Welfare Reform: An Exploration of Devolution.

Pandey, Shanta ; Collier-Tenison, Shannon

Introduction

IN THE EARLY 1990s DEVOLUTION OF POWER TO ADMINISTER SOCIAL PROGRAMS AND services in the United States occurred from the federal to state and local governmental units. Devolution -- defined in Webster's Ninth New Collegiate Dictionary as "the transference (as of rights, powers, or responsibility) to another; especially, the surrender of powers to local authorities by a central government" -- has proved to be a divisive issue in the United States. Supporters of devolution argue that governmental units that are closer to the people (whether state or local) are more knowledgeable about and better positioned to respond to people's needs and challenges with greater imagination and insight than are federal units (Borut, 1996; Buckley, 1996; Conlan, 1998; Kingsley, 1996). Those who oppose devolution contend that block granting of welfare programs to states is based on inaccurate premises and will hurt the poor and the nation at large (Caraley, 1996, 1998; Donahue, 1997a, 1997b; Goldberg, 1996; Kuttner, 1995; Steuerl e and Mermin, 1997; Weaver, 1996). Still others have mixed views regarding the merits of devolution of welfare programs to the states (Gold, 1996; Nathan, 1997). In this article we ask the following questions: How does the recent decentralization of welfare administration responsibilities to states and local governments fit within the context of evolution of welfare programs and services in the United States? Why did state and local political units support the welfare devolution legislation of 1996? How does this differ from earlier governmental moves to decentralize power? What is the true function of welfare in the U.S.? Are certain governmental units better suited to undertake the responsibility of welfare administration than others? Finally, what are the limitations of the welfare legislation of 1996?

Background

There has been ongoing debate over the division of responsibilities between the federal government and the states since the 1700s, when the first federal grants were issued to states and localities (Brown and Corbett, 1997; Nathan and Lago, 1990; Rivlin, 1991). Between 1880 and 1910, pensions for Civil War veterans comprised over one-quarter of federal expenditures, with 90% of surviving Union veterans collecting pensions by 1910 (Skocpol, 1995). Besides the 28% of men aged 65 or more, over 300,000 widows, orphans, and other dependents of Union soldiers received federal benefits during this time. In contrast to the Civil War Pension Acts (Skocpol, 1995; 1998), local governments and charities in the U.s. were primarily responsible for providing poor relief through the time of the Great Depression (Brown, 1940; Nathan, 1997). During the 1930s, states took a more active role as they attempted to reduce the high rates of unemployment and to boost the economy through various work relief programs. Although these p rograms were federally subsidized, only after the passage of the Social Security Act of 1935 did the federal government begin to directly share the responsibility of providing relief to the poor through a variety of social welfare programs. Even today, most of our public assistance programs stem from this act (Gordon, 1994).

The passage of the Social Security Act reflected the general political sentiment that the federal government had a role in alleviating poverty among children, the elderly, and the unemployed (Brown and Corbett, 1997; Rivlin, 1991). Among the various programs established by this act were Supplemental Security Income (SSI), or old-age assistance, unemployment compensation, and Aid to Dependent Children (later known as Aid to Families with Dependent Children [AFDC]). The 11 public assistance programs established under the Social Security Act were aimed at different social groups and operated under different terms (Gordon, 1994). Due to discontent with perceived state neglect, many services that were previously regarded as a function of the states became the responsibility, or shared responsibility, of the federal government, including poverty alleviation programs, income transfer programs, and federal work training and manpower development programs (Rivlin, 1991). In short, where state or local governments were unwilling or unable to act, federal programs established a safety net for the poor (Caraley, 1996). At the same time, critics of this new federal welfare system have argued that the differential foci and terms of the various programs, and AFDC in particular, set up a stratified, inequitable system along gender, racial, and class lines (Abramovitz, 2000; Gordon, 1994; Piven and Cloward, 1993).

Despite calls to slow the trend of federal expansion as negative reaction to centralization developed (Brown and Corbett, 1997; E. Peterson, 1995; G. Peterson, 1995), the evolution of new federal programs continued. In the 1960s, President Lyndon B. Johnson's War on Poverty fueled an explosion of new programs. The federal government, often bypassing state governments, expanded social welfare programs, insured bank deposits, financed healthcare for indigent populations and the elderly, and provided education loans for students (Brown and Corbett, 1997; Rivlin, 1991). Many of these programs assumed the task of changing individual poverty conditions and empowering communities. Contrary to the beliefs of many conservatives, programs of the Great Society did not represent a usurpation of power by the federal government (Brown and Corbett, 1997; Caraley, 1996; Corbett, 1997). In fact, under federal regulations, local officials administered most federally funded programs for the poor (Caraley, 1996).

