The 1996 Welfare Reform Act, officially the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, fulfilled President William Jefferson Clinton's oftrepeated campaign promise "to end welfare as we know it." It replaced the federal program of Aid to Dependent Children (ADC), founded in 1935 as part of the Social Security Act, and later known as Aid to Families with Dependent Children (AFDC). Between the 1960s and the 1990s, AFDC's rolls increased dramatically, especially in the wealthier Northern industrial states. In accordance with the era's individualistic ideologies, welfare's actual and potential claimants now regarded welfare as a right, not a mere privilege. Conservatives denounced the federal welfare system as a communist plot and a threat to American values.
After 1970, liberals, moderates, and even welfare recipients began to join conservatives in denouncing welfare in general, and AFDC in particular. The discussions tended to accuse AFDC of things such as breaking up the family, fostering a rise in illegitimacy, and stimulating dependency, although the evidence of this was sometimes ambiguous. Some studies showed AFDC promoted the economic, legal, and cultural independence of welfare mothers; some believe that there was a gender as well as a racial basis to the criticism. AFDC permitted impoverished mothers to raise their children at home. As AFDC became increasingly generous in the 1960s and early 1970s, it at last fulfilled the original ADC's promise that mothers be paid to stay at home to raise dependent children.
By the 1990s the political and cultural climate had changed. In the new individualistic and free-market world-view that permeated American political and cultural discourse entitlement programs such as AFDC were vulnerable. As liberals and moderates adopted individualistic perspectives parallel to those of conservatives, AFDC's days were numbered. The turning point was likely the Republican Congressional victories in the 1994 elections, which convinced President Clinton to surrender the program in order to remain re-electable. Congress passed the welfare reform act in summer 1996 and President Clinton signed the bill on August 22, 1996.
The law ended AFDC. It required work in exchange for temporary relief; no more than two years could be used before parents would be working or in job training. No recipient could have more than five years of assistance cumulatively. There were a handful of concessions, such as providing new monies for childcare and medical insurance for mothers in cases in which mothers were shifting to employment. The 1996 act also destroyed the independence mothers enjoyed under AFDC. For example, single mothers could afford to attend school part time, or even full time depending on family resources, to advance themselves and qualify for better jobs than they had before. The new law of 1996 made that very difficult, because states could diminish allocations and also limit the time one was on welfare, a serious problem in a cyclical or depressed local economy. Conservative thinkers won a major victory in politics. Culturally this was also a triumph too for the free market, individualistic worldviews of those who had attacked the rationales for the New Deal and the national welfare state.
Grabner, William. 2002. "The End of Liberalism: Narrating Welfare's Decline, from the Moynihan Report (1965) to the Personal Responsibility and Work Opportunity Act (1996)." Journal of Policy History 14: 170–190.