President Trump has quietly fired the starting gun for a race toward another round of welfare reform by signing Executive Order 13828, which directs his agencies to take a deep dive toward reforming and streamlining welfare programs. The key goals: move more able-bodied adults from welfare to work, crack down on welfare fraud, and preserve resources for the truly needy.
It is a far reaching order and much needed. But the executive order is just one vehicle for reform.
The House Committee on Agriculture released its 2018 Farm Bill in April, which deals with one of America’s largest welfare programs: food stamps. America is on the precipice of another moment, a new wave of welfare reform — reform that is long overdue and, like those adopted in the 1990s, driven by state success stories.
Why Welfare Reform Is Needed Again
It was a warm sunny afternoon in 1996 when President Clinton signed a bipartisan package of welfare reforms. Those reforms, built on proven successes from the states, had a common theme: moving able-bodied adults from welfare to work as quickly as possible.
Lily Harden, a former welfare enrollee from Arkansas, joined Clinton at the signing ceremony. She shared with those present in the Rose Garden the profound effect work had created in her life. Work provided Harden with more than just a paycheck. It provided her with dignity, respect, and a path to a better life. It gave her an opportunity to set an example for her children, who would later go on to build their own American dreams.
President Clinton followed Harden’s remarks with his own: “A significant number of people are trapped on welfare for a very long time — exiling them from the entire community of work that gives structure to our lives.” He continued by quoting Robert Kennedy: “Work is the meaning of what this country is all about. We need it as individuals. We need to sense it in our fellow citizens. And we need it as a society and as a people.”
When Clinton finished his remarks, he declared that the 1996 law was not the end of welfare reform, but only the beginning. Perhaps he had this moment in mind.
Most consider the 1996 reform a striking success. The combination of work requirements and time limits helped move millions of able-bodied adults from welfare to work, grow the economy, and preserve resources for the truly needy. But while the 1996 law made major changes to cash welfare, the changes to the food stamp program were less robust. Worse yet, poor implementation and bureaucratic sabotage created large loopholes that kept millions of individuals dependent on welfare.
Food Stamps Growth Over Time Explained
In 2000, 17 million people were dependent on food stamps, costing taxpayers roughly $17 billion annually. By 2016, enrollment had reached 44 million, with costs exploding to $70 billion per year. Much of this growth is being driven not by seniors, poor children, or individuals with disabilities, but instead by able-bodied adults.
Under federal law, able-bodied adults who are between the ages of 18 and 50 and who have no dependents are required to work, train, or volunteer at least 20 hours per week to maintain food stamp eligibility after three months. Although work registration and optional workfare requirements have been part of federal law for many years, the 1996 welfare reform created a new time limit for able-bodied childless adults as a way to reorient the program toward work.
But the law exempts all parents and able-bodied, childless adults over 50 from these commonsense requirements. While some of these adults are subject to a separate requirement to participate in employment and training programs if assigned, few states ever assign them to such programs, rendering the requirement virtually meaningless.
If that weren’t bad enough, regulatory guidance has allowed and even encouraged states to use gimmicks and loopholes to keep as many able-bodied adults on the program as possible. These waivers, originally intended only for areas with high unemployment, have been expanded to the point of absurdity. More than a third of the nation lives in an area where work requirements are waived, despite record-low unemployment and more than six million open jobs across the country. Those loopholes let states like California — with nearly 560,000 open jobs and a record low unemployment rate — waive work requirements in every corner of the state, even in cities with unemployment rates as low as 2.1 percent.
The Changing Face Of Food Stamps: More Able-Bodied, Fewer Working
Bureaucrats at the state and federal level have used loopholes to minimize the impact of work requirements and softened eligibility requirements. They have expanded eligibility to individuals with higher incomes and unlimited assets, to the point where millionaires and lottery winners can now qualify for the program in many states. These expansions — first adopted during the Clinton and Bush years, but supercharged during the Obama administration — have led not only to massive enrollment growth, but to a changing face of the program.
When Clinton signed welfare reform into law, he made clear that the typical family on welfare in 1996 was very different from the one whom welfare was designed to help in the early 20th century. Today’s program doesn’t even look like what was envisioned when Clinton and a Republican Congress “ended welfare as we know it.”
Seniors, poor children, and individuals with disabilities make up a smaller share of enrollment today than they did even twenty years ago. Despite near-record low unemployment and a record number of open jobs, the number of able-bodied adults on food stamps remains at a near-record 21 million.
And with no real work requirement or time limit for most of those adults, few actually work. According to data from the Department of Agriculture, fewer than one in ten able-bodied adults on food stamps work full-time jobs. A whopping 62 percent do not work at all. And while some groups focus their attention on the “welfare cliff,” which affects fewer than 250,000 able-bodied adults, the larger story goes unnoticed: nearly 13 million able-bodied adults on food stamps do not work at all.
