Vice President for Family Income Support Policy
House Budget Committee Chairman Paul Ryan cites the “unprecedented success” of welfare reform to support his claim that the House-passed Republican budget that he authored would “strengthen the safety net.” The facts tell a very different story.
Describing the elements of his budget plan that relate to the safety net, Ryan wrote recently in the Christian Science Monitor, “we are building upon the success of the welfare-reform law, which transformed that program into a block grant and gave states more control over its implementation.” Indeed, the Ryan plan would convert Medicaid and SNAP (formerly called food stamps) into block grants.
So, how did welfare reform do?
In its early years, welfare reform, which replaced Aid to Families with Dependent Children (AFDC) with Temporary Assistance for Needy Families (TANF), benefited from an especially strong labor market. In its first five years, unemployment never rose above 5.4 percent (in November and December 1996) and reached a low of 3.8 percent in April 2000. But, the employment and earnings gains were short-lived. As critics warned when Congress debated welfare reform in 1996, shifting to a block grant with fixed federal funding has resulted in a greatly weakened safety net that failed to respond effectively when the economy weakened and need rose.