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zoo August 1, 1994 HOW CLINTONS BILL EXTENDS WEZiFm AS WE KNOW IT INTRODUCTION Americans are alarmed by the growth and effects of welfare. They correctly per ceive the current system to be an extraordinarily expensive debacle which destroys the lives of those it is intended to help. And by promoting illegitimacy and undennin ing the family, they see welfare as threatening the foundation of society. Campaigning for President, Bill Clinton acknowledged that the War on Poverty had failed. He promised to end welfare. Now, more than two years later, President Clinton has unveiled the details of his end to welfare. But far from reform, the Presidents plan, called the Work and Responsibility Act of 1994, is simply a public relations facade intended to forestall real criticism and change. When t he masquerade of reform is removed, the plan represents little more than a continuing rapid expan sion of the current destructive system. The cosmetic nature of the Clinton plan should not come as a surprise. Periodic sham reform has become the lifeblood o f the welfare system. With each such reform the system grows larger and more expensive. Just a few years ago, Congress de clared it had ended welfare with the Family Support Act of 19 88. This act was touted in the press as a dramatic change in the foundations of the welfare state. In de scribing the 1988 act, Senator Daniel Patrick Moynihan (D-NY), its chief sponsor declared: Were going to turn the welfare program upside down. Were going to take a payments program with a mino r emphasis on jobs, and create a jobs program in which the income supplement is assumed to be temporary 1 Martin Tolchin, Welfare Revision: Moynihan Seeking to Stand System on Its Head, The New York Times June 12,1988. The next day he added This is the fns t time ever were going to take a [income maintenance program with a slight work component and turn it around to be a job program with income supplements until youre on your own 2 And later he declared For the first time in [welfares] half-century existence , the U.S Senate has moved to an entire redefinition and overhaul of what weve come to know as our welfare system under the revised system] welfare will no longer be a permanent or extended condi tion.3 For good measure, Senator Howard Metzenbaum D-OH) dec lared t his bill makes a dramatic step forward to encourage the stability of the family. At the time, conservatives said the act was a resounding lie, in that it did none of these things. They were right. The 1988 legislation did nothing to overhaul the we l fare system. It did not introduce real work requirements:today, seven years after its passage, less than one percent of adult AFDC recipients are required to work. It did not curb the growth of welfare spending: welfare rolls and costs have exploded at near-record rates. And it did not help to stabilize the low-income family: illegitimacy has soared? Nor was the welfare system starved for funds after 19 88. In fact, aggregate welfare spending has increased at a near-record rate of 10 percent per year in the last five years. In the same period, Congress deliberately expanded eligibility for programs such as Medicaid. Few funds were provided for workfare, however, because the lib eral Congress is privately opposed to it. Carbon Copy. Clintons present welfare plan is a carbon copy of the welfare re- form fraud of 19 88. The rhetoric and description of Clintons proposal is virtually in- distinguishable from the earlier historic legislation. As with the 1988 act, Clintons proposal does not reform welfare but merely creates the appearance of reform, blunt ing public disaffection with welfare while permitting the continuous rapid expansion of the current system 61 2 3 4 5 Moynihan on the McNeil-Lehrer NewsHour June 13,19 88. Sr. Petersburg Times, September 30, 19 88. The Congressional Record, June 13,1988, p. 7661. The conventional explanation for the failure of the 1988 Family Support Act is that it did not receive enough funding. This is untrue. The 1988 act has operated exactly as designed by Congress. The crucial fact is that the act required virtually no welfare recipients to work, and only a tiny fraction even to search for work. Most states have executed the requirements of the 1988 act faithfully; but these requirements were designed to affect less th a n a tenth of the AFDC caseload. Furthermore, even the minimal JOBS participation requirements in the 1988 act were opposed by Senator Moynihan 2 Deception is the core of Clintons plan. The President claims his bill ends welfare after two years It does not . It does not even require a significant number of recipi ents who have been on welfare for over two years to participate in government make work jobs in exchange for future benefits. Specifically, the bill Does not establish time limits on welfare. Despit e talk of two years.and you.are out, the bill merely places a few beneficiaries in government make-work jobs-misnamed the WORK program while they remain on welfare Requires only 7 percent of the welfare population to enroll in the WORK program by 19 99. T he bill is deliberately designed to affect only a small fraction of the welfare caseload Requires those in the WORK program to work for only 15 hours per week. With the full value of their continuing welfare benefits included, these individuals will recei ve an effective wage rate of $16 per hour Phases out work requirements in the AFDC-UP program which can substantially reduce the caseload. Allocates $4,000 per year merely to cover the administrative overhead for each participant in the WORK program. Addin g in the cost of continuing welfare benefits and other expenditures, the total taxpayer cost of maintaining a typical household in the WORK program is likely to be around $20,000 per year Is not deficit neutral. The bill contains many costly expansions of welfare programs. Taking advantage of a loophole in the budget rules, much of this new spending does not appear in the standard budget projections. This allows the Administration to claim its plan is deficit neutral when it is not. While the bills time li mits and work requirements are a sham, even worse it does nothing about the two most important welfare reform issues: exploding welfare costs and the crisis of illegitimacy. Last year, federal and state governments spent over $320 billion on welfare; by 1 9 98 welfare costs will rise to over $500 billion costing on average nearly $5,000 for each taxpaying household. And today nearly one in three American children are born out of wedlock; President Clinton himself has warned the illegitimate birth rate will s o on rise to fifty percent or the soaring illegitimate birth rate. In fact, on both issues the Clinton plan will make the situation worse Why does the reality of the Clinton plan depart so much from the rhetoric sur rounding it? No doubt in large part it is because many top officials in the Administra tion and Congress have long opposed work requirements. It is also because the pro fessional social welfare organizations, which are so influential within the Administra Yet the Clinton reform will do nothing to deal with mushrooming welfare costs 3 PROVI tion and on Capitol Hill, want more spending on the services they provide rather than real reductions in the welfare caseload. But if Congress really is to end welfare as we know it, an d thereby improve the lives of those in the system as well as reducing the burden on taxpayers, it must fo cus clearly on several key goals. Lawmakers must change the incentives in the cur rent welfare system that encourage illegitimacy rather than curbin g it. They must channel money now going directly to unwed mothers instead to other ways to im prove the lives of affected children. Lawmakers must place a real cap in the growth of welfare spending. And they must introduce genuine work requirements, focusi n g on those recipients who are most employable-such as able-bodied males-not on single mothers with young children. Legislation to do these things has been intro duced (S. 2134, H.R. 4566) by Senator Lauch Faircloth (R-NC) and Representative Jim Talent (R- MO), but is opposed by the White House. The American people-the poor on welfare as well as the taxpayers who support them-have been promised an end to welfare many times before by congressional leaders and by Presidents. Each time the rhetoric was persuasi ve, and each time the result was more spending, more people on welfare, and higher rates of illegitimacy. The Clinton plan is merely the latest example. And like the others, it is a fraud IONS OF THE CLINTON BILL To understand why the Clinton welfare plan will not deliver on its rhetoric, it is im portant to know a number of key facts about the legislation FACT #I: The Clinton bill does not establish time limits on welfare. Although President Clinton has claimed his welfare reform bill will end cash assis tance after two years, this is untrue. Not one individual will have her cash aid terminated because she has received welfare benefits for over two years-or even for over twenty years. Instead a few individuals who have received AFDC for two years will be p laced in a new welfare program misnamed WORK. These individuals will participate in government make-work jobs closely resembling the CETA jobs created by Jimmy Carter in the late 1970s. Individuals in the WORK program will continue to be on the welfare ro lls and to receive welfare cash aid-but the cash aid will now be dubbed wages. Welfare recipients may remain in the WORK program indefinitely and may even be exempted from actual work assignments in the future and be recycled back into the main AFDC caselo ad. Welfare recipients (including those in the WORK program) may also receive Food Stamps, public housing aid, and medical aid indefinitely; the Clinton Administration opposes placing time limits or work requirements on these programs. FACT S2: Vlrtually no welfare