The Tragic Unintended Consequences of Welfare Reform

In 1994, 9.6 million children and 4.6 million adults received cash assistance. Today’s program covers only a fraction of that—less than 3 million kids and only about a million parents. Back in 1994, Aid for Families with Dependent Children—welfare’s name pre-reform—touched the lives of about two thirds of poor families with kids. Now, only a quarter are aided by Temporary Assistance for Needy Families (TANF).

What happened? Welfare reform. As we argue in our new book $2 a Day: Living on Almost Nothing in America, one unintended consequence of the 1996 reforms was a dramatic rise—130 percent—in the number of households with children living on cash incomes of no more than $2 a day per person. That’s according to the best (though not perfect) data available, the U.S. Census Bureau’s Survey of Income and Program Participation (SIPP).