Improving the U.S. Welfare System

The Challenge

“Our aim is not only to relieve the symptom of poverty, but to cure it and, above all, to prevent it.” President Lyndon B. Johnson inspired a nation with these words as he launched the War on Poverty. In the five decades since this ‘war’ began, $25 trillion has been spent, but poverty rates have not budged, and millions of Americans find themselves in the ‘Welfare Trap’ unable to escape their financial dependence on the U. S. Government.

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Improve the U.S. Welfare System

In the United States, total federal, state, and local government spending on over 80 different means-tested welfare programs now reaches over $1 trillion annually. All of this spending has failed to improve rates of self-sufficiency, as poverty and economic insecurity are major problems for many Americans. Entitlement and welfare programs have created a class of U.S. residents who are dependent on the state, with no incentive to work and better their future.

U. S. Welfare Statistics

There is a lot of confusion about what “welfare” is in the United States. Simply put, welfare programs are government subsidies to people living below the federal poverty level.  In 2018, that's $25,100 for a family of four.

Welfare is not one thing in the U.S., it is comprised of six major U.S. welfare programs. They are Temporary Assistance for Needy Families, Medicaid, Food Stamps, Supplemental Security Income, Earned Income Tax Credit, and Housing Assistance. The federal government provides the funding, while each state individually states administers the funds.

The original intent of welfare programs was to help stabilize the economy and get struggling families back on their feet, But today, many people stay on welfare over the long term because the benefits they receive are worth more than the income they could earn with a job.

Ongoing Changes to Welfare with Mixed Results

There have been many recent moves to change the U.S. Welfare system. In June 2018, President Trump announced his proposal to rename the Department of Health and Human Services into the Department of Health and Public Welfare. This consolidated agency would include several welfare programs within one department. The Supplemental Nutrition Assistance Program, Women, Infants, and Children (WIC) food program and Temporary Assistance for Needy Families (TANF) would all be managed by one agency. At the state and local level, these benefits are managed by single agencies, so having only one department to deal with at the federal level could reduce administrative burdens.

The Trump proposal also recommends making work requirements between welfare programs more uniform. If approved, the plan could lead to increased uniformity between agencies, with a single agency responsible for budgeting and administering the 80 means-tested federal welfare programs that provide cash, food, housing, medical care, and social services to poor and lower-income Americans. These changes are the latest in attempts to improve the large, expensive and cumbersome U.S. welfare system.

Welfare began following the Great Depression of the 1930s, and until 1996 it consisted of little more than guaranteed cash payments to the poor. In 1996, President Clinton led the passage of The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 also known as "The Welfare Reform Act". This Act transformed the welfare system by encouraging recipients to leave welfare and go to work, and by transferring responsibility for administering the welfare system to the states.

Under the Welfare Reform Act, most recipients are required to find jobs within two years of first receiving welfare payments, and most recipients are allowed to receive welfare payments for a total of no more than five years. States receive funds for welfare programs in the form of block grants and each state gets to decide how those funds will be spent.

Since 1996, the attempt to make U.S. Welfare into a Work Activation Program has obtained mixed results. According to a November 2015 survey by the American Perceptions Initiative, nearly 90 percent of the public agree that “able-bodied adults that receive cash, food, housing, and medical assistance should be required to work or prepare for work as a condition of receiving those government benefits.” 87 percent of Democrats and 94 percent of Republicans agreed with the concept that people should work for their benefits.

And in some ways, the Welfare Reform Act has worked. In the years since its passage, the national welfare caseload declined about 60 percent, and the percentage of U.S. children on welfare is now lower than it has been since at least 1970. The Brookings Institute states, "Clearly, federal social policy requiring work backed by sanctions and time limits while granting states the flexibility to design their own work programs produced better results than the previous policy of providing welfare benefits while expecting little in return."

One hindrance to the effect of the Welfare Act’s Work Requirements has been that some states opted out of work requirements. In April 2018, President Trump signed an order stating that "The federal government should do everything within its authority to empower individuals by providing opportunities for work, including by investing in federal programs that are effective at moving people into the workforce and out of poverty.” The current robust economy is resulting in high rates of job openings, which may also help with efforts to move welfare recipients into gainful employment.

Change is Needed to Help People Return to Work

“The whole person, body and spirit, participates in (work), whether it is manual or intellectual work.” – Pope John Paul II.

Work provides emotional, mental and financial sustenance to people, but in the United States, many are still not receiving the satisfaction and reward of a hard day’s work. Compared to countries like Rwanda, China, and Tanzania, the World Bank states that the United States of America has a lower participation of people in the workforce. Over the last 15 years, the number of disability rolls have increased by 48 percent (America Works).

The way most social welfare programs have been constructed actually punishes people for working and increasing their income, creating a much stronger incentive to continue to collect welfare and avoid working (or at least, avoid legal employment) as long as possible. Changes in the last 20 years have improved the situation, but more can be done to empower Americans to join the ranks of the gainfully employed.

Government inefficiency and bureaucracy is also a problem that creates waste in the welfare system. $1 Trillion is spent every year on welfare programs, and with many similar agencies running the different divisions, there is a lot of duplication of effort. Streamlining the system would make a big difference. Burdensome occupational licensing that varies by state and municipality also keeps people from transitioning from welfare to work. With a view to empowering each and every able-bodied person to find gainful and satisfying employment, the U.S. Government should streamline programs and eliminate licensing burdens to encourage free enterprise.

Envision Prosperity for All

While government leaders work on welfare reform, individuals in the U.S. should keep the focus on the ultimate goal of helping each person in our country to work towards self-sufficiency. It may seem easier to pass on responsibility for the poor, criminals, sick, and uneducated among us. But as caring human beings, we should each take part in discovering ways to help the needy. Through innovation, advocacy and partnership we can solve the problems of unemployment and welfare dependence. We can create a more prosperous, healthier nation for ourselves and our children.

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