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Personal Responsibility and Work Opportunity Act

DEFINITION

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) is a  federal law dealing with welfare reform. It was introduced by Representative John Kasich and signed into law by President Bill Clinton in August 1996.

EXPLANATION

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) resulted from a dissatisfaction expressed by both Democrats and Republicans with the existing welfare system. The reasoning behind PRWORA was that people who had been receiving welfare benefits for an ongoing period of time became too dependent on the system, and were no longer motivated to seek work. Changing perceptions of women’s roles in the workplace also shaped the law.

Provisions of PRWORA

The provisions of PRWORA included:

–             Establishing the Temporary Assistance to Needy Families (TANF) program, which replaced the existing welfare benefit program, Aid to Families with Dependent Children, and placed time limits on welfare assistance. Recipients could receive benefits for a maximum of two years.

–             Providing support for families transitioning from welfare benefits into jobs.

–             Lifetime five year limit on benefits paid by federal funds.

–             Granting states greater flexibility in designing public assistance programs.

PRWORA and the Mortgage Crisis of 2008

In 2008, the collapse of the housing bubble, a major wave of mortgage foreclosures and the devaluation of housing-related securities resulted in a nationwide financial crisis. During this period, the enrollment in the TANF program decreased. Critics of PRWORA interpreted these statistics as an indication that the law had failed in reducing poverty levels.

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