Third, individual states are requesting and receiving unprecedented numbers of waivers from federal laws and regulations that allow states to experiment with ways to lower their costs and reduce their welfare loads. In summer 1996, the U.S. Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act, which fundamentally changes the federal government's relationship with low-income Americans. Ends cash assistance to able-bodied adults after two years unless they get a job. Denies most types of assistance to legal immigrants who are not citizens. Allows states to deny welfare benefits for unwed teenage mothers and their children, unless the mothers attend school and live with an adult.
Rewards states with additional cash grants if they reduce births to unmarried women.
Expands funds for child care. Some of the ramifications of the new welfare legislation are clear. The legislation will lessen the amount of money spent on the poor, but it is not likely to have much impact on the official poverty rate. In the short run, provisions of the law will lower living standards of millions of low-income Americans. Many of the cuts are in noncash benefits, such as Medicaid and food stamps, which are not counted in poverty calculations, and which benefited many people above as well as below the poverty level.