Policy Forum: Will the Republicans End Welfare As We Know It?

May/​June 1995 • Policy Report

The Cato Institute held a Policy Forum in the F. A. HayekAuditorium on March 14 to discuss welfare and the efforts of thenew Republican majority in Congress to reform it. The speakers were Charles Murray, a senior fellow atthe American Enterprise Institute and the author of LosingGround, In Pursuit, and (with Richard Herrnstein) The Bell Curve,and Will Marshall, presidentof the Progressive Policy Institute.

Charles Murray: The welfare debate is losing sight of the main issue. Thedebate is increasingly going back to the traditional questions:How can we get welfare women to work? How can we reduce therolls? However, the reason major welfare reform is needed is notto get women back to work. It is to cut the proportion ofchildren being born out of wedlock. Translated, what we need todo — and I know that I sound apocalyptic when I talk about this,but I’m being apocalyptic because I believe it is appropriate — isto head off what seems to be a swift movement toward two nations:not the two nations of traditional poor and rich, not the twonations of black and white, but two nations that are run under twovery different social templates. The upper classes, as I willcall them for want of a better word — I’m actually referring toeverything from the middle class on up — are belatedly beginning tounderstand a variety of things that are going to lead them tocurb a lot of excesses. As the baby boomers approach theirfifties, they discover that such things as community and familyare very important. I cannot give you a lot of systematic data toback up those statements, but I don’t know of very many affluentor middle‐​class young women who now think that it is okay, ifthey are in their thirties, to go ahead and have a baby eventhough they don’t have a husband and they can afford a child.That kind of behavior, which we saw in the 1970s, is fading away.On the contrary, I know personally of a number of women who arein their late thirties and early forties who decided that they really,deeply wanted to have children. They were not married, and theymade the explicit decision that they would not bear a child withoutbeing married because it would not be fair to the child. That isone kind of symptom.

There are other kinds of symptoms such as some statisticalsigns that divorce is decreasing and anecdotal signs that peoplein the upper classes are approaching marriage with a muchdifferent, more serious attitude than they did some years ago.

I will allow those statements to stand as assertions and talkabout another phenomenon, the data on which are much more concrete:things are going to hell in a handbasket in the lower classes.I’m not referring to blacks; I’m referring to whites, and I’mcalling upon some of the themes I raised in my Wall StreetJournal article “The Emerging White Underclass” inOctober 1993.

As of 1992 the out‐​of‐​wedlock birth rate among whites was 22.5percent, but among white women below the poverty line, in excessof 40 percent of all births were out of wedlock. I was called bya newspaper reporter who had gotten some special runs done by theCensus Bureau — I cannot vouch for these numbers, not having seenthem — and who told me that there are a number of cities in which the whiteout‐​of‐​wedlock birth rate at this point is over 40 percent, evenover 50 percent.

I postulate that all the reasons why fatherless families donot work in black communities apply equally to white communities andthat if half of the children are born out of wedlock inlow‐​income white neighborhoods, we are going to observe the same kindof social disintegration that we observe in the inner cities.

I will also point out that by now there is a fairly broadacademic consensus that fatherlessness is terribly destructive, independentof poverty. When Losing Ground came out and I would make a speechand talk about illegitimacy, I could count on angry questionslike “Don’t you understand that a single woman can bring upchildren just as well as a married couple if only we give her adecent level of support?” Academics who follow the data onthese issues do not take that position anymore. So, with regardto welfare reform, I want changes that will reduce illegitimacy.I want people to be ready, mature, and married when they havechildren. The problem is that I’m talking about changing behaviors,namely having sex and having babies, that are certainly deeplyrooted in the human psyche. How are behaviors controlled? If youlook at the way sexual behavior has been controlled in the past, thereis a lesson that people, especially politicians, do not want toarticulate as forthrightly as they should. That is, sexual behavioris constrained by making it extremely painful to have a baby ifyou aren’t married. Furthermore (and this is even more unpopularto say), the pain falls mostly on the woman. The woman is, infact, left holding the baby. You can try all you want to hold theman responsible, but it is extremely hard to do that in a waythat has nearly as much effect. That being the case, I argue thatthe only way we are going to get that kind of behavioral changeis by getting rid of the welfare system. I mean ending Aid to Familieswith Dependent Children, food stamps, and housing assistance — inshort, ending all payments that are contingent on having a baby.