reciplents will actually be required to work. When forced to acknowledge that the Clinton plan does not actually terminate welfare after two years of enrollment, defenders of the plan adopt a fallback posi tion: they claim that the plan does at least require those who have received wel 4fare for over two years to work in exchange for further benefits by participating in the WORK program. But this also is untrue. Under Clintons plan virtually none of the parents who have received AFDC for over t wo years will be required to work, even in a government make-work job with wages paid by the welfare sys tem. The bottom line is clear. Among the nearly 5 million families receiving AFDC at.any point in time almost half have received AFDC continuously for the last two years, and a far higher percentage have been enrolled for over two years when prior spells on the rolls are counted. Yet, under the Clinton plan, it turns out that only 7 percent of the adult AFDC caseload is required to work under the WORK p rogram and even this requirement will not occur until 1999. The reason only a tiny number of recipients will be required to work under the Clinton plan is because of the huge number of exemptions and limitations associ ated with the work obligation. The mo st glaring exemption is that parents born be fore 1972 will not be subject to any time limits or work requirements at all! This alone exempts nearly 80 percent of the current AFLX caseload from the work re quirement FACT #3: Most welfare recipients born a fter 1972 will not be required to work Many journalists and lawmakers, as well as other Americans, might assume that Clintons rule of requiring work after two years will at least be applied rigor ously to recipients born after 19 72. But even this is not t rue. Further exemptions apply to this group as well? Even five years from now, in 1999, only one-third of the AFDC parents who were born after 1972 and who have received AFDC for over two years would be required to work. The two years and then work rule i s purely cosmetic. It is subject to so many limitations that, if enacted, it would have virtually no effect on the actual operation of the welfare system 6 All citations to the Clinton bill refer to Messagefrom the President of the United States Transnritt ing A Draft of Proposed Legislation Entitled Work and Responsibility Act of 1994, House Document #103-273 (U.S. Government Printing Office: Washington, D.C June 21,1994 This document is hereafter referred to as the Clinton bill document. All cited page num bers will refer to the large page numbers at the top of each page in this document, which will differ from the page numbers on separate copies of the bill itself. The exemption for parents born before 1972 appears on page 2. In addition to the many layers of exemptions from work, the Clinton bill contains a simple override mechanism which dictates that the number of participants in the WORK program will be determined by the amount of federal funding devoted to WORK divided by a fixed per capita participan t amount. Since the WORK program is extraordinarily expensive to operate, this ensures that no more than a small fraction of AFDC recipients will ever be required to participate. See Clinton bill document pages 77 and 27 1 7 5 FACT #4: Under the Clinton bi l l, even the small number of welfare recipients required to work must do so for only a few hours per week The small number of AFDC recipients who are actually required to work under the Clinton plan will have to perform very little labor. According to the b ill re cipients who participate in the CETA-like WORK program will be required to work just 15 hours per week, mainly in public service positions created by local governments. States may require more than 15 hours of labor, but experience from the 1988 Fa m ily Support Act, as well as earlier welfare reforms, suggests strongly that most state governments will adhere to the minimum standard. Fif teen hours of work thus will be the norm in all but a few jurisdictions 8 FACT #5: WORK participants will be paid w ell above the minimum wage. The Clinton Administration has claimed that participants in the WORK pro gram will be paid the minimum wage. This is untrue. The plan actually states that all participants in the WORK program must be paid a wage plus an earnings sup plement, which together must be equal to at least the normal AFDC benefits re ceived by the family9 The typical family on AFDC currently receives about $97 per week in benefits. This typical recipient would thus receive a base rate of about $6.46 per hour for 15 hours of work under the WORK program, or almost 50 percent above the current minimum wage. However, nearly all participants in the WORK program also will receive Food Stamps and Medicaid. The value of this total compensation (cash, food, and medi cal care) amounts to about $240 per week for the typical AFDC family. With participants working for 15 hours per week, total compensation under the WORK program would average $16.00 per hour Even if the work standard were doubled to 30 hours per week, total compensation for the average participant would still equal $8.00 per hour In addition, WORK recip i ents will receive free day care. Finally, any state is free to provide any WORK participant with all or part of his or her normal AFDC benefits in addition to the wages paid by the WORK ~rogram Yet even these above calculations still understate the actual wage rates man dated by the Clinton plan because they do not include an additional hidden wage provision in the bill. This provision stipulates that all WORK participants must be paid an hourly wage at least equal to the wage rates of normal employees wit hin the employing organization performing similar ~0rk.l~ Under the plan, most 8 9 10 The fifteen hour requirement appears on page 250. Clinton bill document, p. 38. AFDC benefits for a single mother with two children in 1992 averaged $4,785 per year. Assuming a total increase of 5 percent for inflation over the last two years benefits would average about $97 per week in 1994. See Ways and Means Committee, Green Bmk 1993, p. 1240. Estimated value of AFDC, Food Stamps, and Medicaid for a family of three in 1994 based on data from the Ways and Means Committee, Green Book: 1993, pp. 1644 and 1240. Clinton bill document, pp. 250-25 1 11 12 6 WORK slots will be provided within municipal governments, many of which have unionized workforces So in these localiti es, the bill requires that welfare re cipients be paid union-scale wages. For example, if New York City wished to have a welfare recipient perform janitorial services in the public schools, the re cipient would have to be paid about $20 per hour. l4 FACT #5: Many WORK participants will join public sector unions. Section 103 of the Clinton bill states that participants employed under the WORK program shall be provided with working conditions and rights at the same level and to the same extent as the other e mployees of the same employer performing the same type of work and having a similar length of emp10yrnent.l This means that if the welfare recipient were placed in a unit of government which was unionized, the WORK participant would become part of the bar gain ing unit and would be represented by the union. If the municipality had a closed shop rule, the welfare recipient would become a union member and government funds would be used to pay the required union dues FACT #6: The bill limits useful work. The C linton plan makes it difficult for local governments to place WORK par ticipants in useful work by creating strong barriers against jurisdictions wishing to fill normal job openings within the government with WORK participants. When a normal government jo b becomes vacant, WORK participants must be given the lowest priority in filling that job. WORK participants can fill normal job vacan cies only after the government has attempted to fill the vacancy unsuccessfully through normal employment channels for at least 60 days. l6 This provision will tend to push welfare recipients into pointless, make-work positions reminiscent of CETA program in the 1970s, which provided jobs such as attending dance class and performing street theater. In the real world, it is a l so probable that a large number of the jobs provided under the WORK pro gram will consist of para-political activity such as voter registration drives as well as advocacy activities under the auspices of the Legal Services Corporation and other public int erest legal centers FACT +7: The minimal work requirements are improperly targeted. The work requirements in the Clinton bill are poorly targeted and inefficient. Proper work requirements should be targeted on those welfare recipients who have the least j ustification for being out of the labor force: single able bodied males, fathers in two-parent families, and single mothers with older children. But 13 Ibid p. 233 14 The beginning salary for a janitor in the New York public schools is $4O,OOO per year or roughly $20 per hour. Senior janitors receive up to $38 per hour. Charisse Jones, Pact Breaks Grip of New York School Custodians, me New York Times, May 5,1994, pp. AI and B8. Clinton bill document, p. 12. Clinton bill document, p. 224 15 16 7 Clintons plan focuses on the least employable welfare recipients: young single mothers with pre-school children. Clinton thus reverses the emphasis of current law by phasing out current work requirements on employable males while creat ing new (but modest) work re quirements for single mothers with young children. These are the 300,OOO-plus two-parent families in the Aid to Families with De pendent Children-Unemployed Parent (AFDC-UP) program. Under existing law one of the two parents in an AFDC-UP family will be required to work in commu nity service (workfare) in exchange for the familys welfare benefits. This work requirement will cover up to 75 percent of AFDC-UP families in the mid and late 1990s. Experience