Between the mid-1960s and the mid-1970s, a new philosophy of poverty alleviation evolved as the federal government began to calculate and distribute benefits based upon an income threshold (Corbett, 1997). Cash income-support programs such as AFDC and in-kind programs such as Food Stamps, Medicaid, and Housing Assistance became federal entitlement programs aimed at populations deemed most deserving of help, while local governments maintained responsibility for general assistance programs designated for single or ablebodied adults (Brown and Corbett, 1997; Corbett, 1997). To reach Black voters, the federal government circumvented local governments to expand Great Society programs into the inner cities (Piven and Cloward, 1993). Minorities and women also began to claim welfare as a strategy to move out of poverty in conjunction with the women's movement and increased labor force participation. Unfortunately, these tactics resulted in a strong conservative backlash and a move by Democrats to appeal to conservat ive voters, so that the benefits of centralization began to be questioned again (Gordon, 1994; Piven and Cloward, 1993).

In the 1970s, a movement to give states and local governments unrestricted federal funds and maximum discretion over spending characterized a new federalism (Videka-Sherman and Viggiani, 1996; Wright, 1998). In 1972, President Richard Nixon enacted general revenue sharing for the first time, bringing "no strings" direct federal monies ($6.1 billion annually) to many states and local governmental units (Conlan, 1998). General revenue sharing combined "the advantages of raising revenues at the national level with the advantages of local discretion over spending" (Ibid.: 65). State and local governments had flexibility in the use of federal funds received through general revenue sharing, while federal regulations, paperwork, and choice over the allocation of these funds were minimized. At the same time, the Nixon administration launched three block grant initiatives with increased local discretion on spending in an attempt to curb mismanagement and waste at the federal level (The National Journal, 1995). This b lock grant policy continued through the Ford and Carter administrations. President Gerald Ford signed community development block grant legislation in 1974 and consolidated social services funds to welfare recipients into a block grant in 1975. Although not much change occurred with regard to devolution of welfare spending during the Carter administration, federal funding to state and local governments peaked in 1978 (Conlan, 1998).

In the 1980s, the focus of the federal policy changed course, diminishing the notion of a social safety net as a federally funded entitlement. In the interest of reducing federal government activity and freeing state and local governments to take a more active role, the Reagan administration called for a new federalism by moving to a system of block grants with reduced federal funding. Seventy-seven categorical programs were consolidated into nine block grants with reduced funding, and 62 additional programs were terminated (Conlan, 1998). Through block granting, the Reagan administration cut federal taxes and deregulated federal-state relations (Brown and Corbett, 1997; Conlan, 1998; Jost, 1996; E. Peterson, 1995; G. Peterson; 1995; Rivlin, 1991). General revenue sharing, a large program fiscally, was phased out for states in 1980 and for local governments in 1986, thus offsetting the gains made by advocates of devolution in obtaining special block grants (Conlan, 1998). At the same time, the federal govern ment continued to exercise major authority in the regulation of social program standards.

The Bush administration continued the fiscal policies as outlined during the Reagan years. With bipartisan support from state governors, the Family Support Act of 1988 established new federal requirements for welfare while providing more local flexibility (Brown and Corbett, 1997; Katz, 1995; Rivlin, 1991). States were encouraged to experiment with changes in the welfare system by taking advantage of waiver options offered by the Department of Health and Human Services, which allowed deviation in specific ways from federal program guidelines (Lurie, 1997). Whereas only 10 states successfully obtained waivers allowing experimentation with welfare programs between 1988 and 1990, that number doubled to include 20 states by 1993 (Brown and Corbett, 1997).

Although welfare reform originated as a conservative issue, liberals and even welfare clients joined the calls for reform of an ineffective system in the early 1990s (Gordon, 1994). The Clinton administration, as part of an earlier strategy for economic recovery, continued to promote a redistribution of wealth upward, limited federal government, and a shrinking of social welfare programs (Abramovitz, 1994). This administration further strengthened the role of states with an easier waiver process, resulting in greatly increased numbers and complexity of statebased welfare demonstrations by the mid-1990s (Brown and Corbett, 1997). By 1996, about 90% of the states had successfully obtained at least one waiver to accommodate their own preferences for welfare policy goals and innovative program strategies (Ibid.; Corbett, 1997). This resulted in a wide range of social programs, both in program type and in level of success. Although program results varied, each waiver offered greater flexibility to local governmen ts in designing programs to meet the needs of state and local government populations (Nathan, 1997; Pandey et al., 1999a; E. Peterson, 1995; G. Peterson, 1995).

By the 1990s, a conservative movement to reform welfare was well underway, despite opposition from welfare rights organizations, female academics and professionals, and some feminist groups (Abramovitz, 2000). Five of the many factors instrumental in shifting welfare policy goals are: the changing demography and size of the welfare population; the changing demography of the American labor force; the growth in federal social welfare spending and rising concern that federal government is inefficient; the debate over negative effects of public assistance on recipients; and a supportive political environment.