There is no way that that is going to happen under any of thebills that are currently before Congress, and here is where, when Iturn to the Republican bill, I get nervous. The debate has indeedbeen taken over by the traditional themes. We don’t want to letbabies starve in the streets; therefore, what we have to do is tohave programs that will provide support and maybe make peoplework or encourage them to work; we don’t want to withdraw allsupport. That is an understandable reaction. Forget politicians — itis very difficult for anyone to come out in favor of a programthat may let children slip through the cracks. But, in theprocess of shifting the debate back to the traditional themes,exceptions, qualification criteria, and loopholes are expanding.I personally think that they are expanding at such a rate, andthat the Republicans are now so far behind the public dialogueabout why changes are necessary, that the bill that gets passedand sent to the president is going to be so deeply flawed that it won’thave much effect. That is the discouraging news. The good news isthat we already have some very important things going on thatcould teach us a lot more than we know right now about whether someof the more incremental plans might work. Gov. William Weld’sprogram in Massachusetts is not one that I would have designed​.It is very strong on workfare. You have to get a job within 60days after you first sign up, or else you supposedly have to docommunity service. I’m not a big fan of workfare, but Weld’s planis much more aggressive than any other workfare plan we have everseen. I do not know how much effect it will have, and I don’tthink any other social scientist does either. So, isn’t it nicethat Massachusetts is going to try a new way, and wouldn’t it benice to find out what happens in Massachusetts before we pass a nationallaw requiring all states to take that same route?

In terms of national legislation, I would ask the Republicansto do two things somewhat differently. First, keep their eye onthe main objective, which is to enable states to have broaddiscretion in how they deal with welfare — including the option of endingwelfare altogether. Don’t just make welfare a block grant, makeit a block grant phrased so that if the state of Montana saysthat it wants to take all the money used for AFDC and the otherprograms to support single mothers and instead put it into adoption services,or group living for unmarried pregnant women, or other services,it can. I want Montana to have that option without having to comeback to Washington for a waiver.

The reason I say that is because I think that somewhere somestate will try a proposal that is really radical. What I ambetting is that if a state — just one state — does try a radicalproposal, we will see major results and we will see them fairlysoon. If we don’t, that, in itself, is going to be an important lessonfor us to learn. Let the states do pretty much anything they wantwith the money. That is the first desideratum for a reform bill.

The second one is: Don’t tie the states even to those thingsthat you think are good ideas, because of what will happen in the politicalprocess. I mean things like work requirements. A lot of the logicon Capitol Hill, voiced in the newspapers by, among others,Charles Krauthammer, for whom I have great respect, is that it isfine to say we are going to give block grants to the states, butwe ought to attach certain conditions to them. Otherwise, we areabdicating our responsibility to try to re‐​set the framework forwelfare.

Theoretically that is fine. But if you require something evenas apparently appropriate as work, by the time it makes its way throughthe political process, if you aren’t careful, what you are goingto end up with is not a real work requirement but a half‐​heartedcommitment to providing job training.

I’m really saying turn it over to the states, with very fewstrings attached. I guess I’m also saying to the Republicans thatit is time for them to recognize that it is impossible,apparently, for them to make the case nationally that what theyare trying to do is the humane and compassionate thing to do.

I will conclude on a note that will illustrate the reason formy pessimism about what is going to happen in the long run. The much‐​talked‐​about orphanages question is a classic example of how an idea is, within amatter of weeks, used as an example of how cruel andmean‐​spirited and heartless the Republicans are — “How theGingrich stole Christmas.” What the Republicans should besaying, aggressively, is, “Look at the suffering that iscurrently being experienced by poor children in this society.Look especially at the foster care system in this country, whichseems tailor‐ made to create horror stories about children beingbounced from place to place and then sent back to parents who thenabuse and neglect them, being sent to new foster care parents whoalso don’t do a very good job — children who have no chance inlife.”

What the Republicans should be doing is offering the followingthought experiment to the political cartoonists who want to lampoonthe idea of orphanages. Suppose that you and your spouse were goingto be killed tomorrow (the readers of Losing Ground willrecognize this as a variant of something I have said before), andyou have a small child. You have three choices: You may have yourchild put with a randomly selected recipient of AFDC; you mayhave your child put into the foster care system; or you may haveyour child put into an orphanage run by the Catholic Sisters of Char​i​ty​.Is there anybody who would choose the randomly selected welfaremother? Is there anyone who would choose the foster care systemas it currently operates?

