On July 19, the House Ways and Means Committee held a hearing to review the outcomes of the 1996 Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) (P.L. 104-193). PRWORA reordered the welfare program, then known as Aid to Families with Dependent Children (AFDC), by, among other provisions, time-limiting the provision of cash benefits to beneficiaries and requiring beneficiaries to transition to paid work. The program that replaced AFDC, Temporary Assistance for Needy Families (TANF), also funds programs promoting marriage and abstinence for unmarried persons. PRWORA was last reauthorized in early 2006 through the Deficit Reduction Act of 2005 (DRA) (P.L. 109-171).
In his opening statement, Chair Bill Thomas (R-CA) said, “The positive outcomes of welfare reform confirm welfare recipients share in the American dream of wanting to work and build a better life for themselves and their children. Families want the dignity of collecting a paycheck instead of a welfare check because they see that work is the only true path—and permanent path—out of poverty. Thus, today, we have a new measure of compassion how successful we are in reducing dependence and helping low-income parents go to work.”
Rep. Jim McDermott (D-WA) said, “Five million more Americans live in poverty today than the day President Bush took office…Across America, parents—working hard and playing by the rules—are falling behind. Hardworking Americans earn less today than yesterday as wages fall behind inflation and the soaring increases in healthcare, housing, home energy, or gas for their cars. Instead of growing America’s middle-class, today’s economy grows America’s disadvantaged class. We need to learn why and determine what we can do about it.”
Newt Gingrich, former Speaker of the House, began his testimony with an overview of the history of welfare. He then gave a point-by-point analysis of the steps needed to effect significant change to large, longstanding social programs. Speaker Gingrich said that “reforms must be consistent with American values” and that “successful reform must be citizen centered.” He continued, saying, “The 1996 welfare reforms marked a dramatic change in American social policy. Yet, we cannot stop there if we are to advance the real change required to help the poor.” He recommended that Congress “face our crisis in education.” Speaker Gingrich asked the committee to consider the following: “If only 21.7 percent of students graduate from Detroit schools on time that means that 78.3 percent of students fail to graduate. Almost 80 percent of students — four out of five — are failed by our educational system. Why do we tolerate this level of failure? Cheating the children is wrong. The fact is, in most aspects of life, we don’t. If a private company took the money from its customers and then failed 80 percent of them, it would be closed in a day.”
Tommy Thompson, former secretary of the Department of Health and Human Services and former governor of Wisconsin, testified on his experience with welfare reform. Wisconsin was one of the first states to initiate welfare reform, passing legislation in 1996. “As governor, I could not stand to lose one more generation to a welfare system that certainly made families no better off and often left them worse off than before they entered the system, a system that robbed families of their self-worth and dreams,” said Secretary Thompson. He concluded his remarks by calling for a bipartisan effort to review the effects of welfare reform and to create recommendations that would remedy current shortcomings.
Sharon Parrott, director of welfare reform and income support policy at the Center on Budget and Policy Priorities, said that while it is well-known that welfare caseloads have dropped dramatically since 1996, “[it] is not well known that more than half of this drop reflects a sharp decline in TANF receipts among eligible families, rather than a decline in the number of families poor enough to qualify for TANF.” She added that, in part as a result of TANF, employment rates among single mothers are currently higher than they were in the 1990s. She acknowledged that “most TANF recipients who find jobs are financially better off than when they were on TANF,” but that “most earn low wages and experience periods of joblessness. Many other families are unable to move from welfare to work; some join the growing group of poor families that have neither jobs nor assistance from TANF or another income support program. Research shows that a large share of families that are unable to move from welfare to work have serious barriers to employment, including significant physical and mental disabilities.”
Ms. Parrott urged the committee to “ameliorate the DRA’s potential negative effects and address some of the disturbing trends that have emerged over the last decade.” She said the DRA ”raises states’ work participation targets while simultaneously narrowing the range of welfare-to-work activities that can be counted toward those targets.” She concluded by asking the committee to “give states more flexibility in designing welfare-to-work activities” and to “strengthen work supports such as child care assistance and health care, change unemployment insurance rules so that more low-wage workers qualify, invest in building workers’ skills, and raise the minimum wage…[and] modify the punitive time limit on SSI [social security income] assistance that the 1996 law imposed on extremely poor refugees and asylees who are either elderly or have serious disabilities.”
Dr. Ronald Haskins, co-director of the Center on Children and Families at the Brookings Institute, said that the data on TANF shows a clear pattern, “earnings up, welfare down,” and that “this is the very definition of reducing welfare dependency. Most low-income mothers heading families appear to be financially better off, although work expenses and Social Security taxes consume part of their earnings, because the mothers earn more money than they received from welfare. Taxpayers continue making a contribution to the well-being of these families through the EITC [earned income tax credit] and other work support programs, but the families earn a majority of their income. This explosion of employment and earnings constitutes an enormous achievement for the mothers themselves and for the nation’s social policy.”
He continued with a review of data on child poverty that generally showed improvement, especially among poor and minority children. However, Dr. Haskins said, “The hopes of conservatives about the impact of welfare reform on children have not been vindicated either. High-quality studies of welfare reform show that preschool children of families participating in welfare-to-work studies may experience modest gains in their development and behavior, but equally good studies show that adolescents experience modest problems in school performance.” Dr. Haskins concluded by urging the committee to strengthen work requirements in the Food Stamp Program and to stimulate a national marriage movement, saying, “I believe the evidence strongly supports the view that if we can increase the nation’s marriage rates, especially among poor and minority parents, the parents themselves, children, and the nation will greatly benefit.”
Bishop Roy Riley, chair of the Conference of Bishops for the Evangelical Lutheran Church of America, said that the “Welfare Reform Act of 1996 marked a fundamental shift in the way our government addresses anti-poverty spending and seeks to help the millions of Americans living in poverty.” He said that the concern of the Lutheran Church was then and is now for welfare reform that “truly operates to strengthen American family life and create meaningful work opportunities; that resulting policies truly improve the economy and move people from poverty to opportunity, from mere existence in forgotten alleys and shelters into meaningful and productive life together. The spirit of this testimony, therefore, unfortunately can not be a celebration of unqualified success but an acknowledgement of important commitments set down but not yet realized.” He told that committee that recent census data show that the number of Americans living below the poverty line has increased every year beginning in 2000 and that he is particularly concerned about the increase of children living in poverty. “Yet our Lutheran state policy offices report dramatic reductions in state caseloads,” he said. Bishop Riley continued, saying, “In this context, it is difficult to herald caseload reduction as a measure of success. People are leaving welfare caseloads in dramatic numbers — so much is true. But where are they going? That question should haunt us and propel us forward toward better solutions.” He recommended that the committee: increase the minimum wage; expand the earned income tax credit for poor families; provide more funding for child care and social services under the Child Care and Development Block Grant and the Social Services Block Grant, respectively; and increase the number and scope of job training programs available under the Workforce Investment Act.
Also testifying were: Senator Rick Santorum (R-PA); Robert Rector, senior research fellow, Heritage Foundation; and Dr. June O’Neill, professor of economics, Baruch College and former director of the Congressional Budget Office.
