The Welfare Reform Bill of 1996 enacted some of the most important changes in social policy in several decades. Following the lead of reform efforts in a few key states, the bill was designed to bring about time limits for receiving welfare benefits, diversion of applicants from welfare, and sanctions on states for noncompliance. Opponents of the reform bill suggested that it could have dire consequences, including widespread homelessness for welfare recipients cut off from further cash assistance.
Although in most respects it is too soon to judge the results of the federal law, the effects of policy changes in the early-reforming states have had more time to emerge. To examine those effects, AEI and the University of Maryland's Welfare Reform Academy jointly sponsored a conference on February 6 at AEI. "Welfare Reform: What Happens after Time Limits, Sanctions, and Diversion?" was the first of five joint conferences on welfare policy, all of which will be broadcast via satellite from AEI's Wohlstetter Conference Center to more than sixty cities. The series is being organized by AEI Resident Scholar Douglas J. Besharov, who also served as moderator at the first event.
Secretary of Health and Human Services Donna E. Shalala was the keynote speaker on February 6. She proudly mentioned that the number of welfare recipients recently dropped below 10 million for the first time in more than twenty-five years and that 4.3 million people have left the rolls since President Clinton took office.
Secretary Shalala stressed the importance of making work more attractive than welfare and endorsed the practice of imposing sanctions on able adults who are unwilling to work. "On the other hand," she added, "we don't want to punish children. So we need to research what is happening to the children of recipients who have left the welfare system." Two aspects of reform were discussed in one of the conference panels. Judith Gueron, president of the Manpower Demonstration Research Corporation, presented research on the new time limits for recipients, and Lawrence M. Mead, professor of politics at New York University, analyzed the drop in welfare caseloads in several states.
Ms. Gueron said that for time limits to work as intended, welfare "staff and recipients have to understand the new system and believe it's real." She pointed out that since few state programs have had recipients hit the limit yet, we don't know whether many states are likely to back away from the policy when faced with cutting off recipients.
Mr. Mead acknowledged several factors that have contributed to the reduction in caseloads, including the practice of actively discouraging applicants from entering welfare in the first place. In his view, fears over reform policies appear at this point to have been misguided: "It is true that the new policies are driving people off the rolls, but there isn't much evidence of hardship."