Skip Navigation

This Congressional Budget Office (CBO) memorandum describes the budgetary effects of Public Law 104-193, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. It is part of CBO's ongoing efforts to explain and document its cost estimates.

Sheila Dacey, Justin Latus, Dorothy Rosenbaum, and Kathy Ruffing of CBO's Budget Analysis Division wrote the memorandum under the supervision of Paul Van de Water and Paul Cullinan. Jean Hearne and Robin Rudowitz did the estimates for the Medicaid program. Kasia O'Neill prepared the tables. Sherry Snyder edited the memorandum, and Wanda Sivak prepared it for publication.
 
 

SUMMARY AND INTRODUCTION

TITLE I: TEMPORARY ASSISTANCE FOR NEEDY FAMILIES BLOCK GRANT

• Effect of the Block Grant on Cash Benefits and Training Assistance
• Criteria for State Participation in the Block Grant
• Work and Training Requirements Under the Block Grant
• Effect of the Block Grant on Other Programs

TITLE II: SUPPLEMENTAL SECURITY INCOME

• Disabled Children
• Prorated Benefits in the Month of Application
• Installment Payments of Retroactive Benefits
• Enforcement of Restrictions on Prisoners' Benefits

TITLE III: CHILD SUPPORT ENFORCEMENT

• New Enforcement Techniques
• Lost AFDC Collections
• Elimination of the $50 Pass-through
• Distribution of Additional Child Support to Former AFDC Recipients
• Hold States Harmless for Lower Child Support Collections
• Optional Modification of Support Orders
• Other Provisions with Budgetary Implications

TITLE IV: NONCITIZENS

• Supplemental Security Income
• Food Stamps
• Medicaid
• Other Direct Spending Programs
• Earned Income Tax Credit

TITLE V: CHILD PROTECTION

TITLE VI: CHILD CARE

TITLE VII: CHILD NUTRITION PROGRAMS

• Child and Adult Care Food Program
• Extension of Payment Period
• Rounding Rules
• Summer Food Service Program for Children
• School Breakfast Program Authorization
• Nutrition Education and Training
• Noncitizens Served in Child Nutrition Programs

TITLE VIII: FOOD STAMPS AND COMMODITY DISTRIBUTION

• Work Requirement
• Treatment of Children Living at Home
• Reduction of Maximum Benefit
• Energy Assistance
• Deductions from Income
• Freeze Vehicle Allowance
• Other Provisions
• Interactions Among Provisions

TITLE IX: MISCELLANEOUS

• Reduction in the Social Services Block Grant
• Earned Income Tax Credit
• Funding for Abstinence Education

SUMMARY AND INTRODUCTION

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Public Law 104-193) makes major changes in federal welfare programs. The act replaces federal payments under the current Aid to Families with Dependent Children program with a block grant to states, restricts the eligibility of legal aliens for welfare benefits, modifies the benefits and eligibility requirements in the Food Stamp and child nutrition programs, changes the operation and financing of the federal and state child support enforcement system, increases funding for child care programs, and tightens the eligibility requirements for disabled children under the Supplemental Security Income program. In this memorandum, the Congressional Budget Office (CBO) assesses the effects of welfare reform on the federal budget.

Although the act was signed by the President on August 22,1996, its impact on direct spending and revenues in 1996 is negligible. The act reduces federal spending by an estimated $2.9 billion in 1997 and by $54.2 billion over the 1997-2002 period; it increases revenues by $60 million and $394 million, respectively. Summary Tables 1 and 2 present estimates of the act's budgetary effects by program and title.

This document is available in its entirety in PDF.