Still Needed: Stronger Welfare Reform

We all — not just our presidential candidates — need to focus on welfare reform.

Last week, the House Ways and Means Committee’s Subcommittee on Human Resources began considering draft legislation to reauthorize welfare reform for the first time in five years. (The Temporary Assistance for Needy Families [TANF] program has essentially drifted along through a series of continuing resolutions and other short-term extensions since 2010.) The reauthorization, then, provides a rare and important opportunity to revisit welfare reform and remedy some of the flaws that have undermined the original legislation. However, the initial reports raise some red flags.

At the center of the expected debate will be the law’s requirement that recipients work or participate in other “work activities” in exchange for benefits. Moving recipients “from welfare to work” has been the focus of reform ever since the Republican Congress passed and President Bill Clinton signed the Personal Responsibility and Work Opportunity Act in 1996. Yet most states are less than zealous in honoring those work requirements. Nationwide, just 42.8 percent of adult welfare recipients were participating in work activities in FY 2012, the most recent year for which data are available. In some states, such as Massachusetts, fewer than 15 percent of adult recipients are participating in work activities even under the broadest definition.

The proposed reauthorization would nudge those rates upward by eliminating a provision that allowed states to reduce their work-participation requirements if their overall caseloads declined. States would also be prohibited from gaming the system by signing up people who were already working and counting them against meeting the targets. The reauthorization would also punish states that don’t meet work requirements by reducing their TANF block grant by 5 percent in the first year, with harsher penalties for repeat offenders.

We all — not just our presidential candidates — need to focus on welfare reform.

Unfortunately, the legislation would simultaneously water down the work requirements by following an Obama-administration policy from 2012 that allowed states to seek a waiver that would expand the types of activities that could be counted as work. For most of us outside the welfare system, working actually means having a job. Not so for welfare, where work means all sorts of things that do not involve, well, work. Even going to college can be considered working. Nationally, only about one in five of those categorized as working are in an unsubsidized job.

The proposed new legislation would make this worse, allowing, for example, job search (that is, looking for work) to substitute for work for up to three months, whereas previously this was limited to four consecutive weeks and six weeks total in a year (although it could be increased to twelve weeks if the state qualified). After that, looking for work would still count for half a recipient’s work requirement indefinitely. Vocational training could be substituted for work for up to two years, doubling the current length of time. Other job-training and job-readiness programs would count as work for up to three months. The draft would also eliminate higher work requirements for two-parent families.

There is reason to worry that this could result in a net weakening of work requirements. But, if we actually want to help the poor escape poverty, we know that work is one of the keys to achieving that goal. In the United States, only 2.7 percent of full-time workers are poor. Even part-time work makes a significant difference. Only 15.8 percent of part-time workers are poor, compared with 23.2 percent of adults who do not work.

States will be required to develop an Individual Opportunity Plan for each recipient. This plan would include “a comprehensive assessment of the skills, prior work experience, barriers to employment and employability of each recipient,” to determine the best way to help that individual. It would also set employment goals and establish measurable benchmarks for the recipient’s behavior. This is generally a good idea, and one that states should adopt — though we could wish that it wasn’t imposed from Washington in another example of one-size-fits-all governance.

States will also be required to better track outcomes and measure their success in moving people off welfare and out of poverty. States with poor track records could see their funding cut. This should encourage greater experimentation, while keeping most states from abusing the lenient new definition of work.

Still, simply putting welfare reform back on the table will reopen an important political and policy debate. It will be interesting to see what the candidates for president have to say about the issue. All the Republicans, of course, support welfare reform in concept and the importance of work in particular — at least rhetorically. However, Marco Rubio, for one, has laid out a very specific and very different approach to welfare reform. He would block-grant, not just TANF, but virtually all of the more than 120 current welfare programs, and send the money to the states with far fewer strings than under the proposed TANF reauthorization. The renewed debate may force other candidates to become more specific, and in the process provide greater insight into their beliefs about work, poverty, federalism, and the role of government.

The big question will be for Hillary Clinton. Welfare reform was her husband’s legacy achievement. But today’s Democratic party has moved far to the left. Will Hillary ditch Bill’s reform, or will she stand by her man and leave herself open to an attack from Bernie Sanders?

So far, she has dodged the question. Asked directly if she would distance herself from welfare reform, a Clinton campaign spokesman issued this statement: “Hillary Clinton has a long record fighting for everyday Americans and their families, and she is running to make sure all families are not only able to get ahead, but stay ahead. In the coming months she will discuss more details on her approach to addressing children and families living in poverty, including how best to support those families who rely on the safety net of welfare to temporarily keep their families afloat during the hardest of times.”

Um, okay.

Welfare reform has not gotten much press in the last few years. Yet, federal and state governments spent nearly $1 trillion fighting poverty last year. And more than 45 million Americans are still living in poverty. If the TANF reauthorization debate forces the candidates, the media, and the rest of us to pay a bit more attention, that will be a step in the right direction all by itself.

Michael Tanner is a senior fellow at the Cato Institute and the author of Going for Broke: Deficits, Debt, and the Entitlement Crisis.