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« Back to Does Welfare Reform Need Reform? main page    Transcript for: Does Welfare Reform Need Reform?Ben Wattenberg: Hello, I’m Ben Wattenberg. In 1996 President Bill Clintonsigned into law a controversial welfare reform act. Many liberals were angry. Three senior Clinton aides resigned. It’s now five years later. Congress needs to reauthorize the law. Is welfare reform working? What needs fixing? To find out, Think Tank is joined by: Douglas Besharov, Jacobs scholar at the American Enterprise Institute, professor at the University of Maryland School of Public Affairs, and editor of America’s Disconnected Youth: Toward a Preventive Strategy. And Ron Haskins, former special advisor to President George W. Bush for welfare policy, now senior fellow at the Brookings Institution and co-editor of The New World of Welfare. The topic before the House: Does Welfare Reform Need Reform? This week on Think Tank. (music-animation) Ben Wattenberg: The Welfare Reform bill was a radical piece of legislation, the first big rollback of the safety net state. Welfare recipients now face a five-year lifetime limit on benefits and are strongly encouraged at the outset to find work. Teenaged parents under 18 are required to remain in school and live with an adult to receive assistance. States can require that recipients perform community service. Opponents called the Bill draconian. But when I interviewed welfare mothers and fathers in the early 1990s in Kansas City, it was quite evident why members of Congress felt the need to act. Woman #1: As soon as they found I was working, the next month, no welfare, no Medicaid, no food stamps, my rent went up. Ben Wattenberg: They¹re telling you stay on welfare, in effect. Woman #2: Basically. it¹s a Catch-22. Woman #1: Yes, basically. Ben Wattenberg: I mean some people say, look, these young girls are going out, getting pregnant, in order to get this welfare money. I don’t think that’s true. I don’t buy that. That doesn’t Okay. No. No. Woman #1: Not at all. Woman #3: Very few. Woman #4: Some are. Ben Wattenberg: Some are? Woman #4 Some girls. Because the more children you have the more your check goes up. And there are young girls out here who will brag about, well I have four kids, so I get this, this, this amount of money, and I get this, this amount of food stamps. There is a certain amount of people who do that. Woman #3: Oh, yeah. Ben Wattenberg: Who¹s fault is this whole thing? The men or the women? Man# 1: It¹s nobody’s particular fault. Man #2: Actually. If you just had to point a finger, point it at the government. Because they created this system. They created the welfare system the way it’s going these days. They created the giveaway programs. In my minds eye, it would be easier to help these teens to either stay together or work with them so that they can become self-sufficient citizens, than saying, okay, here’s X amount of dollars because you had a baby, and we¹re going to go after this guy for child support. And it works to your benefit because you’re getting more money, and he can work and he can give you money on the side. That’s kind of what they’re saying, but not saying it. Ben Wattenberg: What happens to the poor now that the economy is in recession, state budgets are tight, and some recipients have already used up the five year time limit the new law mandated? Ben Wattenberg: Gentlemen, thank you for joining us. Doug Besharov, it¹s been six years now since the passage of the Welfare Reform Act. How has it gone? Doug: Well we’ve had this astounding reduction of caseloads, almost sixty percent, since the Bill was passed in the movement before, which is tremendous. No one expected that. There are hundreds of thousands more single mothers out there working and, we hope, building job experience. Ben Wattenberg: Okay. Ron Haskins, any downsides? Ron Haskins: There are some downsides, but it’s been a tremendous success. Not only rolls decline and huge increases in female labor force participation but also huge unprecedented increases in earnings and very substantial declines in child poverty. First substantial decline since the early 1970s, and black child poverty is now the lowest it’s ever been. So, very successful. Ben Wattenberg: Is that right? All right, refresh my memory. I mean, in the mid-1960s, when this passed, this was an enormous issue. What did the two sides say? Doug Besharov: Well, there are many provisions of Welfare Bill, but the underlying concept is the end of the welfare entitlement. No longer did people have a legal right to get welfare, and no longer were the states in a federal straightjacket. Ben Wattenberg: What do you mean when you say they didn’t have a right? They still had, under the terms of the new Bill, they still had a right to get welfare for five years, didn’t they? Doug Besharov: Technically, there is no longer a federal entitlement to welfare. The States run this program and the issue was, do we trust the State? Ben Wattenberg: It was a federal issue and then they just made it into a State issue? Ron Haskins: Well, I think the real issue here is, there’s money, there are rules about who qualifies, but it¹s conditional, not entitled. That means, and this is exactly what we needed, that means if you want to go on welfare and you want to stay on welfare, you have to show