Bill Clinton promised to “end welfare as we know it.” What happened?
Welfare As We Knew It
The Wall Street Journal comments Welfare As We Know It Is Back—and It’s Bipartisan
Bill Clinton won election in 1992 on a promise to “end welfare as we know it.” When running for re-election four years later, he declared “the era of big government is over.” Alas, welfare is back in fashion like girls’ overalls, ushering in a new era of bipartisan big government.
Nearly half of New York City residents are on Medicaid. As are 40% of Californians. Since the ObamaCare expansion took effect in 2014, Medicaid enrollment has swelled. Meantime, states are gaming the program’s rules to wring more money out of Washington.
California imposes a tax on insurers to obtain more federal matching funds, which allows it to extend coverage to millions of undocumented immigrants. The Golden State expects to receive some $120 billion in Medicaid matching funds this year, more than Florida’s entire state budget.
During the 1990s, both parties sought to crack down on such schemes. In 1991, George H.W. Bush signed a bipartisan law to prevent states from using taxes on healthcare providers to milk more federal matching funds, some of which they then kicked back to those same healthcare providers. Even Reps. Nancy Pelosi and Chuck Schumer voted for it.
California, New York and other states then devised ways to circumvent the law’s limitations. Many Republican-led states have joined the Medicaid racket—why give up a free lunch that others are taking? But someone has to pay, and it will be future taxpayers.
Many Republicans in Congress who campaigned against ObamaCare—here’s looking at you, Josh Hawley—are refusing to close Medicaid’s all-you-can-eat buffett. Some are spooked by Democratic claims that any changes to the program, however modest, will throw poor people to the wolves.
As the 1990s welfare reforms suggest, shrinking Medicaid can be a political winner if Republicans make a moral case for it. That means explaining how ObamaCare perversely encourages states to spend more on able-bodied adults than the disabled and discourages work.
If Republicans can’t or won’t make this argument and surrender the battlefield to Democrats, they deserve to lose.
Clinton Made Matters Worse
Clinton did end welfare “as we knew it”. But he made matters worse.
I wrote about this in 2015. Here’s a refresher course.
October 4, 2015: Fraudulent Medicare, Medicaid, EITC, Tax Refunds, etc. Total $1 Trillion Since 2003
Disability fraud is rampant.
- States’ Incentive to Promote Disability Fraud: States Have an Incentive to Promote (Not Stop) Disability Fraud; So How Much Fraud Is There?
- 14 Million on Disability: Unwilling to Work; 25% in Hale County AL Collect Disability, 14 Million Nationwide; A Simple Solution
- Why Work?: Why Work for $7.25 When Welfare Pays $15.00 in 12 States and $8.00 in 33 States? Is a Low Minimum Wage the Problem?
- Puerto Rico Fraud: Puerto Ricans Get U.S. Disability Benefits for Inability to Speak English; Disability Deal Explained
- Police and Fire Fraud: 102 Police and Firefighters Caught in Disability Scam
- Claims Hit Record: Disability Fraud Holds Down Unemployment Rate; Jobless Disability Claims Hit Record $200B in January
Clinton Ends Welfare “As We Know It”
Want to understand the huge spread in disability fraud? Look no further than Bill Clinton as explained in detail in link #1.
This all goes back to 1996 when president Clinton promised to “end welfare as we know it“. Clinton did indeed do just that, and fraud is the result.
Why?
The federal government pays disability, but states pay part of welfare costs. This creates a huge incentive for states to actively promote disability fraud (simply to get people off state-sponsored welfare programs).
And that they have done. A primary example pertains to Hale County (see link #2).
25% of the people in Hale County Alabama collect disability. They are all tied to Hale county’s Dr. Timberlake.
Dr. Timberlake asks a simple question to all his patients. “What grade did you finish?” If you claim “back pain” and do not have a degree, Timberlake believes you are disabled.
The Journal is wrong. Welfare is not back as we knew it. Instead we have the worst of welfare and the worst of disability fraud.
The “One Big Beautiful Bill” Will Continue Spending at Biden’s Level
On May 12, I commented The “One Big Beautiful Bill” Will Continue Spending at Biden’s Level
Please note The GOP Surrenders on Medicaid
The House bill shrinks from a fight over able-bodied men on the dole.
The work requirement doesn’t kick in until 2029—a political lifetime from now. The bill also sets up a waiver process, which states have long abused to evade work rules in food stamps.
But far more notable is that the bill fails to end Medicaid’s outrageous bias toward prime-age men who can work. The feds pay 90% of the cost of able-bodied adults eligible for Medicaid under the Affordable Care Act—but only roughly 50% to 77% (depending on the state) for pregnant women, the blind and so on.
Republicans won’t even insist that able-bodied persons must work.
And people are bragging Trump will bring down inflation.
If this budget passes, there is no way inflation comes down other than a huge recession that destroys demand.
Welfare Reform Odds?
February 12: Trump Says he Will Love and Cherish Social Security, Medicare and Medicaid
The new softer side of Trump now cherishes Medicaid. Is everyone happy?
April 5, 2025: Trump Sides With Elizabeth Warren, Won’t Sign a Bill That Cuts Medicaid
What a fiscal joke the Republican party has become.