Fixing Welfare

By GEORGE J. CHURCH

The criticisms are such timeworn staples of conservative oratory that by now anyone who reads about welfare can reel them off from memory. The system is a monstrous mess: it breaks up families, traps the poor in degrading idleness and breeds a self-perpetuating cycle of illegitimacy, poverty and government dependency. It must be changed by training or even forcing people who get public assistance to become productive members of society. Move them off the welfare rolls and onto payrolls.

So what is new about welfare reform? Three things: 1) such rhetoric now resounds across the political spectrum, from Ronald Reagan to Daniel Patrick Moynihan to Ted Kennedy, and reflects an emerging consensus that embraces just about every politician who speaks on the issue; 2) states from California through Illinois to New Jersey are experimenting with overhauls of their welfare systems, focused on work requirements, and the Federal Government is talking about giving their efforts a formal blessing; 3) as a result, and at long last, something worthwhile might actually be done. Pondering the diverse sources and remarkably similar conclusions of a clutch of recent proposals, Senator Moynihan, a New York Democrat and lifelong student of the welfare system, finds in them a social analogue to a "rare alignment of the sun, the moon and the earth that causes all manner of natural wonders."

Not that anyone expects the creaky 50-year-old system of providing Aid to Families with Dependent Children (AFDC) and other welfare services to be + transformed overnight. The problems of training and finding jobs for welfare recipients -- teenage girls who drop out of school to have illegitimate children, to take the most stark example -- are immense. In the long run, money could be saved if a significant number of long-term welfare recipients could be placed in unsubsidized jobs and more absent fathers could be required to contribute to the support of children they have abandoned. But there is a problem: the additional billions it would initially cost to train and supervise welfare clients who are required to work, to supply day care for their children, and eventually to provide government jobs for those who cannot find employment in the private economy.

Nonetheless, the momentum for welfare reform is building rapidly. Since late November, welfare overhauls have been advocated by four high-level bodies: the American Public Welfare Association, a coalition of welfare administrators; the Project on the Welfare of Families, a group led by moderates of both parties; a task force appointed by New York Governor Mario Cuomo; and a working group of the White House Domestic Policy Council. The National Governors' Association has scheduled a vote Feb. 24 on a welfare reform plan, featuring work, training or study obligations for recipients, including mothers of children age 3 or more; approval is expected. In his budget message last week, Republican Governor Thomas Kean of New Jersey proposed a plan that would require all able-bodied welfare recipients, except mothers of children age 2 or younger, to take jobs, return to school or enroll in training programs.

On the federal level President Reagan has talked of a GROW (Greater Opportunities through Work) program, but has not yet sent a bill to Congress. When he does, it is expected to concentrate on encouraging widespread state and local pilot projects, largely by waiving restrictive federal rules that now inhibit them. In his Saturday radio talk, the President picked up on that theme by inviting Governors to the White House this month to discuss welfare reforms in which states play a greater role. Kennedy is in the game as well. Last week he introduced a bill that would give sizable federal "bonuses" to states that succeed in placing long-term welfare clients in private jobs. Kennedy and Moynihan will probably cooperate on drafting a broader reform bill; Moynihan, who chairs a subcommittee holding hearings on welfare, hopes to produce it as early as next month.

The focus of the reform movement, and the central problem, is AFDC. It is not the only welfare program; the Reagan Administration has issued a much disputed count of 59 federally assisted plans that it considers welfare. Nor is AFDC the biggest; Medicaid accounts for nearly three times as much spending. But AFDC is the principal program that gives cash to people who are neither sick nor disabled; they qualify solely because they have children they cannot support. As such, it is the program that most people think of when they use the word welfare.

AFDC began in 1935 as a little-noticed part of the Social Security Act; it was conceived as a program to tide widows and their children over until the Social Security survivors' fund could pay out claims. Expanded and made independent, AFDC has since mushroomed into a program that last year rang up $2 billion in federal, state and local administrative costs and dispensed an estimated $15.8 billion in benefits to 3.7 million families comprising 11 million people. Almost half of AFDC recipients these days are mothers who have never been married to the father of their children, and 40% more are those whose husbands have left home.

