Welfare(redirected from a Brief History of Welfare Reform)
Also found in: Dictionary, Thesaurus, Medical, Financial, Encyclopedia.
Government benefits distributed to impoverished persons to enable them to maintain a minimum standard of well-being.
Providing welfare benefits has been controversial throughout U.S. history. Since the colonial period, government welfare policy has reflected the belief that the indigent are responsible for their poverty, leading to the principle that governmental benefits are a privilege and not a right. Until the Great Depression of the 1930s, state and local governments bore some responsibility for providing assistance to the poor. Generally, such assistance was minimal at best, with church and volunteer agencies providing the bulk of any aid.
The New Deal policies of President franklin d. roosevelt included new federal initiatives to help those in poverty. With millions of people unemployed during the 1930s economic depression, welfare assistance was beyond the financial resources of the states. Therefore, the federal government provided funds either directly to recipients or to the states for maintaining a minimum standard of living.
Following the 1930s, federal programs were established that provided additional welfare benefits, including medical care (Medicaid), public housing, food stamps, and Supplemental Security Income (SSI). By the 1960s, however, criticism began to grow that these programs had created a "culture of dependency," which discouraged people from leaving the welfare rolls and finding employment. Defenders of public welfare benefits acknowledged that the system was imperfect, noting the financial disincentives associated with taking a low-paying job and losing the array of benefits, especially medical care. They also pointed out that millions of children are the prime beneficiaries of welfare assistance, and that removing adults from welfare affects these children.
During the 1980s and 1990s, criticism of public welfare escalated dramatically. Some states began to experiment with programs that required welfare recipients to find work within a specified period of time, after which welfare benefits would cease. Since job training and Child Care are important components of such programs, proponents acknowledged that "workfare" programs save little money in the short term. They contended, however, that workfare would reduce welfare costs and move people away from government dependency over the long term.
These state efforts paved the way for radical changes in federal welfare law. On August 22, 1996, President bill clinton, a Democrat, signed the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (popularly known as the Welfare Reform Act), a bill passed by the Republican-controlled Congress. The act eliminated some federal welfare programs, placed permanent ceilings on the amount of federal funding for welfare, and gave each state a block grant of money to help run its own welfare programs. The law also directs each state legislature to come up with a new welfare plan that meets new federal criteria. Under the 1996 law, federal funds can be used to provide a total of only five years of aid in a lifetime to a family. In the early 2000s, Congress continued to debate the reauthorization of the 1996 law. Proponents of the law pronounced the reform effort a great success. States had met the requirement of halving their welfare rolls by 2002. In addition, many former welfare recipients had entered the workforce and child poverty had been reduced for the first time since the early 1970s. However, some commentators attributed much of the success to the strong economy of the late 1990s that produced jobs for those coming off welfare. They also noted that welfare recipients were employed in mostly low-wage jobs. Moreover, as the economy took a nosedive in 2001 and 2002, unemployment rose. By the end of 2002, welfare caseloads had increased in 26 states.
In 2003, President george w. bush proposed major changes to the reauthorized welfare reform law. Under his proposals, welfare recipients would have to work 40 hours per week at a job or in a program designed to help the recipient achieve independence. This initiative, coupled with a Medicaid proposal that would give block grants to the states for managing health care services for indigent persons, faced an uncertain fate in Congress.
Federal Social Security Programs
Until the 1996 Welfare Reform Act, the federal government financed the three major welfare programs in the United States under the social security act of 1935 (42 U.S.C.A. § 301 et seq.): Supplemental Security Income (SSI), Medicaid, and Aid to Families with Dependent Children (AFDC). The 1996 law abolished the AFDC program. These types of assistance are in addition to the benefits available to the aged, disabled, and unemployed workers and their dependents. They are distributed to people who demonstrate financial need.
Supplemental Security Income Indigent persons who are aged or disabled receive monthly checks through the SSI program to help provide them with a minimum standard of living. In 1974, SSI assumed the responsibility for three separate plans previously administered by the states for these recipients. Funds are taken from the U.S. Treasury to provide monthly benefits at a standard nationwide rate. Where state funds already supply such benefits, they supplement the amount provided by the federal government.
