WHEN THE administration and Congress finally get down to deciding how to help the nation weather its current distress, two rules should guide their efforts. Measures taken should focus on helping people hurt by economic change--not on propping up businesses threatened by that change. And, to the extent possible, the help provided should promote future economic growth by encouraging adjustment to the new realities of the labor market.
The first requirement is doing something for all those people living in tents and cars and on park benches. Passing the emergency relief appropriation that died in the last Congress is a necessary stopgap measure. It's all very well to rely heavily on churches and private charities to provide last-ditch help to the dispossessed. But it is positively unrealistic to expect them both to make up the money lost through recent cutbacks in government aid and also to expand their services to cover the new homeless. Federal money is scarce these days, so Congress should stifle its normal impulse to distribute program dollars far and wide, and make sure that emergency aid goes to those areas and people in the greatest distress.
Next on the list are some don'ts for the policymakers. Don't pass any protectionist legislation that saves the jobs of a few well-represented people at great expense to everyone else. And recognize that you don't make the economy work better by cutting money for schools and colleges. All the experience of history will demonstrate that those economies do best that invest heavily in educating their citizens.
Further extensions of unemployment benefits are an unavoidable necessity. The federal government will have to pick up this tab--there is no sense pretending that the hardest-hit states can afford to pile up still larger debts to the Treasury than the billions they already owe. Unemployment benefits, however, buy only time, not adjustment. As long as there are hundreds of thousands of displaced workers waiting in vain for their old well-paid assembly- line jobs to reappear, the nation will have to cope with both an enormous social problem and a serious impediment to technological change. It's time to tie benefit extensions to help for the unemployed in getting back on their feet--more about this later.
And with millions of people running through their last dollars -- for God's sake, stop cutting -- or even proposing to cut -- important social programs that are the last line of defense for the "old" and "new" poor alike. These include food stamps -- which also need some relaxation of the absurdly strict rule that excludes families who happen to own a relatively new car or other small assets--and other nutrition programs that are needed for children.
Recognize that there are some people who are not --except perhaps in the statisticians' computations --in the potential labor force. Stop throwing people off the disability rolls and out of mental institutions when they haven't a chance in the world of finding gainful employment. Dumping more responsibilities on state and local governments isn't going to accomplish anything either. It just creates more unemployment while drying up services--such as child care, home care for the elderly, child abuse protection and other services that save money in the long run and help people who want to work.
These are all short-term expedients. They do require that the federal government reassert its responsibility--and, with all its obvious limitations, its real capability -- to exert a positive influence on the nation's economic and social welfare. These emergency measures also need to be reinforced by longer-term efforts to help people and communities prepare themselves better for an economic recovery that will not put back the same jobs in the same places they were in before the downturn. And they need to be supported by larger economic policies that ensure that a sustained recovery does indeed arrive. These are subjects to which we will return in the coming days.