GOING FOR BROKE? Welfare Reform

Tuesday, October 23, 2001

In 1996, a Republican Congress passed, and President Bill Clinton signed, the Personal Responsibility and Work Opportunity Reconciliation Act, better known as welfare reform. The Act replaced the Aid to Families with Dependent Children program (AFDC) with the Temporary Aid to Needy Families program (TANF). These changes effectively refocused welfare as job training and temporary assistance and moved millions of people off the welfare rolls. With TANF up for re-authorization by Congress in 2002, the debate over the first five years of welfare reform is heating up. Has welfare reform helped poor families and reduced child poverty? Does welfare reform itself need to be reformed?

Recorded on Tuesday, October 23, 2001

Peter Robinson: Today on Uncommon Knowledge, it's been five years since welfare reform was enacted. Is it working?

Announcer: Funding for this program is provided by the John M. Olin Foundation and the Starr Foundation.


Peter Robinson: Welcome to Uncommon Knowledge, I'm Peter Robinson. Our show today, Welfare Reform. In 1996, the Republican Congress passed and the Democratic President, Bill Clinton, signed the Personal Responsibility and Work Opportunity Reconciliation Act, better known, much better known as welfare reform. Today, five years later, we ask a simple question. Is welfare reform helping the poor in America or is it not?

Joining us two guests. Barbara Ehrenreich is a Journalist and the author of, Nickel and Dimed on not getting by in America. Eloise Anderson is Director of the Program for the American Family at the Claremont Institute and former Director of Social Services for the State of California.

Title: You Can't Always Get What You Want

Peter Robinson: Two views of the 1996 welfare reform. Senator, now former Senator, Daniel Patrick Moynihan speaking at the time the legislation was enacted. "Those involved will take this disgrace to their graves." The Wall Street Journal writing earlier this year, "The facts now rolling in reveal that welfare reform has done more for the poor than the great society ever imagined." So who's right, Moynihan or the Journal? Barbara?

Barbara Ehrenreich: Moynihan's right, I'm afraid.

Peter Robinson: Hands down?

Barbara Ehrenreich: Yeah.

Peter Robinson: No need to hedge it?

Barbara Ehrenreich: Well no, there are certainly some success stories. There are some people who did well and perhaps were happy to be urged into the labor market. But overall, it's a sad story.

Peter Robinson: A disgrace? You'd use his words?

Barbara Ehrenreich: Disgrace, yeah.

Eloise Anderson: Journal.

Peter Robinson: Eloise? The journal?

Eloise Anderson: Yes. I think that the welfare reform was right on target, right what needed to happen.

Peter Robinson: Well we have here the makings for a good show. Disgrace in this corner and right on target in that corner. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 replaced the old Aid to Families with Dependent Children or AFDC, with the Temporary Assistance for Needy Families or TANF program. The law gave states the primary responsibility for welfare, established a five-year cumulative lifetime cap on benefits and, to a large extent, shifted welfare expenditures from cash benefits to training and employment assistance. Now Barbara, you listen closely because I'm going to tick down some of these statistics that the Journal says are rolling in. The number of families on welfare has dropped even more dramatically than expected from about five million in 1994 to just 2.2 million in 2000. Sixty percent of those who have left welfare have jobs. Employment rates among single mothers have increased and increased dramatically. Child poverty has declined. Now given that set of statistics, how can you call that a disgrace?

Barbara Ehrenreich: Well yes, they found jobs. I mean, people have been kicked off welfare have found jobs but the average wage at which they found jobs is $7.00 an hour, which is far from a living wage. What the journal could have also mentioned is that although poverty as a whole declined slightly in--between 1999 and 2000, the poverty of single mother-headed families increased. You know, and that's what we're talking about with welfare.

Peter Robinson: Okay. So Eloise, you listen to some of the bad news here is that you've got fewer children receiving assistance and the incomes, I think this is what Barbara's talking about, the incomes of the poorest one-fifth of single parent families have continued to fall. They're worse off than before the welfare reform. So how is it that you can call it a success?

