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1996 Welfare Reform Law Caused Increase In Extreme Poverty

New Republic Magazine endorsing 1996 welfare reform. Fair use.

New Republic Magazine endorsing 1996 welfare reform.

The 1996 welfare reform law championed by the Clinton Administration known as the Personal Responsibility and Work Opportunity Reconciliation Act was supposed to bring in a new era and “end welfare as we know it.”

In some sense it did, as the consequence of the law has been a considerable increase in extreme poverty in America according to a new book by Kathryn Edin and H. Luke Shaefer.

The book, “$2.00 a Day: Living on Almost Nothing in America,” traces the rise of extreme poverty in America after the 1996 law using the World Bank poverty metric of living on $2 a day. One of the central contentions of the book is that the 1996 program Temporary Assistance to Needy Families (TANF) is much less effective in reducing extreme poverty than the previous Aid to Families with Dependent Children (AFDC) program.

Having those in need use TANF instead of AFDC led to the number of Americans living on $2 a day or less to more than double in the years following the 1996 law. As noted by CBS News on September 1, approximately 1.5 million households, including 3 million children are now living in extreme poverty in America:

TANF isn’t working, Shaefer and Edin said. Since the program was created in 1996 to replace a 60-year-old welfare system, the number of families living on less than $2 a day has more than doubled. In 2012, only one-quarter of poor families received TANF benefits, down from more than two-thirds in 1996, according to the Center on Budget and Policy Priorities. According to “$2.00 a Day,” the welfare program reached more than 14.2 million Americans in 1994, but by 2014 only 3.8 million Americans were aided by TANF.

Contrary to stereotypes of lazy poor people promoted by opponents of welfare programs, many of those living in poverty do, in fact, work. According to the Economic Policy Institute, most of those in poverty who are able to work do work.

Unfortunately, one of the largest groups in poverty in America is children. A 2014 report from UNICEF noted that 1 in 3 children in the US lives in poverty as measured by living in a household whose income is below 60% of the national median income. The number of children in poverty increased after the Wall Street-induced financial crisis and resulting Great Recession.

While the banksters were not only made whole but wealthier by government actions such as TARP and secret Federal Reserve loans, poor families and children had to try and survive in the depressed economy on what was left of anti-poverty programs after the 1996 cuts.

While the 1996 law may have “ended welfare as we know it” for the poor, it did nothing to stop corporate welfare, which has hit new levels of largesse.

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Dan Wright

Dan Wright

Daniel Wright is a longtime blogger and currently writes for Shadowproof. He lives in New Jersey, by choice.