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Reform law helped reduce welfare rolls
By Cheryl Wetzstein
The 1996 welfare reform law -- not the booming economy -- was the primary catalyst for the mass exodus of women from the welfare rolls into the workplace, says a study drawn from nearly 20 years of census data.
The welfare law accounts for half the decline in the welfare caseload, economists June O'Neill and M. Anne Hill wrote in their recently released study for the Manhattan Institute.
The law also is responsible for "more than 60 percent of the rise in employment among single mothers," they said, noting that the largest gains were among the most disadvantaged women.
The robust economy of the late 1990s accounted for roughly 17 percent of the changes, added the authors, who based their findings on census data from 1983 to 2000. Other elements playing a role were a generous Earned Income Tax Credit and Medicaid for families leaving welfare.
The economists further say that if the economy stalls and unemployment climbs back to a level not seen since 1993, welfare rolls will grow only modestly, as long as the welfare law remains in place.
However, if Congress "chips away at the time limits and weakens work requirements" when it reauthorizes the law next year, "welfare participation could mount once again," said the authors, who are both associated with Baruch College in New York.
These findings are important because "opponents of the law are still trying to argue that the welfare law played little or no role" in the caseload declines, said Henry Olsen, executive director of the Manhattan Institute's Center for Civic Innovation, which sponsored the study.
The Web site of the New York-based think tank says it seeks to disseminate ideas and policies that "foster greater economic choice and individual responsibility."
With another round of debates on the law approaching, he said, "we thought it was time to see what the actual results of the first five years of the operation of the law were."
In August 1996, when the largely Republican-crafted welfare law was signed by President Clinton, there were 12.2 million people on welfare. The rolls had dropped to 5.7 million recipients by September 2000.
Poverty rates have fallen as well, and studies have found that most people leaving welfare are working.
Proponents of welfare reform hail these things as evidence of the law's success.
Critics, however, say people are leaving welfare mostly because of the good economy, and without it, their fragile hold in the work force will be lost and welfare rolls will revive again.
"What will happen to these families as the economy cools down? What safety net will catch their children when welfare time limits are reached, businesses downsize and layoffs hit the most vulnerable workers?" Marian Wright Edelman, president of the Children's Defense Fund, asked at a House Budget Committee hearing on working families last week.
A 1999 report by the White House Council of Economic Advisers, another authority on what has been driving caseload changes, said the 1996 law was responsible for "roughly one third" of the changes while the economy was responsible for 8 percent to 10 percent.
Mrs. O'Neill, a former director of the Congressional Budget Office, said their analysis of census data on single mothers ages 18 to 44 found that the economy played a "relatively minor" role in moving mothers from welfare to work.
"When you look back in time, you don't see anything like this," Mrs. O'Neill said of the dramatic caseload decline. The census data clearly shows "that something new happened that had never happened before," which was the welfare reform law.
©2001 The Washington Times
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