In 1996, welfare reform was rarely far from the headlines. across the country, states were overhauling their cash assistance programs for poor families. That summer, Congress passed and President Clinton signed a deeply controversial revamping of the federal-state system. The new law ended public assistance as a federal entitlement, in favor of a complex system of state block grants with work requirements and time limits. Thanks to a fortuitous rendezvous with a full-employment economy, a great many people who had been receiving welfare found jobs. Many, but certainly not all, improved their livelihoods. As long as welfare caseloads were declining, states enjoyed a surplus of welfare funds and thus an expanding pool of resources to redirect to other benefits and services for low-income families. Eight years later, the picture could hardly be more different. Caseloads are no longer falling in most of the country, and funding remains flat at 1996 levels. It seems virtually inevitable...