Welfare Reform 10 Years Later

Welfare programs have been a substantial part of our nation’s poverty reduction efforts since the mid 1960s. But has welfare been an effective means of lifting people out of poverty?

There are more than 50 different government assistance programs available to the poor, according to Robert Rector of The Heritage Foundation. Rector further estimates that spending on all government assistance programs from 1965 to 2000 (using constant 2000 dollars) was $8.29 trillion.

In 1996, recognizing we were failing to lift people from poverty despite massive investment in government assistance programs, Congress adopted sweeping reform of welfare programs.

The Personal Responsibility and Work Reconciliation Act of 1996 (PRWORA) promised to bring significant change to our misguided welfare state. PRWORA’s stated goal was to reduce dependency by requiring welfare recipients to work. When President Bill Clinton signed the bill, many critics predicted poverty would increase among women, children, and minorities. The Urban Institute, a research group in Washington, DC, predicted as many as 2.6 million people would fall into poverty, including 1.1 million children.

Those terrifying predictions have not been realized. The number of welfare recipients fell by 67 percent nationally from 1996 to 2006, with several states cutting welfare rolls by 80 percent. The number of impoverished children fell by 13 percent while general poverty fell 7 percent. The numbers suggest that encouraging and promoting work is more effective at reducing poverty than are government-funded welfare programs.

African Americans in particular have benefitted from welfare reform. In 2001, 30.2 percent of black children in the U.S. lived in poverty, down from 39.9 in 1996. By 2005, the poverty rate for black children had increased again to 33.5 percent, according to Census data. The best way to fight poverty has always been job growth—thus, the economic slowdown in 2001 eroded some of the gains for children as their parents had more difficulty finding employment.

Welfare reform has modestly reduced poverty by discouraging dependency and rewarding work, but PRWORA is only a partial solution to a larger problem. Our next step should be to introduce elements of accountability, limitation, and responsibility to other forms of government aid, while simultaneously promoting policies that encourage economic growth. Only personal responsibility and a free-market economy can effectively combat our poverty problem.

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I>Dane G. Wendell (dwendell@heartland.org) is a legislative specialist at The Heartland Institute and author of The Heartland Institute’s forthcoming Welfare Report Card.

For more information … Urban Institute Study predicting an increase in poverty, http://www.urban.org/publications/406622.html Office of Family Assistance caseload data; U.S. Department of Health and Human Services, http://www.acf.hhs.gov/programs/ofa/caseload/caseloadindex.htm U.S. Census Bureau Poverty Data (SAIPE data), http://www.census.gov/cgi-bin/saipe/national.cgi?year=1996&ascii= U.S. Census Bureau on Poverty by race, http://www.census.gov/hhes/www/poverty/histpov/hstpov3.html Robert Rector (The Heritage Foundation) on 50 forms of government assistance, http://www.heritage.org/Research/Welfare/wm1183.cfm#_ftnref3 Robert Rector (The Heritage Foundation) on total cost of government assistance, http://www.heritage.org/Research/Welfare/Test080101.cfm

For more information … Urban Institute Study predicting an increase in poverty, http://www.urban.org/publications/406622.html Office of Family Assistance caseload data; U.S. Department of Health and Human Services, http://www.acf.hhs.gov/programs/ofa/caseload/caseloadindex.htm U.S. Census Bureau Poverty Data (SAIPE data), http://www.census.gov/cgi-bin/saipe/national.cgi?year=1996&ascii= U.S. Census Bureau on Poverty by race, http://www.census.gov/hhes/www/poverty/histpov/hstpov3.html Robert Rector (The Heritage Foundation) on 50 forms of government assistance, http://www.heritage.org/Research/Welfare/wm1183.cfm#_ftnref3 Robert Rector (The Heritage Foundation) on total cost of government assistance, http://www.heritage.org/Research/Welfare/Test080101.cfm