Aid to Families with Dependent Children (AFDC) was a federal assistance program in effect from 1935 to 1996 created by the Social Security Act (SSA) and administered by the United States Department of Health and Human Services that provided financial assistance to children whose families had low or no income.
This program grew from a minor part of the social security system to a significant system of welfare administered by the states with federal funding. However, it was criticized for offering incentives for women to have children, and for providing disincentives for women to join the workforce. In 1996, AFDC was replaced by the more restrictive Temporary Assistance for Needy Families (TANF) program.
The program was created under the name Aid to Dependent Children (ADC) by the Social Security Act of 1935 as part of the New Deal. ADC dispensed scant relief to poor single mothers. The federal government authorized case workers, supervisors, and administrators with discretion to determine who received aid and how much. ADC was primarily created for white single mothers who were expected not to work. Black mothers who had always been in the labor force were not considered eligible to receive benefits. The words "families with" were added to the name in 1962, partly due to concern that the program's rules discouraged marriage.
The Civil Rights Movement and the efforts of the National Welfare Rights Organization (NWRO) in the 1960s expanded the scope of welfare entitlements to include black women. The welfare rolls racial demographics changed drastically. The majority of welfare recipients still remained white and most black women recipients continued to work.
Starting in 1962, the Department of Health and Human Services allowed state-specific exemptions as long as the change was "in the spirit of AFDC" in order to allow some experimentation. By 1996 spending was $24 billion per year. When adjusted for inflation, the highest spending was in 1976, which exceeded 1996 spending by about 8%.
Peter Edelman, an assistant secretary in the Department of Health and Human Services, resigned from the Clinton administration in protest of Clinton signing the Personal Responsibility and Work Opportunity Act, which he called, "The worst thing Bill Clinton has done." According to Edelman, the 1996 welfare reform law destroyed the safety net. It increased poverty, lowered income for single mothers, put people from welfare into homeless shelters, and left states free to eliminate welfare entirely. It moved mothers and children from welfare to work, but many of them aren't making enough to survive. Many of them were pushed off welfare rolls because they didn't show up for an appointment, when they had no transportation to get to the appointment, or weren't informed about the appointment, said Edelman.
Early in the program, there were concerns about whether this program encouraged unwed motherhood. In the 1960s through 1980s, physicist and controversial eugenics advocate William Shockley argued that AFDC and other similar programs tended to encourage childbirth, especially among less productive members of society.
Some advocates complained that the rule had the effect of breaking up marriages and promoting matriarchy (see also single-parent family).
... the AFDC program tended to treat households with a cohabiting male who was not the natural father of the children much more leniently than those with a resident spouse or father of the children. This feature created a clear disincentive for marriage and also a clear incentive for divorce, because women who married face the reduction or loss of their AFDC benefits.
Lucy A. Williams and Jean Hardisty point to the existence of policies reacting to this perceived problem in some states such as "man-in-the-house" rule:
States had wide discretion to determine eligibility and many states conditioned the receipt of welfare on the sexual morality of the mother, using "suitable home" and "man in the house" rules to disqualify many African American single mothers. 
The "man-in-the-house" rule was struck down by the Supreme Court in 1968 (see King v. Smith).
In 1984, libertarian author Charles Murray suggested that welfare causes dependency. He argued that as welfare benefits increased, the number of recipients also increased; this behavior, he said, was rational: there is little reason to work if one can receive benefits for a long period of time without having to work. His later work and that of Richard J. Herrnstein and others suggested possible merit to the theory of a dysgenic effect, however, the data are not entirely clear.
One economist was unable to find convincing evidence that welfare programs have a strong effect on the dissolution of marriages. But right or wrong, this argument was among the stepping stones leading to the modification of AFDC toward TANF.
In 1996, President Bill Clinton negotiated with the Republican-controlled Congress to pass the Personal Responsibility and Work Opportunity Act which drastically restructured the program. Among other changes, a lifetime limit of five years was imposed for the receipt of benefits, and the newly limited nature of the replacement program was reinforced by calling AFDC's successor Temporary Assistance for Needy Families (TANF). Many Americans continue to refer to TANF as "welfare" or AFDC.
TANF has remained controversial. In 2003, LaShawn Y. Warren, an ACLU Legislative Counsel, said that TANF gives states an incentive "to deny benefits to those who need it most. The solution to getting people out of the cycle of poverty is not to prematurely kick them off welfare. Too many have been denied aid unfairly, creating a false impression that the number of people who need help has decreased."
In 2006, a The New Republic editorial wrote, "A broad consensus now holds that welfare reform was certainly not a disaster—and that it may, in fact, have worked much as its designers had hoped."
Critics now say that TANF was successful during the Clinton Administration when the economy was booming, but failed to support the poor when jobs were no longer available during the downturn, particularly the Financial crisis of 2007–2010, and particularly after the lifetime limits imposed by TANF may have been reached by many recipients.