The document discusses the history and evolution of the US welfare system leading up to reforms under the Clinton administration. It describes how prior to Clinton, there were failed reform attempts in the 1960s-80s to update the system. Clinton succeeded where others failed by overhauling welfare in 1996, ending the AFDC program and replacing it with Temporary Assistance for Needy Families (TANF) which included job training programs and took further steps toward devolving responsibility to the states. The reforms aimed to make welfare a temporary safety net and incentivize work.

1. 1
To what extent did Clinton administration succeed in improving the United States welfare
system?
Introduction
The United States is a distinct welfare state compared to, for example, her European
counterparts. When ”…in 1998, the US spent 14.6 per cent of GDP on cash benefits, health
care and social services…the average figure for the then member states of the European
Union was 24.2 per cent and the average of the OECD countries was 20.8 per cent.”1
The
reason for the difference is partially cultural, partially political and to some extent social as
well. To emphasize this idea Ross argues that: “The very concept of government assistance
poses a philosophical dilemma for a society that favours individual responsibility, equality of
opportunity and risk-taking over the welfare state’s attempt to create greater equality of
result and contain the risks of the market place.”2
Waddan presents a similar analysis
through Esping Andersen’s three types of welfare regimes in capitalist economies: social
democratic welfare states, “conservative or corporate” welfare states and liberal states.3
He
emphasises that the United States belongs to the last group. The characteristics of the
liberal one compared to the first two are that the government has a relatively small role in
providing welfare to its citizens in the way that it provides “a safety net rather than a
comprehensive system of benefits and services” and that “it is individuals who are primarily
1
N. Barr, Economics of the Welfare State cited in A. Waddan, “Social Policy”, in G. Peele et al (ed.),
Developments in American Politics 5. Basingstoke: Palgrave Macmillan, 2006, p.218.
2
F. Ross, “Social Policy”, in G. Peele et al (ed.), Developments in American Politics 4, Basingstoke: Palgrave,
2002, pp.203-204.
3
G. Esping-Andersen, The Three Worlds of Welfare Capitalism cited in A. Waddan, “Social Policy” in G.Peele et
al, p.218.

2. 2
responsible for their own economic fate.” 4
Moreover, “there is a reliance on residual and
means tested rather than universal assistance programs.5
There have been attempts to renew or update the American welfare system already before
the Clinton administration, but it was only Clinton’s efforts that managed to be successful.
There were many reasons for this improvement in the United States welfare system, but
before these developments are viewed in more detail, it is essential to look more closely at
the word welfare. According to iAmerican Spirit Political Dictionary welfare means: “public
financial or other assistance (food stamps, for example) given to people who meet certain
standards of eligibility regarding income and assets.”6
In this essay the American welfare system is observed in depth. This essay will be divided
into five parts. Firstly, I will look at the history of the American welfare system. This means
prior to Clinton administration. Secondly, I will look at more closely what Clinton’s welfare
overhaul was all about. Thirdly, I will observe why the overhaul happened at that particular
time. And fourthly, I will look at what the impacts of the improvements were on the needy.
And lastly I will briefly summarise what Bush and Obama administrations have brought to
the American welfare system.
Discussion
The first type of welfare assistance from the state in the United States was for widowed
mothers and Civil war veterans leaving the rest of the needy at the mercy of charity.7
It was
only in the 1930s, when the Great Depression took place, when a fresh step needed to be
4
A. Waddan, “Social Policy”, in G. Peele et al (ed.).
5
ibid.
6
iAmerican Spirit Political Dictionary, http://www.iamericanspirit.com/, [accessed 6 March, 2013].
7
D.McKay, Controversies in American Politics and Society, Oxford: Blackwell 2002, p.151.

3. 3
taken by the government for the assistance of the needy. This extension in welfare
materialised in the New Deal programs that created a more extensive safety-net and
provided assistance for other social groups that had earlier been depended on people’s will
of giving. The major improvement in the American welfare system was the Social Security
Act of 1935. By this Act the government took the old, disabled and widowed under its wing.
It also “…created a non-discriminatory welfare system that was highly selective both in
terms of its eligibility criteria and in terms of benefits levels”.8
The main product of Social
Security act was Aid for Families with Dependent Children (AFDC) that provided welfare only
for mothers with children.
The next improvements in the American welfare system took place in the 1960s. This phase
of new programs is more commonly known as the Great Society. McKay argues that: “in
1961, for example, states were given the option also to include unemployed fathers under
the program.”9
Lyndon Johnson’s ‘War on Poverty’, declared in 1964 resulted in programs
from which some still exist today. He started important provisions such as Medicare (the
health insurance program for the aged, blind and disabled), Medicaid (the federal state
health insurance program for the poor) and Food stamp program (nowadays known as
Supplemental Nutrition Assistance Program, SNAP, which provides financial assistance for
purchasing food to poor and no-income people living in the United States). There were
other programs that were introduced as well, that among other things, covered housing and
education.
There has been three, what McKay calls ‘failed reform attempts’ since the 1960s. The first
one took place during Nixon’s administration (1969-74). He proposed a Family Assistance
8
ibid.
9
ibid. p.152.

