WASHINGTON -- In recent speeches and debates, Republican Presidential contenders Mitt Romney, Rick Santorum and Newt Gingrich have all invoked the 1996 welfare reform project as a model for responsibly cutting federal spending on social safety-net programs like food stamps and health care.
But while welfare reform did succeed in slashing the number of poor citizens receiving government assistance, it has not reduced the need for aid. American poverty today is deeper and more widespread than in 1996, and the government offers less relief. Economists and poverty experts predict inadequate aid and needless suffering if the same model were to be adopted for other social programs.
"In a recession, it doesn't work," says former GOP staffer Ron Haskins about welfare as it now functions after the passage of the 1996 welfare reform bill he helped shape. "Even in 2001, which was a relatively mild recession, we saw a lot of these single mothers leaving the workforce because they just couldn't find a job and being forced off the welfare rolls. That's an even bigger problem now," adds Haskins, now co-director of the Brookings Institution's Center on Children and Families.
During Sunday's debate in Concord, N.H., Romney echoed a call from Santorum to model a host of social services on the welfare reform model. "I'd cut programs, a whole series of programs ... return to states a whole series of programs, food stamps, housing vouchers, Medicaid and then set how much goes to them," Romney said.
In 1996, the year the law was passed, the poverty rate stood at 13.7 percent. Today, it's 15.1 percent, with 46.2 million Americans living in poverty, the highest number on record. But welfare rolls have declined by nearly two-thirds from a peak of 14.2 million in 1994 to about 5 million today. Indeed 21.6 percent of all American children are poor, compared with 20.5 percent in 1996.
Welfare was so demonized during the 1990s that even progressives today rarely discuss it as among the major accomplishments of President Franklin Delano Roosevelt's New Deal. But the program established in 1935 served as one of the most important American anti-poverty efforts for more than 60 years. In 1996, however, President Bill Clinton and a Republican-dominated Congress did not merely modify Roosevelt's program; they completely dismantled it, substituting instead a new set of block grants to states for the federally administered aid.
Each state now has broad leeway in how it spends this money received from the federal government (known as a Temporary Assistance for Needy Families grant, or TANF) in place of the uniform federal standards and oversight that guided the old welfare program. After 1996, other social programs previously funded by states became financed by block grants. The financing of poverty relief shrank dramatically as state governments used federal money (instead of state funds) for child protection and domestic violence. The state services remained, but the amount of federal funds devoted to poverty relief was radically diminished.
And so while states spend all of their block grant funds, many are tightfisted about direct cash support for poor families. In Gov. Rick Perry's Texas, for instance, only 8 percent of the state's poor population receives any help.
Nor are benefits particularly generous. The average payout for a family of three in 2011 is less than half the federal poverty level, currently at $18,530.
The overhaul of the welfare program placed three key conditions on the states: Nobody can receive welfare for more than five years over the course of a lifetime, and everyone who receives assistance must be working within two years. The bill also barred immigrants from receiving assistance until five years after arriving in the country.
Many problems with the new welfare program became evident early on. By 1998, although both state and federal coffers were full as the economy boomed, the Government Accountability Office warned that many families pushed off state welfare rolls were unable to access government child support aid, even though they remained impoverished.
Also the work requirements are not accompanied by mandatory state spending for job training or education and do not guarantee that jobs are available. Today, when more than four job seekers exist for every open job, requiring that people do work to qualify for anti-poverty aid poses a challenge. Many of the available jobs are low-wage positions that provide little prospects for raising workers out of poverty. Forcing a worker out of welfare aid after five years is not necessarily a welfare-to-work success if he or she has to raise children on minimum wage afterward.
Some states began treating welfare recipients like criminals, making welfare support seem more like criminal probation. Those accepting assistance had to endure humiliating practices -- drug testing, fingerprinting, mug shots, and even unannounced home inspections -- as detailed in a study by University of Connecticut Law Professor Kaaryn Gustafson.
While the Clinton-era dot-com bubble and the Bush-era housing bubble helped mask some of the problems with welfare reform, the Great Recession has proved it to be a total failure. In 1995, 62 percent of families with children living below the poverty line received welfare aid. By 2008, that number had declined to 22 percent, according to a 2009 study by the Institute for Policy Studies, a liberal think tank.
