1996 Welfare Reform Bill -- Just the Facts

by Barry D. Bowen

President Bill Clinton twice vetoed the welfare reform bill put forward by Newt Gingrich and Bob Dole. Then just before the Democratic Convention he signed a third version. Some liberals were upset. Conservatives continued to sell the line that Clinton did not believe in welfare reform.

Conservative and moderate democrats argued that Clinton stood fast against extreme welfare reforms before signing the best compromise he could extract from Gingrich/Dole.

Just what are the differences between what Clinton vetoed and what he signed, and what were the compromises on which the GOP Congress refused to budge. Here are some facts from the House Ways and Means Committee and the Senate Finance Committee.

1. Three Ways President Clinton Changed The Welfare Bill
Food StampsChild CareMedicaid
Clinton managed to preserve national standards and the guarantee that the poor will obtain food stamps. Congress had called for letting the states do whatever they wanted with food stamp money and program eligibility requirements.Clinton succeeded in strengthening day care support for children of welfare recipients. Congress had been demanding much deeper cuts.Clinton demanded and won the fight to guarantee Medicaid coverage, which generally helps the disabled and poor children. Congress wanted to let states do whatever they wanted with Medicaid, including taking Medicaid funds and using them for other purposes.
2. Three Areas Congress Refused to Budge On The Welfare Bill
Food Stamp SpendingVouchersLegal Immigrants
Congress is cutting food stamps by $24 billion over six years, with $3 billion more cut by banning food stamps to legal immigrants.

No food stamps for unemployed workers not raising children - no hardship exemptions.

President Clinton wanted smaller spending reductions and criticized banning unemployed workers from receiving food stamps.

Congress banned the states from using Federal dollars to give the poor non-cash vouchers to families that exceed the five-year limit on cash assistance.

President Clinton wanted states to be able to use Federal block grant money -- if the states wanted -- to pay for vouchers to help families buy diapers, clothing, medicine, and school supplies for children.

Legal immigrants that have not become U.S. citizens may not get Federal welfare benefits and social services during their first five years in the U.S. Food stamps and SSI (supplemental security income) benefits are now being cut off.

President Clinton called for these cuts to be scaled back.

More Welfare Reform Provisions

  • Federal welfare funding will be given to the states and they will run their own programs.
  • Innovative state programs granted waivers by President Clinton may still continue their programs.
  • Family heads must go to work within two years or benefits are terminated.
  • Lifetime benefits will be limited to five years, but states can set stricter limits. States may offer hardship exemptions for 20 % of families.
  • After two months, states can require adults to perform community service.
  • States can spend up to 30 % of their welfare money on child care, child protection, or other social services.
  • States must maintain their own welfare spending at 75 % of their 1994 levels, or greater.
  • States lose Federal money if they do not meet employment targets. Penalties may rise from 5 % in year one, to 21 % in the 9th year.
  • States must generally deny assistance to people that have been convicted of a drug felony. Exception: pregnant women and adults in drug treatment programs will not be denied assistance.
  • States may continue to pay additional benefits to children born to women already receiving welfare.
  • Teenage parents under 18 must stay in school and live with an adult to receive welfare benefits.
  • Single mothers on welfare that do not help identify the child's father will lose 25 % of her benefits.
  • Women with children under 6 years old will not be penalized for not working, if they cannot find day care.
  • Stricter eligibility rules will exclude many low-income children from getting Supplemental Security Income.