up for training, you have to show up work. Whatever the State requires of you, you have to do, and if you don’t, in the federal legislation it says, States, you must fine individuals who do not meet your work preparation requirements, and if you don’t, the federal government will fine you. So that’s a completely new system compared to what we had before. Ben Wattenberg And conservatives at that time were saying, you know, well, no wonder people stay on welfare. Between welfare and food stamps and housing rent supplements, they can make their way of life of it. Ron Haskins: A minimum wage job, approximately ten thousand a year. If you were on welfare back in 1995, when this debate started, you had about eight thousand dollars in cash and food stamps and four thousand dollars worth of Medicaid. That’s about a twelve thousand dollar package, plus you might add housing, school lunch, lots of other benefits Ben Wattenberg: Plus working off the books? Ron Haskins: That’s true, but probably not more than twenty-twenty-five percent of the cases were working off the books. Doug Besharov: Only? Ben Wattenberg: Only? Part of the reason for the big decline in welfare was that, as I understand it at least, there were more cases of fraud than we ever dreamed. Doug Besharov: Well, I think the big ultimate cause of decline is the economy. It really helps to have a fifty-mile-an-hour wind behind you when you¹re reforming welfare. The 1980s were a great economy. The 1990s, for entry-level jobs, were even better. Ben Wattenberg: But in the 1980s, when the economy went up, so did welfare recipients go up. That¹s what that whole Moynihan scissors thing was about, that he said, now there¹s a disconnect, and welfare is becoming, as Clinton said, it’s becoming a way of life. Doug Besharov: Sure, but I think it’s a little more complicated. In both the 1980s and the 1990s, we created about twenty million. Ben Wattenberg: Everything was a little more complicated. Doug Besharov: But twenty million new jobs in the Eighties and in the Nineties. In the Eighties those jobs tended to go to more middle-class married women. In the Nineties, we had run out of middle-class married women. Those jobs went to never married women, many of them who had been on welfare. We got a lot of help from the economy on that. Ron Haskins: Let me put in a plug here for simplicity. I do think it’s not all that complicated. In the 1980s, women on welfare did not have the intent of leaving welfare. There was no pressure to do so. They lived in an entitlement world. In the 1990s, they were under tremendous pressure, five-year time limit, mandatory work requirements, sanctions hanging over their heads, and an atmosphere, something, you know, that changed in the whole understanding that was communicated by the offices, by the caseworkers. We got to get you off welfare. That’s what the country says. That’s what the taxpayers want. Ben Wattenberg: So how big was the drop? Doug Besharov: Sixty percent. Ben Wattenberg: Sixty percent. Ron Haskins: And compare now Doug’s point about the economy. The most the roles had ever declined before since the Sixties was seven percent over a two-year period. Ben Wattenberg: In a hot economy. Ron Haskins: Yes, and in the Eighties it went up. Doug Besharov: Yes, but we should force Ron here to kind of be precise. Okay Ron, what percentage of the decline is the economy? What percentage is welfare reform? Ron Haskins: Nobody knows and nobody ever will, but the simplest interpretation and one that makes the most sense is, when you have a caseload of people who have no intention of looking for a job and the economy grows like mad, twenty million jobs, and the rolls go up, as you’ve already said, and then you turn the rules around, make them very tough, communicate that they’re going to be tough and then actually implement them. The States weren’t fooling around. They sanctioned people. They did what they said they were going to do and then the rolls fall like a rock. Ben Wattenberg: And many of the people who were against this reform had these. I remember the Urban Institute had a big study that said a million kids would go into poverty and Senator Moynihan said something like- Doug Besharov: Well, Moynihan. Moynihan is credited--we can’t find the quote--but is credited with saying, we’d return to the grate society, not g-r-e-a-t but g-r-a-t-e, which is to say they were afraid of vast increases in homelessness, which didn’t happen. Ben Wattenberg: And then this Bill passed with Clinton and Gore and Hillary Clinton all supporting it because: A) he had run on it, but this was a tougher Bill than they wanted, and they felt, I think appropriately, that it was being used as a litmus test and this would; and it was an election year, not by accident that it passed in an election year, and they felt this would be their bona fides to show how tough they were. Ron Haskins: Right. Here’s something really interesting I think. Republicans, many Republicans, were reluctant to send the Bill to Clinton. He¹d already vetoed it twice. And many Republicans, especially people who were pulling for Dole and working on his campaign, felt that this was the one issue that Republicans could get traction on, and Morris, who worked for Clinton at the time, apparently felt the same way. Ben Wattenberg: Dick Morris. Ron Haskins: Dick Morris. And he