Welfare Post 1996

Introduction

Throughout history, and specifically the twentieth century, the U.S welfare policy has been caught between two competing values. One: a desire to help those who couldn’t help themselves. And two: a concern that this type of charity and philanthropy will create a dependency. In 1996, a series of changes occurred that altered the way the Welfare System is operated, requiring people to work more often in order to receive government assistance, as well as only allowing them to benefit from the system for a maximum of five years (Chatterjee, 1999).

Literature Review

With the creation of the 1935 Social Security Act also came the creation of what we now know as the “old welfare system” or AFDC (Aid to Families with Dependant Children). This was an entitlement program which meant that families that met the federal criteria for cash assistance had the right to receive it. There was a broad agreement that the AFDC program had failed, but there were many different criticisms of the program. For example, some felt that AFDC failed because it encouraged pregnancies and births outside of marriage, allowed single mothers to stay home while other mothers were out working, and created multiple generations of dependency. Other major criticisms were that low benefits and the withdrawal of those benefits as soon as previous recipients started working kept families trapped in poverty. And, the suggestion that too many decisions best made at the state or local level were, at the time, being made in Washington on a far too general basis (Meyer, 1996).

In 1996, a new act, the Personal Responsibility and Work Opportunity Reconciliation Act, ended standard entitlement and most regulatory oversight of traditional welfare mechanisms in the United States. Also, it separated cash assistance from food assistance and health insurance. This new act reformed the old system in many ways. Perhaps, the most dramatic change is the institution of the TANF (Temporary Assistance to Needy Families) program, which replaced AFDC entitlement with TANF block grants. The federal government allocated funds to states on the basis of historic spending levels. Thus, its purpose is to give more decision making power to the states and increase state flexibility, as well as keeping children in their own homes and end parental dependence on government benefits by promoting job preparation and encouraging the maintenance of two parent families/marriages (Caudill, Kunz, & Spera, 1998).

The new TANF program also includes the time specifications that a person can receive cash assistance: sixty months per lifetime. However, this time may be shorter in certain states as the time is set at the discretion of the states. Also, the states may continue benefit beyond sixty months with their own funds if they elect to do so. Another element of TANF is that after two years of cash assistance, recipients are required to get a job. To aid this process, states are required to meet targets for percentage of cases in work activities. If they do not do this they are subject to financial penalties. The final component of TANF is the family cap. That is, states may deny additional benefits when children are born to families already receiving cash assistance (Anderson, 2002).

Other key provisions of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 had to do with immigration, child care, medicaid, child support, food stamps, and supplemental security income. In a nutshell, the reforms have made the primary focus of the welfare system moving recipients into paid work as soon as possible (Bush, 1998).

Unfortunately, it is a statistical fact that employed former welfare recipients are typically employed in positions where they are paid lower wages and are offered few benefits from their employer. To combat this problem, new state and federal programs have been instituted to supplement these people. Two prime examples of this are the EITC, earned income tax credit, and the fact that federal minimum wage rose from $4.25 to $5.15 in September of 1997. Also, other recent policy changes recast low-income programs including subsidized child care, food stamps, and health care programs in an effort to keep people from needing to go on welfare. To assist in reaching these goals, the new policies have been combined with old ones such as unemployment insurance and family and medical leave (Marsh, 2002).

In concurrence with supporting work, many new policies deny assistance to those who do not work. The work requirements of TANF are clearly much greater than those of the AFDC program. Fewer recipients are exempt from them, and those who don’t adhere to the work requirements are subject to financial sanctions (Lens, 2002).

Since the program went