1. Changing demography and size of the welfare population: The earliest welfare recipients were mostly white women with children, whose husbands were victims of war -- recipients viewed as "worthy" of minimum public assistance. Over time, as the number of welfare caseloads and costs rose dramatically, the demography of welfare recipients also changed. In 1940, the average monthly number of welfare recipients was about one million. This number increased to two million in 1950, 3.1 million in 1960, 7.4 million in 1970, 10.6 million in 1980, 11.4 million in 1990, and 14.2 million in 1994 (Committee on Ways and Means, 1996). In 1976, 20.8% of all single women receiving welfare were never married, but by 1992 over half (52.3%) of all single women receiving welfare were never married (GAO, 1994a). Furthermore, in 1992 approximately 42% of all single women receiving welfare gave birth as teenagers, and over half (52.8%) had incomes below 50% of the poverty line (GAO, 1994b). Although marital and birth patterns of w elfare mothers reflect societal trends (GAO, 1994a), these mothers face many barriers to exiting poverty through employment due to the lack of needed services (including childcare, healthcare, and transportation), gender and racial discrimination (Hagen, 1995), and a lack of education, employment skills, and work experience (GAO, 1994a; 1994b).

2. Changing demography of the American labor force: The dramatic rise in the participation of American mothers in the labor force in the last two decades resulted in a change in public attitudes toward working mothers (Orthner and Kirk, 1995; Szanton, 1991). In 1960, only 30.4% of all women with children participated in the labor force, whereas by 1987 their labor force participation rate had increased to 64.7% (Reischauer, 1989). Feminist emphasis on an expansion of women's workplace rights furthered the assumption that women ought to work outside the home, possibly confusing middle-class women's right to work with poor women's obligation to do so (Mink, 1998a). While middle-class mothers can choose to make childrearing a full-time job, poor mothers do not have this choice. Indeed, as Mink (Ibid.: 150) notes, "except among welfare rights activists and a handful of feminists, no one has defended the right of poor mothers to raise their children, and no one has questioned the proposition that poor single moth ers should have to.. .work outside the home." As a result, most welfare mothers are now perceived as undeserving of long-term public benefits and thus are required to work in return for welfare (Kaus, 1992; Mead, 1986; 1992).

3. Growth in federal spending on social welfare programs for the poor: When the federal outlay was compared to perceived outcomes, the federal government appeared to be bureaucratic, inefficient, and distant in providing for the welfare needs of its people (Caraley, 1996, 1998; Donahue, 1997a; Goldberg, 1996; Kuttner, 1995; Steuerle and Mermin, 1997; Weaver, 1996). The general perception of many conservative leaders was that "Washington was trying to do too much with too little success and with too much micromanagement" (Weaver, 1996: 52). Proponents of welfare reform argued that federal welfare policy had failed, that local governments were better positioned to respond to local preferences and circumstances, and that federal budget restraints would be better served by block rather than open-ended grants (Bailey and Koney, 1996; Borut, 1996; Brown and Corbett, 1997; Casse, 1997; Corbett, 1997; Goldberg, 1996; Kingsley, 1996; E. Peterson, 1995; G. Peterson, 1995; Watson and Gold, 1997). As federal policymaker s despaired of national solutions to the problems of welfare, block grants to the states that transferred control of welfare policy appeared to be a viable solution.

4. Sensational debate over the outcomes of public assistance programs: As AFDC caseloads continued to rise, conservative politicians began to express concern over the negative consequences of welfare and long-term dependency upon public support, as well as growing doubts about who among the poor deserve help (Videka-Sherman and Viggiani, 1996). Some researchers (including Murray, 1984) contended that public assistance actually caused many of society's ills, including poverty. It was argued that individuals and even communities were altering behavior to take advantage of federal entitlement programs (Ibid.), proof that federal programs were not having the desired effect on poverty and welfare use. In contrast, many state welfare reform initiatives linked welfare benefits to personal responsibility or changes in personal behavior, a sort of "social engineering" (Corbett, 1997:4). Without a strong feminist counterargument, poor women found themselves and their private behavior at the center of a very public dis cussion about the worth of continuing public assistance programs as an entitlement (Mink, 1998a).

Through devolution, states felt that they could end entitlement programs that were viewed negatively by government officials and citizens of the state (Corbett, 1997; Governors' Bulletin, 1997). Moreover, along with shifting control of many public welfare programs, the state waiver experiments (and later the welfare legislation of 1996) allowed states to set welfare supports and sanctions so that desired behaviors such as work, marriage, education, and reduced fertility were emphasized (Corbett, 1997; Videka-Sherman and Viggiani, 1996).

