Oh, yeah? While you were at the beach, in the middle of an election year that is supposed to paralyze all policy, Something Happened last week. In fact, several somethings happened, in what now must be called the Do Something (Do Anything!) Congress. The hike in the minimum wage from $4.25 to $5.15 an hour, the passage of the Kennedy-Kassebaum health bill – which makes all health insurance portable from job to job and curtails exclusions based on pre-existing medical conditions – and ““The Personal Responsibility and Work Opportunity Act’’ (welfare reform) each directly changes the lives of more than 10 million Americans. The indirect effects – for all low-wage workers and their bosses, for anyone anxious about health, for taxpayers asked to stitch the new safety net – extend into most households in America.
The most far-reaching change is in welfare, where the 60-year-old New Deal system established by Franklin Roosevelt to protect poor mothers and their children was simply abolished. On the last day of July 1996, in a decision that will reverberate through his presidency, Bill Clinton reluctantly agreed to sign a Republican bill that actually changes the social contract between the government and the poor. As Clinton conceded, nobody knows what will happen now – ““we all need a certain level of humility today.’’ But we do know that the nation is embarking on a vast domestic social experiment. The new law is not conservative, it’s radical. It throws the dice on the future without knowing the consequences.
The welfare issue cuts deep, to bedrock notions of compassion, work, race and human nature. Should we blow up social policy, like some village in Vietnam, in order to save it? Should we allow some of the poor to get poorer so that others may pull themselves out of dependency? Should impoverished children become public pawns – of liberals who use them to defend a rotten system, of conservatives who blithely assume they will get by on even less?
The passionate rhetoric on both sides may or may not be justified. Will the bill throw 1.1 million children into poverty, as the Urban Institute predicts in a much-quoted study? Will crime go up? We simply don’t know. But let’s remember that while the legislation ends the federal welfare guarantee, in dollar terms it cuts the rate of increase in welfare, not the total amount itself. And it’s not as if the money provided by Washington has so far correlated with success. The most profound change in social policy in a generation was set in motion not only by Clinton’s 1992 campaign promise to ““end welfare as we know it’’ but by welfare’s unambiguous failure. The true origins of the legislation lay not with Gingrichite conservatives but with 1960s-style liberals, who until recently routinely voted against even the most modest ““workfare’’ requirements. By refusing to move earlier toward more work and responsibility, they reaped the whirlwind.
In political terms, Clinton’s decision, the focus of a fierce internal debate at the White House, culminates an 18-month march to the political center in which he has systematically co-opted core GOP issues like a balanced budget and crime. His centrist advisers believe the decision deals a crushing blow to the Dole campaign, which had hoped a third Clinton veto of welfare reform would finally ignite the GOP cause. Dick Morris, Clinton’s main political adviser, was not in the Cabinet Room during last Wednesday’s dramatic meeting, but he kept tabs by phone. Later that day he exulted to a friend: ““That’s it. The election is over.''
Morris is famous for his melodramatics, but his instincts may be right. On the surface, the decision was explosive: the chair of the Democratic Party, Sen. Chris Dodd, called his president’s action ““unconscionable’’; the party’s elder statesman on domestic policy, Sen. Daniel Patrick Moynihan, whose views on welfare were once deemed conservative, said that ““the premise of this legislation is that the behavior of certain adults can be changed by making the lives of their children as wretched as possible.’’ He went on to accuse White House staffers of ““lying’’ about their principles. But disgruntled Democrats have nowhere to go. The president has performed another crafty (or craven) inoculation – on both himself and the GOP Congress. Because welfare reform is so popular with voters, Clinton is now shielded from potent attacks that he reneged on a central 1992 campaign promise. At the same time, because Clinton went along with an essentially Republican plan, GOP members of Congress are now shielded from the charge that they are heartless extremists. The policy status quo has been upended; the political status quo – Democratic president, Republican Congress – has been solidified.
