Since its beginnings, there has been heated public debate about whether AFDC should be a relatively ungenerous stop-gap program, or an anti-poverty program specifically designed to meet the needs of families headed by single women. In the latest round of this debate, the growing rhetoric has emerged that AFDC should be a stop-gap program that emphasizes transitions to paid employment rather than “welfare dependency.” Is this new round of welfare reform likely to enable more single mothers and their children to live above the poverty level, or will it be another failed attempt to address a problem constructed by political rhetoric? The purpose of this paper to examine the likelihood that current proposals will aid AFDC recipients to bring their families out of poverty. The estimates and analysis are based on the actual income sources and job characteristics of a nationally representative sample of AFDC recipients generated from the 1984-1988 panels of the US Bureau of the Census’ Survey of Income and Program Participation. The findings suggest that unless changes are enacted in the low-wage labor market, or income supplementation policies are designed that specifically address the family care needs of these women, many could wind up worse after a transition to work that “frees” them from dependence on welfare. We conclude by suggesting policy strategies that could successfully alter the circumstances of poor single mothers and bring them and their families out of poverty.