Eloise Anderson: Well if you take their income alone, that's probably true but they don't just get their income alone. They also get their earned income tax credit when then brings them above the poverty level. So I think if we just look at AFDC or what is now called TANF benefits, they--and their wages, it would seem like they're now making less but they're actually making more. And we know for the first time in about thirty years, child poverty has been decreased. So my view is it has been a success. Did we get everybody? No, because people have different kinds of issues going on. And I think what we've moved out right now are the people who are able to work. We've provided them with the kind of supports they needed and now we can turn our attention to people who have many more barriers to work than the ones who've gone out so far.

Peter Robinson: Okay. Before we depart from the ones who've gone out so far, let's turn back to that sixty percent or so who've left the welfare roles and gotten jobs. Now you've written a book called, Nickel and Dimed, tell us the premise of the book and tell us a little bit of what you discovered.

Barbara Ehrenreich: Well this book was inspired by welfare reform and the assumption that women could, just by getting a job, be lifted out of poverty, be able to take care of their children, everything would be fine. And I couldn't help but wonder at the wages that I could see like in my local paper, how you were going to do it. Anyway, I ended up having a magazine assignment originally to try this myself. You know, try going out there--I'm a journalist in real life--but going out there and just like anybody else, applying for jobs that I could find.

Peter Robinson: So name a few of the jobs you held.

Barbara Ehrenreich: I--in a course of three months of doing this in three different cities, I was a Wal-Mart Associate. I was a cleaning lady with a housecleaning service, a nursing home aide, a waitress, a hotel housekeeper.

Peter Robinson: These are all exactly the kinds of job people who were on welfare would find themselves getting.

Barbara Ehrenreich: Oh yeah. Yeah. And I--and at $7.00--I averaged $7.00 an hour which is the average that, you know, it's turning up for people leaving welfare.

Peter Robinson: And you were just trying to care for yourself, you weren't…

Barbara Ehrenreich: Yeah…

Peter Robinson: …paying for kids.

Barbara Ehrenreich: …and I couldn't--I couldn't make ends meet. So, you know, the average welfare leaver, coming off of welfare, has two children with her. I can't imagine how they do that. Childcare costs average in California, for example, a thousand dollars a month.

Peter Robinson: Barbara might not have been able to make ends meet but what about people who are actually coming off welfare?

Title: Take This Job and Love It

Peter Robinson: Are people who are shoved off the welfare roles into jobs of that kind, maybe I'm being unfair in saying they're shoved off the welfare roles because there's some training involved, but the point is, are they better off? Can they make it?

Eloise Anderson: Absolutely because on welfare they make less than that. So they have a series of services along with their income but before we changed welfare, they had very few services and they just had what I would consider an income that was below what they would make at a minimum wage job. What I think we fail to realize is that many people who have never been on welfare work in all those jobs that she just had. So it's not just welfare recipients who are--ex-welfare recipients who are doing those jobs. Many Americans right now work at those $7.00 an hour jobs or $5.50 an hour jobs or $8.00 an hour jobs. And that's why we have the earned income tax to support that. So they get the $7.00 an hour plus they get earned income tax which raises their…

Peter Robinson: Earned income tax credit?

Eloise Anderson: Credit. Earned income tax credit which drives their income higher than what it looks like naturally.

[Talking at same time]

Peter Robinson: By the way, what about this question of the earned income tax credit? Did you try to take that into account?

Barbara Ehrenreich: Okay, let me talk about that for a minute because if you had two children, you might get as much as three thousand dollars a year from that.

Peter Robinson: From the earned income tax credit?

