Welfare and Social Security

excerpted from the book

Against the Conventional Wisdom

by Douglas Dowd

WestviewPress, 1997

The United States has the highest poverty rate of any industrialized country and the stingiest and meanest welfare system. Poor people aren't popular anywhere, but nowhere are they so neglected and demeaned as here; nowhere are welfare programs run so punitively and inefficiently-as measured by cost per person or by "efficiency" in getting people off welfare and back to self-support: in Western Europe, antipoverty programs pulled from 10 to 60 percent of recipients up and out of poverty in the 1980s; in the United States, the relevant rates varied between 0.3 to 0.5 percent, even though our unemployment rates were always lower. Furthermore, regressive taxes on low income groups here pushed more people into poverty than income transfer programs pulled out; the opposite was true in Europe.

The welfare system now undergoing change, besides being clearly inadequate to its task, has long been a form of punishment, degrading to its recipients-intentionally so-although such intentions, covered over by habituation, are not seen as such. The observations of two veteran scholars of welfare help to clarify this easily confused matter:

Most such social welfare activity has not greatly aided the poor, precisely because the poor ordinarily have little influence on government.... However, some social welfare programs do benefit those at the bottom of the economic order. The most important are old-age pensions and unemployment insurance.... As for relief programs themselves, the historical pattern is . . . a record of periodically expanding and contracting relief rolls as the system performs its two main functions; maintaining civil order and enforcing work.... But much more should be understood of this mechanism than merely that it reinforces work norms. It also goes far toward defining and enforcing the terms on which different classes . . . are made to do different kinds of work; relief arrangements, in other words, have a great deal to do with maintaining social and economic inequities.

Those observations apply with special strength to the administration of welfare; but the Social Security Act of 1935, legislation setting up our "relief" system for the past sixty years (AFDC), also provided for the aged (Old Age and Survivors Insurance [OASI]). There have been and remain shortcomings for both the poor and the aged (and their survivors); but there is a substantial difference in the nature and gravity of those defects-a difference worth pursuing for a moment for the light it sheds on our social legislation.

Welfare, providing for those defined as poor, is confined to a relatively low percentage of the population at any time; OASI affects everyone over time, directly or indirectly. Because that difference means there could be diminished numbers of poor among us, but that there are always-increasing numbers of the old, there have been diverse political implications. There is, however, another defining difference: AFDC is paid for out of general taxation, OASI (now OASDHI) from the prior payroll deductions of its beneficiaries. Those differences alone explain why the provisions for the aged, although inadequate and foolishly arranged, are at least not punitive. Because the poor, in the Malthusian tradition, are seen as having defects of character that make them responsible for their own condition, it is an easy step to believe they should be punished while being assisted. The old are not punished for their condition, but they are treated unjustly: The better off you were while working, the better off you will be when you work no longer; the greater your unfulfilled needs earlier, the greater they will remain in retirement-if you receive anything at all.

Having earlier discussed the extent of poverty, now we examine the ways in which the needs of the poor are met-or, more accurately, not met. One should remember that the word need does not occur in economic theory; it is hardly ever heard in the halls of our legislatures. Were we at least to use the word, and were its application pondered sufficiently, perhaps what has happened to the children of the United States, which nowadays worsens their lives, would not have occurred. In the disdainful discussions of welfare and its recipients, the blunt fact that about two-thirds of AFDC recipients are children is seldom mentioned. Therefore, we turn to the poverty and the conditions of American children first, thence to the errors of omission and commission of the recent and emerging welfare system.

Suffer the Little Children

Among the rich societies, ours has by far the highest rate of children living in poverty-four times the rates in Western Europe-and it is the children's rate that rises most rapidly, condemning them to an inhuman life and unnecessary deprivation. Jonathan Kozol (who has spent several decades studying the lives of poor children, especially in their schools) has awakened us to this matter. Here he is speaking of a neighborhood in the South Bronx):

In the drabness of the neighborhood, the friendliness and openness of little kids ... seem like the sunshine that has not been seen in New York City during many months of snow and storm and meanness . . . show[ing] us something very different from the customary picture we are given of a generation of young thugs and future whores. There is a golden moment here that our society has chosen not to seize.... [It is not until later] that the sense of human ruin on a vast scale becomes unmistakable.

