The Effects of Welfare reform.

The Personal responsibility and work Opportunity act was passed and signed into law in 1996. The legislation is also known as Welfare reform. The act redistributed welfare delivery, and structure from the Federal government to state, and local governments. Allowing states to determine their own model for welfare. Since then some states have placed more requirements for welfare recipients  then the act placed.
Some of the major provisions of the PRWORA of 1996 include but are not excluded to:
1)      Requiring welfare recipients to be actively in search of employment. Limiting benefits for beneficiaries who do not obtain employment two years after receive benefits.
2)      The act also placed a 5 year lifetime limit on benefits paid by federal tax dollars, however there are some exceptions for children.
Now we are on to the real felt effects of Welfare reform. Firstly A study conducted by “The Center on Budget and Policy Priorities,” published in 1999[Yes over ten years ago] found that from 1993-1995 poor families income increased by near $1,000. However the poorest families income after the passage of Welfare reform decreased even though the economy was experiencing significantly better economic growth. Their income fell by around $750 dollars in the two years preceding legislation. [1]
Other findings from the study show a significant drop in the number of children leaving poverty or extreme poverty. From 1993-1995 2.4 million children were lifted out of extreme poverty, compared to only 360,000 in 1995-1997, this is again despite a better economy during the latter years. [1]
The above mentioned effects are a bit shocking and disappointing for the well being of American families yet there's more.  
Before the welfare reform act 12 million Americans were on welfare, after the act the number of Americans on welfare fell to 5 million in 2001 or by 60%. Total yearly benefits for those on welfare fell by around $200 or by 10%. Total welfare spending equaled 28 billion dollars in 1996, and 24 billion dollars in 2001.[2,3] If your scratching your head wondering, “How come total welfare spending only fell by 15% when the number of people on welfare fell by 60% and their benefits fell by 10%?”[2,3]
The answer lies in the fact that the major effect of Welfare reform was a substantial increased in administration costs, commonly known as  bureaucracy, and wasteful spending. In fact the total amount of administration costs increased by 300%. [2,3]. After doing the math I found that we could double the number of people on welfare without adding a cent to the total cost of welfare, if we simply repealed “The Personal responsibility and work Opportunity act (welfare reform)”. The savings would come in the reduction in wasteful spending.
The major reasons why welfare reform increased wasteful spending include but don’t exclude:
1)      A decentralized system. Instead of one federally operated program there are now 50 different ones.
2)      Requirements on welfare recipients such as that they must be actively looking for a job. There’s tons of paperwork that has to be done to prove you’re looking for a job and it takes government time and employees to make sure you’re following the requirements.

Feel free to copy and past these realities as you desire.

References:
Footnote #1
http://www.cbpp.org/...
Footnote #2
http://www.libraryindex.com/...
Footnote #3
http://www.libraryindex.com/...

 

 

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Cross-posted at the DNC Blog and DailyKos

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