THE EFFECTS OF WELFARE REFORM

The Effects of Welfare Reform

The Effects of Welfare Reform

Introduction

No one likes the welfare system. The government complains that the law is too flexible and gives money in return for convenience, and the public finds welfare to be anti-work and anti-family. Recipients of welfare find the system degrading and demoralizing, and would prefer to work, but there are so many particulars that are involved in being on, and getting off of the welfare system. In 1996, the Personal Responsibility and Work Opportunity Reconciliation Act, also known as the Welfare Reform Law, was signed into law by President Clinton. This act ended Aid to Families with Dependent Children, which had provided economic assistance to single mothers since the Social Security Act of 1935. Currently in effect is a new system called Temporary Aid to Needy Families, this system dramatically changed the rules, ending the entitlement nature of cash benefits, setting time limits on assistance, and imposing a work requirement on able-bodied recipients.(Pomeroy,2009)

Discussion

Presently, welfare is an entitlement under which funds flow to all eligible recipients on the basis of need. The federal government pays from 50-80% of the costs, depending on the state. New proposals are being thrown around that would give a fixed amount to each state, that would no longer vary with the number of families needing assistance. Nearly all recent reform proposals assume that the best alternative to welfare is work. There are new tools the welfare system is considering using to increase employment and earnings: financial incentives, search and work requirements, and education and training. Financial incentives encourage recipients to work by letting them keep more of their welfare check after they go to work. Because such incentives raise the income eligibility cutoff point for welfare, and allow more people to qualify, the net impact may be to increase rather than reduce welfare caseloads and costs. For this reason, past attempts to reduce welfare dependency by increasing the incentive to work have proved disappointing. The other alternatives are to insist that welfare recipients work or to provide them with education and training.(Zedlewski,2003)

Not As Cost Affective

The evidence suggests that programs focusing on education and training produce positive results but are not as cost affective as those that require people to find a job as soon as possible. If a key goal of welfare reform is to move recipients into jobs, they will need day care for their children, yet the overview of the current federal initiatives notes that it is the working poor who receive the least child care assistance. The largest federal child care program is the Dependent Care Tax Credit which provides assistance primarily to middle and higher income families, because it is non-refundable. National studies have shown that upwards of sixty percent of adults are employed after leaving welfare, but their wage rates and total earnings remain fairly low. Child care assistance for the low income families is only one way of ensuring that work pays more than ...