July 22, 1987

July 22, 1987 | Executive Memorandum on Welfare and Welfare Spending

Time to Pull the Plug on Welfare "Reform"


(Archived document, may contain errors)

7/22/87 169

TIME TO PULL THE PLUG ON WELFARE "REFORM"

J ust one year ago, a bipartisan consensus appeared to exist for an historic overhaul of the nation's troubled welfare system. That consensu s rested on three themes: giving states the flexibility to experiment with creative approaches to ending dependency; mandatory "workfare" requirements; and a crackdown on fathers who ignored their financial responsibilities.

Unfortunately, the consensus w as hijacked in Congress by lawmakers who have used the rhetoric of reform to cloak what is little more thani an attempt to raid the federal Treasury. Despite the deceptive rhetoric, the current I reform proposals from the leadership in Congress, especiall y the primary House legislation championed by New York Democrat Thomas Downey, are anti-work, anti-family, and in a profound sense, anti-poor. The measures would suck millions of additional American families into the mire of welfare dependency and then cre a te a fencel to keep them from climbing out. While claiming to promote work, House Democrats actually would prohibit states from establishing work requirements for welfare recipients and cripple the few successful dependency reduction program enacted durin g the Reagan era. Rather than join in this masquerade pretending to be welfare reform, it is time for lawmakers to work to design new legislation that builds on the three original reform themes.

Encouraging Dependence. The current welfare system is in desp er 'ate need of reform. Yet latest proposals from the House leadership show that-their solutiorr-to- these problems is "more of the same." Virtually every bad liberal welfare idea of- the last twenty years has now reappeared in the guise of reform. For ex a mple, the House bill would provide federal financial incentives to spur states to raise welfare benefit levels, a principle which is endorsed by New York Senator Daniel Moynihan, the chief architect of Senate legislation. Yet higher welfare benefit levels simply make work even less attractive and so encourage more families to become dependent on welfare. Congress seems determined to ignore, the evidence demonstrating this effect. During the last decade the numbei of children 'in poverty in states with low A id to Families With Dependent Children i (AFDC) benefits has declined while the number of poor children in high benefit states has increased dramatically. Some experiments have found that an increase i in welfare has resulted in a decrease in the earned i ncome of welfare recipients of as much as $80 for each $100 in added benefits.

Raising welfare benefits by as little as 20 percent nationwide could expand the AFDC population by a third, adding one milli on families to the welfare rolls; increase the number of female-headed families in the U.S., by 20 percent; and increase the divorce and separation rate nationwide among young families by 66 percent.

Another bad idea in the reform al is to require 1 all s tates to establish ,propos s i AFDC for intact, two-parent families (known as AFDC-UP). 'All available evidence indicates strongly that two-parent welfare increases the rate of family break-up. The reason: including two-parent families in AFDC makes more f amilies accustomed to the idea of welfare dependency. This undermines the role and status of the working father in the affected families by demonstrating that ithe father as breadwinner is dispensable. Controlled experiments indicate that extending AFDC- UP to all states could increase the separation rate among affected families as much as two-thirds.

11mitin rim-tation- Moreover, the House legislation, like Senator Moynihan's recently unveiled proposals, do no more than pay, lip service to the idea of all owing states to devise their own experimental welfare systems by consolidating funds from dozens of overlapping federal anti-poverty programs. The House prop@sal has no decentralization whatever, and the Moynihani plan so limits state experimentation, and the federal program that could be included, as to make decentralization meaningless.

Neither bill actually requires signii-ficant participation by welfare recipients in work or training. Recent state initiatives which have proved,highly successful in redu cing dependency--such as required job search--are restricted. - Indeed, mandatory workfare would be barred under the House bill. Instead the, emphasis would be on gold-plated training and social service strategies that never have proved cost-effective in helping the poor--but do, of course, provide employment to the social services industry now busily lobbying on Capitol Hill.

Senator Moynihan's plan, admittedly, does contain a few welcome proposals to beef up parental support enforcement. But lawmakers wh o sign on to his plan will doubtless find, after Senate floor action and a conference with the House, that the few good provisions in the Moynihan plan are overwhelmed by expensive liberal baggage.

lawmakers and Administration officials committed to funda mental reform of the welfare system should not allow themselves to be stampeded into supporting legislation that is long on reform rhetoric but short on reform. America's poor deserve better. The White House should send a clear signalithat there is no hop e of salvaging these proposals and will veto the bills in their current form. The opportunity for major welfare reforms comes rarely and changes enacted this year or next could affect Americans for a generation or more. Thuslit is vital that legislation ac hieve real reform rather than repeat and enlarge the mistakes of the past. It would be better to have no legislation than bad legislation.

Robert Rector Policy Analyst

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