Between 1968 and 1988, the federal government required states to operate various programs designed to help AFDC recipients get jobs. However, these programs were criticized because they served too few AFDC recipients, focused on the most employable, and did little to reduce welfare dependence. Dissatisfied with the welfare system, the Congress enacted FSA in 1988 to correct previous programs’ weaknesses and transform AFDC into a transitional program. FSA established the JOBS program to help welfare recipients get the services they need to get jobs and avoid long-term welfare dependence. Through JOBS, states are to (1) provide a broad range of education, training, and employment-related activities; (2) increase the number of AFDC recipients participating in these activities; and (3) target resources to long-term and potentially long-term recipients. JOBS also emphasizes helping teen parents complete their high school education. In addition, states are required to provide AFDC recipients with necessary support services, such as child care and transportation. Under JOBS, welfare agencies are to assess the needs and skills of welfare recipients, provide the services and activities needed to prepare them for work, and link them with employers when they are considered ready to work. To provide these services and activities, local JOBS programs rely heavily on a wide variety of community programs, such as Job Training Partnership Act (JTPA) programs, state or local adult basic education programs, the state employment service, Head Start, and community colleges. States received much flexibility in designing and implementing their programs. Most states moved quickly to implement JOBS; by October 1990, 31 had statewide programs. All had statewide programs by October 1992. About $1 billion in federal funds is available per year for JOBS, and, to obtain these resources, states must commit matching funds. In fiscal year 1993, federal and state expenditures totaled $1.1 billion for JOBS. No national studies have been completed on the impact of JOBS, but the limited data available suggest that programs can have a positive, but generally modest, impact. Recent experimental design evaluations found that certain JOBS and JOBS-like programs increased the number of AFDC recipients entering employment, raised earnings, and reduced welfare rolls. Some programs succeeded more than others, but none was able to move most program participants both into jobs and off AFDC after 3 years. Under some welfare reform proposals, many AFDC recipients would be expected to leave AFDC after 2 years. HHS is currently sponsoring a seven-site national evaluation designed to determine the effectiveness of different approaches to operating JOBS. Early results find variation and diversity among the seven sites studied and suggest that the potential for an improved program exists. However, it is not yet known whether the approaches identified in the more noteworthy programs can be implemented nationwide. Despite the progress of some programs in implementing JOBS, additional factors since the 1988 passage of FSA have led to continued dissatisfaction with the current welfare system. AFDC caseloads rose sharply beginning in 1989. The country also experienced a recession that heightened competition for scarce resources in both federal and state budgets. In addition, the public perceives AFDC as a growing problem and a permanent entitlement rather than a route to work. During his campaign, President Clinton promised to “end welfare as we know it,” a promise the public widely supported. Many Congress members and others have also proposed reforms, and some states have initiated their own reform efforts. Most of the congressional reform proposals we reviewed have the basic principles of FSA and build on JOBS to help parents get jobs and end dependence. Most of the proposals aim to require larger portions of the AFDC population to participate in JOBS. To accomplish this, larger proportions of the overall population would be required to participate over time (in some cases up to 90 percent of those deemed able to work) or entire segments of the AFDC population, such as young adults, would be required to participate. Some proposals would require participation of mothers with younger children. Under current requirements, mothers with children under 3 years old (or 1 year at state option) need not be required to participate in JOBS, while some reform proposals would lower this age to 6 months or as low as 3 to 4 months for additional children. Many reform proposals would also increase the focus on employment as the ultimate program goal. Some would no longer require states to offer education and training activities. In addition, some contain provisions to impose time limits on receipt of AFDC benefits. If, after a set time, usually 2 years, AFDC recipients have not found a job, they would be required to participate in a subsidized work program. Some proposals would also limit the time a participant could spend in the work program. While JOBS was designed to make welfare transitional by serving an increasing portion of AFDC recipients and reaching out to those at risk of long welfare stays, its progress has been limited. To date, JOBS has not served a large share of the AFDC caseload, and program administrators report that they cannot provide current participants with