Welfare has been on the forefront of the GOP’s brain lately, as the Romney/Ryan team has been relentlessly (and falsely) accusing President Obama of “gutting” welfare reform. So it’s unsurprising that it might came up in President Bill Clinton’s speech at the DNC last night. After all, Clinton was the one to sign the 1996 welfare reform bill, transforming the program into what it is today. It made sense for him to defend President Obama from the Republican attacks saying he was undoing his own legislation.
In the midst of his defense of Obama, not one to miss a chance to give himself a little back-pat, Clinton said of the ’90s reforms: “This is personal to me. We moved millions of people off welfare. It was one of the reasons that in the eight years I was president, we had a hundred times as many people move out of poverty into the middle class than happened under the previous twelve years, a hundred times as many. It’s a big deal.”
But while welfare reform may have initially reduced poverty, it left those still living at that income level worse off than they were before, reaching fewer of them and giving those it did reach less. And our poverty rates didn’t stay low. When they began to rise again, the program couldn’t offer them the support it used to. The recession has been a crystal clear, and incredibly painful, demonstration of this fact.
Dylan Matthews has already taken a look at the claim that millions moved off of welfare’s rolls and poverty was reduced. As he writes, the program’s numbers have steadily fallen since 1996: “Since reform, the rolls have shrunk from 12.6 million to 4.6 million.” The number of people in poverty “fell by 6.4 million people under Clinton, whereas the number of people in poverty increased by 7.4 million between 1981 and 1993 (and the rate went from 14 percent to 15.1 percent).” There is a catch, though. “But it’s worth noting that welfare reform led to a huge spike in extreme poverty, as defined as the number of households making under $2 a day,” Matthews adds.
The Center on Budget and Policy Priorities has done excellent work to track TANF’s failures. “While the official poverty rate among families declined in the early years of welfare reform, when the economy was booming and unemployment was extremely low, it started increasing in 2000 and now exceeds its 1996 level,” it reports. “Over the last 16 years, the national TANF caseload has declined by 60 percent, even as poverty and deep poverty have worsened.” In fact, nearly 70 percent of poor families with children received cash assistance in 1996; in 2009, less than 30 percent did. And the families who are able to access benefits aren’t getting much. Their purchasing power is below 1996 levels, adjusting for inflation, in every state but two. They fall below 50 percent of the poverty line in every state.
The rolls may be going down, but the need is not. The early employment gains among welfare recipients were tied to the strong economy. As the CBPP puts it, “The data suggest that a strong labor market is central to the success of a work-based assistance system.” When the labor market went into free fall, those gains were lost. But rather than low-income individuals finding themselves cushioned by TANF’s safety net, there was nothing to stop the fall.