RALEIGH – For the most part, the Democratic and Republican national conventions have presented profound policy differences to American voters, on issues ranging from taxes and Iraq to education and abortion. I found it interesting, however, that speakers in both Denver and St. Paul have harkened back to the welfare reform of the 1990s as a symbol of successful government reform.
It fits the bill in several ways. Welfare reform got its start in the states, not in Washington, with innovative governors such as Wisconsin’s Tommy Thompson. In the early 1990s, they experimented with time limits, employment requirements, and other policies designed to transform a culture of dependency into a culture of (subsidized) work. The results didn’t take long to spot – dramatic declines in welfare caseloads, in part because the new rules made benefits less attractive to some potential applicants and in part because the work rules acted as a bridge to the employment market for some recipients who had previously lacked significant work experience.
Washington noticed. After the Republican takeover of Congress in 1994, GOP lawmakers immediately sought to enact federal laws endorsing and expanding the welfare reforms underway in some states. President Clinton opposed the original bill, but later signed a reform bill in 1996 (Dick Morris, his former political aide, credits this event for Clinton’s easy reelection).
As a bipartisan compromise, the welfare-reform bill attracted criticism from both sides of the ideological spectrum. The Left screamed bloody murder, predicting massive increases in homelessness and destitution. The Right warned that reforming welfare was not the same thing as ending the welfare state, but would instead replace a cash dole with work-support programs such as day-care subsidies.
The apocalyptic predictions from the Left were clearly wrong. According to a new Heartland Institute analysis of welfare-reform efforts across the U.S., the poverty rate declined from 1996 to 2006, though not in every state. North Carolina actually fares poorly on this measure, 48th, with a net increase in poverty. However, as with all such comparisons, it is critically important to remember that the two populations being compared – state residents in 1996 and state residents in 2006 – differ in ways unrelated to public policy, most critically the presence of tens of thousands of low-income immigrants from other lands (who almost certainly increased their standard of living by entering the U.S., but have the effect of pulling down average incomes and pushing up poverty rates).
Overall, the Heartland study gives North Carolina a rank of 17th, combining measures of welfare-reform policies and results. The state ranked 9th in the rate of decline of cash-welfare recipients, 16th in the decline of teen births, and 30th in the rate of work participation. The authors also issued letter grades in five categories of welfare policy: work requirements, time limits, family caps (limitations on benefits as recipients have more children), cash diversion (lump-sum payments in lieu of perpetual dependency), and sanctions. North Carolina earned an overall grade of B for its policies, with a C in work requirements, D in time limits, B in family cap, A in cash diversion, and D in sanctions.
The Right was correct to point out that welfare reform would not necessarily reduce the size and cost of government. It was worth doing on its own terms, however, because the previous system was destructive of families, personal responsibility, and the work ethic. Bill Clinton deserves credit for signing the bill. The Republican Congress deserves credit for writing the bill. Previous Republican and Democratic governors deserve credit for pioneering the idea.
So both parties properly claimed welfare reform as a significant accomplishment. Only the hard Left was left seething, a state with which they have more than a passing familiarity.
Hood is president of the John Locke Foundation.