Block Grants for All: Liberating the Poor and Taxpayers Alike

Published May 5, 2014

The remarkable success of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 – better known simply as “welfare reform” – is well known.

Poverty among female-headed households fell by one-third, meaning nearly 4.2 million single mothers and their children climbed out of poverty. A dozen states saw their welfare rolls fall by more than 80 percent. Total spending on Temporary Assistance for Needy Families (TANF) was down by more than half of what it would have been under Aid to Families with Dependent Children (AFDC), saving taxpayers trillions of dollars.

In a new Policy Brief, Heartland Institute Senior Fellow Peter Ferrara describes the failure of the New Deal-era War on Poverty and recounts the successes achieved by the 1996 welfare reform. He calls for dramatic new reforms that would “end the poverty trap and free the nation’s poor.” Ferrara writes:

The 1996 welfare reform had one big shortcoming: It reformed only one program, AFDC. The federal government operates nearly 200 additional means-tested welfare programs. … The reform strategy so successfully applied to AFDC in 1996 can and should be extended to these other federal programs as well.

Ferrara calls for block-granting the remaining means-tested welfare reform programs in a lump sum to the states, giving each the flexibility to structure its welfare system to meet the needs and circumstances of its own citizens. Doing so would restore state control over welfare and “would be much more efficient and effective at achieving the stated goals of welfare-state proponents, as the reform would benefit the poor through increased work and the resulting increased incomes.”

“Block Grants for All: Liberating the Poor and Taxpayers Alike” is the fifth in a multi-part series Ferrara is writing on entitlement reform for The Heartland Institute.

Read the full Policy Brief here:

Earlier installments in the series are available at the links below:

Peter Ferrara, “A Winning Plan for Entitlement Reform,” Policy Brief, The Heartland Institute, December 13, 2012,

Peter Ferrara, “The Foundation for Entitlement Reform: Get American Booming Again,” Policy Brief, The Heartland Institute, March 11, 2013,

Peter Ferrara, “Social Security Personal Accounts: Prosperity for All,” Policy Brief, The Heartland Institute, June 14, 2013,

Peter Ferrara, “A Better Medicare for Seniors and Taxpayers,” Policy Brief, The Heartland Institute, February 12, 2014,