Welfare Reform in the Clinton Era:

"The welfare "reform" of the Clinton era consists of two major elements: a revolutionary change in the basic goals set by the federal government; and a dramatic "devolution" of responsibility – turning what used to be a federal, centralized system over to the states.

Reflecting the new federal mission, welfare rules now:

Require most recipients to work within two years of receiving assistance,

Limit most assistance to five years total, and

Let states establish "family caps" to deny additional benefits to mothers for children born while the mothers are already on public assistance.
The devolution to the states is in some ways even more dramatic.

Traditionally, the federal government set eligibility guidelines on a national basis, then parceled out money to the states to fund specific programs at certain levels. But now, the federal money allocated for public assistance is sent to the states in block grants. The federal role is limited to setting goals, financial penalties and rewards.

States and even counties are designing their own programs for the poor, picking and choosing from approaches they hope will get results."

Washingtonpost.com: Welfare Special Report