111. "THE REFORM AGENDA. Welfare: The Massachusetts Model," The American Enterprise, Vol. 5, No. 4, (July/August 1994), p. 16.


As the nation grapples with the welfare problem, a number of states have sought and received waivers from the federal government to launch welfare policy experiments of their own. Massachusetts Governor William Weld has proposed one of the most sweeping plans. If federal authorities allow Massachusetts to proceed, the role effects in other states could be significant.

The American Enterprise Institute invited Governor Weld to discuss his plan. Four experts reacted to it. Amitai Etzioni, University Professor at George Washington University, is editor of The Responsive Community, a journal about community issues. Robert Lerman, chairman of the Economics Department at American University, is a coeditor of Young Unwed Fathers: Changing Roles and Emerging Policies. Charles Murray, a Bradley Fellow at AEI, is the author of Losing Ground, a book that ignited the welfare debate 10 years ago. Mickey Kaus, author of The End of Equality and a senior editor of The New Republic, has been charting the course of the national debate on welfare reform in the pages of the magazine.

GOVERNOR WELD: Regardless of our prescriptions for reform, most Americans agree that welfare in this country has devolved from a well-intentioned program aimed at families down on their luck to a massive system that often fosters long-term dependency, illegitimacy, and other social ills.

I was struck by a study that came out last August, by M. Anne Hill and June O'Neill at the City University of New York. It indicated that girls who grow up in welfare families are three times as likely as the general population to drop out of school, twice as likely to become addicted to drugs, two-and-a-half times as likely to end up on welfare themselves, and four-and-a-half times as likely to have a child out of wedlock. The picture for boys raised in welfare families is not much better. They are twice as likely to be unemployed, twice as likely to drop out of high school, and two-and-a-half times as likely to end up in prison.

When our $23 billion federal Aid to Families with Dependent Children (AFDC) program is serving 15 million people with such depressing results, it is clear that our present welfare system is neither compassionate nor effective.

The case for welfare reform in Massachusetts has become all the clearer in recent months because of a tragic child abuse case that revealed four generations of a single family dependent on welfare, including 14 children of the matriarch who came to Massachusetts in 1968. A Boston Globe report on the family found several sons among these 14 children on disability for anxiety. The 100 family members are estimated to be receiving $1 million every year from the taxpayers of Massachusetts. One of the sisters in the family was asked what she would say to taxpayers who resented paying a million dollars a year for one family. She said, "Tell them to keep paying." This was not a good advertisement.

This family is, of course, by no means the norm. As no less an authority than Mickey Kaus has said, "The real scandal about welfare is not what goes on fraudulently, it is what goes on legally under the current program."

THE MASSACHUSETTS PROPOSAL

The premise underlying the Massachusetts plan for reform is that it is possible to overhaul welfare without any additional spending. In Massachusetts, we spend more than $1.6 billion in state and federal funds for AFDC recipients through income maintenance and medical services and nutritional assistance every year. Those funds reach about 203,000 children and 111,000 adults, out of a state population of 6 million. This includes 20 percent of all children in Massachusetts under the age of five. That's a lot of people.

We do not think welfare recipients need millions of dollars worth of more government hand-holding. Many of these families need short-term support, which we are glad to provide, and some of them, candidly, need a little encouragement and even a nudge into a productive working life.

The other point to keep in mind is that any reform effort ought not to put the working poor--families who are struggling valiantly to stay off welfare in the first place--at a disadvantage by subsidizing only the jobs of welfare recipients.

Given what we know about life on welfare, we feel we have to break the cycle that perpetuates it. What we have heard repeatedly from mothers stuck on welfare is that they would work if only they had health care and day care for their children. So we introduced legislation earlier this year--and I have sought the necessary federal waivers--to replace traditional cash grants entirely for able-bodied welfare recipients with day care and health care to support work.

Some protectors of the status quo--and, frankly, it amazes me that there are any protectors of the status quo left in the welfare area, but there are--say the problem with what we are doing is that we are focusing on cutting welfare and not focusing on cutting poverty. That argument ignores the fact that people will never lift themselves out of poverty if they are stuck on welfare. So instead of cash grants that in the long run keep people poor and unemployed, we want to provide opportunity. And the benefits that we are offering enable able-bodied recipients to take entry-level jobs, which give them a critical start up the job ladder.

Under our proposal, a family that currently receives, say, $9,900 in welfare benefits would see its standard of living increase by 24 percent if the head of the household took a minimum-wage, entry-level job, and got additional help from food stamps and daycare vouchers, health care (Medicaid), and the earned income tax credit. When $240 in monthly child support was added to the equation--and under our proposal the family would keep all of the child support money--the standard of living for such a family would increase by 44 percent.

