Before 1996, welfare payments were given out through a program known as Aid to Families with Dependent Children (AFDC). In the 1980s, the program began to draw heavy criticism. There were numerous stories of "welfare queens", women who cheated the welfare system, receiving multiple checks each month and growing wealthy while not working. Later, the scale of welfare cheating was found to be very small, but the image stuck and public dissatisfaction grew. Other critics claimed that welfare bred a poor work ethic in the poor.
The AFDC system was under constant attack in the 1980s; these continued in the 1990s, when the system became a favorite target of Newt Gingrich and other Republican leaders. Toughening the criteria for receiving welfare was the third point (out of ten) in the Republicans' Contract with America. The tide of public opinion in favor of some change to the welfare system was considerable.
One of the bill's provisions was a time limit. Under the law, no person could receive welfare payments for more than five years, consecutive or nonconsecutive.
Another controversial change was transferring welfare to a block grant system, i.e. one in which the federal government gives states "blocks" of money, which the states then distribute under their own legislation and criteria. Some states simply kept the federal rules, but others used the money for non-welfare programs, such as subsidized child care (to allow parents to work) or subsidized public transportation (to allow people to travel to work without owning cars).
Supporters held that the five-year limit was a necessity, that allowing states to experiment would result in improving welfare, and that the number of people affected by the five-year limit would be small. These controversies have not been fully resolved.
The consequences of welfare reform are still being debated today. Welfare rolls (the number of people receiving payments) dropped significantly in the years immediately after the passage of the bill. When the original legislation was reauthorized in the summer of 2003 there was a significant amount of debate on the topic, but not as much as there had been in 1996.Welfare before welfare reform
Reforming welfare
The stage was set by 1996. Even Bill Clinton, a Democratic President, had promised to "end welfare as we know it" in his State of the Union Address. The welfare reform movement reached its apex on August 22, 1996, when President Clinton signed a welfare reform bill, officially titled the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. The bill was hammered out in a compromise with the Republican-controlled Congress, and many Democrats were critical of Clinton's decision to sign the bill. In fact, it emerged as one of the most controversial issues for Clinton within his own party.Outcome
Critics made dire predictions about the consequences of welfare reform. For instance, they claimed that the five-year time limit was needlessly short, and that those who exceeded the limit might turn to mendicancy or crime. They also felt that too little money was devoted to vocational training. Others criticized the block grant system, claiming that states would not be able to administer the program properly, or would be too motivated by cost. Finally, it was claimed that though the bill might work in a booming economy like that of the 1990s, it would cause significant harm in a recession.