Welfare Reform Makes a Case for Boosting Welfare of Working Poor

When the nonpartisan Urban Institute recently released the most detailed study yet of women who have left the welfare rolls, it offered ammunition to both critics and supporters of the landmark 1996 welfare reform law.

Supporters pointed to the findings that 71% of the women who had left welfare from 1995 through 1997 were still off the dole--and that 61% of them were working, at wages significantly above their welfare benefit, and comparable to the wages for all low-income working families. Critics noted that fewer than one-quarter of the former recipients had health insurance in their new jobs, and that about a third reported economic strains such as being forced to reduce the size of meals at some point in the last year.

Yet, those economic difficulties were not significantly greater than those reported by other low-income working families who had not been on welfare recently. And that convergence points toward what may be the most important lesson of the Urban Institute study: the need for policies to bolster all working families struggling to stay out of poverty. One of the unanticipated benefits of welfare reform may be to bring that need into clearer focus.

Few issues in Bill Clinton’s presidency have generated more anger on the left than his decision to sign the welfare reform bill--which ended the federal entitlement to welfare, imposed strict work requirements on recipients and set a five-year lifetime limit for aid. That liberal resistance is flaring again in the Democratic presidential race, with former Sen. Bill Bradley, who voted against the bill in 1996, continuing to criticize it. Yet the irony is that welfare reform, by moving millions of welfare recipients into the work force, may strengthen the case for one of the left’s top priorities: supporting the working poor.

Before welfare reform, the campaign dialogue about poverty inevitably collapsed into an argument about whether welfare recipients should be compelled to work. But now that work is required, there’s more discussion in both parties about ensuring that work is more rewarding than welfare. When liberal Sen. Paul Wellstone (D-Minn.) says that “if people work hard, they shouldn’t be poor in America,” he expresses a sentiment with far more popular support than the idea that no one on welfare should be poor.

That’s evident even in the actions of a Republican-controlled Congress usually skeptical of new federal initiatives. Since 1996, Congress has approved an increase in the minimum wage, a $24-billion program to provide health insurance for the children of working poor families, and a measure permitting states to use federal Medicaid dollars to cover working poor adults (which six states, including California, have now done.)

In 2000, both Bradley and Democratic opponent Al Gore are looking to do more. Gore has already called for a $1 hike in the minimum wage, an increase in the earned-income tax credit for married couples and government funding for universal preschool--which could ease the day-care crunch for working parents. Bradley is mulling his own proposals to raise incomes, subsidize day care and provide health care to low-income families.

Yet Bradley has taken a long step away from Gore by challenging the welfare reform law itself. Aides say Bradley hasn’t decided how, if at all, he’d seek to revise the welfare law. But in an interview, he made clear that his objections to the law are fundamental--so much so they would demand basic changes if he acted upon them as president.

Bradley criticizes the decision to end the federal entitlement to welfare, the time limits and the bill’s core provision--the requirement that recipients accept work within two years. “We know the most important period in a child’s life is from birth till age 3, and that’s when the bond between the mother and the child is absolutely critical,” Bradley says. “What this bill does is break that bond.” Asked whether the problem is a shortage of adequate day care or the basic requirement that mothers on welfare leave the home to accept work, Bradley insists: “Both.”

In a separate interview, Gore planted himself firmly on the opposite side. He expressed puzzlement about Bradley’s objection to the law’s two-year work requirement by noting that both partners now work in “7 of 10 American families with two parents”--and that few of them are given two years of maternity leave. And he responded with an unequivocal “yes” when asked if he would maintain the time limits. Those limits, Gore said, are “important as a signal that [welfare] is a way station, not a way of life. And there are sufficient exceptions for the cases where really the time limit is not appropriate.”

While the spectacular decline in the welfare caseload (down 40% since 1996) has attracted justified applause, the early studies of the law’s impact do raise some warning signs. In the Urban Institute study, surprisingly few former recipients were receiving the Medicaid and food stamps for which they remain eligible; as Bob Greenstein, director of the Center on Budget and Policy Priorities, points out, that highlights the need for more effort by states to sign up all working poor adults eligible for that aid. Likewise, evidence suggesting that the very poorest single-mother families may be growing even poorer since 1995 shows the need for states to target more of their mounting welfare block grant surpluses toward training and wage support for those with the fewest skills.

The debate ahead for Democrats may be whether these problems demand a basic reconsideration of the welfare law. There’s clearly a liberal constituency still hostile to the reform. But proposing to loosen the work requirements or time limits could be risky for Bradley even in a Democratic primary (to say nothing of a general election); in one poll last year, 74% of Democrats said they wanted the next president to maintain the welfare time limits.

The larger question for Bradley is whether a frontal assault on the welfare law could threaten his broader cause of assembling a “great coalition” to attack poverty. Without moving more families from welfare to work, it will be difficult to significantly reduce poverty. (In no state is the welfare grant large enough to lift a family over the poverty line.) It’s reasonable to ask government to do more for families that work hard for low wages. But if Democrats retreat from the principle that anyone who can work has a responsibility to work, they could find it much tougher to argue that government itself must shoulder more responsibility to uplift the poor.

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