shows that fm work requirements on AFDC-UP families will cause an immediate drop in caseloads and large savings for the taxpayer. In 1983 Utah imposed a 40-hour-per-week work requirement on parents in their AFDC UP program. The result was an immediate 90 percent reduction in that caseload l7 Faced with having to perform serious work for their familys welfare benefits, most AFDC-UP fathers went out and obt ained real jobs in the private sector. Utahs AFDC-UP population has remained at ten percent of the pre-work fare levels since 19 83. Broadening and toughening the current nationwide work requirements on AFDC-UP families could save the taxpayers up to $15 billion in the next five years alone. But rather than toughening existing AFDC-UP work standards, the Clinton bill takes the unfathomable step of phasing them out by 1998 l9 The meager altema tive work requirements in the bill would focus on exactly the wr ong population young single mothers many with pre-school children. Because of the huge day care costs associated with trying to impose work requirements on this group, the result will be a great increase in welfare spending and barely a dent in the AFDC c aseloads. The inefficient nature of the Clinton work requirements perhaps should not come as a surprise. The Clinton Administration represents the interests of the pro fessional welfare industry, which is naturally threatened by any reform which will signi ficantly reduce welfare caseloads By contrast, welfare bureaucrats are de lighted by reforms which require them to provide an ever expanding array of Current law properly focuses workfare on the most employable AFDC families 17 18 19 See Robert Rector, We lfare Reform, Dependency Reduction, and Labor Market Entry, Journal of Labor Research, Summer 1993, pp. 284-297. The Faircloth-Talent welfare reform bill (S. 2134 and H.R. 4566) establishes work requirements modeled on the Utah plan on the entire nationwide AFDC-UP caseload starting in 1995. The Clinton Administration has sought to abolish the current AFDC-UP work requirements since coming into office in early 19 93. The original draft of the Clinton welfare bill circulated in late June of this year, when the President announced his plan, again sought to abolish the separate work requirements on AFDC-UP families. Stung by immediate criticism showing that this would result in a net reduction in the total number of welfare recipients who would be required t o work for the next five years, the Clinton Administration hurriedly revised its bill. In the present draft the existing AFDC-UP work requirements are retained, but only through 1998 they are then eliminated 8 services to their welfare clientele (such as l engthy negotiations of career goals and plenty of training and day care). Growing welfare caseloads mean full employ ment and plenty of career potential to welfare bureaucracies; shrinking caseloads mean the opposite. Therefore, despite pious rhetoric, mo s t welfare bureaucracies quietly but strenuously oppose any workfare measures which will quickly cut caseloads. Instead, they relentlessly promote investments which increase costs but are claimed to reap savings at some ever-receding point in the future I F act #8 The costs of Operating the work program are exorbitant Although the Clinton plan will require only a small percentage of welfare re cipients to work, and those only for a few hours per week the per recipient cost of operating the WORK program will be extremely high. The Clinton bill allo cates 4,000 per year for each participant in WORK just to cover the administra tive costs of the program (roughly 3,000 in federal funds and $1,000 in required state funding). It should be emphasized that this 4,000 per year cost is not for training or edu cation. It simply represents the extra cost of supervising an individual in a WORK slot. Day care and wage subsidies will add even further, large costs. Although the Clinton Administration has not provided clear f igures, it is likely that maintaining a single individual in the WORK program will involve some $8,000 in extra ex penses above the level of conventional welfare benefits. In the typical state, the total taxpayer cost for a family of three participating in the WORK program for 15 hours per week is likely to be around $20,000 per year a figure covering all wage subsidies, food stamps, medicaid, administrative costs and day care. Many participating families would receive even further bene fits through other welfare programs such as public housing, WIC, school lunch and energy aid. According to the rhetoric of the Clinton Administration, such a family is said to be off welfare I FACT #9 The Clinton bill Is not deficit neutral. In addition to the high cost of o perating the WORK program, the Clinton bill calls for a wide variety of other increases in welfare spending. It provides new funding for education, training, daycare, and administration of the JOBSzo pro gram (for individuals who have been on AFDC for les s than two years Other spending items include increases in welfare benefits, expansions in welfare eligi bility, and daycare subsidies for single mothers who have found employment and left AFDC. The Clinton Administration nevertheless claims its bill is de ficit neutral. Offi cials say the new spending will not increase the deficit because it is paid for by spending cuts in other government program. This claim is false. What the Ad 20 JOBS is the acronym for the Job Opportunities and Basic Skills program, c r eated by the 1988 Family Support Act. This is not a jobs program, despite the acronym, but instead mainly requires welfare recipients to look for employment through job search programs 9 ministration does is take advantage of a loophole in federal budget l aw which re quires that the financial impact of proposed legislation be estimated only for five years into the future. It turns out that much of the increased welfare spending in the Clinton plan is scheduled to occur in the sixth year and beyond-conven i e ntly outside the period for which costs must be calculated. Clintons proposed spending cuts, if enacted by Congress, may be sufficient to pay for the proposed spending increases over the next five years (from 1995 through 1999 But the plan does not even a ttempt to pay for the extraspending increases mandated to oc cur after 19 99. These future welfare spending increases will be paid for either by higher deficits, higher taxes, or both Fact 10 The Clinton plan makes no attempt to control the growth of welfare spending The federal government currently runs over 70 different welfa r e programs pro viding cash, food, housing, medical care, training, and social services to low-in come Americans. Federal and state welfare spending combined amounted to over 320 billion in 1993F1 Even without any changes in law, welfare spending will rise to over $500 bil lion per annum by 19 98. In that year, the cost of welfare will equal nearly $5,000 for each tax-paying household. The U.S. then will spend two dollars on welfare for each dollar spent on national defense. Clintons response to this spending explosion is to call for even more spending. He attempts to defend his proposed spending increases by claiming that welfare increases are an investment which will yield long-run savings. This is a time-worn ploy. hponents of nearly every welfare expan sion in the last 30 years have justi fied new spending as an investment which will ultimately save money. Of course it never does. In launching the War on Poverty, for instance, Lyndon Johnson pro claimed that the war would be an investment [which] will r e turn its cost many fold to our entire economy. Since Johnsons proclamation, annual welfare spend ing has increased nine-fold, after adjusting for inflation. As with past reforms Clintons plan can be expected to increase welfare spending and caseloads I Fa ct #l1: The Clinton bill Ignores the lllegltimacy Crisis. The most serious fault in the Clinton reform plan is that it avoids the central problem of welfare almost completely: Americas soaring illegitimate birth rate. In addition to all its other deficien cies, Clintons proposal focuses almost exclu sively on the superficial symptom of welfare dependence and ignores the underly ing cause of this dependence-the sky-rocketing number of out-of-wedlock births. Last year, over one million children were born out of wedlock. Nearly one third of all American children are now born to single women, up from around 8 percent when Lyndon Johnson launched the War on Poverty in 19 65. The real 21 This figure covers means-tested programs for low-income individuals and comm unities. General spending programs for the middle class, such as Social Security and Medicare, are not included 10goal of welfare reform should not be to put thousands of single mothers in govern ment make-work jobs, while their children are raised in gov ernment day care cen ters. It must instead be to reduce dramatically the number of children born out of wedlock. Clintons rhetoric on the question of illegitimacy has been quite good. The President correctly states that illegitimacy is a key cause of crime in the United States. He also points out correctly that welfare plays a major role in promoting out-of-wedlock births. And in his State of the Union message this year, Clinton warned that unless something dramatic is done, half of all American children w ill soon be born out of wedlock. However, despite his laudable rhetoric, the President proposes no serious poli cies to combat the illegitimacy crisis. In fact, his reform plan would go in the op posite direction, establishing pilot programs to provide new cash welfare entitle ments exclusively for unmarried mothers Even worse, by claiming to provide fundamental reform while changing virtually nothing, the Clinton plan, if en acted, will substantially relieve public pressure for change. Thus, it will effec tively shut the door on desperately needed real reforms for