Number 157 May 24, 2002

This Week:

Quote of the Week
"The Immense Capacity of States"
Welfare Caseloads Down: Key Facts


I meant to write about welfare a little earlier in the year, as the issue is being debated and acted on at both the state and federal levels even as I write these words. Some of the specific legislative details may be incorrect or, rather, out-of-date by the time you read this. No matter. The point of this Nygaard Notes series is not so much to give you up-to-the-minute details about what is happening legislatively—important though that is—but rather to give an overview and a sense of the general direction in which we are moving so you can decide if you want to go along with it or not. I hope you don't want to go along with it, and in one of the next two issues I will give you specific ideas and contacts to help you take action on this pivotal issue.

There is so much to say about welfare "reform" that this series will likely stretch to 3 or 4 parts. Last week I talked about some of the Bush goals for the programs. This week I give a bit of context for the Bush welfare agenda, plus I tear down some of the false assumptions that have achieved the status of "conventional wisdom" in this country. Before I'm done with my current discussion of this issue, I want to talk about how the new welfare system is not reducing poverty, deliver a collection of brief points that I hope will help readers to develop an "overall picture" of what is going on with this fateful debate, and, perhaps inevitably, link the attack on welfare to the War Against Terror (the WAT?!). Stay attuned.

My little slogan is "Independent Weekly News and Analysis," and, voila!, the first piece this week is "analysis" and the second is more or less straight-up "news" that should have been reported in the mass media but wasn't. So this week's issue is sort of a classic Nygaard Notes, I guess. How about that?

See you next week, with another classic,


"Quote" of the Week:

When welfare recipients approach their "five-year limit" for receiving benefits in Minnesota, they undergo an "exit interview" and assessment. Reporting on what welfare workers are learning, the Star Tribune (Newspaper of the Twin Cities!) of May 5th had this to say, and I reprint several of the key sentences:

"The scope of [long-term welfare recipients'] problems has surprised even longtime welfare workers. ‘The results of the assessments have been astounding to us,' said Jan Mueller, who oversees the welfare program for about 1,000 recipients at Lifetrack Resources in St. Paul.

"‘We were amazed at the low IQ levels...and learning disabilities,' she said. ‘And more people had [physical] disabilities than we ever anticipated—everything from a person's ability to hold a pencil, to their ability to stand in a work environment. ‘A lot of these things had simply gone unnoticed and unreported,' Mueller said. ‘What we've found are very obvious reasons why they've been on welfare a long time.'"

"The Immense Capacity of States"

Last week I talked about goals number 1, 2, and 4 of the four goals that the current resident of the White House has stated for the re-authorization of the so-called "welfare reform" that was begun in 1996. The three goals were: "Promoting work;" "Strengthening families;" and "An important restoration of nutrition benefits for legal immigrants." This week I want to spend a little time on the third stated goal: "Acknowledging the immense capacity of states and localities to design and conduct effective social programs."

The New Federalism

Bush's third stated goal represents the larger of a couple of Trojan Horses coming out of the welfare "reform" process, and a little history is required to get the full impact. Welfare "reform" is an example of what political scientists like to call "The New Federalism." The word "federalism" refers, technically, to the distribution of power in an organization (as a government) between a central authority and the constituent units. In the United States we have a "federal" system of governance in which the states and local governments share power with the national government. This sharing was built into our political system by our forebears (see the tenth amendment to the Constitution) in order to limit the power of a strong central government to tyrannize the people. That's what kings tend to do.

In practice, however, supporters of "federalism" in the United States (over the past century-and-a-half, at least) have tended to be people who want to preserve the right in their state to oppress people any way they like without the federal government getting in the way. The biggest battle over this was the Civil War. Slave-owners did not want to be told they couldn't own slaves, so they invoked the idea of "federalism" and went to war with the noble-sounding goal of protecting "states' rights." In the 20th century, the rhetoric of "federalism" was used in much the same way, for much the same purpose: to enforce the successor to chattel slavery, the Jim Crow system. All during the 1950s and 1960s white racists attempted to use it to resist federal civil rights laws and rulings. The Supreme Court's landmark civil rights ruling in Brown vs. Board of Education in 1954, for example, was attacked by racists as a violation of "states' rights," since it forbid the states from having "separate but equal" schools if they wanted to.

The efforts of Presidents Nixon and Ford to promote states' rights came to be called "The New Federalism." But it wasn't until the next Republican administration that the idea really took off.

One of the first things that Ronald Reagan did when he got into office was to push through something called the "Omnibus Budget Reconciliation Act." That Act consolidated a number of social programs into nine block grants, which Reaganites said was a good thing because it allowed for greater state and local autonomy and flexibility in the fashioning of local strategies to address federal objectives. According to the official State Department history of the period,

"The Administration was not successful in the second phase of New Federalism, which would have reallocated federal and state responsibility and resources for welfare, food stamps, and medicare and would have turned back revenue sources to the states. The George Bush Administration also offered a turn back proposal." (They were speaking of Bush the First.)

