The New World of Welfare

The New World of Welfare

by Rebecca M. Blank

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Congress must reauthorize the sweeping 1996 welfare reform legislation by October 1, 2002. A number of issues that were prominent in the 1995-96 battle over welfare reform are likely to resurface in the debate over reauthorization. Among those issues are the five-year time limit, provisions to reduce out-of-wedlock births, the adequacy of child care funding,


Congress must reauthorize the sweeping 1996 welfare reform legislation by October 1, 2002. A number of issues that were prominent in the 1995-96 battle over welfare reform are likely to resurface in the debate over reauthorization. Among those issues are the five-year time limit, provisions to reduce out-of-wedlock births, the adequacy of child care funding, problems with Medicaid and food stamp receipt by working families, and work requirements. Funding levels are also certain to be controversial. Fiscal conservatives will try to lower grant spending levels, while states will seek to maintain them and gain additional discretion in the use of funds. Finally, a movement to encourage states to promote marriage among low-income families is already taking shape.

The need for reauthorization presents an opportunity to assess what welfare reform has accomplished and what remains to be done. The New World of Welfare is an attempt to frame the policy debate for reauthorization, and to inform the policy discussion among the states and at the federal level, especially by drawing lessons from research on the effects of welfare reform. In the book, a diverse set of welfare experts—liberal and conservative, academic and nonacademic—engage in rigorous debate on topics ranging from work experience programs, to job availability, to child well-being, to family formation. In order to provide a comprehensive overview of the current state of research on welfare reform, the contributors cover subjects including work and wages, effects of reform on family income and poverty, the politics of conservative welfare reform, sanctions and time limits, financial work incentives for low-wage earners, the use of medicaid and food stamps, welfare-to-work, child support, child care, and welfare reform and immigration.

Preparation of the volume was supported by funds from the Annie E. Casey Foundation and the Charles Stewart Mott Foundation.

Editorial Reviews

From the Publisher

"A coherent portrait of contemporary welfare. Their inspired format pairs reseachers of opposing ideologies in papers and responses, which sift the numbingly complex research into clear areas of consensus and contention.... brilliantly clear about the confusing new world of welfare." —Corine Hegland, National Journal reporting intern, National Journal, 5/11/2002

"'The New World of Welfare' is an invaluable and much appreciated contribution to the on-going municipal, state and national debates on efforts to redesign and implement effective welfare and 'workfare' programs." — The Bookwatch, 2/1/2002

"Haskins and Blank have effectively summarized the key findings and issues in the upcoming debates about reauthorization of welfare reform legislation." —Bruce A. Weber, Oregon State University, Poverty Research News, 11/1/2001

"This book provides a compendium of valuable information about welfare reform. The books is undoubtedly one of the most comprehensive and infomative accounts of welfare reform currently available." — Journal of Sociology and Social Welfare

"The New World of Welfare has something of value for just about everyone interested in the welfare reform debate. Its vividly written chapters and vibrant commentary will serve as an invaluable resource for assessing the merits of welfare reform issues for many years to come." —Philip Robins, University of Miami, Industrial and Labor Relations Review

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The New World of Welfare

Brookings Institution Press

Copyright © 2001 Brookings Institution Press
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ISBN: 0815710100

Chapter One

Five Years After Welfare Reform: An Agenda for Reauthorization

The Upcoming Reauthorization Debate

On August 22, 1996, President Clinton signed a revolutionary welfare reform bill crafted in Congress over the previous 18 months, the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA). Everyone agreed that the law constituted a major break with the past, although there was substantial disagreement about whether these changes were for the better. The legislation passed Congress with a bigger bipartisan majority - consisting of nearly all Republicans and about half the Democrats in the House and Senate - than the bipartisan majority that enacted Medicare in 1965. But there were those who bitterly criticized it. Several Administration officials, who urged the President to veto the bill, resigned in protest when he approved it.

