It was the "end of welfare as we know it." Those were the triumphant words of then-President Clinton as he signed the bipartisan welfare-reform bill of 1996.

That reform established work requirements for able-bodied welfare recipients and for the public welfare industry itself. Recipients able to work would have to perform some form of labor for at least 20 to 30 hours a week - no more something-for-nothing. And states had to implement work, training and education programs to help move people off the dole and onto payrolls.

The bill transformed a major part of the welfare system from one of perpetual handouts to a temporary "helping hand" designed to lift recipients from poverty to self-sufficiency. To keep people from spending a lifetime on welfare, the reform set a five-year limit on benefits. And states that failed to help people get off welfare faced the loss of federal funds.

The results have been dramatic. welfare rolls have more than halved since the reform. The number of children in poverty has dropped by 1.6 million. And real work has given dignity and purpose to millions who once languished in crushing dependency.

But the 1996 reform was only a start. It took the first steps on a new road. It treated the problem of structural family poverty. Now is the time for a sequel to the 1996 reform to cure the fundamental causes.

Unfortunately Congress' "stimulus" legislation is a major step backward that will swell welfare rolls anew. It created a new entitlement that pays states to increase the welfare caseload, rather than shrink it. And it sharply reduces the work requirements states must implement.

Looking at these perverse incentives to increase the number of people on the dole, my Heritage colleague Robert Rector declared "welfare reform has ended."

Lawmakers who really believe in independence, not dependency, must reverse these damaging changes. Otherwise, they will condemn more families to the humiliation of open-ended welfare dependency.

But then we must move forward to a new phase of welfare reform that builds on 1996 and tackles the root causes. What will that require?

First, the 1996 reforms applied only to part of the welfare structure in America. There are more than 50 other means-tested federal programs that were hardly touched by welfare reform. These include food stamps and Section 8 housing vouchers. State accountability and work requirements need to be extended to all these programs to provide the same incentives for independence.

But second, there must be national effort, led by President Obama, to tackle the collapse of marriage in vulnerable communities. That is the single-biggest cause of child poverty and welfare dependency. And that is why it must be the core of welfare reform - Phase two.

In the early 1960s, just 7 percent of American children were born outside wedlock. Today it is 38 percent, and among blacks it is a staggering 69 percent.

That´s a recipe for disaster. Two-thirds of poor children live in single-parent homes. And when compared with children in two-parent homes, these children are far more likely to fail in school, have emotional problems, get into trouble with the law, and get pregnant as teens and end up on welfare themselves. It´s a vicious circle.

So it´s time for another rescue package. For the American family. But not one that costs billions - one that actually saves billions while saving children and young adults from a life on welfare.

Mr. Obama understands the problem, and he needs to take the lead.

To do that he should use the bully pulpit of the presidency to reaffirm the central importance of the family as the most effective economic and social tool we have to defeat poverty. In particular, he should lead a national effort within the black community, where the collapse of family has been catastrophic.

He should direct agencies within his administration to push forward with marriage education in our high schools and for couples in low-income communities, where the consequences of non-marriage are more severe.

And he should press Congress to reduce the anti-marriage penalties still remaining in welfare programs such as food stamps, Medicaid and public housing, where getting married can reduce eligibility or benefits.

Sometimes we actually do things right in America. The national debate about welfare dependency in the 1980s and 1990s led to a landmark change that partly fixed a broken welfare system -- one that was actually harming those it was supposed to help. Now we must complete the task by fixing a broken marriage system.

Stuart Butler is vice president for domestic policy issues for the Heritage Foundation.