Wisconsin is taking the lead on welfare reform.
In February, the state Legislature passed nine bills, which Gov. Scott Walker is expected to sign. The state government is taking advantage of record-low unemployment and strong job creation numbers to help all of its able citizens enter the workforce.
Among other measures, Wisconsin’s bold plan implements these four important pillars of welfare reform:
1. Establishing work requirements for housing programs.
Of the more than 80 means-tested federal welfare programs, only two have substantial work requirements: the Supplemental Nutrition Assistance Program and Temporary Assistance for Needy Families. In addition, only 39 out of 3,000 federal housing authorities require any sort of work as a condition for housing assistance.
Wisconsin’s plan would expand work requirements to all work-capable individuals who receive federal housing assistance. The generosity of federal housing subsidies and the expense of the program make it a good target for reform. This measure will help those who utilize housing vouchers to reduce their dependency on government.
2. Strengthening existing work measures in food stamps.
Work requirements are a tested policy measure that helps move those who are capable of work away from welfare toward self-sufficiency. Wisconsin’s plan would strengthen work requirements in the food assistance program for able-bodied adults without dependents by increasing the hours required from 20 hours to 30 hours per week—and this would apply for all work-capable people.
The proposal would also expand the FSET training and employment program to ensure that every Wisconsin citizen has an opportunity to work, train for work, or volunteer to fulfill the requirement.
3. Encouraging parental work in food stamps.
Another promising element of the plan is to expand work requirements to parents with children above the age of 6 who are applying for the food assistance program.
At the federal level, work requirements in food stamps only target able-bodied adults without dependents. But there are also many work-capable parents living on welfare, and work requirements would help lift them—and their children—out of poverty.
This positive effect of work requirements was borne out after passage of the 1996 welfare reform bill. That law, among other things, introduced work requirements to the Temporary Assistance for Needy Families program. The result was a 50 percent increase in employment among never-married mothers and a one-third decrease in poverty among that group.
4. Implementing pay-for-outcome measures.
Currently, 10 percent of federal spending in welfare goes to programs aimed at increasing human capabilities or positively influencing behavior. These include drug rehabilitation, child development, and educational and job training programs.
Scientific studies show that very few of these programs actually produce positive outcomes. This lack of success is due to the fact that they are funded on a payment-for-service basis, rather than a payment-for-outcome basis. If performance became the basis for how contracts are funded, our welfare programs would be much more effective
The Wisconsin plan begins to adopt this approach. It mandates that the majority of payments in contracts must be tied to outcome measures. This revolutionary policy will help ensure that taxpayer money is used in the most effective way possible to achieve positive results through social programs.
Some of these measures would require waivers from the federal government, while others would be completely up to state discretion. Either way, Wisconsin’s policy plans are a positive step forward and a model for others to follow.
In this period of economic recovery, policies that help to move work-capable Americans from dependency to self-sufficiency are critical for both the health of our communities and the growth of our national economy. The federal government should support the reforms being pursued in Wisconsin and take them up at the federal level.