The New 'Deal': Notes From a Clinton Appointee Who Resigned in Protest Over the New Welfare Law
Last summer, President Clinton signed welfare legislation that radically altered the way we approach public assistance for families with children, and took some huge budget whacks at a number of other vitally important programs for low-income people. I was assistant secretary for planning and evaluation at the Department of Health and Human Services then, and I resigned in protest because I disagreed profoundly with that legislation.This new law is not welfare reform. It does not promote work effectively, and it will hurt millions of poor children by the time it is fully implemented. It has transformed our six-decade commitment to low-income families into a block grant with no floor of minimum protection, and it imposed an arbitrary lifetime time limit of five years for federally financed help regardless of continuing need.And it doesn't stop there.The new law also cut a wide swath through the federal help available to legal immigrants, made deep cuts in the federal food stamp program, took a swipe at help for disabled children, and cut a number of other nutrition and social services programs. After all the budget drama of the winter of 1995-96, with government shutdowns and Speaker Newt Gingrich complaining of being forced to exit by way of the back steps on Air Force One, the $55 billion cut (over six years) from programs for low-income people was the only multi-year budget-cutting accomplished. The Defense Department actually received $12 billion (for one year) more than the president requested.Six months have now passed since the signing of the bill, and state legislatures all across the country are putting the finishing touches on their plans to implement the new welfare structure (except for a few that had acted anticipatorily and have a head start). Existing legal immigrants will be cut off from Supplemental Security Income (SSI, for the elderly and disabled) and food stamps over the next few months. Though we haven't seen the terrible effects yet, we will start seeing these effects on legal immigrants shortly, and then, more gradually, we will see the effects on poor children and families as the time limits hit. Obviously, the impact will be exacerbated whenever a recession comes along.None of this stops the political spin machines from operating, though. The welfare provisions are not fully operative, but we keep hearing that they are already working beautifully. We are told we know this because the nation's welfare rolls have declined by 2.8 million people in the last two years. The welfare rolls are indeed down, and that is a good thing, but this in fact tells us little about what is going on and what lies ahead as the new law goes into full effect.The rolls shot up during the recession of the early '90s, and the declines have brought them back down, but not even to where they were when the bubble started to form. The rolls were at 10.8 million people in 1989; they went up to 14.3 million people in 1993; and now they are down to about 11.5 million. Why the drop? Common sense says it is for largely the same set of reasons as the increase. We have had sustained pretty low unemployment for quite a while, so people are finding jobs. The welfare rolls are composed of roughly two groups -- the people who cycle on and off, and the people who stay on for a long time. My strong hunch is that the people who are getting off now are those who go on and off -- they are getting off faster and holding on to jobs longer.This is all to the good, but it does not tell us much, except that prosperity is better for employment than recessions. There are still nearly 4 million adults on the welfare rolls (and more than 7 million children). Around half are long-term recipients, on the rolls for over five years. They are the ones who are the target of the new bill. And we have not begun to make a dent in their situation.The arbitrary time limits in the new law dictate that, by five years from the date it went into effect and thereafter, only 20 percent of those getting federally financed help on any given day can be people who have received a total of five years of help during adulthood. That is going to be tough to pull off. I believe strongly in work, and I believe strongly in a serious effort to maximize employment, but I do not think the new law constitutes such an effort. It seeks to accomplish its aims by bumper-sticker slogans and arbitrary strictures, not by a serious effort to ascertain what is really required to attain maximum success.There are three major questions that trouble me deeply. First off, where are the jobs? Where are the entry-level, geographically accessible jobs? Virtually every metropolitan area has been losing jobs in the last few years, although very recent trends are in the other direction now that we are at the top of the business cycle. But there still is a mismatch, and what happens when we are confronted by a recession?Virtually no one is addressing the obvious question: If there are not enough private-sector jobs, we have to be talking about either investing in public jobs or relaxing the work requirements. The five-year lifetime limit says to people that it doesn't matter if they play by all the rules; if they use up their five years of eligibility, whether that moment is five years or 15 years from now, they are simply out. There are millions of people who struggle and struggle, going on and off the welfare rolls as they get and lose marginal jobs. The time limit applies to them as well. It just may take a little longer for them to reach it.Second, how many states will invest in the major effort that it takes to help long-term recipients get and keep work? People without a lot of work experience bounce from one job to another until they stabilize. In Project Match in Chicago's Cabrini Green public housing project, 71 percent of the participants who went to work had lost their initial job by the end of the first year. With a lot of coaching on the job, and support and pushing to help people get the next job, 54 percent of the people were working all year by the fifth year. This costs money. Once cannot just wave a magic wand.Adequate child care and health coverage have to be available, too. Otherwise, people will find it difficult to stay on the job when they are unable to find affordable child care or when the year of transitional Medicaid coverage runs out. This revolving door was bad enough before, but now, with time limits, it will be disastrous. And if people are going to be able to make ends meet, it will be necessary for states to let people keep a part of their welfare payment after they go to work in a low-wage job. The earned income tax credit, even as expanded by Congress in 1993, does not add enough to help all low-wage workers out of poverty. People -- all people -- should be assured of a living wage for their work. This should be true for people coming off welfare, and it should be true for people who have never been on welfare. Very few states are paying adequate attention to these issues as they implement the new law.Third, are the states taking the individual circumstances of people into account: the women who are victims of domestic violence; those taking care of chronically ill children or other relatives; those whose mental or emotional problems or learning disabilities make it very difficult for them to function in a job? Although this varies widely, I believe -- and many professionals in the field agree --that the 20 percent exception is quite inadequate.The states are making decisions about all of this right now. Such states as Oregon, Minnesota and Vermont are making serious effort to do real welfare reform. Others are adopting or proposing time limits shorter than the federal five years, reductions in their state contribution of funds to the task, and patently inadequate child-care funding that sets up a destructive competition for subsidy between people already working and new entrants to the workforce. Indications exist that workfare jobs are being used in a number of places to substitute for existing jobs. This displacement sets up an even more destructive and unjust competition between the already working poor and those just now entering the job market. The overall picture does not lend itself to great optimism. One can only hope that people will make some sensible adjustments before too much damage is done.Some of those people who voted for President Clinton last fall believed he would propose significant changes in this high-risk, forced-march, one-size-fits-all framework. That was never in the cards. He and others want to see how the new welfare provisions work in practice before they propose changes. He has proposed some limited, but worthwhile, budgetary changes that would restore some of the cuts in the legal immigrant and food stamp provisions that make the bill even worse. These have been less than enthusiastically greeted by Hill Republicans, leaving the impression that even these modest suggestions will go nowhere unless the president presses hard for them in the budget negotiations that are beginning now. And there is no proposal on the table to make any significant change in the radical new welfare structure that is at the heart of the new law.The action now is in the states. People across the country need to pay careful attention to what is going on in their state capitals right now. The poor children of America would greatly appreciate it. Editor's Note: Peter Edelman is the former assistant secretary for planning and evaluation at the Department of Health and Human Services. He resigned when President Clinton signed the welfare bill.