The term “welfare reform” still conjures up images of Newt Gingrich and Bill Clinton in 1996, big Southern politicians with big personalities, big ideas, and big hair. Together, they managed to end the old program of cash welfare and provide opportunities for more poor mothers to enter the workforce. Today, the largest program for the poor is Medicaid and policy solutions are harder to find.

The welfare-to-work program, called Temporary Assistance for Needy Families or TANF, is a grant program for states that provides little in direct assistance to poor families. States use the money for a variety of projects from pre-kindergarten and child care subsidies in North Carolina to private college tuition in Michigan and marriage classes in Oklahoma. TANF funding has shrunk over the past twenty years compared to other programs.

Besides Medicaid and TANF, the federal government provides assistance to poor families and persons with housing vouchers, subsidized school lunches, grants and subsidized loans for higher education, and the earned income and child tax credits. To the extent that states accept money from these programs, they restrict their ability to tailor assistance to the circumstances of their own citizens. As a result, welfare reform at the state level focuses more on eligibility standards and enforcement instead of program structure and operations.

Depending on their inclinations and incentives, welfare administrators look for ways to increase or decrease the number of people enrolled in the program and accessing benefits either by making it more or less convenient to get to the social services office, to fill out paperwork, to prove their eligibility, and to update their information. Few people look for ways to reduce the need for welfare programs because each meets a specific need and cannot take responsibility for the whole person, or he is poor and needs assistance in the first place.

Everybody says that their goal is to help people stand on their own, providing a hand up not a handout, but assistance exacerbates helplessness, dependency, superiority, and overconfidence, while depriving purpose, dignity, work, feeling needed, equality, humility, empathy, and mobility. Poverty is more than money and can be self-reinforcing. As more people are lifted out of poverty, those remaining are more entrenched in their condition. “Eliminating the entrenched poverty that remains,” Peter Schuck writes in National Interest, “will require an honest discussion about what truly causes poverty and what it will take to further reduce it.”

Poverty alleviation efforts in developing countries suggest some lessons for welfare reform in North Carolina and some areas that the Rural Center and private philanthropy are already exploring. The first lesson is that each person and community has something to contribute. There are some ways to try to leverage those contributions with saving and lending circles and other forms of microfinance, conditional and unconditional cash grants, and other forms of asset-based community development. These programs also point to a second lesson, which is that traditional government and charity efforts harm both the giver and the receiver of assistance, creating entitlement, dependency, resentment, and exasperation. Bob Lupton diagnosed these pathologies in his book Toxic Charity. He writes, “Anyone who has served among the poor for any length of time will recognize the following progression:

  • Give once and you elicit appreciation;
  • Give twice and you create anticipation;
  • Give three times and you create expectation;
  • Give four times and it becomes entitlement;
  • Give five times and you establish dependency.”

On a broader scale, Atlas Network emphasizes the institutions and property rights that foster an environment in which people can earn success. Atlas asks four questions that are as important in Monroe, North Carolina as in Monrovia, Liberia.

  1. Is it easy to start, grow, and close a business?
  2. Is it easy to realize the rewards of productive behavior?
  3. Is it hard to realize the rewards of unproductive behavior?
  4. Is it hard to stop competitors, except by competing?

Robert Litan and Ian Hathaway are among the researchers who have suggested that it is getting harder to start, grow, or close a business in the United States, that large companies are better able to stop their competitors through regulation, and that unproductive behavior has become more lucrative than productive behavior. Nicholas Eberstadt has documented the shrinking role of men in the market and its connection to the first ever decline in life expectancy in America.

Nathan Glazer helped create the second version of welfare in America during the 1970s and 1980s. In his 1988 book, The Limits of Social Policy, he acknowledged “the simple reality that every piece of social policy substitutes for some traditional arrangement, whether good or bad, a new arrangement in which public authorities take over, at least in part, the role of the family, of the ethnic and neighborhood group, of voluntary associations. In doing so, social policy weakens the position of these traditional agents and further encourages needy people to depend on the government for help rather than on the traditional structures. This is the basic force behind the ever-growing demand for more social programs and their frequent failure to satisfy our hopes.”

A decade later, Richard Cornuelle told participants in The Philanthropy Roundtable, “The spirit of community will be revived as we succeed in devising ways to reinvolve people in solving the perplexing problems they see about them, not just in talking about them, and certainly not in petitioning government to solve them. … The new, unfamiliar task is to present credible visions of alternatives to the failing programs of centrism.”

Government policy can do little to get young people to follow the success sequence: “at least finish high school, get a full-time job and wait until age 21 to get married and have children.” Yet, Brookings Institution researchers Ron Haskins and Isabel Sawhill found only two percent of American adults who did these three things were in poverty.

The point of welfare reform a generation ago was to move people from welfare to work. The point today should be to restore dignity to people and shalom to communities. If we are to reform welfare, it should be with “credible visions of alternatives” to failing programs, not simply with tweaks to eligibility verification, work requirements, or crackdowns on waste, fraud, and abuse. A holistic approach to welfare reform will ask how current laws and social structures trap people in poverty and rob them of their dignity. It may use new ways of paying for human services. It may mean fewer programs and greater trust of case managers. It will definitely mean doing no more harm to traditional social structures like the family, the religious community, and the neighborhood.