Did Bill Clinton's welfare reforms make the Great Recession worse?
Pledging to "end welfare as we know it," President Bill Clinton in 1996 put his signature to landmark legislation that fundamentally reformed the American welfare system. The law has long been praised for ending excessive dependency on government largesse, and Republicans in particular have pointed to the law as a model for reforming other ballooning entitlement programs, such as Medicare and Social Security. But in truth, argues Jason DeParle at The New York Times, it was only in the light of the 1990s' booming economy that welfare reform appeared successful. Once the the Great Recession hit in the late 2000s, single mothers — welfare's main recipients — were left without a helping hand, largely because Clinton's reforms made it easier for states to deny handouts and instead use federal welfare grants to plug their own budget holes. Did Clinton's welfare overhaul actually make things worse?
No. Welfare only encourages poverty and single motherhood: Before Clinton's reforms, welfare "was responsible for accelerating the breakup of the black family and creating the mindless cycle of government dependency," says Donald Douglas at American Power. Single-parent families received a "smorgasbord of public services in addition to cash payments," which gave them "literally no incentive to find a job." Don't let liberals use the economic slowdown to resurrect a "left-wing dependency-style welfare state."
"The New York Times wants to bring back welfare dependency"
But welfare reform stranded the poor: Clinton's welfare law was "a meat-axe for people to swing at what already was a shredded safety net," says Charles P. Pierce at Esquire. The law was premised on "fairy tales about young bucks buying steaks and welfare queens with their Cadillacs," when it actually "gave everybody permission not to care about poverty anymore." States now use federal welfare money "for all kinds of other parochial purposes," effectively abandoning "the people at the very bottom of society." Clinton's law continues to be praised as an "unalloyed triumph," but the truth is far grimmer.
"The legacy of 'welfare reform' and a poverty of ideas"
And it also hurt the broader recovery: Government economic aid is meant to serve a "critical counter-cyclical function" when the economy goes sour, says economist Jared Bernstein at his blog. The welfare rolls should have expanded as soon as jobs started disappearing, but they remained stagnant. That means the poor had less money to spend — money that could have helped jumpstart the economy. Welfare reform "is a stark warning about what happens when you turn a federal function over to the states," as Republicans are proposing to do for Medicaid and food stamps.
"Your safety net on block grants"