President William Clinton, on August 22, 1996, signed the Personal Responsibility and Work Opportunity Reconciliation Act. The intent of this law was to transform the U.S. welfare system into one that provided government assistance in exchange for work. The plan contained specific work requirements and a performance bonus for states that moved welfare recipients into jobs. The bill offered benefits to children and families, including enforced child support, increased child care funding, and guaranteed health care coverage.

Legislators deemed the "from welfare to work" reforms necessary due to a perceived misuse and abuse of public funds in the previous welfare system, as well as a limited scope of assistance in some areas. Based on experimental evidence that new approaches could bring about improved attitudes and fiscal advantages, Congress and the president encouraged and supported these reforms. Teen mothers would continue their studies and the law would require federal employees to support their children financially. There would also be a crackdown on those who owed child support and avoided their responsibility by crossing state lines. The act encouraged welfare recipients to enter the workforce, assisted in vocational training as well as job searches, provided for child care funding, and guaranteed some level of family health care coverage. This act thus promoted personal responsibilities and established penalties to ensure achievement of its goals.

Teen pregnancy prevention was encouraged, and unmarried parents who were under age 18 were required to stay in school and live with an adult who was willing to take responsibility for the teen and her child. Under the 1996 law, after 2 years of assistance, the recipients were required to work--single-parent families a minimum of 20 hours a week the first year and dual-parent families at least 35 hours per week. The bill provided $14 billion in child care funding to assist more mothers in entering the workforce, a $3.5 billion increase over previous government child care assistance. With the passage of this law, families who received assistance were ineligible for income aid after 5 cumulative years. States were able to exempt up to 20 percent of their cases from the time limit and to use their own discretion in providing other forms of family assistance through either the Social Services Block Grant or state funds. The bill required states to maintain their own welfare spending at least at 80 percent of the 1994 levels. The welfare law allowed each state to take money that was previously used for welfare and create jobs, provide hiring incentives, or give income subsidies for employers who were willing to hire previous welfare recipients.

This act appears to have been a move in the right direction. However, not all components have been ideal and may require amendment in the future. No consensus exists about the success of this plan in improving the welfare system, and critics have been vocal in their opinions about disturbing trends. On a positive note, welfare caseloads dropped dramatically, from a 1994 high of more than 14 million recipients to about 4.5 million recipients in 2006. A large number of welfare recipients did indeed join the workforce and develop a new work ethic. Estimates place between 40 percent and 70 percent of those who received welfare prior to 1996 as currently working, thus significantly decreasing the poverty level for children.

However, these changes still leave many current and former welfare recipients in a desperate situation. Some are not working in full-time positions or for the whole year. Others who leave the welfare lines and enter the workforce are not able to maintain their jobs for any length of time because of the exorbitant cost or poor provision of child care, because of limited funding for child care workers. Furthermore, most welfare recipients in the workforce are earning between $6 and $8 an hour, a wage insufficient to elevate them from poverty.

Although statistics indicate that the rate of poverty has declined in general, it increased among the poor working families and especially among single-parent families. The families with the least financial resources have become poorer in the years since the implementation of the act, and, although caseloads have fallen, poverty rates rose among this group. Furthermore, while caseloads fell generally, they did not do so uniformly and, in fact, increased in some areas, especially in the large urban areas of the more populous states.

Through the act, each state receives a block grant, a lump sum of money to use toward welfare reform as the state determines. The block grant structure appears to benefit some states and communities more than others. As welfare recipients move to more concentrated geographic areas, a reallocation of funds becomes necessary.

Another disturbing trend is that poorly educated wage earners seem to stagnate in the lower wage levels with little hope of improvement, while the graduates of secondary school and vocational training can potentially improve their incomes. This pattern may influence future public policy. Many working people, especially single mothers, have fallen deeper into poverty since the implementation of the 1996 law. The idea of working, alone, does not contribute to the elevation from poverty or afford a family adequate housing, food, health care, and child care. Nearly 90 percent of former welfare recipients are mothers. The success in helping these women transition to work and make a decent wage that raises their families from poverty will dictate the long-range success of the 1996 welfare reform act. Narrowing the gender gap of pay for workers and involving male parents in welfare families are only two proposed methods that might raise incomes for poor families.

Although Congress allocated more money to programs that provide child care for working poor families, unfortunately, many families still are not receiving adequate assistance. The tax credits remain too low to help poor working families with the high costs of child care. Head Start programs, which are free, serve fewer than one half of the eligible children. The quality of the low-cost care is marginal, which is again probably due to the limited funding available for child care providers.

Another problem is that health care is often out of reach for families who have given up welfare and returned to work. The working poor cannot afford most of the plans offered by employer-based health care plans. Even though the federal government expanded the Children's Health Insurance Program, more than 6 million children are not enrolled in any health care government program. Another difficulty with the welfare reform legislation is that it does not recognize the major role of housing in the financial plan of poor families, especially in larger cities where the cost of housing has risen significantly since the mid-1990s. Inadequate financial support for housing (minimal affordable housing) has resulted in increasing poverty in welfare families, suggesting the need for additional assistance.

The Personal Responsibility and Work Opportunity Reconciliation Act has clearly accomplished only some of its goals of reform and improvement in the U.S. welfare system. With greater experience and further research, it may well be necessary to address the act's shortcomings and to institute reforms that improve the country's welfare system and better meet the needs of the poor in society.

Bibliography:

1) Crawford, April. 2006. "The Impact of Child Care Subsidies on Single Mothers'Work Effort." Review of Policy Research 23(3):699-711.

2) Greenberg, David, Marvin Mandell, and Matthew Onstott. 2000. "The Dissemination and Utilization of Welfare-to-Work Experiments in State Policymaking." Journal of Policy Analysis and Management 19(3):367-82.

3) Lee, Bong Joo, Kristen S. Slack, and Dan A. Lewis. 2004. "Are Welfare Sanctions Working as Intended? Welfare Receipt, Work Activity, and Material Hardship among TANF-Recipient Families." Social Service Review 78:370-403.

4) Midgley, James. 2001. "The United States: Welfare, Work and Development." International Journal of Social Welfare 10(4):284-93.

5) O'Neill Murray, Kasia and Wendell E. Primus. 2005. "Recent Data Trends Show Welfare Reform to Be a Mixed Success: Significant Policy Changes Should Accompany Reauthorization." Review of Policy Research 22(3):301-24.

6) Rodgers, Harrell R., Lee Payne, and Serguei Chervachidze. 2006. "State Poverty Rates: Do the New Welfare Policies Make a Difference?" Review of Policy Research 23(3):657-79.

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