5. Supportive political environment: In response to popular ambivalence and a political climate supporting welfare devolution, Bill Clinton, in his first presidential campaign, promised that he would "end welfare as we know it." On August 22, 1996, President Clinton kept his promise by signing the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), which limited federal authority over program standards, reduced and block-granted federal funds, and eliminated entitlement status (U.S. Congress, 1996). This law reflected public sentiment that the able-bodied poor who are of working age should change their reproductive and parenting behavior and engage in productive employment. Moreover, passage of the PRWORA helped to fulfill other political agendas. Socially conservative politicians used welfare reform to promote their own views of family values, while liberal politicians established conservative credentials through their support of PRWORA (Abramovitz, 2000). Congressional feminists also voted in favor of the new welfare law to show support for increased work opportunities for women and increased responsibility from absent fathers (Mink, 1998a).

Personal Responsibility and Work Opportunity Reconciliation Act PRWORA) of 1996

The PRWORA revamped 60 years of welfare tradition and decentralized the authority for welfare administration to state and local governmental units. Major changes under PRWORA include the end of welfare as an entitlement to individuals, the creation of time limits, and the addition of a work requirement. States and local governments now have much wider discretion over the block grants they receive (U.S. Congress, 1996; Powers, 1999). According to this law, adults can receive cash assistance for a maximum of five cumulative years in their lifetimes (or less at state option) and must begin working after two years of receiving assistance. State and local governments may require community service as early as two months after public assistance begins. The law also requires that by fiscal year 2002, states put 50% of single parents receiving cash assistance in work programs for at least 30 hours per week.

Temporary Assistance to Needy Families (TANF) block grants, unlike the open-ended federal matching grants under AFDC, consolidate grants from AFDC, the Job Opportunities and Basic Skills (JOBS) program, and some Emergency Assistance funds to create a fixed-amount grant (U.S. Congress, 1996). The cost of income maintenance and service programs is no longer shared proportionately between federal and local governing bodies, as the federal role is substantially reduced (Brown and Corbett, 1997). Moreover, PRWORA has shifted the emphasis of welfare to altering the personal behaviors of recipients. Under this law, poor single mothers became the only people in America required by law to participate in the labor market and to identify the biological fathers of their children (Mink, 1998b).

Tribes and Local Governments

Another dimension of the PRWORA is its Section 412, which bestowed power to American Indian tribal governments to administer their own public assistance programs (U.S. Congress, 1996). This legislation authorizes the U.S. Department of Health and Human Services (DHHS) to provide direct funding to tribes that wish to design and operate their own TANF services (Pandey et al., 1999a; 1999b). Tribes that take this option must be prepared to forge new relationships with the federal government and the states to access this funding as new service systems compete for limited resources.

As the federal government shifted the authority to administer social welfare policies and programs to states and tribes, the latter in turn will pass the administration authority on to counties and tribal political subunits (Nathan, 1997; The Economist, January 3, 1998). Some states (e.g., California, Colorado, Minnesota, New York, Ohio, and Wisconsin) are already giving their counties authority to design and administer their own welfare services (Gallagher et al., 1998; GAO, 1998). Tribal governments must also decide if their local governing units have adequate resources to administer and support welfare programs. These decisions probably will be made at the local level as more authority is given to tribal political subunits; that was the case with the "Local Governance Act," which was recently passed by The Navajo Nation. This act provides broader recognition of local governments, for it allows tribal chapters to make decisions over local matters, including the administration of welfare programs and servic es (Office and Commission on Navajo Government Development, 1998).

A review of the evolution of welfare policies in the U.S. indicates that federal and state governments have periodically expanded or shrunk their welfare responsibilities. Thus, in the future federal welfare responsibility for the poor may again expand in some ways where state and local governments are unwilling or unable to act. In the following section we revisit the motivation behind state and local governments' support for welfare devolution.

Why Did State and Local Governments Support the 1996 Welfare Legislation?

State and local governments supported passage of the 1996 welfare legislation for several reasons. First, state and local officials, with the general agreement of many U.S. citizens, felt that local governmental units were better equipped than the federal government to slow the rate of growth of welfare populations and welfare spending. Second, prominent Republican governors expressed a desire for tax reductions and budget cuts (Videka-Sherman and Viggiani, 1996; Weaver, 1996). Republican congressional leaders viewed devolution as a potential solution to their problems, beyond reducing the national deficit and increasing congressional support among Republican governors (Weaver, 1996). Many Democrats viewed it as an opportunity to reach out to conservative elements of their constituencies (Abramovitz, 2000).