the next five or ten years Fact #12: On teen abstinence, the Clinton Administration uses conserva In an attempt to camouflage his Administrations policy vacuum on the crisis of illegitimacy, the P resident has included some small sex education programs in his bill. In describing this feature, like other provisions, the President uses bold, con servative rhetoric. In advertising the proposed education programs, Administra tion materials proclaim tlv e rhetorlc to camouflage liberal policies W]e need to send a strong signal that it is essential for young people to delay sexual activity, as well as having children, until they are ready to accept the responsibilities and consequences of these actions. It is critical that we help all youth understand the rewards of deferring childbearing until they are married.23 But once again, conservative rhetoric conceals a contradictory liberal policy. In establishing the proposed education programs, the bill itself n e ver mentions mar riage, abstinence, or moral education to delay sexual activity. This should perhaps come as no surprise, since Health and Human Services Secretary Donna Shalala has spent most of the last year seeking to abolish the federal governments on l y abstinence education program. In its place, the Clinton bill will promote a stock set of tired policy failures: lavish condom distribution, self-confidence pro grams values clarification, life-skills training, and decision-making skills train- ing A 22 23 24 Clinton bill document, pp. 496-504. Work and Responsibility Act of 1994 a Detailed Summary, p. 32. Clinton bill document, pp. 365,351 11 I If the Clinton Administration proposed a broad effort to promote moral-based abstinence education this could b e expected to cause a modest reduction in ille gitimacy. Such programs have a demonstrated track record Example: Students who participated in the Title XX-sponsored program Sex Re spect: The Option of True Sexual Freedom had considerably lower preg- 25 na n cy rates one and two years after participation than the comparison group Example: San Marcos Junior High School, San Marcos, California, has also used an abstinence-only program. The year before it was implemented 147 girls were reported pregnant. Two yea r s after its initial implementation only 20 girls became pregnant. 26 However, HHS Secretary Donna Shalala is vehement in her opposition to such programs. Commenting on her elimination of Title XX funds she said: absti nence-only messages rovide no hope of protection at all against the risks of preg nancy and disease. Thus, despite its conservative rhetoric, Clintons bill does not proposed to ex pand abstinence education. Instead, the proposed programs will be closely mod eled on affect-based drug education programs. But, according to one of the princi pal originators of the techniques used in these programs, psychologist W.R. Coul son, such programs, featuring life-skills training, self-esteem building, and deci sion-makin skills, have been shown scientifi c ally to increase drug, alcohol, and tobacco use. Similar counter-productive results can be expected from Clintons education proposals 27p 38 TRUE REFORM Even the simplest analysis of the White House proposal shows that Clintons time limits and work requir e ments are a sham. Moreover, the Presidents re forms do not seriously address the more important issues of reducing illegitimacy and controlling welfare costs. True and comprehensive welfare reform is needed 25 26 27 28 Project Respect, Final Report; Once of Adolescent Pregnancy Programs. Performance Summary Report 0816,Title XX, 1985-1990 Dinah Richard, Has Sex Education Failed Our Teenagers; a Research Report Focus on the Family, Pamona California, 1990, pp. 56-60. Cheryl Wetzstein, Teen Abstinence funding deleted in Clinton Budget, The Washington Times, May 23 W.R. Coulson, Questianity: Why the War on Drugs Drags, Research Council on Ethno-Psychology, Box 134 Comptche, California 954 27. Dr. Coulson was a close associate of Dr. Carl Rogers and one of the originators of non-directive therapy and values clarification during the late 1960s and early 1970s. Coulsons techniques serve as the basis for most programs featuring decision-making and life skills training in the public schools. See also, William Kilpatrick, Why Johnny Cant Tell Rightfrom Wrong (New York: Simon and Schuster 1993 1994, p. A-11 12 0 It. reduces. illegitimacy in the future. by.eliminating those welfare benefits which s ubsidize and promote out-of-wedlock births?9 It provides an improved quality of life for those children who are born out of wedlock in the future. It does so by channeling those welfare funds which, under the current system, go directly to unwed mothers, i nto alterna tive and superior forms of care, such as adoption services and closely super vised group homes for young unmarried women and their children It controls the size of the welfare state by putting a cap on the future growth of aggregate federal we l fare spending 0 It establishes serious but sensible work requirements for welfare recipi ents. It does so by focusing those requirements on the most employable wel fare recipients first (such as single able-bodied males and fathers in two par ents familie s), rather than on single mothers with infant children. The authors of this legislation realize that the welfare system is waging a war of annihilation against the American family. In that war, welfare is winning and the family is losing. Welfare pays low- income Americans to adopt self-defeating courses of action. By encouraging young women to have children out of wedlock, welfare ru ins the lives of the women and their children. The disintegration of the family pro moted by welfare is, in turn, a major ca u se of most of Americas other social prob lems including crime, poverty, school failure, and drug and alcohol abuse l CONCLUSION Candidate Bill Clinton vigorously promoted his pledge to end welfare through out the presidential election campaign. It is unli k ely that voters listening to this thought that ending welfare meant what President Clinton now proposes: requiring just 7 percent of the AFDC caseload to work in public sector make-work jobs by the end of this century 29 One year after enactment, the bill would eliminate AFDC, Food Stamps, and Housing aid to women under age 21 who have children out of wedlock. Since the bill is intended to affezt the future illegitimate birth rate, the cut-off would be prospective; it would not affect women who had childre n out-of wedlock before the cut-off date. All savings from the elimination of direct welfare payments to unmarried women would be directed to alternative methods of caring for illegitimate children, including adoption and closely supervised group homes for unmarried mothers and their children. See Patrick F. Fagan, Rising Illegitimacy: Americas Social Catastrophe, Heritage Foundation FYI No. 19. June 29,1994 30 13 Administration officials argue that reform must be incremental and that changes take time. Ho wever, the true rationale of the Clinton plan can be better understood by examining the history and politics of the issue of work and welfare. The liberals who have dominated the U.S. Congress have adamantly opposed work requirements for welfare recipient s for nearly a quarter century.31 any of the liberal profession als who staff key posts in the Clinton Administration share this view.32 But since over 85 percent of the public now favor making welfare recipients work, most liber als no longer publicly opp o se work requirements. Instead, they have adopted Fabian tactics, seeking quietly to minimize and delay work requirements as long as possible while publicly claiming to support them. While public disaffection for welfare is as suaged through sham work requ irements, liberals quietly move to expand welfare programs This strategy of delay and obfuscation packaged as bold reform began with the Family Support Act of 1988 and will continue for the foreseeable future. Unlike Bill Clinton, Senator Faircloth and Congressman Talent realize that the War on Poverty has failed. The Faircloth-Talent bill delivers what Clinton promised if not an end to welfare, at least the beginning of fundamental change. Robert Rector I Senior Policy Analyst 3 1 Senator Russell Long fir st proposed the idea of workfare (requiring some AFDC recipients to work for benefits in the early 1970s, but his ideas were blocked by liberals in Congress. During the late 1970s. the Carter Administration actually declared workfare illegal and expelled t he state of Utah from the AFDC program for a number of years for attempting to make some recipients work for benefits. In 1981, President Reagan finally succeeded in making workfare legal, providing states with the option to operate very limited workfare p rograms. However, Reagans repeated efforts to require even a small fraction of the AFDC caseload to actually participate in job search or workfare were rebuffed by Congress on a yearly basis during the mid-1980s. During the 1988 reforms, efforts to requir e even a small percentage of AFDC recipients to participate in job search or to work for benefits again were opposed by liberals led by Senator Moynihan. Conservatives led by then-Representative Hank Brown (R-CO) and Senator Bill Armstrong (R-CO) succeeded in establishing, over liberal opposition, actual work requirements for some AFDC-UP recipients to take effect in 19 94. Thus due to persistent liberal opposition, nearly a quarter century passed between Russell Longs initial proposals for workfare and th e time when the federal government actually required the first AFDC recipient to work for benefits. See Lawrence M. Mead, Beyond Entitlement: The Social Obligations of Citizenship (New York The Free Press, 1986). For example, HHS Secretary Shalala is a former member of the board of the Childrens Defense Fund, an organization which historically has taken the lead in opposing even token work requirements for welfare recipients 32 I 14