supposedly told Clinton, this is the only issue that they can make progress on. If you sign the Welfare Bill, you’ll be President for sure. And of course that’s exactly what happened. Ben Wattenberg: I think that’s right. I mean, you know, that was the one remarkable thing he said in the 1992 campaign was for a Democrat to say, we’re going to end welfare as we know it and then--of course, that’s a pretty loose construction--but ultimately in 1994 the Republicans took over the Congress. Doug Besharov: I don¹t want to be in an unusual position of defending Bill Clinton, but Bill Clinton understood state government and understood governors. The big argument, the fear that the folks in Washington had was basically a distrust of State Government. The federal entitlement disappears and the fear was that the states would just wrap up their welfare programs and close up shop. I think Clinton understood that that¹s not how States work. Ben Wattenberg: And it would be, they used foreign trade language, they said it would be a race to the bottom. I mean that, in order to secure commercial advantage against a competitor, State A would lower welfare and State B would lower it lower and lower and lower and lower. And in fact, the reverse happened, actual total spending on welfare, with all things considered, actually went up some. Is that right? Doug Besharov: That¹s right. That¹s right. Yeah, I think the people who thought- Ben Wattenberg: I mean, counting schooling and all that. Doug Besharov: Sure. Sure. I think the people who thought that families would be thrown off welfare and become homeless just didn¹t understand how moderate this country is and it¹s politics. Like I don¹t know a governor who will say, yes, I want another five thousand women and their children sleeping on the streets, because we¹re going to reform welfare. And I think that was a big miscalculation from the Left¹s point of view. Ron Haskins: But I think it¹s very misleading. Those roles went down and money was saved. Furthermore, if you look at the Census Bureau data for lower income female-headed families, it is such a clear picture. If you trace their welfare income from Ninety-three to Two Thousand, it goes just like that. If you traced their earnings, it goes just like that. Ben Wattenberg: So this is an example of a program that works, albeit one that worked by eliminating another program. Doug Besharov: I think it partially worked. I would say, if we don¹t appreciate the power of the economy, we¹re not ready for the next upturn in the caseloads, that¹s number one. If we don¹t appreciate the fact that about fifty percent of the mothers with children who left welfare didn¹t go out for jobs but are now living with someone else or getting support through some other government program, we misunderstand what happened under welfare reform. This is not just - Ben Wattenberg: But at the same time that you had welfare reform you had the increase in the earned income tax credit, the EITC which is substantial and goes to low income people, but who are already working. Doug Besharov: Right, right. But I don¹t think that¹s enough to explain what happened. We have-hear me on this. We have about forty percent of the families who left welfare now not working. They just left. Now, if you¹re a real conservative and you say, you see, they didn¹t need that extra three, four, five thousand dollars a year. Someone else is supporting them. But that happened, and I think before we measure welfare success and say, it¹s happened, it¹s great, we have to find out how those people are doing and what they¹re doing. Ron Haskins: I want to go back to the point about these other programs. Starting in the mid-1980s, Congress radically changed not just the welfare laws, which took much longer to do, but a whole series of laws that supported low-income working families. You¹ve already mentioned the income tax credit. We spent four or five, eight billion dollars, now we¹ve spent thirty. The Medicaid rules were completely overhauled so working families could get Medicaid. Food stamps was expanded- Ben Wattenberg: And they now have that CHIP program whichŠ Ron Haskins: And you have CHIPs. It goes up to two hundred percent of poverty for children. Childcare was dramatically expanded, and if you compare the amount of money that the federal government spends on these work support programs for low income working families in say 1985, with the amount that we spent in say 2000- huge increases. So Congress was making the welfare laws tougher to encourage people and if necessary force them off welfare, but meanwhile the Congress had created a system that would make sure that if they worked, they¹d have twenty-five, thirty, forty percent more total income because they got money for food stamps and so forth. Ben Wattenberg: So it was a decrease in dependence and an increase in incentive. That was the idea of it. Ron Haskins: Absolutely. Doug Besharov: Well, you could describe it as a shifting of dependence. Ben Wattenberg: To incentive? Doug Besharov: To a different kind of dependence. I mean the numbers that Ron has just given, if you carry them from 1984 to the year 2000, there are seven times as many people, seven times as many people getting government means tested benefits. These are people with children. I¹m not talking about Medicaid. I¹m not talking about elderly