A third initial driving force of devolution was the support of the National Governors' Association for state autonomy over welfare programs (Brown and Corbett, 1997; Katz, 1995; Lurie, 1997; E. Peterson, 1995; G. Peterson, 1995; The Economist, 1995). Led by the Republican Governor's Association, many governors expressed a willingness to accept limited federal funds for welfare, in the form of block grants, in exchange for unprecedented state autonomy in structuring program reforms. These proposed reforms were seen as an opportunity for the states to develop innovative new welfare programs (Bailey and Koney, 1996; Katz, 1995), as well as to economize by saving administrative costs and relying more heavily upon private industry and community organizations (e.g., churches, nonprofit agencies, etc.) to support reforms (Corbett, 1997; Shapiro, 1987; Watson and Gold, 1997). The use of block grants allows state governments to support private industry in their own states and potentially to conserve funds by contract ing out portions of welfare administration. Although welfare benefits vary greatly across states, many state governors maintained that a move to unrestricted welfare block grants would not result in a reduction of their commitment to serve the most vulnerable citizens (Chernick and Reschovsky, 1996; E. Peterson, 1995).

Although tribal representatives were not as actively involved as were state governors in designing the welfare legislation of 1996, tribal governments have historically sought to self-administer tribal social and economic development programs (Pandey et al., 1999a; 1999b). A primary argument in favor of devolution to tribes is that tribal members are better positioned to address the unique challenges and problems faced by American Indians due to their distinct culture, strong history of oppression, and geographic isolation (Ibid.). Moreover, the PRWORA acknowledges the scarcity of economic development and self-sufficiency on reservations. Tribal governments also favored the devolution of federal authority in welfare reform because of the greater flexibility and simplified administrative and reporting requirements.

Fourth, although the passage of PRWORA officially designated the devolution of AFDC, actual devolution had already occurred in many ways through the states' use of waivers to experiment with welfare reform. As a result, many of the changes required by the new law, such as time limits and work requirements, came as a direct result of innovative state programs and were actually already underway in the states (Governors' Bulletin, 1997). Although it is too early to tell if these reform initiatives will prove successful, welfare caseloads decreased significantly as a direct result of these waiver programs.

State Welfare Reform Initiatives

By 1995, more than 51 welfare demonstration programs were operating in 27 states (Public Welfare, 1995). When PRWORA was signed into law in 1996, 46 states already had experimental programs underway (Gallagher et al., 1998). Many of these programs were much bolder and multidimensional than earlier welfare experiments, and many involved initiatives designed to influence personal and community responsibility. In Wisconsin, Learnfare required teen mothers to meet school attendance requirements in order to collect benefits. Ohio provided a bonus to teenage parents who returned to high school after dropping out if they had fewer than five absences in a month (Editor's Report, 1992). Demonstration programs in Mississippi and Texas involved a wide range of community partners, including faith-based organizations. Massachusetts, Oregon, Missouri, Maryland, Pennsylvania, and others offered financial incentives to encourage employers to hire welfare recipients (Governors' Bulletin, 1997).

Participants in the "To Strengthen Michigan Families" program develop a contract of actions that may involve establishing paternity, attending parenting or training classes, and increasing work hours (Governors' Bulletin, 1997). Attributed to the use of this social contract are a drop of 60,000 cases from the welfare rolls and an all-time high of 29% of AFDC recipients earning income in that year (Engler and Abraham, 1995; Governors' Bulletin, 1997). In Tennessee's "Families First" program, welfare recipients also create a personal responsibility plan that commits recipients to 40 hours a week of work, training, or school attendance. This program also provides daycare and transportation, but has an 18-month time limit on benefits (Governors' Bulletin, 1997). Many other states have put resources into childcare for welfare recipients to overcome the serious challenges faced by welfare parents making the transition from welfare to work (Ibid.).

Although states such as Michigan and Tennessee are considered to be innovators in the area of welfare reform, Wisconsin has served as a model for the nation, even with mixed reviews from critics (see, for example, Boehnen and Corbett, 1996a; Bush, 1996; Department of Workforce Development, 1996; Engler and Abraham, 1995; Ethridge and Percy, 1993; Lurie, 1996; Mead, 1997; Moore, 1997; Vitale, 1995; Wiseman, 1996). Beginning with an innovative approach to the federal JOBS program and culminating with Wisconsin Works, welfare reform in Wisconsin has taken place in several stages. Between 1986 and 1994, Wisconsin's welfare caseload declined by 23% (Mead, 1997), while the nation's total increased (Bush, 1996; Wiseman, 1996). Real benefits of AFDC in Wisconsin were reduced by 31% during this period, while the real value of the need standard declined by 26%. It is noteworthy that by reducing the payment standards of AFDC, the available welfare benefit package became less attractive than labor market wages (Wiseman, 1996).

Wisconsin Works (W-2) -- a "work-based system of public aid providing services, subsidies, and opportunities to help parents establish their own means of support, primarily through work, and then help them maintain long-term self-support" (Bush, 1996:1) -- was the groundbreaking program that made Wisconsin a leader in the area of welfare reform. Signed into law in early 1996, W-2 was established to end individual entitlement to cash assistance through a four-tiered program of assessment training, community service jobs, trial (subsidized) employment, and unsubsidized employment. With a 60-month lifetime limit on benefits, W-2 provided the first fully articulated model of how block grants could be used to restructure a state welfare program (Wiseman, 1996).