A Brief History of Welfare Reform
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996, 110 Stat. 2105, popularly known as the Welfare Reform Act, is the most significant piece of welfare legislation since the New Deal administration of franklin d. roosevelt. The 1996 act was the culmination of a 30-year debate over the effectiveness of government welfare programs and the proper role of government assistance. The act's goals of moving people off the welfare rolls, limiting the amount of time on public assistance, and mandating that welfare recipients' work were based on the idea of personal responsibility. For conservatives, the law delivered a blow to the modern liberal welfare state. For liberals, the act raised as many questions as it answered. It was unclear how states would provide training to welfare recipients that would allow them to find employment paying a living wage. More ominously, what would happen to children when families lost their welfare benefits permanently?
The history of welfare reform reveals that the question of personal responsibility versus assistance to those in need has been a constant in the debate over welfare. Dissatisfaction with welfare began during the 1950s. Critics began to assert that the federal Aid to Families with Dependent Children (AFDC) program had made welfare a way of life, rather than simply short-term assistance, for many in the program. With this perception, a backlash set in.
In the 1950s and early 1960s, welfare reform was limited to various states' attempts to impose residency requirements on welfare applicants and remove illegitimate children from the welfare rolls. Many states also passed so-called "man in the house" rules, which cut off benefits when a man lived in the home. By the late 1960s, such laws had been struck down on the ground that the equal protection clause of the Fourteenth Amendment requires the government to treat all persons in similar situations equally.
During the 1960s President lyndon b. johnson's administration declared an ostensible "war on poverty" with its Great Society programs: Head Start, the Job Corps, food stamps, and Medicaid funded education, job training, direct food assistance, and direct medical assistance. Although the poverty rate declined in the 1960s, more than 4 million new recipients signed up for welfare.
With the election of President richard m. nixon in 1968, the conservative backlash against liberal policies began to take hold. Nixon was the first president since Roosevelt to offer major national welfare legislation. His 1969 Family Assistance Plan, however, pleased neither liberals nor conservatives. Nixon proposed giving needy families with children $1,600 annually; as a work incentive, they would be allowed to keep any earned income up to approximately $4,000. More important, all welfare recipients except mothers with children under the age of three would be required to work. Liberals rejected the plan because they believed that the support levels were too low and that the work requirement was punitive. Conservatives were unimpressed by Nixon's goal of reducing the welfare bureaucracy through a program that appeared to expand public assistance. The program died in Congress in 1972.
Instead of reform, welfare programs underwent major expansions during the Nixon administration. States were required to provide food stamps, and Supplemental Security Income (SSI) consolidated aid for aged, blind, and disabled persons. The Earned Income Credit provided the working poor with direct cash assistance in the form of tax credits. As spending grew, so did the welfare rolls.
During the 1970s advocates of welfare reform promoted the theory of "workfare." The idea initially referred to working off welfare payments through public service jobs, but it developed into the concept of using training and education to help recipients gain independence. By the 1980s workfare had emerged as the future of welfare reform.
President ronald reagan came into office in 1981 as a harsh critic of welfare. During his first term, he helped secure deep cuts in AFDC spending, including the reduction of benefits to working recipients of public assistance. In addition, the states were given the option of requiring the majority of recipients to participate in workfare programs.
During the 1980s the welfare system was subjected to many critical attacks, most notably in sociologist Charles Murray's book Losing Ground: American Social Policy, 1950–1980 (1984). Murray argued that welfare hurt the poor by making them less well off and discouraging them from working. The system effectively trapped single-parent families in a cycle of welfare dependency, creating more, rather than less, poverty. Murray proposed abolishing federal welfare and replacing it with short-term local programs. Though many criticized Murray's data and conclusions, most agreed that welfare produced disincentives to work.
