the brookings institution, washington, d.c. overview of the 1996 welfare reform law: temporary...

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The Brookings Institution, Washington, D.C. www.brookings.edu Overview of the 1996 Welfare Reform Law: Temporary Assistance for Needy Families Program Reduction of Nonmarital Births Supplemental Security Income for Children Child Support Enforcement Welfare for Noncitizens Child Care

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The Brookings Institution, Washington, D.C. www.brookings.edu

Overview of the1996 Welfare Reform Law:

• Temporary Assistance for Needy Families Program

• Reduction of Nonmarital Births

• Supplemental Security Income for Children

• Child Support Enforcement

• Welfare for Noncitizens

• Child Care

The Brookings Institution, Washington, D.C. www.brookings.edu

Overview of Temporary Assistance for Needy Families Program:

• Elimination of cash welfare entitlement

• Block grant funding

• Work participation standards

• Sanctions

• 5-year time limit

The Brookings Institution, Washington, D.C. www.brookings.edu

Provisions in Welfare Reform LawDesigned to Fight Illegitimacy

• Congressional findings on the negative effects of nonmarital births

• Creation of Temporary Assistance for Needy Families Block Grant

• TANF purpose to “prevent and reduce out-of-wedlock pregnancies”

• Performance Bonus, including prevention of nonmarital births

• Illegitimacy reduction bonus

• Require teens to attend school

• Require teens to live at home or in other adult-supervised setting

• Abstinence education

• Child support enforcement

• Paternity establishment

• National goals to prevent teen pregnancy

• States establish numerical goals for illegitimacy reduction

• Annual ranking of states on nonmarital pregnancy rations by HHS

• Allow family cap

• Allow reduction in cash benefits

The Brookings Institution, Washington, D.C. www.brookings.edu

Results at Four Years:

• Welfare-to-work (TANF)• Reduction of nonmarital births• Supplemental security income for children• Child support enforcement• Welfare for noncitizens• Child care

The Brookings Institution, Washington, D.C. www.brookings.edu

0

1

2

3

4

5

6

1959

1961

1963

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

Year

Mill

ions

of

Fam

ilies

AFDC/TANF Caseload, 1959-1999

The Brookings Institution, Washington, D.C. www.brookings.edu

Family Income fromWelfare vs. Low-Wage Work

Aid to Families with Dependent Children $4,500 Earnings $10,000

Earned Income Credit $3,500Food Stamps $3,500 Food Stamps $2,000

$8,000 $15,500

Welfare Work

The Brookings Institution, Washington, D.C. www.brookings.edu

Percentage of Married, Single,and Never-Married Mothers Working,

1985-1999

35

40

45

50

55

60

65

70

75

85 86 87 88 89 90 91 92 93 94 95 96 97 98 99

Year

Per

cent

age

of M

othe

rs W

ork

ing

Married Mothers

Single Mothers

Never Married

Source: Gary Burtless, The Brookings Institution, 2000

The Brookings Institution, Washington, D.C. www.brookings.edu

Average Income of Female Family Heads with Children in the Bottom Fifth

of Post-Tax Income, 1993-99

$6,000

$6,200

$6,400

$6,600

$6,800

$7,000

$7,200

$7,400

$7,600

$7,800

$8,000

1993 1994 1995 1996 1997 1998 1999

Year

1993-1999Source of Income 1993 1999 in $ in %Earnings 1,331 2,417 +1,086 + 82Cash Welfare 2,107 1,218 - 889 - 42Food Stamps 1,276 988 - 288 - 23Child Support 253 365 + 112 + 44EITC 209 716 + 507 +243Other 1,535 1,902 + 367 + 24 Total 6,711 7,606 + 895 + 13

