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Reforming welfare
The stage was set by 1996. Even Bill Clinton, a Democratic President, had promised to "end welfare as we know it" in his State of the Union Address. The welfare reform movement reached its apex on August 22, 1996, when President Clinton signed a welfare reform bill, officially titled the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. The bill was hammered out in a compromise with the Republican-controlled Congress, and many Democrats were critical of Clinton's decision to sign the bill. In fact, it emerged as one of the most controversial issues for Clinton within his own party.
One of the bill's provisions was a time limit. Under the law, no person could receive welfare payments for more than five years, consecutive or nonconsecutive.
Another controversial change was transferring welfare to a block grant system, i.e. one in which the federal government gives states "blocks" of money, which the states then distribute under their own legislation and criteria. Some states simply kept the federal rules, but others used the money for non-welfare programs, such as subsidized childcare (to allow parents to work) or subsidized public transportation (to allow people to travel to work without owning cars).
Outcome
Critics made dire predictions about the consequences of welfare reform. For instance, they claimed that the five-year time limit was needlessly short, and that those who exceeded the limit might turn to mendicancy or crime. They also felt that too little money was devoted to vocational training. Others criticized the block grant system, claiming that states would not be able to administer the program properly, or would be too motivated by cost. Finally, it was claimed that though the bill might work in a booming economy like that of the 1990s, it would cause significant harm in a recession.
Supporters held that the five-year limit was a necessity, that allowing states to experiment would result in improving welfare, and that the number of people affected by the five-year limit would be small. These controversies have not been fully resolved.
The consequences of welfare reform are still being debated today. Welfare rolls (the number of people receiving payments) dropped significantly in the years immediately after the passage of the bill. The original bill was set to expire in September of 2002; as of July, 2004, Congress had passed 7 temporary reauthorizations, generally of 3 months. Debate continued over Republican attempts to increase the amount of hours that recipients would need to work.
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