Welfare programs are run by the states, which set their own eligibility rules and benefit levels within guidelines established by Washington. The Federal Government pays, on the average, 54% of the costs. In about half of the states, families in which both a mother and a father are present can receive benefits, but in the other half only single-parent households qualify. Benefit levels vary widely: in Alabama, for example, a family of three gets about $4,000 a year in AFDC and food-stamp benefits; in Alaska such a family gets about $11,500. Some state officials feel that the system must be reformed on a nationwide basis so that recipients do not have an incentive to move to places where the benefits are more generous.

In recent years the nation has been conducting what amounts to an ad hoc experiment in discouraging welfare applicants. Under Reagan Administration prodding, states have tightened eligibility rules. Partly as a result, the number of AFDC families peaked at 3.9 million in 1981 and has declined slightly since. Benefit increases since 1970 have lagged so far behind inflation that the real value of combined federal and state AFDC grants has plummeted 33%.

But parsimony has failed to push people off the relief rolls and into jobs, ! and the manifold social evils associated with AFDC have only been getting worse. Poverty rates have generally risen since the late '70s, and the rise has been especially rapid among the children the system was designed to help. Welfare mothers who rear children who in turn go on relief are a core element of the so-called underclass. David Ellwood, a Harvard authority on welfare, figures that a quarter of all AFDC recipients have received benefits, off and on, for ten years or more; at any one time they constitute a startling 60% of all recipients. The rise of illegitimate births, especially among ghetto teenagers, has probably done more to turn middle-class Americans against AFDC than anything else.

The issue of whether welfare in fact encourages illegitimate births has been hotly debated. Most studies show there is no direct causal relationship. But the AFDC program, by its very nature, inevitably provides some economic incentives for the creation of single-parent families. It offers a steady (though meager) income to young women if they decide to have children they cannot support. It may encourage irresponsible men to father children without worrying how to provide for them. And it can produce a situation where a father with a low-paying job may feel forced to leave home so that his children can qualify for more benefits.

The root problem, say most reformers, is that AFDC does not require recipients to do anything in exchange for their benefits. Indeed, as presently administered, AFDC actively discourages work, in keeping with the bygone society of its origin, which simply assumed that most women would devote themselves to housekeeping and child rearing. Says Moynihan: "AFDC is unable to command stable political support. A program that was designed to pay mothers to stay at home with their children cannot succeed when we now observe most mothers going out to work."

The central idea of the reform movement is a "new social contract" between government and welfare recipient. That concept is not just a vague metaphor: a project in California requires AFDC applicants to sign individual contracts pledging to return to school, enroll in training programs or look for jobs. The welfare-reform report that the National Governors' Association is expected to approve this month calls for making such a system nationwide.

Such contracts, however, would not be one-sided. Besides supplying cash grants, the state would provide job training and assist welfare recipients in - looking for work. It might also pledge to subsidize day care for the children of working or studying AFDC parents, and to continue Medicaid or underwrite equivalent health insurance for those who find jobs. Conservatives are increasingly willing to accept such changes in return for the key concession from liberals to impose obligations on welfare clients.

Some other potential elements of welfare reform still stir fierce dispute, occasionally among surprising combatants. Don Fraser, the liberal Democratic mayor of Minneapolis, advocates barring new benefits to a welfare mother, married or unmarried, who bears a second child. Says he: "Those who increase their dependency by having additional children while on welfare are not likely to work very hard to get off of it." He has been publicly opposed by his wife Arvonne, a senior fellow at the University of Minnesota. Her view: "Once you've got kids you can't get rid of them, and we just don't have as many married people living together supporting kids as we used to."

But an impressive consensus is forming on some other components of a welfare-reform program, beyond work and study requirements. Under 1984 federal legislation, states can pursue fathers across state lines and force them to contribute to the support of AFDC families. Some states have launched vigorous enforcement programs. "We work with the mother to find out as much information about the father as we can," says Dan Pittman of the Illinois department of public aid. "Then we tap into the federal Parent Locator Service," which conducts a computer search for the missing father. Once he is found, Illinois will have his wages attached or take slices of his federal or state tax refunds. Wisconsin will collect 17% of an absent father's income if he has one child, 25% if he has two. Men might benefit from one other reform idea: there is some talk in Congress of requiring all states to extend AFDC to two-parent families. The system as it now stands is widely believed to encourage fathers to desert their families, and to discourage unwed AFDC mothers from marrying the fathers of their children.

