Celebrating 20 Years of Welfare Reform – Part 1: Welfare – The Rear View Mirror
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Insights and Reflections from the Front Lines
A Series of Blogs by Welfare Reform Veteran Doug Howard
Part 1: Welfare – The Rear View Mirror
The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) was signed into law on August 22, 1996, marking one of the most significant social policy reforms in recent history. It dramatically transformed the entitlement system Aid to Families with Dependent Children (known as AFDC or ADC), which had emphasized cash welfare payments over employment. Doug Howard, a former state administrator who ran welfare programs in Iowa and Michigan, shares his insights in a series of blogs about the transformation that started before 1996 and has continued over two decades.
I was born and raised in rural Iowa. I had 36 people in my graduating class. I didn’t envision becoming a civil servant, let alone going on the unforeseen, unplanned, yet very rewarding journey, which included participation in a major public policy debate that would result in positive changes to a program that affected millions of Americans.
The Social Security Act of 1935 established AFDC, a program that allowed states to disburse cash welfare payments for the care of children who were deprived of parental support or care because one of their parents was absent, incapacitated, deceased or unemployed. States defined "need," set their own benefit levels, established income and resource limits within federal limitations, and administered the program or supervised its administration at the local level. States were entitled to unlimited federal matching funds (a fixed percentage of the total cost) for reimbursing benefit payments. States were also required to render aid to all individuals who were in groups eligible under federal law and whose income and resources fell within state-set limits. Flexibility to make substantial alterations to the program was limited or nonexistent.
AFDC had stability and predictability. Caseloads projections, which were based on the economy and the unemployment rate, were generally pretty accurate. While desired, there were low expectations for major caseload declines. Limited effort and money was expended on comprehensive and effective work programs. We knew what we had and how to manage it because there were limited variables.
We also knew that something needed to change; AFDC might be operating as designed, but it wasn’t the best solution for participants or taxpayers. States often included AFDC within a universe of “income maintenance” programs. We saw that this “maintenance” mode actually created a trap. We might have been maintaining family incomes, but we were also maintaining low expectations, limited investments in participant skills and welfare dependency that could cross generations.
PRWORA changed everything. AFDC rules in the federal statute and regulations were wiped out and the program was replaced with the Temporary Assistance for Needy Families (TANF) program. TANF brought forth a focus on employment and time limits, along with broad goals and policy flexibility that ignited state innovation nationwide.
In the next post, we’ll take a look at what I refer to as “life under waivers.” These waivers in the early 1990s helped feed future debate on a “devolution revolution” and reinforced states as “laboratories of innovation.” A vision was emerging that allowed stakeholders to truly grasp the magnitude of change and progress welfare reform could deliver.