The beauty of the plan is that, by definition, it can be funded by existing resources. We propose to take about $800 million that is now devoted to cash grants and other related programs and steer that money toward our day-care support. Health care would continue to be covered under existing Medicaid expenditures. The plan has no new taxes and no new spending. We project a substantial savings of about $70 million annually. We propose to use $30 million of that savings to create 6,500 subsidized daycare slots for low-income parents who are already working, and who want to keep working and avoid having to rely on welfare at all.

Only able-bodied AFDC recipients would be affected by the plan. A family with a disabled member, an individual with a disability, or a person caring for someone with a disability would not be affected. A teen parent in high school would not be affected. Women in the third trimester of a pregnancy and women who have recently given birth would still receive traditional cash assistance.

We project that about 50 percent of our caseload will continue to receive cash grants. Under our plan, new applicants will get cash grants during the first 60 days on welfare while they conduct job searches. We have a safety net in place for recipients who cannot find work. We will subsidize minimum-wage community service jobs for them until they find paid employment. They will be expected to perform community service for 25 hours a week and conduct a job search for another 15 hours each week. In the meantime, they will receive day care for their children.

It is easy to pooh-pooh community service. It should not, however, be underestimated. It can provide job skills and references and self-esteem.

The most important thing to me about our plan is that it will alter the daily physical routine of the recipients. Many AFDC mothers do not get out of the house. As a result of their isolation, they develop major self-esteem problems, and it grows harder and harder for them to become contributing members of society. That, as much as anything else, is the cycle that we want to break.

The point of the plan is to get recipients into work not six months down the road, not two years down the road, but right away. I like job training as well as the next person, but I am convinced that the best preparation for work is not thinking about work, or talking about work, or studying about work, or even learning about work--the best preparation is work.

The so-called Draconian aspect of our plan is that able-bodied recipients who refuse to do any work or to do a community service job in a school or a hospital or a food pantry or a shelter or a private day-care center will lose cash assistance. They will still receive food stamps and housing and health care for their children, but their cash grant will be gone.

Some opponents of our plan have claimed that jobs for the welfare recipients simply do not exist. And the truth is that many welfare recipients lack a high school diploma or job experience or both. But let's face some facts. There are millions of immigrants in this country who do not speak a word of English yet manage to support themselves through work. Work is better than welfare, and the road away from welfare begins with a job, any job. So it is hard for me to see how we are unduly penalizing single parents on welfare by asking them to apply that notion.

Low-wage entry-level jobs are available. Welfare recipients are not going to be competing for jobs with laid-off computer technicians and defense workers. There was an article in the Boston Globe a couple of months ago about the so-called outer class. It said that most of the single parents on welfare acknowledged that they could find low-paying service-sector jobs, but they don't take them because they cannot afford the child care. Our plan, by definition, takes care of child care and health care.

Also, by dramatically ratcheting up day care, our plan will create a demand for many new day-care providers. Those are jobs that welfare recipients certainly could hold themselves. We believe that under our proposal, about 55,000 welfare recipients--slightly under half the caseload in Massachusetts--will no longer be receiving traditional cash grants by the fall of 1995. We plan a phased-in approach.

Those 55,000 who will no longer receive traditional cash grants include the following: 7,000 individuals who will be receiving enough child support to lift them out of dependency; 8,000 individuals who will find jobs through the Mass Jobs program, enabling them to leave the welfare rolls; 7,000 families already performing part-time work who will now be able to expand their work hours; 5,000 individuals who will find work through entry-level jobs listed with the Department of Employment and Training and no longer qualify for cash grants; 5,000 individuals who will find entry-level jobs on their own and move off the rolls; 6,000 people who will take day-care jobs created by the increased demand for day care included in the program; 5,300 families who are deemed eligible to receive a onetime job search payment that could keep them off the welfare rolls; and 4,900 recipients who will not have found paying work, but who will receive assistance in return for community service. Beyond this, we expect that 7,000 able-bodied individuals who qualified for cash grants in the past will simply not participate in any of these other programs and drop off the rolls.

Our plan may also have the advantage of ending the inducements for people to come into welfare in the first place, and it does go a long way toward breaking the cycle of intergenerational dependency.

