SESSION# 5: PUBLIC ASSISTANCE

1. A PROCEDURAL NOTE:HENCEFORTH TEXT SLIDES WILL OCCASIONALY FEATURE PARENTHESIZED NUMBERS REFERENCING SLIDES COVERING COMPLEMENTARY MATERIAL. THE AIM IS TO IMPROVE CONCEPTUAL INTEGRATION OF THE OVERALL PRESENTATION. SEE IF YOU CAN FIND EXAMPLES IN THE FOLLOWING UNIT ON:PUBLIC ASSISTANCE

2. SESSION# 5: PUBLIC ASSISTANCE

3. HISTORICAL BACKGROUND • Virtually all societies provide assistance to those whose survival is otherwise threatened. • In traditional Judeo-Christian contexts (4/5), such assistance was provided on the basis of need and in the belief that all people are created in God’s image. Wealth itself was regarded as sinful unless shared. • Pervasive in both creeds was the awareness that material things distract us from the pursuit of that which is immaterial and eternal. • In Judaism this theme was counterbalanced by acknowledgement of wealth as a potential good if responsibility used, whereas Christianity took a much more “radical” line, often stressing a near-absolute divorce between wealth and virtue. This orientation reflected Jesus’ role as prophet and spokesman of the otherwise voiceless poor---the Bible’s “wretched of the earth.” Indeed, some modern scholars have even argued that He was actually a social revolutionary.

4. AND THE LORD SAID UNTO CAIN, WHERE IS ABEL THY BROTHER? AND CAIN SAID, I KNOW NOT: AM I MY BROTHER’S KEEPER? GENESIS 4: 9 • EVERY MAN AT HIS BEST STATE IS ALTOGETHER VANITY. PSALMS 39.5 • WHOSO MOCKETH THE POOR REPROACHETH HIS MAKER. PROVERBS 17:5 • LABOR NOT TO BE RICH; CEASE FROM THINE OWN WISDOM. PROVERBS 23:4 • WATCHING FOR RICHES CONSUMETH THE FLESH, AND THE CARE THEREOF DRIVETH AWAY SLEEP. THE APOCRYPHA 31:1

5. JESUS SAID UNTO HIM: 21. IF THOU WILT BE PERFECT, GO AND SELL THAT THOU HAST, AND GIVE TO THE POOR, AND THOU SHALT HAVE TREASURE IN HEAVEN: AND COME ANDFOLLOW ME. 23. THEN, SAID JESUS UNTO HIS DISCIPLES, VERILY I SAY UNTO YOU, THAT A RICH MAN SHALL HARDLY ENTER INTO THE KINGDOM OF HEAVEN. 24. AND AGAIN I SAY UNTO YOU, IT IS EASIER FOR A CAMEL TO GO THROUGH THE EYE OF A NEEDLE THAN FOR A RICH MAN TO ENTER UNTO THE KINGDOM OF GOD. 30. BUT MANY THAT ARE FIRST SHALL BE LAST; AND THE LAST SHALL BE FIRST. MATTHEW, 19

6. EMERGENCE OF CAPITALISM AND THE PROTESTANT ETHIC • The twinned advent of capitalism and Protestantism initiated a dramatic break with these ancient values. Beginning in the 16th century, distinctions began to be made between the “worthy” and “unworthy” poor; that is, between those deemed in genuine need and those whose need allegedly resulted from laziness or improvidence. Both types of people were still entitled to help, but members of the latter group were expected to work for what they received, since they were deemed responsible for their poverty. The overriding point is that, for the first time, people were being stigmatized for being poor. • Complementarily, wealth was decreasingly seen in communal context, or as a threat to godliness, but rather as a symbolic reflection of “election” (that is, salvation): in short, the rich were “saved,” not because they were rich, but rather because they had followed God’s commandments to work hard and save for the future. The fact that they had succeeded was thus testimony to their piety and implied that they had won God’s approval for their industry and frugality. Successful in this world, they were more likely to be chosen for the appropriate place in the next. The revolutionary implications of this theology, as compared with traditional teachings, is obvious. • As the great German sociologist, Max Weber, explained, this Protestant Ethic gradually shed its theological roots and evolved into an entirely secular doctrine: whereas wealth was once feared as a “a snare and a delusion,” it is now sought as a good in itself, with the wealthy being admired for their acumen, if not their charity.

7. TRANSFORMATION OF THE SOCIAL ENVIRONMENT • These changes in values reflected and contributed to encompassing changes in the social environment, especially in England, during the period of “primitive capital accumulation.” (c.16-18 centuries.) • Prominent among these new circumstances was the “enclosure” for profit of land previously open for cultivation by the entire community. Farming for profit rather than for use was becoming the norm, as was displacement of peasants in favor of wool producing sheep. (“Sheep are eating men,” as Sir Thomas More famously put it.) • Those forced off the land had no alternative but to offer their labor for sale on the market, often in the new factories (“dark, satanic mills”) that were soon appearing in rapidly expanding urban industrial areas. • Most of the poor were the human products of this massive disruption: without resources, they either found work in the emerging capitalist economy or fell upon the tender mercies of officials charged with overseeing them at minimum cost to the taxpayer.

