DECEMBER 26, 1995
ELIZABETH FARNSWORTH: We now turn to another of our nation's safety nets, welfare. Last week, the Senate and the House passed a compromise welfare reform bill that President Clinton has promised to veto. The legislation eliminates the 60-year-old federal guarantee of cash assistance for poor children, replaces the federal aid to families with dependent--to Families with Dependent Children program, known as AFDC, with block grants to states, reduces the growth of welfare programs by $58 billion over seven years, mandates that 40 percent of all welfare recipients find work by the year 2002, requires states to limit welfare benefits to a total of five years, requires teen parents to live at home and attend school to get cash benefits, and gives states the option of eliminating benefits to mothers who have additional children. Here to analyze and discuss these changes are New York Senator Daniel Patrick Moynihan, the ranking Democrat on the Senate Finance Committee, Rep. Clay Shaw, Republican from Florida and one of the authors of the welfare reform bill, he joins us from Miami, Bob Greenstein, director of the Senate on Budget and Policy Priorities, a new profit research group, and Robert Rector, senior analyst at the Heritage Foundation, a conservative think tank. Thank you, gentlemen, for being with us. Congressman Shaw, let's start with you. The President says that he will veto this bill. Can you briefly make the case for the bill to us, for us. Why shouldn't the President veto it?
REP. CLAY SHAW: (Miami) Well, he shouldn't veto it, first of all, because he ran on the promise of welfare reform. He has said that he's going to change welfare as we know it today. Then he endorsed the bill that the Senate passed. Then the House bill moved substantially towards the Senate. We worked very closely with the Senate, and we either met or moved in his direction on over 85 percent of some 80 points that Sec. Shalalah complained about in the bill, so I think he should certainly take a look at this bill and see isn't this exactly what he promised the American people? It's certainly what the American people want.
ELIZABETH FARNSWORTH: Sen. Moynihan, are we at a historic juncture here?
SEN. DANIEL PATRICK MOYNIHAN: We surely are, and my friend, Chairman Shaw, put it very clearly, excepting for one word, one term. He talked about welfare reform. This is not reform. This is repeal of Aid to Families with Dependent Children. The center provision in the Social Security Act, in case you have any idea what's involved, 24 percent of American children receive AFDC before they reach age 18, and we have a decision to make. I think the tide is going out on repeal. Last September, just as the debate began, George Will had a wonderful phrase. He said, you know, can we remember one thing, no child asked to be here, and in--on September 15, we had 11 Democrats, two, three days ago, four, we had 45 plus, plus Mark Hatfield, the conscience of the Senate. The President has called for a bipartisan effort.
ELIZABETH FARNSWORTH: Voting against the bill?
SEN. MOYNIHAN: Yeah, voting against. I would like to sit down with Clay Shaw any time. And let's do this together. We can't do it as adversaries.
ELIZABETH FARNSWORTH: Mr. Rector, what do you find worthy of support in this bill?
ROBERT RECTOR: Well, I think that we must understand that we cannot spend our way out of our current welfare problem. Since we began the war on poverty, we have spent as a nation $5.4 trillion on programs to aid the poor, and the situation has gotten worse. What we need is a system not that spends more on this system, which is actually harmful to children, but on a new system that does not reward states for increasing dependents, as the current system does, that does not reward individuals for becoming dependent, and does not reward individuals for having children out of wedlock. That's what this bill does. This bill is profoundly good for children because it exactly, it does end AFDC, and AFDC has destroyed the lives of millions of children. For 25 years, we have been told you can't change this system because you will harm kids. Is there anyone in the United States today who believes that children are better off because we've had this system for the last quarter of a century? Is there anyone listening to this program who believes that if we retain the existing AFDC system for the next quarter of a century children are going to benefit because of that? This is not a safety net. This is a system of child abuse that is destroying the lives of the very children we're trying to help. We need to change it.
ELIZABETH FARNSWORTH: What do you think about that, Mr. Greenstein?
