The recent urban violence in Milwaukee has spurred much public discussion about the toxic effects of a growing, permanent underclass just in time for the 20th anniversary of the historic 1996 welfare reform.
That remarkable policy achievement freed millions from the demoralizing grip of dependency on government. It marked the first and only time that Washington had relinquished such power over a major program to the states. Before then, the coveted cash assistance program, Aid to Families with Dependent Children (AFDC), was the linchpin of the federal welfare system. Eligibility for it conferred entry to the myriad other welfare programs including Medicaid, food stamps and housing assistance.
The unqualified success of this radical shift in power exceeded the wildest dreams of the person behind the whole idea – no, not Bill Clinton, who ultimately signed it into law – but the man who had championed the solution as California Gov. Ronald Reagan’s and then President Reagan’s welfare reformer – my husband, Bob Carleson.
The opportunity to truly reform welfare became politically possible when Clinton’s 1992 campaign pledge to “end welfare as we know it” collided with the Republican Party’s regaining control of the House of Representatives in 1994. What ultimately emerged – the Temporary Assistance for Needy Families (TANF) program – was certainly not what Clinton originally had in mind, but 1996 was a re-election year for him and he had excellent political instincts.
TANF was the carefully crafted product of my husband’s many years of practical experience beginning in the early ’70s when Gov. Reagan entrusted him to design the welfare reform plan that rescued California from certain bankruptcy. While implementing the plan as state welfare director, Bob came to know and understand the iron-fisted stranglehold of the federal welfare agencies. Washington bureaucrats flat out prevented state-run, innovative policies to meet welfare recipients’ real needs.
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The 1996 welfare reform, now a distant memory to most Americans, reversed bureaucratic incentives that had turned the 30-year expansion of the Great Society into an entrenched welfare state. Ronald Reagan had incisively noted that, “The War on Poverty created a great new upper-middle class of bureaucrats that found they had a fine career as long as they could keep enough needy people there to justify their existence.”
Instead of paying states more for each recipient added to the welfare rolls, TANF capped the cash assistance program’s cost but gave the states the freedom to make their own determinations about who was eligible for aid and for how much. It is common sense to realize that the welfare needs of a family in a rural county differ greatly from those of one in an inner city.
Bob understood the dangerous implications of federal regulation and oversight and sought to transfer all of TANF’s program authority to the states. But over his strenuous objections, one federal string – a mandated work requirement – was imposed by Congress at the insistence of certain welfare theoreticians, many of whom are still making a good living at it. What could possibly be more conservative than a tough federal mandate requiring work, you ask? I’ll explain later.
TANF’s design was unique. While establishing a firm ceiling on welfare spending to satisfy the fiscal hawks, it provided a spending floor to assure those who feared a “race to the bottom” that any state’s program savings would have to be used to enhance work-related benefits. This meant lifting welfare beneficiaries out of poverty with child care subsidies or transportation assistance while they underwent job training. The combination worked!
Limited, but guaranteed, federal welfare dollars gave state officeholders running for re-election the incentive and assurance that they could give priority to the neediest while requiring the able-bodied to earn their benefits. State welfare departments reviewed cases with an eye to finding the best solution to a family’s situation without worrying about their own jobs, transforming them from welfare intake offices to employment centers.
This shift in motivation and viewpoints of welfare officials themselves was what really made the program succeed – not the work requirements. Previously free-spending state bureaucrats became responsible fiscal stewards because they understood that once they spent their federal allotment, the state’s own taxpayers would have to pick up the burden – and their government superiors would be left to face the political consequences.
By 2006, just 10 years after TANF’s passage, the number of children on welfare was lower than it had been since the War on Poverty’s cash assistance program began in 1966. In the eight years following 1994, the percentage of children on welfare had plunged from 14.1% to 4.7%. No one, regardless of political party, could deny the irrefutable success of the new system. Freedom from government dependence was a source of national pride. But sadly, not for much longer.
When President Barack Obama entered office, his long to-do list included resurrecting federal control over welfare. But because of the deliberate repeal and replacement of the AFDC program through finite appropriations to the states, he was thwarted from dismantling the essential design and operation of the ’96 reform. He could not escape the fact that he’d need federal legislation to reconstitute federal control and he knew he’d never get Congress to go along with reversing the most successful domestic policy reform ever enacted.
However, surrounded by leftist thinkers who recognized TANF’s Achilles’ heel, he moved quickly to grab that one federal string to unravel as much of the reform as he could. By granting himself the authority to “waive compliance,” he rescinded the hallowed federal work requirement, effectively discouraging states from requiring work for welfare benefits. That’s the risk you run when you give the power to define something like “work” to a central authority – especially one that, depending on its political mood, can change its mind.
Obama failed at undoing TANF, whose cost today is the same as it was in 1996. But, intent on expanding government dependence, he looked to other welfare programs like Food Stamps, where he increased benefits while loosening income and other eligibility requirements. Seeking to overcome many Americans’ independence and pride, he ordered enticing media ads and seminars to remove the social stigma of welfare and encourage greater participation. He undermined the fundamental American value of self-reliance.
The solution to the growth of welfare dependence was implemented 20 years ago by moving power from Washington to the states. And, it is hoped, we learned an important lesson about not leaving susceptible strings attached. In 1996, my husband spoke for Ronald Reagan, and today I must speak for Bob. I know that if he were here he would remind us “that government is best that governs least.”
Whatever the outcome in November, welfare in America will be transformed. Will we allow it to destroy more lives in its inexorable pursuit of the socialists’ dream? Or, will we return it to its proper mission to provide a secure safety net for those of us with nowhere else to turn but government.
We should all care because the fate of the American spirit lies in the balance.
Susan Carleson is the founder of the Carleson Center for Welfare Reform.
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