The irony for Clinton is that while he kept his welfare pledge literally, he violated its spirit. After all, his original plan called for adding money – more than $10 billion – to programs that move people from welfare to work. The bill he will sign not only ends the federal entitlement, it subtracts money – $56 billion over six years – and disregards Clinton’s 1992 notion that job training is the route out of poverty. Under the plan, every state will get a lump sum, with the cuts coming mostly through restricting eligibility for legal immigrants and from food-stamp reductions. The cuts in welfare for legal immigrants are opposed not only by Clinton but by many GOP governors who must fill the gap. In California, that amounts to a shortfall of nearly $20 billion over six years, 30 percent of the national total. New York’s state constitution, which commits itself to protecting ““the needy,’’ appears to prevent throwing immigrants off the rolls. Some New York officials are even prepared to argue that the bill is an ““unfunded mandate,’’ exactly the kind of burden on states that Congress outlawed last year.
But the larger handoff of responsibility to the states is a done deal. They now have almost total flexibility. The headline-grabbing work requirements are in fact more like guidelines for the states. They are as follows: The head of most families on welfare would have to find work within two years – or face the loss of benefits. After two years, able-bodied adults unable to find private-sector work might be offered community-service jobs, if states and localities want to pay for them. While Clinton insisted on some child-care support and the continuation of federally funded health care for the poor (Medicaid), the bill provides no money for public jobs.
The most striking provisions are that no American can receive more than five years’ worth of welfare in a lifetime, that single mothers on welfare who refuse to cooperate in identifying the fathers of their children could lose at least 25 percent of their benefits and that unmarried teen mothers are eligible for benefits only if they stay at home and in school. Loopholes allow the states to make these requirements tougher or more lenient, but the steely architecture is now in place. States that fail to move 20 percent of their caseloads from welfare to work by the end of 1997 – and 50 percent by 2002 – would face cutbacks in their block grants, further squeezing the poor.
The experience of Wisconsin, which has cut its caseload by 44 percent since 1987, shows that the targets can be met. But as GOP Gov. Tommy Thompson notes, Wisconsin’s secret is to spend more, not less, on the poor, investing millions in job training, health benefits, child care and other support. He says it usually takes 18 months of the state’s patience – and spending – to prepare a person to leave the dole for good. After that, the savings begin. ““You can’t just pass a bill and assume you’ll save money the next day,’’ Thompson says. ““How can you ask a welfare mom to get a job if she has to give up the medical insurance she gets on welfare, if she has no training or bus ticket to get there, if she can’t find a safe place to leave her children? But I don’t think anybody’s listening.''
Other Republicans like Massachusetts Gov. William Weld and Michigan Gov. John Engler reject Thompson’s premise. They argue that welfare reform can actually save money immediately through better management and tighter eligibility (or none at all) for ““general relief’’ recipients like single, able-bodied men. But many states have already curtailed or ended such benefits. That leaves them the choice of asking taxpayers to fund short-term but expensive welfare-to-work programs like Wisconsin’s – or pushing people into the street.
Which will happen (especially if a recession hits)? For all of our social scientists toiling away on their studies, we have no idea how states, taxpayers and welfare recipients themselves will respond to this chilly, chaotic but ultimately optimistic experiment. All we know is that ““momentous’’ and ““historic’’ are not platitudinous exaggerations but straightforward descriptions of a whole new chapter in the domestic life of the United States.
Welfare reform is a reality and 13 million recipients-and the states-are bracing for cuts. The plan would save the federal government $55 billion in the next six years, $27 billion in food stamps alone.
STATE HOUSEHOLDS AVG. CUT PER ON FOOD STAMPS HOUSEHOLD California 1,178,423 $530 New York 984,579 $624 Florida 591,268 $403 Pennsylvania 496,431 $351 Illinois 466,856 $344 Michigan 414,984 $372 Washington 204,316 $557 Utah 41,233 $346 North Dakota 16,322 $270
Sources: Health and Human Services Department, Center on Budget and Policy Priorities
