The Debate Begins On Nixon's Reforms

Having presented his new welfare proposals to the nation on television, Richard Nixon turned last week to the arduous task of selling his innovative program to Congress. It will take some doing. While generally lauding the direction of Nixon's reform efforts, many legislators on both the left and the right have doubts about the details of the proposals. The President delivered his reforms to Congress in three separate messages :

qed A manpower-training act, designed to completely consolidate the existing, disparate federal job-training programs, then place them in the hands of state and city administrators.

qed A welfare-reform program intended, by linking aid to work, to overhaul fundamentally poverty assistance. For a family of four, the basic federal subsidy would be $1,600, available to able-bodied recipients only if they accept employment or enrollment in job-training classes. The Office of Economic Opportunity (OEO) would lose operating authority over the nation's antipoverty projects and would assume the more limited responsibility for research and development of new programs.

qed A revenue-sharing system, aimed at aiding ailing state and city treasuries by returning a portion of federally collected taxes to states and localities on a pro-rated basis.*

Employer of Last Resort. Most of the first round of criticism was aimed at welfare reform, and both liberals and conservatives joined in the firing. Overall, they praised Nixon's desire to combine an income supplement to the working poor with a national minimum welfare benefit, but they severely scored the way the Administration proposed to make the new system work.

The most serious charge against the Nixon program is that, while it stresses the need for getting welfare recipients off the dole and onto payrolls, it has not yet acknowledged the necessity for programs to create more jobs. A corollary criticism is that the Administration refuses to accept the role of employer of last resort.

In recent years, liberal legislators have urged the creation of a guaranteed-job program. Most of their proposals would combine federal public-service jobs, such as hospital and recreation workers, with a system of tax incentives to private industry to encourage the hiring, training and retraining of unskilled labor.

Under the provisions of the Nixon welfare plan, able-bodied parents, except mothers of preschool-age children, would be required to accept "suitable" work or job training, if offered. Yet neither this program nor the proposed manpower-training act provides any means to create more jobs. "Like the welfare proposal," argued A.F.L.-C.I.O. President George Meany, "the manpower message outlines a training mechanism but suggests no plan --and provides no funds--for turning a trainee into a job holder. It is the Government that must be the employer of last resort, and on that subject the President's proposal is absolutely silent."

Jobs Needed. Joseph Califano, former presidential aide to Lyndon Johnson, agreed and noted that the manpower proposal includes a provision for a 10% increase in job-training funds when unemployment hits 4.5% (about 4,000,000 unemployed) for three consecutive months, a level that some experts think could be reached this year. "If unemployment goes that high," argued Califano, "it's not manpower funds they'll need. It's jobs. The guys who are already trained will be out of work. You can make a case that we need a public-employment program right now." The primary problem is money. The cost of the Government's assuming the role of employer of last resort could be astronomical, far above what a Congress concerned with inflation would accept. Unemployment is now 3.6%, 2,592,000 people. If the rate were to rise 1%, 858,000 more workers would be jobless. To place even half of these unemployed in public service could cost the Government up to $3 billion. Ideology is an equal barrier. Presidential Adviser Arthur Burns shies away from the concept, both on the ground of economy and because it rasps uncomfortably against his conservative principles.

Several critics also balk at the work requirement in the Nixon welfare program. They question the social value of forcing mothers of school-age children to accept employment or job training rather than staying at home with their youngsters. The requirement that family-assistance recipients accept "suitable" employment also worries some. They fear that the lack of safeguards in Nixon's plan against abuses of this requirement could lead to unemployed people being trained for skilled work and then being forced to accept menial jobs to qualify for federal aid.

Liberals were also less than pleased with the welfare program's proposed base-subsidy figure of $1,600. As the family income increases, the federal subsidy would decrease. When the family's annual income reached $3,920, all federal assistance would end. New York Republican Senator Jacob Javits said that the $1,600 must only be considered "as a beginning." Javits added: "Congress will have to consider--perhaps on a phased-in basis--a support level of at least $3,000 for those who are unable to support themselves." Congress will have that opportunity. Three representatives--Jonathan Bingham, John Conyers and Charles Whalen--presented a new bill last week that would provide a base of $3,200 for a family of four.

Suspicion Created. The Administration's proposal has its confusing points. Chief of these is the relationship between the proposed welfare system and the $1 billion federal food program that Nixon sponsored last spring. According to the new program, families who accepted federal assistance would not be eligible for federal food stamps. Said Nixon in his message to Congress: "For dependent families there will be an orderly substitution of food stamps by the new direct monetary payments."

John Kramer, executive director of the National Council on Hunger and Malnutrition, promptly charged that this edict would change Nixon's "family-assistance system" into a "family-deprivation system." He argues that at least 80% of welfare recipients now on the rolls who receive food stamps would be worse off under the new Nixon plan. Capitol Hill quickly supported Kramer's criticism. Senator Javits attacked the food-stamp restriction, and South Dakota's Senator George McGovern and Minnesota's Senator Walter Mondale rapidly petitioned the President to retain the stamps for welfare recipients. Last May, Nixon proposed a $1 billion annual increase in spending for the federal food program for the poor. The White House's present position against giving food stamps to family-assistance recipients has led some critics to suspect that Nixon intends to finance his welfare plan partially with money saved on the federal food-assistance program.

Despite their concern with the inadequacy of the basic federal subsidy, black leaders are cautiously optimistic about the Nixon proposal. Whitney Young, executive director of the National Urban League, said that the proposal represents "a major change about problems of the poor and offers hope for the future." Roy Wilkins, head of the N.A.A.C.P., called the concept a "step in the right direction." Their optimism, in fact, was not too far removed from the views of the critics. Even the more outspoken criticism of the program's details seemed not so much calculated to reject the scheme as to improve on an essentially good idea.

* If it is approved by Congress, Nixon's revenue-sharing plan would begin by splitting $500 million among the 50 states during the six-month period starting Jan. 1, 1971. By 1975, the money to be divided would grow to an estimated $5 billion. The program would begin by offering the states one-sixth of one percent of the nation's total taxable income, less deductions and exemptions. By 1976, this share would grow to 1 % of the country's total taxable income, the level at which it would remain. Each state's share would be calculated through a formula involving population and the proportional share of the federal-tax revenues that the state contributes. The larger the state's proportional contribution to the federal coffers, the larger its return. Localities within the states would be eligible for a portion of the returned revenue, which would be "passed through" the state capitals and on to the city halls. Significantly, the funds would be given without any strings attached.

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