Barbara Ehrenreich: Now if you're making fourteen thousand dollars a year or twelve thousand dollars a year at one of these jobs, that will bring you up to, you know, seventeen thousand or something. That may be above the official poverty level for a family of three--not it's about the official poverty level--but that's not a living wage. The Economic Policy Institute in Washington calculated--and it's just recently--they released a study showing that you--a family of three, one adult, two children, requires thirty thousand dollars a year for a basic, minimal standard of living. No extras, no--no eating out, anything like that. So the EITC is not enough. It doesn't do it. And another thing, I think Eloise which you would acknowledge is that a lot of people did not, you know, get increased benefits when they moved off welfare because food stamps was cut arbitrarily and often illegally by many states in the process of pushing people off of welfare.

Eloise Anderson: Those people who went to work did better than they did when they were on welfare because their welfare check was smaller than their wages. So if you take what they got on welfare and their food stamps and you take what they got off welfare and most people got food stamps, most people got healthcare. I would say eighty to ninety percent of the people got healthcare. They got food stamps, they got childcare, they got all these supports to help them work, did far better than they did on welfare. Secondly, what is even more important for them is that they entered into the mainstream. They're not isolated on AFDC anymore. There is an opportunity for them to move up. On welfare, there is no opportunity to move up. It is only an opportunity to stay put, to stay contained, to stay in their place. Work moves you out. Work gives you mobility. Welfare does not give you mobility.

Barbara Ehrenreich: Some jobs do but the jobs I was in were not ones that had career ladders ahead of them. And, you know, the other--I think you're discounting the cutbacks in things like food stamps and the affect that they had. That's one reason for the degree of hardship that we've seen and let me just say, you know, there are studies that talk about that hardship, studies by the Urban Institute, for example, finding much greater levels of food insecurity, meaning missing meals, meaning having to go without as a result of welfare reform. That--and even another kind of data that I--is what originally disturbed so much was seeing the reports from food pantries and shelters around the country saying, we can't handle it. You know, these are working people coming into the food pantries.

Peter Robinson: Eloise mentioned it, self respect. How should we take that into account?

Title: Find Out What It Means To Me

Peter Robinson: Nobel Prize winning economist, Gary Becker, "Mothers on welfare convey the impression to their children that it is normal to live off government hand-outs. In such an environment, it is difficult for children to place a high value on doing well at school. The vast majority of families do much better when treated as responsible adults." So can you just add…

Barbara Ehrenreich: Well, we have a study that came out in August that was quite disturbing about the affect of welfare reform on teenagers. Finding that comparing teenagers in families that had been on welfare to families comparably poor families and finding those that had been moved from welfare were having more problems in school, more problems with the law because they didn't have an adult anymore in their lives. Their single parent is now working one or two jobs.

[Talking at same time]

Eloise Anderson: Well, you know, I think that's very interesting. I've heard this and I've also read the study and I say to myself, if we're going to argue that adolescents need supervision then all the working mommas in the United States, including the middle class, should go home because I would…

Barbara Ehrenreich: We're talking about single mothers here though. We're talking about single mothers.

Eloise Anderson: But there are a lot of single mothers in the middle class in the United States who should go home because adolescents have--adolescence is a terrible age. Adolescents have all kinds of problems. Adolescents need a lot of supervision whether they are from single moms, two parent moms, but if you are off from work whether you're a two parent family or one parent family, and your kid comes home and you are not there, Katie bar the door.

Barbara Ehrenreich: Eloise, you can't compare raising children in an affluent situation with raising children in poverty. It's a lot harder to raise children…

[Talking at same time]

Barbara Ehrenreich: …in a neighborhood where you have to worry about crime, drugs. You know, this is--that's what makes, you know, they can't compare.

Peter Robinson: Eloise, let me ask you. If, on welfare, some single mothers were able to stay home with their kids, a lot of them were able to stay home with their kids, is it better in principle, we can worry about food stamps and getting the income up later but is it better, in principle, for the mother to be setting an example of self-reliance for the children and going out into the workplace? Or is it better, in principle, for the mother to be performing the nurturing role at home?