Common traits shared by most of the state demonstration programs are a reduction in welfare caseloads and an initial increase in expenditures for welfare (Ganzglass, 1996; Long and Wissoker, 1995; Moore, 1997; Wiseman, 1996). Florida, Vermont, and Wisconsin, three of the first states to receive approval for time-limited welfare demonstrations, found that changing the focus of welfare from a cash entitlement to a work requirement was an expensive proposition. All three states experienced high expenditures, although Florida and Wisconsin expect to see a savings pattern in the longer-run. Regardless of the expense, state officials judged the implementation of flexible time limits to be worth the initial cost (Ganzglass, 1996). In contrast, the "Family Independence Program" in Washington state cost much more than AFDC, and the program outcomes were exactly the opposite of expectations. Under this ambitious program, which was structured in a manner similar to the federal JOBS program, employment fell and welfare participation rose (Long and Wissoker, 1995).

A review of state and local government support of recent welfare reform legislation indicates that beyond their desire for tax cuts, budget cuts, and flexibility in spending, officials gained confidence from waiver implementations. Many states will see changes in savings as welfare recipients reach their time limits and caseloads decrease. States are also experiencing a windfall of funds as the level of federal reimbursement continues at 1995 levels (through 2002). Even so, state and local governments face many challenges under welfare devolution.

What Are the Challenges of Devolution?

This section reviews the welfare reform literature and focuses on how current or former welfare users have faired under the 1996 federal welfare legislation.

Welfare caseloads declined, but the poverty rate remained high. Decentralization of central authority, accompanied by reductions in federal funding, resulted in a decline in welfare caseloads without much improvement in the economic conditions of poor women with children. Under devolution, welfare caseloads have declined in every state in the nation (DHHS, 1998) and, although less rapidly, on many Indian reservations (Pandey et al., 2002; 1999b). Although states are encouraged by the nationwide drop in caseloads of more than 40%, whether due to employment or sanctions, most do not have enough information about what happens to these welfare leavers (Tweedie, Reichert, and O'Connor, 1999). Moreover, the decline in welfare caseloads has not resulted in a decline in poverty.

Critics of welfare reform under block granting argue that behavioral-based welfare, or social engineering via TANF, is not effectively bringing poor families and individuals out of poverty (Abramovitz, 2000; Cancian and Gordon, 1996; Ethridge and Percy, 1993; Moore, 1997; Polit, London, and Martinez, 2000). Welfare reform efforts have coincided with the U.S. economic boom, and welfare participants seem to have benefited from the good economy. As long as the country experiences low levels of unemployment and a strong economy, the market will support a successful welfare-to-work program. A summary of studies in nine states shows that between 50 and 70% (Mississippi is an exception with only 35%) of former welfare recipients are currently employed or have work earnings (Tweedie et al., 1999). However, most families who leave welfare are still dependent upon some form of public assistance (e.g., Food Stamps, Medicaid, or subsidized childcare), and somewhere between one-fifth and one-third of families who leave w elfare return within a few months (Ibid.). Critics are concerned about welfare recipients in low-wage jobs and about the potential displacement of current workers if the economy weakens (Cancian and Gordon, 1996).

Evidence from other studies suggests that even women who have found jobs are worse off. A study from Oregon indicates that while welfare caseloads declined, the poverty rate in that state increased (ECONorthwest, 1998), indicating that available jobs are not paying enough to lift these women out of poverty. Similarly, in Wisconsin, despite rapid growth in the economy and a tremendous decline in the welfare rolls, the number of poor declined marginally, and the number of extremely poor (below 50% of the poverty level) increased sharply from 1989 to 1997 (Moore and Selkowe, 1999). Another study indicates that in 1996, over 2.7 million children (19% of all poor children) came from families whose heads of household worked full time year round, but earned incomes below the official poverty threshold (Wertheimer, 1999). This indicates that forcing parents directly into work may get their children off welfare, but it does not guarantee that they will escape poverty (Ibid.). While the U.S. economy is booming, increa sing numbers of poor families, many of whom are employed, are turning to food pantries, soup kitchens, and other emergency food services to survive hunger (America Press, 1998; Revkin, 1999a; 1999b; U.S. Conference of Mayors, 1999).

