What is the future of welfare? In the past 40 years, the United States spent at least $8.9 trillion (in constant 2003 dollars) on the “war on poverty.” It is time that policy-makers admit we cannot spend our way out of this problem.
The Congress we are about to elect will vote on welfare reauthorization next year, deciding the future direction of welfare, and the president will have to sign that reauthorization into law. So why aren’t the candidates talking about what they will do? Are they in favor of stronger work requirements that encourage recipients to gain work experience to compete in the job market? Would they make teenage pregnancy prevention a true priority, since over half of welfare expenditures go to single mothers who entered the welfare system after a teenage birth?
In 1996, Congress looked to the states to see how they were experimenting with welfare reform and what was working. The federal government reformed welfare by encouraging recipients to work and by putting more control in the hands of the states. That helped bring caseloads down by almost 60 percent as families began to escape the welfare system. Today, the welfare reforms of 1996 are seen as a great success.
Congress should look to the states once again. A new study by the Cato Institute evaluates all 50 states and the District of Columbia on how they have implemented welfare reform since 1996. The report card grades each state on how its caseloads have changed and what programs and regulations each state has used. It is necessary that states reduce caseloads and poverty rates, but if they do not establish sound welfare policies that will help recipients achieve self-sufficiency, many of those in need will never permanently escape the system.
How did the states fare? On Cato’s report card four received A’s, seven received B’s, 20 scored C’s, 11 trailed with D’s, and nine received F’s. Every New England state, except Connecticut, scored a D or an F. Idaho and Ohio received the two highest grades by emphasizing work and personal responsibility; Missouri and Vermont received the two lowest grades by failing to implement substantive welfare reform. These four states provide valuable lessons about how to implement policy changes that work:
—Idaho ranked second in the nation in caseload reduction with an 85 percent decline since welfare reform was implemented. In 2000, 78 percent of Idaho’s former welfare recipients had found jobs, the highest rate in the nation. This success is attributable to the state’s strict enforcement of time limits, diversion programs that meet emergency needs and prevent individuals from having to apply for welfare, and a family cap that maintains benefits at the level a family entered welfare.
—Ohio is an example of moving administration of the welfare system down to the state and even county level. By taking decision-making to the local level, the state allows those closest to the welfare recipients to determine how social services should be delivered.
—Missouri sent the wrong message to welfare recipients by increasing cash benefits to parents who have additional children while on welfare. The state also allows multiple exceptions to the federal requirement that teenage mothers live at home and finish school. Unsurprisingly, the state’s results in cutting welfare rolls and lowering the teen birth rate have been mediocre.
—Vermont did not implement a single program that the report card considered necessary for recipients to achieve self-sufficiency. Vermont failed to encourage meaningful work experience, the key to assisting welfare recipients back into the job market.
We can look to the states to see what is and is not working from the 1996 reforms. The best systems try to encourage students to finish high school, prevent teenage pregnancy and get welfare recipients working. The candidates can see this too, but they aren’t discussing it. Candidates talk about how they are going to create more jobs but not about how to help low-skilled workers get them. They mention the increase in the poverty rate but not how to help families become financially independent.
We need to know where candidates stand on welfare. Whether the candidates are talking about it or not, the new Congress and president will determine the future of welfare reform. Now is the time for them to tell us where they plan on taking it.