4. 4
Plan (FAP) that “offered guaranteed income for all parents with young children, tied to a
strong incentive scheme.”10
What this meant was that “as parents’ income rose so their
welfare benefits would fall…”11
Although this plan was not successful, his administration did
manage to change the welfare and social security agenda. Social Security Income (SSI,
welfare benefits for elderly and disabled with insufficient social security benefits) and
Earned Income Tax Credits (EITC, tax refund for low- and medium-income individuals and
couples, primarily for those who have qualifying children) were introduced.
Carter (1977-1981) did try to renew the welfare agenda as well, but the number of welfare
recipients had increased and the national fiscal condition had deteriorated in the country.
Therefore McKay argues that “as a result as FAP-type of reform would have proved both
expensive and politically unpopular.”12
He tried to push through a reform called Better Jobs
and Income Plan (BJIP). This program combined public service employment, a cash
assistance program to replace AFDC, SSI and Food Stamps and an expanded EITC, but the
Congress did not approve of it.
The Reagan (1981-1989) administration took a different stand in welfare. Reagan was for
devolution in welfare. He proposed a reform where states would be responsible for AFDC
and Food Stamps and federal government for Medicaid, with the addition that the states
would get assistance from the federal government, but only until 1991. But the economy
was in recession and the states were not ready to grow their responsibility in welfare.
However, Reagan managed to pass “the Family Support Act in 1988, which gave states the
10
ibid. p.153.
11
ibid.
12
McKay p.154.

5. 5
option of waiving AFDC rules in favour of state-run programs that increased the incentive to
work and reduced truancy among families on welfare.”13
President Clinton came into power in 1993 and served for two consecutive terms. His
attempts for welfare reform were different between the two terms. Therefore it is essential
to look at what was achieved by one term at a time.
The welfare budget had been increasing from president to president since the 1930s and
Clinton’s wishes for the welfare overhaul were definitely ambitious from the previous
presidents. In order to underline this, McKay argues that “so much had the agenda changed
from the 1960s that the underlying assumption of the legislative debate was that, the
disabled aside, welfare should be given only as a stopgap until poorer Americans could
return to work or receive training in preparation for entering the labour force.”14
Clinton’s
main agenda was a system of universal health care. Despite of his attempts, the health care
reform failed, but this did not stop him, the opposite Clinton concentrated all his energy on
welfare. According to Ross:” The spectacular collapse of this plan [health care],
overshadowed important achievements, such as the 1993 expansion of the EITC, the Family
and Medical Leave Act (granting employees up to twelve weeks of unpaid leave for family
and medical reasons), a rise in the minimum wage from $4.25 to $5.15 per hour and
improved regulation of the managed care industry.”15
She goes on further stating that “ This
last assured new mothers of a minimum 48 hours postnatal hospital stay (the aptly named
“drive through baby bill”), increased the flexibility of health insurance with the ‘portability’
13
Ibid p.155.
14
Ibid p.156.
15
F. Ross, “Social Policy” in G. Peele et al (ed.), p.207.

6. 6
bill, and required mental health to be treated in the same way as physical health.”16
According to Katz EITC, that got expanded during Clinton’s first term, is a very significant
program in reducing poverty. He argues that” the EITC is the federal government’s fastest
growing entitlement program and it is most effective means of lifting children out of
poverty.17
The main change in the Clinton administration’s welfare reform was that it ended AFDC
program that had been running since the 1930s. This transformation, that took place in
1996, is generally known as The Personal Responsibility and Work Reconciliation Act
(PRWORA), where AFDC was replaced with Temporary assistance to Needy Families (TANF).
TANF included the main federal job training program, Job Opportunity and Basic Skills
Training (JOBS). It also was a step towards devolution: “TANF was to be administered
entirely by states” and “each state was given enormous flexibility over how it ran its TANF
program so long as it used the federal money in manner ‘reasonably calculated to
accomplish the purposes of TANF’.”18
Ross argues that “states have a high incentive to
enforce work mandates for two reasons: firstly because each state was obliged to
demonstrate that 35 per cent of welfare recipients were working for a minimum of twenty
hours per week by FY 1997 (…) otherwise it could have its grant cut by 5 per cent of the
following year and by an addition two percent for each year of non-compliance (up to a
total of 21 percent). And, secondly the states continue to receive the same block grant from
the federal government irrespective of their caseload.19
16
ibid.
17
M.B.Katz, The Price of Citizenship: redefining America’s welfare state, New York: Henry Holt, 2002, p.294
18
McKay, Controversies in American Politics and Society, p.156
19
Ross, “Social Policy” in G. Peele et al (ed.), p.208

