Last night, former President Bill Clinton claimed that President Obama had not gutted welfare reform. Clinton proclaimed that Obama would actually strengthen welfare reform by urging states to increase the number of people moving “from welfare to work” by 20 percent.
What is Obama really doing? In July, the Obama Administration illegally declared that it would waive all the work requirements in the 1996 welfare reform law. State welfare bureaucracies will no longer be obligated to obey the federal work requirements written in that law.
The Obama Administration will put in mothballs the formal purpose of welfare reform—to reduce the number of people dependent on government benefits. The Administration will abandon the legislative performance goal that encourages states to reduce welfare caseloads. It will weaken the “work participation” standards that require some 30 percent of able-bodied Temporary Assistance for Needy Families (TANF) recipients to engage in work activities for 20 to 30 hours per week.
Even worse, the Obama Administration will “waive compliance” with those work participation standards entirely and replace them with alternative standards designed unilaterally by Health and Human Services (HHS) bureaucrats without congressional input or approval. It will encourage states to use those new standards “in lieu of” the work requirements written in the statute. In other words, HHS explicitly plans to jettison the work requirements provided in the law and replace them with an alternative reform model.
What is that new model of reform? HHS asserts that states will be exempted from work “participation rate requirements” (requiring welfare recipients to engage in work activities) if they raise the number of individuals leaving welfare for work (called “employment exits”) by 20 percent. Clinton defended this by saying, “The requirement was for more work, not less.”
This sounds impressive, but what does it really mean?
In the typical state, 1.5 percent of the TANF caseload leaves welfare and obtains work each month. Thus, any state can be fully exempted from the TANF work requirements if it raises the number of exits to 1.8 percent. This is a miniscule change. What will the other 98.2 percent of the caseload be doing? No one knows for sure. But one thing we do know for certain: They will be exempt from the federal “work participation” requirements established in the welfare reform law.
It gets worse. The Administration plans to redesign the TANF program around a new performance measure: employment exits. Welfare bureaucracies have kept statistics on employment exits for decades. These statistics are meaningless as a measure of success in welfare reform. Why? Because all welfare caseloads have routine turnover. The larger the caseload, the greater the number of employment exits. As caseloads increase, the number of employment exits increases. As caseloads fall, the number of employment exits falls. Thus Obama’s new performance goal (increases in employment exits) is positively correlated with increases in welfare caseloads and negatively correlated with actual reductions in welfare dependence.
According to Obama’s new welfare reform performance goals, the pre-reform Aid to Families with Dependent Children program would be a stunning success. In the period prior to welfare reform, caseloads soared–and employment exits nearly doubled. By contrast, the post-reform TANF program would be judged a failure, as fewer people were going on welfare in the first place—caseloads plummeted, and employment exits declined.
Obama has not only gutted welfare reform, he has turned it completely upside down.