services. I¹m talking about people who might some day vote. We are rapidly increasing the American social welfare state, not just because of welfare reform but because of this very amorphous idea of supporting the working poor, which has been translated into not just people under poverty but at two and a half times poverty. If you have three kids, we¹re right in the middle of the middle-class. Ron Haskins: But Ben, let me ask you this. Ben Wattenberg: Do you say that with regret or just as a point of information? Doug Besharov: Deep concern. Ron Haskins: We may be spending a little bit more money on the welfare families per se than we were before, but not much more. But meanwhile, they are earning by actual Census Bureau data, they are earning more than three times as much as they were in 1993. Ben Wattenberg: What was the whole ruckus about immigration? How did that play out? What was that about? Ron Haskins: Well, that was a huge part of the fight. Ben Wattenberg: You were working in the Senate at that time? Ron Haskins: In the Ways and Means Committee in the House. We wrote all the original drafts of the Bills including this provision, and the members were really very serious about this. They thought it was horrible to bring people to America for opportunity, bring people to a country that-most freedom in the world and the hottest economy and then to put them on welfare. And believe me, if you look at the roles for supplemental security income, the old AFDC program, food stamps, the percentage of non-citizens on those roles was growing like mad. In fact, in Ninety-six when we passed the legislation, Census Bureau data shows that households that had non-citizens were actually more likely to have the welfare benefit than a household with citizens, and taxpayers didn¹t like it. Ben Wattenberg: And those were most often legal immigrants? Doug Besharov: An illegal immigrant wouldn¹t take her children in and sign the child up for benefits. Ben Wattenberg: I know. But what¹s so interesting to me is that a legal immigrant comes in, as I understand it, with an affidavit from some family member that says, you will not be a ward of the State, and bingo, we just ignore that and they came in and they had the affidavit and they got the welfare. Doug Besharov: Administration after administration did that. That¹s right, and the second or third largest group of elderly receiving American retirement benefits were Russian Jews. I don¹t remember whether it was the second-do you remember?-or third. The largest group, of course, was Hispanics, and I don¹t remember whether the Jewish immigrants were larger than the Asians, but they were either two or three. That¹s how much abuse was in the system. Sure. Ron Haskins: But this system of the affidavit, its support, it was not legally enforceable because of flaws in the way it was done. That whole law was changed in Ninety-six. A) Non-citizens were not eligible for benefits. B) Every non-citizen that came in here that was a worker had to have this Affidavit of Support from an individual or from a church, some group, and it was legally enforceable. So now the safety net for non-citizens is not the government and taxpayers, it¹s whoever supported their entry into the United States. Then once they become citizens, they¹re eligible for welfare just like anybody else. It¹s a totally reasonable system. It¹s been horribly misrepresented in the media. It¹s one that voters would undoubtedly support. In fact, they do in poll after poll. Ben Wattenberg: You buy that? Doug Besharov: Well, I think there are two pieces of this, one is the retirement benefits, which I think are quite difficult to justify because those people didn¹t contribute, they just moved here. The other side of it though is there are a lot of immigrants in this country, and we have not come to terms with their presence here. Ben Wattenberg: And most of them work very, very hard. Let me ask you a question. Now here¹s a Bill that notwithstanding the glitches you¹ve described has worked and yet there is once again another big fight about re-authorizing this Welfare Bill. What¹s the fight about? And what do you do about it? Ron Haskins: There are several big issues. One of the biggest is the non-citizen issue. Something that- a number of people on the Hill would like to roll back the changes for non-citizens and bring non-citizens back onto the welfare rolls, so that¹s been part of the fight. Doug Besharov: We welcome these folks and then we have a society that¹s very expensive. If these folks are living in Mexico or Guatemala, whatever, medical care is within reach. They just go to the local clinic. In this country we provide medical care through Medicaid, and the issue is, can those immigrants gain access to medical care unless they get the American ticket, which is Medicaid. Ben Wattenberg: Okay. What else is there? Ron Haskins: The biggest issue on welfare itself is work. There¹s a glitch in the Ninety-Six legislation. A provision was inserted in legislation that if the States had a caseload decline then they would not have to have such a high percentage of their caseload in actual work programs, and the effect of that, because the caseload which we¹ve already talked about declined so much, that there are virtually no work requirements now. So the administration is very intent on fixing that hole. Doug Besharov: