Sammis White, Ph.D.
The consensus in Wisconsin and the nation is that the current welfare system must be changed. Welfare today neither raises the poor out of poverty nor does it make them any less dependent. A new approach to welfare must be employed – one that both reduces poverty and moves recipients, as responsible citizens, into the mainstream of American life. The new welfare approach, unlike the present one, must encourage initiative and independence and be based on the realization that recipients have an obligation to actively strive to achieve that independence. No longer can the system provide an entitlement for an indefinite period: recipients must provide a quid pro quo; they must reciprocate for the support they are provided.
The new structure should not be based on any one political ideology. It must be pragmatic. The structure proposed draws ideas from individuals ranging from Milton Friedman to Ralph Nader. The proposed approach acknowledges that recipients are different individuals, that they should not and cannot all be treated similarly. It also acknowledges that many recipients are not valued enough in the marketplace so that they can sell their services at a sufficient price to become immediately independent. And it acknowledges that a combination of carrots, sticks, and higher expectations of recipient behavior are critical ingredients in the recipe for a new welfare system. In short, no single solution will work. What must be employed is a combination of several, coordinated initiatives.
The proposed structure is based on five principles:
- income support is no longer an entitlement: recipients owe society for its assistance and must begin to repay society within two years of accepting help;
- the system must include some program elements that treat recipients differently from each other because it is clear that existing and potential recipients will have varying abilities to support themselves;
- known perverse requirements, such as currently making welfare more remunerative than work or setting income guidelines that force recipients to stop working in order to receive any benefits, should be eliminated or greatly reduced in impact;
- all families should be assured of some minimum level of income, as long as they are making the required effort to move toward independence; and,
- the new system must, to the degree possible, help to push low-income participants into mainstream activities, such as work and education, through a series of incentives and opportunities.
The proposed new structure has three basic components. They are interrelated and form a system that seeks to promote recipient movement from dependence to independence over a limited number of years.
Cash Grants
The first major component of the new approach is the substitution of a cash grant to low income households in lieu of Aid to Families with Dependent Children (AFDC) benefits and Food Stamps. A new minimum-income program would be established that would create a base level of indefinite period of support. Recipients will be allowed up to two years of assistance on the cash grant. After that. they must either be participating in the Time Dollars volunteer program or be working at least 20 hours a week. If they do neither, their stipend will be reduced by 30% for two additional years, after which they will be ineligible for any public support. The message is similar to another espoused today, “tough love.” Higher expectations of behavior, as research in education has shown, should result in more mainstream behavior.
Cost Estimates
If only the current AFDC population were to participate in this program, it would be less expensive than the cost of the AFDC and Food Stamp programs it would replace. The program is likely, however, to appeal to some of those households which are eligible for, but not currently participating in, AFDC. To the degree that they do enroll in this program, they could force program costs above the savings level for the short and possibly intermediate runs. In the long run, the movement of families to work and the reduction in program administrative costs, due to the switch to cash grants, should make serving this population less expensive than the current approach.
Toe proposed approach has not resolved all of the issues, nor will .it solve all of the problems of welfare. But it would be a significant step forward and a dramatic improvement over the present, failing system.
