How to Improve America’s Welfare System


Several months ago I had a post entitled “A Balanced and Sensible Antipoverty program,” describing four characteristics of effective antipoverty programs: work requirements, work incentives, supporting married, two-parent families, and supporting business growth.
The Budget Committee of the House of Representatives has just released the outline of a new plan, “Expanding Opportunity in America,” designed to implement the above basic principles of welfare reform.  The introduction states that “Fifteen percent of Americans live in poverty today – over 46 million people. … A key tenet of the American Dream is that where you start off shouldn’t determine where you end up. …  Of all Americans raised in the bottom fifth of the income scale, 34% stay there and just 38% make it to the middle class or above (see the chart below).”
CaptureThe idea is to let selected states experiment in consolidating separate means-tested programs such as SNAP, TANF, child-care and housing assistance programs, into a new holistic Opportunity Grant program.  The purpose is to make these programs more effective in lifting welfare recipients out of poverty. Here is how the program is envisioned to work:

  • Each participating state will approve a list of certified providers who are held accountable for achieving results such as moving people to work, out of poverty and off of assistance.
  • Needy individuals will select a provider who will conduct a comprehensive assessment of that person’s needs, abilities and circumstances.
  • The provider and the recipient will develop a customized plan and contract both for immediate financial needs and also for long term goals towards self-sufficiency.
  • Successful completion of a contract will include able-bodied individuals obtaining a job and earning enough to live above the poverty line.

The U.S. is currently spending over a trillion dollars a year on welfare programs for low income families and individuals.  A good way to increase both the efficiency and effectiveness of federal programs is to shift them over to state control.  The Opportunity Grant program proposes to do this on an experimental basis.  It makes good sense to try it!

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