TROUBLES OF THE WELFARE STATE
Lekachman, Robert
Such as it is in the United States, the welfare state, a term for which exegesis will soon be supplied, came under intense fire even before the OPEC coup slowed economic growth, upset a...
...The Great Society in a second respect is distinguishable from earlier welfare provisions...
...The House of Representatives dutifully approved FAP in 1970 and again in 1971, but on each occassion the Senate rejected it...
...Now 50 percent just happens to be the highest marginal rate applicable to ordinary wages and salaries...
...Moreover, to a degree frequently ignored in media analysis, the bulk of the resources devoted to social purposes actually flows to Americans of moderate, middle, or even high income, and only a modest percentage is targeted to the poor...
...The hunger of communities and regions for jobs and tax revenues encourages large corporations to extort an endless assortment of valuable concessions from state and local governments, either as blackmail to retain existing enterprises or bribes to lure new ones into town...
...Deprived of all enforcement provisions, the toothless statute even substituted the ambiguous "maximum employment" for the more alarming "full employment" and, in a wordy preamble, elevated the maintenance of free enterprise to parity with high employment as a legislative target...
...The politics of growth that has dominated debates since the end of World War II is comparatively benign...
...Traditional entry-level, unskilled bluecollar jobs have become more and more scarce...
...No economic training should have been necessary to predict these consequences of increasing the effective demand for services whose supply was unregulated...
...Corporate propaganda has noticeably slowed the pace of environmental regulation...
...Robert Blake's magisterial biography...
...A vast majority can reasonably expect to reach a time of life when energies flag and earning capacity first diminishes and then vanishes...
...Nowhere is the discrepancy between apparent and actual social goals wider...
...The cleaning bills will run into billions of dollars over many years...
...After bitter debate and much pressure from the National Association of Manufacturers and the Chamber of Commerce, Congress enacted the Employment Act of 1946...
...Too much is vital in American traditions of social and political equality to allow of despair...
...Steps have been taken in numerous areas to meet the needs of those who had previously been neglected...
...Fearing a return to mass unemployment after World War II, liberals struggled valiantly in 1944 and 1945 to enact planning legislation for full employment...
...Although the earlier Kennedy-Corman bill stopped short of a national health service on the British model and continued the independence of doctors and hospitals, Kennedy-Corman would have put almost all health costs into the national budget, put a ceiling on expenditures, and forced health providers to operate within fixed budgets...
...Its accomplishments have been more than negligible...
...Kennedy's experts have devised a sophisticated approach to the deployment of existing market mechanisms...
...Mild or brutal, corporatism presents new and larger bills, first to the usual losers, women, blacks, Hispanics, and young workers, and very shortly thereafter to hordes of new recruits from the ranks of factory and office workers...
...Nor is this quite the end of the tale...
...Just approaching visibility is still another substantial subtraction from potential growth as national income statisticians measure it.* This is the staggering expense of rectifying the more malignant consequences of past (and continuing) commercial irresponsibility...
...The brutal fact is that unemployment, at "moderate" rates showers substantial benefits upon the prosperous and affluent...
...In short order, the Nixon court reversed direction and reverted to the old language of 420 gratuity...
...Full employment sucks into the labor force men and women who now struggle to survive on welfare and food stamps...
...See Paul Starr's useful New Republic piece [June 9, 1979], "Kennedy's Conservative Health Plan...
...Adding to the confusion, half the states limit eligibility to families headed by a single parent, and the rest of the country offers help 421 to intact families in which neither adult is employed...
...I am inclined, quite on the contrary, to say that nothing was wrong with Lyndon Johnson's rhetoric...
...Have middle-class civil servants hire upper-class student radicals to use lower-class Negroes as a battering ram against the existing local political systems...
...Inclusion of subsidies to employers may have been the price of Senator Long's support of Moynihan's alternative to PBJI...