During the 1980s 40 states set up socalled welfare-to-work programs that provided education and training. The federal Family Support Act of 1988 (23 U.S.C.A. § 125) adopted this approach, directing all states to phase in comprehensive welfare-to-work programs by 1990. Each state was to implement education, job training, and job placement programs for welfare recipients. Nevertheless, the initiative proved unsuccessful because the states lacked the money needed for federal matching funds. By 1993 only one in five eligible recipients was enrolled in a training program.
Thus, the stage was set for the 1996 welfare reform legislation. It did much of what Murray had advocated: it made personal responsibility and work central to the welfare agenda, and it shifted welfare to the states. State governments were given fixed blocks of money known as Temporary Assistance to Needy Families (TANF), which they could use as they saw fit, as long as they imposed work requirements and limited a family's stay on welfare to five years. By placing ceilings on the amount of money states receive for welfare, the 1996 act announced that public welfare programs would shrink rather than grow over time.
This 1996 welfare reform law, known as the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), was considered revolutionary by many experts. With a strong economy and an unemployment rate that by the late 1990s was down to only 4 percent, states were more confident about making welfare reform work. By 2000, the economy began to slow down, and the September 11, 2001 attacks in New York and Washington further slowed economic growth. States that had once been flush with cash now faced deficits, some of them substantial. Meanwhile, the federal government's TANF funding was scheduled to end on October 1, 2002.
On May 16, 2002, the House passed the Personal Responsibility, Work, and Family Promotion Act of 2002 (H.R. 4737) by a vote of 229 to 197. This bill would reauthorize TANF funding for an additional five years. It would also increase the minimum work requirement for recipients by 5 percent per year, so that states would have 70 percent of TANF families working or engaged in other job-preparation activities for 40 hours per week by fiscal year 2007. It would continue to fund childcare through a block grant, and it would also work to strengthen Child Support laws to increase money available to mothers and children. It would also provide up to $300 million each year for programs that encourage healthy and stable marriages, such as premarital education and counseling programs.
The Senate did approve the Work, Opportunity, and Responsibility Act (WORK). Among the differences between WORK and H.R. 4737, WORK provides $5.5 billion more in childcare funding and reduces the required work-week to 30 hours instead of 40. The Senate did not act on this legislation, and in September the House and the Senate passed continuing resolutions to extend TANF funding through March 31, 2003. The Senate was expected to take up the issue again in the spring of 2003.
The creation of the SSI program meant that applicants had to meet the same standards of eligibility in every state. For example, applicants must prove they are residents and citizens of the United States. The 1996 Welfare Reform Act cut billions of dollars of aid for legal Aliens, and completely excluded legal aliens from receiving SSI benefits. No new noncitizens could be added to the program after the date of enactment, and all legal aliens who were receiving SSI benefits will eventually be removed from the rolls, unless they meet one of the law's exceptions. A recipient will not receive benefits for any full month that he is not living within the 50 states or the District of Columbia. Inmates in a public institution cannot collect SSI unless they reside in a community-run group home with a maximum of 16 residents.
The passage of the Contract with America Advancement Act of 1996 (P.L. 104-221) made a significant change in the basic philosophy of the SSI program. Beginning on the date of enactment (March 29, 1996), new applicants for SSI disability benefits are not eligible for benefits if drug addiction or alcoholism is a material factor in their disability. Unless they can qualify on some other medical basis, they cannot receive disability benefits. Previously, if a person had a medical condition that prevented them from working, he was considered disabled for SSI purposes, regardless of the cause of the disability.
All persons who are otherwise qualified must show that their incomes are below the levels prescribed by federal law and that they have no assets that can be used for their support. Various rules regulate the calculation of an applicant's income. A person need not be totally devoid of assets in order to receive benefits. A home, for example, does not count as an asset, and the government does not impose liens (charges against property to secure the payment of a debt) against the homes of recipients of SSI benefits.
Medicaid The largest government welfare program that provides benefits other than money for indigent persons is Medicaid. Medicaid was enacted in 1965 as an amendment to the Social Security Act of 1935, (Title XIX, 42 U.S.C.A. 1396). A state receives federal money if it furnishes additional financing and administers a medical program for the poor that satisfies federal standards. A state can supplement federal benefits with its own funds. Medicaid is designed to make private medical care available to impoverished people. As long as their procedures are reasonable, states can establish their own methods of determining a Medicaid applicant's income and resources and whether the applicant qualifies for aid.