ROBERT GREENSTEIN: Well, I don't think there's any dispute that we need reform. But it is possible to take even a very troubled system and make it still worse. And that's what this bill does. You know, we've heard a lot of talk. Mr. Rector has been talking about the AFDC program, the Aid to Families with Dependent Children. This bill cuts nearly $60 billion over seven years. Less than 1/10 of that is in the AFDC area. This bill is labeled welfare reform, but in addition to the problems in the welfare area that Sen. Moynihan mentioned, it also cuts benefits 25 percent for poor children who are disabled, it cuts their supplemental security income benefits, if they have conditions like multiple sclerosis, cystic fibrosis, muscular dystrophy, things of that sort. In addition to that, it has $30 billion in reductions in food stamps and other nutrition benefits, most of which are across-the-board benefit cuts. It cuts benefits up to 30 percent for poor elderly widows on food stamps. It takes the working poor and reduces people who aren't on welfare and reduces their food stamps. You get to the welfare part of the bill and it does not have, the Congressional Budget Office's figures show, it doesn't have enough child care both to meet the needs for welfare recipients who are required to work and maintain even current levels of child care for working families not on welfare. So what it would mean is the working poor could lose child care, they could lose food stamps. Elderly widows say 65 and 66 under this bill eventually lose eligibility for supplemental security income cash assistance. Now, when most Americans hear the words "welfare reform," not only do I think do they not think this means that when children get poor and more children get into poverty during a recession that there won't be a government response, but they certainly don't think it means making the working poor poorer, cutting food stamps, and cash aid for elderly widows living below the poverty line. But that's what this bill does.
ELIZABETH FARNSWORTH: Okay. Congressman Shaw, I'm going to get into some of the specifics in a few minutes, but overall, you just heard a very cogent critique. How do you respond generally to that critique? This is the critique that we're mostly hearing, that it cuts off way too much for too many poor, sick children and not just very poor and sick children but other people too?
REP. SHAW: It's simply not true. That's a short answer. But the long answer, we actually increase AFDC. The new budget figures that came out of the Congressional Budget Office shows that we're actually increasing. What we're doing is investing--
ELIZABETH FARNSWORTH: Okay.
REP. SHAW: --in people.
ELIZABETH FARNSWORTH: Actually let me stop--can I stop you right there,--
REP. SHAW: Yes.
ELIZABETH FARNSWORTH: --just on AFDC, and I'll come back to you in a minute. What is true?
MR. GREENSTEIN: What the truth is--
SEN. MOYNIHAN: How can you increase what you are repealing? Now, we've got to get our language straight.
REP. SHAW: Well, you're not repealing it. You're, you're simply putting it into block grants. We have a basic disagreement, and, Pat, I'd say you're one of my heroes as someone who sounded the alarm years ago in this area. Too bad that you're not working with us, because you have--
SEN. MOYNIHAN: I want to work with you.
REP. SHAW: --you have a tremendous--
SEN. MOYNIHAN: I'm going to work with you, Clay Shaw.
ELIZABETH FARNSWORTH: Congressman Shaw, you're saying that you're not cutting the AFDC--
REP. SHAW: No, we're not.
ELIZABETH FARNSWORTH: --because it'll go in the block grants, and it will get to the kids?
REP. SHAW: It's going to the states in the form of a block grant, and the states can do a much better job. What we have in this bill is already in place in Wisconsin, Michigan, Massachusetts, Delaware, some of these other states, and look at the record that they have amassed. They are getting people out of welfare. That's what we should be all about, not paying them to stay in welfare. That is the flaw of the present system.
MR. GREENSTEIN: But that's not what the debate is really about. This bill, when we talk about the level of resources in the bill, what Congressman Shaw didn't explain is this bill takes cash assistance for poor families with children and money for work programs. I don't think any of the four of us would disagree, we should have much greater emphasis on work programs. We should be transforming the welfare system into a work system, but running work programs costs money. When the Contract With America first came out in September '94, it had $10 billion of new funding for work programs to put welfare recipients to work. The Congress removed that $10 billion. It does not have enough money in this block grant to both do the work programs and provide the cash assistance, and the Congressional Budget Office which Republican leaders in the budget fight are relying on a great deal these days, the Congressional Budget Office, itself, their own figures which they brought out a week or two ago show that this block grant falls short over the next seven years by about $14 billion for the amount you would need to mount the work programs that the bill says it requires without cutting into cash assistance for poor children while they're in need at the same time.
ELIZABETH FARNSWORTH: Okay. Let's stay on the work programs for a minute. I want to cover that, because that's a central part of this.
MR. RECTOR: Let me clarify--
ELIZABETH FARNSWORTH: Yes.
