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August 23, 2016

Comparing Welfare Reform's Success to Obamacare's Failure

 

Twenty years ago, August 22, 1996, Bill Clinton signed one of the most successful pieces of federal legislation in decades: welfare reform, or the Personal Responsibility and Work Opportunity Reconciliation Act of 1996.

It was successful because it worked, and it is instructive because both the process and results of the legislation stand in direct contrast to President Obama’s Affordable Care Act.

To begin with, welfare reform dramatically shrunk the welfare rolls.   There were about 14.2 million people on welfare in 1994 but only 6.3 million by 2000, and the rolls continued a gradual decline to a little more than 4 million today. 

By contrast, Obamacare has put millions of Americans on welfare.  Some 10 million more Americans are now on Medicaid, a means-tested health insurance program for the poor. 

In addition, there were 25.5 million Americans participating in the food stamp program in 1996. That number declined to a low of 17.2 million in 2000 and then began a gradual increase.  But during the Obama years the number ranged from 40.3 million to 47.6 million between 2010, a year after the recession ended, and 2015.

Next, welfare reform, with its work requirement, put people back to work.  About 64 percent of unmarried mothers were working in 1996, rising to 76 percent in 2000.

By contrast, the labor force participation rate has seen a huge decline under Obama, only recently beginning to level out.  Part of that decline was likely due to Obamacare’s mandate that employers provide health insurance, essentially pricing many low-skilled workers out of the market.

Finally, welfare reform was successful because a Republican-led House and Senate passed it with a Democratic president, Bill Clinton.  And it passed in a presidential election with bipartisan support—with 53 Republicans and 25 Democrats in the Senate and 230 Republicans and 30 Democrats in the House.  So it can be done.

Obama, by contrast, couldn’t be overly troubled with garnering bipartisan support for Obamacare because he had enough Democrats to pass it without any Republican support.

In the old days that refusal to work with both parties to pass major legislation was considered a failure of leadership.  And that’s what it should be considered today as well.

 

 


 

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