President Bill Clinton signed the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, better known as "welfare reform," on Aug. 22 of that year. A decade later it stands as a rarity: a Washington success story. It did not succeed in the utopian sense of eliminating all poverty or family breakdown. It succeeded in a more practical way. It improved life modestly for millions of people and showed that government could orchestrate constructive change. There are small and large lessons in this. The small lessons involve poverty; the large lessons involve politics.
One little-known fact is that we have made gains against poverty in recent decades — and welfare reform deserves some credit. The poverty rate among blacks has fallen sharply, though it's still discouragingly high. From 1968 to 1994, it barely budged, averaging 32.4 percent. By 2000 it was 22.5 percent. . . . Similarly, there have been big drops in child poverty. From 1989 to 2004, the number of children in poverty fell 12 percent for non-Hispanic whites and 14 percent for blacks.
The economic boom of the 1990s explains much of this improvement. But it is not the whole explanation, because even after the 2001 recession, many poverty rates stayed well below previous levels. For all blacks, it was 24.7 percent in 2004. . . .
Welfare caseloads have plunged. From August 1996 to June 2005, the number of people on welfare dropped from 12.2 million to 4.5 million. About 60 percent of mothers who left welfare found work. Their incomes generally rose. Many qualified for the federal earned-income tax credit, which subsidizes low-income workers. Finally, there were intangible benefits: work connections, self-respect.
One lesson is that what people do for themselves often overshadows what government does for them. Since 1991, for example, the teen birthrate has dropped by a third.
Of course poverty endures. Some mothers are unemployable and are worse off without continuous welfare. . . .
So: We've made a stubborn problem a bit more manageable. It's pragmatic progress, not a panacea. Why can't we do the same for other pressing problems — energy, immigration, retirement spending (Social Security, Medicare)? Here, welfare reform's political lessons apply.
One is the need to overcome a bias against change. We underestimate people's ability to adapt. In 1995 one think tank forecast that the welfare bill would throw 1 million more children into poverty. If Congress had listened, little would have happened. Today we could gradually raise Social Security and Medicare eligibility ages without causing a social catastrophe. Another lesson is the virtue of candor. Welfare's flaws were openly acknowledged. . . .
The final lesson is the value of some bipartisanship. Although welfare reform was mainly a Republican project, President Clinton (who had pledged to "end welfare as we know it") provided general support, as did many Democrats who voted for the final bill.
According to what I recall from that master of triangulation, Dick Morris, White House staffers were mostly fervently opposed to substantial welfare reform, but both Bill Clinton and Al Gore were eventually solidly in favor of it.