Toward a Working Welfare System

WHAT America needs now," the President told the nation last week, "is not more welfare, but more 'work-fare.' " On the wings of that Nixonian neologism, the President proposed the first fundamental overhaul of the U.S. welfare system since it was created 34 years ago. The key element to the reform was a "family-assistance system." Although Nixon pointedly denied it, the notion is very much like a guaranteed income--with one'crucial difference. For the ablebodied, willingness to accept "suitable" employment or vocational training would be the quid for the quo of assistance. In essence, Nixon notified the nation that his Administration is prepared to help those of the nation's 9.7 million relief recipients who try to help themselves.

With congressional approval, Nixon's cure for welfare woes could go into effect in 1971. Under its provisions, federal assistance for the aged, the blind and the disabled would continue unchanged, except that benefits would be increased. A uniform floor of $65 per month for all such recipients would be established, with the Treasury chipping in 25% of the cost in excess of $65. The largest and most controversial segment of the present welfare system--aid to families with dependent children (AFDC)--would be eliminated.

The proposed substitute introduces a standard federal welfare minimum for the first time and would raise basic benefits in the 20 states now paying less than that figure: $1,600 a year for a family of four, with an extra $300 for each additional member. The basic allowance would be reduced as private income increases, but the family would be allowed to keep more of its earnings than at present. When the family of four reaches an income of $3,920, all federal assistance would end. Benefits paid by local or state authorities, however, could be added to the total.

This family would be allowed $720 in earned income without suffering any reduction in the maximum federal subsidy of $1,600. (The $720 constitutes what the government considers the cost of working, such as transportation, clothes and lunches, for a year.) For a family of four, the descending scale of federal subsidy--apart from any state payment--would work this way:

Earnings Benefit Total

720 1,600 2,320

1,000 1,460 2,460

2,000 960 2,960

3,000 460 3,460

3,920 0 3,920

At the core of the concept is the desire to get as many welfare recipients as possible working. Only mothers of preschool children and those physically or mentally incapable of holding a job would be exempted. When an ablebodied, but unemployed father applies for federal assistance under the Nixon plan, he would also have to register with a local employment service. If "suitable" work or job training is available, the applicant would have to accept. If he refused, his portion of the federal grant ($500) would be eliminated. The remaining federal funds would be made available to the mother and children through a trustee or a local welfare agency. To make vocational education both more available and more attractive, the Nixon plan calls for the creation of 150,000 new federal job-training slots (raising the total to more than 1,000,000) and the payment of $30-per-month stipends for those who enroll.

To encourage mothers of dependent children to work, the Nixon welfare package would develop 450,000 additional openings in new or expanded day-care centers. These facilities provide nursery care for the children as well as job opportunities for some of the mothers. The centers would also offer educational programs. To make the entire system more attractive to the states and cities, Washington would contribute more than it now does for AFDC costs. For instance, if the new approach were in effect this year, California would be getting an extra $179,500,000. Alaska would receive $1,000,000 more.

The crucial difference between the new proposal and current practice is that the Nixon program would recognize the nation's working poor. In many states, the present AFDC laws bar aid to families with able-bodied fathers in the home. For many of these men, who are either unemployed or have low-paying jobs, there is only one choice. They desert their families. Nixon's program would provide for such families without encouraging the father to leave. It would authorize relief for 12,400,000 needy Americans who now get none.

Under the present hodgepodge of individual state regulations, benefits fluctuate wildly. In Mississippi, a family headed by an unemployed woman receives $39 per month. In New Jersey, the same family gets $263. Largely as a result of these discrepancies, many impoverished people migrate from low-paying states--especially in the South --to areas with better benefits. -

Also of potential benefit to the states and cities is the Nixon plan for revenue sharing. Although the sum which would initially be dispersed--$500 million--is minute compared to the needs, the machinery is the thing. Unquestionably, the amount would grow in the future. Under Nixon's proposal, in January 1971, the Federal Government would start sending tax money back to the states, with a mandatory amount "passed through" to the cities and localities. Few strings would be attached, and present grants for particular purposes would presumably be continued. Nixon also wants to turn many of the manpower-training responsibilities back to the states. Both these plans mesh with the welfare proposal, and Nixon recommended that they be considered as a group. A fourth part of the plan would take all operating authority away from the Office of Economic Opportunity. O.E.O. could then concentrate on developing new programs to be run by other agencies.

As Nixon himself admitted, no system represents a panacea. Undoubtedly, there will be difficulty in defining what constitutes a "suitable" job for potential applicants. Incentive to work may be dampened if unemployed men are forced to travel great distances to work, even if their transportation is paid. Coordination among levels of government is always a complicated process and, logical as the plan may sound to middle-class taxpayers and legislators, it is the response of the poor themselves that will be crucial to its success.

The ultimate aim is to reverse the steady growth of relief rolls. In the end, this would save money as well as redeem wasted lives. But to get started, the extra welfare cost to Washington would be $2.5 billion. For its $4.7 billion-a-year investment under the present system, however, the Federal Government has little to show.

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