I suggest to you that when we start to talk about what we wantfor our own children, we realize that the existing terms of debateand the ones that should be used are utterly different. I suggestto you, in fact, that what we are witnessing is not only a tragedyin terms of social bifurcation, not only a tragedy in terms ofthe loss of large low‐​income communities that used to functionbut are ceasing to do so; we are also witnessing a situation inwhich literally millions of children are growing up in desperately bad environments,not because their parents don’t have enough money, but becausethey are born to people who are not prepared to be parents.

Until the Republicans do a much better job of making that casethan they have in the last six months, we are not going to get thewelfare reform that the country desperately needs.

Will Marshall: There is a striking contrast between the purposeful way inwhich the Republicans are trying to fulfill their contract andthe actual legislative outcome, which has often been a grab‐​bagof campaign themes, and welfare is a case in point. The Republicanshave produced a bill that is an incoherent collection of campaignpromises. Whether you take Charles’s view that the purpose ofwelfare reform is to reduce the number of out‐​of‐​wedlock birthsor follow my view that the overriding purpose of welfare reform oughtto be to get people working in unsubsidized, private‐​sector jobs,that bill fails to achieve your goal.

Now, lest we forget, President Clinton has a bill in thisdebate and, while not perfect, it at least focuses on the right goal — work.I think it has some serious deficiencies in terms of creating the machinerythat will help propel large numbers of welfare recipients intoprivate labor markets, but the goal is right.

The Republican bill, on the other hand, is an amalgam ofconflicting ideas, principally three: The first, reflecting the“Murray, or marry,” school of thought, is that there isa strong connection between welfare and the rising rates ofillegitimacy, and that the logical conclusion is to stoprewarding with cash teenage girls who have children out ofwedlock. Certainly, there is some appeal to that logic. The bestway to reform welfare, I will grant, is to prevent the need forit in the first place, and there is no doubt that prevention ofout‐​of‐​wedlock births has to be a key component of any seriouswelfare reform.

As James Q. Wilson reminds us, illegitimacy is the process bywhich the underclass reproduces itself. We at the Progressive PolicyInstitute have a comprehensive agenda for trying to tackle androll back teenage pregnancy. We focus on the boys as well as thegirls. I think the reasons for the growth in out‐​of‐​wedlockbirths are highly complex and that they are not going to beturned around overnight. The evidence, as I read it, suggeststhat welfare is only one of many factors implicated in the trend, and noteven the most important one at that. Robert Moffit’s survey ofthe research suggests that welfare may account for about 15percent of out‐​of‐​wedlock births.

Nonetheless, many Republicans seem determined to test anunproven theory on unmarried adolescent girls and their children. Theoriginal proposal was for a lifetime ban on at least the cashwelfare part of the package for children whose mothers were unmarriedteenagers under 18. That was, in my view, rightly assailed ascruel and punitive, and under the lash of Democratic criticism,the House has duly modified the bill so that now the childrencan’t get the benefits until their mothers have turned 18. Even if Charles’stheory is correct, I am puzzled as to why we are focusing only onit. While the Republican bill focuses only on denying cashbenefits to welfare recipients, the real value of AFDC benefitshas dropped roughly 43 percent since 1970. That drop has beenmore than offset by the increase in other benefits, principallyfood stamps and Medicare. But the Republican bill focuses only onthe cash portion of the package. The second idea that ismanifested in the Republican bill is devolution, primarily driven byRepublican governors like Tommy Thompson and John Engler. Theidea is to turn welfare reform over to the states on the groundsthat Washington doesn’t know how to do it right. I don’t thinkthat premise is correct, but let’s lay that aside and look justat what the Republicans have done. Is it real devolution or not?The bill would replace AFDC and JOBS and other programs and putthat money into block grants that would give the statestremendous flexibility in fashioning their own paths to reform. Butthe House bill also subverts the promised flexibility by adding awhole array of new federal mandates. The states must denybenefits to whole categories of people — to children of unmarriedteen mothers; to legal immigrants awaiting citizenship, even ifthey have paid taxes for five years; to those who have been onwelfare longer than five years; to people who aren’t cooperatingin establishing paternity; and to others. My question is, is itreally realistic to think that all the folks who fall in those excludablecategories will not turn to the states for various kinds ofassistance? I don’t think so. And if the excluded people do turnto the states, the states will face a pretty tough choice betweendenying assistance and giving assistance that they would have topay for themselves. The Republican preference for block grants manifestsa strange confidence in state welfare bureaucracies, which I findodd coming from conservatives. Usually, they complain that thestate welfare bureaucracies are as sclerotic, inflexible, andresistant to new ideas as their federal counterparts. It seemspassing strange to me to turn the whole enterprise over to them.Why not try to bypass state bureaucracies and find ways todevolve decisions and resources all the way down the line,perhaps even to the welfare recipients themselves? That would bea classic instance of empowerment. We at PPI propose to do thatthrough a device we call a job placement voucher, which wouldconcentrate purchasing power in the hands of welfare recipientslooking for private or public job placement services. In anycase, I wish the Republicans would make up their minds. Either weare going to have pure devolution or we’re not. If there is no compellingnational interest in or responsibility for welfare, fine. Let’sstop funding it at the national level. Let’s let the states takeover the whole project and let them pay for it themselves. Idon’t think you can have it both ways. The third strand ofRepublican thinking on welfare, and the weakest strand, is work. Thatis very surprising to me. Isn’t work what Republicans have beenclamoring for over the last quarter of a century, really? On theeve of winning the battle over work, it is surprising to find theRepublicans suddenly abandoning the field.