Prior to the abolition of the AFDC program in the 1996 reform law, children and parents who received AFDC automatically qualified for Medicaid. The 1996 law provides Medicaid coverage to all families that meet their state's July 1996 AFDC income and asset standards. When a family becomes ineligible for Medicaid coverage due to increased earnings or Child Support income, it becomes eligible for transitional Medicaid, regardless of whether the family received assistance under the block grant program that has replaced AFDC.
As with SSI and other programs, however, the 1996 law denies Medicaid eligibility to most legal immigrants. Except for Refugees, those who have claimed political Asylum, and a few other categories, immigrants entering the United States are ineligible for Medicaid for five years, with states having the option of extending this ban for a longer period. Immigrants who had been receiving Medicaid as a result of receiving SSI are not eligible for Medicaid once their SSI benefits are cut off.
Medicaid furnishes at least five general categories of treatment, including inpatient hospital service, outpatient hospital services, laboratory and x-ray services, skilled nursing home services, and physicians' services. Generally each of these services is available to treat conditions that cause acute suffering, endanger life, result in illness or infirmity, interfere with the capacity for normal activity, or present a significant handicap. In addition, all states provide eye and dental care and prescription drugs. Almost all states provide physical therapy, hospice care, and rehabilitative services.
Medicaid is a "vendor" plan because payment is made directly to the vendor (the person or entity which provides the services) rather than to the patient. Only approved nursing homes, physicians, and other providers of medical care are entitled to receive Medicaid payments for their services. Since the early 1970s, rising medical costs have placed financial pressures on the Medicaid program. Consequently, health care providers are not fully reimbursed for the services they provide to Medicaid patients. When Medicaid began, persons who were eligible had the right to select their own doctors, hospitals, or other medical facilities. Because of skyrocketing medical expenditures, almost all states have received waivers from the federal government concerning the choice of physician.
Aid to Families with Dependent Children Prior to 1996, the most controversial component of the welfare system was the AFDC program. AFDC was established by Congress to ensure the welfare and protection of needy dependent children by providing them, and a custodial relative, with basic necessities within the framework of the family relationship. It was abolished in the 1996 welfare reform act, replaced by block grants to the states to fund welfare under new sets of rules and requirements. The block grant, which is titled the Temporary Assistance to Needy Families (TANF) block grant, converts AFDC to fixed funding. Under TANF, states receive a fixed level of resources for income support and work programs based on what they spent on these programs in 1994, without regard to subsequent changes in the level of need in a state.
Every state was required to establish an AFDC system within broad federal guidelines, with the federal government providing funds for the state programs. The state plan had to be applied uniformly throughout the state, with the state providing some funding itself and designating one state agency to administer the program. Even though the 1996 law eliminated AFDC, many of the general categories and definitions contained in state-AFDC statutes and regulations remained relevant in new state welfare program laws for determining eligibility.
A child is classified "dependent" if he has no parental support or care because of the death of a parent, the Abandonment by a parent, or the physical or mental incapacity of a parent to fulfill the responsibilities to a child. Once a child qualifies as dependent under these standards, the state agency will decide whether the child is "needy." Each state establishes a minimum income level of subsistence. If the income of a child and the members of his family are below this level, these individuals are deemed needy. All sources of income actually received by the family are considered, as well as the value of all the family's assets.
Under the old AFDC system, each state fashioned exemptions depending upon the circumstances of the case. For example, a state might allow a portion of Social Security benefits received because of the death of a parent to be saved for the child's future education.
Once the state agency determines the income of members of a family and decides whether their assets are sufficient to meet their needs, it compares their income to the standard of need applied in that state. The standard of need is based on the number of family members, sometimes up to a specific maximum. Under the old law, if the family's income was inadequate to provide what the state considered a minimum amount for the family's needs, AFDC benefits were issued. Under the 1996 law, there is no explicit requirement that the families get cash aid, making it possible for the states to provide vouchers or services rather than cash help. The law specifically eliminates the promise of help and eliminates individual entitlement to aid under federal law. In addition, if a state runs out of block grant funds for the year, and does not provide state funds, it can place new applicants on waiting lists. Under the old law, states received federal funds on an open-ended, entitlement basis.
