HILLARY CLINTON’S presidential campaign is premised, at least implicitly, on the idea that if you liked her husband Bill Clinton’s presidency, you’ll love hers. That’s understandable, given that the period between 1993 and 2001 saw economic growth, balanced budgets and declining crime. At the same time, it was inevitable, and also fair, that her opponents in 2016 would challenge this upbeat narrative.
Take the emerging debate over a signature policy of the Clinton presidency: welfare reform. It has been almost 20 years since Mr. Clinton signed an overhaul of the nation’s cash assistance program for the poor, converting it from an open-ended benefit to a time-limited one conditioned on work effort and funded by a fixed federal grant to the states (plus state dollars). Supporters hailed the new program, Temporary Assistance for Needy Families (TANF), as the antidote to the previous system’s perverse incentives for dependency, especially among single mothers. Opponents (this editorial page included, at the time) feared it would cast poor women and children into deeper privation. Among the opponents was then-Rep. Bernie Sanders (I-Vt.), who has lately been claiming vindication, blaming the Clinton-era bill for “scapegoating” vulnerable people and doubling the number of families in extreme poverty.
As it happens, welfare reform is one of the most intensively studied policy changes of recent history. The findings support neither unbridled enthusiasm nor the dire hindsight Mr. Sanders voices today. “A broad summary of that voluminous literature,” write economists Marianne Bitler and Hilary Hoynes, “is that welfare reform contributed to a significant reduction in welfare participation and an increase in female employment, with little consistent evidence that reform led to an increase (or decrease) in poverty or a worsening of (or improvement in) child well-being.”
In its first half-decade, welfare reform produced dramatic results, as both caseloads and poverty rates declined rapidly. Additional improvements have been harder to come by since the recession of 2001 and the subsequent decade of slower economic growth and job creation. Today, after the catastrophic recession of 2008, the welfare caseload remains low — 1.7 million families in 2014, down from 4.7 million in 1996. Yet the national poverty rate has crept back up to the pre-reform level; and much of the growth has occurred among the poorest of the poor, as Mr. Sanders noted. However, employment for single mothers, the legislation’s top priority, remains above pre-reform levels, and the poverty rate for female-headed households remains below them. These successes, to be sure, reflect policies separate from welfare reform, such as a more generous earned-income tax credit.
Welfare reform’s time-limited, work-based concept, in short, has been broadly vindicated and enjoys wide bipartisan support. The block-grant funding mechanism, however, is in need of change. Intended to encourage localized experimentation, the system has over time been gamed by many states, which have figured out how to use the money for programs well outside the law’s “core purposes” of helping the poor get work and providing cash assistance until they do. Add the fact that total federal funding has been frozen at $16.5 billion per year since 1996, and you begin to understand why states are squeezing benefit levels and shortening lifetime eligibility periods — all the way down to a draconian one year in Arizona. Today states use only about half of their total TANF funds for core purposes. Some of the poor who are hardest, and most expensive, to help, have gotten no help, especially during recessions.
The House Ways and Means Committee has actually passed a half-dozen minor tweaks to the program this year, including a tightening of the rules about state spending. However, TANF is overdue for a full reauthorization; the last one expired in 2010 and since then it has been continuing based on short-term legislation. A comprehensive approach would include measures to ensure states spend more of their funds on the law’s core purposes; more flexibility in how individuals may meet work requirements, to reflect realistic needs, in today’s labor market, for education, vocational training, addiction treatment or other long-term services; increased support for child care, to help parents who hold low-wage jobs with unpredictable schedules; and a mechanism for increased funding during recessions.
Welfare reform has served the poor, and the country as a whole, better than its many critics predicted, but not as well as it might. In other words, after 20 years, welfare reform needs reform.
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