In 1993, you may recall, there was something called theSantorum bill in the House. Over 150 House Republicans backed thatbill, which was essentially a tougher version of the Clintonwelfare reform plan — two‐​year limits followed by strict work requirements.Suddenly, that focus disappeared this year. The first version ofthe House bill that came out of the Ways and Means Committee hadvery weak work requirements. Again, under the spur of Democraticcriticism, the House added yet another federal mandate, anunfunded one, at that — that the states put 50 percent of theircaseloads to work by 2003.

The block grants also freeze federal welfare spending, a stepthat has been variously estimated to save between $9.0 billion and$12.0 billion. Can the states do more with less? Well, some ofthem possibly can. But the House bill hedges by giving states acheap way to meet the 50 percent target: any net reduction in thewelfare caseload would count toward meeting the target. So, ifpeople leave the rolls for any reason, states can count themtoward the work requirement target. It could be that the natural attritionof people cycling off welfare after five years will be sufficientto meet the mandate and we won’t have a work system at all, eventhough we have a gaudy requirement that the states get half their caseloadsworking. Despite the various and conflicting goals — stoppingout‐​of‐​wedlock births, devolving power and responsibility to thestates, putting work at the center of welfare reform — it is possibleto discern a common denominator to the Republican bill: theRepublicans all agree to cut the federal contribution to welfare.Their block‐​and‐​freeze strategy will do that, to the tune ofabout $35 billion over five years.

So, this is the offer. We can have fundamental welfare reformand save billions for either deficit reduction or tax cuts. Thelast person who tried to sell me a deal like that was IraMagaziner. I don’t trust it this time either.

I think that a new system that requires and rewards work isgoing to require money. It is more expensive to pay people to workthan to not work, unfortunately. When destitute people go fromthe dole to full‐​time work, their child‐​care costs rise. Yet theRepublican bill proposes to cut federal child‐​care spending.

I think a critical element of any serious welfare plan is tomake work pay, to make it clear that when people are willing to workfull‐​time year‐ round, they are not going to live in poverty, andthey are not going to be worse off than they would be if theywere on welfare.

In all likelihood, the block‐​and‐​freeze strategy means thatthe states are going to face choices between spending more to pursuetheir own visions of reform, whatever they may be, in compliance withthe federal mandate and cutting people off from assistance.

So, I think what is being offered here is flexibility to cut,not flexibility to undertake serious reforms. I regard thatstrategy as phony welfare reform achieved through phonydevolution — block grants with lots of strings attached. Thepolitical advantage of that approach is clear enough; it leavesall the hard decisions about systemic reform to the states. Therereally is no mystery about what we are trying to do. Charlesstarted by saying that we are losing sight of the fundamentalgoal and I agree with him. I would say that the goal ought to beto move people into private, unsubsidized jobs. When polls give people choices betweenhelping welfare recipients become self‐​sufficient through workand cutting out benefits or expelling people from the rolls, thepublic invariably elects to help people become self‐​sufficient throughwork. The American people would support a fundamental change inthe system — a recasting of welfare as a work‐​based system thatpromotes individual responsibility, work, and family. Though Charles’sfocus is on cutting illegitimacy and I focus on work, don’t weend up in the same place? The families who are not going to be onthe rolls because they are preemptively disqualified will beeither working or not surviving. I think what we at PPI areproposing is a transition system — converting welfare into anemployment system, connecting people to labor markets, making workpay, providing job placement and support services that do work(we’ve got plenty of models that show that). That kind of systemwill more readily begin to re‐​weave the patterns of socialstability and order that Charles so rightly points out aremissing in our society. The point of departure on welfare todayshould be to make work the organizing principle of everybody’slife, including those who are low income and poor.