After 25 years of ‘ending welfare’, poor people far worse off

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Promising work, not welfare, President Bill Clinton signed into law the Personal Responsibility and Work Opportunity Act 25 years ago this month, abolishing the widely unpopular, 61-year-old cash entitlement program known as Aid to Families with Dependent Children, or AFDC, and fulfilling Clinton’s campaign pledge to reduce poverty by weaning off the urban poor—especially African Americans—from the admittedly meager government handouts.

“I signed this bill because this is a historic chance, where Republicans and Democrats got together and said, ‘We’re going to take this historic chance to try to recreate the nation’s social bargain with the poor. We’re going to try to change the parameters of the debate. We’re going to make it all new again and see if we can’t create a system of incentives which reinforce work and family and independence. We can change what is wrong.’”

Then he said the words that continue to resonate: “Today we are ending welfare as we know it.”

Indeed, most of what Clinton articulated 25 years ago has come to pass, although not, perhaps, in the way that he had planned. A strong case can be made that his overhaul not only “ended welfare as we know it” but ended the dole in the U.S. entirely by shrinking considerably the pot available for cash assistance and making applicants jump through so many hoops that many simply don’t consider it worthwhile.

The result is objectively clear: By any measure, the urban poor, generally, and African Americans specifically, are far worse off than they were in 1996 when Clinton replaced AFDC with the Temporary Aid to Needy Families, or TANF, program.

For starters, the labor force participation rate—which measures the percentage of workers over the age of 16 with jobs—has continued its 60-year-slump, declining from every two in-three workers in 1996 to six-in-10 today, even before the onset of the COVID-19 pandemic. And those who are fortunate enough to find work have seen no increase in pay; when adjusted for inflation, the federal minimum wage is about a dime more per hour than it was 25 years ago.

The ratio of African American households who own their own home has dropped to its lowest number, 42%, in more than 50 years. Homelessness has exploded in cities that span the width and breadth of the country.

The most distinguishing feature of the TANF program is its restructuring of AFDC’s means-tested entitlement, which meant that everyone who qualified for the cash benefit got it, at least in theory. Under TANF, the U.S. Department of Health and Human Services administers the program as a fixed block grant, reducing both the number of households served and the benefit amount.

Since 1996, TANF’s average monthly caseload nationwide has fallen dramatically even as poverty spread. In 2019, 4.5 million families with children were living in poverty, yet for every 100 destitute families, only 23 received cash assistance, down from 68 families in 1996 when AFDC was repealed.

“If TANF had the same reach now as AFDC did in 1996,” the Center for Budget and Policy Priorities wrote in a recent report, “the program would have reached 3.1 million families living in poverty in 2019, 3 million more families than were actually reached by TANF.

In fact, TANF’s maze of red tape, rigorous job search requirements, and paltry payouts make the cash benefit so inaccessible that enrollment in the state of Pennsylvania actually fell by more than 15,000 since the start of the COVID-19 pandemic, despite the economic hardships caused by lockdowns.

Alisha Gillespie, 32, an unemployed hospital worker from a Philadelphia suburb with three children ages six, nine and 13, said that she’d been on TANF for nearly five years, receiving about $400 a month in cash benefits, or roughly the same she would’ve received in 1990.

“It seemed like a form of slavery,” she told the Philadelphia Inquirer. “It wasn’t that much money. I wanted to use it to further my education, but they kept telling me to find a job.”

The problem is that Clinton’s welfare reform didn’t occur in a vacuum but coincided with a tectonic reorganization of the global economy that augured not only the end of welfare but work as well. The enactment of Clinton’s North American Free Trade Agreement was shipping decent-paying, unionized jobs abroad, and deregulation of the financial sector was saddling consumers with more and more debt.

Meanwhile, TANF’s inflexible work requirements “come from a legacy of enslavement and forced labor, and this belief that Black people are lazy and undeserving of support and if we don’t coerce them to work, they won’t,” Ife Floyd, director of TANF research and analysis for the Center on Budget Policy and Priorities (CBPP), told reporters earlier this month. “So, harsh TANF work requirements with difficult paperwork obligations and time limits served to punish rather than help families.”

 The CBPP found that TANF benefits are lowest in Southern states with large Black populations, with benefit levels either at or below 20% of the poverty line. (Minnesota’s benefit levels are among the highest in the nation, according to the CBPP report, with benefit levels at 102% of the poverty line).

 “I couldn’t always be at job centers looking for work when my kid was sick in the hospital with asthma issues. They act like you don’t have trials and tribulations. In the end, TANF was just a ball and chain,” said Gillespie of her decision to leave the program.