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Welfare reform refers to changes in the operation of a given welfare system. The term often denotes reforms that are more aligned with neo-liberal policies. In the United States, the term was used to get Congress to enact the Personal Responsibility and Work Opportunity Act, which further reduced aid to the poor, to reduce government deficit spending without coining money.
In recent years reform of the welfare system in Britain began with the introduction of the New Deal programme  introduced by the Labour government in 1997. The aim of this programme was to increase employment through requiring that recipients make serious efforts to seek employment. The Labour Party also introduced a system of tax credits for low-income workers.
The Welfare Reform Act 2007 provides for "an employment and support allowance, a contributory allowance, [and] an income-based allowance.".
Beginning in the mid-1970s, a deficit in the social insurance program began to appear. The deficit saw peaks at 27.75% of the social insurance budget in 1992. This led to a major push by the government to cut back spending in the welfare program. By the end of the 1990s the deficit had been almost completely eradicated. The often large deficits that the program has endured has led to a tremendous amount of opposition to the program as it stands.