Commentary

A Happy Anniversary for Welfare Reform?

By Lisa E. Oliphant
August 22, 2000
Corks will fly in Washington today as politicians celebrate the fourth anniversary of legislation supposedly “ending welfare as we know it.” Other tributes will hail welfare reform’s success at cutting the country’s caseload in half and moving an unprecedented number of single mothers into jobs. But those testimonials should carry a warning label: Welfare progress is smaller than it appears.

The welfare reform law ended the federal entitlement to cash assistance and placed a five-year lifetime limit on benefits. This has had a predictable, and salutary, effect. To wit: The 50 percent reduction in welfare rolls, which is the decade’s most exciting and positive reaction to a public policy change. But even now some states are experiencing a slowing, and even a reversal, of this trend. Emerging evidence also indicates that the caseload declines have been concentrated mainly in urban areas of already low poverty and unemployment, confirming what many skeptics warned from the start: Work requirements and time limits will lose their effectiveness after the most employable welfare recipients have moved on to jobs.

Even supporters of the new law acknowledge that its success has been largely confined to the easily employable recipients, and that much of the reduction in caseloads is a result of this group profiting from the booming job market. Conversely, when the economy slows, caseloads are likely to surge again. And judging from the states’ recent willingness to go soft on time limits and work requirements, it is unlikely that recidivism will be effectively prevented when jobs start to disappear.

As for those who have left the rolls and found work, most still remain deeply entangled in the public safety net. Few former recipients are earning enough to support their families on wages alone. In fact, two-thirds of former welfare families continue to turn to government for assistance in meeting their health care, food, child care, transportation and housing needs. That’s hardly self-sufficiency.

Welfare reform’s primary success has been in ushering off the rolls people who would have left anyway. But it has failed, and always will fail, at encouraging dependent families to be self-reliant. The results thus far indicate that when people are given the opportunity to become dependent, they often do so permanently. Most of the young mothers who head welfare families have limited education and job experience and several young children to raise on their own. Job coaching and low-paying employment aren’t going to offer any miracle cures.

The conventional attempt to reform welfare has produced no satisfactory solutions, and has run up an increasingly costly bill for taxpayers. As of 1998, almost all states had increased spending per welfare family and nearly half were spending more than required by the new law. Despite this fiscal commitment to welfare reform, new applicants continue to enter the rolls in every state, largely as a result of persistent increases in unwed motherhood.

The next Congress should turn its attention from incremental improvements to the 1996 legislation and focus instead on prevention. Three-quarters of single teenage mothers end up on welfare before their first child is five, and out-of-wedlock pregnancy is almost always a precursor to long-term dependency. With welfare an alternative, is it any surprise that out-of-wedlock births, as a percentage of all births, have continued to climb under the new law? The most effective guarantee against dependency involves removing the safeguard that tells young women that single motherhood is a socially acceptable and economically viable option. While continuing to support and encourage work among those receiving welfare, Congress should enact a prohibition against anyone new from signing onto the rolls.

It is time for policymakers to focus on truly ending welfare as we know it, rather than simply tinkering with the decades-old, fundamentally flawed program. Until welfare is no longer a viable option, young women will continue making harmful choices and the country will continue to spend endless amounts of energy and taxpayer money trying to clean up the resulting dependency problem.

What is most destructive about the welfare program is not the money it costs taxpayers, but rather how it supplies an opportunity for people to damage their lives and the lives of their children through out-of-wedlock births and dependency. True compassion demands that government not establish policies that encourage such hardship.

Lisa Oliphant is entitlements policy analyst at the Cato Institute and author of “Four Years of Welfare Reform: A Progress Report.”