In 1996, Congress passed – and President Bill Clinton signed – the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, a bill that would, in President Clinton's words, "end welfare as we know it" and make welfare "a second chance, not a way of life"  (read the entire bill here).  The main goal of the legislation was to repeal Title IV of the Social Security Act of 1935, the program then known as Aid to Families with Dependent Children (AFDC).  The new version of AFDC is called Temporary Assistance for Needy Families (TANF).  TANF assistance has a maximum benefit of two consecutive years (with a five-year lifetime limit) and requires recipients to find work within two years of receiving assistance.  Clinton's legislation also gave states broad flexibility to carry out their own programs, including how the programs are designed, the amount of assistance recipients receive, and the state's rules for determining who is eligible for benefits.


The final version of the bill was much more stringent than President Clinton originally proposed.  Clinton initially recommended that, because the legislation had a work requirement, the federal government would act as employer of last resort.  That pivotal idea did not make it to the final bill, which ultimately ended cash welfare with little transitional help like job training, etc.  Essentially, the final version pushed welfare recipients to find work without a backstop, and eventually cut off almost all cash benefits (although there was an expansion of non-cash benefits like food stamps and housing vouchers to supposedly compensate). 

There is no question that changes needed to be made in 1996.  However, the way this was originally implemented created challenges so severe that many Americans have never caught up. The sloppy transition essentially yanked the rug out from under the feet of poor Americans and many still haven't regained their footing.  A major problem is the way TANF is funded, which is in the form of a “block grant” to states.  The amount is a fixed sum that has never been adjusted for inflation, which is obviously a problem in and of itself.  Plus, states are given few restrictions on how they spend the money.  Therefore, since states can spend the money for things other than providing a safety-net, they routinely channel the money toward things that barely have anything to do with easing the chokehold of poverty. 

States should not be allowed this much flexibility.  The guidelines must change at once.