The United States Welfare System

In the United States the Social Security Act of 1935 provided for federally funded financial assistance to the elderly, the blind, and dependent children. Subsequent amendments broadened the act in terms of coverage provided and eligibility; included was the provision for medical insurance to the aged (1965) under the Medicare program and to low-income families (1965) under the Medicaid program.

In the United States public assistance has increasingly come under state and federal control, although private philanthropy still plays a major role. By the early 1990s the Clinton administration approved changes in many states' welfare systems, including work requirements in exchange for benefits (so-called workfare) and time limits.

In 1996 the president signed a bill enacting the most sweeping changes in social welfare policy since the New Deal. In general the bill, which sought to end long-term dependence on welfare programs, represented a reversal of previous welfare policy, shifting some of the federal government's role to the states and cutting many benefits. Among the bill's major provisions were the requirement that about a quarter of the population then on welfare be working or training for work by 1997 (a goal that was reached in most states) and that a half do so by 2002; the granting of lump sums to states to run their own welfare and work programs; an end to the federal guarantee of cash assistance for poor children; the limitation of lifetime welfare benefits to five years (with hardship exemptions for some); the requirement that the head of every welfare family work within two years of receiving benefits or lose them; and the establishment of stricter eligibility standards for the Supplemental Security Income program (which excluded many poor disabled children from benefits).

In terms of reducing the welfare rolls, the bill initially proved successful; in 1999 there were fewer welfare recipients then there had been in 30 years. Most states also reported a surplus of federal welfare funds. Those funds, which by law remained fixed for five years, provided an unforeseen benefit for the states, enabling some states to increase social welfare spending. Skeptics fear, however, that the long-term effects of the reform will be to force welfare recipients into jobs that do not pay a living wage and to burden private charitable organizations with costs the government is no longer willing to bear.