For argument’s sake, let’s say that Obama’s plan to save the economy by raising taxes on the most productive segments of our society, creating millions of useless government jobs, and subsidizing windmills and failing companies actually works. In a year or two, the country is experiencing a period of economic growth. The stock market is skyrocketing. Home sales are booming and jobs are plentiful. Will we have more or fewer people on welfare?
The answer would appear to be obvious: “Why fewer, of course.” Most reasonable people would expect that to be the goal, but if that is your final answer, you would be wrong.
With the Great Society programs initiated by Lyndon Johnson in 1965, welfare became a way of life for many people. For the first time in our nation’s history people who were not elderly or disabled, who simply did nothing, began receiving a living courtesy of the American taxpayer.
These programs were supposed to be a temporary helping hand, but with no work requirements and a seemingly endless supply of federal money provided to the states for this purpose, it was not at all surprising that people began taking advantage of the system.
Much of this money went to able-bodied single mothers under the Aid to Families with Dependent Children (AFDC) program. Not happy at home? All you have to do is get pregnant out of wedlock and you can get free housing, free food, free health care and free money. What a deal!
Many teenagers were sucked into this system, but it wasn’t long before older women began following suit. Why not? If you marry, in most cases you have to work to provide for your family. If you shack up, you can live off the state.
In 1996 that began to change after welfare reforms were forced on President Clinton by the Republican Congress and AFDC was replaced by Temporary Assistance to Needy Families (TANF). As a result, there has been a 60 percent drop in welfare caseloads and 1.6 million fewer children living in poverty — a success that President Clinton was happy to claim as his very own!
With the passage of the so-called economic stimulus bill designed by the Democrat-run Congress and promoted by President Barack Obama, the perverse incentives that actually reward states for enrolling and keeping people on the public dole are baaack!
The biggest change that occurred in 1996 was the way in which federal money was distributed to the states. Instead of rewarding states by giving them more money for every welfare recipient they sign up, the states were given block grants based on overall population with incentives to move people from welfare to work.
Some people are under the misguided impression that when the number of caseloads went down the country saved money. It should have, but it didn’t. Tucked into the 1996 reforms was a liberal boondoggle called “maintenance of effort.” That means, that as long as there is anyone left on welfare, states received the same amount of money as they did before, with additional money added each and every year. They just had to find more creative ways to spend it. Make sense? Of course not but that is the way the liberal mind works.
With the economic stimulus package, we will go back to rewarding states for increasing their caseloads. Robert Rector of the Heritage Foundation, one of this country’s leading experts on poverty, says this is actually worse than the old AFDC programs because, under the new system, the payoff to the states is greater. Unfortunately, the education and work requirements, which always had big loopholes, will go by the boards because the incentives for states to move people from welfare to work are gone.
This is not simply wrong. It is cruel! When the education and work requirements are not enforced, when every need is provided by the state, the individual loses his or her incentive to find work. The longer the individual remains unemployed, the more doubts that individual has about his or her ability to succeed. After a while, these doubts are replaced by fear and, in an effort to cope, fear is replaced by an attitude of acceptance or even entitlement.
The negative effects on children raised by a welfare recipient are legion. Furthermore, these children are more likely to be dependent on the state when they reach adulthood. They become trapped in the system and taxpayers are trapped into supporting them.
During the presidential campaign, Barack Obama praised those 1996 reforms. Now we know that this was just another cheap political stunt.