Sources: US Office of Manajement and Budget (1980–2000). State outlay figures calculated by the author: see Rector and I auber. Amencis Faled $54 Trikon War on Poverty. 1995. Projected spending hased on OMB Budget FY 2001 and White House, Blue Print for New Begerings, 2001

The Effects of Welfare Reform

In 1996, Congress enacted a limited welfare reform; The Aid to Families with Dependent Children (AFDC) program was replaced by the Temporary Assistance to Needy Families (TANF) program. Critically, a certain portion of AFDC/TANF recipients were required to engage in job search, on the job training, community service work, or other constructive behaviors as a condition for receiving aid. The effects of this reform have been dramatic.

AFDC/TANF caseloads have been cut nearly in half.

•TANF outlays have fallen substantially. (See chart 5.)

• The decline in the TANF caseload has led to a concomitant decline in • Food Stamp enrollments and spending.

Chart S

The Heritage Foundation

How Welfare Reform Reduced Expenditure:
AFDC and TANF Expenditures

Mates Aid to Families with Dependent Children (ADC) wat replaced by the new Temporary Assistance to Needy
Families (TANF) program starting in 1997

Source Office of Management and Budget Budget of the Lined States Government Feed Your 2000 appends State outlay calculated based on legally required and historic ratios from Congressional Research Service publications.

While critics predicted the reform would increase child poverty, the exact opposite has occurred. Once mothers were required to work or undertake constructive activities as a condition of receiving aid they left welfare rapidly. Employment of single mothers increased substantially and the child poverty rate fell sharply from 20.8 percent in 1995 to 16.3 percent in 2000. The black child poverty rate and the poverty rate for children living with single mothers are both at the lowest points in U.S. history.

In the welfare reform 1996 all sides came out as winners: taxpayers, society and children. By requiring welfare mothers to work as a condition of receiving aid, welfare costs and dependence were reduced. Employment increased and poverty fell. Moreover, research shows that prolonged welfare dependence itself is harmful to children; reducing welfare use and having working adults in the home to serve as role models for children will improve those children's prospects for success later in life.

The workfare principles of the 1996 reform should be intensified and expanded. Work requirements in TANF should be strengthened. Similar work requirements should be established in the Food Stamp and public housing programs. Finally, because the reform has clearly succeeded in cutting welfare use, TANF outlays should be reduced by 10 percent in future years.

Welfare Spending and the Collapse of Marriage

As noted previously, about half of all means tested welfare spending is devoted to families with children. Of this spending on children, nearly all goes to single-parent families. Chart 6 shows the percent of aid to children in major welfare programs which flows to single-parent families. The single parent share is generally well above 80 percent.

Clearly, the modern welfare state, as it relates to children is largely a support system for single parenthood. Indeed, without the collapse of marriage which began in the mid-1960's, the part of the welfare state serving children would be almost non-existent.

The growth of single-parent families, fostered by welfare, has had a devastating effect on our society. Today nearly one third of all American children are born outside marriage. That's one out-of-wedlock birth every 35 seconds. Of those born inside marriage, a great many will experience their parents' divorce before they reach age 18. Over half of children will spend all or part of their childhood in neverformed or broken families.

This collapse of marriage is the principal cause of child poverty and a host of other social ills. A child raised by a never-married mother is seven times more likely to live in poverty than a child raised by his biological parents in an intact marriage. Overall, some 80 percent of child poverty in the U.S. occurs to children from broken or never-formed families. In addition, children in these families are more likely to become involved in crime, to have emotional and behavioral problems, to be physically abused, to fail in school, to abuse drugs, and to end up on welfare as adults.

Since the collapse of marriage is the predominant cause of child-related welfare spending, it follows that it will be very difficult to shrink the future welfare state unless marriage is revitalized. Policies to reduce illegitimacy, reduce divorce and expand and strengthen marriage will prove to be by far the most effective means to: ⚫ reduce dependence;

cut future welfare costs;

⚫ eradicate child poverty; and,

improve child well-being.

Tragically, current government policy deliberately ignores or neglects marriage. For every $1,000 which government currently spends subsidizing single parents, only one dollar is spent attempting to reduce illegitimacy and strengthen marriage. Fortunately, President's Bush's budget plan does propose a new program to "promote responsible fatherhood." This proposed program could become the seedbed for a broad array of new initiatives to strengthen marriage. Still, the money requested is pitifully small: only $64 million per year. This amounts to roughly one penny for each one hundred dollars in projected welfare spending. The budget allocation to the new fatherhood program in FY 2002 should be increased fivefold with the funds diverted from TANF outlays. Beyond FY 2000 some 5 to 10 percent of Federal TANF funding should be devoted to pro-marriage activities.