"The nation's cash assistance program for poor families with children has not played much of a countercyclical role during the current recession," notes an August Urban Institute study. "Since the start of the recession in 2007 through 2010, the unemployment rate increased by 88 percent while national TANF caseloads increased by only 14 percent." Today the United States features the lowest level of economic mobility among developed nations.
But this has not prevented Santorum from touting his work in Congress on welfare reform in the 1990s and promoting block grants as an ideal vehicle for delivering food stamps, affordable housing and health care for the poor. During Sunday's debate in Concord, N.H., Santorum cited those three programs in response to a question from NBC's David Gregory about which budget items he would cut "to make Americans feel pain."
"Food stamps is another place, we gotta block grant it and send it back to the states just like I did on welfare reform. Do the same thing with Medicaid [and] housing programs ... require work, and you put a time limit on it," Santorum said. "We'll help take these programs which are now dependencies ... and you help people move out of poverty."
In December Romney raised welfare reform's track record to justify his support of not only sending food stamp money to states in block grants, but also to cut the program by $127 billion: "Cutting welfare spending dramatically, I don't think will hurt the poor," Romney told Fox News' Chris Wallace.
But groups like the Center on Budget and Policy Priorities point out that using the block grant model for food stamps or other social programs could lead to severe problems, especially during a recession, because the level of aid remains the same despite fluctuations in the economy.
Right now food stamps and housing programs receive automatic funding boosts when unemployment or food prices rise. From December 2007 to December 2009, the number of people receiving food stamps climbed 45 percent, according to the Center on Budget and Policy Priorities.
Prior to 1996, the federal government would automatically increase welfare spending during a recession, provided states kicked in some funds. But since 1996, the government has kept the program's funding at $16.5 billion a year. Taking into account inflation, welfare funding has declined 30 percent over the past 15 years. (President Barack Obama tempered this by providing a one-time $5 billion emergency block grant in the 2009 stimulus package, largely used by states to subsidize jobs for the poor. GOP staffer Haskins estimates that such funding paid for 260,000 jobs.)
Both candiate Romney and his rival Jon Huntsman praised the federal budget proposed last April by Rep. Paul Ryan (R-Wis.), which would have changed the financing of food stamps and Medicaid into block grants and sliced $1.4 trillion from Medicaid and $127 billion from food stamps funding over a decade. Gingrich initially criticized the Ryan budget as "right-wing social engineering," but distanced himself from those comments as the Republican debate season continued.
As Catholics, both Santorum and Gingrich could face a backlash over their budgetary positions from members of their own faith. The United States Conference of Catholic Bishops opposed the Ryan budget, declaring, "A just framework for future budgets cannot rely on disproportionate cuts in essential services to poor persons. It requires shared sacrifice by all, including raising adequate revenues, eliminating unnecessary military and other spending, and addressing the long-term costs of health insurance and retirement programs fairly."
Slashing food stamps and public housing aid are curious targets for deficit reduction, some economists say. Last year allocations for food stamps totaled just $72 billion, while affordable housing vouchers amounted to only $18 billion. Together, the two anti-poverty programs comprise just 7 percent of the $1.3 trillion federal budget deficit, and less than 3 percent of the $3.6 trillion federal budget.
Economists also point out that Medicaid spending can indeed be cut but without imposing the burden on the poor. The program's costs could be reduced significantly, for instance, by allowing the government to negotiate prescription drug prices with pharmaceutical corporations.
While Gingrich has repeatedly touted his work on welfare reform as an example of his bipartisan leadership in stump speeches and debates, last February, the Conference of Catholic Bishops issued a call to strengthen welfare and other anti-poverty programs that stands in stark contrast to the positions taken by the candidates. "We reiterate our call for a minimum national welfare benefit that will permit children and their parents to live in dignity. A decent society will not balance its budget on the backs of poor children. Sadly, the fiscal difficulties in many of our states have meant disproportionate cuts and unfair burdens for poor families."
Says Haskins: "We need a better program."