Welfare Reform and the Work Support System

Abstract

[© Brookings Institution] Although the sweeping welfare reform law of 1996 has received widespread attention in the media and among policymakers, the development of the nation's work support system, which is a vital complement to the 1996 reforms, has received far less attention. The work support system is a series of programs that provide benefits to poor and low-income working families. In popular parlance, they are programs that make work pay. The most important of these programs are the minimum wage, the Earned Income Tax Credit, the child tax credit, income supplement programs conducted by states, food stamps, health insurance, child support enforcement, and child care. A recent study by the Congressional Budget Office showed that numerous expansions of these programs since the mid-1980s have increased by a factor of more than eight the value of federal work support benefits now being paid to working families. Given the important role these programs play in maintaining work incentives, supplementing earned income so working families can provide a minimum living standard for their children, and helping families when unemployment hits, the maintenance and even expansion of these programs will be a major part of this year's welfare reauthorization debate in Congress. In this brief, we provide an overview of work support programs and examine the pros and cons of proposals to expand them.

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