The welfare reform model

Maryland's success in moving people off public assistance provides an example for all policy areas

By Gary MacDougal

September 8, 2008

When the Republican Congress and Democratic President Bill Clinton agreed to "end welfare as we know it" in 1996, it stood to reason that states would need time to recover from decades of policies that undermined work incentives and encouraged family breakups - or never forming two-parent families in the first place.

After more than a decade with the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 in place, however, we now can see success has been widespread and deep, and we can assess how some states effectively capitalized on the freedom offered by this landmark national welfare reform, and how some failed embarrassingly. Maryland has reason to be proud, having earned the top rank in a new nationwide study of states' implementation of welfare reform that is based on the most recently reported data. Maryland cut its welfare rolls by more than 161,000 people, an 80 percent reduction over 10 years, to 43,000 welfare recipients in 2006.

True, some states achieved even more progress than did Maryland in reducing welfare rolls. Florida, Georgia, Idaho, Illinois, Louisiana, Virginia and Wyoming each reduced by least 85 percent the number of people receiving Temporary Aid to Needy Families. But Maryland's success in welfare reform should provide a model for Annapolis in dealing with other policy areas. As the results of the study show, policies that encourage individual choice and personal responsibility empower citizens and strengthen the economy.

In that same 10-year period, the average state government reduced the number of welfare recipients by 68 percent, as 8.5 million were trimmed from welfare rolls, down to a total of 4 million. Studies show the vast majority of those former welfare recipients ended up in jobs, proving wrong the predictions that homeless numbers would swell as welfare rolls shrank.

Other key measures of success also strengthened, including a lower poverty rate, reduced teenage birth rates and declining unemployment rates.

The success of Maryland in "ending welfare as we know it" dramatizes the importance of policies that encourage individual choice and personal responsibility in building a strong economy. Across the nation, welfare reform has been a major success, as my coauthors and I note in "Welfare Reform after Ten Years: A State-by-State Analysis," published by the Heartland Institute.

This stunning progress was achieved without throwing people into poverty or failing to help those who have yet to climb the ladder of success. Our report notes the poverty rate in the United States declined between 1996 and 2006. Despite an economic slowdown in 2001, it is lower today than it was 10 years ago.

Common among successful states was the encouragement they offered their citizens for self-sufficiency and personal responsibility. Our report identified seven policies known to encourage such economic self-sufficiency: service integration (streamlining the delivery of social services), increased applications for the federal earned income tax credit (EITC), work requirements, cash diversion programs, family cap provisions, lifetime limits on aid, and sanctions (enforcement tools to ensure compliance with welfare reform rules).

Our study found Maryland was among the states that most successfully adopted policies that encourage personal economic self-sufficiency. Although it scored poorly on lifetime limits for aid (D) and sanctions (C), and left fully 73 percent of EITC funds unclaimed, its work requirement (A), cash diversion (A) and family cap provisions (B) scored well.

State lawmakers should take notice. On issues such as school choice, health care reform, tax rates, environmental issues and just about anything else the state government regulates, Annapolis should implement policies that give citizens the freedom to make their own choices and experience the consequences, as was done with such success in the state's welfare reform efforts.

Maryland has reason to be proud of its accomplishments in welfare reform. Now it is time to duplicate that success in other areas of government policy. All it takes is political will.

Gary MacDougal is the former chairman of the Illinois governor's Task Force for Human Services Reform. His e-mail is gemacd@aol.com