Stimulus Bill Would Bring Return to Welfare

Posted By Bobby Eberle On February 12, 2009 at 7:36 am

One of the major accomplishments of the 1990s combination of President Clinton and a Gingrich-led Republican Congress was that of welfare reform. Some may argue that it was Clinton's plan. Others would say that the Republicans forced him to do it.

Regardless of where the credit ends up, the notion and structure of the welfare program was fundamentally changed. Now, through Obama's stimulus plan, all that work and effort may be wasted.


As noted in an editorial in National Review, "Democrats have inserted provisions into the catch-all stimulus bill that will reverse Clinton-era welfare reform, re-establishing the wasteful, incentive-killing system whose transformation was the bipartisan pride of the 1990s."

First, some background... Prior to the welfare reform measures promoted by Clinton and Gingrich, there was no incentive to move off the welfare rolls. Rather than a temporary station in life, welfare became a way of life.

As the editorial explains, before the reforms, "the federal government simply gave the states more money for every family they added to the welfare rolls." Of course, the states wanted all the money they could get. So, the more people on welfare, the more money for the state treasuries.

The Clinton-Gingrich reforms replaced that bounty-hunter system with a flat rate for each state, based on population and other factors. That gave state-level welfare authorities a better set of incentives, encouraging them to use their resources in the most effective manner and to reserve them for the truly needy.

The results were successful—spectacularly so. The Personal Responsibility and Work Opportunity Act was followed by reductions in both the number of families on welfare and the rate of poverty. Single women entered the workforce in substantial numbers and the household incomes of former welfare recipients went up. In other words, the incentives to reduce welfare dependence and help people to find work, worked.

The editorial points to a report by The Heritage Foundation which states that "little-noted provisions in the U.S. House of Representatives and U.S. Senate stimulus bills actually abolish this historic reform."

Authors Robert E. Rector and Katherine Bradley note that in Obama's stimulus plan "the federal government would begin paying states bonuses to increase their welfare caseloads."

Indeed, the new welfare system created by the stimulus bills is actually worse than the old AFDC (Aid to Families with Dependent Children) program because it rewards the states more heavily to increase their caseloads. Under the stimulus bills, the federal government will pay 80 percent of cost for each new family that a state enrolls in welfare; this matching rate is far higher than it was under AFDC.

Votes in the House and Senate could come as early as Thursday or Friday for the stimulus plan. As the American people slowly start to digest the impact of the massive government takeover of the economy, public opinion is starting to fall. Karl Rove points out in National Review that "CBS News polling reveals a 12-point drop in support of the bill over the past month." A recent poll by Rasmussen Reports indicates that 67% of those surveyed believe they could do a better job on the economy than Congress.

We must continue to put pressure on our legislators to fight this plan. This is not just a spending plan that America can't afford. It is massive government intervention and left-wing social engineering. Making more people dependent on welfare is not the American way.

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