Why Obama's Welfare Waivers Have Both Sides Seething
Life + Money

Why Obama's Welfare Waivers Have Both Sides Seething

REUTERS/Stephen Jaffe AS

When he first heard that the administration was offering some states the chance to waive some work requirements in the federal welfare program, Ron Haskins said he had little doubt that President Obama was trying to circumvent the law and turn the clock back on welfare reform.

Haskins literally drafted the 1996 Clinton-era welfare reform legislation as a senior Republican staffer on the House Ways and Means Committee, and he probably understands the law and how it has been implemented better than most. “When I saw it, I thought it was illegal because I supervised the drafting of the legislation and worked on the provision that supposedly outlawed any waivers,” he told The Fiscal Times on Wednesday.

But as he delved more deeply into the administration’s action and conferred with lawyers at the Department of Health and Human Services and state officials in recent weeks, he concluded that amid rough economic times and budget shortfalls, states needed greater latitude in administering Temporary Assistance for Needy Families (TANF), the successor to the old Aid to Families with Dependent Children program. 

“I think there is merit to it,” said Haskins, now the co-director of the Brookings Institution’s Center on Children and Families. “I think the circumstances have changed dramatically in the states, and among welfare clients since 1996 and that there should be room for some flexibility.”

Haskin’s views are blasphemy to conservative legal scholars and to presumptive Republican presidential nominee Mitt Romney, who this week accused  Obama of attempting to recreate a “culture of dependency’ by dismantling the welfare reforms pushed through Congress by former House Speaker Newt Gingrich and other Republican revolutionaries and signed into law by Democratic President Bill Clinton.

“I want state flexibility to craft programs in a way that is best on increasing work requirements not eliminating them,” Romney said earlier this week on Fox News. “And what the president is doing is saying that we are going to take out the requirement for work.”

Under the 1996 law, the AFDC system was scrapped in favor of a block grant program administered by the states that imposed strict work and job training requirements of recipients.  States were required to log the hours recipients spent working, volunteering or participating in other activities to find employment. If they were unable to meet set targets or caps, they risked losing federal funding. In no case could recipients stay on welfare for more than five years.

Romney and other conservatives have complained that the president last month used a memorandum to subvert the law passed by Congress by offering states more latitude in how they tailor their cash-assistance program. And some have hinted at a possible legal challenge to the proposed waiver.

“The President’s power to act unilaterally in domestic affairs is limited both by his constitutional obligation to ‘take care that the laws be faithfully executed’ and by the laws that Congress passes,” Andrew Grossman wrote for the conservative Heritage Foundation this week. “In this instance, the President has chosen to disregard that obligation.”

Since his politically disastrous clashes with congressional Republicans over the debt ceiling and other fiscal issues last year, Obama has repeatedly sought to go around Congress by issuing executive orders and regulations that don’t require congressional approval. The effort to ease the work requirement definitions under TANF marks the latest such move that potentially could curry favor with governors and help the financially strapped middle class. But Obama’s critics say that his failure to consult Congress on such an important policy shift potentially could backfire.

Administration officials and supporters have hotly denied Republicans’ claims and insist that the president continues to embrace the concept of welfare to work.  Deputy campaign manager Stephanie Cutter told reporters that that the administration agreed to allow states to apply for waivers after hearing from governors, including Republicans Gary Herbert of Utah and Brian Sandoval of Nevada, who sought relief from some of the more onerous federal requirements and paper work.

White House Press Secretary Jay Carney said the administration’s welfare policy would strengthen the program by giving states the ability to employ “more effective ways to help people get off welfare and into a job. He stressed that the new administration policy would reject any requests by states to undercut the work requirement.

But there is widespread skepticism among Republicans that the waiver proposal would provide states with an excuse to backslide in their enforcement of the law, just as some states did several years back in listing as part of a “federal work activity” such things as bed rest, personal care activities, massage, weight loss and smoking cessation, according to a 2005 report by the non-partisan Government Accountability Office (GAO).

Haskins conceded that state backsliding under the new waiver is “a definite possibility,” and that “Republicans have a point that if HHS wanted to undermine the work requirement in the Obama administration and they wanted to loosen up on the states so that they could more easily meet the work requirement by underwater basket weaving or whatever the hell it is, then this is a way to do it.”

“It’s all in the way they implement it,” he added. “If [HHS Secretary Kathleen Sebelius] is vigilant and they implement the waivers in accord with the things they are requiring states to do to qualify for a waiver, there’s no problem.  But Republicans are very suspicious of Democrats on this issue. So there’s no trust here.”   The administration has specified a number of requirements states must meet  to qualify for a waiver, including identifying interim performance targets and explaining “in compelling fashion” why the proposed alternative approach may be more efficient or effective in promoting employment entry and job retention for TANF clients.

