Economist praises U.S. welfare reform

While it is still too early to judge its ultimate success, there is evidence that President Clinton's 1996 welfare reform act is accomplishing its original goals. That was the analysis Northwestern University Professor Rebecca Blank presented to an overflowing crowd in Steinberg-Dietrich Hall this past Thursday. The lecture -- which focused on the status of welfare reform -- was sponsored by the Gruss Public Management Program run through Wharton's Public Policy and Management Department. Blank, a professor of public policy at the Evanston, Ill., school, discussed the effects of the hotly debated welfare reform act of 1996, which reallocated much of the federal government's control over welfare to the states. The act is intended to reduce welfare caseloads and promote economic self-sufficiency. A main product of the act is Temporary Assistance to Needy Families, a program which provides assistance to unemployed Americans for a lifetime maximum of five years. The Gruss Program chose the topic of welfare reform to highlight the connections between social policy, labor and business. "It's really important for business students to understand that business operates in a society," Wharton Public Policy Chairperson Elizabeth Bailey said. Blank, the third of four speakers in the lecture series, serves on the Council of Economic Advisors in Washington, D.C., which advises the president on economic policy. Using that experience, Blank analyzed the impact of the welfare reform act. Three years after the legislation was enacted, the number of welfare caseloads has dropped by a staggering 40 percent since its 1991 peak. "We have accomplished exactly what we set out to accomplish in welfare reform," Blank said. The success of the welfare reform has been contingent on a number of variables. For instance, the strong economy of recent years has allowed for substantial wage increases and greater job availability. Other policies coincided with TANF to make it "much more lucrative to go to work," Blank said, pointing to the latest increase in minimum wage and the tax breaks afforded to low-income workers. A single working mother with two children can now receive a subsidy of up to $3,656, as compared to $1,179 in 1989. But the improved statistics don't reveal the whole picture. The factors that have nurtured the drop in welfare caseloads, such as the tight labor market, are not permanent. It is uncertain how the reform programs will fare in a weaker economy, Blank warned. Even if unemployment rates remain low, other social programs will be needed to supplement the welfare reform. When low-income earners -- especially single mothers -- go to work, they have an increased need for day care and face greater obstacles to obtaining health care. "Our childcare support system is a horrendous mess," Blank said. Overall, students appreciated the exposure to social policies and their consequences. "It's something that Wharton doesn't deal with that often," Wharton sophomore John Haushalter said.

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