DEADBEAT DADS

Those of us in government have to be as aggressive as possible in ensuring that absent parents support their children financially and emotionally. With that in mind, in Massachusetts we have turned our state Department of Revenue, which is in charge of child support collection, into both a fox hound and a pit bull when it comes to chasing deadbeat dads. Every few months, we circulate posters in Massachusetts of the 10 Most Wanted Deadbeat Dads. Actually, we have had one mother. These posters feature pictures of absent parents who have the capacity to have a well-paying job and owe tens of thousands of dollars in support. We have apprehended 90 percent of those pictured on these posters, including a former pitcher for the Boston Red Sox. We've seen overall collections go up by 17 percent. I'm convinced that many, many parents who are a little behind on their child support are now paying up because they don't want to be the next poster boys for deadbeat dads.

I also signed into law this January a Comprehensive Child Support Enforcement Act that makes willful nonpayment of child support a felony, punishable by five years in prison. The same law gets hospitals to be more active in determining paternity on birth certificates and recording the father's Social Security number.

In addition, under this new law our revenue department is authorized to tap into records that are held by labor unions, by utilities, and by licensing authorities, so we can cross-reference everything to track down absent parents in the underground economy. All told, we expect these measures to bring in an extra $60 million a year in child support for single-parent families and save the state more than $100 million a year in AFDC and Medicaid expenses.

THE WORKING POOR

While reforming welfare, we've also got to do more for the working poor. That's the point of the 6,500 additional day-care slots that we want to subsidize in Massachusetts with the welfare savings. We can use and should use the tax code to great advantage here. A recent study by the Heritage Foundation noted that in 1950 the average American family with children paid 2 percent of its income to the federal government in taxes. That figure is now up to 24.5 percent, 37 percent when state and local taxes are added. The federal deduction for dependent children, $2,350, would be worth $8,600 if it had just been indexed to inflation in the early 1970s, as retirement benefits were. We should use tax cuts now to strengthen families who are raising children. I have proposed increasing the tax exemption in Massachusetts for children and other dependents, increasing the personal exemption, and raising the no-tax status threshold to provide real, tangible tax relief for hard-working parents, especially the working poor.

We would like to see that same spirit suffuse Washington. The folks at the federal level have generally abandoned any talk of middle-class tax cuts, but perhaps some thought could now be given to working parents at the lower rungs of the economic ladder.

Meaningful reform does not require billions more in taxpayer dollars. It requires the political will to acknowledge that welfare recipients need a few basic supports, but also a few basic responsibilities to change their lives and the lives of their children. If we tinker at the margins or if we expand welfare spending and welfare bureaucracy, we're going to be missing out on a once-in-a-generation chance to make welfare and welfare recipients really work.

AMITAI ETZIONI: The House Republican welfare reform plan and what is rumored to be the Clinton plan combine the worst liberal and conservative ideas. Both apparently start with a new entitlement, that is, a two-year education and training program, and then they throw people out into the street after the two years are up. The former is too liberal, the latter inhumane. Governor Weld has avoided both traps and that is a great credit to him. What his program means, of course, is that people in Massachusetts will continue to be on public subsidy for many years to come, only now the subsidy will be called community-service jobs instead of welfare.

I differ with the governor on how many jobs exist in the private sector for people who are now on welfare. In my judgment there are not going to be many private sector jobs. A large number of people are already actively seeking work, and currently discouraged workers will come into the market if more jobs are available.

The other concern I have is not with getting people off welfare but with discouraging them from going on welfare. The governor's proposal has good points here. The governor correctly pointed out that teen mothers are an important part of the population that enters the welfare system. Here, we have to draw a distinction between illegitimacy and children having children.

Illegitimacy is not the problem. Children having children is the problem. And, if we deal with children having children we have to deal with contraception, abortion, and the kind of sex education we provide in the schools. One of the reasons people prefer to talk about curbing illegitimacy is that they don't want to confront these difficult issues. But to stop the flow of people into welfare in the future, we have to deal with them.

ROBERT LERMAN: Discussion of work programs for welfare recipients has come a long way in this country. About 15 years ago, in the midst of one of the many Washington debates about forcing single mothers to work, an international scholarly conference was organized.

I assumed that very few countries would contemplate harsh workfare measures, but I asked the representative from Sweden, perhaps the most generous welfare state, what age the youngest child had to reach before the Swedes pushed single mothers into the job market. He said that Sweden waited until the child was one year old.

I was shocked by that response, but since then I have seen the merits of that idea. The Swedes made the same point that Governor Weld makes--that single mothers who are outside the workforce for an extended period of time experience social isolation.

My first concern is whether the new policies, which do try to make single mothers independent with more childcare training and even jobs, will add to the marginalization of low-income men and especially low-income minority men. Given current concerns about an expanding underclass, one would think that policymakers would focus more on young men. After all, young men are primarily responsible for the violent crime in these areas. The lack of the father's income is the most important factor causing child poverty. The reform proposals do involve men but they focus almost entirely on child support and, to some extent, on paternity establishment. Those are important, but other alternatives should be explored. Working with young fathers and encouraging them to help raise their children might do more to fight poverty and dependency than requiring single mothers to work.

