IN A DEFICIT-reduction bill that is dealing mainly with Medicare and the cigarette tax, the House Ways and Means Committee proposed just as Congress was going home an important change in the government's leading cash welfare program, Aid to Families with Dependent Children. The committee voted to require states to offer this aid not just to families in which only one parent is present but to those where both parents are in the home but the principal wage earner is unemployed. Current law allows states to offer such aid, and 23 do (including Maryland; the District of Columbia does also). The 23 include almost all the major industrial states where unemployment has been the greatest problem in recent years. Thus, requiring such aid in the remaining 27 states, mostly in the South and West, would cost only $390 million in federal funds over the next three years, the committee estimated. That is a relatively minor amount; the federal share of the entire AFDC program (the federal government pays about half, the states the rest) is now about $7 billion a year. From a practical standpoint, as these figures suggest, the proposed expansion is not that great a departure. Conceptually, however, it alters the program substantially.
AFDC was created as an adjunct to the Social Security system in the 1930s. It was said at the time that it would be only a temporary program. The various kinds of social insurance that were being put in place -- old-age, survivors, unemployment, disability -- would render it unnecessary. That optimistic view was based on a false assumption about the stability of the American family. There are now close to 11 million people on AFDC at any given time, about one American in 20. The program has become particularly important to blac. About 40 percent of black families are now headed by females, and about one black American in seven is now on AFDC.
To qualify for federal welfare programs, one generally needs to be more than just poor. The food stamp program is the only exception; there, poverty is enough. All the others are narrowly drawn, so that aid will go only to those deemed deserving -- the needy blind, disabled and elderly, and under AFDC, needy children. In this sense, the proposed expansion of AFDC is welcome. Children in families with no other income surely deserve society's help as much if they have two parents at home as if they have one.
But there is another sense in which the proposed expansion, which committee Republicans resisted, is faintly troubling. The economy no longer seems able, even in good times, to provide jobs for as high a percentage of those who want them as it used to. The unemployment rate in the current recovery has come down to only 7.3 percent, and seems stuck there. That used to be about as high as unemployment got; now it may be as low. There are various reasons: the depth of the last recession, a continuing flood of imports, structural and regional shifts and dislocations in the economy. The unemployment compensation system is missing most of these unemployed; it was not set up to deal with chronic unemployment problems. To some extent the committee vote would shift this responsibility to AFDC. That is all right as a palliative. But what Congress and the administration really need to do is think through the new unemployment problem. It cannot be plastered over; it appears to be here to stay.