Welfare Reform Turns 25
What a disaster. Let’s scrap it and establish UBI
Photo by Sharon McCutcheon on Unsplash
This article was first published on Medium on August 25, 2021
On August 22, 1996, President Bill Clinton signed the Personal Responsibility and Work Reconciliation Act of 1996 (PRWORA), better known as “welfare reform”. Passed by a Republican Congress and signed by a Democratic President, the measure was designed after years of racially coded language that undermined public support for a social safety net. At its core, the Act eliminated the open-ended entitlement of Aid to Families with Dependent Children (AFDC) and created a block grant for states to provide time-limited cash assistance for needy families (known as Temporary Assistance to Needy Families — or TANF), with work requirements for most recipients.
Its famous promise was to “end welfare as we know it”, and it certainly did that. PRWORA demolished an important safety net for families at points in their lives when they needed it. It caused levels of deep poverty in the country to grow, and in doing so, has weakened all Americans' financial well-being.
Like many other government’s supports for working families, welfare began as financial aid for White people. It was established during the Great Depression as part of the Social Security Act of 1935 primarily for White single mothers who were expected not to work. Black mothers, who had always been in the labor force regardless of their marital status, were not considered eligible to receive benefits. Also, because the program was implemented at the local level, guidelines varied, including different payment and eligibility rules for White families and Black families. In Las Vegas, for example, the payment schedule included separate columns for Whites and Blacks, under the assumption that White women needed more money to raise their children, and Black women could do with less.
During the civil rights movement, Black single mothers and the National Welfare Rights Organization won critical victories that expanded access to AFDC for Blacks. Along with other Great Society programs of the 1960s, access to AFDC helped Black poverty decreased from 55 percent in 1960 to 27 percent in 1968.
But with every expansion in rights for Blacks comes a backlash. As Marguerite Ward wrote in Business Insider, “as the anti-discriminatory practices from Johnson’s presidency were enforced and Black Americans were allowed to participate in new benefit programs, there was a dramatic shift in public perception about government subsidies — to the negative.
“Public assistance was not as demonized until African Americans began to exercise their right to use it, ironically,” [Sanford] Schram [political-science professor at CUNY Hunter] said. “And that’s when welfare started to be seen as this inferior program for non-white people who didn’t play by the white middle-class rules of work and family.”
The racialized demonization of welfare and the so-called “culture of poverty” was popularized by Ronald Reagan, first as Governor of California then as President of the United States. He stoked racial resentment through the description of a welfare recipient as an undeserving “welfare queen” with multiple children living high off the US taxpayer.
But while Reagan simply cut AFDC’s budget, Bill Clinton literally ended the whole program. His commitment to “ending welfare as we know it” emphasized the culture of poverty argument. Using similarly racially coded language of dependency and people taking advantage of the system, Clinton alluded to the “fear of black street crime, drug use, crack babies, the breakdown of the family, and the drain on public dollars.” Clinton and Congress’ main goal for welfare reform was to end the “cycle of dependence” and “achieve a national welfare reform bill that will make work and responsibility the law of the land.” “Welfare to work” was touted as the ultimate goal for families facing temporary economic hardship, with the assumption that “work” in and of itself would pull people out of poverty.
At its most basic, “welfare” is understood to be cash assistance to needy families. But under PRWORA’s new TANF program, direct cash assistance to families was only one of the four spending purposes that states could use their block grant funds on. The other three purposes are to end the dependence of needy parents on government benefits by promoting job preparation and work; prevent and reduce the incidence of out-of-wedlock pregnancies, and encourage the formation and maintenance of two-parent families.
At first, the new program was successful at moving people from welfare to work. “But,” as a 2020 Pew Charitable Trust Stateline report found “over time, instead of focusing on helping low-income people get jobs, TANF has devolved into a kind of candy store that many states are raiding to plug budget holes and pay for programs that have little to do with moving poor people into the workforce.”
In 2018, states spent an average of 21 percent of TANF expenditures on cash assistance programs, with nearly a dozen spending less than 10 percent, according to Center on Budget and Policy Priorities data. So, in fact, what most people think of when they think of “welfare” is just a small part of how federal welfare dollars are spent. As for work-related activities such as education and training, states are directing about 11 percent of TANF money to that purpose. Seventeen states spend less than 5 percent.
And many states spend TANF dollars on families who aren’t in poverty or otherwise seemingly don’t comply with the four purposes at all. Several examples of this include college scholarships for middle-class students and crisis pregnancy centers and other programs that support single pregnant women to get on public assistance. As Kevin Aslanian, executive director of the Coalition of California Welfare Rights Organizations told Pew’s Stateline, “TANF is a Christmas tree for the states where they can do all kinds of crazy things with the money. It doesn’t really address the needs of the clients. This is Temporary Assistance for Needy Families, not needy states.”
Racism still plays a large role in how America provides welfare. A 2019 study from Columbia University found that states with larger Black populations allocate the lowest amount of their TANF block grant funds to direct cash assistance. They are also more likely to allocate funds to the “discouragement of lone motherhood” category. The study also found that if inequities between states’ TANF spending priorities were reduced (thus moving more spending to direct cash assistance payments), the Black-White child poverty gap would be reduced by 15 percent.
Getting families off welfare was the main goal of the reform legislation. Data reflects success by that measure. Before PRWORA, 75 percent of people who were eligible for welfare were receiving it. By 2000 — four years after ending AFDC as an entitlement program — that number fell to 25 percent. But it is not due to people moving out of poverty. Many states and communities run the program in ways that are degrading and cumbersome so as to discourage needy families from even trying to access benefits. Rich Huddleston of Arkansas Advocates for Children and Families told Alana Semuels of The Atlantic in 2016 that the state focused on reducing the welfare caseloads rather than helping people get a job. “For many people, the hoops to jump through to get on [TANF] are so confusing that they don’t apply at all,” Semuels reported. Pew’s Stateline reports that Georgia’s state welfare rolls dropped 90 percent between 1997 and 2018, and that’s certainly not because past recipients are no longer in poverty.
Part of that decline in the welfare rolls in the late 1990s may have been in part because of the strong economy. But especially after the Great Recession, economic insecurity for lower-income American’s has become more endemic as wages have not kept up with rising costs. The federal minimum wage hasn’t been increased since 2009, and there has long been concern among some economists about the quality of jobs for those at the lower end of the economic spectrum and the inability of work to pull people out of poverty. For all intents and purposes, America does not have a functioning social safety net.
The pandemic has upended almost every aspect of American life, and much still remains to be seen as the country’s economy recovers. President Biden and his Democratic allies in Congress are trying to rebuild an economic system that provides some protections and stability for American families. But even then, reforming the 1996 PRWORA is not a central component of their proposals. And maybe that’s for the best. Instead of using the framework of PRWORA to provide temporary assistance to needy families, policymakers should look harder at Universal Basic Income programs of the type promoted by Presidential candidate Andrew Yang and pilot in several cities across the country by mayors and foundations. UBI might do an even better job of providing a financial cushion for all people to meet their family’s daily needs as they pursue a vocation without the stigma seeped into “welfare”.
