SOME SMALL ITEMS in the administration's budget package have big hidden price tags. Among these are the proposals to reduce assistance to welfare mothers who are working in the private sector and to require most of those who are not to "work off" their welfare grants in specially created public jobs. The Senate Finance Committee this week endorsed these proposals with minor changes.
Neither of these proposals promises noticeable savings for taxpayers. The work-off-your-welfare plan was not assigned any savings value at all by the administration, a no doubt realistic assessment given experience with programs of this sort in California and other states. Reducing aid to recipients in low-paying jobs is expected to save the federal taxpayer about $170 million next year.
Encouraging welfare recipients to become self-supporting is not the issue. The argument is over appropriate means for encouragement. The right combination of incentives, job search assistance, supportive services and, when needed, training and work experience can, indeed, help many welfare recipients become self-sufficient. But this sort of help is not a feature of the administration's proposals. Instead, recipients would be put into makeshift jobs with no financial gain, in hope that this will drive them to find regular work.
Whatever incentive effect this would have, however, would be undercut by the companion proposal to cut back sharply on welfare benefits for those taking regular jobs. Under the rules endorsed by the Finance Committee, a typical welfare mother would net less than $25 a week if she took a full-time job at the minimum wage -- a better job than 70 percent of working welfare mothers can get. After 4 months, her grant would be further cut, and, in most cases, she would be worse off than before she took the job.
To expect the proposals to produce welfare savings, you would have to assume not only that recipients are now turning down jobs that, under present law, would make them substantially better off, but also that they would flock to these same jobs when, as the result of the proposed changes, they would have little or nothing to gain from taking them. These are assumptions that the House public assistance subcommittee was unwilling to make in marking up its version of the plan this week. The subcommittee plan provides both better work incentives and a more sensible job requirement.
The danger in the Senate approach, however, is not simply that it won't produce savings, but that it will do substantial harm. From the perspective of work encouragement, it sends all the wrong signals: Don't seek regular work because you'll be little or no better off than in a made-up job; don't try hard at your made-up job because you'll be no better off than the malingerers. It opens up the possibility of enormous abuse by local administrators. And, what is most important, it will take needed dollars from hundreds of thousands of working poor families who are trying to help themselves off welfare. All of this, moreover, will result in virtually no immediate savings -- and probably higher long-run costs for the taxpayer.