Haskins said that, politics aside, Republicans would normally jump at an opportunity to ease regulations for the states, just as they have advocated converting Medicaid and other entitlement programs to block grants to be run as governors and state officials see fit. 

“I would say these requirements that are in the statute made a lot of sense in 1996, a lot of sense,” Haskins said. “But they make less sense now because the states have changed so much and their financial situation is such that they don’t want additional people on welfare. They’re highly motivated to get them off.”

The political dustup is a throwback to an era of welfare politics, when Republicans berated liberal Democrats for promoting overly generous and unbridled welfare programs that produced “welfare queens,” encouraged women to have children out of wedlock, and spawned generations of unemployed and unemployable people heavily dependent on the government for survival.

Clinton campaigned for president in 1992 promising to “end welfare as we have come to know it.” And as he signed the Personal Responsibility and Work Opportunity Reconciliation Act on August 22, 1996, Clinton said that the new legislation “gives us a chance we haven’t had before to break the cycle of dependency that has existed for millions and millions of our fellow citizens, exiling them from the world of work.” 

To make sure that the states didn’t attempt to evade the law’s strict work requirements, Congress included great detail in Section 407 of the law, defining terms with specificity and setting caps on exemptions. Rather than leaving the matter to administrative discretion, the law spells out a dozen “work activities” – including subsidized and unsubsidized employment, on-the-job training, and vocational training—that satisfy the state and individual work requirements.

It specified the number of hours per week that family members would be required to work to be considered “participating in work activities, according to a Heritage Foundation analysis. It put a hard cap of 30 percent on the proportion of a state’s welfare recipients who could participate in educational activities and still be counted as engaged in work. The law also requires HHS to oversee and verify states’ compliance with all work requirements. 

The economy appeared robust and resilient when the reform was passed in 1996, a far cry from the fragility that persists today. A wave of hiring lowered the unemployment rate from 6.3 percent to 5 percent over the course of the year. Initial public offerings from 739 companies—many attached to the curiosity that was the Internet—lifted the Dow Jones Industrial Average by an optimistic 28.21 percent.

Welfare was then ripe for becoming workfare, as jobs that now seem scarce were plentiful.

At the time, more than 4.5 million households received benefits from AFDC, down from a peak of 5 million in 1994, according to HHS. Under the 1996 reform, enrollment plunged to 2 million by the middle of 2011, making it the least utilized of the 13 different social safety net programs tracked by the Census Bureau.


TANF costs federal taxpayers $16.5 billion annually, compared to the $50 billion the government devoted last year to extending unemployment benefits.  Funding has remained relatively flat since the passasge of the welfare reform legislation. And many of the more than 20 million unemployed and underemployed Americans are by necessity applying for the types of jobs that in the past might have been available for welfare recipients.

“What happens with low-income, low wage, poorly educated workers – especially people who aren’t in the labor market at all – is that they’re going to struggle in a recession because they are going to be competing against people who have a lot more experience and skills,” said Carl E. Van Horn, director of the Heldrich Center for Workforce Development at Rutgers University. ”

 While the basic structure of TANF work requirements hasn’t changed since its inception, the reauthorization of TANF through the Deficit Reduction Act in 2006 included changes designed to increase work among TANF participants and improve the integrity of work participation data. These changes generally made it more difficult for states to meet federal work requirements, according to an Urban Institute report.

On Feb. 28, 2011,Obama issued a Presidential Memorandum directing federal agencies  to work closely with state and local governments to identify “administrative, regulatory and legislative barriers in federally funded programs” that prevent the effective use of tax dollars. HHS followed up with discussions with state and local officials about TANF that led to the request from Utah, Nevada and other states for more flexibility.

A July 12 HHS “Information Memorandum” to state welfare plan administrators said the administration  “is encouraging states to consider new, more effective ways to meet the goals of TANF, particularly helping parents successfully prepare for, find, and retain employment.”  To achieve these goals, the memorandum announced that HHS would accept applications for waivers from TANF requirements “to allow states to test alternative and innovative strategies, policies, and procedures that are designed to improve employment outcomes for needy families.”

That would mean, in part, adopting different “definitions of work activities and engagement, specified limitations, verification procedures, and the calculation of participation rates.” But Haskins insists that change is needed. He said the states likely would seek ways to broaden the definition of the work requirement to include job searches and to ease limitations on the use of TANF funds to pay for subsidizing employment and job training.

“The trick is to have a system that’s tough and tries to help people find work but does allow people to be on welfare if they can’t find work,” Haskins said.

Josh Boak, TFT’s National Correspondent, contributed to this report.