Some of the dimensions of those ruins for today's children in the United States (and an addendum concerning those elsewhere) follow:

* Children in the United States are poorer than children in most other Western industrialized nations because the gap between rich and poor is so large and because welfare programs are less generous here than elsewhere.

* Poor children are more than twice as likely as other children to suffer from stunted growth, severe physical or mental disabilities, fatal accidental injuries, iron deficiency, and severe asthma.

* Poor children are more than twice as likely as other children never to finish high school, even when differences in family structure, race, and ethnicity are taken into account.

* Poor children have significantly lower achievement test scores than children of high-income families.

* In 1993,46 percent of all African-American children and 41 percent of all Latino children lived in families with incomes below the poverty level.

* Poverty rates among children have increased since 1970 as follows: 1970 15 percent; 1980, 18 percent; 1993, 22 percent; those living in "extreme poverty-a family income of less than half that of "plain poverty"-have doubled, to 10 percent, since 1975.

* Child poverty rates grew in all racial categories between 1979 and 1989 and again for white and Hispanic (but not black) children from 1989 to 1994. . . [when] more than one out of every five children was poor (21 8 percent). For children under six years old, the rate was even higher, reaching 24.5 percent. Black children have the highest poverty rates; in 1989 half of all black children under six were poor. The rates were about the same in 1996.

* More than 60 percent of all AFDC families have a youngest child under the age of five.

* Marian Wright Edelman, president of the Children's Defense Fund, noting that over 16 million children live in poverty in the United States, reports that "every 9 seconds a child drops out of school, every 14 seconds a child is arrested, every 15 minutes a baby dies, every 2 hours a child is killed by a firearm, every 4 hours a child commits suicide, every 7 hours a child dies from abuse or neglect.''

And globally? UNESCO's 1995 International Forum on the Rights of the Child reported that 1.4 billion children under age 18 live in poverty and 100 million are homeless; in Europe 5 percent are below the poverty line; in the United States, 20 percent. More than 6.6 million children die yearly of diarrhea and pneumonia, because of poor living conditions and, despite vaccines against these diseases, close to 2 million children annually die from measles, tetanus, and polio. In 1993, UNICEF reported that over the globe, every day 36,000 children die from malnutrition and disease (= 13 million every year)-a calamity that could be ended at the cost of $1 a day per child.

President Clinton signed the new welfare legislation on August 22,1996. A bit more than two weeks earlier, Senator Daniel Patrick Moynihan (D.-N.Y.), whose academic work had led to a governmental career centering on the welfare system (beginning with a secretary-ship in the Nixon administration), rose to speak to the Senate to warn of the disaster they were creating: "Let me put that in terms of how many children will be cut off.... The Urban Institute says 3,500,000 will be dropped from the rolls by 2001. By 2005,4,896,000 will have been cut off." And commenting on the unlikelihood that government officials would make a good faith effort to meet the work requirements spelled out in the bill, Moynihan went on to summarize the estimate of the (nonpartisan) Congressional Budget Office: "given the costs and administrative complexities involved, the CBO assumes that most states would simply accept penalties rather than implement the [work] requirements."

It would be bad enough if what we have already allowed and now permit to worsen concerning children were an outcome of mere heartlessness, shameful indeed for a society that presumes to value the family. Moreover, there is no sufficient reason for having done and doing all this damage. In the past it has been costly not only to the direct victims but to the society as a whole; Senator Moynihan is by no means alone in believing that those costs will escalate both for all. This combination of pitilessness and mindlessness in our society makes the heart to weep, the mind to boggle.

Perhaps, however, the above is merely the carping of the soft-hearted, based on misleading impressions; perhaps our leaders have acted harshly in past and present because the facts demand it, perhaps from this human and social morass there is no better exit? The answer to that question is a resounding "No! "

... on August 22, 1996, Congress passed and the president signed the welfare bill, with its reassuring title, "The Personal Responsibility and Work Opportunity Reconciliation Act of 1996."

