CARTER'S WELFARE REFORM

...Series P-60, No...

...Humphrey-Hawkins would make full-employment an obligation, or at least a goal, of administrations...

...This would expand the range of factors a president would have to consider in investigating economic problems...

...Fourth, the fundamental flaw in Carter's proposal is that it does not include or attempt to build upon any mechanisms for permanently correcting some of the deficiencies of American capitalism, namely unemployment and subemployment...

...I The NIT (or guaranteed-income) plan should be part of any viable welfare reform...

...It would require in-depth analysis of the nation's economy and coordinated fiscal planning to achieve balanced economic growth (without excessive inflation) and full employment...

...All workers who earn less than $15,600 per year will receive some tax relief...

...C) Relieve the states of all or most welfare costs...

...Those unable to work will be eligible for a Negative Income Tax (NIT) program, which will provide a guaranteed income based on family size...

...If all else failed and unemployment were not brought down to 3 percent, enough public-service jobs would have to be created to reach that goal...

...Even if Carter could temporarily improve the economy with tax incentives and public-sector jobs, his poverty reforms would be built on a 4 U.S...

...Department of Health, Education and Welfare, Rural Income Maintenance Experiment, (Washington, D.C., November 1976...

...Carter's economic approach, for instance, does not consider the impact of oligopoly on the economy, the impact of poor schools, inadequate transportation systems, and many other factors requiring correction by Humphrey-Hawkins...

...3 Millions of other Americans (including half of all 2See Bernard Brown, "Long-Term Gains from Early Intervention: An Overview of Current Research," Presented at the 1977 Annual Meeting of the American Association for the Advancement of Science (Denver, February 23, 1977...

...A heads of poor families) have always worked at jobs paying inadequate, even poverty, wages...

...Since all the poor would be covered by the bill, the number of citizens eligible for Medicaid would increase substantially...

...NIT would: consolidate welfare programs, provide uniform benefits, federalize welfare, cover all the poor...

...Rather than expand federal and state child-care efforts, the proposal allows deductions to lowincome workers so that they can pay for child care...

...Carter's proposal operates on the assumption that employment problems in America are a temporary anomaly that need attention only from time to time...

...Those designated as 6 capable of work will be expected to accept a publicor private-sector job the government will supplement if wages fall below established levels that vary by family size...

...103 (Washington, D.C., September 1976), P. 27...

...U.S...

...Thus, in the absence of full employment, Carter's guaranteed income would simply perpetuate many persons in a spiral of poverty...

...B) Seriously reduce the number of welfare programs...

...Thus, with Carter's approach, even the end of poverty would be a temporary and illusionary condition, because the flaw of capitalism will not have been addressed...

...E) Be designed to prevent and break the cycle of poverty rather than just administer to the poor...

...Since Carter's proposal only calls for a total of 1.4 million public-service jobs and is vague about how the job market would be expanded, millions of ablebodied persons would continue to be left out of the job market...

...If future presidents do not feel obligated to take steps to limit unemployment, or if they decide, as President Ford did, that 8 percent unemployment is as good a means as any to fight inflation, the whole system will flounder, with the blame inevitably placed on the jobless poor...

...Second, the jobs to be created under the bill will be quite inadequate...

...foundation of sand...

...In truth, the American economy has never served anything like all the public...

...This requires the parent to incur considerable expense to start work, is too nondirected to stimulate the child-care market, and fails to set any standards for child care...

...Between 1950 and 1975 official unemployment averaged about 5 percent, with an average of 8.5 percent in 1975, and 7.7 percent in 1976...

...An urban family of four with no outside income would receive only $4,200, an aged, blind, or disabled person $2,500, and an aged, blind, or disabled couple only $3,750...

...This would probably increase congressional support for National Health Insurance...

...Since 1929, unemployment has been below 3 percent only twice...

...Despite its merits, the problems in Carter's approach are substantial...

...These lowpaying jobs may cause employers (particularly state and local governments) to replace higher-paid workers with welfare recipients, thus further disrupting the job market...

...8...

...5See Thomas Vietorisz, Robert Mier, and Bennett Harrison, "Full Employment at Living Wages," in Stanley Moses, ed., "Planning for Full Employment," The Annals of the American Academy of Political and Social Science (New York, March 1975), p. 104...

...Welfare recipients would have more incentive to work, other jobs would not be jeopardized, and welfare workers would have the dignity of earning their own living...

...Since most of the jobs will have to be supplemented, it would make more sense to simply pay a decent wage...

...There are numerous deficiencies, but four deserve emphasis...

...The bill recognizes that unemployment results from a wide range of systemic problems, and it requires not only efforts to overcome these problems, but continual monitoring to determine if reforms are working and if new problems must be dealt with to create or retain a tight labor market...

...President Carter's recently announced proposal to reform the welfare system is based on the strategy of dividing the poor into those who can work and those who cannot...

...D) Make welfare aid automatic, administratively simple, comprehensive, and adequate for decent living standards without intrusion into the personal lives of the poor...

...Bureau of Census, "Money Income and Poverty Status of Families and Persons in the United States: 1975 and 1974 Revisions (Advance Report...

...5 A HILL such as Humphrey-Hawkins, even with all its flaws, would be a first step toward facing up to some of the serious deficiencies of American capitalism and fashioning a response to them...

...Since the benefits cannot be supplemented with Food Stamps or SSI, both of which will be abolished, poverty will be institutionalized for those who cannot work...

...Since good child care and preschool education can provide poor children with the educational stimulation and training they so often lack, 2 can provide the poor child with at least one nutritious meal per day and with health care, the optimal value of child care should be obtained by federal expenditures...

...The Census Bureau reports that in 1975 12.9 million persons worked full-time year-round and still earned less than $7,000.° During the 1970s some 35 to 40 million Americans have been consistently either out of work or unable to earn a decent living in the job market...

...Specific programs are proposed to reduce unemployment resulting from cyclical, structural, regional, and youth factors, as well as unemployment caused by discrimination...

...As far as it goes, Carter's basic approach is sound, and consistent with reform proposals and empirical validation of the last 15 years...

...First, the benefits to nonworkers are much too low...

...The studies conducted by the Institute for Research on Poverty at the University of Wisconsin, in Madison, are explained in U.S...

...Most important, the bill would hold a club over the head of the Congress and the executive...

...The jobs will pay only the minimum wage, with cash supplements to families (up to $2,300 for a family of four...

...Maintenance at a very low guaranteed income would become a substitute for serious efforts to expand and improve the economy...

...Third, there is too little emphasis on child care...

...Bureau of Census, Employment and Earnings (Washington, D.C., January 1977), p. 24...

...it would be simple to administer, its costs would be reasonable (most estimates are in the $25- to $35-billion range), it would not intrude unnecessarily on the privacy of the poor, and it could provide some tax relief to low-income workers...

...Since those unable to find a job would qualify for assistance (which would include many persons not presently covered by welfare programs), the government might feel some obligation to keep the economy healthier than normal in order to keep down the welfare rolls...