20 Years Later, Poverty Is Up, but Architects of 'Welfare Reform' Have No Regrets

By Zaid Jilani, The Intercept

25 August 16

gathering Monday in Washington, D.C., featured a bipartisan group of former government officials agreeing on the benefits of slashing the nation’s safety net.

This week marks the 20th anniversary of “welfare reform,” the 1996 law passed by Congress and administered by President Bill Clinton that strictly limited the amount of federal cash assistance that the poorest Americans can receive — transforming the Aid for Families with Dependent Children program into the more restrictive Temporary Aid for Needy Families.

One of the main impacts of the law was to help double the number of American households living in extreme poverty in America – defined as living on less than $2 a day.

The Capitol Hill event, hosted by the right-leaning American Enterprise Institute and the Progressive Policy Institute, which has been referred to as President Bill Clinton’s “idea mill,” celebrated the 20th anniversary of the law. Its architects said they had no regrets about its passage.

Former Michigan Republican governor John Engler, who pioneered state-level welfare cutbacks and who today serves as the head of the corporate lobbying group the Business Roundtable, recounted how Bill Clinton’s support helped make national welfare reform possible.

“It was pretty stunning in 1992 to have a Democratic candidate for president, albeit a 12-year veteran in the governor’s office talking about ending ‘welfare as we know it,’” he said. “That was a pretty decisive moment.”

Right-wing praise for Bill Clinton was a reoccurring theme at the event. Robert Rector, a Heritage Foundation scholar who has been dubbed the “intellectual godfather” of welfare reform, claimed that Clinton took up the same cause as Ronald Reagan, allowing him to outmaneuver George W.H. Bush. “In my perspective that’s the issue that put Clinton in the White House in ’93,” Rector said.

Thompson, who had served as another welfare reform pioneer when he was the Republican governor of Wisconsin, was unrepentant about the impact of the welfare overhaul.

“It did work,” he said. “Poverty went down and more people are working.”

Not everyone agrees with this rosy assessment, however. Luke Shaefer, a University of Michigan Social Work professor and one of the researchers who documented the rise in extreme poverty since the passage of welfare reform, told The Intercept that the claims of reduction in poverty and increase in employment were more true up until 2000. “Single moms did go to work, but it is unclear if welfare reform had much to do with it,” he said. The Earned Income Tax Credit “expansion is much more clearly important. And we know that the moms who left welfare were not any better off for it, and in some cases a lot worse off.”

Shaefer worked with sociologist Kathryn Edin on a book released last year that found before welfare reform, more than a million households with children were being kept out of extreme poverty thanks to federal assistance. By 2011, that had dropped to about 300,000. The researchers estimated that 1.5 million American households, including 3 million children, are today living at or below extreme poverty – double the number that it was in 1996.

The impact of welfare reform was particularly severe on women and minorities, with many female-headed families losing income and women being forced into low-wage work without benefits.

Shaefer points to research from Jim Ziliak, a prominent economist who studied the issue for the National Bureau of Economic Research. “Taken together, the results from leaver studies, demonstrations, and from national samples suggest that many women were worse off financially after welfare reform,” he writes. “Especially at the bottom of the distribution.”

Yet those deemed most vulnerable had little representation at the event. Of 19 invited speakers, just two were women.

Bruce Reed, one of Bill Clinton’s chief domestic policy advisers and the man behind the former president’s campaign pledge to “end welfare as we know it,” conceded that more remains to be done for the working poor, but told The Intercept that welfare reform was overall a “success.”

In fact, the latest numbers from the Current Population Survey Food Security Supplement found that 5.5 percent of American households — 6.7 million households in all — used a food bank or some other form of food charity in 2014. That’s the highest percentage since record-keeping on the matter began in 1995.

Despite the reforms, the stigma of receiving government assistance remains — and opponents of aid to the needy continue to demonize the remaining programs, such as food stamps. Maine’s Republican Governor Paul Lepage recently claimed that food stamp recipients in his state are on a “steady diet of Mars bars and Mountain Dew.”

At the conclusion of the event, the speakers and audience were treated to a reception featuring alcoholic drinks, cheesecake squares, specialty meats, and gourmet cheese.