Unlearned Lessons About WelfareBy Paul Offner
Thursday, July 25 1996; Page A29
Lesson number one: Welfare reform won't remove many families from the rolls. Only four of 23 welfare reform demonstrations had caseload reductions exceeding 5 percent, one study found. Even the program in Riverside, Calif., regarded by many as the most successful on record, saw caseloads decline less than 10 percent. "The payoff for such programs has been shown to be low in terms of reductions in welfare case loads," says the CBO. Yet reform leaders predict the rolls will plummet under their plans. Wisconsin Gov. Tommy Thompson, for instance, says 60 percent of those placed in workfare in his state will find private jobs and leave the rolls.
Since caseloads won't fall much, putting welfare adults to work will require a large public jobs program. This is the ugly little secret that neither Democrats nor Republicans want to face up to. President Clinton always has shied away from a big jobs program "It won't be necessary, we won't do it, we can't afford it," says top aide Bruce Reed. And Republicans agree. "I don't see us going back to a massive public works program," says Michigan Gov. John Engler. The only problem is that that's exactly what's needed if we're going to put welfare mothers to work.
Unfortunately, the states don't have the slightest idea how to run large jobs programs. Nowhere have public jobs been created for more than a small fraction of welfare recipients even though workfare is popular with the voters, and one governor after another has committed himself to it. Even in carefully organized demonstrations, only a minority of recipients actually participated in work activities. Yet both parties now say they'll put half of all recipients 2.5 million people into jobs.
Look at what happened the last time the federal government passed a welfare work requirement. The year was 1988, and the requirement applied to only 6 percent of all cases welfare families in which both the father and mother were present. Since only one parent had to work, day care was not an issue. Most of those to whom the requirement applied were fathers with work experience who thus were relatively easy to place. States were given five years to get ready. Still, 41 states flunked. Nine didn't even make one-quarter of the federal standard.
Granted, that was several years ago. Maybe the states are more committed to the effort now and more skilled at job creation. So let's assume the governors actually create all the needed jobs and come up with the necessary day care and transportation. It will cost a bundle. When fully phased in, says the CBO, the Republican bill would increase spending by almost $9 billion a year. Meanwhile, however, federal welfare funding is being cut by about $10 billion a year. Does anyone really think governors are going to increase state taxes to close the gap? States will be "reluctant to commit their own funds to employment programs," predicts the CBO. (States simply could drop recipients from the rolls, of course, although the governors insist that's not their intention. And there are practical difficulties: Even the most anti-welfare governor will seek to avoid TV pictures showing mothers with young children being thrown into the streets.)
So what happens? The congressional bills provide penalties for states failing to meet the federal employment targets. The only problem is that the penalties are small compared with the costs of creating public jobs. Here's the CBO again: "Most states would simply accept penalties rather than implement the requirements." In other words, the work strategy will be a flop, and once again the American people will have been misled by all the reform talk.
But we've got to do something, respond the congressional reformers; the current arrangements have given us soaring illegitimacy and rising welfare dependency. Doubtful. Last year, three eminent conservatives (William Bennett, Glenn Loury of Boston University and James Q. Wilson of UCLA) told the Ways and Means Committee that little is known about the link between welfare and out-of-wedlock births. They might as well have been talking to the four walls. Members continue to insist that slashing welfare will bring back the fathers, whatever the research community may say.
Through all of this, the Congressional Budget Office told congressional leaders the truth about their the welfare proposals. It cannot have been easy. CBO Director June O'Neil was handpicked for the job by Gingrich and Dole, at whose pleasure she serves. In time, though, it is congressional leaders who will be on the hot seat. When the new plans don't work, they will have to acknowledge they were forewarned.
The writer is commissioner of health care finance for the District of Columbia.
© Copyright 1996 The Washington Post Company