The Welfare Reform Act of 1996: Summary & History

Instructor: Matthew Helmer

Matt is an upcoming Ph.D. graduate and archaeologist. He has taught Anthropology, Geography, and Art History at the university level.

The Welfare Reform Act of 1996 was one of the most significant bi-partisan pieces of legislation passed in recent generations. This lesson covers specifics of the act, key players, and the historical impact of the legislation today.

Introduction: Balancing Safety Nets and Budgets

How do we maintain an independent society but also take care of those in need? This question has plagued governments for most of modern history and dominates partisan politics today. As a capitalist country based on private profit, the United States prides itself on individual work and success. In capitalist economic systems, however, privatization can leave many people out in the cold when it comes to social welfare and opportunity. A series of welfare reforms throughout the 20th century, which are presented below, have tried to balance safety nets, budgets, and a national ideology of self determination.

History of Welfare Reform in the 20th Century

Ever since the Great Depression of the 1930's, safety nets and social welfare have dominated the role of the government in balancing a 'survival of the fittest' capitalist mentality with safety nets for the poor. At that time, Franklin Delano Roosevelt enacted what became known as the New Deal, a series of welfare policies that provided work, jump-started economic recovery, and instituted welfare for the poor, elderly, and unemployed. One of the key provisions of the New Deal was a program known as Aid to Families with Dependent Children (AFDC) aimed at providing welfare for single-mother families.

From its inception, AFDC was extremely controversial. More conservative politicians believed it encouraged children out of wedlock and irresponsible reproduction, as well as providing incentives not to work. Additionally, the funds needed to run the program were viewed as unsustainable by economic conservatives. This all boiled over in the 1990s leading to the Welfare Reform Act of 1996.

Passage of the Welfare Reform Act of 1996

President Bill Clinton signing the Welfare Reform Act of 1996.
Bill Clinton Welfare Reform Act

In 1996, President Bill Clinton faced a difficult re-election campaign. Republicans had gained control of both the House and the Senate for the first time in nearly 50 years. The Speaker of the House, Newt Gingrich, put pressure on Clinton to act on welfare reform, which had long been on the agenda of conservatives. Welfare reform proponents, such as Florida U.S. Representative E. Clay Shaw, who introduced the bill, played on ideological principles of liberty, saying 'The inscription at the base of the Statue of Liberty was written before welfare. ... People came to this country to work. Now the question becomes, Are these handouts a magnet that is bringing people into this country? To some degree, they are'. President Clinton had also won his election in 1992 partly on the promise of welfare reform.

The Welfare Reform Act of 1996 was officially named the Personal Responsibility and Work Opportunity Reconciliation Act, a name that again pushed the ideals of self-determination and work ethic. The first major proponent of the welfare act was the replacement of AFDC, which had now been in effect for approximately 60 years, with what was known as the Temporary Assistance for Needy Families, or TANF. TANF placed a lifetime limit of five years on eligibility for welfare and required a person to be employed within two years of receiving benefits. In order to maintain childcare benefits previously provided by AFDC, the new bill provided tax credits and childcare benefits to people eligible for welfare while they worked. Passage of the act was hailed as one of the most significant bi-partisan achievements of our time.

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