I.O.U.'s

Social Security Blues: Social Security has long been a political platform issue for campaign debate, which ends there. Nothing ever gets done to stop the pilferage of this system. Social Security is a National Retirement System, whether you like the term or not. Workers pay into this system all of their lives, but their SS money goes for other uses, unfairly so. Social Security worker contributions must be treated with more respect.

Sing it! "Yes, I got the Welfare Blues, I pay my dues, but I still lose. Yes, I got the Welfare Blues, 'Cause some don't pay no dues. Yes, I got the Welfare Blues, 'Cause I don't want those I.O.U.'s" There is welfare taken out of the Social Security fund, which by the way, has been heisted, misused and replaced with IOU's. Doesn't exist! Federal Government employees do not contribute to any of the welfare that comes out of the Social Security contributions made by workers who pay into and support the SS system over their lifetime. This is to say that the welfare paid out of the SS fund, which has nothing to do with retirement fund benefits, is balanced solely on the back of Social Security worker contributors. Federal Government employees are not paying any share toward the welfare assigned to this fund. It seems to me that welfare is welfare, and every tax payer, including Federal Government employees, should contribute. No worker should be exempt from paying a fair share of all welfare. The government should stop raping the SS contributors of their investment and start charging a Welfare Tax to Federal Government employees. Common workers who pay into SS bear more than a fair share of welfare. Seems like those who pay SS taxes get screwed at every turn. The Federal Government employees have a gravy train going for themselves! And, they double dipped up through the 1980's and can still retire and draw from the SS system after a few quarters. Fair? You be the judge! "Yes, I got the SS Blues, I pay my dues, but I still lose. Yes, I got the SS Blues, 'Cause some don't pay no welfare dues. Yes, I got the SS Blues, 'Cause I don't want those I.O.U.'s"

A major public policy success, welfare reform in the mid-1990s led to a dramatic reduction in welfare dependency and child poverty. This successful reform, however is now in jeopardy: Little-noted provisions in the U.S. House of Representatives and U.S. Senate stimulus bills actually abolish this historic reform. In addition, the stimulus bills will add nearly $800 billion in new means-tested welfare spending over the next decade. This new spending amounts to around $22,500 for every poor person in the U.S. The cost of the new welfare spending amounts, on average, to over $10,000 for each family paying income tax.

Ending Welfare Reform

The welfare reform of 1996 replaced the old Aid to Families with Dependent Children (AFDC) with a new program named Temporary Assistance to Needy Families (TANF). The key to welfare reform's reduction in dependency was the change in the funding structure of AFDC.[1]

Under the old AFDC program, states were given more federal funds if their welfare caseloads were increased, and funds were cut whenever the state caseload fell. This structure created a strong incentive for states to swell the welfare rolls. Prior to reform, one child in seven was receiving AFDC benefits.

When welfare reform replaced the old AFDC system with TANF, this perverse financial incentive to increase dependence was eliminated. Each state was given a flat funding level that did not vary whether the state increased or decreased its caseload. In addition, states were given the goal of reducing welfare dependence (or at least of requiring welfare recipients to prepare for employment).

The House and Senate stimulus bills will overturn the fiscal foundation of welfare reform and restore an AFDC-style funding system. For the first time since 1996, the federal government would begin paying states bonuses to increase their welfare caseloads. Indeed, the new welfare system created by the stimulus bills is actually worse than the old AFDC program because it rewards the states more heavily to increase their caseloads. Under the stimulus bills, the federal government will pay 80 percent of cost for each new family that a state enrolls in welfare; this matching rate is far higher than it was under AFDC.

It is clear that--in both the House and Senate stimulus bills--the original goal of helping families move to employment and self-sufficiency and off long-term dependence on government assistance has instead been replaced with the perverse incentive of adding more families to the welfare rolls. The House bill provides $4 billion per year to reward states to increase their TANF caseloads; the Senate bill follows the same policy but allocates less money. Robert E. Rector and Katherine Bradley, Heritage Foundation.