Eloise Anderson: In this society, it is important to establish the work ethic in the home. And if the mother is the only adult in the home, the work ethic has to established by her. We do not live in a society that supports anymore women's staying at home. Every since the '60s and a little bit before, particularly middle class and upper class women have been pushing for equal access into the workforce. We want to be treated like guys. We want to be doing all these things. Well you can't say, on the one hand, it is okay for middle class females to do this. It is okay for upper class women to do this. Is it okay for the educated to do this and it's then hold back poor women from doing that.

Barbara Ehrenreich: No, but it's--let's turn that around. If it's okay for Laura Bush to be a stay-at-home homemaker, why isn't it okay for another women who's poor to have that kind of choice.

Eloise Anderson: She can do that if she has a husband.

Barbara Ehrenreich: And in fact, most women on welfare we know from studies going back before 1996, were working on and up. It was sort of an unemployment insurance program for them. It was a safety net. They went in and out of jobs.

Eloise Anderson: To stay at home with your child requires you to have a husband. Government should not replace husbands. So if you want to be a stay-at-home mom, which I think is a very good thing to do then you have to have a husband because government is not to replace a husband. That is not the role of the government. And when you say that I want to be a stay-at-home mom and have no husband, or has the child's father not supporting you, then you are asking the government to do something that is beyond its role.

Peter Robinson: Hold on there because that's…

Peter Robinson: Next topic, a basic one, the origin of poverty.

Title: The Blame Game

Peter Robinson: Let me quote Eloise. "Over the past forty years, the federal government has invested billions in trying to reduce poverty. What seems to be missing is the willingness of those in poverty to make the necessary life changes to move out of poverty. Poverty of a healthy adult," this is a sentence I want you to listen to especially carefully, "poverty of a healthy adult needs to be thought of as a condition in which the person has made some life choices that have brought him or her this circumstance." It's not society's fault. That poor person has made some bad decisions and needs to be shaken up not subsidized.

Barbara Ehrenreich: Well, I mean, that's a very disapproving, moralistic approach to a problem that arises basically from low wages and lack of social supports for people. If there's so many employers--so many people in our country, twenty-nine percent of American families according to a recent study, do not make enough to make ends meet and these are, by and large, working people. You know, you can't put it together on $7.00 an hour, $8.00 an hour, $9.00 an hour. It cannot be done. Has nothing to do with what kind of a person you are, how moral you are, how--even your work ethic. It has to do with the fact that people aren't paid enough in this country.

Peter Robinson: But Eloise, correct me if I'm wrong, but I think part of what Eloise is saying is, terrific, you move from welfare into one of those $7.00 an hour jobs and you discover that you need a--you need to get back together with your husband, you need to educate yourself or make sure your children get educated. You need the family structure. You get confronted with certain realities about the workplace and you begin to modify your behavior as a result.

Barbara Ehrenreich: I don't think the government or any of us should be in the business of modifying people's behavior as to whether they marry somebody or not. If that husband or boyfriend is gone, there's probably a good reason. It's not our business to say, you've got to get back together. And that actually a direction…

Peter Robinson: No, you may do anything you want to but we're no longer going to subsidize a particular lifestyle.

Barbara Ehrenreich: I think we should be though in the business of helping the person who wants to go to college, for example. And one of the really bad effects of welfare reform, intentional or not, is so many states have made it impossible now for a woman to go to college or community college while she's continuing to get temporary aid to needy families. And that just stops them right there.

Peter Robinson: Eloise, let me turn this on you now. So you said poor individuals have made some bad life choice but there are cases in which society hasn't done them any favors. You grow up in the inner city, the school is so bad, it leaves you functionally illiterate. Everybody around you is either dealing drugs or on drugs. And so you can argue that certain poor people aren't at fault and since society has failed them, society ought to help care for them. What do you make of that argument?