8. THE NEW CAPITALIST RULES OF THE GAME • Displaced peasants had to find capitalists to hire them or risk the degrading conditions of the poor house. • Competition replaced cooperation in virtually all social relationships outside the home, which now became the sole “haven in a heartless world.” Each able bodied person was expected to competitively fend for himself/herself. Failure to do so was taken as evidence of moral turpitude and personal inadequacy regardless of economic conditions. • Little distinction was made between young and old, male and female. Children of the impoverished were expected to work or to be apprenticed. • Those receiving assistance (the “dole”) were local people; outsiders were generally not eligible for help, and instead were returned to their native parish. • Under no circumstances was aid to exceed the lowest wage lest laborers be tempted to exchange assistance for paid labor. ALL MINE!

9. Modern Public Assistance: Basic Characteristics • The administrative modernization of public assistance was prompted by the Depression (1929-1941), during which poverty became the common plight of vast numbers of Americans. • These emergency circumstances prompted the federal government to provide funding for state administered “relief,” so as to forestall civil unrest, if not of outright revolution. • However, while aid to the poor increased (ADC, later renamed AFDC, was enacted in this period), and actually made an “entitlement” of citizenship, the old attitudes towards poverty remained pretty much unchanged: being poor was still regarded as a shameful condition for which the poor themselves bore responsibility. • It was this attitude, plus the use of public assistance funding as a way of dampening discontent while regulating labor markets, that are the keys to understanding public assistance. • Thus, in keeping with the traditional policy of insuring that welfare benefits did not undercut the low wage labor market, levels of assistance have always been lower than the lowest legal wage. Assistance has also tended to fluctuate in relation to labor supply and demand: when supply is low, wages tend to go up, but if those on public assistance are forced off the rolls, as tends to be the case in these circumstances, then wage demands are correspondingly dampened by the new influx of job applicants. On the other hand, when demand for labor is low and unemployment high, the government has increased assistance as a way blunting political unrest. (This pattern is emperically evidenced in Frances Fox Piven and Richard Cloward, Regulating the Poor.)

10. THE OLD SYSTEM: PRIINCIPLES AND PREJUDICES • The ADC (later AFDC/AFDC-UP) system lasted for approximately sixty years and had the following characteristics: • Federally-regulated but state administeredtemporary assistance to women and children, with: • States deciding on eligibility and actual relief levels, which were typically much lower than the poverty threshold in order to deter “freeloading.” The federal government matched the level of state funding according to a formula based on state per capita income and level of assistance, with higher matching rates for poor states. • Almost all recipients unmarried, divorced, or separated women and with minority children. • Automatic eligibility for both Medicaid and food stamps tending to make public assistance more attractive than minimum wage work, especially since AFDC recipients would otherwise lack access to medical care. • Assistance becoming the political “lightening rod” issue because of the many factual misperceptions associated with it and because these distortions in turn confirmed racist and sexist stereotypes. AFDC could in this respect be described as a collective Roscharch onto which white, middle class America tended to project its otherwise often tacit racist and sexual fears, prejudices, and perhaps desires.

11. THE 1968 - 1995 “PERIOD OF AMBIVALENCE” • Although popular resentment towards AFDC mounted steadily between 1968-95, only a few “extremist” politicians advocated outright abolition of the existing system. Denunciations of AFDC instead tended to be mixed with demands for welfare reform emphasizing education and job training. • The public attitude towards welfare---an ambivalently unstable mixture of compassion and punitive elements---was reflected in various ways.On the one hand, the Reagan years witnessed substantial federal purging of the welfare rolls, as well as denial of Medicaid assistance to expectant mothers (1984). At the state-level,“workfare” experiments encouraged recipients to find gainful employment. Yet, though inadequately funded, the Family Support Act (1988), the main federal reform during this period, did contain provisions for educational and child care assistance to AFDC recipients. Hi! Remember Me?

12. END OF THE OLD SYSTEM: THE GINGRICH REVOLUTION • While politicians of all stripes have long sought to placate public anger over the alleged “welfare crisis,” Democrats generally took a softer line on the issue than did Republicans. However, during the 1992 presidential campaign Democratic candidate Bill Clinton took the fateful step of promising, in an unspecified way, to “end welfare as we know it”--- a commitment that would come back to haunt him. • Results of the 1994 congressional brought the “crisis” to a head. Seizing control of the House, and thus of its leadership, the new House Speaker, Newt Gingrich, led a reinvigorated Republican majority in pressuring Clinton to scrap AFDC. • Clinton initially responded by seeking to block the Republican “extremists.” However, in July 1996, in the midst of the presidential election campaign, he acquiesced by signing the so-called Personal Responsibility and Work Opportunity Act (PRWOA), which replaced AFDC with Temporary Aid toNeedy Families (TANF).