zoo August 1, 1994 HOW CLINTONS BILL EXTENDS WEZiFm AS WE KNOW IT INTRODUCTION Americans are alarmed by the growth and effects of welfare. They correctly per ceive the current system to be an extraordinarily expensive debacle which destroys the lives of those it is intended to help. And by promoting illegitimacy and undennin ing the family, they see welfare as threatening the foundation of society. Campaigning for President, Bill Clinton acknowledged that the War on Poverty had failed. He promised to end welfare. Now, more than two years later, President Clinton has unveiled the details of his end to welfare. But far from reform, the Presidents plan, called the Work and Responsibility Act of 1994, is simply a public relations facade intended to forestall real criticism and change. When t he masquerade of reform is removed, the plan represents little more than a continuing rapid expan sion of the current destructive system. The cosmetic nature of the Clinton plan should not come as a surprise. Periodic sham reform has become the lifeblood o f the welfare system. With each such reform the system grows larger and more expensive. Just a few years ago, Congress de clared it had ended welfare with the Family Support Act of 19 88. This act was touted in the press as a dramatic change in the foundations of the welfare state. In de scribing the 1988 act, Senator Daniel Patrick Moynihan (D-NY), its chief sponsor declared: Were going to turn the welfare program upside down. Were going to take a payments program with a mino r emphasis on jobs, and create a jobs program in which the income supplement is assumed to be temporary 1 Martin Tolchin, Welfare Revision: Moynihan Seeking to Stand System on Its Head, The New York Times June 12,1988. The next day he added This is the fns t time ever were going to take a [income maintenance program with a slight work component and turn it around to be a job program with income supplements until youre on your own 2 And later he declared For the first time in [welfares] half-century existence , the U.S Senate has moved to an entire redefinition and overhaul of what weve come to know as our welfare system under the revised system] welfare will no longer be a permanent or extended condi tion.3 For good measure, Senator Howard Metzenbaum D-OH) dec lared t his bill makes a dramatic step forward to encourage the stability of the family. At the time, conservatives said the act was a resounding lie, in that it did none of these things. They were right. The 1988 legislation did nothing to overhaul the we l fare system. It did not introduce real work requirements:today, seven years after its passage, less than one percent of adult AFDC recipients are required to work. It did not curb the growth of welfare spending: welfare rolls and costs have exploded at near-record rates. And it did not help to stabilize the low-income family: illegitimacy has soared? Nor was the welfare system starved for funds after 19 88. In fact, aggregate welfare spending has increased at a near-record rate of 10 percent per year in the last five years. In the same period, Congress deliberately expanded eligibility for programs such as Medicaid. Few funds were provided for workfare, however, because the lib eral Congress is privately opposed to it. Carbon Copy. Clintons present welfare plan is a carbon copy of the welfare re- form fraud of 19 88. The rhetoric and description of Clintons proposal is virtually in- distinguishable from the earlier historic legislation. As with the 1988 act, Clintons proposal does not reform welfare but merely creates the appearance of reform, blunt ing public disaffection with welfare while permitting the continuous rapid expansion of the current system 61 2 3 4 5 Moynihan on the McNeil-Lehrer NewsHour June 13,19 88. Sr. Petersburg Times, September 30, 19 88. The Congressional Record, June 13,1988, p. 7661. The conventional explanation for the failure of the 1988 Family Support Act is that it did not receive enough funding. This is untrue. The 1988 act has operated exactly as designed by Congress. The crucial fact is that the act required virtually no welfare recipients to work, and only a tiny fraction even to search for work. Most states have executed the requirements of the 1988 act faithfully; but these requirements were designed to affect less th a n a tenth of the AFDC caseload. Furthermore, even the minimal JOBS participation requirements in the 1988 act were opposed by Senator Moynihan 2 Deception is the core of Clintons plan. The President claims his bill ends welfare after two years It does not . It does not even require a significant number of recipi ents who have been on welfare for over two years to participate in government make work jobs in exchange for future benefits. Specifically, the bill Does not establish time limits on welfare. Despit e talk of two years.and you.are out, the bill merely places a few beneficiaries in government make-work jobs-misnamed the WORK program while they remain on welfare Requires only 7 percent of the welfare population to enroll in the WORK program by 19 99. T he bill is deliberately designed to affect only a small fraction of the welfare caseload Requires those in the WORK program to work for only 15 hours per week. With the full value of their continuing welfare benefits included, these individuals will recei ve an effective wage rate of $16 per hour Phases out work requirements in the AFDC-UP program which can substantially reduce the caseload. Allocates $4,000 per year merely to cover the administrative overhead for each participant in the WORK program. Addin g in the cost of continuing welfare benefits and other expenditures, the total taxpayer cost of maintaining a typical household in the WORK program is likely to be around $20,000 per year Is not deficit neutral. The bill contains many costly expansions of welfare programs. Taking advantage of a loophole in the budget rules, much of this new spending does not appear in the standard budget projections. This allows the Administration to claim its plan is deficit neutral when it is not. While the bills time li mits and work requirements are a sham, even worse it does nothing about the two most important welfare reform issues: exploding welfare costs and the crisis of illegitimacy. Last year, federal and state governments spent over $320 billion on welfare; by 1 9 98 welfare costs will rise to over $500 billion costing on average nearly $5,000 for each taxpaying household. And today nearly one in three American children are born out of wedlock; President Clinton himself has warned the illegitimate birth rate will s o on rise to fifty percent or the soaring illegitimate birth rate. In fact, on both issues the Clinton plan will make the situation worse Why does the reality of the Clinton plan depart so much from the rhetoric sur rounding it? No doubt in large part it is because many top officials in the Administra tion and Congress have long opposed work requirements. It is also because the pro fessional social welfare organizations, which are so influential within the Administra Yet the Clinton reform will do nothing to deal with mushrooming welfare costs 3 PROVI tion and on Capitol Hill, want more spending on the services they provide rather than real reductions in the welfare caseload. But if Congress really is to end welfare as we know it, an d thereby improve the lives of those in the system as well as reducing the burden on taxpayers, it must fo cus clearly on several key goals. Lawmakers must change the incentives in the cur rent welfare system that encourage illegitimacy rather than curbin g it. They must channel money now going directly to unwed mothers instead to other ways to im prove the lives of affected children. Lawmakers must place a real cap in the growth of welfare spending. And they must introduce genuine work requirements, focusi n g on those recipients who are most employable-such as able-bodied males-not on single mothers with young children. Legislation to do these things has been intro duced (S. 2134, H.R. 4566) by Senator Lauch Faircloth (R-NC) and Representative Jim Talent (R- MO), but is opposed by the White House. The American people-the poor on welfare as well as the taxpayers who support them-have been promised an end to welfare many times before by congressional leaders and by Presidents. Each time the rhetoric was persuasi ve, and each time the result was more spending, more people on welfare, and higher rates of illegitimacy. The Clinton plan is merely the latest example. And like the others, it is a fraud IONS OF THE CLINTON BILL To understand why the Clinton welfare plan will not deliver on its rhetoric, it is im portant to know a number of key facts about the legislation FACT #I: The Clinton bill does not establish time limits on welfare. Although President Clinton has claimed his welfare reform bill will end cash assis tance after two years, this is untrue. Not one individual will have her cash aid terminated because she has received welfare benefits for over two years-or even for over twenty years. Instead a few individuals who have received AFDC for two years will be p laced in a new welfare program misnamed WORK. These individuals will participate in government make-work jobs closely resembling the CETA jobs created by Jimmy Carter in the late 1970s. Individuals in the WORK program will continue to be on the welfare ro lls and to receive welfare cash aid-but the cash aid will now be dubbed wages. Welfare recipients may remain in the WORK program indefinitely and may even be exempted from actual work assignments in the future and be recycled back into the main AFDC caselo ad. Welfare recipients (including those in the WORK program) may also receive Food Stamps, public housing aid, and medical aid indefinitely; the Clinton Administration opposes placing time limits or work requirements on these programs. FACT S2: Vlrtually no welfare reciplents will actually