Most Americans today struggle with the high cost of living, and the least fortunate often have to rely on government aid just to get by. Yet when Bill Clinton signed the 1996 welfare law 30 years ago on August 22, it fundamentally changed how America values cash assistance as an option to support people living in poverty.
Today, the Temporary Assistance for Needy Families program (TANF), created by the 1996 welfare law, still fails to adequately address the needs of families struggling to make ends meet, and conservative policymakers continue to draw the wrong lesson from this experiment in their most recent round of public benefit cuts. By trying to make other public benefits look more like TANF, more struggling families will lose access to food, healthcare, and housing.
The law’s 5-year lifetime limit on TANF cash assistance set a harmful standard that many states decided to make even more restrictive. Additionally, the program’s block grant structure imposed a hard limit on the number of families that could receive assistance, which has fallen over time. Since the program’s inception, the roughly $16.5 billion in annual federal grant funding has lost about half its value to inflation.
As a result, TANF cash assistance now reaches far fewer families in need, and its role in helping people afford the basics has faded over time. By 2023, only 21 out of every 100 families with children in poverty were receiving assistance, compared to 68 in 1996. Total inflation-adjusted funds spent on cash assistance have also fallen by around 70 percent as states shifted money elsewhere, with the maximum benefit for a family of three typically hovering around a quarter of the federal poverty guideline. Low levels of access combined with inadequate benefit levels help explain why TANF keeps only a fraction of people out of poverty compared to refundable tax credits, food assistance programs, and housing subsidies.
Despite these shortcomings, the Trump administration and its allies in Congress are trying to replicate aspects of the 1996 law in other public benefits programs. H.R. 1, passed in July 2025, expanded the already complex and burdensome work requirements in the Supplemental Nutrition Assistance Program (SNAP) while introducing them to Medicaid for the first time nationwide. Meanwhile, the Trump administration is seeking to introduce work requirements and time limits for rental assistance.
These restrictions have been shown to reduce participation in benefits programs, but usually not because people have found good-paying jobs. Oftentimes, a participant gets lost in the hassle of paperwork and has difficulty demonstrating their eligibility, or they reach the arbitrary time limit. In both cases, people who still need assistance are kicked off their benefits. Work requirements alone have not produced strong employment gains in TANF, and produce even weaker effects in SNAP. In fact, more than 4.5 million people have already lost their SNAP benefits since last July, with no noticeable impact on unemployment. Early evidence from Medicaid work requirements in Nebraska also suggests people are beginning to lose coverage amid confusion over how to comply with the new rules.
People who receive public benefits don’t need to be told to work; they already work as much as they can. And even if you have a job, that’s not a guarantee of economic security. Medicaid and rental assistance lack robust systems to help participants find stable employment, so slapping on a work requirement will only set recipients up to fail. But helping them navigate obstacles that prevent them from working more can go a long way.
The 2021 temporary expansion of the child tax credit (CTC), alongside its restructuring as a monthly benefit, provided powerful insight into the true potential of cash assistance. Amid a generational pandemic, the expanded CTC helped drive child poverty to a record low without a significant decrease in employment. When the expansion expired in 2022, child poverty immediately shot back up and has remained elevated since.
The best version of cash assistance would prioritize people’s needs over burdensome, ineffective paperwork requirements and would actually provide adequate financial resources. Since it is especially hard to find a job when someone is hungry, unhoused, or ill, ensuring people can meet their basic needs should be the top priority. Then, meeting people where they are and addressing the barriers that hinder them from working more hours or finding a new job can create lasting benefits that help power upward mobility.
Alternatively, we could keep beating the same old drum: tell people to get a job, give them little guidance or support, and kick them off their benefits when they struggle to find one. Based on evidence from the past 30 years, that seems like an effective way to lock people out of the American Dream. It’s about time to try something different.