The administration boxed itself in a corner on this issue. It proposed a major increase and mandatory work and no increase in child care for the mothers whose work requirements would increase, and the Democrats, although I agree that part of this is just a mandate, the Democrats took that issue and ran and they said, if you want to increase the work requirements, well, we¹re in favor of work but we¹ll have to increase the childcare. Bing! Fifteen billion dollars, and this administration was not prepared, I think, to spend the additional money for childcare. And so, while I think Ron is right that work was an important issue here, you know this town, Ben. They could have bought their way out of this with five, ten, or fifteen billion dollars in childcare money. Ben Wattenberg: Coffee change. Doug Besharov: Yeah, well- Ben Wattenberg: Let¹s go to this. I think I know a little bit about how the federal statistical services work. These wonderful golden numbers that you¹ve given me, sixty percent decline and so on and so forth, that would basically precede the onset of the recession. Now the recession is almost two years old. The figures will-maybe the very latest ones have caught up with it. Has the Welfare Reform Act shown that it works, not only in times of a vibrant growing economy but also at a time when the economy is sluggish? Doug Besharov: So far, yes. The tricky part here is we don¹t know kind of recession this is. It looks a lot stronger at the entry level than other recessions have. Ben Wattenberg: Well, stronger meaning it hasn¹t hit as hard? Doug Besharov: Hasn¹t hit as hard for people at the bottom as for people in the middle. You know, dot com companies didn¹t hire that many-whatever¹s-and so partly- Ben Wattenberg: Janitors? Doug Besharov: Janitors-well, not just janitors, but lower wage type employees. So partly it¹s a more gentle recession for folks at the bottom, but it¹s absolutely the case that predictions that any recession would result in a giant increase in caseloads have not proven true. There¹s been a little up-kick. Cases are actually a little higher today than their all-time low, which was about a year and a half ago, but they haven¹t jumped. Ben Wattenberg: And the recession itself, I mean, measured traditionally, which people are trying to avoid is still below six percent unemployment, which is not really high. In fact, that used to be regarded as full employment. Doug Besharov: Right. Right, so- Ron Haskins: In fact, you know, if you look at the recent Census Bureau data for 2001 when the recession started, overall poverty increased, but child poverty did not increase significantly, and poverty among Black children and Hispanic children actually declined a little bit, even though it wasn¹t significant Ben Wattenberg: Ron, tell me about the new marriage proposal in the proposed Reauthorization Bill? Ron Haskins: Right, right. It is a modest proposal that the federal government would put up two hundred million dollars a year. The States would put a hundred million. States on a voluntary basis would organize programs to promote healthy marriages among low-income families through counseling, through help with employment, various range of services, some of which have been shown to be effective with middle-class families. And the goal would be to increase the percentage of American children, especially poor children who are reared in two-parent families. The first thing that would happen is, they wouldn¹t be poor anymore, but there would be lots of other positive consequences for the children and for the adults if we could increase the percentage of kids in two-parent families. Ben Wattenberg: Do you buy that, Doug? Doug Besharov: Sure. I mean, Cher said, ³Having a husband is a luxury². He¹s not a luxury for a low-income mother. The problem is this is a tremendously, tremendously controversial provision from the Right and from feminists. Ben Wattenberg: Right. Our colleague at the American Enterprise Institute, Michael Novak, says there¹s a four-word solution to poverty, which is get married, stay married. So that¹s pretty good stuff. Ron Haskins: Right. Ben Wattenberg: Let me just close it on this note. If there was one thing that you would like to see in this new Reauthorization Bill, what would it be? Ron Haskins: The marriage provision. I think we could be successful. Ben Wattenberg: Doug, what do you think? Doug Besharov: I¹m close to that, but fifty percent of all single mothers live with somebody else. About half of them live with boyfriends; about half of them live with their families, parents and so forth. There¹s hardly anything in any Welfare Bill that reflects that underlying reality. If we¹re going to be relevant to low-income families, mothers, children, and the people they live with, the law has to reflect those realities. Ben: Okay. Thank you very much Ron Haskins and Doug Besharov. And thank you. Please remember to send us your comments via e-mail. For Think Tank, I¹m Ben Wattenberg. We at Think Tank depend on your views to make our show better. Please send your questions and comments to New River Media, 1219 Connecticut Avenue, NW, Washington, DC 20036. Or e-mail us at thinktank@pbs.org. To learn more about Think Tank, visit PBS on line at www.pbs.org, and please, let us know where you watch Think Tank. 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