It has been a depressing turn of events, but it isn't too late to turnthings around. There is still time and opportunity for a serious affirmativeagenda that both promotes work and reduces poverty. But if there's going to beprogress this year, it's important to look at where the debate ought to be, howit got derailed, and what can be done to get it back on track.
Some quick background: The 1996 welfare law was controversial because, amongother things, it ended entitlements to cash assistance for low-income families,imposed a federal five-year time limit on assistance, and shifted to a system inwhich states received fixed block grants each year and had enormous discretionover how to use them. The law also made many legal immigrants ineligible forpublic benefits, made sharp cuts in the Food Stamp Program, and restricteddisability benefits for children.
There were heated disputes about each of these issues, but there was far lesscontroversy about work itself. Many members of both parties have long agreed thatthe welfare system should expect and require work of those who are able. So in aneffort to both promote and support work, the 1996 law expanded child-carefunding, made it easier for families who weren't eligible for welfare to qualifyfor Medicaid, strengthened child-support enforcement, and adopted"participation-rate" requirements (under which a state could be penalized unlessa specified percentage of families receiving assistance were working orparticipating in work-related activities each month). The participation-raterequirements were just one feature of the 1996 law, but they're taking on acentral role in this year's debates.
What the States Learned
Most states began implementing the 1996 law with a "work first"philosophy, urging and requiring families receiving welfare to take any availablejob, restricting access to education and training, and imposing sanctions (grantreductions and terminations) when families failed to meet program requirements.When states took this approach, their caseloads went down and employment went up.At the same time, a lot of the employment was in very low-wage jobs, and many ofthe families with the most serious problems got cut off from assistance when theycouldn't meet the new requirements.
Many, though not all, states gradually moderated their approaches, for severalreasons. First, as they looked at the quality of jobs people were getting, theybegan to conclude that programs needed a better mix of education, training, andwork-related activities. Second, they came to conclude that families stillreceiving assistance often faced serious and multiple barriers to employment:health and mental-health problems, disabilities, domestic violence, substanceabuse, no means of transportation, and a lack of basic literacy, among others.This suggested that many of these families needed more than a work requirementand a threat of grant cancellation; rather, it was important for states to usemore flexible, individualized strategies in working with them. Third, the strongeconomy and caseload decline left them with freed-up block-grant funds, whichmeant that they weren't under pressure to cut benefits and actually hadadditionalmoney to expand services and supports.
As 2002 began, there seemed to be a surprisingdegree of consensus amongstates, researchers, and advocates about the basic story since 1996. Since thelaw was enacted, a historically unprecedented drop in welfare caseloads hadoccurred; child poverty had fallen (but not nearly as much as welfare caseloadshad dropped); employment had largely increased among single-parent families; muchof the employment was unstable and low-wage; too often the gains in employmentdidn't translate into significant improvements in family well-being; anddifferentstrategies were needed for the families that hadn't found employment amid thestrongest economy in recent U.S. history. Moreover, research suggests that ifparents went to work but family income didn't go up, there wasn't much change inchild well-being; for children to do better, it was important that parentalemployment translate into increased family income.
There also seemed to be a broad consensus about how to build on what hadworked and where to make needed adjustments. Probably the strongest themes formost states were that they wanted to stay the course with sustained funding andincreased flexibility. For many in the progressive community, the affirmativestrategy includes the following:
Despite arguments about details, there was a surprising amount ofagreement about the need to respect state flexibility. This was not becauseadvocates agreed with everything that states have done. Rather, many believedthat the welfare debates in states tended to be less ideological and morepragmatic, and that as caseloads have fallen and more people have gone to work,the discussions were less divisive and more focused on what could be done betterin the next stage.
As the reauthorization debate began, the two most anticipatedagenda items from the right were efforts to cut block-grant funding to states andto impose new requirements for them to "promote marriage." Block-grant fundinghad been frozen at levels reflecting welfare caseloads since the early 1990s, andit was anticipated that conservatives would argue that states no longer neededthe money. The counterargument was that as welfare caseloads went down, stateshad redirected block-grant funds for expanded child care, transportation, andother benefits that helped low-income families and reduced the need for welfare.By 2000, in fact, 33 states were spending more on child care than on cashassistance, largely because they had been able to redirect welfare block-grantfunds. The freed-up funds thus were playing a critical role in helping workingfamilies get by so that they wouldn't need welfare.
