While speaking to a crowd in Philadelphia on Thursday, former president Bill Clinton was interrupted by protesters affiliated with the Black Lives Matter movement carrying signs criticizing the crime bill and welfare reform bill that he signed into law in the 1990s.
In response, Clinton gave a misleading defense of welfare reform. “They say the welfare reform bill increased poverty,” he said of the protesters. “Then why did we have the largest drop in African-American poverty when I was president?”
It’s true that there was a large drop in black poverty under Clinton’s presidency, with the share of black families in poverty falling from about 33 percent when he took office to just under 23 percent by the time he left. But that downward trend began long before welfare reform was signed into law in 1996, and it was short-lived. By 2002, the rate started climbing again as the country entered a recession.
The same story played out with poverty generally. While the booming economy of the 1990s provided enough jobs such that people who were forced to work in order to receive welfare benefits were able to find them, as soon as the economy faltered that story faltered as well and recipients fell into hard times. The work requirements have been repeatedly found to significantly increase financial hardship for those who lose benefits because they can’t find work.
Meanwhile, after reform, welfare was less and less able to help those at the very bottom. The number of families living at half the poverty line, or less than $12,000 a year for a family four, is higher now than in 1996, and extreme poverty — families who live on $2 or less per person a day — has risen 159 percent since then, especially among those who were most directly impacted by welfare changes.
Clinton went on to argue that the failings of the program were thanks to Republican lawmakers, not the package he approved. “The Supreme Court elected President Bush five to four, then all these Republicans took over state legislatures,” he said. “We left them with enough money to take care of all the poor people who couldn’t go to work on welfare.”
But failure was baked into the original policy design he signed into law.
Before the law, the Aid to Families with Dependent Children (AFDC) program, as welfare was then known, operated as a cost-sharing program between states and the federal government. If need spiked suddenly — say, during a recession — the federal government would give states more money to fund more benefits. But after reform, Temporary Assistance for Needy Families (TANF), as it’s now known, was block-granted, meaning that states get a fixed amount of money from the federal government no matter what happens. The law doesn’t mandate that the pot of money grow if needed. So as inflation has risen over the years, the funds stagnated, losing 28 percent of its value. That incentivizes states to simply push people off the rolls so that they don’t have to pay more on benefits.
Meanwhile, states were given wide latitude to design their programs, and many of them move the money for TANF around to be used for other purposes.
That all means the program, which used to be a vital part of the safety net for low-income families, has been completely hamstrung. As the Great Recession hit between 2007 and 2011 and unemployment was widespread, TANF caseloads actually fell. Meanwhile, food stamps, which are not block-granted, rose by 45 percent to meet increased demand. Before welfare reform was enacted, the program reached about three-quarters of low-income families with children, or those who are supposed to benefit. Today it reaches just about a quarter.
While defending the law on Thursday, Clinton attempted to shield his wife from an association with it, arguing that Hillary “had nothing to do with it.” Yet she helped round up votes in favor of the package in the 1990s and wrote favorably of it, and even as recently as 2008 defended the law. In response to Democratic presidential rival Bernie Sanders’ attack on her welfare reform legacy, she recently defended some pieces of the package — such as the Earned Income Tax Credit, job training programs, and child care assistance — but said she would work to address other shortcomings like the five-year lifetime limit on receiving benefits.
Sanders said for his part that he would address poverty and people who have suffered from welfare reform’s changes by increasing the minimum wage and providing universal health care. Yet he so far hasn’t offered up a plan to fix TANF itself.