all the services and assistance they need. In addition, although JOBS has made progress in serving those at risk of long-term dependence, some AFDC recipients who have barriers to employment have not been widely served. Proposals to reform the program will be challenged to balance increased participation with the need for additional resources and the need to develop additional capacity over time. Under FSA, the Congress took steps to involve an increasing portion of AFDC recipients in welfare-to-work programs through its new JOBS program, but the proportion of AFDC recipients active in JOBS has not been growing. FSA expanded the base of AFDC recipients required to participate. For the first time since AFDC (originally Aid to Dependent Children) began in 1935, recipients with preschool children were required to prepare for and accept employment to receive full benefits. Even with this expanded base, about 56 percent of AFDC parents in fiscal year 1992 remained exempt from JOBS, most often because they were caring for a young child. In addition, FSA recognized that states may not be able to serve all who were required to participate at the program’s inception. It established gradually increasing minimum participation standards that tried to go beyond counting the participants and ensure satisfactory participation in JOBS. These minimum participation standards rose from 7 percent of those required to participate in fiscal year 1991 to 20 percent in fiscal year 1995.According to HHS, almost all states met the minimum participation standards in fiscal years 1991 through 1993. However, we concluded in a 1993 report that participation rate data reporting requirements were complex and burdensome, and participation rate data did not provide a fair basis for assessing states’ performance because they were not accurate or comparably derived across states. Due to exemptions, relatively low minimum participation standards, and AFDC caseload growth, the share of AFDC recipients active in JOBS remains limited and has not been increasing. As shown in figure 1, the numbers of those receiving AFDC and those required to participate in JOBS have increased from fiscal year 1991 through fiscal year 1993. Also, the number actually participating in JOBS at any level of involvement in an average month increased by 5 percent during this period. However, the share of AFDC recipients participating at any level has remained at about 11 percent of the total AFDC caseload over the same period of time. Although some individual programs have succeeded in enrolling most of their AFDC recipients who were required to participate, JOBS programs overall served only about one-fourth of those required to participate in an average month in fiscal year 1993. States met the minimum participation standards without committing enough matching funds to spend all federal moneys available for JOBS. As shown in table 1, about 57 percent of the federal allocation for JOBS was used in 1991, and use increased to 70 percent in 1993. Some argue that the states did not fully use available federal funds because of state fiscal pressures and competing demands for scarce resources due to the recent economic recession. While recent data suggest the states’ financial position has improved, even if the states drew down all available federal funds, this amount would not be sufficient to serve all AFDC recipients or even all those required to participate in JOBS. Some experts believe that the welfare culture will not change until recipients believe they must participate and accept employment and that this will not occur until a larger segment of the AFDC population is actually required to participate. While JOBS programs serve only a portion of the AFDC caseload, many program administrators reported that they could not always provide those participating with the services they need. In our mid-1994 survey of a nationally representative sample of county JOBS administrators, many administrators reported unmet needs in key program activities, such as basic education and job skills training. Administrators often cited transportation problems for participants, the need for more JOBS staff to serve participants, and, to a lesser extent, the lack of community resources and child care funding as reasons they could not meet participants’ service needs. FSA directed JOBS programs to draw on resources in the community before spending JOBS funds to pay for services or programs for JOBS participants. In many cases, local JOBS administrators reported that they now must reimburse programs for some or all of the services provided to JOBS participants. Under FSA, the Congress acknowledged the importance of child care to help welfare recipients get jobs and leave and stay off welfare. States are required to provide child care to AFDC recipients participating in JOBS, if they need it, and a year of transitional child care to recipients who leave AFDC because of employment. Federal funds for this child care are uncapped, and states must provide matching funds to acquire them. If a state cannot provide child care, it cannot require the AFDC recipient to participate in JOBS. Therefore, a shortage of state funds for child care can limit the number of AFDC recipients participating in JOBS. Not all JOBS participants receive child care assistance, but spending for child care assistance has been growing.