...Its adepts can evade group and class conflict and concentrate instead on more agreeable problems of dividing up each year's increment to growth...
...In the next decade, this country is likely either to curtail welfare benefits on the ground that resources are scant and their administration is incompetent, or to move in the direction of social democracy by grappling at last with the hard task of redesigning the markets in which jobs, health care, and education are now supplied...
...The squalor has turned out to be dangerous as well as distasteful...
...Corporate money has funded a covey of conservative think tanks, among them the American Enterprise Institute, the Heritage Foundation, and the Hoover Institution...
...Levitan and Taggart rebut intemperate charges of administrative inefficiency and emphasize instead the intractability of many of the conditions addressed and the experimental mode of some of the attempts to ameliorate them...
...By the end of the 1977-78 session of Congress, Senator Moynihan had introduced a measure that did little more than extend a measure of fiscal relief to New York City and urban communities in similar straits, and a series of subsidies to employers who graciously hire people off the welfare rolls...
...The federal deficit rises partly because of these new expenses and partly because at the same time tax receipts decline...
...By semantic convention, tax breaks for investors and corporations, subsidies for homeowners, and assorted benefits for any well-organized producer group are not called welfare...
...Congress and a presumptive majority of its constituents were unwilling to declare a right to a minimum income...
...The welfare state is a diverse, sprawling phenomenon, of equally varied popularity, piece by piece...
...All the same, the statute was a giant step toward protection of ordinary citizens against the vicissitudes of indigency in old age, short-term joblessness, and more protracted or permanent inability to find secure paid employment...
...During the 1979 New York State legislative session Hugh Carey, a "liberal" Democratic governor, opposed any increase in welfare cash grants even though the last previous adjustment occurred in 1974...
...Feel guilty again...
...Kennedy's own, more comprehensive scheme, which is given no chance of passage by the Congress, itself represents a retreat from public operation and something of a surrender to insurers and health suppliers...
...The natural program of the democratic left— a coalition of unions, women and minorities, 428 consumerists and environmentalists—will include attention to the equity of wealth and income distribution, social control of health, energy, housing, and participatory national planning...
...Even a 33.3 percent rate would enlarge benefits to include families earning up to $13,962, a sum larger than that collected by a very large fraction of New York City's employed population...
...Moreover, according to the scorecards of qualified experts, the Great Society has turned out to be a mixture of incomplete successes and partial failures, by no means the tale of foolish bureaucracies and wasted taxpayers' dollars so frequently told these days in Congress and in the media...
...From the heavy advertising in the business media of improved ways to manage offices, write business letters, and sort and store information, a skeptic might easily infer that the flood of data has more than kept pace with the technology designed to simplify and rationalize it...
...It also rises by the amounts spent to treat the lung cancer and other ailments associated with smoking...
...At this point in the argument, care is essential, for I may be conveying an impression that I accept the familiar indictment of the Great Society as dreadfully prone to throw money at problems...
...Go in for a little force, just enough to anger, not enough to discourage...
...An innovative feature is the insertion between subscribers and insurers of four private national consortia, representing respectively Blue Cross, commercial health insurers, Health Maintenance Organizations, and independent groups of doctors who consent to accept a flat amount annually for each enrolled patient...
...See their The Promise of Greatness [Cambridge: Harvard University Press, 1976], probably the best available examination of the social science evidence pro and con community action, housing, education, manpower training, and other Great Society efforts...
...The virtual disappearance of these growth dividends has provoked current unresolved and ill-tempered controversies over the distribution of existing entitlements and the incidence of the taxes needed to pay for them...
...381, 27 L.Ed.2d...
...Still, any narrowing of the gap is good news...
...Recent apprehensions over the adequacy of the trust funds have persuaded Congress to increase contribution rates as well as the earnings levels to which the rates apply...
...On recent performance, it is hard to distinguish liberals from conservatives...
...On this occasion, it is to accept continuation of the inconsistencies, inequities, and cruelties that have always disgraced the conduct of welfare programs...
