Gotham Gazette

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Welfare Reform, Round Two

By the fall of 2002, Congress will decide how hard the lives of the poorest Americans will be for the next few years. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 is about to expire, putting all the questions about welfare reform back on the table in a changed political climate.

In 1996, the nation's economy was booming, unemployment was closing in on a 30-year low, Washington was intent on conquering the federal deficit, and the president was a Democrat who had already vetoed two welfare reform bills. Today the economy is struggling out of a slump, the unemployment rate started to go up in April 2001, and the deficit is about to reappear. This time, no one cares if we run a deficit, as long as we do so in order to fight terrorism.

Five years of experience with welfare reform have generated results ambiguous enough to support arguments on both sides of the issue. Supporters of the reforms point to the decrease in the poverty rate that paralleled the drop in the welfare rolls as proof that welfare benefits discouraged recipients from working their way up financially. Opponents say that poverty was reduced by the overall rise in prosperity, which has now ended.

New York City has also changed since 1996. Our poverty rate has dropped slightly, welfare rolls were reduced by about 60 percent, we lost 139,000 jobs between December 2000 and April 2002, and we now have a mayor who does not call welfare a "sick culture of dependency." The new commissioner of the Human Resources Administration pledges to provide more job training and support services, including child care and transportation, and the Department of Employment is spending the city's allotment for job training, which the previous administration failed to use.

However, the number of people on public assistance in New York City continues to fall by an average of about one percent a month. Mayor Michael Bloomberg's contingency plan for the coming year's budget eliminates money earmarked to expand the supply of subsidized child care slots, which are too few for the low-income mothers already at work. The administration refused to apply for a waiver that would have allowed unemployed adults without children to receive food stamps for longer than three months.

The debate about welfare reform reauthorization is most heated around a small set of questions with large implications for public assistance recipients:

  • What counts as work? Everyone agrees that paid or unpaid employment is work, as are on-the-job training, and community service. The disagreement concerns whether work requirements can also be met by looking for work, going to vocational school, or learning job skills.
  • How much of a work week has to be "primary" work? Now only 20 hours have to be the kind of work universally acknowledged as work, and the rest of the week can be any training or education related to employment. There is pressure to raise the primary requirement to 24 hours.
  • How many hours a week do you have to work to be considered employed? Thirty hours is the number for most welfare recipients now. Conservatives want to raise it to forty, even for parents of children under six, for whom the requirement is twenty hours at present.
  • What kind of learning should you do to prepare for work, and for how long? Now you can go to vocational school for a year and count it as primary work. Proposals about this vary widely, from reducing the year to four months during any two-year period, to increasing the year to two years, to broadening the type of schooling to include basic literacy classes, English as a Second Language, and/or college.
  • How long should it take to recover from substance abuse? Several proposals want to allow three or six months of treatment before clients have to start working.
  • How long should you be excused from work requirements in order to rebuild your life after surviving domestic violence? This is considered a "barrier removal" activity, because it prepares you to hold a job. Other barriers that might need to be removed are mental health problems and substance abuse. Advocates for the poor propose counting "barrier removal" as work for as long as it takes, rather than for a defined period of time.
  • What are you supposed to do with your children when you are at work? This is not explicitly discussed, but it underlies the haggling over whether child care funding should be raised only enough to keep up with inflation, or enough to cover care for all the children already on waiting lists, or enough to prevent new waiting lists from forming if more parents have to work more hours.
  • How many of the people getting welfare benefits should be able to find and keep jobs? Now the minimum is 50 percent; some want to raise it to 70 percent. There is also negotiating room over whether that fraction comes out of the large pool of everyone who gets a welfare check, or the smaller pool of people who are capable of work on any given day. As of March 3, 2002. over a third of the people receiving public assistance in New York City were classified as "unengageable," due to such reasons as being under 16 or over 60 years of age, having AIDS/HIV infection, caring for a newborn baby, or being temporarily incapacitated by a health problem.


The first move on welfare reform reauthorization came in February 2002, when President Bush laid out his vision of an improved system. Bush urged Congress to raise the percentage of recipients who must work from 50 percent to 70 percent, and extend their work week from 30 to 40 hours. On May 16, 2002, the House of Representatives passed a bill including those proposals, among other provisions that are more likely to discourage or disqualify people from receiving benefits than to prepare them for successful careers.

Also in mid-May, the Bloomberg administration sent Congress a 30-page wish list of what the city hopes to see in the next phase of welfare reform. In line with his attention to the Board of Education, Bloomberg calls for a new purpose to be added to the four already on record for Temporary Aid to Needy Families: "Prevent future dependence on government benefits and promote self-sufficiency by providing education and training to children, youth, and adults, in order to develop and enhance job skills."

More concrete city proposals include increased funding for child care to meet the full need for it, increased funding for public assistance to keep up with inflation, and restoring eligibility for federal benefits to all legal immigrants. Advocates for welfare recipients will welcome the city's recommendations to keep the percentage of recipients who must work at 50 percentage, and stopping the clock on the five-year lifetime limit for federal benefits during periods when the recipient is working full-time. Many recipients earn so little that they still qualify for cash assistance; others are using their five years while they receive only smaller benefits meant to encourage work, such as subway fare or child care assistance.

There are multiple bills in the Senate already, where the Democratic majority is expected to pass a less stringent measure than the Republican-controlled House. One bill is being called "tripartisan," because its sponsors include Republican, Democratic, and Independent Senators. This version would keep the work week at 30 hours, allow education and training to count as work for two years, and raise the required work participation rate to 70 percent.

Hillary Clinton has co-sponsored a bill considered more conservative, introduced by Senators Evan Bayh and Thomas Carper. It would increase the work week from 30 to 40 hours for most parents (although single parents with children under the age of six would still only have to work 20 hours), and add $8 billion for child care over the next five years. A detailed comparison of the current law, the House bill that passed, three Senate bills, and two other proposals has been prepared by the Center for Law and Social Policy and the Center on Budget and Policy Priorities.

The Washington debate seems far removed from reality in New York City, where the Jobs section of the Sunday New York Times is so thin, you can hardly find it. The number of jobs in the city increased slightly in April, by 7,300, but so many more people were looking for work that the unemployment rate also rose, from 7.6 percent to 7.7 percent. According to Stephen Bell of the Urban Institute, who reviewed nine studies of welfare caseloads, historically, the number of welfare cases has fallen five percent for every one percent drop in the unemployment rate. It seems reasonable to expect a similar rise in caseload when unemployment goes up.

So far, we haven't seen that in New York. However, welfare benefits do not begin until unemployment benefits run out. Those who lost jobs in September 2001 can receive unemployment checks until July 2002. They will face increased competition for the small supply of job openings if the reauthorized version of welfare reform requires more public assistance recipients to work.

Some opponents of welfare reform are starting to talk about unemployment insurance reform. Unfortunately, our unemployment insurance system is geared toward full-time factory workers needing a few months of checks to tide them over during temporary layoffs. It is not geared to part-time workers. But welfare recipients often find themselves in part-time jobs when they first start working, and go for weeks or months between jobs until they find one that lasts. Now that public assistance as we knew it has ended, it may be time to acknowledge that unemployment as we knew it ended years ago.

Linda Ostreicher, a former budget analyst for the New York City Council, is a freelance writer and consultant to nonprofits. She is currently on the staff of Bronx Independent Living Services.

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