Blueprint for a (Deeper) Tragedy

The new law mandates the following: an end to sixty-one years of the federal guarantee of cash assistance for poor children and a delegation of authority to the separate states to run welfare programs with lump sums of federal money ("block grants"). Adult recipients of the resulting state welfare programs will be required to find work within two years; there will be a five-year lifetime limit on benefits; aid to non-citizens will be curtailed. More specifically:

1. Most immigrants arriving after the bill was signed have become ineligible for most benefits and social services financed by the federal government.

2. Strict new standards for granting Supplemental Security Income (SSI) to disabled children are going into effect, with the expectation that "several hundred thousand" disabled children will immediately lose support.

3. States were given about a year to rework their welfare programs to meet the new requirements.

4. Within the year after the bill's signing, most non-citizens receiving food stamps and SSI will become ineligible for benefits when their cases are reviewed.

5. As of October 1, 1996, "no individual or family shall be entitled to any benefits or services" under the now defunct federal program Aid to Families with Dependent Children.

6. Also as of October 1, 1996, new Federal rules for food stamps took effect, reducing benefits previously paid.

7. As of January 1, 1997, states were allowed but not required to cut off cash assistance, Medicaid, and social services for non-citizens who were receiving such aid up to August 22, 1996.

There it is in black and white. Some of its meanings over time can only be guessed at; others can be predicted fairly easily. Among the latter, two stand out:

1. No one doubts the likelihood of a recession at some time in the future. But that the legislation's hardships will be "manageable" is predicated upon the assumption that the future fiscal conditions of the separate states will be no weaker than those of 1996-the fifth and most buoyant year of consecutive economic expansion. As both Republicans and Democrats know, the separate states' coffers fill as the economy expands and empty when it contracts; also known by all is that states are prohibited b`,, their constitutions from engaging in "counter-cyclical deficit financing": when the economy weakens, therefore, state expenditures must decline, unless-as is totally improbable-voters support the floating of bonds for specific purposes (like welfare?), and a consequent increase in their taxes. So, it's back to the fiscal policies of the pre-New Deal era: Each for himself, and God for all.

2. It is generally acknowledged that the delegation of federal funds for welfare to the states in the form of block grants-argued for by its supporters in order to free states from "meddlesome Federal regulations specifying how, why and where the Federal money could be spent"-contains yawning loopholes for state governments to use what are presumably funds for the poor for those who are not. Indeed, in today's climate, such funds are just as likely to be used against the poor, directly or indirectly: for prison construction or anti-immigrant fences, for example.

There are two other matters to worry about: The first, as recent conferences of mayors from around the nation have agreed, is that the delegation of block grants to the states will almost certainly lead to their delegation of responsibility, but not of their grants, to the cities and counties. The latter will have to scrounge up the money somewhere or, failing that (as is likely), let the poor-two-thirds of them children, remember-suffer. The other matter to worry about jumped into the news almost before the ink was dry on the new legislation: "Giant Companies Entering Race to Run State Welfare Programs: Powers like Lockheed Martin Vie for Contracts." 34 Part of the story went this way: "The jockeying [for welfare contracts] frightens longtime social-service workers and public-interest lawyers. No company can be expected to protect the interests of the needy at the expense of its bottom line, least of all a publicly traded corporation with a fiduciary duty to maximize shareholder profits."

Companies, giant or pygmy, are supposed to have the fabled "bottom line" as their guide; although those firms lobbied frenziedly for the new bill, it's not their fault but that of Congress and the White House that their newest area for profits-prisons, education, and health care having earlier been added-will be another of the "uses of poverty."

So much for the poor, except for a final observation. Admirable though the idea of "workfare" may be-and surveys show that the poor also overwhelmingly prefer jobs (at a livable wage) to welfare-sufficient jobs do not now exist, and to prepare people for and create them would require an expenditure of time and thought and money that exceeds the amounts previously spent on AFDC itself. Few if any of those supporting the new act are prepared to devote that much time, thought, or money. As long as that remains true, and the "Personal Responsibility Act" reigns, we shall have to anticipate "children sleeping on grates," in Senator Moynihan's grim phrase. By comparison with the past and present plight of the poor, what will now be shown regarding the present and prospective situation of the old will seem downright reasonable-though it combines unreason and inadequacy in substantial measure.

Against the Conventional Wisdom