1. Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002 1 Session 1 Overview and History of Welfare Reform

2. Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002 2 Overview of the Aid to Families with Dependent Children Program (AFDC) Established in 1935 as part of the Social Security ActEstablished in 1935 as part of the Social Security Act Shared cost program between federal government and statesShared cost program between federal government and states Originally intended primarily for widows, AFDC increasingly served never-married mothersOriginally intended primarily for widows, AFDC increasingly served never-married mothers States had discretion primarily over setting income eligibility limits and benefit levelsStates had discretion primarily over setting income eligibility limits and benefit levels Activity requirements were weak and generally focused on education and training rather than workActivity requirements were weak and generally focused on education and training rather than work States were not allowed to time limit beneficiariesStates were not allowed to time limit beneficiaries Beginning in early 1990s, states increasingly used waivers to try new approaches to reducing welfare dependenceBeginning in early 1990s, states increasingly used waivers to try new approaches to reducing welfare dependence

3. Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002 3 Poverty Rates for Children in the U.S. Have Been Higher than Those for Other Age Groups 65 years and over Under 18 years 18 to 64 years Source: U.S. Census Bureau 16.2 10.2 9.4

4. Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002 4 Two Views of Poverty The poor are victims of their circumstances and do not have opportunities to advanceThe poor are victims of their circumstances and do not have opportunities to advance The poor are responsible for their circumstances and do not take advantage of available opportunitiesThe poor are responsible for their circumstances and do not take advantage of available opportunities The emphasis of antipoverty policy in the U.S. has shifted between these two viewsThe emphasis of antipoverty policy in the U.S. has shifted between these two views The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 emphasizes the second viewThe Personal Responsibility and Work Opportunity Reconciliation Act of 1996 emphasizes the second view

5. Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002 5 The Measurement of Poverty The Census Bureau uses a set of money income thresholds that vary by family size and composition to determine who is poorThe Census Bureau uses a set of money income thresholds that vary by family size and composition to determine who is poor The poverty thresholds do not vary geographically; they are updated annually for inflation but they have not kept pace with rising real incomesThe poverty thresholds do not vary geographically; they are updated annually for inflation but they have not kept pace with rising real incomes In determining who’s poor the Census Bureau counts money income before taxes and does not include non-cash benefits, the EITC, or work-related expenses. The National Academy of Sciences has recommended changes to deal with these and other issues. The thresholds in 2000 were:In determining who’s poor the Census Bureau counts money income before taxes and does not include non-cash benefits, the EITC, or work-related expenses. The National Academy of Sciences has recommended changes to deal with these and other issues. The thresholds in 2000 were: 1-person under 65$8,959 3-person family (adult and 2 children) 13,874 4-person family (adult and 3 children) 17,524 Source: U.S. Census Bureau

6. Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002 6 Countries that Spend More on Social Welfare (as percent of GDP) Have Lower Child Poverty Rates Cash and noncash social expenditures exclude health, education, and social services, but include all forms of cash benefits and near-cash housing subsidies, active labor market program subsidies, and other contingent cash and near-cash benefits. Nonelderly benefits include only those accruing to household heads under age 65. Source: Institute for Research on Poverty (IRP), University of Wisconsin-Madison

7. Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002 7 Government Benefits Lift Children Out of Poverty Source: Center on Budget and Policy Priorities; U.S. Census Bureau

8. Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002 8 Political Background to the 1996 Welfare Reform Legislation

9. Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002 9 Characteristics of the AFDC Caseload Majority are racial and ethnic minoritiesMajority are racial and ethnic minorities 4 percent of mothers in 1995 worked full-time, and another 5 percent worked part-time4 percent of mothers in 1995 worked full-time, and another 5 percent worked part-time Total expected duration of all Awelfare spells@ was 13 years; more than 76 percent were expected to stay on for more than 5 years totalTotal expected duration of all Awelfare spells@ was 13 years; more than 76 percent were expected to stay on for more than 5 years total

10. Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002 10 Efforts at Comprehensive Welfare Reform Usually Failed Nixon’s Family Assistance Plan (1969-1972)-- failed to pass CongressNixon’s Family Assistance Plan (1969-1972)-- failed to pass Congress Carter’s Program for Better Jobs and Incomes (1977)--failed to pass CongressCarter’s Program for Better Jobs and Incomes (1977)--failed to pass Congress Reagan’s 1981 Budget Act changes--moderate cutbacksReagan’s 1981 Budget Act changes--moderate cutbacks Reagan’s New Federalism (1982)--never introduced in CongressReagan’s New Federalism (1982)--never introduced in Congress Family Support Act (1988)--incremental reformFamily Support Act (1988)--incremental reform

11. Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002 11 Why Did Welfare Reform Legislation Pass in 1996 After Many Previous Failures Dramatic caseload increases after 1988 fostered perception that program was “out of control”Dramatic caseload increases after 1988 fostered perception that program was “out of control” Public opinionPublic opinion –Public opinion had not united around all of the proposals in PRWORA: public had shifted to overwhelming support for work requirements for custodial parents, while remaining more divided on “hard time limits” and family caps –Republicans in Congress were not trusted more than President Clinton on welfare reform issues in 1996 –The AFDC program was very unpopular because seen as anti-work and anti-family. The public was willing to accept almost any alternative to the status quo

12. Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002 12 Social Science knowledge and evaluation studiesSocial Science knowledge and evaluation studies –increased policymaker concern about intergenerational transmission of welfare receipt and length of welfare spells –gave support to “work first” approaches Budgetary considerations: Republicans needed to find budget savings (especially from cuts in Food Stamps and benefits to legal immigrants) in order to finance tax cut and budget balancing promises in the Contract with AmericaBudgetary considerations: Republicans needed to find budget savings (especially from cuts in Food Stamps and benefits to legal immigrants) in order to finance tax cut and budget balancing promises in the Contract with America State experiments under waivers increased confidence in innovative capacity of statesState experiments under waivers increased confidence in innovative capacity of states Why Did Welfare Reform Legislation Pass in 1996 After Many Previous Failures Cont.

13. Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002 13 Critical role for political bargaining:Critical role for political bargaining: –Bill Clinton promised to “end welfare as we know it” –Republicans in Congress committed to welfare reform by Contract with America –Moderate Democrats in Congress followed President Clinton to the right in order to avoid being seen as more liberal than President Clinton on welfare issues Why Did Welfare Reform Legislation Pass in 1996 After Many Previous Failures Cont.

14. Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002 14 Session 2 A Primer on the Major Programs

15. Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002 15 Overview of the 1996 Welfare Reform Law Temporary Assistance for Needy FamiliesTemporary Assistance for Needy Families Non-marital BirthsNon-marital Births Supplemental Security Income for ChildrenSupplemental Security Income for Children Child Support EnforcementChild Support Enforcement Welfare for Non-citizensWelfare for Non-citizens Child CareChild Care Food StampsFood Stamps

16. Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002 16 1. End Cash Entitlement 2. Block Grant Funding 3. Work Requirements 4. Sanctions 5. 5-Year Time Limit Five Components of TANF

17. Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002 17 1. Provide assistance to needy families with children children 2. End welfare dependency by promoting job preparation, work and marriage preparation, work and marriage 3. Prevent non-marital pregnancies 4. Encourage formation and maintenance of two-parent families two-parent families Purposes of TANF

18. Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002 18 Provisions in Welfare Reform Law Designed to Reduce Non-marital Births Congressional findings on the negative effects of non-marital birthsCongressional findings on the negative effects of non-marital births Three of four TANF purposes address family formationThree of four TANF purposes address family formation Performance bonuses tied to purposes of lawPerformance bonuses tied to purposes of law Illegitimacy reduction bonusIllegitimacy reduction bonus Require teens to attend schoolRequire teens to attend school Require teens to live at home or other supervised settingRequire teens to live at home or other supervised setting Abstinence educationAbstinence education Child support enforcementChild support enforcement Paternity establishmentPaternity establishment National goals to prevent teen pregnancyNational goals to prevent teen pregnancy States establish numerical goals for reducing non-marital birthsStates establish numerical goals for reducing non-marital births Annual ranking of states on non-marital pregnancy ratios by HHSAnnual ranking of states on non-marital pregnancy ratios by HHS Allow family capAllow family cap Allow reduction in cash benefits for non-marital birthsAllow reduction in cash benefits for non-marital births

19. Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002 19 Elements of the Work Support System Earned Income Tax Credit (EITC)Earned Income Tax Credit (EITC) Food Stamps and Child NutritionFood Stamps and Child Nutrition Medicaid and SCHIPMedicaid and SCHIP Child CareChild Care HousingHousing Child Tax CreditChild Tax Credit Child Support EnforcementChild Support Enforcement Workforce Development & Job Advancement ServicesWorkforce Development & Job Advancement Services State Income SupplementsState Income Supplements

20. Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002 20 Support for Working Families Increases Dramatically, 1984-1999 Source: Congressional Budget Office 5.6 51.7 Spending in 1999 under: 1984 Law 1999 Law

21. Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002 21 Session 3 How States Have Responded

22. Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002 22 Under TANF States Have Discretion To: Set eligibility limits and benefit levels for cash benefits (as before)Set eligibility limits and benefit levels for cash benefits (as before) Define who receives various benefits and servicesDefine who receives various benefits and services Set income supplements for working familiesSet income supplements for working families Offer other “carrots”Offer other “carrots” Set stricter “sticks” than those in federal lawSet stricter “sticks” than those in federal law Spend funds on a variety of services other than cash benefitsSpend funds on a variety of services other than cash benefits Save block grant funds for economic downturnsSave block grant funds for economic downturns

23. Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002 23 States Have Very Different Resources Under the TANF Block Grant