Aid to Families with Dependent Children

From 1935 to 1996, Aid to Families with Dependent Children (AFDC) was the major government-funded means-tested public assistance program for low-income children and their caretakers. Its antecedents were states' mothers pension programs, which reflected the child-centered, “maternalist” philosophy of the Progressive Era.

Originally a relatively minor component of the Social Security Act targeted at poor widows and their children, AFDC was a federal-state cost-sharing partnership. States retained the authority to determine eligibility requirements and benefit levels and to administer the program. However, the program lacked specific safeguards against racial discrimination, particularly in determination of eligibility. It was not controversial until the size and racial composition of caseloads began to change in the 1950s.

In 1961, amendments to the Social Security Act created AFDC-UP, giving states the option of extending benefits to families with unemployed fathers and creating an extensive set of rehabilitation and prevention services. Five years later, other amendments emphasized work as an alternative to welfare, establishing the Work Incentive Program and allowing AFDC recipients to keep the first $30 in monthly earnings and one third of subsequent earnings without a cut in benefits. Although judicial decisions in the 1960s struck down “suitable home” and “man-in-the-house” provisions and states' residency requirements, efforts by advocates to establish a constitutional “right to welfare” through the courts failed. Proposals to establish a guaranteed annual income, such as the Family Assistance Plan of 1970, were defeated in Congress by an unusual coalition of conservatives and liberals.

The dramatic increase in welfare costs and caseloads in the 1960s led to calls for welfare reform. The proponents of reform, however, generally overlooked the small percentage of the federal budget (1 percent) that AFDC consumed, the low level and wide variation of benefits, and the percentage of Americans who received AFDC (about 5 percent). They also significantly overstated the extent of long-term dependency and welfare fraud and ignored the fact that about 70 percent of recipients were children.

[Page 38]Failure to reform AFDC in the 1970s led to further changes in 1981, restricting access to benefits and encouraging states to establish work incentive demonstration programs. Families with fathers absent due to military service and caretakers who participated in strikes were now ineligible. The definition of dependent child was narrowed; states could require employment searches at the time of application. An income limit of 150 percent of states' need standard was set and the sequence of the earned income disregards changed. States could also count previously excluded income sources available to some families.

Between 1970 and 1996, through benefit cuts and failure to keep pace with inflation, AFDC grants lost between 18 percent and 68 percent of their value. By 1995, states' maximum AFDC grants ranged from 8.6 percent to 46.1 percent of per capita income, and the combined benefits of AFDC and food stamps ranged from 41 percent to 85 percent of the federal poverty threshold.