Now Bill Clinton–having attacked the deficit, made a strong start on health-care reform and earned a clear-cut victory on NAFTA–seems ready to tackle the welfare mess. Mindful that welfare reform played well during the 1992 campaign, and hopeful of reinforcing Clinton’s image as a tough-minded New Democrat, White House staffers see big political benefits in the issue. Clinton’s mantra–we may hear it again in the State of the Union address next month–is a promise to “end welfare as we know it.”
What he hasn’t said is just bow he intends to do it. But last week, in NEWSWEEK’S interviews with key administration officials and a draft plan leaked to The New York Times, the outlines began to come clear. The core notion is a two-year limit on welfare benefits–basically an attempt to end welfare as a way of life and break what many experts see as an intergenerational cycle of welfare dependency “‘Two years and out’ always looked good in the campaign as a totem of Bill Clinton being a New Democrat,” one White House aide says. “Now that we’re here, we have to be willing to say that nobody is automatically entitled to the safety net.”
But the welfare debate, with its inescapable undertones of race, class and social Darwinism, is arguably the stickiest policy dilemma facing government today–a political and ideological quagmire and one that has defied every president since LBJ. The federal government spends more than $50 billion a year on various forms of welfare support, including food stamps and social-security benefits for the disabled. The reform debate focuses primarily on AFDC (Aid to Families with Dependent Children), a joint state-federal program that currently supports about 5 million households and costs $23 billion a year. AFDC is specifically aimed at women and children, and most recipients collect benefits for two years or less. The reformers’ real target is the minority of AFDC families–estimates range from 1.5 million to 2 millionhouseholds–who stay on welfare for eight years or more. As a group, these welfare mothers represent the poorest of the poor–the least educated and least employable women in America. Many are inner-city blacks.
Clinton and his advisers are now engaged in an excruciating internal debate over just how to treat these long-term AFDC recipients. A 32-member task force is hammering out the options, and not always agreeing: the debate involves large questions of cost, feasibility and–crucially–just which families would lose their benefits and what would happen if they did. The Department of Health and Human Services has granted waivers to more than 15 states to allow them to tinker with AFDC. One closely watched experiment is in Wisconsin, where AFDC recipients in two counties with low unemployment will lose their benefits after two years on the dole. But “we’re not about cutting people off and putting them in the streets,” says David Ellwood, an assistant secretary at HHS.
According to aides, Clinton himself says Murray has the “right diagnosis” but the wrong prescription"–which is a typically Clintonesque straddle on an issue that allows no real middle ground. In an interview with NEWSWEEK last week, the president also said he was “prepared to support cutting off benefits if people are able to work without hurting their children, and if there’s a job available.” But, he added, “that’s a Big If.”
It is actually two Big Its, and the president’s attempt to qualify his position probably reflects the administration’s urge to enjoy the political benefits of appearing to be tough while avoiding the pitfalls of seeming to be mean. In fact, the welfare debate is full of traps. Here are the main ones:
Paradoxically, welfare reform won’t save money. Administration officials, who are trying to scrounge the money from existing federal programs, estimate that it will cost $12 billion to $15 billion more over five years, and outside experts say reform may create a new class of entitlement programs.
Take day care, for example. You can’t force welfare mothers to take full-time jobs if there is no one to care for their children. That means government will probably have to subsidize daycare services for low-income women. The potential “market” for this subsidy is very large: nationwide, there are 5.2 million preschool children below the poverty line. Multiply that by the average cost of day care ($3,000 per child per year, conservatively) and you get $15.6 billion a year in additional costs. True, no one believes that all 5.2 million kids will actually need day care. But some experts think that the administration is grossly underestimating the potential demand.
Administration planners want to turn AFDC into transitional financial support for welfare mothers who will eventually get jobs in the private sector. That means setting up subsidized job-training programs to prepare unskilled women for the world of work. Fine, but job training costs money, and some experts, like Douglas Besharov of the American Enterprise Institute, think such programs may themselves become a form of welfare magnet.
The real question is, where are the jobs? Private-sector jobs for unskilled workers are hard to find in most big cities. Should government once again become the employer of last resort, as it did during the Depression? Community-service programs like CETA, the Carter-era jobs initiative, have a lousy reputation in Washington. Overhead is high, and those who actually get the jobs rarely move on to careers in the private sector. Public-employee unions, fearing competition from lower-paid workers, bitterly oppose such programs. So does organized labor in general: in a tight economy, there is good reason to believe that subsidized employment for former welfare recipients will hurt the working poor. If the “real” jobs aren’t there, reform could turn into a revolving door: two years of job training followed by two years of community-service work, then back on welfare to begin the cycle all over again.
Administration officials are still divided over just how many long-term AFDC recipients should be exempted from the two-years-and-out requirement. Women with infant children would probably be allowed to stay on welfare, and there is much debate over just how old the kids should be before the mother is required to sign up for job training or a job. It could be when the youngest child is 3 years old, or 6–a huge difference. And what about women with learning disabilities, emotional disorders or drug habits? These women, too, may be exempted–and when all the exemptions are added up, some experts think, the number of families that would actually lose benefits could be as low as 300,000.
So Clinton’s version of welfare reform will probably be far less sweeping than the “end of welfare as we know it.” But with competition from the GOP, which is pushing its own plan, Clinton and the Democrats will probably do something to restrict AFDC within the next year or two–possibly after Congress deals with health reform. The nation will rewrite its social policy to liberate at least some of the poor from the scourge of welfare dependency. And all the rest of us–the millions of middle-class Americans who rely on massive subsidies like the mortgage-interest deduction–can say we admire them for their pluck. The States’ Experiment
More than 15 states have already begun experiments in welfare reform. Some of the more innovative elements include:
Provides no extra aid for mothers who have children while on welfare, offering instead more generous benefits and job training for those who marry or go to work.
Docks teenage mothers $62 of their monthly welfare check if they don’t attend school regularly, but pays them $62 extra when they do. Several states have followed this example.
Will impose, beginning in January, a more draconian version of the Clinton task-force proposal: a two-year limit on cash assistance to indigent families in two rural counties.
Forces unemployed noncustodial parents (usually fathers) of AFDC children to enter the state JOBS program and help out with child support.
