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Bernie Sanders is right: Bill Clinton’s welfare law doubled extreme poverty

Bernie Sanders seeks to broaden his appeal among voters of color ahead of imminent primaries in several Southern states. (Sean Rayford/Getty Images)

After 20 years, Bernie Sanders wants to put welfare back on the national agenda, seeing a chance to use his message of economic equality to undermine Hillary Clinton's base of support among black voters.

Primaries across the South over the next few days give him what might be the best chance he'll get. Hundreds of thousands of Southern families are living on less than $2 in cash a day as a result of legislation President Bill Clinton signed in 1996, according to new research by Johns Hopkins University's Kathryn Edin and University of Michigan's Luke Shaefer.

In South Carolina this week, ahead of that state's primary election on Saturday, Sanders brought up the 20-year-old law in a press conference. "What welfare reform did, in my view, was to go after some of the weakest and most vulnerable people in this country," he said on Wednesday, noting that Hillary Clinton, the former first lady and his rival for the Democratic presidential nomination, supported the legislation.

Across the South, candidates battle for the young black vote with the hope of carrying this important Democratic constituency. (Video: Dalton Bennett/The Washington Post)

Black voters will be crucial in the upcoming contests — 55 percent of Democratic primary voters in South Carolina in 2008 were black, according to exit polls — and black Democrats in other states have voted overwhelmingly for Clinton so far. Sanders's calls for economic transformation have not convinced this group of voters to support him, even though they're disproportionately likely to live in poverty. Sanders, however, is trying to build a case for their support by criticizing President Clinton's welfare reform policies, which he voted against.

"It's important. If people are going to elect a president, they want to know, 'What is the history?' " Sanders said the day before in an interview with The Washington Post.

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The profound and enduring consequences of that law, and of the rest of Clinton's policies on poverty, are only just becoming clear. It is a complicated legacy. Economists credit Clinton's decisions with reducing poverty overall and helping many people find work. Yet recent evidence suggests that financial conditions have worsened for those who could not find work — the poorest of the poor.

Some observers are sounding a note of concern.

"People who were able to find work, either because they live in places where work was available, or because they were better qualified than the average welfare recipient, have done pretty well." said Christopher Jencks, an expert on poverty at Harvard University. "People who can’t find work are where they were before they had welfare at all. That’s a big problem. People have no means of support for themselves or their children."

In 2004, Jencks was one of the authors of an article that declared, "Welfare reform is now widely viewed as one of the greatest successes of contemporary social policy."

"I was wrong," he said.

'A disgrace'

President Clinton's law required welfare recipients to participate in various work-related programs, such as vocational training, community service, and employment searches, in order to get financial help. States were free to determine the specific requirements, and they had broad authority over how the money dedicated to public assistance would be spent.

The reforms had broad public support, but the new system had cracks, and some people fell through them. Those who couldn't work for whatever reason were ineligible for any kind of assistance.

As a result, a certain kind of grave poverty has reappeared in the United States. Sanders said that the number of people living in extreme poverty has doubled under President Clinton's reforms. If anything, that was an understatement. Edin and Shaefer's research shows that the number of people living on $2 a day or less in cash has increased more than twofold, to 1.6 million households.

[Read more: What it's like to live on $2 a day in America]

"It's a disgrace," Edin said.

Getting an accurate estimate of the cash available to households that have so little is difficult, but the federal Survey of Income and Program Participation suggests that their numbers have steadily increased.

To some degree, expansions of other government assistance programs have mitigated the circumstances of families with little cash income. President Obama's health-care reform law, for instance, insured many people living in poverty or close to it through Medicaid. Congress has also made more people eligible to receive food stamps. Some families may be able to live in public housing.

Nonetheless, broader analyses of severe poverty that account for in-kind assistance besides cash also show a worsening situation for the neediest.

Going to work

While the poorest of the poor have suffered, other low-income Americans have benefited. Many experts think Clinton's policies reduced poverty overall.

In particular, Clinton expanded the Earned Income Tax Credit, greatly improving standards of living for many people in poverty.

