Updated 12-2-97



The New Law


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The Great American Welfare Lab Wisconsin has cut its rolls by half. Many former recipients are working, but where have the rest of them gone? By Adam Cohen/TIME (4/21/97)

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Related Sites

The Department of Health and Human Services Welfare Reform Page

Health and Human Services Welfare Reform Fact Sheet



Should Congress restore welfare funds for legal immigrants?



Background: Time For A New Approach?


Franklin D. Roosevelt signed the first federal poverty assistance law in 1935, called the Aid to Dependent Children Act, a little-noticed add-on to the Social Security law designed to aid poor Depression-era widows and their children. The act established what for the next sixty years became the core of federal welfare -- open-ended payments from the federal government to single mothers with dependent children.


As the Depression lifted, caseloads remained low during the post-war years. Then in 1962, at John F. Kennedy's urging, Congress raised welfare payments, and renamed the program Aid to Families with Dependent Children (AFDC). Under the new law, states were permitted to require beneficiaries to do community work and attend training programs. Kennedy articulated what has since been a central goal of federal welfare policy: to end poverty, not just alleviate it. Welfare should be "a hand up, not a hand out," in Kennedy's words.


It wasn't until Lyndon B. Johnson's "War On Poverty," beginning in 1965, that welfare spending began to take off. Eligibility requirements were broadened and benefits increased for AFDC and a bevy of federal programs designed to lower the 14 percent poverty rate. But some 27 years and $6 trillion later, the official poverty rate had notched up to 15.2 percent.

More ominously, perhaps, out-of-wedlock births jumped from 5 percent (2 percent of white children, 19 percent of black children) in 1965 to its current level of 32 percent (23 percent of white children, 68 percent of black children).

Such numbers fueled arguments that welfare was actually exacerbating America's poverty problems. Citing the emergence of an entrenched urban "underclass," welfare critics stepped up their arguments during the 1980s that government poverty assistance was destroying personal initiative and self-responsibility, and breeding a dependent class, virtually trapping generations of families in welfare.

And, some analysts warned welfare spending was rising at unsustainable levels. The conservative Heritage Foundation predicted that, left unchecked, combined federal and state welfare spending from 1996-2000 would total $2.38 trillion.

Enter Clinton, Stage ... Wherever


Democrats had long argued that the poor lacked adequate employment and education opportunities. Candidate Bill Clinton in 1992, however, echoed Republican criticisms, decrying "permanent dependence on welfare," and asserting, "No one who can work should be able to stay on welfare forever."

His own welfare plan, presented in June 1994, proposed limiting welfare recipients to two years of aid, while adding some $9.3 billion in new spending for community service jobs for those who couldn't find private sector work.

But Republicans, taking control of Congress in 1994, were not interested in expanding Washington's role. They embraced a more watershed approach: putting state governments in charge of welfare policy, while imposing work requirements coupled with lifetime limits on cash benefits. And, Republicans proposed ending welfare for all immigrants, legal or illegal.

That was a bitter remedy for most Democrats, including the president, who vetoed two bills containing GOP-written welfare provisions during 1995 and 1996. Still, the president insisted he wanted to sign welfare reform, challenging Republicans to send him a "clean" bill, free of other issues such as Medicaid reform. In July 1996, Republicans did just that.

After meeting with aides and Cabinet members in frenzied sessions in late July, Clinton announced he would sign the bill despite misgivings about cuts to legal immigrants and savings from food stamps.

"All Americans, without regard to party, know that our welfare system is broken, that it teaches the wrong values, rewards the wrong choices, hurts those it was meant to help," Clinton said. "We also know that no one wants to change the current system in a good way more than people who are trapped in it."


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