7. 7
In addition, TANF program limited welfare recipient’s eligibility to five years maximum and
obliged them to undergo training if appropriate. Moreover, non-exempt adults [disabled
and those with very young children] who are not working must participate in community
service two months after they start receiving benefits. Katz argues that with the
introduction of TANF “ two groups would lose benefits completely: legal immigrants, except
those who have worked in the United States for more than ten years, and those associated
with military”.20
Also, “able-bodied childless individuals between ages eighteen and fifty
would receive benefits for only three months in any 36-month period unless they worked at
least twenty hours per week or participated in an acceptable employment or training
program”.21
The PRWORA did not only transform the cash benefit system, but also made cuts in the
Food stamps program. This slash was not without result. Katz argues that “in the 1996
welfare bill, Republicans won 27.7 billion worth of cutbacks in food stamps.22
This reform was all about workfare in a way of changing the attitudes of the needy. Ross
asserts that “it is important to recognize that PRWORA was designed to change the
behaviour of the poor more than reduce the cost of welfare, which constituted one percent
of the federal budget.23
Or as Katz points out “the ‘new politics of poverty’ observed
political scientist Lawrence Mead, was about dependence, not money”24
.
20
Katz, The Price of Citizenship, p.303.
21
ibid.
22
ibid.
23
Ross, “Social Policy” in G. Peele et al (ed .) p.208
24
Katz, The Price of Citizenship, p.320

8. 8
Ross argues that “Clinton’s second term agenda can be best described as incremental”25
She
states that “he did amend elements of the PRWORA as part of the 1997 balanced budget
deal and the same agreement slashed Medicare spending by 112 billion over five years.”26
President Clinton did restore most of the cuts in food stamps, assured medical coverage for
disabled children and enlarged the budget for Medicaid plus made more people to be under
the SSI. “Overall, approximately 13 billion in welfare-related spending was restored. The
incremental revisions softened the harshest elements of American welfare experiment.”27
Zuckerman argues similarly: “the final regulations announced in April 1999, contains
exceptions to the rules, which make the bill less rigid.”28
Many reasons can be viewed to have contributed to the situation that the reform took place
at that particular time in 1996. Two of the reasons can be directly linked to the President
Clinton himself. First of all President Clinton was very ambitious to change the policies of
both the health and welfare systems during his presidency. And since he failed in the first
one, he did not want to be seen as a failure in both of his attempts or as Ross puts it
“anxious to respond to the conservative mood of the country and in need of a major
domestic achievement, Clinton embraced a largely Republican vision of welfare
restructuring (albeit after two earlier presidential vetoes)29
Thus, he made everything
possible to make the welfare reform a reality.
Secondly, President Clinton wanted to stand out as a representative of the Democratic
Party. Or how Waddan puts it: “Clinton had never defended the old AFDC program – indeed
25
Ross, “Social Policy” in G.Peele et al (ed.) p.214
26
ibid.
27
ibid. p.209
28
D.M. Zuckerman, ‘Welfare reform in America: A Clash of Politics and Research’, Journal of Social Issues,
Winter 2000, p.597.
29
Ross, “Social Policy”, p.207

9. 9
his pledge to “end welfare as we know it” in the 1992 campaign was a primary basis of his
claim to be a “different type of Democrat” – but the plan advanced by Republican leaders
did go well beyond his own reform agenda.”30
In addition, Republicans won in the 1994 congressional election and gained majority both in
the House and in the Senate, which gave them great policy making power. Zuckerman
asserts that: “the result was that every congressional committee was chaired by a
Republican instead of a Democrat and composed primarily of Republican rather than
Democrats.”31
Indeed, McKay argues that “although hailed as a bipartisan effort, it
[PRWORA] had all the hallmarks of a Republican rather than Democratic piece of
legislation.”32
Also, there were demographic changes taking place in the country. As we have already
learned the welfare budget had been increasing during the past decades before Clinton
administration and the safety net for the old makes a great part of it. Ross argues that “an
ageing population combined with an expansion in early retirement and increased longeavity
into old age, place obvious stress upon the health and pension sectors.”33
This meant that
Clinton had to do something about the welfare before the “baby boomers” started retiring.
Ross also argues that it was in the public’s interest to make people work rather than staying
on welfare.34
The media played an essential role in educating the public. Zuckerman argues
30
Waddan, “Social Policy” in G.Peele et al (ed.) p.221
31
Zuckerman, ‘Welfare reform in America’, p.591
32
McKay, Controversies in American Politics and Society , p.156
33
Ross, “Social Policy” in G.Peele et al (ed.), p.205
34
ibid. p.217

