Sunday, February 15, 2009

I hope no one responds to these incentives

President Obama’s spending proposals are encouraging individual states to add more families to their welfare rolls; the more Americans sign on to the dole, the more state budgets will benefit from US Treasury payouts. This policy essentially undoes the policy changes passed a decade ago by Republicans and President Clinton, over the objections of liberal Democratic legislators:

Despite dire warnings that reduced benefits for single mothers and deadlines on entitlement would create a social calamity – one liberal senator warned at the time that children would be “sleeping on grates” – the 1996 reforms cut welfare rolls from more than 5m families in 1995 to below 2m a decade later without a discernible increase in hardship.

The changes that Obama has proposed will undue one of the "few undisputed triumphs of American government in the past 20 years.

Douglas Besharov, author of a big study on welfare reform, said the stimulus bill passed by Congress and the Senate in separate votes on Friday would “unravel” most of the 1996 reforms that led to a 65% reduction in welfare caseloads and prompted the British and several other governments to consider similar measures.

Though some researchers have questioned the true impact of Clinton’s “workfare” reforms, they were wildly popular with millions of US taxpayers tired of subsidising what many saw as a generation of slackers.

“They have completely overturned the fiscal and policy foundations of welfare reform,” Rector complained.

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