...Lead people to believe that they will be much better off, but let there be no dramatic improvement...
...At some time or times, almost any wage slave will experience weeks or months of unemployment...
...No doubt, as Moynihan and others charged, some Community Action Programs fell into the hands of hustlers, and others were exercises in incoherence...
...Less savory ingredients of the conservative mixture include lingering racism and associated aspersions upon the morality and wot k habits of welfare clients...
...deliver a little...
...Community Action programs and allied participatory procedures in housing and education were designed to mobilize apathetic low-income constituencies against city halls around the country so as to increase the volume of local services in low-income neighborhoods...
...During a half dozen years of the 1960s, the welfare state considerably enlarged its ambitions and in the process acquired new constituencies and new enemies...
...Although Kennedy's scheme does increase public regulation of the market for health services, it leaves the structure of that market comparatively unaltered...
...Democratic Congresses have rejected Carter's welfare reforms and evaded health issues...
...The case against it involves identification of the narrow possibilities of social change within the context of market capitalism in the United States...
...As much in 1979 as in 1970 and 1971, no solution can dodge redistribution of income to poor people in general, not just to welfare recipients...
...Despite their contrary reputation, social programs are not particularly wasteful...
...In inescapable contrast, programs that threaten seriously to rearrange the distribution of either resources or power are suspect...
...Fairly construed, the government's record on social policy during the last decade has been one of vigorous effort and some note-worthy if nevertheless defective accomplishments...
...How can even an however, it is by no means certain that tens of thousands of suitable "teachers' could be found to look after them...
...Among federal bureaucracies, the Social Security Administration enjoys an unusually favorable reputation because its mission is almost entirely a matter of collecting money from the public and then disbursing it to appropriate groups of recipients, a task at which government excels...
...Quoted, naturally enough, by Daniel Patrick Moynihan opposite the title page of his Maximum Feasible Misunderstanding (New York: Free Press, 1969...
...Political reaction intensified when legal service attorneys began filing class actions aimed at expanding the rights of welfare clients, women, the rural poor, native Americans, prisoners, and other comparatively passive groups...
...The "failure" of the welfare state, in particular, is taken by many as a platitude in no need of evidence or analysis...
...Kennedy's new plan responds to twin political imperatives, coexistence with private insurers and minimum costs...
...427 services and benefits...
...What doomed the concept, nevertheless, was its threat to existing distributions of local services and patronage...
...Like many other ostensibly neutral economic concepts, the national income definitions are skewed by the ideology of the marketplace...
...Yet, this thumbnail sketch of the history and hard times of welfare brings us back yet again to the solution of an easily untangled dilemma: if everybody including its apparent beneficiaries detests the welfare system, why is it so hard to improve...
...Just across the river, they ballooned in Kansas City, Kansas, all the way up to $4,368...
...Hooker dumped tons of poisonous wastes, which have seeped into soil and water tables in a number of sites around the country, including upstate New York's Love Canal...
...Johnson's amplification of the smaller job-training efforts of the Kennedy administration aimed at improving the quality of marketable skills at the lower end of the labor force and by doing so to improve the negotiating position of some employees against some employers...
...The health sector is an outstanding illustration of the point...
...The dangerous dilapidation of urban infrastructures is another example of business reluctance to support the environment within which it operates...
...Economists, traditionally devoted to free trade, will almost unanimously oppose requirements of notice and compensation...
...When workers are apprehensive about their jobs, they work harder and gripe less...
...In plainer words, businessmen do their effective best to shuffle off the costs of treating the victims of their operations upon the taxpayers...
...The battle over regulatory quality highlights the complicated politics of the welfare state...
...As several critical reviewers [including myself] pointed out, Moynihan in Maximum Feasible Misunderstanding once more floated sweeping and adverse conclusions on evidence from just two cities, Syracuse and New York...
