TIME: Almanac 1995

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<text id=94TT0015> <title> Jan. 10, 1994: Unraveling The Safety Net </title> <history> TIME--The Weekly Newsmagazine--1994 Jan. 10, 1994 Las Vegas:The New All-American City </history> <article> <source>Time Magazine</source> <hdr> WELFARE, Page 25 UNRAVELING THE SAFETY NET </hdr> <body> The paradox of welfare reform is that saving money can be very expensive By Richard Lacayo--Reported by Ann Blackman/Washington, Jordan Bonfante/Los Angeles and John F. Dickerson/New York After her divorce in 1984, Joanne Brooking discovered that her real problems were just starting. For a newly single mother with three young sons, finding and keeping a full-time job was a challenge in Montpelier, Vermont, a state where unemployment hovers around 4.8%. As it turned out, too much of a challenge. Brooking, 43, has been on and off welfare ever since. There wasn't much incentive to work anyway. When stints as a substitute teacher and an Amway saleswoman brought in some money, her welfare check was cut. Her best hope for the future might be the sociology degree that she is 30 credits shy of getting from nearby Goddard College. But she can't afford day care for her six-year-old--or transportation to get to school. Given all that, Brooking should be happy that this month Vermont's legislature is expected to adopt a $700,000 reform package to help people like her get back into the job market. But she's not exactly thrilled. While the plan would provide educational assistance and child-care support, Vermont is following the lead of several other state plans by imposing a two-year limit on benefits for many recipients. That is, get a job or get off the dole. "It isn't that people don't want to work," Brooking insists. "It's that there are no jobs out there." Or maybe it's some combination of the two. Whichever is true, welfare reform is back on the agenda in state capitals and in Washington, meaning that a good many of those collecting checks all around the U.S. may eventually find themselves tossed into the job market. Last month a task force appointed by Bill Clinton completed draft recommendations for legislation aimed at a nationwide revamping of the system. At the center of any comprehensive plan, which the White House expects to send to Congress some time this year, will be the goal of ending most support payments after two years. After that, recipients would have to enroll in a work program. But to achieve that aim, the presidential task force envisions significant increases in child-care support and job training--and beyond that, the prospect that if the market doesn't provide enough work, government will be obliged to create jobs or to subsidize employers to take on the new hires. All of which means that reforming the system could cost more than not reforming it, at least in the short term. Is welfare really so out of control? The recent recession helped swell the number of households getting Aid to Families with Dependent Children, the largest component of welfare, by 33% since 1989, to nearly 5 million. And most people's reliance on welfare is transitional. If patterns hold, half of today's recipients will be off the rolls within two years. Just 2% collect checks for more than a decade. Even so, welfare's flaws are under scrutiny. For a fraction of recipients, the checks create a culture of dependency in which children grow up without ever seeing members of their family go to work. Also, because half of all children on welfare were born out of wedlock, compared with just 10% for American children generally, critics accuse the system of creating financial incentives for single motherhood. Add to those sentiments an enduring voter discontent over taxes and pressure on the President to keep up his image as "new Democrat." All have combined to make welfare reform a White House priority. "It has gone from a subject for think tanks to a grass-roots issue," says one top Administration official. "It has a big head of steam." The most impressive thing about Clinton's campaign pledge to "end welfare as we have known it" is that it came from a man who understands something about the complexities of welfare reform as we have known it. As head of the National Governors Association, he helped draft the last major piece of federal legislation to deal with the issue, the 1988 Family Support Act, which requires most recipients to take part in job-training programs. The 1988 act has been only modestly effective so far, which is one reason Clinton is likely to proceed warily. In his Jan. 25 State of the Union address, the President is expected to outline proposals drawn up by a 32-member interagency task force that he formed last June. But White House insiders say he will put off sending the proposals to Congress until his health-care legislation has moved through committee--the same committees that would handle welfare reform. That could be six to 10 months from now. To do otherwise, argues one high Administration official, could put potential allies in a bind. "If some members of Congress feel they would be tugged to the left in health-care reform, they might want to go to the right in welfare reform, to the detriment of our program." What the White House fears most, however, is not a major ideological battle like the one over NAFTA. "You will have more agreement on policy than people expect," says Andrew