be required to work. When forced to acknowledge that the Clinton plan does not actually terminate welfare after two years of enrollment, defenders of the plan adopt a fallback posi tion: they claim that the plan does at least require those who have received wel 4fare for over two years to work in exchange for further benefits by participating in the WORK program. But this also is untrue. Under Clintons plan virtually none of the parents who have received AFDC for over t wo years will be required to work, even in a government make-work job with wages paid by the welfare sys tem. The bottom line is clear. Among the nearly 5 million families receiving AFDC at.any point in time almost half have received AFDC continuously for the last two years, and a far higher percentage have been enrolled for over two years when prior spells on the rolls are counted. Yet, under the Clinton plan, it turns out that only 7 percent of the adult AFDC caseload is required to work under the WORK p rogram and even this requirement will not occur until 1999. The reason only a tiny number of recipients will be required to work under the Clinton plan is because of the huge number of exemptions and limitations associ ated with the work obligation. The mo st glaring exemption is that parents born be fore 1972 will not be subject to any time limits or work requirements at all! This alone exempts nearly 80 percent of the current AFLX caseload from the work re quirement FACT #3: Most welfare recipients born a fter 1972 will not be required to work Many journalists and lawmakers, as well as other Americans, might assume that Clintons rule of requiring work after two years will at least be applied rigor ously to recipients born after 19 72. But even this is not t rue. Further exemptions apply to this group as well? Even five years from now, in 1999, only one-third of the AFDC parents who were born after 1972 and who have received AFDC for over two years would be required to work. The two years and then work rule i s purely cosmetic. It is subject to so many limitations that, if enacted, it would have virtually no effect on the actual operation of the welfare system 6 All citations to the Clinton bill refer to Messagefrom the President of the United States Transnritt ing A Draft of Proposed Legislation Entitled Work and Responsibility Act of 1994, House Document #103-273 (U.S. Government Printing Office: Washington, D.C June 21,1994 This document is hereafter referred to as the Clinton bill document. All cited page num bers will refer to the large page numbers at the top of each page in this document, which will differ from the page numbers on separate copies of the bill itself. The exemption for parents born before 1972 appears on page 2. In addition to the many layers of exemptions from work, the Clinton bill contains a simple override mechanism which dictates that the number of participants in the WORK program will be determined by the amount of federal funding devoted to WORK divided by a fixed per capita participan t amount. Since the WORK program is extraordinarily expensive to operate, this ensures that no more than a small fraction of AFDC recipients will ever be required to participate. See Clinton bill document pages 77 and 27 1 7 5 FACT #4: Under the Clinton bi l l, even the small number of welfare recipients required to work must do so for only a few hours per week The small number of AFDC recipients who are actually required to work under the Clinton plan will have to perform very little labor. According to the b ill re cipients who participate in the CETA-like WORK program will be required to work just 15 hours per week, mainly in public service positions created by local governments. States may require more than 15 hours of labor, but experience from the 1988 Fa m ily Support Act, as well as earlier welfare reforms, suggests strongly that most state governments will adhere to the minimum standard. Fif teen hours of work thus will be the norm in all but a few jurisdictions 8 FACT #5: WORK participants will be paid w ell above the minimum wage. The Clinton Administration has claimed that participants in the WORK pro gram will be paid the minimum wage. This is untrue. The plan actually states that all participants in the WORK program must be paid a wage plus an earnings sup plement, which together must be equal to at least the normal AFDC benefits re ceived by the family9 The typical family on AFDC currently receives about $97 per week in benefits. This typical recipient would thus receive a base rate of about $6.46 per hour for 15 hours of work under the WORK program, or almost 50 percent above the current minimum wage. However, nearly all participants in the WORK program also will receive Food Stamps and Medicaid. The value of this total compensation (cash, food, and medi cal care) amounts to about $240 per week for the typical AFDC family. With participants working for 15 hours per week, total compensation under the WORK program would average $16.00 per hour Even if the work standard were doubled to 30 hours per week, total compensation for the average participant would still equal $8.00 per hour In addition, WORK recip i ents will receive free day care. Finally, any state is free to provide any WORK participant with all or part of his or her normal AFDC benefits in addition to the wages paid by the WORK ~rogram Yet even these above calculations still understate the actual wage rates man dated by the Clinton plan because they do not include an additional hidden wage provision in the bill. This provision stipulates that all WORK participants must be paid an hourly wage at least equal to the wage rates of normal employees wit hin the employing organization performing similar ~0rk.l~ Under the plan, most 8 9 10 The fifteen hour requirement appears on page 250. Clinton bill document, p. 38. AFDC benefits for a single mother with two children in 1992 averaged $4,785 per year. Assuming a total increase of 5 percent for inflation over the last two years benefits would average about $97 per week in 1994. See Ways and Means Committee, Green Bmk 1993, p. 1240. Estimated value of AFDC, Food Stamps, and Medicaid for a family of three in 1994 based on data from the Ways and Means Committee, Green Book: 1993, pp. 1644 and 1240. Clinton bill document, pp. 250-25 1 11 12 6 WORK slots will be provided within municipal governments, many of which have unionized workforces So in these localiti es, the bill requires that welfare re cipients be paid union-scale wages. For example, if New York City wished to have a welfare recipient perform janitorial services in the public schools, the re cipient would have to be paid about $20 per hour. l4 FACT #5: Many WORK participants will join public sector unions. Section 103 of the Clinton bill states that participants employed under the WORK program shall be provided with working conditions and rights at the same level and to the same extent as the other e mployees of the same employer performing the same type of work and having a similar length of emp10yrnent.l This means that if the welfare recipient were placed in a unit of government which was unionized, the WORK participant would become part of the bar gain ing unit and would be represented by the union. If the municipality had a closed shop rule, the welfare recipient would become a union member and government funds would be used to pay the required union dues FACT #6: The bill limits useful work. The C linton plan makes it difficult for local governments to place WORK par ticipants in useful work by creating strong barriers against jurisdictions wishing to fill normal job openings within the government with WORK participants. When a normal government jo b becomes vacant, WORK participants must be given the lowest priority in filling that job. WORK participants can fill normal job vacan cies only after the government has attempted to fill the vacancy unsuccessfully through normal employment channels for at least 60 days. l6 This provision will tend to push welfare recipients into pointless, make-work positions reminiscent of CETA program in the 1970s, which provided jobs such as attending dance class and performing street theater. In the real world, it is a l so probable that a large number of the jobs provided under the WORK pro gram will consist of para-political activity such as voter registration drives as well as advocacy activities under the auspices of the Legal Services Corporation and other public int erest legal centers FACT +7: The minimal work requirements are improperly targeted. The work requirements in the Clinton bill are poorly targeted and inefficient. Proper work requirements should be targeted on those welfare recipients who have the least j ustification for being out of the labor force: single able bodied males, fathers in two-parent families, and single mothers with older children. But 13 Ibid p. 233 14 The beginning salary for a janitor in the New York public schools is $4O,OOO per year or roughly $20 per hour. Senior janitors receive up to $38 per hour. Charisse Jones, Pact Breaks Grip of New York School Custodians, me New York Times, May 5,1994, pp. AI and B8. Clinton bill document, p. 12. Clinton bill document, p. 224 15 16 7 Clintons plan focuses on the least employable welfare recipients: young single mothers with pre-school children. Clinton thus reverses the emphasis of current law by phasing out current work requirements on employable males while creat ing new (but modest) work re quirements for single mothers with young children. These are the 300,OOO-plus two-parent families in the Aid to Families with De pendent Children-Unemployed Parent (AFDC-UP) program. Under existing law one of the two parents in an AFDC-UP family will be required to work in commu nity service (workfare) in exchange for the familys welfare benefits. This work requirement will cover up to 75 percent of AFDC-UP families in the mid and late 1990s. Experience shows that fm work