...If work is such a splendid idea, particularly for the poor, and unemployment does so little to combat inflation, a naive soul might be astonished at the extent of opposition to effective pursuit of policies designed to make work available in larger quantities...
...As Blackmun stated the majority's view, One who dispenses purely private charity naturally has an interest in and expects to know how his charitable funds are utilized and put to work...
...say your are surprised that worse has not happened...
...But: really to encourage work is to redistribute income...
...In effect, both FAP and PBJI do tax earnings (or reduce benefits) at 50 percent rates—$1 is subtracted from benefits paid for each $2 of earnings...
...Across the border, its Oklahoma opposite number could expect a lavish $3,408...
...There is, however, no doubt that right now government action of almost any kind is supect...
...Following a scenario eerily reminiscent of the 1940s, Congressman Augustus Hawkins and the late Hubert Humphrey refought the full-employment battle with only marginally superior results...
...Lyndon Johnson's grandiloquent rhetoric is a good place to begin a search for the reasons why social advance has been so infrequent and so incomplete...
...No one knows how many Hookers have been fouling the environment...
...It is the most efficient agent of equitable income redistribution politically feasible within the limits of market capitalism...
...The "revolution" of rising entitlements of which Nathan Glazer, Daniel Bell, and their allies have made so much unites in a common clamor for political attention and financial, aid women, blacks, Hispanics, Gray Panthers, and the physically or mentally handicapped...
...Their crucial objection was to the heart of FAP's design—a guaranteed income...
...Possibly the most encouraging reaction came from Business Week, one of the more intelligent business journals...
...n the last decade, the welfare state has taken a new turn toward federal regulations aimed at cleaning air and water, improving the quality of consumer protection against dangerous products, raising standards of occupational health and safety, and attacking job discrimination against women and minorities...
...The taxes imposed upon productive workers to subsidize the essentially unproductive discourage effort and enterprise...
...Almost equal amounts were designated to assist the blind and disabled, and almost no one arose to challenge their appropriateness...
...The very Carter administration economists who have been designing economic slowdown concede that only a major depression is likely to cool inflation...
...Payments will be adjusted to the characteristics of the clients...
...The increasingly inequitable distribution of income will stimulate increasingly violent public reactions...
...In the social welfare community, it is a truism that programs for poor people tend to be poor programs, or at least are so perceived...
...Since Carter imposed guidelines last October, even strong unions settled at figures well below the escalation in the cost of living...
...Vouchers, of course, have been a favorite proposal of free-market economists...
...Edward Banfield's notorious association of intractable poverty with lower-class attitudes hostile to thrift, postponement of immediate gratification, education and training, and reliable work habits, readily leads to the conclusion that public action can do almost nothing to improve the situation...
...Many labor unions, unfortunately but comprehensibly, have an occasion allied themselves with corporations in resisting regulations that appear to threaten jobs by increasing corporate costs...
...Within the Carter administration, Council of Economic Advisers Chairman Charles Schultze has led the movement toward either deregulation or regulation that accords with "free"-market incentives...
...Pensions for the elderly are taken for granted...
...As even Daniel Patrick Moynihan has conceded, not very much money was ever devoted to, much less thrown at, the Great Society's constituents...
...Some of the most controversial features of the Great Society involved attempts substantially to alter the operations of markets for public services...
...Social security has been comparatively uncontroversial for familiar reasons...
...What doomed FAP ultimately, however, was equally determined opposition from the right...
...If the poor are as rational as the rest of us (why not...
...In his excellent dissection of the neoconservatives—in his book The' Neoconservatives (New York: Simon & Schuster, 1979), Peter Steinfels quotes Aaron Wildaysky to this effect...
...No quantity of Nixon work-ethic rhetoric and no volume of disclaimers of any resemblance between FAP and any version of a negative income tax could disguise the fact that FAP extended incomes guarantees not only to unemployed families now on welfare but also to lowincome, fully employed persons...