MR. RECTOR: --one point, though, for the audience. When you take all of the programs for the poor and low income Americans, cash, food, housing, setaside medical care, under this budget proposal and under the welfare reform bill, aggregate spending is going to grow at about 4 percent per annum as opposed to the current law, which is a growth of about 6 percent per annum. We're not talking about cutting here. We're talking about slowing the rate of growth of welfare spending. Under this proposal, under the Republican proposal, welfare spending is going to grow at roughly twice the rate of inflation. We're simply slowing down the rate of growth. Now, the second thing, does it cost more money to put someone to work? Absolutely not. And we've demonstrated in many, many states it does not. If you run an efficient work program, as opposed to the bad failures which we have run in the past, what you get is a dramatic drop in caseload very quickly, and then under the block grant system, the state can use the savings from that and re-channel that money back into day care. Under the current system, if you dramatically drop your caseload, what happens to your welfare money? It drops proportionately. That's a disaster. What we want is a system that rewards states for reducing illegitimacy and for reducing dependency. The current system penalizes them for doing those two things. It's a very bad system.
ELIZABETH FARNSWORTH: Senator, what do you think about the work requirement?
SEN. MOYNIHAN: I've a lot of respect for Bob Rector, but that's not the--that's not where we are in our understanding. I don't think we know how serious our problem is. A third of American children are born out of wedlock. It happened suddenly. It's a transformation. In my state of New York, half, just turned 50 percent, crossed that line. Our, our--as regards behavior, what we have to do is change the behavior of males, not mothers, fathers, not mothers. And all the things that Clay Shaw has described in terms of the state programs, they are all now going forward under the Family Support Act of 1988, which came out of the Senate floor, out the door, ninety-six to one. We have to get together on this and admit how little we know--
ELIZABETH FARNSWORTH: But just what about the work programs, do you think that there--is there work for people? That's the question--
SEN. MOYNIHAN: That's an avoidance of the fact that people have to be self-reliant, if they can. We're beginning to find some programs that work, just beginning. It's so difficult. We don't know how damaged so many of these adults are, and we are not concerned about how much damage we can do to the children who, as George Will said, didn't ask to be here.
ELIZABETH FARNSWORTH: You're worried that if this bill passes, we're going to see a whole lot more children on the streets, aren't you, hungry children on the streets?
SEN. MOYNIHAN: We could have--with that five-year time limit, I'm sorry, you could have half a million children on the streets of New York. You think homelessness is a problem since we emptied out the mental institutions? Wait till we empty out those slum buildings.!
ELIZABETH FARNSWORTH: Okay. Congressman Shaw, what's your response to that?
REP. SHAW: We have a program now that's 60 years old. Sen. Moynihan wouldn't think of, of a 60-year-old car as reliable transportation and neither would anybody else who's listening to this program. We have to venture ahead. We have to go out and see what's working in other communities, and we know what Gov. Weld has done in Massachusetts. We know what Gov. Engler and Gov. Thompson have done in their states. We know that these things are working, and all we are doing is giving the states a flexibility to make these things work. The problem we have now is that the bureaucrats all across this country have a vested interest in the problem, not the solution. We are paying people not to work, to have children, and it's, it's absolutely insane. And then on top of it, tell them not to get married. Patrick Moynihan was just talking about the scandalous statistics we have on people who are living out of wedlock and just having one child after another. And we know that those kids are going to go nowhere, they're going to do poorly in school, they're going to probably have problems with the law, and they're, in all likelihood, going to be on welfare, themselves.
SEN. MOYNIHAN: The Congressman is right.
REP. SHAW: What we're doing is horrible.
ELIZABETH FARNSWORTH: Yes, go ahead.
MR. GREENSTEIN: He's right in what he just said, but the bill doesn't address that problem. The bill would make, I think, some of those problems worse. The states he mentioned like Michigan and Wisconsin, most of them have these work programs in only a limited number of counties in the state. It does at least up front cost money to mount these work programs statewide. Now, this isn't just some figure that I'm making up. The Congressional Budget Office told the committee Sen. Moynihan's on, they told the committee Congressman Shaw is on that this bill doesn't have enough resources for the work program. The Congressional Budget Office forecast twice before the Congress that the majority of states would fail to meet the work requirements in the bill.
MR. RECTOR: That's simply not correct.
MR. GREENSTEIN: It is, it is correct, and beyond that, beyond that, think of what would happen in a recession. Under the current, under the current system, when a recession occurs, more children and more families become poor. The federal government shares with states the additional costs that arise. Under this bill, there's a very small rainy day fund during recessions. It provides about 1/6 the amount of additional federal funding that was needed during the last recession in the early 90's. Come the next recession many states will face a choice. Do they meet the needs for the additional children who are becoming poor and pay for that by cutting back on the work programs, do they keep the work programs and put newly unemployed families on waiting lists? You can have more state flexibility without forcing states into a choice like that.
