Research and Commentary: Welfare Reform Policies

Published August 27, 2013

In 1996, the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) was implemented. Federal welfare reform gave flexibility to states allowing them to take advantage of the opportunity to reform their welfare systems.

Proponents of the current welfare system agree that many Americans in poverty have a need for aid from their state. Opponents, however, understand the system requires taxpayers to pick up the bill for failed programs, and leaves the poor in a program that destroys opportunity for them.

Today, over a third of Americans now receive some type of means-tested welfare aid, with an average of $9,000 per person totaling nearly $1 trillion in taxpayer dollars annually. Taxpayers have financed almost $20 trillion in welfare spending since the 1960s.

Some governors and legislatures have seized the opportunities provided by the law and developed thoughtful policies and integrated services needed to help recipients move into the workplace. These policies include: providing welfare applicants with a cash diversion program to meet a short-term need, worth up to a few months of benefits, instead of fully enrolling them in welfare; implementing a family cap provision to reduce or eliminate the benefits one can receive for each additional child born while the mother remains on welfare; imposing lifetime limits for recipients, and enforcing full family sanctions to secure compliance by Temporary Assistance and Needy Families (TANF) recipients with work and other requirements for eligibility.

On July 12, 2012, the Obama Administration issued a new policy asserting that it would provide waivers to exempt states from the work requirements established in the 1996 welfare reform law. Despite this provision, a Rasmussen Report found, a full 80 percent of Americans agree with the statement “work is the best solution for poverty.” Work improves family well-being economically, by providing a stable source of income and the opportunity to acquire assets, as well as socially and culturally. States should continue to include in their state TANF plans a requirement for recipients to begin work immediately before receiving benefits.

Successful anti-poverty efforts necessitate most or all of these policies be implemented, since they work together to create the appropriate incentives and opportunities for welfare recipients. Policies should escalate opportunities for upward mobility and self-sufficiency. Providing aid to those in need should also include policies to help individuals become independent. Reforming the fragmented welfare system is vital to helping reconstruct ladders of opportunity in order for more Americans to achieve a prosperous future.

The following documents provide additional information about welfare reform.


Welfare Rules Database
The Urban Institute Welfare Rules Database provides a “comprehensive, sophisticated resource for comparing cash assistance programs between states” and for researching changes in cash assistance rules between states.

Welfare Reform after Ten Years: A State-by-State Analysis
In 2008, The Heartland Institute published Welfare Reform after Ten Years: A State-by-State Analysis, which reports the welfare policy choices of all 50 states and the District of Columbia, and then ranks the states by how aggressively they have implemented effective policies. This has provided policy makers with a roadmap to successful anti-poverty efforts.

Implementing Welfare Reform: A State Report Card
In this Cato Institute policy analysis, Jenifer Zeigler analyzes state welfare reform implementation in the present and uses that analysis to track welfare reauthorization program changes in the future.

Welfare Reform at 10: Analyzing Welfare Caseload Fluctuations, 1996-2002
The Center for Data Analysis, part of The Heritage Foundation, published this Report #06-07 on Welfare and Welfare Spending, by Dr. Michael J. New, discussing the changes that states made after the Aid to Families with Dependent Children (AFDC) was replaced with a time-limited assistance and work requirement program called Temporary Assistance to Needy Families (TANF).

Comparing Program Participation of TANF and Non-TANF Families Before and During a Time of Recession
A Census report, written by Shelley K. Irving examines whether partcipation in TANF increased and whether employment decreased as a result of the economic recession. It also compares participation in other assistance programs across families based on welfare and poverty status before and during the economic recession.

Welfare Reform: Less Than Meets the Eye
Michael Tanner, author of The Poverty of Welfare: Helping Others in the Civil Society, wrote this Cato Institute policy analysis in which he argues for Congress to go “beyond proposals that simply tinker with welfare and begin to phase out government assistance in favor of private charity.”

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit The Heartland Institute’s Web site at, and PolicyBot, Heartland’s free online research database at

If you have any questions about this issue or the Heartland Web site, contact John Nothdurft, Heartland Institute’s director of government relations, at [email protected] or 312/377-4000.