As for marriage, some conservatives had advocated setting aside 10percent of block grants (about $1.6 billion a year) for marriage-promotionactivities; others seemed to be advocating preferences for married families inpublic programs, and a heated debate about marriage was expected.
The Administration's Bombshell
Then, on February 26, the administration announced its welfarereauthorization proposal; seemingly overnight, the focus of debate shifted. Theadministration proposed to maintain block grants at current levels through2007 -- neither a cut nor an acknowledgment that a fixed block grant erodes invalueevery year. And the administration "only" proposed to redirect $300 million eachyear for activities intended to promote "healthy marriages" -- an amountconsiderably less than some had sought but still reaching $1.5 billion over fiveyears for a narrowly defined list of approved activities.
The centerpiece of the administration's proposal, though, has become known asthe "70-40" proposal: By 2007 states would be penalized unless 70 percent offamilies receiving welfare were working or in certain work-related activities forat least 40 hours a week. In meeting the 40-hour requirement, only a narrow setof activities could count toward the first 24 hours. There are many details, butthe practical effect would be that after three months of participation, an adultcould only be counted if he or she was in a subsidized or unsubsidized job -- or a"work experience" program for at least 24 hours a week. If he or she onlyparticipated for 23 hours a week, he or she wouldn't count at all. The statecould count training or other activities toward the first 24 hours for no morethan three months in a two-year period. A state could thus effectively allowpeople to participate in full-time training for no more than three months. Afterthat, individuals could only participate in training if they were also satisfyingthe 24-hour direct-work requirement.
There are at least five significant problems with the proposal:
Given all this, the plan would pose serious problems even if theadministration were seeking additional funding to pay for it. But theadministration sought no new funds to pay for either the new work program or theincreased child-care costs. Instead, both block-grant funds and child-carefunding would be frozen at current levels for the next five years, which means acut when adjusted for inflation. So states would essentially face two choices:Cutback on child care for other low-income working families and curtail otherlow-income assistance to pay for the costs of the work program, or find ways tocut off families from assistance in order to manage.
The Response and the Politics So Far
Had anyone other than the administration proposed a plan like this, itwould have been dismissed out of hand. There have been many criticisms of stateperformance over the past five years, but two things seemed incontestable:Welfarecaseloads had fallen beyond anyone's predictions and there had been ahistorically unprecedented increase in work among single-parent families. So,going into 2002, people had argued about whether states could be doing more toimprove job quality or about which approaches were the best for working with thehardest-to-employ. But no one was suggesting that states hadn't been seriousabout requiring work.
Furthermore, the hallmark of the block-grant framework had been stateflexibility. The principal arguments used in 1996 to dismantle the then-existingsystem had been that Washington can't and shouldn't micromanage, thatone-size-fits-all solutions don't work, and that states need maximum discretionand flexibility to craft solutions that work for them. But here was a proposalthat would put the federal government back in the business of specifying whichactivities would count toward which hours of a participation rate -- and that wouldforce states to dismantle effective programs because they don't conform to theadministration's specifications.
Nothing in the research findings over the last five years commends theadministration's approach. The drafters of the plan seem enamored of large-scaleworkfare programs. The research, however, has never found that such programs arethe most effective ways to promote employment. The most recent welfare-workresearch finds that the programs with the largest impacts use "mixed strategies,"which emphasize linking people with employment but use a combination of jobsearches and development, education and training, and individualized approaches.
Then there's the problem of cost. The Center for Law and Social Policy hasestimated that, if state caseloads remain flat, the plan would cost about $15billion more over five years than states would spend under current law. TheCongressional Budget Office has estimated that a House bill modeled after theadministration's approach would cost $11 billion above current state spendingover five years. While states would need to cut other spending in order tomanage,the administration has never articulated which current programs are expendableand where states ought to be cutting.
So if the plan is responding to a problem that doesn't exist (in a wayinconsistent with the basic framework that states have valued for the past fiveyears, without a basis in research, and with prohibitive costs), what does ithave going for it? The politics of welfare and the current politics ofWashington, seemingly.
