After the Safety Net: A Welfare Reformer Reflects on What Washington Wrought
David T. Ellwood is the Lucius N. Littauer Professor of Political Economy and former academic dean at Harvard's John F. Kennedy School of Government. He previously served as assistant secretary for Planning and Evaluation, Department of Health and Human Services. After serving as one of the two chief architects of President Clinton's welfare reform proposal, Ellwood resigned in protest over Clinton's support of the Republican bill -- a bill that did not provide jobs or other protections for welfare recipients who reached welfare time limits without finding a job.
Q: You were one of the principle architects of a welfare reform policy that pledged, "Two years, and you work," with some sort of job guarantee if no jobs were available. As you wrote in this magazine in 1996 ["Welfare Reform as I Knew It," TAP, May-June 1996], Congress changed that to "Two years, and you're off [welfare]" with no job protections. What harm has come of that change?
A: So far it hasn't made a whole lot of difference, largely because the economy has been outstanding. We did some things right prior to and along with the passage of welfare reform, one of which was to dramatically expand tax credits to working families. We really improved the rewards to working people who can find a job. We made work pay and we did welfare reform in a great economic environment. So in some sense, the issue of "two years, and you work" versus "two years, and you're off" is mitigated when there are plenty of jobs in the private economy. The real test is twofold: What happens in the next recession, and what about the folks who can't find jobs even in a good economy?
Q: The public perception of welfare reform so far seems to be one of cautious optimism. Will that change once more recipients reach their lifetime limit and are forced off the rolls?
A: I'm not sure it will. So long as the economy remains good and people are doing reasonably well, I suspect the cautious optimism will continue. Partly this is because those who are the most desperately poor are often not very visible. I think there will be some perception that there are some folks being harmed, but I'm not sure the public perception is likely to change, barring some major economic changes.
Q: It's been argued that we're in the midst of the "easy part" of welfare reform, that case loads are dropping with little pain or public outcry. The other side of that argument holds that once recipients start reaching limits en masse, we'll experience the "hard part" of reform and its accompanying problems. Do you put credence in this outlook?
A: I think that's right. I've always had a rough rule of thumb: One-third of folks on welfare, with appropriate support, would leave welfare fairly readily; a second third, with effort and energy, could be gotten into work; and a final third, for whom the problems are extremely serious -- people who have limited education, little work experience, seriously ill children, or have been subject to abuse and neglect growing up -- [would have a very hard time holding steady jobs]. Where we are right now is somewhere in the middle of that second group. Case loads are down about 50 percent, but already we're hearing from states that the people who are left will be a much more difficult problem.
Q: The liberal postmortem seems to be that Clinton's original welfare reform proposal, which you helped craft, was quite good. Where did the administration go wrong?
A: The Republican takeover of Congress really did change everything. The president wasn't willing to fight for the original conception of "two years, and you work" and indeed was comfortable with a more pure devolution and strong encouragements to move folks off welfare very rapidly without necessarily getting them jobs. The loss of the House and Senate [for Democrats] made it a much more difficult situation. The president, being a [former] governor, adopted a strategy that pretty much lets states do what they want. I'm very disappointed because I think what was lost in this process were some protections for people for whom work is going to be very difficult.
Q: Would you do anything differently if you could go back?
A: I would try and move more quickly. Waiting toward the end of the second year was really quite unfortunate. I don't think we in the administration did nearly enough work with the Democratic Congress to make them comfortable. There were some who had misgivings about the original proposal. We made some mistakes with how this was portrayed in the media.
Q: Do low-income working families get a better deal today than they did before welfare reform?
A: Absolutely, although it's not principally due to welfare reform. Those of us who worked on welfare reform had a three-part agenda. The first part was to make work pay, and a series of things have really improved the situation for low-income working families, including dramatic expansions in earned income tax credits, much more generous medical care supports for the children of working parents, and more generous child care allowances. The child-support enforcement system was also dramatically improved. What was lost was protection for people who are willing to work but unable to find reliable work. For us it was "two years, and you work" not "two years, and you're off."
Q: One facet of your reform strategy was to change the welfare culture from one of check-writing to one where work was the expectation and the goal from day one. To some degree, that has occurred. What still needs to be done to fix welfare reform?
A: The culture of welfare offices really has changed. I don't think there are many offices anywhere that are primarily about eligibility and check-writing. But I'm not sure that most welfare offices are about finding people jobs, either. They're about saying, Listen, you've got to get going, you can't get on welfare. The biggest issue with welfare reform is what to do about the people who can't find work or for whom full-time work is unrealistic.
Q: Has the reduction in case loads been commensurate with the reduction in need?
A: It clearly hasn't. The case loads have gone down very dramatically and poverty has gone down only somewhat. There is some evidence that people are worse off at the very bottom. But keep in mind that we're spending more now on social policy than we were at the start of welfare reform because of this dramatic expansion of the Earned Income Tax Credit (EITC), medical support, and so forth.
Q: Critics have long suspected that the goal on the right is to end federal spending on welfare. Are the sharp case load reductions the first evidence of this happening?
A: I really do think we're gradually shutting down the welfare system. The basic support for people who are not in the disability programs and who are not working is shrinking, and likely will continue to shrink into the foreseeable future.
Q: You were heavily involved in Clinton's expansion of the Earned Income Tax Credit. Today, far more money is spent on the EITC than is spent on welfare. Do you think Americans realize how much money is being spent on the EITC? And if so, do they support this spending on the poor?
A: That's correct; we now spend more on the income tax credit than we ever spent on Aid to Families with Dependent Children (AFDC) or Temporary Assistance for Needy Families (TANF). But I don't think most Americans know how much is being spent on AFDC, although I think that's true of a hundred other tax credits as well. This is one of the Clinton administration's major accomplishments that hasn't gotten the attention it deserves. We have dramatically increased supports for the working family, and often in a bipartisan way.
Q: You've noted how drastically an election -- even an election year -- can influence welfare policy. How might a Bush or a Gore presidency affect welfare reform?
A: That's a very interesting question. Based on what people have said so far, I'm not sure it would make a huge difference on welfare policy. I think Gore would do more to support working folks, but I'm not sure the differences are huge on welfare per se. Both administrations are going to have to address the problem of these hard-to-serve cases, once we're down to that, though I suspect Gore would be more concerned about the issue. And if there's a recession, both are going to have to deal with the fact that the current system is not very well designed to cope with recessions. Under either president, old-style welfare is unlikely to return. But I worry that if we had a Republican Congress and a Republican president we might see much more radical changes: perhaps time-limiting food stamps or the elimination of other major parts of the safety net that could be very, very harmful.
Q: What has happened to those pushed off, and what will happen as more are?
A: We know that about 60 percent are getting jobs. No one is quite sure what has happened to the rest. Very few people relied solely on welfare, so there's the food stamp program, which remains in pretty good shape, housing programs, and state and local programs that help some people. But I think there is a group of people who are clearly becoming worse off whom I'm troubled about. That remains an issue.