The federal welfare reform of 1996, formally known as the Personal Responsibility and Work Opportunity Reconciliation Act, was among the most significant domestic policy achievements in modern American history.
Its passage meant that, for the first time, welfare recipients would be expected to work toward self-sufficiency and that the welfare bureaucracy's focus would be on facilitating employment rather than simply writing checks. For decades prior to the reform's passage, welfare had essentially been viewed as an entitlement. Benefits were offered to qualified participants, with few strings attached. But under the new program, Temporary Assistance to Needy Families (TANF), beneficiaries were required to go to work, search for work, participate in short-term training or education, or undergo drug and alcohol counseling.
And it worked. Since 1996, welfare caseloads have dropped by more than 50 percent. Millions of Americans once consigned to a lifetime of dependency have moved into the mainstream culture of work.
Now, however, welfare reform is potentially being undercut. In July 2012, the federal Department of Health and Human Service (HHS) announced that it would begin "encouraging states to consider new, more effective ways to meet the goals of TANF, particularly helping parents successfully prepare for, find, and retain employment." To that end, HHS issued a "guidance" memorandum expressing its willingness to unilaterally waive existing TANF rules "to allow states to test alternative and innovative strategies, policies, and procedures that are designed to improve employment outcomes for needy families." The HHS memo undermines TANF's work rules by:
- Doing away with work participation rates in some instances;
- Extending periods of education and training;
- Liberalizing the counting of subsidized employment; and
- Discouraging one-time non-assistance payments.
The Obama administration said that the change was a response to requests by governors for more flexibility in administering the program and that it was not intended to "waive or dismantle" the work requirement. But in some key respects, the HHS waiver is inconsistent with this statement. The language itself signals the agency's willingness to water down the program's current focus on work participation rates as the primary test of each state's compliance with the goals of welfare reform.