In 1996, under the Bill Clinton administration, Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act, which gave control of the welfare system back to the states. Because welfare is no longer under the control of the federal government, there are basic requirements the states need to meet with regards to welfare services. Still, most states offer basic assistance, such as health care, food stamps, child care assistance, unemployment, cash aid, and housing assistance. After reforms, which President Clinton said would "end welfare as we know it,"[20] amounts from the federal government were given out in a flat rate per state based on population.[24] Each state must meet certain criteria to ensure recipients are being encouraged to work themselves out of welfare. The new program is called Temporary Assistance for Needy Families (TANF).[23] It encourages states to require some sort of employment search in exchange for providing funds to individuals, and imposes a five-year lifetime limit on cash assistance.[20][23][25] The bill restricts welfare from most legal immigrants and increased financial assistance for child care.[25] The federal government also maintains an emergency $2 billion TANF fund to assist states that may have rising unemployment.[23]
Following these changes, millions of people left the welfare rolls (a 60% drop overall),[25] employment rose, and the child poverty rate was reduced.[20] A 2007 Congressional Budget Office study found that incomes in affected families rose by 35%.[25] The reforms were "widely applauded"[26] after "bitter protest."[20] The Times called the reform "one of the few undisputed triumphs of American government in the past 20 years."[27] However, critics of the reforms sometimes point out that the massive decrease of people on the welfare rolls during the 1990s wasn't due to a rise in actual gainful employment in this population, but rather, was due almost exclusively to their offloading into workfare, giving them a different classification than classic welfare recipient. The late 1990s were also considered an unusually strong economic time, and critics voiced their concern about what would happen in an economic downturn.[20]