HomeBudget & Tax NewsStates' Budget Problems Worsened by Lack of Welfare Work Requirements

States’ Budget Problems Worsened by Lack of Welfare Work Requirements

With most states struggling with significant budget deficits after locking down their economies in response to the coronavirus, some states with the most severe shortfalls are those that have waived work requirements for welfare recipients.

When Barack Obama became president in January 2009, the number of Americans on welfare immediately began to increase. In 2008, the number of food stamp recipients was 28 million. By 2012, the food stamp rolls had risen to 47 million. Obama had issued a directive allowing states to waive the work requirements of the 1996 welfare reform act, making it easier for able-bodied people to collect welfare.

The original federal welfare reform was a response to a similar rise in cases. Between 1989 and 1994, the number of people on welfare in the United States increased by 33 percent, and during his 1992 presidential campaign, Bill Clinton promised to “end welfare as we know it,” making it a primary focus of his campaign. Upon Clinton’s election and then the election of a Republican majority in the House of Representatives in 1994, a bipartisan effort led by House Speaker Newt Gingrich on the Republican side resulted in the 1996 Work Opportunities Act. The new law reformed welfare into a program focused on temporary support that set goals for work and self-sufficiency. The idea was to change the trajectory of what had become a generational entitlement with extensive budgetary implications, transforming it into a short-term lift into independence that would benefit its recipients far more over the long term by leading them to self-sufficiency.

“TANF (Temporary Assistance to Needy Families) was a historic reversal of the entitlement welfare represented by AFDC (Aid to Families with Dependent Children),” explained Ron Haskins of The Brookings Institution in his 2006 testimony to the House Ways and Means Committee. This legislation provided for work training, education, and job search assistance through various grants, and the branding in itself made it clear that assistance would no longer be long-term. It would be temporary assistance, not a permanent entitlement. Gingrich said the way to ensure the reduction of expenses tied to means-tested entitlements, such as welfare, is to offer job training and job opportunities. Program tracking after ten years indicated the Work Opportunities Act was successful. The caseload declined by 60 percent between 1994 and 2005, reducing government expenses as hoped.

Despite this success, Obama instituted the Section 1115 waiver, allowing states to avoid enforcing strict work requirements. Government dependency increased radically, and by 2012, 49 percent of Americans were receiving government stipends, up from 30 percent in 1980. Waiving the work requirements neutralized the earlier reforms.

“Over the past decade, our fellow citizens have fallen deeper into the welfare trap, ensnared by government policies that pay people to not work,” Gingrich and Mary Mayhew wrote at Gingrich 360 in 2018, imploring the federal and state governments to restore welfare reform. “The so-called ‘War on Poverty’ has left our nation with record-high levels of welfare enrollment—despite a 17-year record-low unemployment rate and more than six million open jobs across the country.”

An additional concern Gingrich and Mayhew note is that budget allocations intended to help those most in need are often now provided to single adults who are capable of working.

“There are now nearly 21 million able-bodied adults dependent on food stamps—three times as many as in 2000. Twenty-eight million able-bodied adults are now dependent on Medicaid, quadrupling the number of those enrolled in 2000,” Gingrich and Mayhew write.

The budget dollars allocated to these programs continued to grow, calculated at $1 trillion per year by 2012 as reported by The Heartland Institute in its 2015 Welfare Reform Report Card, in which it documented the development of welfare programs state by state. Some states were doing far better than others in moving people to self-sufficiency, the study found. Writing in Forbes, Justin Haskins and Logan Pike attribute the success of the 1996 welfare reform to the work requirement and other provisions such as time limits and sanctions for violations. Connecticut, for example, was able to reduce its TANF enrollment by 80 percent from the time welfare reform was enacted until 2016, twenty years later. Idaho, another state that utilized work requirements and time limits, reduced its TANF enrollment from nearly 23,000 in 1996 to 3,000 in 2016.

At present, 33 states waive their TANF work requirements wholly or in part, including California, Illinois, Nevada, and Washington. The other states, such as Indiana, Maine, and Texas, enforce work requirements throughout the entire state, write Jonathan Ingram, Sam Adolphsen, and Nicholas Horton of the Foundation for Government Accountability.

States also allow able-bodied, childless adults to receive food stamps. When a state adds a work requirement, large numbers of enrollees opt to stop receiving the food support. “In 2014, Maine took the initiative to require work participation for food stamp recipients who are able-bodied adults and have no dependents. As a result, its caseload plummeted,” writes Rachel Sheffield in a Heritage Foundation commentary. Maine’s work requirements demonstrated nearly instant success, with 80 percent of able-bodied adults leaving the system within three months.

Most states continue to use work waivers liberally. Even states with very low unemployment, where workers are desperately needed, are issuing work waivers and paying benefits. More than 2.6 million able-bodied adults without dependents are receiving food stamps because they live in states that give work waivers, the Foundation for Government Accountability study reports.

The waivers destroy the beneficial effect of welfare reform on the recipients, Gingrich and Mayhew write.

“We included work requirements in the legislation because we knew the power of work,” write Gingrich and Mayhew. “The reforms were compassionate—they gave people the opportunity to build better lives and create their own American dreams. We know this not only because the research has proven it, time and time again, but because we’ve seen the transformational power of promoting work firsthand.”

The state-by-state analysis conducted for The Heartland Institute’s 2015 Welfare Reform Report Card concluded work requirements are effective.

Many lawmakers oppose work requirements despite the documented success in reducing poverty, write Haskins and Pike. In 2013, when the Obama administration told states it would allow them to waive work requirements, essentially nullifying the 1996 reform, House Republicans voted to block the move. Nearly all Republicans voted in favor, but only 18 Democrats voted with them.

This opposition affirmed the movement of the modern Democrat Party far beyond its Progressive and New Deal roots. “Happiness is not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort” said President Franklin Delano Roosevelt in his first inaugural address, in 1933.

Self-sufficiency is the key to reducing the budget impact of welfare, and work requirements are necessary to that, Heartland’s Welfare Reform Report Card states. “Successful welfare reform can save lives and produce positive effects on multiple generations,” the Heartland report states. “It can save taxpayers billions of dollars and help address such serious social maladies as crime, alcoholism, and teenage pregnancy.”

 

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