No Time to Go Wobbly on Welfare Reform

August 22, 2011, marked the fifteenth anniversary of the signing of the welfare reform law by President Bill Clinton. On that occasion, a number of liberal publications and Web sites, including the American Prospect, Daily Kos, Think Progress, and Firedoglake, ran pieces that all made essentially the same argument: welfare reform has failed. As evidence, each piece noted that enrollment in the government’s Temporary Assistance for Needy Families program—created by the 1996 law as the successor to the traditional welfare program, Aid to Families with Dependent Children (AFDC)—has barely inched up since the recession. If TANF were doing its job, the argument goes, you would expect to see its rolls ballooning at a time when jobs are persistently scarce. “The effectiveness of a government aid program can best be judged by its performance during periods of economic turmoil,” wrote Jake Blumgart in the American Prospect, summing up the case. “By almost any measure, Temporary Assistance for Needy Families … has failed to cushion the neediest through recessions.”

That some liberals would question the legacy of the 1996 law is, in a sense, to be expected. After all, many on the left fought hard against its passage, and its progressive advocates conceded that a law requiring welfare recipients to work would be tested by a recession that made jobs scarce. What these new critiques fail to acknowledge, however, is that TANF is not, nor was it meant to be, the central pillar of the social safety net. Indeed, the intent of welfare reform was to move as many Americans as possible off the welfare rolls, which, by supporting mothers only if they weren’t working and weren’t married, created lamentable behavioral incentives. The goal was to see them then move into either the work world or the arms of other government programs that offer more targeted forms of assistance. In both respects, the law has been a success. No doubt the safety net needs shoring up. But even in these tough economic times, it is providing much more of a cushion for the kinds of families that once relied on welfare than its critics seem to realize.

In the years since 1996, the biggest American antipoverty program has been not welfare, but the Earned Income Tax Credit, which rewards low-wage work through the tax system. As the following chart illustrates, spending on the EITC took off just as welfare reform was adopted. The EITC grew 12.5 percent in the 1990s due to legislation passed under the first President Bush and then under President Clinton, and it is now the nation’s largest cash or near-cash antipoverty program.

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For people who have lost their jobs or who can’t work, other programs swing into play. In a recession, the first line of support for those who have been laid off is, of course, unemployment insurance. We know from research that a substantial percentage of the former welfare population did in fact go to work in the years after welfare reform was passed. We also know that the share of low-income single parents receiving unemployment benefits doubled between 2005 and 2009, a fact that the Urban Institute says “suggests that as more single mothers went to work during the late 1990s and early 2000s more could qualify for unemployment benefits in the event of job loss.” Obviously, many Americans who were or would have been on welfare entered the workforce instead; if they have lost jobs in the recession, they are now receiving unemployment compensation along with millions of their fellow citizens.

For those of us in the Clinton administration who worked to pass the 1996 reforms, it was clear that quite a number of the single mothers who had ended up on AFDC also had disabilities that would independently keep them from working full-time. Depression resulting from abuse at the hands of partners or parents, drug and alcohol problems, diabetes, and other conditions that disproportionately plague the poor kept many of these women out of the workforce. It was not surprising to us, then, that the disability rolls grew well before the latest recession started. Take for instance, data from the Social Security Administration compiled by economists David Autor of MIT and Mark Duggan of the University of Maryland. In the period between 1984 and 2004, male high school dropouts receiving disability payments increased by only 0.2 percent. In that same time period, the percentage of female high school dropouts (the group most likely to be on AFDC) receiving disability increased to 1.7 percent, nearly doubling the size of that population on the disability rolls. What happened was that after 1996, AFDC recipients who could not work because of their disabilities were moved onto the rolls of Supplemental Security Income (SSI) and other federal disability programs, often with the active help of their welfare case officers. As the U.S. Social Security Administration, which administers SSI, noted in a report, “States promoted transfer and in some instances paid organizations to assist AFDC recipients in establishing SSI eligibility.”