In passing this legislation, Congress placed a specific time limit on its funding. Thus, by October 1, 2002, Congress must enact new legislation in order to continue federal funding for many of the provisions of the 1996 law. Inevitably, as Congress considers whether and how much new spending to authorize, most of the major provisions of the 1996 law will come under scrutiny including those that do not explicitly require reauthorization. In this sense, allthe provisions of the 1996 law are open to discussion and possible amendment during the reauthorization debate.

Given the importance of the 1996 reforms, Congress is likely to spend a great deal of time in 2001 and 2002 on the reauthorization debate. Extensive hearings in several House and Senate committees are likely; multiple bills by many members of the House and Senate, and in all probability a bill from the Administration, can be expected; extensive and elaborate debates on the major provisions in subcommittees, full committees, and the floors of the House and Senate are a certainty. The best guess is that Congress will begin writing legislation in the late winter of 2002 and enact final legislation in the fall of 2002.

During this process, many forces will influence Congressional decision-making. These include the political philosophy of the Republican and Democratic parties; the particular alignment of power between the political parties in the House and Senate; the bitterness over the 2000 Presidential election; the virtually even split of Republicans and Democrats in the House and Senate; the philosophy and goals of the leaders of the committees of jurisdiction; conservative interest groups that focus on limiting government power and spending while expanding personal responsibility in social programs; liberal interest groups hoping to ensure that the poor receive adequate public benefits and that some of the provisions of the 1996 legislation are modified; the states and their powerful lobbying groups working to ensure that states receive plenty of money and retain the vast flexibility they were given in the 1996 reforms; and a bewildering array of other individuals and groups lobbying on specific issues addressed by the 1996 reforms.

One other voice deserves a prominent place at the table during the lively debates that will accompany reauthorization. As the papers in this volume show, the world of social science has produced a mountain of information about the provisions that were at the heart of the 1996 reforms, how the reforms have been implemented, and their effects on employment, income, poverty, family composition, and children's well being. A major goal of social science is to inform policymakers about how policies have been carried out and the effects they have produced. The editors and authors of this volume, though equally divided between political conservatives and liberals, are advocates for the important role social science should play in the reauthorization debate. All of us have learned through experience, however, that there is no guarantee that social science will affect the debate or the decisions made by Congress and the President. Social scientists, like other actors who would influence Congress, must win a place at the table by delivering clear messages in prominent places.

Hence this volume. We certainly do not expect members of Congress to read a scholarly tome like this one. Nevertheless, we do expect Congressional staff, social scientists, reporters, child advocates, and informed laymen to read this volume. In this way, we believe a consensus about the major findings will begin to grow and this consensus will in turn influence media reports, Congressional testimony, the analyses produced by Congressional agencies like the Congressional Research Service and the General Accounting Office, and the one-page summaries staff will give to members of Congress about specific reauthorization issues. It would be naive to think that social science will be the major force influencing Congress during reauthorization, but we have a lot to say about how the reforms have been working and Congress - as well as those who would influence Congress - ignores this information at the peril of making poorer decisions.

There are at least three reasons for the abundance of information now available on the 1996 reforms. First, the 1996 law contained several provisions that required data collection, data reporting, and research or evaluation studies. Congress worked closely with the Administration and the states to produce new administrative reporting requirements as part of the Temporary Assistance for Needy Families (TANF) block grant. In addition, the legislation required states to report, for the first time, fairly complete administrative data on child care subsidies. Although there have been problems with the state reported child care data, other research has also focused on this topic and information on child care utilization and funding has improved.

The 1996 law also provided HHS with about $15 million per year to fund research on a wide variety of issues relevant to the new legislation and to continue ongoing research, especially program evaluation studies of demonstration projects that had been authorized during the five or so years before the 1996 legislation. In addition, the law provided the Census Bureau with about $70 million in funding (which has since been increased by $6 million) to collect additional data on participants in two waves of the widely used and admired Survey of Income and Program Participation (SIPP). These funds allowed the Census Bureau to continue following the SIPP's representative sample of about 18,500 households and to expand their data collection on children's well-being. This important new study, called the Survey of Program Dynamics (SPD), was funded by Congress because it would permit comparisons of the condition of children and families before and after the 1996 reforms.

