When President Bill Clinton and the Republican Congress passed a highly-controversial welfare reform bill in 1996, the economy was booming. Jobs were abundant, so refashioning the 60-year old program from one centered on cash aid to one with time limits and work requirements made some economic and political sense.

But the Temporary Assistance for Needy Families (TANF) program had flaws. Because states were given a fixed amount of money to pay out welfare subsidies -- regardless of need -- they were set up to bear all of the increased costs if more people sought aid. Not surprisingly, states aggressively knocked families off the rolls, since they could use block grants to cover other services related to serving the needy. At the time, former welfare recipients were able to find adequate employment, so this was heralded as a success. But now the poor are competing in an extremely tight job market. If they come up empty, they forfeit any aid. In other words, the recession has shown just how riddled TANF really is.

New research underscores the claim. Illinois’ unemployment jumped two full percentage points last year, yet the state’s welfare rolls shrank by 8.1 percent, according to data acquired by the New York Times. Because the rolls have been clipped by 80 percent since January 2001, only 62,525 adults still receive welfare payments.

This trend isn’t relegated to the Land of Lincoln, either:

Despite soaring unemployment and the worst economic crisis in decades, 18 states cut their welfare rolls last year, and nationally the number of people receiving cash assistance remained at or near the lowest in more than 40 years.

The trends, based on an analysis of new state data collected by The New York Times, raise questions about how well a revamped welfare system with great state discretion is responding to growing hardships.

Few wish to live off welfare, especially because the benefits are so meager. According to the Seargent Shriver National Center on Poverty Law, Illinois cash grants for families with minor children have fallen from 79.0 percent of the Federal Poverty Level (FPL) in 1973 to 27.6 percent FPL in 2007. But TANF has its benefits. Mother Jones Stephanie Mercimer explains:

TANF is a gateway to education, drug rehab or mental health care, child care, even transportation and disability benefits—tools for upward mobility. Without those options, some women are driven to more desperate measures.”

Welfare is a deeply stigmatized program that Democrats happily pushed aside a decade ago. But as many as two million single moms and four million children are now falling through the cracks, unable to find work or receive the type of benefits TANF once offered. That’s too many people to ignore.