13. THE NEW WELFARE LAW BASIC FEATURES: DEVOLUTION SUMMARY AND COMMENTARY Among the PRWOA’s most innovative features is “devolution,” the shift of responsibility for welfare policy to the states, subject only to broad federal work requirements and time limits on receipt of aid: recipients must find work within a maximum of two years or be cut from the rolls. They cannot receive more than five years of assistance over a lifetime. States now became responsible, not only for setting levels of assistance (as previously), but also for determining eligibility standards and conditions for receiving assistance: for example, whether recipients would have to work at unsubsidized jobs while on the rolls. Ostensibly intended to bring decision making “closer to the people,” skeptics saw the “devolution revolution” as a strategy to promote cuts in benefit levels while tightening eligibility criteria. In their view, state governments: had prompted programmatic federalization in the first place due to their poor track record in assisting the needy during the Depression. would seek to engage in a “race to the bottom” by keeping benefit payments low and by making conditions for receipt of assistance as difficult as possible, so as to deter new applicants from other states. use as much of the new TANF “block grants” (#14/15) as possible for unrelated purposes, especially since state legislatures are even more susceptible to pressure from “special interests” than is the federal government.

14. THE NEW WELFARE LAW BASIC FEATURES: BLOCK GRANTS SUMMARY AND COMMENTARY (1) TANF is funded by five year fixed (“capped”) federal block grants based on a state’s prior welfare spending levels.(This constituted a significant change from the past, when poorer states were compensated with higher AFDC matching grants.) States in their turn must maintain welfare spending at 80% of their 1994 levels or have their grants reduced. TANF thus ended the previous “entitlement” status of welfare, whereby the federal government assumed an open-ended commitment to increased welfare funding as the need arose. Henceforth states, and the poor, would be limited to what they received from the “capped” TANF grants, even if welfare rolls increased during bad times. Together with state control over welfare policy (#13), this was the most fundamental change in federal welfare strategy. Whatever the size of their grants, states risk TANF cuts if they fail to meet federal guidelines for reducing their caseloads on a yearly preset percentage basis, with most of the terminated recipients expected to be absorbed into the private sector. This “work first” priority contrasts markedly with previous welfare-to-work programs(#11), which tended to emphasize training or education as the key to successful mainstreaming. As its name suggests, “work first” places the emphasis squarely on job acquisition in order to clear the rolls as quickly as possible. TANF complements that states’ desire to avoid the “stick” of reduced payments with a very appealing “carrot:” namely, state retention of savings resulting from cuts in the number of recipients. Since the size of TANF grants is based on 1994 welfare spending levels, states stand to benefit if they are able to reduce caseloads below those levels. They are legally allowed to keep all such savings, and this provides a powerful incentive to prune the rolls, perhaps by declaring recipients “job ready” even before expiration of the two year federal limit on aid.

15. THE NEW WELFARE LAWBASIC FEATURES: BLOCK GRANTS(2) SUMMARY AND COMMENTARY (2) TANF ground rules have resulted in some surprising outcomes. When the law passed in 1996, many predicted that TANF grants would be inadequate to meet states’ needs. In fact, however, the opposite has occurred: the states are now awash in TANF funds because caseloads have dropped precipitously (#16), aided by the buoyant job market that has facilitated recipient employment. The states have benefited because, as noted above (#14), they are allowed to keep TANF savings resulting from drops in caseloads below 1994 levels. These reductions have in fact been so steep that the states have collectively reaped a $7.4 billions dollar windfall (#16). The gratifying but unexpected question has been what to do with this surplus. The answer has predictably varied from state to state. Some states have simply put the money in “rainy day” funds for use when the economy turns down and welfare rolls correspondingly increase. Others have spent at least part of their bonanza on programs for the poor, including the working poor. Still others have used the federal money to replace state welfare expenditures. Few, however, have actually raised the amount of their welfare benefits, and indeed six states have actually reduced benefit levels even while collecting surplus TANF dollars. As unexpectedly positive as these developments have been, they do not speak to the primary question: What has actually happened to former recipients who have entered the job market? The answer is summarized in slide #17.

16. INDICES OF CHANGE SOURCE: NY TIMES, 8/29/99 NEW WELFARE LAW ENACTED

17. How Are They Doing? • THE ENCOURAGING NEWS • The number of people on welfare was cut virtually in half---14m to 7m---between 1993-1997. • Over 2/3s of former recipients have found employment. THE DISCOURAGING NEWS • The average ex-recipient only made $6.61 an hour. • About 75% lacked medical insurance • The poorest 20% of American families have actually lost $1400 more in welfare benefits than they gained in earnings. • One third of those who left the rolls between 1995-1997 have returned. • The next economic downturn will probably force many of the recently employed back on the rolls.

