This is part of our stimulus...
We reformed welfare in the late 90's, most importantly undoing the system whereby states get more money for having more people on the books. We changed to a capped amount from the fed to the states. If a state got people off the books, then they got to keep the extra for whatever. If the state added people to the books, the state had to make up the difference themselves - not the fed. This incentivized states to move people off of welfare rather than get more people on to it. This plan was immediately very effective and has been claimed as a success by both parties. Dems and Clinton go on about him having signed it. Reps sometimes mention the fact that they were the ones who voted for it while most dems did not. Seems like this whole business was win/win/win/win for everyone, right? We all get credit and it WORKS!
Except, in the mess of our stimulus bill, this plan was undone and in fact made worse than prior to 1996. Now, if states go over on the rolls, we are back to the fed giving them more money. In fact, the fed will pay 80% on the overages now when they only paid something like 50% prior to 1996. So, it is actually worse. This is supposed to be short term, but you know how these things go. In fact, there is an extra ungodly number of billions of extra 'stimulus' written in to be approved/not approved in a couple of years regarding this rolling back of welfare reform.
1996 Welfare Reform Undone
There is a rational argument to be made that welfare reform was intended to end the cycle of permanent welfare entrapment, not to prevent welfare from being a useful social safety net in times of economic crisis, which we are clearly in the midst of. The main thing to watch out for is whether this reversal remains permanent or not.