Other safety net programs that unemployed and low-income families have increasingly had to rely on during this economic downturn were specifically preserved in the welfare reform law—and later expanded by Clinton. Indeed, Clinton vetoed a previous GOP version of the legislation that would have turned the food stamp program into a state block grant and ended guaranteed access to Medicaid for the poor. In 1997, he actually got the Republican Congress to expand Medicaid eligibility and create SCHIP, a health insurance program for the children of families with incomes slightly above the Medicaid cutoff.

Measured in poverty statistics, the track record of welfare reform has been strong. In 1996, when the law was passed, 13.7 percent of Americans lived below the poverty line, according to census figures. That number made a slow and steady decrease until 2001, when it began to inch back up, reaching 13.2 percent at the beginning of the recession in 2008—still lower than in 1996. In 2009, at the height of the Great Recession, poverty stood at 14.3 percent, and the most recent numbers have the poverty rate at 15.1 percent. None of this is surprising. Poverty statistics were slightly higher in 1983, at the height of that recession, when AFDC was alive and well.

Of course, we hardly have the perfect social safety net, and there is much more we could do to shore it up, especially in a time of immense economic downturn. The TANF emergency fund—part of Obama’s stimulus package— led to the creation of a quarter of a million jobs. But now that fund is exhausted, and, given the attitudes of the current Republicans in the House of Representatives, it’s unlikely that more money will be forthcoming any time soon. Nonetheless, as Will Marshall of the Progressive Policy Institute has suggested, other fixes to the current TANF program, such as waiving the work requirements for a longer time or extending its time limits, could help it through the recession.

Liberals should be unafraid to fight for fixes like these, just as they’ve fought, successfully, for extensions of unemployment benefits. But they shouldn’t get hung up on the TANF program. It is only one piece of a social safety net whose entire fabric, from unemployment benefits to the EITC to the Social Security system itself, is now under attack from the far-right wing of the Republican Party.

Indeed, one of the most positive long-term effects of welfare reform has been that it strengthened the Democrats’ political ability to protect and expand the safety net by eliminating its least defensible part. AFDC—the program Clinton referred to in 1990s as “welfare as we know it”—was, at best, an anachronism. It was created in 1935 to support mothers of young children at a time when mothers seldom worked outside the home; it survived into a time when most mothers—especially poor ones—had entered the workplace. At worst, AFDC was politically toxic to the entire progressive project, and the truth is that few progressives now mourn its loss (disagreement over welfare reform was not a focus of debate in any of the last three Democratic nomination races, even as presidential candidates were trying their hardest to appeal to a base of African Americans and white liberals). Without a doubt, government social programs have been easier to defend—and expand—in an era when welfare does not give them a bad name among vast swathes of the American public. The expansion of the EITC under three presidents—Clinton and both Bushes—is an indication of how important it is to have antipoverty programs grounded in American values.

None of this means that conservatives won’t continue to go after programs for the poor. Indeed, in the name of deficit reduction, GOP lawmakers and candidates have not only targeted traditional social programs like Medicaid and food stamps; in their recent complaints about Americans who pay no income tax, they are implicitly criticizing the EITC (which in many cases wipes out the income tax burden for poor working families). This is a politically dangerous road for the GOP to go down. After all, the EITC was championed by their hero Ronald Reagan, and for good reason: it is a benefit that goes only to those who work, thus underscoring the most basic of American values. Attacking the EITC may play well with many in the Republican base, but it’s liable to alienate other potential conservative and moderate voters, thus splitting the Republicans the way the AFDC once split the Democrats.

This recession is, of course, a bad one, and poverty rates are likely to climb and keep climbing, as will TANF rolls as more and more families with children under eighteen enter the system. There are many things that progressives need to do to make sure a functioning safety net is there for those in need. But refighting the battles over welfare reform is not one of them.