18. MOREOVER… • There is little distinction to be made between the condition of newly employed recipients and very low-income working mothers in general. Indeed, as the following survey results demonstrate, the life circumstances of both groups remain appallingly difficult:

19. “TAKES” ON TANF:THE CONSERVATIVES (Misc.) • “It is easy for liberals to take cheap shots at TANF, but much more difficult---indeed, seemingly impossible---for them to propose workable alternatives to it. We had the liberal “solution” for sixty years, and everyone, including the liberals themselves, knows it didn’t work. Motivated by their misplaced sense of compassion, and their equally characteristic misunderstanding of human nature, liberals sought to aid the “unfortunate” and instead only succeeded in creating an intergenerational welfare-dependent population socialized out of the work ethic. The old system also encouraged illegitimacy and other forms of self- and socially destructive behavior entirely at odds with traditional American values. The old system therefore had to be replaced by arrangements designed to foster rather than flout that steady commitment to work and responsibility that have made this country what it is. • Every thoughtful person knows that we are ultimately accountable for whathappens to us in life. Those who can’t (or won’t) grasp this simple lesson perhaps have not had the benefit of loving parents able to teach such values. Nevertheless these values must be taught, even at the price of a difficult transitional period during which former recipients either succeed or fail to meet this challenge. The choice is ultimately their own, as are the practical consequences of that choice. “

20. “TAKES” ON TANF: THE LIBERALS (Edelman) • “The new welfare law is a disgrace to American democracy, and should be scrapped. The law is replete with various reactionary cruelties---the provision depriving legal immigrants of food stamps being a particularly egregious but hardly isolated case in point. Certainly the old law had its flaws and needed to be replaced---but not by this! Required is acknowledgment of the simple realities that conservatives have been unwilling to face, namely, that: • Most of those on welfare want to work but find it exceedingly difficult to do so without child care and transportation---needs ignored both in the new law and generally by the states as well.There is a comparable blindness to the need for quality training and educational programs able to prepare recipients for something other than minimum wage employment. The result is that, faced with ultimatums rather than assisted in the necessary ways, former recipients will be lucky to find even dead end jobs, especially in low wage labor markets that are already tight. • Because many (not all!) conservatives come from privileged backgrounds, they don’t appreciate how difficult the competitive struggle can be for those confronting multiple obstacles to success: e.g., underfunded schools, disorganized families, and crime-ridden neighborhoods. Nor do they understand that a certain percentage of the population is simply too damaged---cognitively or emotionally---to participate in our ruthlessly competitive society. Committed to their “survival of the fittest” ethos, conservatives are willing to throw such unfortunates---and their children!--- into the street, even while preaching their moralistic doctrine of “individual responsibility.”

21. TAKES ON TANF: THE RADICALS (Piven) • “Demonstrating the limitations characteristic of “idealist” analysis, liberals fail to comprehend the underlying aim of the new welfare law. Rather than simply being an expression of conservative meanness, as liberals naively assume, the PRWOA is part of a calculated class strategy to assure that labor markets reflect capitalist needs. Like other “reforms” of recent years (e.g., legal clearance for the use of so-called “replacement workers”---in plain language, scabs), TANF helps to blunt potential worker militancy, in this case by flooding low wage labor markets with large numbers of desperate job seekers, thereby helping to keep wages down and profits high. The irony is that liberals like Edelman “just don’t get it:” they think that labor markets saturated by ex-welfare recipients are the problem, when in fact they are, from the capitalist perspective, the solution insofar as the increased supply of workers drives down employer costs (that is, wages). • “In this respect the so-called Personal Responsibility and Work Opportunity Act (Orwell, where are you when we need you!) is hardly new. Instead it is merely the most recent in a long line of relief laws designed to assure an “adequate” supply of workers with no choice but to accept low wages. The Act is thus a manifestation of the “accumulation” dimension of state policy intended to assure that profits remain high even while living standards stagnant or actually fall. True scientific understanding must be based on evidence rather than pious sentiment, and the evidence in this case could not be clearer. In short, like every other aspect of social welfare policy, public assistance is essentially a tool in the ongoing class struggle. It is only liberal idealism that prevents us from seeing it that way.”

22. QUESTION FOR NEXT TIME • HAVING CONSIDERED THE EVIDENCE AS PRESENTED HERE AND IN THE READINGS, DISCUSS THE “TAKE ON TANF” YOU THINK IS MOST INSIGHTFUL IN SUMMING UP THE SIGNFICANCE OF THE NEW WELFARE LAW. THINK ABOUT IT, WHY DON’T YOU?