Wages at the lower rungs of the economic ladder will be kept down due to the massive supply of low-wage workers. Studies in nine states that have tracked former welfare recipients (NCSL, 1998) indicate that most have jobs that pay between $5.50 and $7.00 an hour, higher than the minimum wage, but not enough to lift a family out of poverty. Although state tracking studies provide little evidence to indicate an increase in homelessness, child neglect, or child abuse (Tweedie et al., 1999), working mothers report more material hardship than do welfare mothers. According to Jencks (1997), the reason for this hardship is that single mothers' expenses (in the forms of childcare, transportation, healthcare, and clothing) rise sharply when they work. In Wisconsin, although welfare leavers report substantially higher earnings and Earned Income Tax Credits (EITC) post-welfare, their net incomes are actually lower in the year following exit due to the decline in benefits such as TANF and Food Stamps (Cancian et al., 20 00). Only 26% of the 1997 welfare leavers in this study had total incomes above the poverty level in 1998.

Many advocates argue that for low-wage work to be a viable option for women with children, a government support system with a wide range of subsidies is needed (Savner, 1996). States and local governments will have to focus on education and job training (Pandey et al., 2000), the creation of better-paying jobs, childcare, transportation, and healthcare (Moore, 1997; Pandey et al., 2002; 1999b). These resources are particularly important for women leaving welfare under the TANF program. In a study comparing welfare leavers under early Wisconsin reforms and welfare leavers under TANF, Cancian et al. (2000) found higher rates of exit under TANF, as this more stringent program pushes mothers with fewer skills into the low-wage labor market. For these women, consistent work is uncommon, as indicated by the median of three employers for 1995 welfare leavers.

Decentralization and inequality. Although devolution offers governments an opportunity to be more responsive (Conlan, 1998), when accompanied by reductions in federal funding, it diminishes the ability of local governments to respond effectively to local needs (Gold, 1996; Donahue, 1997b; Pandey et al., 1999a, 1999b). The devolution of welfare administration provides greater flexibility for states and local governments to design and manage creative support programs for the poor. It also increases the risk of failing to adequately support poor families and children, especially during an economic downturn. Moreover, rural areas of the United States have not experienced the economic growth enjoyed by the rest of the country, making this population especially vulnerable to funding cuts (Pandey et al., 2002; 1999b). To respond effectively to poor women with children in rural areas, economic growth and support programs must be evenly distributed across the United States (World Bank, 1999).

With the federal contribution in the form of a fixed block grant, states are responsible for the remaining fiscal burden, particularly as the real value of the block grants declines over time (Corbett, 1997). Federal requirements for monitoring and reporting are also greatly reduced in this approach, thus increasing the potential for radically different benefit levels within and across states. As a result, devolution in the 1990s may have increased inequality, as levels of support to poor families may vary within and between states (Donahue, 1997b; Conlan, 1998; Weir, 1997).

There has also been a resurgence of questions about who is or is not deserving of help. Welfare benefits, no longer an entitlement, will be available only to those persons deemed to be deserving by local authorities. Because over 95% of adult welfare recipients are women, women experience these reforms disproportionately (Mink, 1998a). As Piven (1998: 68) notes, the logic of restrictive new welfare policies is "simply to eliminate the possibility of a welfare-to-work tradeoff for many women, and to worsen the terms of the welfare option for many others." Limits on time and personal behavior will force women to take whatever work is available, regardless of their ability to support a family.

Local variations in programs have created a nightmarish complexity of services and eligibility criteria that may vary from county to county. The Office of the Inspector General of HHS reports that fragmentation or subcontracting of the TANF program has at times resulted in confusion for TANE recipients about whom to call regarding sanctions (GAO, 2000). TANF recipients have had to explain their circumstances multiple times to different people, and even then sometimes received conflicting information. Further, the mandate is so broadly written that the benefit may vary depending upon how a case is evaluated.

Documenting regulatory and income differences and their effect on the poor is critical to understanding the strengths and weaknesses of a decentralized welfare system. In the U.S., not all states received federal dollars for evaluation, and federal funding for performance evaluation is even scarcer at the tribal level (Pandey et al., 1999a; 1999b). Studies that monitor the performance of antipoverty programs at the local level are imperative as these programs are decentralized. Since the performance of social programs for the poor depends upon the objectives and restrictions of local governments, outcomes for the poor will be very diverse. The federal government must have a means of evaluation that takes into account the diversity and outcomes of social programs administered locally. Lack of such a mechanism could result in increased inequalities within and between states and local governmental units.

Local governments' capacity to manage welfare devolution. Not all local governments are positioned to take on these responsibilities. As shown above, successful implementation of welfare programs requires extraordinary staff, as well as monetary and community resources that many local governments lack. Tribal governments are a case in point. Although states are mandated to assume the responsibility of implementing 1996 welfare legislation, tribes have an option to do so. An examination of the recent experiences of several tribes within Arizona reveals that not all tribes are technically and administratively equipped to undertake a task of this magnitude (Pandey et al., 1999a; 1999b). Moreover, as the federal trust relationship is devolved, tribes must count on the discretion of states to share limited resources proportionately with tribes. As of January 2000, only 21 Indian Tribal Organizations in the country were administering their own tribal TANF programs.

