President Obama Weakens Welfare Reform

In mid-July the Obama administration was once again ruling the country by legislative fiat. The Health and Human Services Department bypassed Congress and informed states that they need no longer require recipients to work-for-welfare.

Arthur Brooks writes that the work-for-welfare reform implemented in 1996 “was arguably the most successful policy change to help low-income Americans in the past 60 years. Welfare policies of the 1960s led generations of families to languish on the government dole at subsistence levels, never gaining the skills to work and with little hope to rise. It took more than a decade to get Congress to reverse course. But it was worth the effort.”

The reform was implemented in the late 1990s, when research found that welfare paid better than work in many states. This was obviously unsustainable. Cato Institute scholars Michael Tanner, Stephen Moore and CEO of Hartland Bank David Hartman, wrote a report in September of 1995 titled The Work Versus Welfare Trade-Off. Some of the key findings are summarized below.

• In 40 states welfare pays more than an $8.00 an hour job. In 17 states the welfare package is more generous than a $10.00 an hour job.
• In Hawaii, Alaska, Massachusetts, Connecticut, the District of Columbia, New York, and Rhode Island welfare pays more than a $12.00 an hour job–or two and a half times the minimum wage.
• In nine states welfare pays more than the average first-year salary for a teacher. In 29 states it pays more than the average starting salary for a secretary. And in the six most generous states it pays more than the entry-level salary for a computer programmer.
• Welfare benefits are especially generous in large cities. Welfare provides the equivalent of an hourly pretax wage of $14.75 in New York City, $12.45 in Philadelphia, $11.35 in Baltimore, and $10.90 in Detroit. For the hard-core welfare recipient, the value of the full range of welfare benefits substantially exceeds the amount the recipient could earn in an entry-level job. As a result, recipients are likely to choose welfare over   work, thus increasing long-term dependence.

A bipartisan government put welfare abuses and inefficiencies behind the country. Now president Obama is bringing them back. He must not be reelected in November.