Welfare

       “On the basis of what we know now,” you write, children in “quite a few states” will ” ‘fall into the abyss’ unless currently contemplated policies change.” There is a lot of lawyering going on in that sentence, but the key point is this: children are falling “into the abyss” right now, every day, in the ghetto-poor culture the welfare system has been sustaining. We have neighborhoods where 80 percent of the households have no fathers, where 60 percent of the population is on the dole. There are schools in Chicago where 6 percent of the students read at grade level. A recent Newsweek story on Wisconsin’s welfare plan described the pre-reform attitude that “getting any kind of job is seen as ‘selling out to The Man.’ ” Sure, there are hundreds of thousands of children who survive in these communities and grow up to be successful, self-supporting citizens. But there are also hundreds of thousands who don’t. To cite the most obvious statistic, one in four young African-American men is either in prison, in jail, on probation, or on parole.
       What’s missing from the response of the left to the 1996 welfare reform law–and, in particular, from your criticism of the president for signing that law–is a sense of urgency regarding the problem of ghetto poverty, a realization that while there are risks involved in trying to change the welfare system, there is also an enormous risk of not changing the system enough. Instead, you say, we should have “had the patience” to see what was happening under the “waivers” Presidents Bush and Clinton granted states to allow them to conduct limited welfare reform experiments. “Evaluations were taking place”! We could have waited two or three years while the Manpower Demonstration Research Corporation compiled (and put its soft, semi-liberal spin on) the numbers. Then another couple of years of debate, and perhaps, a few years after the turn of the century, if we were lucky and the House, Senate, and president could agree, we would have a nationwide reform. You’re right, I’m not that patient. For good reason. If you had been planning D-Day, the Allies would still be running experiments to determine the safest beach to land on.
       Clinton was faced with a complicated decision that involved balancing the risks of signing the Republican reform–primarily the risk that states, freed to design their own welfare systems, would be harsh–with the benefits of trying, quickly, in virtually every state, a wide variety of welfare reforms and finally finding out which ones work when it comes to reducing ghetto poverty. I agree with you that Clinton could probably have gotten away with vetoing the bill. But I’m glad he didn’t seize that political opening, because signing it was the right thing to do.
       Now for the tedious details:
       The Trouble with Waivers: We agree that the choice was between the new system and continuing with the “waivers” allowed by the Department of Health and Human Services. Many of these state “waiver” reforms were not very significant–unlike you, I don’t have much hope that fiddling with the rate at which welfare benefits are taken away as incomes rise (the “earned income disregard”) will dissolve the underclass. But a dozen or so waivers (in Massachusetts, Florida, and Virginia, for example) were significant: They either expanded work requirements or established time limits with exceptions for people who “played by the rules”–in effect creating a system in which recipients had to show they were really trying to find work.
       Yet no state had really stepped up to the plate to offer the large number of public jobs and expensive day care slots that would be necessary to replace welfare with work across the board. When one state–Wisconsin–did, HHS refused to approve the waiver. I urge readers to glance at the gauntlet of bureaucratic objections to the Wisconsin plan listed in your last entry and decide for themselves if there was any chance HHS would ever approve the Wisconsin reform. (Those onerous “large copayments for health coverage” in Wisconsin, by the way, were $20 per month.) Since I think public jobs are the key to welfare reform, HHS’s anti-Wisconsinism was a big flaw in the waiver regime.
       In general, HHS did not allow a fair test of various reform ideas. Most ridiculous was the agency’s iron requirement that benefits increase with family size. Couldn’t one state have been allowed to set a single benefit level for all families, establishing the “work-oriented” principle that you don’t get paid more money just because you have another child, so we might see if it made a difference? I thought you might have backed off on this “family size” point–but there it is again in your anti-Wisconsin list! As noted earlier, there is virtue in trying even ideas you and I think are bad. How are conservatives going to be convinced that strict time limits without public jobs won’t work unless they are allowed to try their idea in at least one or two states?
       And if Clinton hadn’t signed the bill, who could guarantee that the more liberal elements in HHS wouldn’t one day seize control and restrict even further the range of ideas that could be tried? In 1996, after all, there was a lot of election-year pressure to be tough. Mary Jo Bane, the HHS waiver czar at the time, had at least some non-liberal instincts. She allowed states to take away all benefits from the family of a single mother who flat-out refused to work. You make it pretty clear in your last entry that you oppose such “full family sanctions.” What if, heaven forbid, you had gotten Mary Jo Bane’s job after Clinton’s reelection?