Absent fathers who later marry suddenly have increases in earnings even without additional training. We might consider experimenting with involving fathers in a variety of ways. For example, why not encourage--or even man date--enough work by absent fathers so that they can at least pay off the AFDC grant. That would reduce the welfare rolls without any massive increase in child-care outlays. It would make work pay for mothers and might stimulate young fathers to play a more active and long-term role in raising their children.

Second, why wait two years to require work? The governor seems to have answered that by not waiting. The two-year limit will lead to an administrative nightmare. We'll have to shift to an entirely new federal record system so that families cannot move to evade the limit. But states will still have to keep their own records. Changes in family composition complicate the problem. Would exclusions for new benefits be based on individuals, adults, or children? If a child had not been born when the mother was on her two-year stint, would the child be eligible for benefits?

If time limits created a foolproof work requirement, the effort might be worthwhile. But to me the time limit only delays for two years the hard decisions about sanctions, with all the administrative discretion, caseworker resistance, and procedural rules these will entail. Suppose subsidized employers reject the recipient as unsuitable. What's the caseworker going to do?

Third, I agree with both Governor Weld and Amitai Etzioni about the advantages of jobs over training. A subsidy will produce the actual output of a work program and yet it will have a long-run effect equal to classroom training. There is no evidence whatsoever that training programs have a better long-run impact, and the jobs certainly have a better short-run impact.

My final concern has to do with the job creation component of the plan. I support job creation. First, it could smoke out recipients already working. Second, it could rigorously implement the work requirement, and, third, it could keep people productive in high unemployment periods. If we can successfully encourage recipients to move into the private job market, they will be moving into the market for low-skilled labor. This market has had stagnant wages, and subsidized employment could offset the wage-depressing effects of moving large numbers of recipients into the low-skill market.

My worries about a job creation component are, first, can we keep the wages in subsidized jobs low enough to avoid attracting workers from the private sector and avoid keeping workers in subsidized jobs when they could get private sector jobs?

Another worry is, can we assure the public that these jobs are providing real production and are not just a new subsidy, a new entitlement? It is very important to have the kinds of administrative apparatus that can focus specifically on this kind of program. The welfare department is not the place to do it; however, a public corporation might be able to develop expertise in soliciting proposals, in choosing those proposals that can provide the best outputs and training combinations, and in documenting what is actually produced.

Finally, I think we ought to take advantage of those places where the government itself is already creating or stimulating new jobs, such as the Head Start Program. But there we ought to combine the jobs themselves with on-the-job training and apprenticeships, so that at the end the recipients can clearly certify their competence to private employers.

CHARLES MURRAY: The very bold initiative Governor Weld has introduced in Massachusetts is exactly what is needed. We need 50 such initiatives.

But the fundamental issue has nothing to do with welfare, except indirectly. If a job program puts more women on welfare to work than we have any reason to expect from past experience, what we will have is more women on welfare who have jobs and the same number of children without fathers.

The issue we must deal with is the role of the traditional two-parent family in sustaining the institutions of a free society. I would argue not on religious grounds and not on broad ethical grounds, but on pragmatic historical grounds that that role is utterly indispensable. Our system of government works with relatively few police and relatively broad freedom for people to do as they wish only because each new generation is socialized into habits of virtue.

There are single mothers doing a magnificent job raising their children--and that includes unmarried single mothers. But statistically speaking, when large numbers of young males grow into adulthood without having formed the kind of attachment and seen the kind of models that a father provides, then, as the young Pat Moynihan said best, their society asks for and gets chaos.

To the extent that 30 percent of American children are being born out of wedlock, there is a growing crisis that has nothing to do with budget deficits; it has everything to do with how we will sustain a free society in the next century.

Therefore, the first objective is not legislation; the first objective is for this society's elites once again to say openly that to bring a child into the world is the most important thing that almost any human being ever does, and it must become treated as a portentous and solemn event.

The act of getting pregnant if one is not prepared to care for a child is not morally neutral; it is a very destructive act. And much as we may sympathize with a young woman who finds herself in that situation, society as a whole must organize itself so that it happens as seldom as possible. And arranging society so that it happens as seldom as possible requires imposing penalties on the act.