It's hard to go wrong saying that you're in favor of requiring work fromfamilies on welfare. But going into 2002, caseloads were down, employment was up,the typical news story was about the struggling working parent, and publichostility seemed to have receded. This all suggested the potential for a newframework. But when the administration's plan was announced, key Republicans inCongress promptly agreed that the problem was that states were doing too littleto require work. Republican governors, unwilling to criticize President Bush,have generally been either supportive or silent. Democratic governors, with a fewexceptions, have been hesitant to criticize the plan without their Republicancolleagues' support. And Democrats in Congress have struggled in their efforts toframe a clear set of messages: They've generally agreed about the need for morechild-care funding and to end restrictions on benefits to immigrants, but they'vehad sharp internal disagreements about how to otherwise respond to the workproposals.
A bill closely tracking the administration's proposal sped through the Houseand was adopted on a near-party-line vote of 229-to-197 on May 16. In addition tothe work provisions, the bill also incorporates an administration proposal for"superwaivers," under which states could attain federal permission to operateprograms without complying with generally applicable requirements. For example,states struggling to meet work requirements could attain waivers of therequirement to spend part of their federal child-care funds on initiatives toimprove child-care quality; or states could attain waivers to impose time limitsin the food-stamp or public-housing programs. And the bill would allow up to fivestates the option to turn the Food Stamp Program into block grants.
In the Senate, a more moderate approach may emerge from the Senate FinanceCommittee. In late April, six members of the committee (John Breaux, Orrin Hatch,James Jeffords, Blanche Lincoln, John Rockefeller, and Olympia Snowe) joined inannouncing a set of "tripartisan" principles, adopting the administration'srecommended 70 percent participation rate but rejecting its restrictions oneducation, training, and 40-hour participation requirements -- and giving moreweight to state efforts to help families get jobs. Outside the committee, a groupof 18 progressive Democrats led by Senators Ted Kennedy and Paul Wellstone issueda statement urging broader access to education and training, increased fundingfor child care, and funding for transitional jobs programs (subsidized work forharder-to-employ families). The statement also recommended an exception to timelimits for poor working families. Another group, led by Senator Evan Bayh andclosely allied with the Democratic Leadership Council, supports theadministration's 70 percent participation rate and 40-hour requirements; itsmembers have sought to contrast their commitment to increased resources andflexibility with the administration's approach, but their principal politicaleffect has been to ratchet up the political pressure for others to be "tough onwork."
What Happens Next?
Apart from being a flawed proposal, the 70-to-40 discussions have beentroubling for another reason: They've pushed virtually all other issues out ofthe conversation. Debate has largely been conducted within the administration'svery narrow framework: Should the participation rate be 70 percent or 60 percent?What else can be done to adjust the rate? Should the participation requirement be30 or 35 or 40 hours? What activities should count toward the first 24 hours? Orshould it be the first 20 hours?
Many people assume that, in the end, compromise will produce something betweenthe original administration proposal and the current law. That's very possible,but if that's all that happens, a historically important opportunity will havebeen lost. In 1996 proponents of the changes argued that the nation would nevermake much progress in poverty policy as long as the debate was dominated bydisputes about what to do about the universally despised welfare system. SoCongress ended that system, and what now operates in many states bears verylittle resemblance to the system that existed 10 years ago. The plunge in welfarecaseloads and surge in work should have opened up the potential to talk about anext stage in antipoverty policy, but leaders of both parties need to be willingto say so.
A poll done for the National Campaign for Jobs and Income Support actuallysuggests that good policy could also be good politics. The survey asked whichshould be the higher priority for welfare: implementing tougher work requirementsfor people who receive benefits or expanding training, child care, and othersupports that help move people from welfare to good jobs. The public preferredexpanding work supports to implementing tougher requirements, 71 percent to 22percent. Most strikingly, the poll described the current Bush plan and acongressional Democratic one that would increase the availability of child care,transportation assistance, and other welfare-to-work programs; permit flexibilityin time limits so that families meeting their work requirements are not cut off;and expand access to education and training so that people can get and keep goodjobs. The public preferred the congressional Democratic plan, 60 percent to 31percent.
If the debate is about being tough on work, liberals and moderates will neverbe able to make a convincing case that they're tougher than conservatives. But ifthe debate is about what would most help people get to work, about what wouldmost help people get jobs at which they can make ends meet, or about whichpolicies can help children when their parents go to work, the affirmative agendais the more plausible one. It's not too late to reframe the debate, but time isrunning short.