...express shock and dismay when they follow your advice...
...Ten years of fruitless reform initiatives by presidents of both major parties have sharply etched the limits of the welfare state in the United States...
...That scramble is certain to intensify in the 1980s...
...The public, when it is the provider, rightly expects the same...
...In a sense, those who denounce the Great Society as a total failure do Lyndon Johnson the unintended honor of adopting his own definition of success...
...With or without attribution, Kristol and Moynihan are heavily indebted to Joseph Schumpeter, who in a few pages of his brilliant Capitalism, Socialism, and Democracy identified the stratum of alienated intellectuals whom the very success of capitalism has created...
...Only the policy explicitly directed to the needs of the poor, young, black, or urban is most often challenged as inequitable, wasteful, and indulgent of morally suspect human types...
...The print and electronic media conveyed the distinct impression that Hooker was a poorly managed family firm rather than the responsibility of a huge oil company...
...Timidly but unmistakably, its administrators tried briefly at least to influence markets in the private sector...
...The answer is neither the President's low standing in the public opinion polls, nor Russell Long's frequently demonstrated capacity to block true welfare reform in his Senate Finance Committee...
...They shrewdly identified its imperfect articulation with food stamps, housing allowances, and Medicaid...
...In the short run, the strength of business influence upon the political process, the pervasiveness of free-enterprise ideology, and the weakness of the left, all strongly combine to create a drift toward some version of corporatism—far less mitigated than it is now by pressures from unions, consumers, minorities, women, and environmentalists...
...Pupils in Bedford-Stuyvesant and South Bronx public schools will continue to test worse than their Scarsdale and Great Neck age mates...
...The Nova Institute recently estimated that at least $40 billion must be spent over the next decade simply to maintain, repair, or replace bridges, sewers, water mains, and highways...
...No one, not President Carter nor his few congressional allies and his more numerous opponents, cares to play the new zero-sum games...
...When in his 1964 run for the presidency Senator Goldwater hinted a preference for private alternatives, he raised so violent a political storm that he hastily retreated...
...In 1977, a welfare family of four in Mississippi got $720 in cash grants annually...
...Try a variety of small programs, each interesting but marginal in impact and severely underfunded...
...Although a currently fashionable cry is for less rather than more regulation,* each new intervention has responded to a collection of corporate practices outrageous enough to overcome normal congressional reluctance to take on the large corporations whose contributions finance their campaigns...
...For reasons to be examined, social spending, and especially programs aimed at the difficulties of low-income Americans, had reached the point at which either retreat or significant institutional change was becoming unavoidable...
...Bloody but unbowed, President Carter sent Congress in May 1979 a substantially curtailed version of PBJI, billed as costing only $5.7 billion extra, down from the $20 billion price tag attached to the 1977-78 proposal...
...One had to look hard for this corporate association even in the New York Times...
...Such as it is in the United States, the welfare state, a term for which exegesis will soon be supplied, came under intense fire even before the OPEC coup slowed economic growth, upset a precarious political detente over the size and direction of social spending, set off a dangerous inflation, and precipitated a current crisis of governmental legitimacy that has paralyzed presidential and congressional responses...
...The figure in New York City.was $5,712...
...It is the fashion of the benevolent so to define the goals of social action as to increase the number of program successes...
...In piquant contrast, the "conservative" State Senate majority leader, Warren Anderson, favored a cost-of-living adjustment on the ground that he and his Republican associates were not Scrooges...
...A 25 percent tax on earnings would widen assistance to families earning as much as $18,616, just about 1979's median figure for the entire population...
...in a free society infants cannot be taken from their parents on the grounds that the parents are lower-class and that the children therefore will not do well in school...
...Although employees in the end almost surely finance the entire program because in its absence their employers would pay higher wages, the lower actual deduction from paychecks might be preferred even by the sophisticated to the hypothetical prospect of higher wages were employers relieved of this cost...
