Top Finance GOP, Dem Agree: 1990s Welfare Reforms Aren't Working

WASHINGTON – The top Republican and Democrat on the Senate Finance Committee agree that the welfare reforms implemented in 1996 are not working to ease the poverty rate and called for changes to provide additional assistance to the nation’s poor.

Sen. Orrin Hatch (R-Utah), the committee chairman, and Sen. Ron Wyden (D-Ore.), the ranking member, agreed that Temporary Assistance for Needy Families, or TANF, which transitioned welfare from an individual entitlement into a block grant that states can use for a wide variety of anti-poverty programs, has produced mixed results.

While the number of families on welfare has declined from a peak of 5.1 million in 1994 to 1.6 million in 2015, the poverty rate in 2014 was nearly the same as it was prior to the institution of the reforms.

“I think it’s fair to say that many on both the left and the right would agree, although for different reasons, that TANF, the federal government’s welfare flagship, is in need of reform,” Hatch said.

Hatch and Wyden agreed that many families eligible for TANF assistance are not getting it and the time has arrived for a restructuring.

Extreme poverty “has risen substantially,” Wyden said during a meeting of the Senate Finance Committee, and TANF, which is intended to connect people to jobs, “isn’t working.”

“Too often these dollars aren’t making a dent in poverty or connecting struggling parents to employment,” he said. “Our social safety net has frayed. Millions of people are walking on an economic tightrope forced to make tough decisions like whether they should pay to keep the lights on or food in the cupboards. And the safety net isn’t working for them.”

Studies show that people in poverty want to work, Wyden said, but are left with desperate choices when they are unable to find a job. He noted that single mothers and minorities are two to three times more likely to live in poverty than the rest of Americans.

“I don’t think it’s naïve of me to think a jobs program should measure how well it connects people to jobs,” Wyden said. “But TANF doesn’t. States shouldn’t get credit for simply kicking families out of the program regardless of whether they’ve helped them find work or not. What really ought to count is whether recipients find their way into a job that can support their families. The answer is to improve the program – to make it more relevant, more accessible, and more effective for families in poverty.”

Wyden said the panel “ought to work together on a bipartisan basis to fix this lifeline to meet people’s needs and give them a springboard to better opportunities.” Hatch agreed, although he acknowledged there is no easy solution to addressing issues associated with poverty.

“Policymakers have been arguing for years about the best way to address poverty,” Hatch said. “For a long time programs which provided cash assistance to women and children did little to encourage work and in many cases perpetuated the cycle of poverty.”

The welfare reforms adopted during the administration of President Bill Clinton were intended to address that issue. But Hatch said the states oftentimes “do not engage TANF recipients in robust activities designed to help them obtain and keep a job.”

TANF benefits provided to eligible families are relatively small, ranging from $170 to $923 a month for a family of three. But TANF expended almost $30 billion during the 2014 fiscal year.

“Unfortunately, the smallest expenditure was directed toward work program activities while the largest expenditure was spent on what states report as ‘other expenditures,’” Hatch said. “There is no definitive definition of what these other expenditures are, but we do know that nearly $11 billion are spent on them each year.”