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IBD – Welfare Reform R.I.P.

March 17, 2009


Big Government: Even many liberals thought the 1996 reform ended the welfare debate forever. That Congress’ stimulus unravels that landmark law proves again the mindlessness of its unprecedented spending spree.

The Monica Lewinsky scandal didn’t spur prominent Clinton administration staffers to resign on principle. It was President Clinton’s embrace of the Republican Congress’ welfare reform in 1996 that motivated a longtime Clinton friend like HHS assistant secretary Peter Edelman, a former Bobby Kennedy aide and husband to Children’s Defense Fund founder Marian Wright Edelman, to depart. Edelman’s fellow HHS officials Mary Jo Bane and Wendell Primus also turned in their walking papers.

At issue was the idea of insisting that millions of people make a transition from the dole to the work force. States were given much more power in running their federally-funded welfare programs, deadlines were imposed on individuals getting back to work, and a lifetime time limit of five years was set for family benefits.

Defenders of the status quo warned that more than a million additional children would be condemned to poverty. But what really happened was a 65% drop in welfare caseloads, millions liberated from the government teat and returned to supporting themselves, and a model gratefully followed by other countries.

Welfare reform proved the conservative Republicans right about the destructive wastefulness of government “helping” the have-nots by trapping them in a cycle of dependency. But it also proved that liberal Democrats, led by Bill Clinton, were capable of abandoning blind faith in the powers of government.

Clinton was re-elected in great part thanks to his signing of welfare reform that year; the Republican architects of the law maintained a House majority for a decade afterward.

 But today’s Washington seems little impressed by the achievement of reducing the welfare rolls from over 5 million to below 2 million in the course of a decade. Congress’ big-spending “recovery” package reverts the federal-states welfare funding arrangement to the old Aid to Families with Dependent Children (AFDC) system — in some respects making it worse than those bad old days.

“For the first time since 1996, the federal government would begin paying states bonuses to increase their welfare caseloads,” noted Heritage Foundation scholars Robert Rector and Katherine Bradley in an analysis released last month.

“Indeed, the new welfare system created by the stimulus bills is actually worse than the old AFDC program because it rewards the states more heavily to increase their caseloads,” they added.
Under Congress’ new scheme, “the federal government will pay 80% of cost for each new family that a state enrolls in welfare; this matching rate is far higher than it was under AFDC.”

Rector and Bradley found that in the first year welfare spending will see its highest rise in history, an increase of more than 20% to exceed $600 billion. The overall cost over the next decade is estimated to reach $1.34 trillion.

In response to the argument that the magnitude of the current financial crisis and economic downturn mandates this welfare reversal, the Heritage analysts point out the existence of a quickly accessible $2 billion contingency fund for the states under welfare reform. Congress could easily have expanded that fund; instead, it chose to repeal reform. blogger Mickey Kaus is a liberal who is proud that Clinton and other Democrats embraced one of the most successful domestic reforms of recent decades. Last month, he reminded his readers that big labor interests view the workfare requirements of welfare reform as a threat to their members’ inflated salary levels.

Kaus added, however, that the biggest-spending, Edelmanesque liberals “don’t really need to be pressured into relaxing work requirements. They’ve never liked work requirements, including ‘workfare,’ and are always looking for an excuse to say ‘It’s OK to come back on the dole.’ “

On top of the return to welfare can be added the Obama administration’s tax policies set to take a majority of Americans off the income-tax rolls — giving them no interest in lowering income-tax rates.

It all signals that this country may be taking a giant step toward a high-unemployment, low-growth European-style economy.