Welfare Reform

divorced, deserted, and minority mothers and their children. Few private and government retirement pensions existed in the United States before the Great Depression. The prevailing view was that individuals should save for their old age or be supported by their children. About 30 states provided some welfare aid to poor elderly persons without any source of income. Local officials generally decided who deserved old-age assistance in their community.

The emphasis during the first two years of President Franklin Roosevelt's "New Deal" was to provide work relief for the millions of unemployed Americans. Federal money came to the states pay for public works projects, which employed the jobless. Some federal aid also directly assisted needy victims of the Depression. The states, however, remained mainly responsible for taking care of the unemployables (widows, poor children, the elderly poor, and the disabled). But states and private charities, too, were unable to keep up the support of these people at a time when tax collections and personal giving were declining steeply. In his State of the Union Address before Congress on January 4, 1935, President Roosevelt said "the time has come for action by the national government" to provide "security against the major hazards and vicissitudes [uncertainties] of life." He went on to propose the creation of federal unemployment and old-age insurance programs. He also called for guaranteed benefits for poor single mothers and their children along with other dependent persons.

By permanently expanding federal responsibility for the security of all Americans, Roosevelt believed that the necessity for government make-work employment and other forms of Depression relief would disappear. In his address before Congress, Roosevelt argued that the continuation of government relief programs was a bad thing for the country: "lessons of history, confirmed by the evidence immediately before me, show conclusively that continued dependence upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fiber. To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit . . .."

A few months later, on August 18, 1935, Roosevelt signed the Social Security Act. It set up a federal retirement program for persons over 65, which was financed by a payroll tax paid jointly by employers and their workers. FDR believed that federal old-age pensions together with employer-paid unemployment insurance (also a part of the Social Security Act) would provide the economic security people needed during both good and bad times. In addition to old-age pensions and unemployment insurance, the Social Security Act established a national welfare system. The federal government guaranteed one-third of the total amount spent by states for assistance to needy and dependent children under age 16 (but not their mothers). Additional federal welfare aid was provided to destitute old people, the needy blind and crippled children. Although financed partly by federal tax money, the states could still set their own eligibility requirements and benefit levels. This part of the law was pushed by Southern states so they could control the coverage made available to their African-American population.

This is how welfare began as a federal government responsibility. Roosevelt and the members of Congress who wrote the welfare provisions into the Social Security Act thought that the need for federal aid to dependent children and poor old people would gradually go away as employment improved and those over 65 began to collect Social Security pensions. But many Americans, such as farm laborers and domestic servants, were never included in the Social Security old-age retirement program. Also, since 1935, increasing divorce and father desertion rates have dramatically multiplied the number of poor single mothers with dependent children. Since the Great Depression, the national welfare system expanded both in coverage and federal regulations. From its inception, the system drew critics. Some complained that the system did not do enough to get people to work. Others simply believed the federal government should not administer a welfare system. As the system grew, so did criticism of it, especially in the 1980s and '90s.

In 1992, candidate Bill Clinton, a Democrat, ran for president promising to "end welfare as we know it." In 1996, a Republican Congress passed and President Clinton signed a reform law that returned most control of welfare back to the states, thus ending 61 years of federal responsibility. When the federal Aid to Families with Dependent Children (AFDC) program began in 1936, it provided cash aid to about 500,000 children and parents. By 1969, the number had grown to nearly 7 million.

Over the years, Congress added new programs. President Lyndon B. Johnson's "War on Poverty" provided major non-cash benefits to AFDC recipients as well as to other needy persons. In 1964, Congress approved a food stamp program for all low-income households. The next year, Congress created Medicaid, a federal and state funded health-care system for the destitute elderly, disabled persons, and AFDC families. In 1974, during the Nixon presidency, Congress established the Supplemental Security Income (SSI) program to provide aid to the needy elderly, blind, and disabled. This program made up the last major component of the federal welfare system.

By 1994, more of the nation's needy families, elderly, and disabled received federal welfare than ever before. Aid to Families with Dependent Children