Welfare Law Creates Race to the Bottom

by Jean Taddie

The Personal Responsibility and Work Opportunity Reconciliation Act that President Clinton signed into law on August 22, 1996, dramatically changed nearly all aspects of welfare. In their efforts to save money and put poor people to work, the federal government has made sweeping changes to programs that provide cash aid, food stamps, child care, and other social services.

The new Temporary Aid to Needy Families (TANF) block grant replaces the old AFDC system that required states to maintain a basic level of human services. Federal reform pushes the responsibility for welfare to the states. “It’s an unfunded mandate to the states,” explained Brian Davis, Director of NEOCH. “States are going to have to pay for a lot more.”

In order to apply for federal block grant money, each state will have to create its own welfare policy and submit it to the federal government for approval before July, 1997. Last September, Ohio was one of the first three states to submit a plan. The Ohio Department of Human Services submitted Sub HB 167, a welfare reform law that was approved in 1995.

Under the newly “reformed” welfare system, states no longer have a responsibility to operate a program of cash assistance for needy families for any period of time. States can choose to eliminate benefits to legal aliens and other non-citizens. States are no longer required to provide access to education, training, job placement assistance, work programs, or child day care assistance, according to the Center for Law and Social policy. In addition, states are prohibited from using federal TANF money to pay benefits to a family when any member of that family has received benefits for more than 60 months from the date the law went into affect.

According to estimates by the Congressional Budget Office (CBO), welfare reform should save the federal government about $3 billion in fiscal year 1997. Of these savings, 44% will be from restrictions on benefits to non-citizens. Another 43% will be saved through cuts to Food Stamps.

Copyright NEOCH and the Homeless Grapevine published March 1997-April 1997 Issue 20