‘Change’ we can’t afford
Buried in President Obama’s new economic stimulus law is a reversal of the very successful welfare reform legislation of 1996. President Clinton signed it into law with bipartisan support. In the House, 98 Democrats and 230 Republicans voted for the bill while 25 Democrats and 53 Republicans supported it in the Senate.
The welfare-reform legislation, which was known as Temporary Assistance for Needy Families, was designed to do three things:
• Reduce dependence on welfare by increasing employment
• Reduce child poverty
• And increase the number of children born into married families.
Instead of providing federal dollars to individual states based on the number of families placed on welfare rolls — as was the case prior to the 1996 reform — money was distributed to the states regardless of caseload.
This ended the incentive to add families to the welfare rolls and, instead, encouraged states to reduce their caseloads. The amount of time that an individual could receive aid also was limited to five years, encouraging recipients to learn skills and find jobs.
Opponents argued then that welfare reform would have disastrous consequences and lead to substantial increases in poverty and hunger, particularly among children.
The late Sen. Daniel Patrick Moynihan, D-N.Y., predicted that poor children would end up “sleeping on grates.”
Marian Wright Edelman, president of the Children’s Defense Fund, predicted that poor children would become hungrier and that child poverty rates would increase by 12 percent.
Peter Edelman (Marian’s husband), then assistant secretary for planning and evaluation at the Department of Health and Human Services, resigned from his post in protest, declaring that the new law would inflict serious harm on America’s children.
A widely cited report issued by the Urban Institute predicted that welfare reform would push an additional 2.6 million people, including 1.1 million children, into poverty.
In contrast to these dire warnings, the record shows that welfare reform was extremely successful.
According to the U.S. Census Bureau, between 1995 (the year before welfare reform was enacted) and 2003, the number of Americans in poverty fell by 3.5 million.
Children in poverty declined by 2.9 million.
The number of black children in poverty declined by 1.2 million, the lowest level in U.S. history.
The number of children born out of wedlock also stopped increasing, leveling off at about 32 percent after decades of increases under old policies.
According to the U.S. Department of Agriculture, the number of hungry children in the U.S. was cut in half , declining by 420,000.
The bottom line is that welfare reform produced the first significant decline in the number of welfare recipients in 60 years, with caseloads declining nationally by 58 percent and by as much as 80 percent in some states.
But these numbers tell only part of the story. In the 12 years of welfare reform, millions of parents and their children benefitted materially and psychologically from the dignity of work. The value of this dignity to millions of individual Americans and our culture in general cannot be quantified.
Although some Democratic Party leaders have continued to argue against welfare reform, others have supported it because of its unprecedented success. President Obama himself took credit in a July 2008 campaign ad for the 80 percent reduction in Illinois’ welfare caseloads.
Yet, in spite of the success of welfare reform, Democratic Party leaders terminated key features of welfare reform in their stimulus bill and President Obama accepted them with his signature.
Once again, states will be paid additional federal money — up to 80 percent of the cost for each new family — to increase their welfare caseloads.
According to Robert Rector, senior research fellow at The Heritage Foundation, approximately one-third of the new stimulus law is for “new means-tested welfare spending, providing cash, food, housing, and medical care to poor and low income Americans.”
This amounts to about $250 billion of the total $800 billion stimulus law. While the new law covers only two years, new entitlement programs like these have a history of becoming permanent.
Now that welfare reform is dead, the cost of welfare increases will likely total close to $1 trillion over the next 10 years, Rector says. This number is so large, in part, because the new law provides benefits to able-bodied men and women without children for the first time in American history.
So what are we buying with all of this new government welfare spendingâ¢ Using the pre-1996 Aid to Families with Dependent Children program as a guide, we can expect to see a return to rising welfare caseloads, rising poverty levels and increasing numbers of children born into unwed and single parent families.
We can also expect to see a devaluation of both work and education in American culture. Instead of lifting people up, our government is tearing Americans down. Whether we can “count on” it or not, the death of welfare reform is change for the worse.
Glen Meakem was the founder and CEO of FreeMarkets Inc. in Pittsburgh. He’s now a managing director of Meakem Becker Venture Capital.