Pres. Barack Obama vowed to correct the mistakes of the Bush administration but instead is determined to undo one of the great successes of the Clinton years: welfare reform. Democrats have inserted provisions into the catch-all stimulus bill that will reverse Clinton-era welfare reform, re-establishing the wasteful, incentive-killing system whose transformation was the bipartisan pride of the 1990s.
Prior to reform, the federal government simply gave the states more money for every family they added to the welfare rolls. The predictable result was that the states worked hard to maximize their welfare caseloads in order to maximize the amount of federal funding they could therefore claim. The system had zero incentive to help people make the transition from welfare to work and independence?in fact, the states were financially punished for doing so. The Clinton-Gingrich reforms replaced that bounty-hunter system with a flat rate for each state, based on population and other factors. That gave state-level welfare authorities a better set of incentives, encouraging them to use their resources in the most effective manner and to reserve them for the truly needy.
The results were successful?spectacularly so. The Personal Responsibility and Work Opportunity Act was followed by reductions in both the number of families on welfare and the rate of poverty. Single women entered the workforce in substantial numbers and the household incomes of former welfare recipients went up. In other words, the incentives to reduce welfare dependence and help people to find work, worked.
Obama, in what is plainly a sop to ACORN and the rest of the ?community organizing? gang, is overturning those reforms. Under the provisions in the stimulus bill, states will once again be paid a bounty for expanding their welfare rolls. As reported by Robert Rector of the Heritage Foundation, the federal government will now pay states 80 percent of the cost for each new family they sign up for welfare. That means that states will get $4 for every $1 they spend. This will leave the main welfare program, Temporary Assistance to Needy Families (TANF), with a funding mechanism similar to the one that supports Medicaid. As Brian Blase argues here, Medicaid?s funding ratio, which gives states $1 to $3 for every dollar they spend, has caused state Medicaid spending to skyrocket. If Medicaid?s dollar-for-dollar model has proved ruinous, Obama?s new $4-to-$1 ratio for welfare will prove, in all likelihood, four times so.
What can Republicans do about this? Not much. House Republicans hung tough against the stimulus only to have their position undermined by three of the usual suspects in the Senate: Senators Specter, Collins, and Snowe. Republicans were locked out of the process by which the differences in the House and Senate versions were resolved?their last (forlorn) shot at taming this beast of a bill.
Given that the states will receive $4 from the federal government for every $1 they add to their welfare budgets, even conservative governors will feel pressure to inflate their welfare rolls in order to wring every dollar they can out of Washington. And there are early rumblings about removing the already weak work requirements that rounded out the Clinton-era reforms.
The Democrats are stuffing years? worth of legislation into their ?stimulus? bill. They are operating in the legislative shadows, evading scrutiny and debate, while enacting an expansion of the welfare state that would never survive a more considered process. Obama?s right-hand man, Rahm Emanuel, put it bluntly if cynically: ?You never want a serious crisis to go to waste.? Obama obviously intends to make the most of this one as he proves that he is, after all, the Second Coming?of Lyndon Baines Johnson.
Part 2 comes later...
Facebook
Twitter