Work Is Good For Enrollees And Their Communities
Work is the single best path out of dependency. But it also provides more than just a paycheck. Research shows that work is key to happier and higher quality lives.
Work helps individuals build social relationships, gain new skills, and create new experiences — all of which can lead to future employment opportunities. It creates a natural path to higher wages and better jobs and is the only effective path out of poverty. And it provides powerful foundations for marriage, sobriety, and distance from the criminal justice system.
Work has the power to change lives for the better.
States Successes Are Leading The Discussion
The 1996 law was built on years of state-led efforts to reform broken cash welfare programs. Today’s welfare reform moment is no different. The changes being discussed as part of Trump’s executive order and the 2018 Farm Bill build on state success stories moving able-bodied adults from welfare to work, cracking down on welfare fraud, and protecting resources for the truly needy.
When Kansas and Maine restored work requirements for able-bodied childless adults on food stamps, they set in place an innovative tracking system to measure the reform’s success. As a result, these states tracked not just a small sample of those impacted, but every single able-bodied adult who left the program following the change — tens of thousands of them. The results were incredible.
Those leaving welfare after work requirements were implemented quickly found work, not just in retail or food service, but in more than 600 different industries. Better still, many of those who did find work in retail, food service, or temp agencies used that experience to move into more permanent, higher-paying jobs within just a few months.
More work led to higher incomes. In both states, incomes of those leaving the program more than doubled, more than offsetting the value of food stamps they lost. The average income among these working able-bodied adults is now above the poverty line. This has spurred economic growth, increased tax revenues, and preserved resources for the truly needy.
More states have since followed suit. And states like Wisconsin are leading the nation toward a new horizon: expanding the work requirement to even more able-bodied adults. In 2018, Gov. Scott Walker called a special session on welfare reform. His Wisconsin Works for Everyone plan — which quickly passed the legislature and was signed into law in April — expands work requirements to as many able-bodied adults as allowed under federal law. Parents with school-aged children and some middle-aged childless adults will now need to work or participate in a job training program to receive benefits in Wisconsin.
Accelerating Positive Change At The Federal Level
Congress and the Trump administration should build on these state successes to move as many able-bodied adults as possible from welfare to work. As the 2018 Farm Bill makes its way through Congress and as federal agencies begin to implement the President’s executive order, they should keep one principle in mind: able-bodied adults should move from welfare to work as quickly as possible.
That principle should drive the discussion for how to close the loopholes that let states waive existing work requirements in some or all areas. These waivers were intended only for areas with high unemployment rates — the statutory threshold is 10 percent — that otherwise lacked jobs, training programs, or volunteer opportunities. At a minimum, the waivers should return to that original purpose and only be granted in areas with unemployment rates above 10 percent.
But these waivers also create a separate problem: they ignore the unique marketable skills and labor conditions for each able-bodied adult on food stamps. The goal should be employment for as many of these adults as possible.
That principle should also drive the discussion on expanding work requirements. All able-bodied adults on food stamps who can work should work. The 1996 law mostly limited work requirements to childless adults under the age of 50, but research from other welfare programs shows work requirements are successful for all able-bodied adults. Parents and middle-aged childless adults should no longer get an automatic exemption as they do today in virtually all states. The Wisconsin reform model should be taken nationwide.
The Welfare Reform Moment Is Now
There has never been a better time for welfare reform than today. The unemployment rate is near record lows — a full percentage point lower than when Clinton signed the 1996 reforms into law. Employers are desperate for workers as they try to fill more than six million open jobs — a record high.
And the problem at hand isn’t a skills gap. It’s that too many able-bodied adults are on the sidelines. According to the Bureau of Labor Statistics, nearly three-quarters of the job openings that will occur over the next decade require a high school education or less. Nearly four out of five job openings require no training or less than a month’s training on-the-job, while a whopping 87 percent require no prior experience.
America needs workers. The only way to make that happen is to move millions of able-bodied adults from welfare to work. And if Congress and Trump make that happen, they’ll surely be rewarded come election day. A whopping 82 percent of Americans support requirements that all able-bodied adults work or participate in job training programs as a condition of receiving food stamps.
The American people know — like Clinton and Robert Kennedy understood — that work has the power to transform lives. They’ve experienced it firsthand, like Lily Harden did. They know that paychecks, not government checks, lead to independence. This principle was the bedrock of the 1996 welfare reform and stands as the basis for the reforms before us now.
The 1996 law was just the beginning of welfare reform. It’s time for the next chapter.