Conclusion

When Lyndon Johnson launched the war on poverty he did not envision an endless growth of welfare spending and dependence. If Johnson returned today to see the size of the current welfare state he would be deeply shocked.

President Johnson's focus was on giving the poor a "hand up" not a "handout." In his first speech announcing the war on poverty, Johnson stated, "the war on poverty is not a struggle simply to support people, to make them dependent on the generosity of others." Instead, the plan was to give the poor the behavioral skills and values necessary to escape from both poverty and dependence. Johnson sought to address the "the causes, not just the consequences of poverty."

Today, President Johnson's original vision has been all but abandoned. We now have a clear expectation that the number of persons receiving welfare aid should be enlarged each year, and that the benefits they receive should be expanded. This expectation is clearly reflected in the future spending projections in Appendix A. Any failure to increase the numbers of individuals dependent on government and the benefits they get is regarded as mean spirited.

Yet the expansion of the conventional welfare system is destructive. More than twenty years ago, then President Jimmy Carter stated, "the welfare system is antiwork, anti-family, inequitable in its treatment of the poor and wasteful of the taxpayers' dollars." President Carter was correct, yet today little has changed except that the welfare system has become vastly larger and more expensive.

This expansion of welfare spending has harmed rather than helped the poor. Instead of serving as a short-term ladder to help individuals climb out of the culture of poverty, welfare has broadened and deepened the culture of self-destruction and trapped untold millions in it.

Rather than increasing conventional welfare spending year after year, we should change the foundations of the welfare system. Policy makers should embrace three basic goals.

1. We should seek to limit the future growth of aggregate means-tested welfare spending to the rate of inflation or slower.

2. We should require welfare recipients to perform community service work as a condition of receiving aid along the lines of the TANF program operating in Wisconsin.

3. We should support programs which foster and sustain marriage rather than subsidizing single parenthood. In addition, we should reduce the anti-marriage penalties implicit in the welfare system.

These three goals are synergistic. They will operate in harmony and reinforce each other. In the long run, it will be difficult to control welfare spending merely by cutting funding. Rather, if we change the behaviors of potential recipients we will reduce the need for future aid. As the need for aid diminishes, spending growth will slow and then decline, and the well-being of the poor and society as a whole will rise.

Mr. RYAN. So the growth of spending is increasing.

Could we do better in social service block grants? Absolutely.

But the point is, this bill is really about the big guy versus the little guy. Many Catholic charities, many religious charities already get Federal funds. You see tenets, such as in Catholic hospitals, whereby their religious beliefs are practiced in their hospitals, and yet they still get Medicaid and Medicare dollars.

You have this going on all of the time. They have the 1964 exemption for the hiring discrimination point.

So what happens about getting into the inner city, getting into the rural areas? What about the little guy, such as the Baptist churches in Racine, Wisconsin, who have some ideas, who have relationships, who know the problems and know the people and how to help them?

Giving them the ability to compete for these funds fairly is what this is all about. It is not bringing new discrimination into the land. It is simply evening that playingfield and removing some of the barriers, some of the obstacles that exist in Federal statutes today, where they exist, because a lot of these barriers have already been removed.

The charitable choice law on the books right now is an excellent example. Do you see widespread discrimination? I don't think so.

I think what you look at here is the big churches, the big religious organizations, they can get around this. They can form that (c)(3) organization, they can pay for the lawyers, they can pay for the regulators to fix their statutes, fix their books, and get them going.

But what about the little guy, the small religious institution, who is in the middle of the battle on the war on poverty, who is already putting together an army of fighting these kinds of problems in our inner cities, in our rural areas? That is kind of what this is all about.

And when you take a look at it, at the end of the day, I think you are going to see more attention paid to our social pathologies. I think you are going to see that you are going to match the religious expenditures of people donating their time and money with what we are doing at the Federal, State, and local government, and you are going to see an accumulation of more dollars, more people, and more resources dedicated to fighting the poverty and problems that are facing us in our inner cities.

So to think that this is going to take away from those efforts, I think that just misses the point. I think it quite the opposite. Mr. NADLER. Mr. Ryan.

Mr. RYAN. Please.

Mr. NADLER. Mr. Ryan, a couple points.

Number one, the little church in Racine, Wisconsin, is perfectly allowed under current law to compete for Federal grants. Having to form a 501(c)(3), I agree, could be a barrier. Even though it is not very difficult to do.

And if you wanted to say that we ought to have some ability to help that church to do that, that makes sense, as far as I am concerned.

However, Title VII enables the church to discriminate for the church's purposes. But, they cannot today, on the basis of religion, discriminate in who ladles out the soup, if they receive Federal