The second source of information about the effects of the 1996 reforms is research funded by foundations (see Research Forum on Children, Families, and the New Federalism, 2001). Although to our knowledge no one has yet produced an overview of all the welfare reform research funded by foundations since 1996, the Annie E. Casey Foundation, the Packard Foundation, the Foundation for Child Development, the Charles Stewart Mott Foundation, the Ford Foundation, the W.T. Grant Foundation, and the Rockefeller Foundation, among many others, have made extensive investments in studies on some aspect of welfare reform. Perhaps the most important among the foundation-funded projects is the Assessing the New Federalism project housed at the Urban Institute in Washington, D.C. The centerpiece of the New Federalism project is a large-scale national survey called the National Survey of America's Families (NSAF). Other important research projects funded primarily by Foundations are also being conducted by the Manpower Demonstration Research Corporation and by a consortium of scholars at Harvard University, Northwestern University, and Johns Hopkins University. Several of these studies have already produced important information and can be expected to provide additional information during the reauthorization debate.

Third, as the papers in this volume amply testify, welfare reform has attracted the attention of many individual scholars, including some of the nation's most respected researchers. A growing number of scholarly papers either report new empirical data on some aspect of welfare reform or review the available evidence on specific issues.

In this volume, we bring many of these scholars together to examine the major issues that are bound to play a role in the reauthorization debate. Our goals for this volume are to describe changes in welfare programs that have taken place since the 1996 law was enacted, to assess the evidence on the effects of these changes, and to open debate on key issues that are likely to be important (and perhaps controversial) in the upcoming reauthorization debate. Many of these issues will be important well beyond reauthorization in 2002, and are relevant not only to federal decisionmaking, but also to ongoing efforts to design and implement effective welfare and work programs by states and localities. Before turning to a summary of the key parts of this volume, we next remind readers of the major provisions of the 1996 reforms.

Overview of the 1996 Welfare Reform Law

Since enactment of the sweeping welfare reforms in 1996, the attention of policymakers, researchers, and the media has been focused on the state programs funded under the Temporary Assistance for Needy Families (TANF) block grant which replaced the Aid to Families with Dependent Children (AFDC) program. However, there were many other major and minor provisions in the legislation, any of which could come up during the reauthorization debate. Table 1 provides an overview of the major provisions of the 1996 law. The table also indicates when the funding for each provision must be renewed and whether the funding for the renewed provision is assumed in the budget baseline. Many of the reforms enacted in 1996 became part of permanent federal law and do not need additional action to remain in effect after 2001 or 2002. Our guess is that this will not make much difference if members of Congress or powerful outside constituencies want the provision considered as part of the reauthorization debate.

For example, the restrictions on the access of legal immigrants to welfare were permanent and require no reauthorization. These provisions were among the most controversial during the original debate in 1995 and 1996 and were singled out by President Clinton when he signed the bill as an example of provisions he did not like and would try to change. In fact, in 1997 the President recommended and Congress accepted, and even expanded, legislation that reinstated some benefit eligibility to noncitizens, especially those who had been receiving benefits at the time of enactment. But many Democrats and advocacy groups believe these changes do not go far enough and remain strongly opposed to the general ban on welfare benefits for noncitizens who enter the country after August 22, 1996. These groups will make restoring benefit eligibility for noncitizens a major issue in the reauthorization debate.

As Table 1 shows, there were eight major programs or policy domains addressed in the 1996 law: TANF, Supplemental Security Income for children, child support enforcement, support for child protection, child care, child nutrition, and food stamps. In addition, the new law contained many provisions designed to reduce pregnancy outside marriage. The papers in this volume cover most of these issues, and we reference these papers below. Because we have elected to discuss what are in our opinion the most important issues for reauthorization, our review of the 1996 provisions is somewhat selective.

Temporary Assistance for Needy Families (TANF).