The 1996 law placed a yearly limit of $16.4 billion nationally on federal welfare spending that replaced AFDC and several other programs, with no provision to raise the limit in the future. Within this financial framework, the states have greater autonomy in determining how to spend the funds on welfare. However, the 1996 law imposed several important changes in national welfare policy.
The 1996 law mandated that states increase the number of persons on welfare who work. It included a directive that by 2002, a minimum of half the families receiving public assistance must have an adult working a minimum of 30 hours per week. If states do not meet these requirements, they can be penalized by losing a percentage of their TANF block grants. Adults cannot be penalized for failure to meet work requirements if their failure is based on the inability to find or afford child care for a child under the age of six. Otherwise, if an adult recipient refuses to participate in a work program, states must reduce the family's assistance by a pro rata amount. States, however, have the option of increasing this penalty, including the termination of assistance to the entire family. Adults can also lose Medicaid as well as cash aid.
One of the criticisms of the AFDC program was that it allowed teenage mothers to set up independent living arrangements and receive AFDC. The 1996 law directs that minor parents can only receive TANF block grant funds if they are living at home or in another adult-supervised setting. They must attend high school or an alternative educational or training program as soon as their child is at least 12 weeks old.
The most radical change in abolishing AFDC and moving to the TANF block grants was the limitation on families receiving TANF funds. Federal funds can only be used to provide a total of five years of aid in a lifetime to a family. The law provides that states may give hardship exemptions of up to 20 percent of their average monthly caseload. However, the law also permits states to set limits shorter than five years.
A state welfare assistance plan must set forth objective criteria for the delivery of benefits and for fair and equitable treatment, as well as how the state will provide opportunities for recipients to appeal decisions against them. While the law and regulations governing AFDC were explicit regarding appeal rights, the 1996 law is more general in this area, leaving each state to devise due process protections in state law.
Food and Food Stamps
The federal government provides food to those in need through several types of programs, including nutrition programs, and, most importantly, the Food Stamp program.
The federal government sponsors special nutrition plans to promote child welfare. Such programs, including the Child and Adult Care Food Program (CACFP), provide federal grants of money and food to nonprofit elementary and secondary schools and to child-care institutions so that they can serve milk, well-balanced meals, and snacks to the children. Additional money is provided so that free or reduced-price food and milk can be given to children of needy families. These programs provide lunch and breakfast to children in public and private nonprofit schools. Pregnant and nursing mothers and their children up to age four who live in areas that have large numbers of people who are considered nutritional risks are eligible for a special program that supplies food supplements.
The Food Stamp program, as provided by the Federal Food Stamp Act of 1964, is the most significant food plan in the United States. Needy individuals or households obtain food stamps (or official coupons) that can be exchanged like money at authorized stores. Some states create electronic banking accounts that allow a person to purchase food using an electronic bank card. The person's account is debited the amount of the cash value of the stamps when he purchases food at a store.
The federal government pays for the amount of the benefit received, and the states pay the costs of determining eligibility and distributing the stamps. The value of the food stamp allotment that state agencies are authorized to issue is based on the "thrifty food plan," a low-cost food budget, reduced by an amount equal to 30 per cent of the household income. Prior to 1996, poor families with children that spent more than 50 per cent of their income for housing would have had their excess shelter costs included in calculating the amount of food stamps received. The 1996 law placed a maximum amount for the food stamp deduction for shelter costs.
Since the late 1930s, the federal government has provided funds to build public housing for the poor. Almost all programs rely on local public housing agencies created by state law or by a local government unit authorized by the state. Contracts between the Housing and Urban Development Department and the local agency provide the means for the transfer of the federal funds.