"During President Clinton's time in office, the African American child poverty rate fell 25 percent, the unemployment rate was nearly cut in half, and the median income of African American families increased by more than 30 percent," Maya Harris, one of Hillary Clinton's senior advisers, said in a statement.

The improvement in black families' financial circumstances during the Clinton administration was in part due to a vigorous economy, but the tax credit helped substantially, Edin said.

The share of unmarried mothers with no more than a high-school diploma who were working at some point in a given year increased from a little more than half when Clinton took office to about three-quarters at the end of his tenure, according to an analysis by the Center on Budget and Policy Priorities.

Economists have attributed much of this increase to the tax credit.

Those women's wages and the additional cash they received in the form of tax refunds have made life much easier for many poor families, with lasting benefits for their children. A number of researchers have found that children in families that receive the credit do better on standardized tests in school and are more likely to attend college.

In other words, the tax credit can break the cycle of poverty — at least for the children of parents who are able to claim it by finding work.

Down and out in Dixie

For those Americans unable to work and who were ineligible for government assistance as a result, the effects were devastating. That has been clear in the South, which has the greatest poverty rate of any U.S. region.

Edin reported that about 4 in 10 households surviving on less than $2 in cash a day live in the South. The prevalence of extreme poverty there is partly a result of how state policymakers used the authority they gained under President Clinton's reform.

Clinton replaced traditional welfare with a new program called Temporary Assistance to Needy Families. In order to comply with the law, states either had to place a certain number of beneficiaries in training, job-placement or community service programs, or they had to stop issuing payments to those recipients. For many states, it was easier and cheaper to reduce the rolls.

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State policymakers imposed strict requirements on would-be beneficiaries to discourage them from applying and making it difficult for recipients to remain in the program. For instance, many food banks directors and charitable organizations don't bother telling the poor to apply, Edin said.

As an example, the number of people receiving assistance has plummeted in Georgia, where voters cast ballots Tuesday. Using the authority they gained under Clinton's law, policymakers in Georgia virtually eliminated assistance for adults beginning in 2004. The number on the rolls declined by 93 percent over five years, according to official data. Only about a third of people who were leaving the program were finding work.

Today, applicants in Georgia must complete an onerous structured employment search before they can receive benefits. The search often involves spending 40 hours a week for several weeks looking for a job.

"You can't take three weeks," Edin said. "You've got to actually go scrounge for stuff so your kids don't starve."

Although people of color are disproportionately likely to be living on less than $2 a day, about half of people at that economic level are white nationwide. Extreme poverty is multiracial in the South, as well.

"You've got a lot — a lot — of really vulnerable whites in the Appalachian mountains," she said. "You've got a lot of really poor blacks everywhere from the Piedmont to the Lowcountry ...  all the way over to Memphis and the Delta."

The voters decide

So far, at least, there is little indication that black voters are persuaded by Sanders's critique of Clinton in the South or elsewhere. Clinton is heavily favored to win in South Carolina. Exit polls suggest she won 76 percent of the black vote in Nevada's primary, a decisive margin in her victory over Sanders there last week.

One obstacle for Sanders could be the fact that President Clinton's reform was popular across race and class. Even the country's poorest people embrace the principle embodied in the legislation: that work is part of what it means to be an American.

A poll conducted by The Washington Post, the Kaiser Family Foundation and Harvard in 1995 found that 81 percent of Americans strongly felt that the welfare system should be reformed, including 73 percent of black respondents.

In another poll conducted by the Pew Research Center in 2002, about half of both black and white respondents agreed that the reform had improved the welfare system. Just 26 percent of black participants and 16 percent of white participants said the reform had worsened the system.

These favorable figures likely reflect the fact that Americans broadly agree on the importance of work.

Among households with less than $2 a day in income, 7 in 10 have an adult who has spent a month or more in the past year working in the formal sector, Edin said. Many of those positions are temporary. Some poor parents might find they can't hold down a job, given the responsibilities of caring for their families. That doesn't prevent them from trying.

"This is how deeply the poor, even the extreme poor, value work," she said. "They're trying to make work work."

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