1996 Personal Responsibility and Work Opportunity Reconciliation Act

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The 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWOR) (PL 104-193), also known as the 1996 Welfare Reform Act, was signed in to law on August 22, 1996, by President Bill Clinton. The Act is described by the U.S. Government as "a comprehensive bipartisan welfare reform plan that will dramatically change the nation's welfare system into one that requires work in exchange for time-limited assistance. The law contains strong work requirements, a performance bonus to reward states for moving welfare recipients into jobs, state maintenance of effort requirements, comprehensive child support enforcement, and supports for families moving from welfare to work -- including increased funding for child care and guaranteed medical coverage." [1]

In its September 13, 1996, "Legislative Update," NOW (the National Organization of Women) included the following: [2]

On August 22, President Clinton signed the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 Conference Report to accompany H.R. 3734, the controversial legislation which repeals the 60 year old social safety net for the poor and requires welfare recipients to work. The legislation is very much like H.R. 4, the previous welfare bill that the President vetoed at the urging of NOW and other advocacy organizations. And, like the previous bill, the President received severe criticism from community activists, women's rights, social service advocacy, labor, minority, and religious groups in embracing this Republican-led effort to change the Aid to Families with Dependent Children (AFDC) program. In response, the nominee promised at the Democratic National Convention that he would to make welfare reform "successful" by helping to create a million new jobs by the year 2000, with tax credits for companies who hire welfare recipients and from state plans which may utilize "savings" from welfare program cuts to create jobs for recipients.
In addition to massive funding cuts of $60 billion over six years in programs that would supply cash assistance and food stamps, the "reform" plan ends the welfare entitlement (the federal guarantee of assistance to the poor), requires recipients to find work within two years or perform community service, mandates a minimum of 30 work hours per week (for parents with children over age 6), imposes a lifetime limit on receipt of aid, and rewards states with financial bonuses for reducing their caseloads. The new act establishes a block grant program, the Temporary Assistance for Needy Families (TANF), funded at $16.4 billion for the period of 1997 through 2002, to replace Aid to Families with Children (AFDC), the cash assistance program which previously helped millions of poor families. Each state will now receive a lump sum of federal money to run its own welfare and work programs; many states have already filed waiver applications with the federal government outlining their new approaches to aid for the poor. Some waiver programs are even more restrictive in their requirements for poor families than is the new federal law. States have until July 1, 1997 to submit a plan to the federal government detailing how they will structure their welfare programs under TANF.
The core policy is a personal work requirement where the "head" of every family on welfare must work within two years, or the family will lose benefits. After receiving cash assistance or other help for two months, adults must begin performing community service work unless they have found regular jobs. However, states may choose not to establish a community service work requirement. There is now a lifetime welfare benefits limitation of five cumulative years, which states may reduce.
Welfare spending must be maintained by the states at 75 percent of their 1994 level, but states that do not meet goals for employment of welfare recipients will lose part of their welfare block grant money from the federal government. The penalty is a block grant reduction of 5 percent in the first year rising to 21 percent in the ninth year. States are offered a "work program performance" bonus of $1 billion, if they reach welfare recipient employment goals by the year 2003. "Innovative" state welfare programs may continue under federal waivers granted before October 1, 1996, even if they do not meet all terms of the new act.
Some provisions attempt to ease the transition. A contingency fund of $2 billion (with a trigger based on the food stamp caseload) was established to meet increased poverty and economic recessions in individual states. Twenty percent of recipient families may be exempted from the five year limitation because of hardship. Women with children under age 6 are only required to work 20 hours per week and those who can't find child care will be exempted (although previous versions passed by both the House and Senate allowed exemptions for women with children under age 11). States have the authority to excuse single parents with children under a year old from meeting the work requirements for 12 months. Social services block grant money can be used for vouchers to buy goods and services for children in families cut off of cash welfare as a state option (but that funding was reduced 15 percent from the present level to now total $2.8 billion a year).
The new law denies cash aid to most legal immigrants who are not citizens and states may restrict Medicaid eligibility for those individuals. Noncitizens and their dependents are still eligible for Head Start, job training programs, student loans, and certain health programs. But they will be denied food stamps and Supplemental Security Income (SSI) until they become citizens of the U.S.
There is no major revision of the Medicaid program -- something that Republicans had wanted but the President had threatened to veto the bill if this was included -- so health care coverage for poor women and children remains with current eligibility standards. The final version does specify that states must provide Medicaid coverage to all families that meet their state's July, 1996, AFDC income and asset standards. There is transitional Medicaid assistance for up to 12 months for families whose income increases due to higher earnings or collection of child support.
  • Read remainder of Background, Summary, and NOW's Objections.

According to the Illinois Coalition to End Homelessness, the Act "significantly changed welfare in the United States. While some success has been achieved, many families and disabled adults have fallen deeper into poverty and forced on to the streets because the gaps in the safety net. Changes in welfare legislation were based not on sound research, but instead on the myths that welfare recipients have little incentive to find work and a one-size-fits-all approach will work. However, the actual situation is much more complicated. Families on welfare must contend with a nationwide lack of affordable housing, a lack of jobs that pay a living wage, the difficulty finding child care, as well as increasingly rigid requirements for recipients of public aid." (Now only in Internet Archive)

"The charitable choice provision of the 1996 federal welfare reform law makes Christian ministries and other faith-based organizations eligible for government funds to provide welfare services, without requiring them to form separate corporations or remove religious content from the services they offer. We asked two experts on charitable choice to explore the issues of church-state relations raised by the provision." [3]

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