Charlotte, NC — Sen. Joe Manchin, D-W.Va., has all eyes on him. Again. This time it’s because he’s questioning his party’s line on whether work matters for people receiving welfare.
He recently revealed his reservations with the Biden tax credit, which was transformed into unconditional cash grants: “There’s no work requirements whatsoever. There’s no education requirements whatsoever for better skill sets. Don’t you think, if we’re going to help the children, that the people should make some effort?”
Manchin is right to be concerned with the current legislation. Work matters, especially for the most vulnerable among us.
Twenty-five years ago, both Democrats and Republicans agreed with him. In 1996, there was broad agreement that our national welfare system held people in poverty, for the simple reason that it discouraged work. Even then-Sen. Joe Biden said, “Work should be the premise of our welfare system.”
The reality of workless benefits was striking. Before 1996, after decades of no-strings-attached payments, nearly 9 in 10 families on welfare were jobless. Most were stuck in long-term poverty, dependent on meager benefits for over 8 years. About 90% of these families were led by a single mother, and one in seven children survived on the benefits.
Congress tackled this problem, with the help of then-President Bill Clinton, who promised to “end welfare as we know it.” Congress came together to pass one of the most important and successful social reforms in American history: bipartisan welfare reform.
The resulting welfare reform limited recipients to five years of support, while requiring states to engage them in work between 20 and 30 hours a week, depending on the age of the kids.
Some asserted that poverty would increase, yet the opposite happened. Dependency declined for the first time in a half century. Employment rose among never married mothers who didn’t graduate high school. Single mothers who worked rose from 51 percent in 1992 to 76 percent within eight years.
The most significant result: Child poverty, which had been static for decades, fell sharply by almost 8 percent in the following decade.
It’s undeniable that moving from welfare to work leads to financial benefits for families. Those who stay dependent indefinitely obviously lose a lifetime of higher earnings. So do those who get a job after being unemployed for just six months or more. They earn up to 15% less in the short run and even more long-term.
Endless unemployment also has significant physical health outcomes, affecting mortality by as much as a year and a half for a 40-year-old worker. It also has substantial mental health impacts. Studies have also found that when mothers formerly dependent on welfare found employment, they saw improvements in their physical health and emotional and psychological well-being.
Welfare reform was a success, yet that policy could be all but permanently overturned by President Biden and congressional Democrats.
That’s the reality of the new child “tax credit” (really, welfare grants for people paid through the IRS) included in the American Rescue Plan, passed by Congress and signed by the president in March. This child credit, which used to require work, was transformed into a child allowance for one year. If Congress passes the House’s $3.5 trillion reconciliation bill, the child allowance will be essentially made permanent.
If the Biden child tax credit is made permanent, the pre-welfare reform system will be resurrected. The transformed child tax credit sends parents a monthly check regardless of whether they work. It pays about 85 percent of what welfare paid in 1995, yet it also expands the income eligibility, so millions of additional families are receiving it.
Combined with other federal transfer payments, including cash welfare itself, low-income families who don’t work can now receive far more than they could have before the ’96 reforms. The inevitable result, proven before 1996, will be fewer struggling families striving to rise through employment.
Manchin is right to be worried about irrevocably disconnecting welfare from work. Too many on the left have forgotten that what happens when families don’t work, despite the decades of evidence proving how dangerous this view is. We shouldn’t return to welfare as we knew it.
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ABOUT THE WRITER
Leslie Ford is a Visiting Fellow in Domestic Policy Studies at The Heritage Foundation (heritage.org).
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