The Future of Children, Princeton - Brookings: Providing research and analysis to promote effective policies and programs for children.

By 1987, Congress was ready to take up the issue of welfare reform, passing in the next year the Family Support Act (FSA). The law called upon states to operate programs that would be successors to WIN. These were generically known as Job Opportunities and Basic Skills (JOBS) Training Programs and were to provide education and training services and at least two of four additional activities—job search, on-the-job training, work supplementation, and community work experience. If services (including child care) could be made available to them, all AFDC recipients who were not specifically exempted were obliged to participate in welfare-to-work activities or face financial sanctions. In practice, however, states have lacked the resources to offer services to all who are eligible for them.

Federal funding for JOBS programs was available under a "capped entitlement" system; from 1991 to 1993, states could claim up to a total of $1 billion annually as reimbursement for the costs of JOBS operations.²¹ These resources were considerably more generous than what had been available through WIN, but FSA also called on states to step up their own commitment to welfare-to-work programs: While the federal government had paid 90% of the cost of WIN programs, its contribution dropped to between 60% and 80% of JOBS costs.

The FSA legislation reflected both an impulse to engage more mothers in welfare-to-work programs and an interest in expanding support services to facilitate their participation. States were to require participation for a recipient when her youngest child turned three (or earlier, at state option). To help defray child care costs, Congress for the first time agreed to match state contributions for child care, substantially increasing the availability of child care subsidies (see also the article by Kisker and Ross in this journal issue). FSA also allowed most participants to continue to receive child care and Medicaid subsidies for a year following a transition from welfare to work.

While political considerations dominated many decisions about FSA, to a far greater degree than usual, the legislative process behind the law was shaped by research. The MDRC's findings that the impacts of state demonstrations were generally positive, if small, helped to persuade lawmakers to expand welfare-to-work programs (see the article by Nightingale and Holcomb in this journal issue). Studies showing that subgroups of the AFDC population use the program for very different lengths of time influenced decisions about how the new program should define eligibility and target resources.^22-25 Consistent with MDRC's findings that different state welfare-to-work models were feasible to operate and yielded positive results, FSA gave states a fair amount of discretion in determining, for instance, the proportion of resources devoted to different activities and their sequencing.²³

FSA established targets for states to meet in enrolling JOBS participants, which over a four-year period rose from 7% to 20% of all eligible AFDC recipients. Evaluations of earlier programs had shown there to be less payoff to society when programs focused on the most employable recipients—that is, those most likely to leave the rolls without extra help. As a result, the FSA funding formula encouraged states to target hard-to-serve groups like teen parents and women who had been on welfare for many years.^2,15,23

When enacted in 1988, FSA was hailed by many as landmark legislation. Proponents of the new law cited its emphasis on engaging mothers of preschoolers in JOBS, its targeting of teen parents, its requirements that states provide education and training in their mix of services, and its provisions for transitional child care and Medicaid benefits. Even at the time, however, some were less enthusiastic. Policy analyst Robert Reischauer wrote in 1989 that, while the changes wrought by FSA "represented important shifts of policy and direction," they were modest in relation to the nation's problems of poverty and dependency. According to Reischauer, "Future administrations and Congresses will thus be compelled to revisit the same policy battleground."²⁶

Reischauer's prediction that FSA would not settle the welfare reform debate was accurate. When political leaders engaged in a new round of welfare reform seven years later, they made minimal reference to FSA. Clearly, the law did not mark a decisive turning point in U.S. responses to welfare policies. While it changed the structure of welfare-to-work programs, the law left AFDC eligibility rules and benefit levels undisturbed. But FSA's low profile in the mid-1990s should not obscure its place in the evolution of U.S. welfare-to-work policy. The shifts that FSA brought about were not seismic: The principle of balancing mandates and supports established under WIN remained intact, but the law stimulated state welfare departments to expand and invigorate their employability services.