       Finally, there is the point that America has a national culture and there was no substitute for sending a nationwide signal that the old regime was over. “Waivers” were not sending such a signal. The 1996 law has gotten the message across. (Even liberals say ghetto neighborhoods are apprehensive about the new system; they just implausibly deny that this fear has in any way prodded the hundreds of thousands who are leaving the rolls for work.)
       Those Nasty States, Chapter XVIII: I agree there are real risks states will do bad things, and have said so since the beginning of our dialogue. It’s a question of how much risk (again, compared to the clear risks of not changing the system).
       I just don’t think you are a reliable guide to estimating those risks. Take Ohio. You announce that “the Ohio House is about to pass a bill with a three-year lifetime limit and an exception of up to 20 percent for the very limited categories of physical abuse, sexual abuse,” etc. Once again, you have it wrong. The exemption in the Ohio legislation is not limited to the categories you cite. The criteria are completely open–counties can exempt anyone (up to the 20 percent) when they decide it’s necessary to avoid a hardship.
       Then there is your legalism about how children will be harmed “unless currently contemplated policies change.” Well, that may well be true if by “currently contemplated policies” you mean the initial plans put forward by Gov. Wilson in California and Gov. Pataki in New York, which are essentially bargaining positions designed to set up negotiations with Democrats in the legislature (who control both houses in California and the Assembly in New York). It’s only realistic to note that neither governor’s initial plan has a chance of being enacted, and that from here on out they will only get more liberal. In California, for example, Wilson just quadrupled the Democrats’ proposed increase in child-care funding (the state now plans to spend $1.3 billion). In New York, Republican county officials just rebelled against the Pataki voucher plan you complain about. This isn’t a race to the bottom; it’s a race to please the voters, who tend to buy the Democratic child-care argument, and who don’t like to see people living on the streets.
       Even states that seem, on paper, to “currently contemplate” potentially mean policies are likely to change them. Take Utah. The Utah time limit, as you say, is 36 months, with an undefined 20 percent hardship exemption. Looks like it could be harsh, and it could. But when I called Utah and spoke to John Davenport of the state Department of Workforce Services, I learned that a) as with the federal 5-year limit, the “20 percent” exemption is 20 percent of the whole caseload, not just of those who hit the limit; b) legislators, worried that this 20 percent exemption might not be big enough, ordered a study of how many people need extensions, with the study’s results due a year before anyone hits the time limit in order to give the legislature time to liberalize the law. “If someone has done everything they can do” but still can’t find employment, Davenport says, “we would want to continue assistance.”
       In short, if it looks as if the time limit is going to cause hardship, then the limit will probably not be allowed to take effect (though in the meantime state officials probably don’t mind if a lot of recipients are scared into taking jobs). The same is true of the Utah-like limits in Georgia and Ohio.
       Indiana and South Carolina, two other states you mention, already have generous escape hatches, as you note. Indiana lets anyone stay on welfare who “has been unable to find … employment” that pays as much as their welfare grant plus a $90 expense allowance. I was told there is no move to change the Indiana policy (nor does there seem to be a move to narrow the grounds for extensions in Massachusetts). I think these are examples for my side, not yours.
       Finally, there is that federal five-year limit. All your horror stories of people hitting “the five-year limit” because of “on and off” receipt still assume the federal limit has some independent force, which it doesn’t, because any state that wants to get around it can. You note that though the initial Wilson and Pataki plans would extend aid beyond five years at state expense, they would not do it “at the same level of assistance they did in the past.” Massachusetts would also extend aid beyond five years, but only through case-by-case judgments. All true. But I brought up these examples in response to your assertion, in your previous entry, that “very few states contemplate offering assistance financed with state money beyond the five-year limit.” That assertion was, well, bullshit. Lots of states contemplate offering assistance with their own funds beyond the five-year limit, even if not at “the same level” of benefits.
       There is a pattern here. In the Atlantic, you claimed there was now an “absolute lifetime limit of five years,” and when this federal limit hit, “a large group of people in each state will fall into the abyss all at once.” It turned out that this isn’t true–the limit isn’t absolute, states can extend it by using their own funds. So you fell back on the position that “very few states contemplate” such assistance. But that isn’t true either, so now you note that “most states are not deciding right now,” that the extensions they offer rely on the judgment of caseworkers, and that continued benefits beyond five years may be lower. I think that is close to the reality. In retreat, you have asymptotically approached the truth. It’s too bad you wrote your Atlantic cover story at the beginning of this process rather than at the end.
       Let me discuss a few more states … just kidding.
