
surveys showed that some single mothers living alone with their children
actually experienced income declines. Some 725,000 single-mother families
were economically worse-off in 1999 than in 1994. And even among families
whose earnings rose significantly, family income increased only modestly
because many families stopped receiving work supports like food stamps,
child care, health insurance, and cash assistance even though they remained
eligible.
The next round of welfare reform should preserve and build upon its successes
and ameliorate its negative impacts. The emphasis should shift from caseload
reduction to poverty reduction.The work support strategy should shift
from cutting off recipients to ensuring they receive all benefits to which
they are entitled from work support programs.
To better accomplish the goals of Temporary Assistance for Needy Families
(TANF), funding needs to be increased. First, the overall size of the
TANF block grant, as well as required levels of state spending for TANF
programs (maintenance-of-effort), should be increased and indexed for
inflation. In addition, the TANF contingency fund needs to be renewed
and restructured so that states can provide for increased numbers of needy
families when the economy slows. Funding disparities among the states
need to be reduced; if states want to sustain (and increase) the flexible
funding available under TANF, they should agree not to supplant federal
TANF dollars.
Second, the emphasis on work must be continued and strengthened. The
caseload reduction credit should be eliminated; time limits should not
apply to working families; work supports and employment services provided
to single mothers as part of welfare reform should be extended to non-custodial
parents. States should also be allowed to expand the definition of what
counts as "work" for the purpose of TANF's participation requirements.
These should include activities that enhance the probability of employment
such as substance abuse treatment, mental health counseling, and education.
Sanction policy needs to be focused on getting families to work, not cutting
families off from assistance.
Third, the harsh restrictions imposed on legal immigrants' eligibility
for safety net programs should be repealed. As taxpayers, legal immigrants
contribute not only to the cost of education, roads, and national defense,
but also to the cost of providing safety net benefits for low-income families.
Legal immigrants should not be excluded from these programs when temporary
hardship interrupts their employment.
Fourth, TANF policy should strengthen families. States should continue
their efforts to reduce unintended pregnancies, particularly among teens,
with programs that have proven track records.These include insuring that
more two-parent families receive the work supports to which they are entitled,
and maintaining a strong child support system but modifying it so that
all child support payments directly benefit the children of a contributing
non-custodial parent, rather than benefiting government by recovering
the cost of previous welfare payments. States could go further by matching
the child support payments made by low-income non-custodial parents. Transitional
jobs should be available to both moms and dads.
The structure and flexibility under TANF should not change. However,
additional funding and the suggestions above would further accomplish
the goals of TANF and improve child well-being.
The 1996 welfare reform was a defeat for "Money Liberals,"
such as Wendell Primus, who are concerned above all else with getting
money into the hands of those in the bottom quintiles of the income charts.
Reform was a victory for the work ethic, and the notion that honoring
this popular American value -- by not giving cash to those who don't
work -- is ultimately the best way to build a decent society for poor and
rich.
Primus apparently remains an only slightly reconstructed advocate of
Money Liberal solutions, though he makes his pitch as a friend of welfare
reform who just wants to "build upon its successes." His main
complaint, characteristically, focuses on money income -- the 725,000 single
mothers he claims were "economically worse off in 1999 than 1994."
Hmm. Why didn't he update his data to include the year 2000? Could it
be because between 1999 and 2000, incomes in the bottom quintile jumped
13 percent (including a 26 percent jump in earnings)?
Did that shrink Primus' 725,000 worse-off single moms to zero? Maybe
not. In a welfare reform regime, it's true, single mothers who don't work
often lose part of their government assistance. In other words, if they
don't work, they end up worse off -- that was sort of the idea! In the
long run, the result will be more workers, less poverty, stronger families,
better neighborhoods. (The income numbers for the next-to-the-bottom quintile
are spectacular.) Only a Money Liberal would think the purpose of welfare
reform was to make absolutely everyone immediately better off.
Several of Primus' other seemingly friendly suggestions also violate
the work ethic and in doing so undermine welfare reform's long term goal.
He wants drug abuse treatment to count as "work"! (Become a
crackhead, get a check.) He wants "education services" to count
as "work" -- never mind that the 1996 reform succeeded because
it emphatically rejected the "train first, work later" approach
of its predecessors. There's nothing wrong with supplementing work with
education and training. But "self-esteem" classes and the like
shouldn't substitute for actual work.
Primus also wants to fudge the bright line between work and welfare.
He would repackage both the main welfare program (Temporary Assistance
for Needy Families) and food stamps as "work supports," and
urge even families who work to claim "all benefits to which they
are entitled" if they have low enough incomes. But if many poor families
don't sign up for welfare and food stamps because they are stigmatized
"dole" programs -- available to shirkers as well as workers --
that's a good thing, not a bad thing! Their work ethic is far healthier
for society than the Money Liberal ethic Primus is pushing, which is,
roughly, "Come and get yours! You're entitled!"
Letting workers keep part of their welfare checks, and all of their child
support payments, will also create a perverse incentive, in the long run,
to go on welfare before going to work. After all, if you just go immediately
to work, you don't get to supplement your wages and your child support
with a welfare check. But if you go on welfare right out of high school,
and only then go to work, you get the benefits of both worlds.
Money Liberals, concerned only with getting cash into the hands of the
poor right now, tend to ignore these long-term perversities -- or else
they don't mind that their "improvements" will lure thousands
onto the dole.
"Whatever we have been doing over the past five years, we ought
to keep going" -- Primus said that, to the New York Times a
few months ago, and it was a brave, clarifying thing for a prominent opponent
of the 1996 bill to say. There are plenty of ways to support the working
poor without violating the work principle underlying the 1996 reform,
things Primus supports: boosting the minimum wage, raising the EITC, increasing
funds for training as a supplement to work, not a substitute for work.
Why not concentrate on these popular improvements, as opposed to changes
that subtly undermine the philosophy of a reform that, so far, has worked
well?