requirements on AFDC-UP families will cause an immediate drop in caseloads and large savings for the taxpayer. In 1983 Utah imposed a 40-hour-per-week work requirement on parents in their AFDC UP program. The result was an immediate 90 percent reduction in that caseload l7 Faced with having to perform serious work for their familys welfare benefits, most AFDC-UP fathers went out and obt ained real jobs in the private sector. Utahs AFDC-UP population has remained at ten percent of the pre-work fare levels since 19 83. Broadening and toughening the current nationwide work requirements on AFDC-UP families could save the taxpayers up to $15 billion in the next five years alone. But rather than toughening existing AFDC-UP work standards, the Clinton bill takes the unfathomable step of phasing them out by 1998 l9 The meager altema tive work requirements in the bill would focus on exactly the wr ong population young single mothers many with pre-school children. Because of the huge day care costs associated with trying to impose work requirements on this group, the result will be a great increase in welfare spending and barely a dent in the AFDC c aseloads. The inefficient nature of the Clinton work requirements perhaps should not come as a surprise. The Clinton Administration represents the interests of the pro fessional welfare industry, which is naturally threatened by any reform which will signi ficantly reduce welfare caseloads By contrast, welfare bureaucrats are de lighted by reforms which require them to provide an ever expanding array of Current law properly focuses workfare on the most employable AFDC families 17 18 19 See Robert Rector, We lfare Reform, Dependency Reduction, and Labor Market Entry, Journal of Labor Research, Summer 1993, pp. 284-297. The Faircloth-Talent welfare reform bill (S. 2134 and H.R. 4566) establishes work requirements modeled on the Utah plan on the entire nationwide AFDC-UP caseload starting in 1995. The Clinton Administration has sought to abolish the current AFDC-UP work requirements since coming into office in early 19 93. The original draft of the Clinton welfare bill circulated in late June of this year, when the President announced his plan, again sought to abolish the separate work requirements on AFDC-UP families. Stung by immediate criticism showing that this would result in a net reduction in the total number of welfare recipients who would be required t o work for the next five years, the Clinton Administration hurriedly revised its bill. In the present draft the existing AFDC-UP work requirements are retained, but only through 1998 they are then eliminated 8 services to their welfare clientele (such as l engthy negotiations of career goals and plenty of training and day care). Growing welfare caseloads mean full employ ment and plenty of career potential to welfare bureaucracies; shrinking caseloads mean the opposite. Therefore, despite pious rhetoric, mo s t welfare bureaucracies quietly but strenuously oppose any workfare measures which will quickly cut caseloads. Instead, they relentlessly promote investments which increase costs but are claimed to reap savings at some ever-receding point in the future I F act #8 The costs of Operating the work program are exorbitant Although the Clinton plan will require only a small percentage of welfare re cipients to work, and those only for a few hours per week the per recipient cost of operating the WORK program will be extremely high. The Clinton bill allo cates 4,000 per year for each participant in WORK just to cover the administra tive costs of the program (roughly 3,000 in federal funds and $1,000 in required state funding). It should be emphasized that this 4,000 per year cost is not for training or edu cation. It simply represents the extra cost of supervising an individual in a WORK slot. Day care and wage subsidies will add even further, large costs. Although the Clinton Administration has not provided clear f igures, it is likely that maintaining a single individual in the WORK program will involve some $8,000 in extra ex penses above the level of conventional welfare benefits. In the typical state, the total taxpayer cost for a family of three participating in the WORK program for 15 hours per week is likely to be around $20,000 per year a figure covering all wage subsidies, food stamps, medicaid, administrative costs and day care. Many participating families would receive even further bene fits through other welfare programs such as public housing, WIC, school lunch and energy aid. According to the rhetoric of the Clinton Administration, such a family is said to be off welfare I FACT #9 The Clinton bill Is not deficit neutral. In addition to the high cost of o perating the WORK program, the Clinton bill calls for a wide variety of other increases in welfare spending. It provides new funding for education, training, daycare, and administration of the JOBSzo pro gram (for individuals who have been on AFDC for les s than two years Other spending items include increases in welfare benefits, expansions in welfare eligi bility, and daycare subsidies for single mothers who have found employment and left AFDC. The Clinton Administration nevertheless claims its bill is de ficit neutral. Offi cials say the new spending will not increase the deficit because it is paid for by spending cuts in other government program. This claim is false. What the Ad 20 JOBS is the acronym for the Job Opportunities and Basic Skills program, c r eated by the 1988 Family Support Act. This is not a jobs program, despite the acronym, but instead mainly requires welfare recipients to look for employment through job search programs 9 ministration does is take advantage of a loophole in federal budget l aw which re quires that the financial impact of proposed legislation be estimated only for five years into the future. It turns out that much of the increased welfare spending in the Clinton plan is scheduled to occur in the sixth year and beyond-conven i e ntly outside the period for which costs must be calculated. Clintons proposed spending cuts, if enacted by Congress, may be sufficient to pay for the proposed spending increases over the next five years (from 1995 through 1999 But the plan does not even a ttempt to pay for the extraspending increases mandated to oc cur after 19 99. These future welfare spending increases will be paid for either by higher deficits, higher taxes, or both Fact 10 The Clinton plan makes no attempt to control the growth of welfare spending The federal government currently runs over 70 different welfa r e programs pro viding cash, food, housing, medical care, training, and social services to low-in come Americans. Federal and state welfare spending combined amounted to over 320 billion in 1993F1 Even without any changes in law, welfare spending will rise to over $500 bil lion per annum by 19 98. In that year, the cost of welfare will equal nearly $5,000 for each tax-paying household. The U.S. then will spend two dollars on welfare for each dollar spent on national defense. Clintons response to this spending explosion is to call for even more spending. He attempts to defend his proposed spending increases by claiming that welfare increases are an investment which will yield long-run savings. This is a time-worn ploy. hponents of nearly every welfare expan sion in the last 30 years have justi fied new spending as an investment which will ultimately save money. Of course it never does. In launching the War on Poverty, for instance, Lyndon Johnson pro claimed that the war would be an investment [which] will r e turn its cost many fold to our entire economy. Since Johnsons proclamation, annual welfare spend ing has increased nine-fold, after adjusting for inflation. As with past reforms Clintons plan can be expected to increase welfare spending and caseloads I Fa ct #l1: The Clinton bill Ignores the lllegltimacy Crisis. The most serious fault in the Clinton reform plan is that it avoids the central problem of welfare almost completely: Americas soaring illegitimate birth rate. In addition to all its other deficien cies, Clintons proposal focuses almost exclu sively on the superficial symptom of welfare dependence and ignores the underly ing cause of this dependence-the sky-rocketing number of out-of-wedlock births. Last year, over one million children were born out of wedlock. Nearly one third of all American children are now born to single women, up from around 8 percent when Lyndon Johnson launched the War on Poverty in 19 65. The real 21 This figure covers means-tested programs for low-income individuals and comm unities. General spending programs for the middle class, such as Social Security and Medicare, are not included 10goal of welfare reform should not be to put thousands of single mothers in govern ment make-work jobs, while their children are raised in gov ernment day care cen ters. It must instead be to reduce dramatically the number of children born out of wedlock. Clintons rhetoric on the question of illegitimacy has been quite good. The President correctly states that illegitimacy is a key cause of crime in the United States. He also points out correctly that welfare plays a major role in promoting out-of-wedlock births. And in his State of the Union message this year, Clinton warned that unless something dramatic is done, half of all American children w ill soon be born out of wedlock. However, despite his laudable rhetoric, the President proposes no serious poli cies to combat the illegitimacy crisis. In fact, his reform plan would go in the op posite direction, establishing pilot programs to provide new cash welfare entitle ments exclusively for unmarried mothers Even worse, by claiming to provide fundamental reform while changing virtually nothing, the Clinton plan, if en acted, will substantially relieve public pressure for change. Thus, it will effec tively shut the door on desperately needed real reforms for the next five or ten years