The report of the New York task force on poverty and welfare gives one of the most detailed outlines of what a comprehensive overhaul might be like. The key idea is to convert welfare into a "short-term support program that helps those who can to achieve self-sufficiency." The group proposes a transitional program during which AFDC parents would sign contracts spelling out their < obligations. Teen parents would be required to complete high school. Others would be placed in training programs or helped to find jobs. In return they would get benefits sufficient to bring family income up to the poverty line (currently $10,989 for a family of four). But the benefits would be limited to three years on the average. "Failure to carry out (contracts) would subject the recipient to some degree of sanction" -- presumably a cut in benefits, though the task force did not specify. Welfare recipients who completed their contracts and still could not find employment would be "assigned to jobs in public agencies or nonprofit organizations."

No program quite that thorough is in effect anywhere yet, and none is likely to be soon. One reason is the price tag. The New York task force estimates that three parts of its plan -- subsidized child care, educational and training expenses and administration of the guaranteed-jobs program -- would cost $5.9 billion a year if applied nationally. States do not have that kind of money and are unlikely to wheedle it out of Washington in an era of giant budget deficits. Consequently, any reforms along the lines of those proposed by the New York group and other commissions will probably be phased in gradually.

But many states are making a start. Massachusetts and California claim impressive results from "workfare" programs. The one in Massachusetts, called ET, is voluntary, but California's Project GAIN is mandatory. Nine states submitted to the White House Domestic Policy Council proposals for demonstration projects that they hope will get federal approval. North Carolina would require all able-bodied recipients to satisfy a minimum work requirement in exchange for benefits. Pennsylvania proposed to reward welfare clients who got full-time jobs with cash grants for day care, medical insurance for one year and a cash subsidy if their wages did not equal the benefits they were getting on welfare.

Controversy still rages around many details of a welfare-reform program. Should work be required only from mothers of school-age children (roughly age 6 or older) or from parents of youngsters as young as 3? What should be done about mothers who continue to have babies and thus avoid the work requirements? What should be done about welfare parents who refuse to work or drop out of training programs; if their benefits are cut off, would that not amount to punishing the children for the sins of the parent? And will jobs be available in an economy where the unemployment rate for years has stubbornly hung at 7% or higher? The New York task force pithily observes that "job placement programs cannot work without jobs." Pete du Pont, the conservative former Governor of Delaware who is now running for the 1988 Republican presidential nomination, proposes that the Government become the employer of last resort, and that might be extremely expensive.

Some experts believe the economic climate is about to turn propitious for welfare reform. The competition for jobs that resulted when the baby-boom generation reached working age is becoming a thing of the past. In the 1990s fewer people -- those born during the baby bust, the period of low birth rates that began in 1965 -- will be looking for jobs. Says the Domestic Policy Council: "The baby bust will make it easier to lift America's welfare recipients up from dependency. Plenty of jobs will be available in the private economy, and at wage rates that will provide an adequate living. Welfare recipients will be able to fill those jobs, provided they have both the motivation and the proper preparation."

The political climate is also propitious for overhauling the welfare system. AFDC is such a mess that, as presently administered, it has few staunch defenders. Liberals and conservatives, despite continued squabbling, have reached a rare measure of agreement on at least the essentials of a reform plan. That agreement is seconded by most welfare recipients; the New York report, like most other studies, finds that "evidence from around the country indicates that most people who receive public assistance would rather work." The task during the period of experimentation that is beginning is to find the best and most practicable mix of methods to help them do just that.

CHART: TEXT NOT AVAILABLE

Credit: TIME Charts by Renee Klein

Caption: Number of families receiving AFDC

Description: Number of families receiving Aid to Families with Dependent Children in millions 1960-1985. Upward graph against artwork of faces.

CHART: TEXT NOT AVAILABLE

Credit: TIME Charts by Renee Klein

Caption: Percent AFDC recipients who are unwed mothers

Description: Percentage for years 1973-1984. Upward graph against artwork of faces.

CHART: TEXT NOT AVAILABLE

Credit: TIME Charts by Renee Klein

Caption: Average monthly AFDC payments

Description: Double rows of coins piled up form graph for years 1960-1985, one row in 1960 dollars and and the other in current dollars.

With reporting by Anne Constable and Hays Gorey/Washington