NCPA - National Center for Policy Analysis

Making Welfare Work

April 12, 2004

Congress has temporarily extended the 1996 welfare reform law that established Temporary Assistance to Needy Families (TANF), the federal program that provides cash assistance to poor families. The Bush Administration and the House of Representatives have sought to improve TANF by adopting stronger work requirements, while simultaneously increasing child care funding by $2.1 billion. Legislation to reauthorize the program has been held up by the Senate, which continues to resist the administration's push for stronger work requirements.

This is unfortunate. Studies have found that strictly enforced work requirements were the most important reason for TANF caseload reductions over the past decade. A stronger emphasis on employment would further reduce the attractiveness of welfare and strengthen recipients' motivation to find a job and keep it, say the National Center for Policy Analysis' Joe Barnett and Todd Gabel.

With the goal of reducing welfare dependency, TANF introduced a number of significant reforms, including time limits on the receipt of benefits, work requirements and an array of financial incentives. The results have been positive:

  • From 1996 to 2002, the number of families on welfare fell from 4.5 million to 2.1 million, and caseloads continue to remain at low levels despite the recent economic slowdown.
  • Between 63 and 87 percent of those leaving welfare have found employment, with the average household income of welfare leavers reaching about 125 percent of the poverty level.
  • The reduction in welfare rolls has not contributed to an increase in poverty; today, just 9.6 percent of families live in poverty - one of the lowest levels on record.

Welfare reform reauthorization must strengthen work requirements by reducing exemptions and stressing the importance of private sector employment. It is time for lawmakers to build on past success and empower welfare recipients to lead happier, more productive lives, say Barnett and Gabel.

Source: Joe Barnett and Todd Gabel, "Welfare Reform: Finishing the Job," Brief Analysis No. 472, April 12, 2004, National Center for Policy Analysis.

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