       The (Relatively) Good News on Health Care: You speak of “people with jobs who feel driven back to welfare when their transitional Medicaid runs out because they have a child with chronic asthma.” You seem to be under the impression that after a year or two off welfare, the children of low-income workers lose their “transitional Medicaid.” But that is no longer the case. There has been a quiet revolution in Medicaid: For children, medical coverage has been largely decoupled from welfare receipt. Children aged 6 and under whose family income is less than 133 percent of poverty are guaranteed Medicaid in every state of the union, whether their parents get welfare or work. So your hypothetical concerned, working-poor parent would very probably not have to go back on welfare to get coverage for her asthmatic kid, if the kid was 6 or younger. Older children–aged 13 and under–are also guaranteed medical coverage in every state if their families make 100 percent of poverty or below, even if they’re not on welfare. And the upper age limit on this guaranteed coverage automatically increases until by 2002 (about the time any five-year time limit might hit) all poverty-level children 18 and under will be covered.
       This new system still has major problems: for example, young children can lose their coverage if their parents make $1 over the 133 percent of poverty limit (which translates into roughly an $8.50 an hour full-time job for a mother with two kids). And in many states (not Wisconsin!) a single mother might still have a perverse incentive to go back on welfare to get coverage for herself, if not for her children. I’m for extending health coverage to everyone and eliminating these problems. The new money for child health coverage in the recent budget deal should help. But even now, the situation for children isn’t nearly as bad as you suggest.
       I’m Work-Oriented, You’re Work-Oriented: As noted, in the name of “fairness and protecting children” you seem to oppose taking away an entire family’s grant when, say, a single mother refuses to work. But if you only take away part of her grant, and leave her enough to live on, then she and other recipients will learn that they can simply defy work requirements, “take the sanction,” and go on living off their now-smaller welfare checks. If, on the other hand, you take away so much of her check that she can’t live on it, then you threaten to harm her children. That’s the dilemma. Reformers have to choose. There is no magic Archimedean point at which a penalty is severe enough to be “compulsory” but yet mild enough to still “protect” children. My choice is that enforcing work is worth the temporary risk to the children of mothers who refuse to work and are penalized. That was also Clinton’s conclusion, in his 1994 welfare plan that you claim to support (and praise as “responsible”). It included the “full family sanction.”
       I don’t mean to minimize the distance you have traveled from supporting a “guaranteed annual income” to supporting what you call “compulsory work.” Congratulations. I used to be for a guaranteed income too. But we should both realize that the American people crossed this bridge at least 35 years ago. Indeed, the electorate always hated the “guaranteed income” or any scheme that pays cash to people who could work. They were right. We were wrong. My point is that they will support the sort of spending we now both want–on public jobs, child care, and supplements for low wages–if it is rigorously conditioned on work. But they don’t trust us, so any waffling will be very damaging. Opposing effective sanctions in the name of “protecting children” is exactly the sort of fudge they pick up on, and rightly so.
       That said, there is a potential compromise: We might pay parents a small “child allowance” of, say, $1,000 per year per child. The money would be available to poor one-parent and two-parent families, whether or not they worked. It wouldn’t be enough to live on–so it wouldn’t relieve single mothers of the obligation to enter the labor force. But it would be some recognition that parenting itself is work, and it would let many single mothers get by with taking something less than a full-time job. The main drawback with such a scheme is that it would be a very expensive new entitlement, and liberals would try to increase it, complaining that it wasn’t enough to raise a family on (even though the whole idea would be that it’s not enough to raise a family on). But perhaps the expense would keep any increases in check.
       Poverty Isn’t Everything: To illustrate that money–and the poverty line–isn’t the only thing for welfare reformers to worry about, I used a hypothetical example: “It’s better for children, and for communities, to have intact working families making 95 percent of the poverty line than nonworking non-families on the dole at 105 percent of poverty.” You say it’s “hard to disagree” with that statement, but that it has “nothing to do with Wisconsin, or for that matter with anything else we’re talking about.” Yet in the very next paragraph you criticize the Wisconsin plan for its “effect … on the income status of larger families.” In other words, you would oppose Wisconsin because four-person families might lose 60 or so dollars a month in benefits–even if in the process they would be transformed from welfare families to working families! Marxists have a term for this money-fixated mindset: economism. I call it Money Liberalism. It’s the same mentality that takes as a talisman HHS’s famous “1.1-million-more-children-in-poverty” study, as if the only test of welfare reform’s effect on children is how many families slip a few dollars above or below the poverty line–and who cares whether or not they live in working families and communities.
