Stimulus Bill Abolishes Clinton Welfare Reform and Adds New Spending

[Chris]

Through a little noticed provision of the stimulus package that has passed the House of Representatives, the bill creates a fund for TANF that is open-ended -- the same way Medicare and Social Security are.

In the section of the House bill dealing with cash assistance to low-income families, the authors inserted the bombshell phrase: "such sums as are necessary." This is a profound departure from the current statutory scheme, despite the fact that, in this particular bill, state TANF spending would be capped. The "such sums" appropriation language is deliberately obscure. It is a camel's nose provision intended to reverse Clinton-era legislation and create a new template for future TANF reauthorizations.

http://online.wsj.com/article/SB123422835499665849.html

Under the old AFDC program, states were given more federal funds if their welfare caseloads were increased, and funds were cut whenever the state caseload fell. This structure created a strong incentive for states to swell the welfare rolls. Prior to reform, one child in seven was receiving AFDC benefits.

When welfare reform replaced the old AFDC system with TANF, this perverse financial incentive to increase dependence was eliminated. Each state was given a flat funding level that did not vary whether the state increased or decreased its caseload. In addition, states were given the goal of reducing welfare dependence (or at least of requiring welfare recipients to prepare for employment).

The House and Senate stimulus bills will overturn the fiscal foundation of welfare reform and restore an AFDC-style funding system. For the first time since 1996, the federal government would begin paying states bonuses to increase their welfare caseloads. Indeed, the new welfare system created by the stimulus bills is actually worse than the old AFDC program because it rewards the states more heavily to increase their caseloads. Under the stimulus bills, the federal government will pay 80 percent of cost for each new family that a state enrolls in welfare; this matching rate is far higher than it was under AFDC.

Proponents of the stimulus plan might argue that these changes are necessary to help TANF weather the current recession. This is not true. Under existing TANF law, the federal government operates a TANF "contingency fund" with nearly $2 billion in funding that can be quickly funneled to states that have rising unemployment. It should be noted that the existing contingency fund ties increased financial support to states to the objective external factor of unemployment; it specifically avoids a policy of funding states for increased welfare caseloads, recognizing the perverse incentives this could entail.

http://www.heritage.org/Research/Welfare/wm2287.cfm

Robert Rector, a prominent welfare researcher who was one of the architects of Clinton's 1996 reform bill, warned last week that Obama’s stimulus plan was a “welfare spendathon” that would amount to the largest one-year increase in government handouts in American history.

Douglas Besharov, author of a big study on welfare reform, said the stimulus bill passed by Congress and the Senate in separate votes on Friday would “unravel” most of the 1996 reforms that led to a 65% reduction in welfare caseloads and prompted the British and several other governments to consider similar measures.

Despite dire warnings that reduced benefits for single mothers and deadlines on entitlement would create a social calamity – one liberal senator warned at the time that children would be “sleeping on grates” – the 1996 reforms cut welfare rolls from more than 5m families in 1995 to below 2m a decade later without a discernible increase in hardship.

http://www.timesonline.co.uk/tol/news/world/us_and_americas/article5733499.ece

USA Today reports that welfare rolls rose five percent in 2009.  Four-million people received welfare checks last year, up from 3.8 million in 2008.  The number of people receiving food stamps increased by 18 percent while the number receiving unemployment benefits more than doubled to 9.1 million.

"If they increase the size of their welfare rolls, then the federal government would give them bonus money -- you would almost call it reward money," Katherine Bradley, a fellow in welfare studies and family at The Heritage Foundation explains.  "It was all phrased in the way of if you're experiencing some kind of economic downturn in your state so your welfare rolls are increasing, we'll give you more money.  Well, that's actually the very opposite of the heart of welfare reform in 1996."

http://www.onenewsnow.com/Politics/Default.aspx?id=871264

One more part of the Clinton legacy down the toilet.  Pity, it was one of the few things he did right.

[Spirit of Ronald Reagan]

One more part of the Clinton legacy down the toilet.  Pity, it was one of the few things he did right.

He'll always have Monica, don't think anyone in their right mind would take that from him.