Tag Archives: poverty

ending welfare as we knew it

Washington Monthly has an interesting post on Bill Clinton’s welfare reforms. I admit, even though I lived through it I didn’t know much more than the sound bite version. The fuller version is that while he did allow Congress to drastically scale back welfare as it was known at the time, which was cash assistance to poor families with relatively few strings attached, he drastically scaled up the earned income tax credit, which ended up helping more people. The article ends by making an interesting case that the debate has actually shifted somewhat to the left since the 1990s, and there is actually somewhat of a bipartisan consensus that more is needed to fight poverty and help the poor develop job skills. At the same time, the poverty rate among children and minority children in particular is still shameful.

 

What did happen is that Clinton seized on one element of the conservative welfare reform agenda – work – and used it as leverage to create the broadest expansion of federal spending on poverty reduction since the New Deal. Welfare recipients should work, Clinton agreed, and the 1996 legislation set both a five-year time limit on benefits and imposed, for the first time ever, a requirement that recipients work to receive aid.

But Clinton also argued government’s obligation to “make work pay.” “No one who works full time and has children in the home should live in poverty,” said Clinton in 1996. It was a bargain that would win over the public, which soon shed its appetite for punishing the poor that conservatives had done their best to encourage. It also enabled Clinton to push through his ambitious agenda of new programs aimed at helping the working poor.

Clinton’s biggest win was the expansion of the EITC, which was framed as a precondition to passing welfare reform and which Congress passed in 1993. Today, the EITC is the federal government’s largest anti-poverty program, delivering $63 billion in benefits a year to nearly 28 million families. This makes it nearly four times the size of the federal block grants under Temporary Assistance to Needy Families (TANF) – the successor to AFDC. Researchers credit the EITC for dramatically increasing workforce participation for lower-income women (more so than the reform of AFDC). According to the Center on Budget and Policy Priorities, the EITC lifted 9.4 million people in working households out of poverty in 2013.

Nixon and basic income

In 1969-70, Richard Nixon made an attempt to guarantee a basic income to all families in America.

Richard Nixon was not the most likely candidate to pursue the old utopian dream, but then history sometimes has a strange sense of humor. The same man who was forced to resign after the Watergate scandal in 1974 had been on the verge, in 1969, of enacting an unconditional income for all poor families. It would have been a massive step forward in the War on Poverty, guaranteeing a family of four $1,600 a year, equivalent to roughly $10,000 in 2016…

According to Nixon, this generation would do two things deemed impossible by earlier generations. Besides putting a man on the moon (which had happened the month before), they would also, finally, eradicate poverty.

A White House poll found 90% of all newspapers enthusiastically receptive to the plan to pay an unconditional income to all poor families. The Chicago Sun-Times called it “A Giant Leap Forward,” the Los Angeles Times “a bold new blueprint.” The National Council of Churches was in favor, and so were the labor unions and even the corporate sector. At the White House, a telegram arrived declaring, “Two upper middle class Republicans who will pay for the program say bravo.” Pundits were even going around quoting Victor Hugo – “Nothing is stronger than an idea whose time has come.”

It seemed that the time for a basic income had well and truly arrived.

“Welfare Plan Passes House […] a Battle Won in Crusade for Reform,” headlined The New York Times on April 16, 1970. With 243 votes for and 155 against, President Nixon’s Family Assistance Plan (FAP) was approved by an overwhelming majority. Most pundits expected the plan to pass the Senate, too, with a membership even more progressive than that of the House of Representatives. But in the Senate Finance Committee, doubts reared. “This bill represents the most extensive, expensive, and expansive welfare legislation ever handled,” one Republican senator said. Most vehemently opposed, however, were the Democrats. They felt the FAP didn’t go far enough, and pushed for an even higher basic income. After months of being batted back and forth between the Senate and the White House, the bill was finally canned.

In the following year, Nixon presented a slightly tweaked proposal to Congress. Once again, the bill was accepted by the House, now as part of a larger package of reforms. This time, 288 voted in favor, 132 against. In his 1971 State of the Union address, Nixon considered his plan to “place a floor under the income of every family with children in America” the most important item of legislation on his agenda.

But once again, the bill foundered in the Senate.