Eloise Anderson: Well, you know, what is very interesting to me about bad schools and I'm not--bad government run schools, is that there are many kids who come out of there taking everything they can get out of it. It's not saying that there's a lot there but everything they can get out of it, they get out of it. One of the problems that we have is that we have parents who live in homes where they model for their children that it's unimportant for you to study. It is unimportant for you to give up something now for the future because their parents have never done it. One of the things that work does is it teaches you how to give up something now for the future. And that's one of the things that you want people to do. You want people to be future oriented. Well if I don't go out here and hang out on the street corner tonight and I study my math, I will do better in tomorrow. The street corner versus the math. Those are the decisions that people make on an every day basis that gets them here or here or here. And my view is that what we do when we say that the society out there is doing this to you is that we put people in a position where we are saying that you're less than me, that you don't have the same capacity as I do, is that you can't get over these barriers like I can, that there's something different about you. And I don't want us to say that about people. I want people to look dead in their paths and say there are many ways that I can go here. I don't have the best of opportunities but in this low piece of opportunities, I have opportunities. And what we continually do to the poor is we say, you can't do this. And that is nonsense. They can do it. They can jump over these hurdles.

Peter Robinson: Let's explore a few further issues of parenthood and marriage.

Title: Papa Was A Rolling Stone

Peter Robinson: Let me quote Eloise to you. "States should put more emphasis," this is Eloise Anderson, "on decreasing out of wedlock births and establishing and supporting marriage and two parent families." That's just not the business of the…

[Talking at same time]

Barbara Ehrenreich: Well then I guess Eloise will agree on more subsidies for Planned Parenthood and things like that. But anyway, before we get to that. Most women, what causes them to actually go down to the welfare office and apply at least in the days when you could do that, not just be turned out the door as you will often now, was domestic violence. You know, these are women leaving difficult situations. White women, Black women, Latino women. This was the precipitating factor, even if the background is poverty. Or middle class women fleeing an abusive relationship. And that's not acknowledged with this talk about well marriage will solve it. I think some of these were relationships that cannot be put back together.

Eloise Anderson: It's not most. Some but not most.

Barbara Ehrenreich: Most, no…

Eloise Anderson: Many of the young women who come under welfare come from divorce. Many come from never being married so they weren't in relationships. But there are many women who are in good, healthy relationships when the baby is born--we used to have this image about the fathers--when the babies are born, the fathers are there and they're there until they're about two years old. And my view is that during that time, because they're cohabitating, they need to begin--we need to find support systems to help them think about marriage and permanent relationships. And what we don't do is we don't do that. Also one of the things that we know in looking at the data is most of the domestic violence where it occurs, doesn't occur in marriage. It occurs in cohabitation. So marriage is a pretty safe place for women to be.

Barbara Ehrenreich: Yeah, but don't marry the guy who's been battering you. That won't solve it.

[Talking at same time]

Eloise Anderson: But that usually is not the child's father either.

Barbara Ehrenreich: Well where are these men going to come from?

Peter Robinson: In those cases--in those few cases, you'd be in favor of some kind of support or help for them provided by the government or are you drawing a (?) even on that?

Eloise Anderson: I'm not anti helping people when they're in a crisis. That is what welfare is for, is helping people when they're in a crisis.

Peter Robinson: But it had better be a genuine crisis according to you.

Eloise Anderson: But what I am against is people making welfare a lifestyle, which people have--a lot of people have done during…

[Talking at same time]

Barbara Ehrenreich : No, that was--it was never that. As I said, it was an unemployment insurance program in a way.

Peter Robinson: Intended that way but you wouldn't deny…

[Talking at same time]

Peter Robinson: People ended up on wel--families ended up on welfare from year after year after year.

Barbara Ehrenreich: A very small majority. Some estimates are that that was ten percent of the people on welfare who were sort of long-term but I think we have to…

Eloise Anderson: So then welfare reform shouldn't have people because they're going to be working.