Cuomo, assistant secretary of Housing and Urban Development and a member of Clinton's task force. "Nobody likes welfare. Nobody thinks it works." Many of the ideas that the White House is likely to endorse are also to be found in a Republican proposal put forward in the House. Among the features: a national campaign of persuasion to reduce teenage pregnancy, two-year benefit caps, penalties for mothers who bear children on welfare, a greater effort to track down deadbeat dads for child support and rules that allow welfare recipients to take jobs without losing all their benefits. While the policy gap between Republicans and Democrats is bridgeable, the question of how to pay for any new system remains. The big challenge of welfare reform is not the relatively small percentage of recipients who refuse to work but the much larger number who would love to. When the cost of finding or providing them jobs is added up, the present system may look like a bargain. All welfare programs, including AFDC, food stamps, housing subsidies and supplemental income for the disabled elderly, cost a total of $53.4 billion to the Federal Government--about 4% of the federal budget. (The states kick in another $15.3 billion.) By some estimates, reform could push 1.5 million people into a job market where 8.3 million are already out of work. That could add $10 billion annually to the budget for training, transportation, child-care subsidies, incentives for private employers to hire recipients and the creation of community-service jobs for those who don't find other work. Strict budgetary caps will mean that the money will have to come from cuts in other programs. How much would be saved through declining welfare rolls? States that have been experimenting with their own reforms have generally seen a mere 5% reduction in the number of recipients. But they continue to look for ways to squeeze harder. In November the Clinton Administration approved a Wisconsin pilot program to take effect in 1995, which will require welfare recipients in two counties to find full-time work or a job-training program within 30 days after they enter the welfare rolls. Cash benefits will end entirely after two years. Georgia has just adopted a more gradual measure that refuses benefits to any able-bodied recipients who turn down a minimum-wage job. But since its exemptions include anyone caring for a child under 14, among many others, it will end up applying to less than about 6% of the roughly 120,000 adult Georgians on welfare. While it's too soon to tell how those measures will work, some preliminary results are already available for programs in other states. California, as home to one-sixth of America's welfare recipients, had little to lose eight years ago when it launched Greater Avenues for Independence (GAIN), a program that will cost $289 million this year to provide job training to about 200,000 welfare recipients. A recent study by the Manpower Demonstration and Research Corp., a New York-based nonprofit group, found that two years after entering the program, single parents earned an average of 20% more than those who had not taken part. Even so, job training has a bad reputation among conservatives, who see it as a boondoggle for the trainers that does little to improve the earning potential of the trainees. Better to subsidize them in low-skill jobs, the argument goes, like ringing registers at 7-Eleven, where they can get on-the-job experience in regular working habits that will help them move up. (However, labor unions complain that when government pays private employers to hire from the welfare roles, it puts nonwelfare job applicants at a disadvantage.) For mothers on welfare, New Jersey currently provides health insurance, food stamps and $64 a month for each child. But as part of a larger revamping of the welfare system, the state is now denying increased child support to women who have more children while they are already on welfare. Georgia and Wisconsin have adopted similar penalties. "Even if you work at poverty level there's nobody that gives raises if you have children," says New Jersey Assemblyman Wayne Bryant, chief author of the welfare-reform plan. Early numbers indicate that the penalties may be having some effect. From August through October the number of babies conceived by mothers already on welfare was 2,398, down 452 from the same months in the previous year. However, last month the National Organization for Women, the American Civil Liberties Union and Legal Services of New Jersey sued the state and Federal Government on the grounds that the policy violates constitutional guarantees of privacy, equal protection and due process. "There is no constitutional right to welfare," protests Bryant. "Therefore the state can make conditions." True, says NOW, but not in ways that violate constitutional mandates. Said NOW New Jersey's president Myra Terry: "We have Roe v. Wade that says women have the right to choose, not some women based on their economic capacity." The questions being asked in the states will be heard before long in the halls of Congress. Whatever the complications, the consensus in Washington is that welfare reform is a problem that will have to be faced this year. Which means that eventually even a cautious President will have to solve the central problem: how to fashion a safety net that doesn't also double as a hammock. </body> </article> </text>