In 1996, for the first time ever, a major Great Society program was repealed. Aid to Families with Dependent Children (AFDC) was replaced with finite block grants to the states under Temporary Assistance to Needy Families (TANF), bringing an end to the runaway growth of welfare spending. AFDC had encouraged states to increase their welfare caseloads and expand assistance to the non-needy. But, the design of TANF’s block grants reversed that destructive incentive and encouraged the states to focus their assistance on those truly in need. Click here to read “Block Grants Were THE Key to the Success of Welfare Reform.” (PDF – 287 KB)
The 1996 welfare reform was an unqualified success by every measure. Caseloads dropped by more than two-thirds, from a record 5 million families in 1994 to 1.6 million families in 2009. Recipients left welfare in droves — most of them to work — and earnings rose as child poverty fell. It was a true American success story.
But, following the 2008 election, liberals in Congress and the White House desired a return to the old days. So, in the first stimulus bill they undermined the 1996 reform by rewarding states that increased their welfare rolls and added a variety of new or expanded welfare benefits.
The first order of business for the CCWR will be to help reverse the damage done to the 1996 welfare reform. Then, it will concentrate on extending the successful design of returning power and responsibility to the states for other welfare programs, specifically Medicaid and Food Stamps.
Click here to view the original recommendations, approved by President-elect Reagan, Jan 6, 1981.