Tot

al I

nco

me

The Brookings Institution, Washington, D.C. www.brookings.edu

Average Income of Female Family Heads with Children in the Second Fifth

of Post-Tax Income, 1993-99

$12,000

$12,500

$13,000

$13,500

$14,000

$14,500

$15,000

$15,500

$16,000

$16,500

$17,000

1993 1994 1995 1996 1997 1998 1999Year

1993 - 99 Source of Income 1993 1999 in $ in %Earnings 4,815 9,603 +4,788 + 99Cash Welfare 3,099 1,361 -1,738 - 56Food Stamps 1,684 810 - 874 - 52Child Support 446 540 + 94 + 21EITC 678 1,973 +1,295 +191Other 2,479 1,732 - 747 - 30 Total 13,201 16,019 +2,818 + 21

Tot

al I

nco

me

The Brookings Institution, Washington, D.C. www.brookings.edu

Welfare Caseloads and Child Poverty Decline Simultaneously,

1995-1999

-25

-20

-15

-10

-5

0P

erc

en

tag

e D

ec

line

Welfare Caseload

Child Poverty

Black Child Poverty

1995 1996 1997 1998 1999

Year

The Brookings Institution, Washington, D.C. www.brookings.edu

Decline in Child Poverty by Broad Definition, 1983-89 and 1993-99

0

5

10

15

20

25

30

35

40P

erc

en

t in

Po

ve

rty

or

De

clin

e

Source: Bureau of the CensusYear

21.3

18.0

20.0

12.9

35.5

1983 1989 1993 1999 1980s 1990s

15.5

Decline

The Brookings Institution, Washington, D.C. www.brookings.edu

Support for Working FamiliesIncreases Dramatically between 1984 and 1999

0

10

20

30

40

50

Bil

lion

s of

199

9 D

olla

rs

Child Care

CHIP

Child Credit

Medicaid

EIC

Spending in 1999 under: 1984 Law 1999 Law

Source: Congressional Budget Office

The Brookings Institution, Washington, D.C. www.brookings.edu

Number of Births, Birthrate, and Percent of Birthsto Unmarried Women: United States, 1940-99

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1940 1950 1960 1970 1980 1990 19990

10

20

30

40

50

60

70

Pe

rce

nt u

nmar

ried

0

200

400

600

800

1000

1200

1400Births per 1,000 unmarried women Births in 1000's

Percent

Birthrate

Numberof births

SOURCE: National Center for Health Statistics.

The Brookings Institution, Washington, D.C. www.brookings.edu

Teen Birthrate, 1980-1998

495051525354555657585960616263

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

Year

Rat

e pe

r 1,

000

Wom

en

The Brookings Institution, Washington, D.C. www.brookings.edu

Number of Children Receiving SSI Benefits, 1985-2000

0

200000

400000

600000

800000

1000000

1200000

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

Year

Nu

mb

er

of

Ch

ildre

n

Re

ce

ivin

g S

SI

The Brookings Institution, Washington, D.C. www.brookings.edu

Child Support Collections Are Up

9.8

18.0

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

$20

1994 2000

Year

Ch

ild S

upp

ort

Co

llect

ion

s in

Bill

ion

s

The Brookings Institution, Washington, D.C. www.brookings.edu

Number of Noncitizen Families in Selected Welfare Programs,

1995 and 1999

200

400

600

800

1000

1200

1400

1600

1800

2000

1995 1999 1995 1999 1995 1999 1995 1999

Nu

mb

er

on

We

lfa

re (

tho

us

an

ds

)

Medicaid Food Stamps TANF SSI

Program and Year

Source: Urban Institute tabulations of current population source data

The Brookings Institution, Washington, D.C. www.brookings.edu

Federal Spending on Child Care,1985-2000

0

2

4

6

8

10

12

14

16

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

Year

Exp

end

itu

res

(Bill

ion

s, 1

999)

Source: Besharov & Germanis, American Enterprise InstituteNote: Includes Head Start, Child and Adult Feeding Programs, Title XX Block Grant, old AFDC Programs, Child Care and Development Block Grant, and Temporary Assistance for Needy Family Funds

2000