ELIZABETH FARNSWORTH: Okay. Briefly respond to that, and then I want to move on to something different.
MR. RECTOR: The CBO study that Mr. Greenstein is referring to simply assumed that states would run the old programs from the past, which we all know are failures. In fact, they are specifically prohibited from running these type of old failed programs.
MR. GREENSTEIN: That's not true.
MR. RECTOR: We're going to run new programs, programs that require welfare recipients for the first time in U.S. history to actually work for the benefits they get. The evidence that we have on that from Wisconsin, from Utah, from Arizona, is very sharp, immediate drop in caseloads, and unlike the present system, if your caseload drops, we're not going to cut your money. You then have extra money to spend for more services for remaining welfare recipients.
ELIZABETH FARNSWORTH: Okay. Congressman Shaw, I want to raise something that Sen. Moynihan raised earlier and, and I get a lot of letters about this usually when we do discussions about this. We're all talking about mothers and children mostly, but fathers, we don't talk about the fathers. I know that the bill has, has certain restrictions and ways to try to get money from fathers, but does it have enough?
REP. SHAW: Everything we could have thought of has been put into this, and this is one area where the, the Democrats and the Republicans and the administration worked together to work this out. This is the toughest parental responsibility provision that could have ever been worked out.
ELIZABETH FARNSWORTH: Just briefly, tell us what it is.
REP. SHAW: We're going to track 'em. Well, we're going to track these fathers. To begin with, we're going to require that they be identified when these babies are born, and they are going--the mothers are going to have to cooperate, or they'll lose some of their assistance. Then we're going to track 'em down, and we're going to trace 'em nationwide, so that they can't jump over the state line and avoid their responsibility. Those that do not cooperate, in addition to the state remedies which are out there now but aren't being used to full potential, we'll take away every license they have, whether they're a lawyer, a doctor, even a fishing license we take away. This is the toughest portion of the bill, and I think this is one of the things that's going to bring great dividends, and it's going to be male responsibility, because these poor women have had the responsibility as single moms to raise these kids, and it's just a tragedy, what, what's been going on, the way that, the way that they have lost their lives, lost their future, and the men seem to think this is some kind of a joke. It's not joke any longer.
ELIZABETH FARNSWORTH: Do you agree that there's enough in this bill for--to force men to pay?
SEN. MOYNIHAN: I think the Congressman is absolutely right. And they're, they're doing what they know, but I would plead we don't know very much. We have seen a transformation in our society of these out-of-wedlock births. We--the great problem, as Daniel Boorstin has written, is not ignorance, so much as the illusion of knowledge. I want to work with Clay Shaw.
ELIZABETH FARNSWORTH: You're worried--
SEN. MOYNIHAN: I can work with that man.
ELIZABETH FARNSWORTH: You're worried that this is based on faulty social science, is that what you're saying, that we don't really know why there are so many births out of wedlock?
SEN. MOYNIHAN: We don't know why it has happened--
ELIZABETH FARNSWORTH: We don't know if this will make any difference.
SEN. MOYNIHAN: --in Canada, why has it happened in Britain, why has it happened in France, why has it not happened in Japan. It's all come very suddenly on us, as, as much a change as the industrial revolution was.
ELIZABETH FARNSWORTH: And you think that, that by responding to it this way we could do more harm than good, is that right?
SEN. MOYNIHAN: Hippocrates, "primum non nocure," first do no harm.
ELIZABETH FARNSWORTH: What do you think about that, Mr. Rector?
MR. RECTOR: Well, I think that, you know, a lot of people are arguing that we don't want to change the current safety net. This is not a safety net. This is a toxic waste dump.
ELIZABETH FARNSWORTH: And you think it's actually helped make, create the problem?
MR. RECTOR: This is aggressively harming the very children it's supposed to help. It's destroying their lives. We do not. We have to change the system. We have to change it as soon as we can. The current system--I mean, there's an assumption here that welfare is good for children. Welfare harms children. The longer children spend on AFDC, the more likely they are to fail in school, the more likely they are to grow up and end up in jail, and so forth and so on. This system is harming kids. We must change it, and we must change it soon, before the American family disappears before our eyes.
ELIZABETH FARNSWORTH: Okay. I'm sorry. That's all we have time for. Gentlemen, thank you for being with us.