Congress passed a hugely successful welfare reform in 1996. Hundreds of thousands of people moved off welfare and into the workforce. The child poverty rate plummeted, and the black child poverty rate dropped to its lowest level in U.S. history.
But that reform touched only one program.
Unfortunately, our massive welfare system consists of more than 80 means-tested programs providing cash, food, housing, medical care and social services. Together, they cost $1 trillion annually — and are rife with problems. Reform is long-overdue.
Earlier this year, Sen. Mike Lee, Utah Republican, and Rep. Jim Jordan, Ohio Republican, introduced the most substantive welfare reform legislation in decades. The Welfare Reform and Upward Mobility Act addresses some of the system’s biggest problems, including out-of-control spending and policies that discourage work.
One reason spending is out of hand is that the system is so sprawling and complex that it’s easy to obscure the total size and cost. Means-tested welfare programs are spread across roughly a dozen federal departments, including Health and Human Services, Agriculture, and Housing and Urban Development.
The proposed legislation would require the president’s annual budget to include the total cost of federal and state means-tested welfare spending and to estimate expected spending for the next nine years. Requiring federal budgets to spell out total welfare spending would mean greater accountability to taxpayers.
The proposal would also strengthen and expand work requirements for welfare recipients — the core of the 1996 reform. That measure inserted a work requirement into the old Aid to Families with Dependent Children program, changing it to Temporary Assistance for Needy Families.
With that work requirement, the TANF caseload decreased by half within a little over five years. Employment rates among low-income single mothers increased, and the child poverty rate dropped.
But today, more than half of able-bodied TANF recipients in most states are neither working nor engaged in any type of work activity (job training, job search, etc.). The main reason is that the work participation rate was set too low from the start. Only 50 percent of able-bodied adults were required to be working or preparing for work, meaning the other 50 percent could be doing no work activity at all.
The Welfare Reform and Upward Mobility Act would strengthen the program by requiring states to ensure that 75 percent of their unemployed TANF cases include work activity.
It also would attach work requirements to the food stamp program, one of the largest means-tested welfare programs. It currently has a modest work requirement for “able-bodied adults without dependents,” but even that requirement is weak because states or local jurisdictions are allowed to waive it. Mr. Lee and Mr. Jordan’s bill would put an end to that.
Maine and other states that have eliminated waivers and enforced the work requirement have reported many able-bodied adults without dependents leaving the program. The result: major caseload decreases, employment increases and a reduction in poverty.
Work requirements for able-bodied adults should be foundations of any sound welfare system. A work requirement encourages self-sufficiency and creates reciprocity between the recipient and the taxpayer. It also serves as a gatekeeper to ensure that those receiving welfare truly need it.
America’s massive welfare system is paid for almost entirely by federal taxpayer dollars. Politicians at the federal level hand taxpayer dollars down to politicians at the state level. That’s a perfect recipe for unaccountability and inefficiency. States have little incentive to operate programs efficiently when they are not responsible for the cost. The Welfare Reform and Upward Mobility Act would require states to take more financial responsibility for welfare by gradually reducing the amount of federal funding for public housing programs.
The Welfare Reform and Upward Mobility Act is just a first step in a broader reform initiative needed to get our bloated, self-perpetuating welfare system working for welfare recipients and for taxpayers. Other serious issues, such as how the system penalizes married couples, also must be addressed. Yet this reform is a bold step in the right direction.
• Rachel Sheffield is a policy analyst in the Heritage Foundation’s DeVos Center for Religion and Civil Society.