What Did States Do?

Flexibility and devolution were hallmarks of the reforms laid out in PRWORA. After enumerating four broad goals - to support needy families, reduce welfare dependency and increase work, reduce out-of-wedlock childbearing, and promote the formation of two-parent families - and establishing a set of rewards and penalties tied to those goals, the new act devolved primary responsibility for the actual design and implementation of welfare programs to the states. In state law and in practice, states overwhelmingly emphasized the first two goals, while all but a few ignored the latter two. Equally important, nearly every state added a new goal - to reward work and reduce poverty for welfare recipients who took jobs, at least until they reached the state's time limit on benefits.

Programmatically, most states used their new responsibilities and flexibility to implement the following three policies:

Requiring work. To increase work and reduce welfare receipt, virtually every state required adults who receive cash welfare benefits to work or participate in employment and training activities, primarily job search but also some short-term education and training. These mandatory employment service programs differed from past efforts by their focus on job search first (commonly known as "work first"), their comprehensiveness (nearly everyone was expected to participate), and the frequency and intensity of the sanctions states imposed for failure to comply. As a result of the 1996 reforms, therefore, in most states, even mothers with infants were expected to prepare for, look for, and take jobs; when they did not, the whole family could lose its welfare grant.

Making work pay. The federal welfare reform law essentially ignored welfare's historic goal to reduce poverty, but that aim was front and center in most states. Recognizing that welfare recipients were leaving welfare for low-wage jobs that made them little or no better off financially than when they were on welfare, more than 46 states used the impetus of the 1996 federal welfare reforms to help make work pay. Most did so by increasing the amount of the "earned income disregard," that is, the amount of earnings not counted when calculating welfare benefits. In effect, states supplemented earnings by only gradually reducing welfare benefits as earnings increased.

Time-limiting welfare benefits. PRWORA's 60-month lifetime limit on how long states could use federal funds to pay a family's welfare benefits was the most striking change in the new law. Disillusioned by the results of earlier reform efforts, lawmakers sought to send the strongest possible message about welfare's temporary character. While most states enacted some form of time limit, several of the largest states either do not have a time limit or only reduce benefits rather than cut people off, opting to use state funds, if necessary, to pay benefits for those who exceed the federal lifetime limit. Twenty-three states have incorporated the federal law's 60-month time limit, at the end of which a family's entire welfare grant can be terminated. Shorter limits were established by 17 states. Eight states have time limits that reduce rather than terminate benefits, and three effectively have no time limit at all. Because the last two categories include some of the nation's largest states, nearly half of the national caseload reside in states that do not impose a time limit that cancels a family's entire grant.

Not surprisingly, the block-grant framework - and, thus, the reality that TANF is a flexible funding source, not a program - spawned tremendous diversity among the states in the mix of mandates, incentives, and time limits employed, as well as in the emphasis placed on one or the other of these component parts. Some states - Iowa, Michigan, and Pennsylvania, for example - have dramatically increased participation in work activities by emphasizing mandates. Taking advantage of the caseload reduction credit, other states, such as Rhode Island, have placed less emphasis on mandates. Massachusetts, Ohio, and Utah adopted time limits that are significantly shorter than the federal 60-month maximum and have enforced them strictly. California and Minnesota, among other states, use incentives in the form of generous earned income disregards to encourage work. These policy options are not mutually exclusive; on the contrary, most states are doing some or all of these things. Connecticut's Jobs First program is a good example: At 21 months, its time limit is one of the nation's shortest, though its disregard of all earnings up to the poverty line is the nation's most generous.

The direction a given state took also depended on local circumstance. States with big cities were preoccupied with making the transition from an education-first to a work-first orientation and tended to focus on mandates and the new message that welfare is a temporary source of support. Predominantly rural states had to focus on building the service network required to engage everyone, on solving the transportation problems that make engagement difficult, and on addressing the lack of employment opportunities that often characterize rural economies and tribal areas. Next Tab