California Considers Ditching Welfare

California has proposed the previously and supposedly unthinkable: ending welfare.

Before you get too outraged (or perhaps excited), "welfare" specifically refers to a single but significant program known in the Golden State as CalWORKs. It is California's version of the nation's welfare reform effort. Known as Aid to Families with Dependent Children until 1996, traditional "welfare" changed its name to Temporary Assistance for Needy Families (TANF) when Congress passed comprehensive reform. Then-President Bill Clinton, who had twice vetoed the legislation, finally signed it on the advice of then-adviser Dick Morris because "a third veto could [have] cost him the 1996 election."

One has to go back to Ronald Reagan's term as governor to find the last time this core entitlement program was really under control in the Golden State. As the late Paul Weyrich noted in a 2006 column, "Reagan managed significantly to cut welfare rolls while increasing support for those who really needed help."

But by the mid-1990s, a mind-boggling 8% of the state's residents, or almost 2.6 million people, were on the dole, almost double the percentage in the rest of the country.

Under welfare reform, the country's bloated caseload dropped very quickly. In its first four years, about 2.5 million families came off the dole. In the vast majority of these families at least one adult entered the workforce. Huge numbers of formerly dependent tax consumers became economy-contributing taxpayers. This unprecedented mass transformation is an important but underappreciated element of the prosperity of the late 1990s.

During its first six years, welfare rolls came down in California at about the same rate as the rest of the nation. By the end of 2002, the number of families and total caseload in the state were down 47% and 55%, respectively, compared to 52% and 57% for the rest of the U.S. But as noted, California was starting from a much larger base. The state's family and caseload declines should have been much, much steeper, but weren't.