Those penalties do not have to be legislated. Throughout history and across cultures, a single woman with a child has been a vulnerable, weak, and economically inviable unit not because anybody passed a law, but because that is the way the world has worked. We have lifted the terrible economic penalties of having a child out of wedlock by intervening through the power of the state. The other terrible penalty that has been imposed everywhere across cultures and throughout history has been severe social stigma. To some extent, that stigma has arisen from ethical and religious beliefs. But there is a very powerful link between social stigma and the economic penalties, which is to say that communities understand instinctively that they cannot afford to have a lot of children coming into their community without two mature adults, preferably even more, prepared to care for them.

And when the short-term economic penalties are lifted from the community, so is a lot of the power of the social stigma, even though the long-term social penalties remain enormous. So when I advocate ending the welfare system, it is because what is going on here is not just another of the many social problems that face this country; what is going on is a fundamental corrosion of very important institutions.

Once we admit, then, that bringing a child into the world is an important and serious act, our second objective is to get the government out of the business of subsidizing births out of wedlock. That means ending welfare in all its forms even though, for various reasons, I would keep Medicaid.

What does a young woman do if she finds herself pregnant? Well, she does what she used to do some years ago. She takes a look at the father of the baby and sees if she can get support from him. She looks to her parents, she looks to the church, she looks to local organizations. She thinks about her own readiness to care for a child. And I would hope that in a large number of instances, with the advice and persuasion of her elders, she would give up the child for adoption at birth. If she can find those other kinds of support, more power to her. She has self-selected herself, so the chances are she's going to be a pretty good mother.

The third step is to get rid of the nonsense that encumbers the adoption system. We have in this country an extraordinarily deep pool of people who are willing to adopt babies at birth, including black babies and physically handicapped babies. Let's fix the adoption system to take advantage of this extraordinary pool.

Let us spend as much money as is necessary to provide as best we can for the children who are found in situations of terrible neglect and abuse so bad that under existing laws they must be taken from their parents. I do not advocate making those laws more strict. I do suggest that the foster-care system right now is a scandal, and I'm not at all hopeful it can be reformed.

The emphasis on keeping children with their biological parents in the face of repeated neglect and abuse is misguided; and I have used "orphanages" as a symbol of the kind of thing we must think about as a better alternative for the children than what they have now.

Finally, the step that I advocate that has received the least attention, but I personally think may be the most important, is that we restore marriage with the set of clear, bright lines separating it from the state of not being married so that all parental rights and responsibilities are defined by marriage. If a marriage does not exist, there are no parental rights and responsibilities; among other things this means that the father of that baby does not have the right to see that child and also that the father of the baby has no responsibility for that child.

I doubt there are many who go along with me on this. And I don't count it as success if I have easily persuaded you to agree with me. But I would ask you most passionately to reconsider again what it is we are talking about, to move away from thinking about this as one more social engineering problem, mainly involving how to get women off the dole and into work, and rather think about it as a problem that requires not only policy changes but also a change of heart.

MICKEY KAUS: Governor Weld, let me ask you to compare a woman who has a child out of wedlock with a woman who does what most people consider the right thing and doesn't have a child out of wedlock and is, therefore, ineligible for AFDC; she may go to work, she may many a worker. If she does the wrong thing, under your plan, she gets a guaranteed job, health care, day care, and child support.

And as I understand it, if she does the right thing, she doesn't get the job, she doesn't get the health care, and she will only get the day care if she qualifies for one of those 6,500 slots. Doesn't your plan still create a lure to do the wrong thing, to go onto welfare, even though there's not much training, and get the guaranteed job? Isn't that better for many people than the alternative?

GOVERNOR WELD: Bob Lerman raises the question, are these community service jobs going to be something more than "make-work"? In Massachusetts, the answer is "yes." Part of the reason is that we have a highly developed not-for-profit, private human service delivery sector, and partly it is a result of privatization of government services that began and went quite far under Governor Dukakis, my predecessor, and which we have continued.

But I have met with representatives of schools, hospitals, food pantries, shelters, day-care providers, and environmental organizations, and I am satisfied that there's a crying need for responsible and rewarding work out there. These are the community service jobs for people who do not find jobs in the private sectors.

In answer to Mickey Kaus's question, all of our policies--our tax policies, our housing policies, our health care policies, and our welfare policies--are aimed at helping the working poor. The disjunction between people who are just poor enough to qualify for everything and people who are working to make ends meet and raise a family, but get nothing, is one of the disgraces of American social policy today. I agree with you. But the same disincentive or perverse incentive exists in the current system, and my plan doesn't make it any worse; as a matter of fact, it makes it a little bit better by taking away the cash grant that, as Professor Etzioni says, is part of the allure--let's be frank.

 

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