10. 10
that: “the media were also influential and tended to focus on the shortcomings of the
welfare program that was in place, AFDC.”35
It is clearly proved by researches that the amount of people on welfare declined evidently
since the reform was put into practise. “The caseload has dropped by 50 percent since the
PRWORA was enacted and close to 30 percent of welfare recipients who remain in the rolls
are working.”36
Before the impacts of the 1996 reform are viewed it is important to give
some background information that clearly illustrates other reasons for the decline of the
welfare recipients. All the theorists agree on one fact which is not related to the 1996
reform: more people got out of welfare rolls because of the economic boom from mid-90s
onwards.37
Also, McKay argues that other federal programs, including the expansion of EITC
encouraged many erstwhile welfare recipients to take up work38
Katz argues in similar lines:
“The impact of the EITC on poverty signalled the program’s success. It lifted more children
out of poverty than any other safety net program.”39
The impacts of the reform on the
needy are divided. On the other hand disabled and old people were still covered, but poor
people were left out of the renewed safety net in many ways. Mckay argues that While the
old and disabled remain protected by the federal government, the status of assistance for
the poor has changed out of recognition.40
However, Ross argues that poverty has declined in numbers but that the depth of it is still
alarming. There are several reasons to this phenomenon. She argues that
35
Zuckerman, ‘Welfare Reform in America’, p. 592
36
J.Handler, ‘Something Old, Something New’, cited in Ross, “Social Policy” in G. Peele et al (ed.), p.210
37
Mckay, Controversies in American Politics and Society, p.157
38
ibid.
39
Katz, The Price of Citizenship, p.296
40
Mckay, Controversies in American Politics and Society, p.158

11. 11
“One of the chief explanations as to why the drop in welfare caseload has not brought a
proportionate decline in poverty is that the low wage labour market, where the vast
majority of welfare recipients find jobs has stagnated despite America’s economic boom”.
She goes on further arguing “that Children’s Defence Fund and National Coalition for the
Homeless found that many families who moved from welfare lacked the three most basic
necessities of life: food, shelter (or stable housing) and medical care.”41
Children’s Defence
Fund from 1998 also reveals that “nearly two out of three recipients had lower income than
during the three months they left welfare” in Wisconsin.42
Katz argues more about food and hunger in the United States after the reform. He states
that: “the great decline in food stamp rolls did not signify a correspondingly massive
reduction in hunger.”43
Bush administration’s agenda for welfare is commonly known as ‘compassionate
paternalism’. It made the welfare requirements stricter, expected faith-based organisations
to become more involved in government funded human service programs and was more
aggressive in reducing out-of wedlock births and promoting marriage44
. Altogether, it was
re-enforcing the Clinton administration’s agenda.
Obama administration on the other hand has taken a step back from the reform. It gives the
states more flexibility in taking care of the unemployed by offering them a waiver from
TANF. This reminds more of the Reagan system with AFDC. Some people argue that this
41
Ross, “Social Policy” in G. Peele et al (ed.), p.212
42
Chidren’s Defense Fund, “Welfare to What: Early Findings to Family Hardship and Well-being” cited in Ross
Ross, “Social Policy” in G. Peele et al (ed.) p.210
43
Katz, The Price of Citizenship, p.305
44
S.W. Allard, National Poverty Center, http://npc.umich.edu/publications/u/working_paper07-18.pdf,
[accessed 6 March, 2013]

12. 12
agenda guts the reform, because people would not need to work in order to receive the
benefits45
but others say that this is not true, because if a state has a better program of
tackling unemployment than TANF, they can use it instead46
.
Conclusion
The United States has always been and still is after Clinton’s reform quite a minimal welfare
state. It does provide for the old and disabled, but definitely neglects the poor. Because of
increasing welfare costs and demographic pressures, something was expected to be done to
the American welfare system by President Clinton. What happened at the end was partly
because of his own ambitiousness, partly because of Republican majorities in the
government and also because of the public’s concern about wasting money for ‘able bodied’
people, who can provide for themselves when they work hard enough.
What Clinton administration managed to improve was the welfare situation for the old and
disabled, but left the poor in a difficult situation that was in many ways even worse than
before the overhaul. The administration tried everything in order to change the attitudes of
the poor; that they have to work in order to be eligible for benefits and assistance from the
government. This came as a shock and made many people falling in between the work and
the benefit. If you had none, you had nothing.
The Clinton administration managed to tie work and benefit together and this type of
workfare created a poorer and hungrier society than before dividing in fact the haves from
the have-nots in a sharper way.
45
E. Kiely & R. Moss, http://www.factcheck.org/2012/08/does-obamas-plan-gut-welfare-reform/, [accessed 6
March, 2013]
46
R. Ponnuru, http://www.bloomberg.com/news/2012-07-23/obama-puts-democrats-back-in-welfare-reform-
trap.html [accessed 6 March, 2013]

13. 13
Bibliography
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