Flash forward to 2002, and the welfare plan proposed by Bush the Second, with its Goal #3: "Acknowledging the immense capacity of states and localities to design and conduct effective social programs." I said in Nygaard Notes #147 ("Balancing Democracy and Freedom") that the attack on welfare is only one tactic in a larger strategy of attacking any people or institutions that might limit the freedom of corporations and wealthy people to exploit whomever and whatever they like. Only when we understand this larger strategy—the name of which is "federalism"—can we begin to see what we're up against in the welfare "reform" struggle.


Welfare Caseloads Down: Key Facts

Since the passage of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), what we call "welfare" is now known as TANF, or Temporary Assistance for Needy Families. Supporters like to talk about what a "stunning success" it's been. Of course, they aren't talking about poverty reduction, they are talking about caseload reduction.

The Department of Health and Human Services, in justifying the freeze on new welfare spending proposed by the Bush administration in their proposal for TANF re-authorization, says that the same number of dollars "will allow states to assist more families than when the program was originally passed in 1996 due to welfare caseload decreases of 56 percent nationwide." This premise—that more than half of former welfare recipients have "left the system"in the past six years—is taken as the basic "reality" in the current debate in Washington, in the media, and in the minds of many well-meaning people. Two corollary assumptions—that these millions of people left the rolls because of "reform" and that they are now "better off"—are assumed to be true and are rarely talked about. So, let's talk about them.

Caseloads Down by Half?

Officially, welfare caseloads nationally fell from 4.4 million families in August 1996 to 2.1 million families in July 2001, which would be a reduction of 2.3 million if it were true. However, the investigative arm of the U.S. Congress, the General Accounting Office, in testimony before the Senate Committee on Finance last month, pointed out that these numbers are most likely ‘way off. They didn't put it so impolitely, preferring to say, in their dry bureaucratic language, that "TANF caseload data regularly used by program administrators and policymakers do not provide a complete picture of the number of families receiving benefits and services through TANF." The reason is that many "former" welfare recipients are considered to be off the rolls because they are not officially receiving cash benefits. However, many states have decided to use the "flexibility" offered by the federal government "to provide services to low-income families not receiving welfare," and these people are counted as "off the rolls."

People receiving these TANF-funded benefits—which include such things as child care, case management, family literacy and after school activities, substance abuse prevention services, and job retention and advancement services for families who have recently left welfare for employment and for other low-income working families—likely number well over a million.

In addition, an unknown percentage of those leaving the welfare rolls have done so not because they are now employed. Instead, they have been kicked off of the rolls, or "sanctioned," for not complying with one or more of the myriad of rules imposed by the states, most of which have policies that are more stringent than required by federal law. According to a January report from the Brookings Institution, "there is little systematic data on how, and how often, sanctions are imposed," but "it is easy to conclude that well over half a million families have had their cases closed due to full-family sanctions." (Full-family sanctions terminate assistance to an entire family for an individual's noncompliance with program requirements.)

So the supposed drop of "more than half," which would be 2.3 million "success" stories, is quite likely one-third or one-quarter of that number.

"Reform" Doing the Job?

That still leaves several hundred thousand people who are no longer receiving cash benefits. But is this due to welfare "reform" or to something else? Looks like it's something else. A little-known fact about the reduction in welfare caseloads is that they started going down in March of 1994, a full two years before the PRWORA was passed. While some of that reduction was due to welfare "reform" experiments on the state level, a January 2000 study called "Accounting for the Decline in AFDC Caseloads: Welfare Reform or the Economy?" took a look at "the relative contributions of the macroeconomy and welfare reform in accounting for the 1993 to 1996 decline in AFDC caseloads." Their conclusion was that "had it not been for the influence of economic factors, welfare reform would not have led to any decrease in aggregate [welfare] caseloads." The study, conducted by four economists from various universities, predicted that "when a recession next occurs, the slowdown in employment growth may more than offset the impacts of welfare reform, and caseloads are likely to rise again." That remains to be seen, although caseloads did go up by one percent between July and September of last year, so it looks like it might be accurate.

The February 20th New York Times ("All the News That's Fit to Print") reported (on the inside pages) on an "unusually rigorous welfare study" conducted in Connecticut. The Manpower Demonstration Research Corporation, a nonpartisan research organization, randomly assigned 2,400 Connecticut families in 1996 to get public aid under old welfare rules, as a control group for "one of the nation's most ambitious welfare reform experiments." The report found, as the Times put it,

"In the end, the similarities between the two groups were striking: both sets of families remained poor, with low wages and high levels of hardship, like lacking money to buy food. One small but statistically significant difference was particularly troubling: 2.6 percent of Jobs First [that's the name of Connecticut's welfare program] participants became homeless in the study's third year—a percentage point more than in the control group."

Even in terms of increasing employment, which was the main goal of "Jobs First," the Times pointed out that "differences between the groups were modest: 5 percent more Jobs First participants took jobs at some point, and 9 percent fewer were on the rolls after four years." This led one of the authors of the study, Dan Bloom, to remark, "It shows that a lot of what we've been talking about in the last few years would have happened without welfare reform."

In summary, we are having a public discussion of the future of welfare that is premised on the idea that welfare "reform" so far has been a "stunning success," based on three assumptions:

  1. Rolls have been cut in half,
  2. Those rolls have shrunk because of the effects of welfare "reform," and
  3. The people no longer on welfare are now doing better than they were before.

The first two assumptions are false, and the validity of the third one (hinted at in the above paragraph) I will discuss next week.