Why Welfare Reform Worked
In his first State of the Union address in 1993, President Bill Clinton promised to “end welfare as we know it.” The system at the time famously disincentivized work by making it more lucrative for many to take benefits instead. He proposed placing time limits on benefits and requiring that recipients “get back to work in private business if possible.” Government, Clinton said, could lend a temporary helping hand to those in need. But the time had come to “end welfare as a way of life.”
Four years later, Clinton delivered on that promise, signing the Personal Responsibility and Work Opportunity Reconciliation Act. The bipartisan legislation transformed the old federal welfare system, known as Aid to Families with Dependent Children (AFDC), into a new program, Temporary Aid for Needy Families (TANF).
A decade after signing welfare reform into law, Clinton took a victory lap in The New York Times. “Welfare rolls have dropped substantially, from 12.2 million in 1996 to 4.5 million today,” he wrote in 2006. “At the same time, caseloads declined by 54 percent. Sixty percent of mothers who left welfare found work, far surpassing predictions of experts.”
Most important, poverty, and especially child poverty, had declined. In 2000, the share of children living in households earning less than the official poverty threshold was 16.2 percent—still too high, but the lowest rate since 1979. The decade after welfare reform passed saw the sharpest
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