       Ah, you say, but in Wisconsin people in community-service jobs won’t make 95 percent of poverty! The mere fact that you fixate on the poverty number and not the point of the hypothetical shows what a hopeless Money Liberal you are. But you get the numbers wrong too. You forgot about food stamps. A community service worker with two kids in Wisconsin’s original plan would make $555 a month, but she’d also get $268 in food stamps, for a total of about 78 percent of the census poverty line for 1996. Plus she also would get a health policy worth about $345 dollars a month for only a $20 monthly copayment. Count even half that health subsidy and you reach … 93.5 percent of poverty. So, purely by accident, my hypothetical wasn’t far off. (The pay for Wisconsin’s public jobs has since been increased to $673 a month.)
       The Bill for Process Comes Due: We haven’t had as much of a debate about “due process” for welfare recipients as I had expected. Thank God. But since you have, in passing, raised the issue of procedural protections “before people are cut off in whole or in part,” I’ll quickly half-disagree. In a cash-dispensing welfare system, it makes sense to give recipients all sorts of legal rights–notice, a hearing, a chance to cross-examine witnesses, etc.–before their checks are cut. After all, they aren’t expected to work. It’s not such a big deal if they get sent checks for a few more months while their case is heard.
       The problem is that it’s very hard to run a work system with such elaborate procedural protections. You are supervising a public jobs crew. I show up high on crack and pick a fight with a fellow worker. You want to fire me–but what if you have to keep paying me for several months until I receive notice and a hearing, etc.? It won’t work. Roosevelt couldn’t have run the WPA with that kind of elaborate due process, and we can’t run a neo-WPA with it.
       Unfortunately, in Goldberg vs. Kelly the Supreme Court ruled that as a matter of constitutional law any time the government creates a welfare “entitlement,” it can’t be taken away without a pretermination hearing. No wonder Congress and states like Wisconsin have decided to replace welfare with a program that, they declare, is not an “entitlement.” That doesn’t mean they aren’t going to provide for appeals and other safeguards. But they do not want the courts to invoke Goldberg and smother public job programs with proceduralism.
       Conclusion: It would have been better to have a welfare reform that “insisted” on investment in public jobs. It would have been better to have a reform that allowed states to experiment but kept a federal guarantee of generous funding in good economic times and bad. Something like that might have been enacted if the left had supported Clinton’s 1994 “two-years-and-go-to-work” plan instead of sniping at it and demanding that he instead pursue his disastrous health-care scheme.
       So the Republicans presented Clinton with a second- or third-best reform. The problem isn’t that it “oversimplifies” the welfare problem. It recognizes complexity, in its very structure, by letting every state try a different scheme, so various combinations of features can be tested. Most states are delegating to caseworkers a lot of authority to recognize the differing situations of single mothers by offering them different services, imposing varying requirements, and granting extensions. (It’s a bit contradictory for you to talk about the complexity of the problem while you also complain about caseworker discretion. Once we’re not running a check-mailing system, caseworkers are the mechanism states use to handle the complexity.)
       The reason to worry about the Republican plan is, first, the possibility of harshness on which you focus. The risk is nothing like what you claim it is in the Atlantic, but it exists. But there is also an opposite risk: that states won’t do all that much differently after all, in the end–that there will be nominal time limits and nominal work requirements, but when recipients come close to hitting them, states simply grant routine extensions rather than create backup public jobs, so the system comes close to replicating the pre-reform status quo. Public employee unions, in particular, are mobilizing against the idea of public jobs because they fear (correctly) that “workfare” workers will do some jobs well-paid unions’ members might otherwise perform.
       Right now, though, no disasters seem to be materializing. Instead, throughout the country, state legislatures are having just the sort of debate we would want them to have–about exactly who should be required to work, when, and how. The states haven’t made many irrevocable decisions (and, I admit, I am counting on liberals and Democrats like you to keep them from right-wing excesses in the future). Even in nasty New Mexico, as you note, there is still a fight going on. Meanwhile, at least one state, Wisconsin, is trying the sort of large public jobs program on which I’m pinning my hopes. In my own state–big, unimaginative California–Republicans are already talking less about cutting people off and more about emulating the Wisconsin approach. (For a gripping, and generally encouraging, account of the first days of Wisconsin’s plan, read the Milwaukee Journal Sentinel’s coverage. Also see Newsweek’s well-done story of “One Family’s Journey from Welfare to Work” in the May 26 issue.) Clinton could hardly have picked a better economic climate in which to launch an attempt to push welfare recipients into the labor force.
       We are finally tackling our nation’s most serious social problem. So far, so good.