Applicants for public housing must meet income requirements. So as not to penalize people for improving their financial condition, tenants usually can continue to live in public housing after they surpass the income level that admitted them to the project. As the tenant's income increases, he or she might be charged a higher rent so that the rent can be kept lower for other tenants with greater need. Federal law limits the percentage of a tenant's income that can be charged for rent in low-income housing projects.
With the development of the welfare system, the courts have been called on to resolve disputes involving welfare recipients and government agencies. The most important case concerning the scope of welfare rights is Dandridge v. Williams, 397 U.S. 471, 90 S. Ct. 1153, 25 L. Ed. 2d 491 (1970). In Dandridge, a California law set an upper limit on the amount of welfare benefits that a family could receive, preventing larger families from receiving the same amount per person as smaller families. Large-family recipients charged that the law violated the Social Security Act of 1935 and the equal protection clause of the Fourteenth Amendment.
The Court ruled that the California law did not violate either. It stated that the act does not prohibit a state from "providing the largest families with somewhat less than their ascertained per capita standard of need," given the finite amount of resources a state has available. The Court also contended that states might reasonably theorize that large families are able take advantage of other types of assistance unavailable to smaller households. The Court ruled that the law did not violate the Equal Protection Clause because it was free from "invidious discrimination," and it reasonably worked to further the state's interest of "encouraging employment and in maintaining an equitable balance between welfare families and the families of the working poor."
An equally compelling welfare case was heard in the late 1990s. The Supreme Court, in Saenz v. Roe, 526 U.S. 489, 119 S.Ct. 1518, 143 L.Ed.2d 689 (1999), struck down a California law that limited new residents to the amount of welfare benefits they would have received in the state of their prior residence. The law was enacted in an attempt to discourage individuals from moving into the state in order to gain higher welfare benefits. California officials estimated that, each year, more than 50,000 people applying for benefits had lived in another state during the previous 12 months. Many of these individuals came from states that had much lower benefit levels. For example, a family of four who arrived from Mississippi would have received $144 in that state. In comparison, but for the one-year residency limitation, they would receive $673 in California.
In a previous case (Shapiro v. Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600 ), the Court had struck down the laws of three states that denied all welfare benefits to persons who had resided in their states less than one year. In that case the Court ruled that it was "constitutionally impermissible" for a state to enact durational residency requirements that sought to inhibit the migration of needy persons into the state. These laws restricted a person's right to travel, which is protected under the Fourteenth Amendment. California argued that its law had not been enacted for the purpose of inhibiting the migration of poor people and that it merely reduced the level of benefits rather denying benefits.
The Supreme Court disagreed. It ruled that persons have a right to travel from state to state and that once a person decides to reside in a state he or she must be treated like all other citizens of that state. The Court concluded that "the state's legitimate interest in saving money provides no justification for its decision to discriminate among equally eligible citizens." Citizens, regardless of their incomes, have the right to choose to be citizens of the state in which they reside. The states, however, "do not have any right to select their citizens."
In an attempt to discourage welfare recipients from litigating the 1996 welfare reform law, Congress prohibited legal aid groups that receive federal money from taking such cases. The Supreme Court, in Legal Services Corporation v. Velazquez, 531 U.S. 533, 121 S.Ct. 1043, 149 L.Ed.2d 63 (2001), overturned this restriction as unconstitutional. The Court concluded that once Congress appropriated funds for providing legal assistance to private citizens, First Amendment rights were implicated. A federally-funded legal aid attorney "speaks on behalf of a private, indigent client in a welfare benefits claim, while the Government's message is delivered by the attorney defending the benefits decision." Therefore, the attorney's advice to the client and advocacy to the court was private speech that could not be restricted by the government.
Axinn, June, and Mark Stern. 2004. Social Welfare: A History of American Response to Need. 6th ed. Boston: Allyn and Bacon.
Gensler, Howard, ed. 1996. The American Welfare System: Origins, Structure, and Effects. Westport, Conn.: Praeger.
Marx, Jerry D. 2004. Social Welfare: The American Partnership. Boston: Pearson.
Mink, Gwendolyn, and Rickie Solinger, eds. 2003. Welfare: A Documentary History of U.S. Policy and Politics. New York: New York Univ. Press.