Most Welfare Dollars Go To Poverty Pimps

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Twenty years after President Bill Clinton fulfilled his vow to “end welfare as we know it,” it’s fair to say: mission accomplished. The old U.S. welfare system is dead. Whether the system that replaced it is better for the poorest Americans remains the subject of fierce debate.

The welfare reform bill that Clinton signed into law 20 years ago this month fractured the U.S. welfare system, from one managed mostly by the federal government to one largely directed by individual states. As each state became empowered to spend its welfare grant as it saw fit, one monolithic system devolved into 50 different ones — with far less money going directly to low-income families.

The 1996 reform didn’t result in a reduction in total spending on welfare, now known as Temporary Assistance for Needy Families. Since 1998, the first year for which we have complete data, total TANF spending — both from federal block grants as well as required state matching funds — has remained essentially flat, after adjusting for inflation,1The monthly average of the Consumer Price Index was used to deflate the annual spending statistics. according to data from the Center on Budget and Policy Priorities, a left-leaning think tank that is critical of welfare reform. Per-person spending has fallen, however: In 2014 there were about 12 million more people below the poverty level than in 1998, according to the Census Bureau. The U.S. population has grown nearly 20 percent during that time.
 

Perhaps the more significant change, though, is in how that money is being spent. Welfare reform replaced the old, federally run cash assistance program with a system of state-administered block grants. Under TANF, states can spend welfare money on virtually any program aimed at one of four broad purposes: (1) assistance to needy families with children; (2) promoting job preparation and work; (3) preventing out-of-wedlock pregnancies; and (4) encouraging the formation of two-parent families.

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