Enactment of the TANF program was the most thorough and fundamental of the reforms because it replaced the AFDC program with a federal block grant. The most important elements of the TANF reforms can be captured in five provisions:

• States were given primary responsibility for designing their cash assistance program and determining the rules under which families could receive assistance. The result is an increasingly diverse set of state programs since 1996.

• The entitlement to benefits provided under AFDC was abolished. In the past, destitute families with children who met joint federal-state income eligibility rules had to be provided with cash benefits. Under TANF-funded programs, states have imposed a greater number of work and other behavioral requirements, along with income eligibility requirements, and states have authority to decide who receives benefits and under what circumstances. In most cases, cash benefits are now conditional on attempts to prepare for self support.

• The AFDC funding mechanism of open-ended federal matching payments for state welfare expenditures was replaced by a block grant to each state. The block grant funding level for each state is fixed and is based on the level of federal expenditures in the mid-1990s under the old AFDC program. Because the block grant funding is fixed, if states can help families leave welfare, they retain the funds that used to pay their welfare benefit. This feature of the block grant was intended to provide states with a financial incentive to help families leave welfare, although some argue that it was intended to control federal spending. States must also maintain their own spending at a level equal to 75 or 80 percent of the amount they spent from state funds on the AFDC and JOBS programs in 1994.

• States are required to place an annually accelerating percentage of their caseload in work activities for a specific number of hours, although states can also meet this requirement by reducing their caseload below its 1995 level. By 2002, states must have 50 percent of their caseload involved in work for 30 hours per week; some or all of the 50 percent can be met by caseload reductions. States that fail to meet the work requirement have their block grant reduced. States in turn impose sanctions by reducing the cash benefits of individuals who fail to work. States with large caseload declines face less stringent work requirements.

• States are not allowed to use federal TANF dollars to pay the benefits of families who have been on welfare for more than 5 years. Twenty percent of the caseload may be exempted from this time limit.

Taken together, these five characteristics have made state-run TANF programs radically different than the AFDC program they replaced.

Supplemental Security Income for Children (SSI)

The SSI provisions for children were intended to tighten the standards by which children qualified for cash SSI benefits and thereby reduce the number of children receiving SSI. The Individualized Functional Assessment test that a number of parties, including the U.S. General Accounting Office (1995), thought too subjective in judging children to be disabled, was banned and the definition of childhood disability was made more specific and restrictive. These and similar measures were designed to ensure that only poor children with the most serious disabilities were admitted to the SSI program.

Child Support Enforcement

The child support enforcement amendments, by sheer number alone, were the most extensive provisions in the 1996 legislation. They were exceptionally comprehensive and amended nearly every aspect of the child support enforcement program. The general thrust of the reforms was to increase the number of children with paternity established at birth, to provide access to new sources of employment and financial information for state programs, to reform state programs by automating information and case processing as much as possible, and to provide additional child support payments to mothers who left welfare. The major goal of these reforms was to improve the performance of the child support program so that more noncustodial parents would be located, more paternities established, more child support orders put in place, and more money collected to help single mothers leaving welfare and to reimburse the government for providing cash welfare payments for needy children.


Excerpted from The New World of Welfare Copyright © 2001 by Brookings Institution Press
Excerpted by permission. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.

Meet the Author

Rebecca Blank is dean of the Gerald R. Ford School of Public Policy at the University of Michigan. She was senior staff economist with the Council of Economic Advisers during the first Bush administration and was appointed to the council under President Clinton. Ron Haskins is a senior fellow at the Brookings Institution and a senior consultant at the Annie E. Casey Foundation. A former adviser to the President for welfare policy, he spent 14 years on the staff of the House Ways and Means Human Resources Subcommittee, first as welfare counsel to the Republican staff, then as the subcommittee's staff director. He is the author of Work over Welfare: The Inside Story of the 1996 Welfare Reform Law (Brookings, 2006) and coeditor, with Rebecca Blank, of The New World of Welfare (Brookings, 2002).

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