Fact #12: On teen abstinence, the Clinton Administration uses conserva In an attempt to camouflage his Administrations policy vacuum on the crisis of illegitimacy, the P resident has included some small sex education programs in his bill. In describing this feature, like other provisions, the President uses bold, con servative rhetoric. In advertising the proposed education programs, Administra tion materials proclaim tlv e rhetorlc to camouflage liberal policies W]e need to send a strong signal that it is essential for young people to delay sexual activity, as well as having children, until they are ready to accept the responsibilities and consequences of these actions. It is critical that we help all youth understand the rewards of deferring childbearing until they are married.23 But once again, conservative rhetoric conceals a contradictory liberal policy. In establishing the proposed education programs, the bill itself n e ver mentions mar riage, abstinence, or moral education to delay sexual activity. This should perhaps come as no surprise, since Health and Human Services Secretary Donna Shalala has spent most of the last year seeking to abolish the federal governments on l y abstinence education program. In its place, the Clinton bill will promote a stock set of tired policy failures: lavish condom distribution, self-confidence pro grams values clarification, life-skills training, and decision-making skills train- ing A 22 23 24 Clinton bill document, pp. 496-504. Work and Responsibility Act of 1994 a Detailed Summary, p. 32. Clinton bill document, pp. 365,351 11 I If the Clinton Administration proposed a broad effort to promote moral-based abstinence education this could b e expected to cause a modest reduction in ille gitimacy. Such programs have a demonstrated track record Example: Students who participated in the Title XX-sponsored program Sex Re spect: The Option of True Sexual Freedom had considerably lower preg- 25 na n cy rates one and two years after participation than the comparison group Example: San Marcos Junior High School, San Marcos, California, has also used an abstinence-only program. The year before it was implemented 147 girls were reported pregnant. Two yea r s after its initial implementation only 20 girls became pregnant. 26 However, HHS Secretary Donna Shalala is vehement in her opposition to such programs. Commenting on her elimination of Title XX funds she said: absti nence-only messages rovide no hope of protection at all against the risks of preg nancy and disease. Thus, despite its conservative rhetoric, Clintons bill does not proposed to ex pand abstinence education. Instead, the proposed programs will be closely mod eled on affect-based drug education programs. But, according to one of the princi pal originators of the techniques used in these programs, psychologist W.R. Coul son, such programs, featuring life-skills training, self-esteem building, and deci sion-makin skills, have been shown scientifi c ally to increase drug, alcohol, and tobacco use. Similar counter-productive results can be expected from Clintons education proposals 27p 38 TRUE REFORM Even the simplest analysis of the White House proposal shows that Clintons time limits and work requir e ments are a sham. Moreover, the Presidents re forms do not seriously address the more important issues of reducing illegitimacy and controlling welfare costs. True and comprehensive welfare reform is needed 25 26 27 28 Project Respect, Final Report; Once of Adolescent Pregnancy Programs. Performance Summary Report 0816,Title XX, 1985-1990 Dinah Richard, Has Sex Education Failed Our Teenagers; a Research Report Focus on the Family, Pamona California, 1990, pp. 56-60. Cheryl Wetzstein, Teen Abstinence funding deleted in Clinton Budget, The Washington Times, May 23 W.R. Coulson, Questianity: Why the War on Drugs Drags, Research Council on Ethno-Psychology, Box 134 Comptche, California 954 27. Dr. Coulson was a close associate of Dr. Carl Rogers and one of the originators of non-directive therapy and values clarification during the late 1960s and early 1970s. Coulsons techniques serve as the basis for most programs featuring decision-making and life skills training in the public schools. See also, William Kilpatrick, Why Johnny Cant Tell Rightfrom Wrong (New York: Simon and Schuster 1993 1994, p. A-11 12 0 It. reduces. illegitimacy in the future. by.eliminating those welfare benefits which s ubsidize and promote out-of-wedlock births?9 It provides an improved quality of life for those children who are born out of wedlock in the future. It does so by channeling those welfare funds which, under the current system, go directly to unwed mothers, i nto alterna tive and superior forms of care, such as adoption services and closely super vised group homes for young unmarried women and their children It controls the size of the welfare state by putting a cap on the future growth of aggregate federal we l fare spending 0 It establishes serious but sensible work requirements for welfare recipi ents. It does so by focusing those requirements on the most employable wel fare recipients first (such as single able-bodied males and fathers in two par ents familie s), rather than on single mothers with infant children. The authors of this legislation realize that the welfare system is waging a war of annihilation against the American family. In that war, welfare is winning and the family is losing. Welfare pays low- income Americans to adopt self-defeating courses of action. By encouraging young women to have children out of wedlock, welfare ru ins the lives of the women and their children. The disintegration of the family pro moted by welfare is, in turn, a major ca u se of most of Americas other social prob lems including crime, poverty, school failure, and drug and alcohol abuse l CONCLUSION Candidate Bill Clinton vigorously promoted his pledge to end welfare through out the presidential election campaign. It is unli k ely that voters listening to this thought that ending welfare meant what President Clinton now proposes: requiring just 7 percent of the AFDC caseload to work in public sector make-work jobs by the end of this century 29 One year after enactment, the bill would eliminate AFDC, Food Stamps, and Housing aid to women under age 21 who have children out of wedlock. Since the bill is intended to affezt the future illegitimate birth rate, the cut-off would be prospective; it would not affect women who had childre n out-of wedlock before the cut-off date. All savings from the elimination of direct welfare payments to unmarried women would be directed to alternative methods of caring for illegitimate children, including adoption and closely supervised group homes for unmarried mothers and their children. See Patrick F. Fagan, Rising Illegitimacy: Americas Social Catastrophe, Heritage Foundation FYI No. 19. June 29,1994 30 13 Administration officials argue that reform must be incremental and that changes take time. Ho wever, the true rationale of the Clinton plan can be better understood by examining the history and politics of the issue of work and welfare. The liberals who have dominated the U.S. Congress have adamantly opposed work requirements for welfare recipient s for nearly a quarter century.31 any of the liberal profession als who staff key posts in the Clinton Administration share this view.32 But since over 85 percent of the public now favor making welfare recipients work, most liber als no longer publicly opp o se work requirements. Instead, they have adopted Fabian tactics, seeking quietly to minimize and delay work requirements as long as possible while publicly claiming to support them. While public disaffection for welfare is as suaged through sham work requ irements, liberals quietly move to expand welfare programs This strategy of delay and obfuscation packaged as bold reform began with the Family Support Act of 1988 and will continue for the foreseeable future. Unlike Bill Clinton, Senator Faircloth and Congressman Talent realize that the War on Poverty has failed. The Faircloth-Talent bill delivers what Clinton promised if not an end to welfare, at least the beginning of fundamental change. Robert Rector I Senior Policy Analyst 3 1 Senator Russell Long fir st proposed the idea of workfare (requiring some AFDC recipients to work for benefits in the early 1970s, but his ideas were blocked by liberals in Congress. During the late 1970s. the Carter Administration actually declared workfare illegal and expelled t he state of Utah from the AFDC program for a number of years for attempting to make some recipients work for benefits. In 1981, President Reagan finally succeeded in making workfare legal, providing states with the option to operate very limited workfare p rograms. However, Reagans repeated efforts to require even a small fraction of the AFDC caseload to actually participate in job search or workfare were rebuffed by Congress on a yearly basis during the mid-1980s. During the 1988 reforms, efforts to requir e even a small percentage of AFDC recipients to participate in job search or to work for benefits again were opposed by liberals led by Senator Moynihan. Conservatives led by then-Representative Hank Brown (R-CO) and Senator Bill Armstrong (R-CO) succeeded in establishing, over liberal opposition, actual work requirements for some AFDC-UP recipients to take effect in 19 94. Thus due to persistent liberal opposition, nearly a quarter century passed between Russell Longs initial proposals for workfare and th e time when the federal government actually required the first AFDC recipient to work for benefits. See Lawrence M. Mead, Beyond Entitlement: The Social Obligations of Citizenship (New York The Free Press, 1986). For example, HHS Secretary Shalala is a former member of the board of the Childrens Defense Fund, an organization which historically has taken the lead in opposing even token work requirements for welfare recipients 32 I 14