Barbara Ehrenreich: No, I know.

[Talking at same time]

Barbara Ehrenreich: Initially what Bill Clinton said was let's just increase childcare and educational subsidies and, of course, people will get off welfare. The benefits are so low, why stay on it? But if you don't have high enough paying jobs, if you don't have transitional subsidies, you can't do it. The trouble is now, Peter and Eloise, is with an economic downturn, rising unemployment, the whole assumption behind welfare falls apart.

Peter Robinson: Welfare reform is up for renewal this year. What changes to it would our guests make?

Title: Going For Broke

Peter Robinson: TANF was authorized for six years. That means that congress has to reauthorize the program. Barbara and Eloise, you both get to name one reform--you could name more I'm sure but this is television--what reform, what change would you like to see made when congress reauthorizes the program?

Barbara Ehrenreich: I'd like to stop the clock, that is, on the time running out for your lifetime welfare benefits for…

Peter Robinson: You'd like to elim--oh sorry, go ahead.

Barbara Ehrenreich: …for women who have sick children, who have, you know, or elderly people they're caring for, for those who are going to school, for those who are victims of domestic violence.

Peter Robinson: Now, states are already allowed to waive the clock for twenty percent of their caseload. One-fifth of the…

Barbara Ehrenreich: I'd go way beyond that.

Peter Robinson: You'd go way beyond that.

Barbara Ehrenreich: And I would restore food stamps to all who need it.

Peter Robinson: Eloise, you get to name one reform.

Eloise Anderson: I would like to see TANF moved out of the social services and moved into the Department of Labor so that we separate it from being a social services where I'm going to take care of you to being a really a true unemployment program. And then I'd like to see the social service component be established in mental health, developmentally disabilities and substance abuse, where we really start dealing with these issues with the families who are left and who need those kinds of services.

Peter Robinson: When you say you want it moved to the Department of Labor, are you saying that you want it to be more of an employment training and job finding service?

Eloise Anderson: Right. I want it to be--I want it to be a true unemployment insurance program and not a, I'm going to take care of you program. I want it to be over in Department of Labor and I want it to be about jobs, work experience and all those kind of things. People who need social services and people who need jobs ought to be separated from one another and then we can take a serious clinical look at the other kinds of needs that we find here still staying.

Peter Robinson: Okay. Last question. I'm going to ask you to make a prediction of a kind. President Franklin Delano Roosevelt speaking in 1935, "The lessons of history show that continued dependence upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fiber. To dole out relief is to administer a narcotic, a subtle destroyer of the human spirit. It is in violation of the traditions of America." FDR went on to pledge that eventually, this is in 1935, the national would, "quit this business" of welfare. Seventy some years later, or sixty-five years later, we have not quit this business of welfare. Can you see the government, the federal government, ever getting out of the business of welfare altogether.

Barbara Ehrenreich: Well we have so--to a huge extent, since 1996, gotten out of the business of it. I very much disagree with that statement.

Peter Robinson: I guess I'm asking you to make a political judgment. Do you think it's going--will the federal government reassume more responsibilities.

Barbara Ehrenreich: I think we're going to be faced with a terrible crisis with the economy--unemployment rising and this…

Peter Robinson: People running into their five-year limit.

Barbara Ehrenreich: This very frayed safety net and probably it will be at the state level where people have to say, this can't go. We can't do this. You know, we cannot have children, you know, children going without food and without places to live.

Peter Robinson: Eloise, will we continue to quit the business of welfare or face a crisis like the one Barbara describes.

Eloise Anderson: The federal government will diminish its funding of these programs and the state's government may be will stabilize where they are but we hopefully will not go back to what we've been doing for the past seventy-five years of what I believe is really undermining families and undermining children. And that we will find some other kind of way to support families when they are in crises.

Peter Robinson: Barbara and Eloise, thank you very much. For Uncommon Knowledge, I'm Peter Robinson. Thanks for joining us.

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