Welfare

Floor Speech

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Mr. GRASSLEY. Mr. President, a little over 25 years ago, a Democrat President and a Republican Congress came together, to quote former President Clinton, ``end welfare as we know it.''

On a bipartisan basis, Congress passed, and President Clinton signed into law, a bill called the Personal Responsibility and Work Opportunity Reconciliation Act. Amongst other things, this landmark law established the Temporary Assistance for Needy Families--what we go by here in Washington, called the TANF Program. That program was replacing the previous family assistance program.

TANF was specifically designed to promote work and to help struggling parents back onto their own two feet. It was very successful--about 40 percent less people on welfare than before 1996.

The new program did this by creating work requirements and promoting skill development through education and job training. While critics at the time contended dire consequences would result--particularly for single mothers--in the end, all these critics were proven fantastically wrong. Welfare reform immediately led to a precipitous decline in welfare caseloads and usage. At the same time, the single mother labor force participation rate rose, and their incomes climbed--a step toward getting out of poverty.

A recent research shows the gains were not only short term but led to an improvement in the material well-being of single mothers throughout the following decades. Additional studies show welfare reform has contributed to higher education attainment and improved food security for the following generation.

The 1996 welfare reforms helped families to enjoy the dignity of self-sufficiency. It helped end the cycle of poverty. It gave parents the hope of seeing their children grow up to be better off than they had been--exactly what every parent dreams of for their family, particularly for their children.

This was achieved thanks to a Democrat President and a Republican Congress working together for the benefit of those that were elected to serve.

Now, President Biden and Senate Democrats want to effectively end welfare reform as we know it and reconstitute failed policies of the past--in other words, end helping people in poverty by helping them get out of poverty--guaranteeing a life in poverty, rejecting a successful reform, signed by Democratic President Clinton.

So you can understand why they don't want to tell the American people that is what they are doing. They know that trying to sell their proposal as the largest expansion of welfare history isn't going to fly with the American people who know how well the 1996 reform has worked up to and including now.

As an end-run around welfare reform--and in an attempt to garner broad public support--they want to co-opt a popular tax program for their own political ends or what they ideologically believe in; that the government ought to assume a more prominent role in people's lives and in the economy.

That program that they are co-opting is the child tax credit. This credit was established on a bipartisan basis in 1997 as a complement to welfare reform, with the idea of assisting parents as they left the welfare rolls to go to productive employment.

Since then, Republicans have taken the lead in improving the credit as an anti-poverty tool that partially offset the burden of payroll taxes on the working poor. And remember, payroll taxes on the working poor is a regressive tax.

In 2001, as then-chairman of the Senate Finance Committee, I worked with fellow Republicans to increase the credit that was set in 1997 at $500 to move it to $1,000. Moreover, the credit was made partially refundable for the very first time.

This made low-income working families eligible to receive a tax refund, even if they had paid no income tax--though they paid the payroll tax. And, obviously, the child tax credit helped offset the regressive impact on the working--low-income working people.

Then, in 2017, Republicans went even further in improving this credit because we doubled the credit, and we increased the amount that those who pay no Federal income tax can receive a tax refund. But a key feature of the child tax credit through these 25 years has always been that it is a work incentive.

In order to benefit them, the tax filer must have at least a minimal amount of earned income, which basically means wages from employment. As you earn more, a larger share of the credit becomes refundable, partially offsetting the payroll taxes.

So, now, this is what the Democrats have in mind: They want to turn this broadly popular, this bipartisan, this pro-work tax incentive into a government assistance program akin to the old, pre-Clinton welfare program.

What Democrats propose can no longer be considered a tax credit in any traditional sense of the word. The benefit is entirely divorced from the tax system in every way except how the tax system is going to give out the benefits.

To qualify, no one in the household needs to work, needs to have income, or needs to pay any sort of Federal tax at all. Now, even more alarming, there are no job search requirements, no job skill development assistance, and no educational assistance--the foundation of the welfare reform of 1996, when the whole idea was to help people help themselves by either schooling or productive employment.

All the requirements then that apply to those receiving TANF under the 1996 welfare reforms would be gone. In other words, their proposal provides no help to getting struggling parents back on their feet or to tackle the root causes of generational poverty.

The bipartisan 1996 reform bill--everything I just said they propose is contrary to that basic Federal reform of 1996. In other words, this is a big step back to encouraging people into a lifetime in poverty. I fear the Democrats' proposal will be a poverty trap for far too many needy families.

We would be reversing the gains made since we had this bipartisan welfare reform of 1996 signed by a Democratic President. That is exactly what a recent University of Chicago analysis of the Democrats' proposal suggests will occur.

According to this study, the Democrats' child tax credit proposal would result in 1.5 million parents leaving the workforce at a time when everybody is crying that we need to get people back into the workforce if you want to keep inflation under control, if you want to keep the supply chain moving smoothly.

This analysis directly contradicts Democrats' claims that their proposal will cut poverty in half. In fact, according to the University of Chicago authors, ``deep child poverty would not fall at all.'' I will bet the Democrats are trying to sell this on the proposition that it is going to reduce child poverty, but not according to the University of Chicago scholars. In fact, it might even make things worse.

That is exactly why Democrats and Republicans came together to reform welfare in 1996, because it became self-evident that child poverty could not be solved simply through money alone.

If money alone is a solution, why are my Democratic colleagues willing to settle for only reducing child poverty by half?

Why don't they simply dedicate more of their foreign $4.2 trillion tax-and-spending spree to completely end child poverty?

Is it that they believe subsidizing individuals to buy electric vehicles, as their bill would do, is more important than eradicating child poverty?

I fully support lending a hand to families in need of support, but our policies must be focused on providing a hand up, not a handout. Providing assistance untethered from any work or job promotion requirement or education or work training requirement is not a compassionate approach to helping people. You want to help people get in the world of work because only in the world of work can you work yourself up the ladder and get out of poverty. But being on government programs is a certainty of a lifetime of poverty.

No, it is not compassionate. It is just the opposite. It sets up a generation of Americans being trapped in soul-crushing government dependencies.

I urge my colleagues to abandon their ill-conceived, ``no strings attached'' child tax credit proposal. They would get a lot of Republican support--bipartisan support--for improving the child tax credit, but not this way. Do not yank away the ladder of opportunity from struggling Americans. Take a page out of former President Clinton's playbook. Work with Republicans to find a bipartisan solution that will actually help low-income families together.

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