Isolation of local governments. A decentralized welfare system has the potential to isolate local governments. Reduced federal requirements for monitoring and reporting increase the potential for radically different benefit levels within and across states (Donahue, 1997b; Conlan, 1998; Weir, 1997). "Voicelessness and powerlessness are intimately linked to material poverty; participation in local and national decision-making not only helps outcomes for the poor directly, but it also helps to improve the quality of development policies" (The World Bank, 1999:46). Both horizontal and vertical flows of information may be limited, thus decreasing knowledge of events outside local service areas and further limiting local governments. For example, American Indian tribes were not actively involved in the welfare debate and do not have experience comparable to that of state governments in the administration of welfare programs. Nor do tribes have all the resources necessary to assume tribal welfare programs without t he assistance of states (McCarthy, 1999; Pandey and Collier-Tenison, 1999). Again, state and tribal governments must forge new relationships if tribes are to have the opportunity to administer their own welfare programs.

Erosion of individual dignity. Devolution has increased privatization of welfare services, but it has not sufficiently increased competition among the qualified bidders (GAO, 1999). Anecdotal evidence suggests that devolution without much competition could strip away the basic rights and dignity of the poor. According to Bernstein (1999), participants in welfare-to-work programs through the city are not protected from sexual discrimination and sexual harassment in the workplace because these women are not considered employees. Furthermore, current or former welfare recipients from rural Missouri described overt sexual harassment and their fear of losing benefits if they were to complain (Pandey and Collier-Tenison, 1999). Some of these focus group respondents had left a job or refused to take a job when their employers made sexual advances toward them. When discussing sexual harassment, one woman stated, "it feels like you can't get a job unless you give something."

The restrictive policies passed by many states will push or humiliate women currently on welfare to find work (Piven, 1998). Rules of paternity establishment compel welfare recipients to "disclose private matters in exchange for cash and medical assistance -- to answer questions like: Whom did you sleep with? How often? When? Where?" (Mink, 1998a: 151-152). Moreover, studies in nine states report that less-educated women may have trouble understanding complex program requirements and the consequences of noncompliance (GAO, 2000). These families are more likely to be sanctioned and a few indicate that they had to place their children in the care of others or that they had become homeless.

Because tribal governments are not subject to federal requirements for due process hearings, American Indian welfare populations may also have difficulty advocating, or even fully knowing, their rights (McCarthy, 1999). Although tribal sovereignty may allow a greater focus on the unique needs of poor American Indians, it may also create a new roadblock to accessing assistance or justice. Reports of unfair sanctions, welfare application systems that deter needy people from applying for benefits, and recipients whose medical benefits had been cut illegally indicate that welfare recipients are not receiving equal protection under the law (Houppert, 1999; Welfare News, 1999; Kaplan, 1999).

Conclusion

Welfare reform in the 1990s resulted from a need for budget restraints and a push for flexibility in program development and implementation by the states (Conlan, 1998; Corbett, 1997; Videka-Sherman and Viggiant, 1996). Yet, the economic conditions of, and opportunities for, women living at the margins of a society do not necessarily improve with decentralization of welfare programs from federal to state and local governments. Even with a booming economy and dramatically lowered welfare caseloads across the country, including many Native American communities, the poverty conditions of many women with children have remained the same or have improved only marginally. Their conditions are likely to worsen as the economy slows because they are already at the margin and are least prepared to deal with economic downturns. We cannot, however, ignore the striking early success of some state programs. Many women do prefer work (in a job paying a living wage) to welfare. Former welfare recipients report increased self -esteem and improved relationships when they successfully move from welfare to work (Sing, Kauff, and Fraker, 1999). Thus, longer-term evaluations are needed before declaring the 1996 welfare reform either a failure or a success.

In the last few years, welfare evaluation studies have primarily indicated a need for the expansion of support services (e.g., childcare, healthcare, and transportation) that make it possible for welfare recipients to work. Although Congress under the Clinton administration showed a willingness to increase funding in these areas, it is uncertain how the Bush administration will influence welfare policy. It is imperative to build in these protective services now, regardless of whether the welfare system is centralized or devolved. Finally, still missing from the welfare reform debate is the importance of institution building and information sharing, the need to reduce inequality, and the imperative of preserving the rights and dignity of the poor and marginalized women and children. More research must be devoted to these areas.

SHANTA PANDEY, Ph.D., is Associate Professor in the George Warren Brown School of Social Work, Washington University, Box 1196, One Brookings Drive, St. Louis, MO 63130; e-mail: Pandeys@gwbmail.wustl.edu. SHANNON COLLIER-TENISON, M.S.W., is a Doctoral Student and Research Associate at the George Warren Brown School of Social Work. This research is supported by grants from the U.S. Department of Health and Human Services and the U.S. Department of Agriculture, Washington, D.C. The opinions expressed are solely those of the authors.

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