...All parties agree that it would be just splendid if more adults on welfare got jobs in the private sector...
...Throughout American history, a steady tension has existed between the political and social egalitarianism of the Bill of Rights and the equal protection clause of the Fourteenth Amendment and those institutions of market capitalism that glorify financial inequality...
...It is rather startling to realize that the contemplated cost of AFDC at the federal level in the 1980 budget is just $6.7 billion, not much more than 1 percent of that budget's halftrillion total, little more than half of the sums allocated to unemployment compensation...
...Of course, high unemployment afflicts even good customers and frightens into thrift the still employed...
...Franklin Roosevelt lost a historic opportunity when he considered but rejected inclusion of health care in that act...
...It is a minor irony that this artifact of one of Nixon's so-called strict constructionists serenely ignored several inconvenient precedents contrary to its preferred position...
...Their subsidiaries process and market an increasing share of exports to American markets...
...With the glaring but single exception of AFDC, the old welfare state grappled and continues to grapple with the normal vicissitudes of life...
...Mix well, apply a match, and run....' The Great Society has been unfairly and maliciously criticized...
...No wonder then that welfare reform was high on Jimmy Carter's agenda of campaign pledges...
...The choices are so unpleasant that they are almost inevitably evaded...
...Moynihan sweet-talked his surly master into reenacting the political role of Benjamin Disraeli and even into reading *See Wyman v. James (400 U.S...
...President Carter's 1980 defense budget of $125.8 billion was a trifling $10 billion or so larger than the $115.2 billion committed to social security pensions...
...Unfortunately, the prospects for fundamental reform in this direction appear very poor...
...Although Proposition 13 directly influenced neither AFDC nor foreign aid, the public mood it signaled led to widespread emulation by other states and the adoption of a balanced-budget amendment by Jerry Brown, the most sensitive political weathervane of our day...
...The medically indigent will receive free cards or vouchers...
...One of recent history's saddest unanswerable questions concerns the Great Society's development in the absence of a futile war, which drained resources and diverted national attention from domestic reform to the tragedy of Vietnam...
...They still reject similar shifts from rich to poor...
...Although some ill-paid men and women who survive to retirement age eventually collect pensions in excess of the sums actuarily justified by their contributions, large numbers in this category either fail to qualify for benefits, die in their fifties and early sixties, or live a comparatively short time after retirement...
...Everybody's favorite aspiration for those on welfare is to shift them to private payrolls, to paraphrase the immortal sentiments of Richard Nixon...
...Unemployment insurance is an equally routine arrangement, criticized mostly by conservative economists...
...then complain that people are going around disrupting things and chastise local politicians for not cooperating with those out to do them in...
...In a further attempt to control costs, a national health insurance board, still another new agency, will set national and state health budgets and the payroll tax rates required to finance them...
...The old welfare state sought to do little more than 417 shuffle funds from the employed to the retired, from employers to the briefly unemployed, and from taxpayers to welfare families, veterans, and other claimants...
...To say this is to identify the instability of corporatism...
...It might well expect more, because of the trust aspect of public funds, and the recipient, as well as the caseworker, has not only an interest but an obligation.* Welfare reform has been a lost cause and will continue to be so in the absence of major shifts in political and public attitudes, because a successful redesign of AFDC requires transfers of income from the top to the bottom half of the income distribution...
...Full employment is valuable to blacks, Hispanics, teenagers, and women—last hired during economic expansions and first fired during subsequent business cycle contractions...
...A cynic might even conclude that the less the human need, the more acceptable is the expenditure of public funds to assuage it...
...The "old" welfare state begins with the 1935 Social Security Act...
...Taxpayers do not stagger under the heavy burdens of paying for social programs...
...Daniel Patrick Moynihan has favored somewhat more generous cash allowances, retention of at least some social programs, and an emphasis upon job training...
...Progress halted in the 1970s in an atmosphere of slower growth and higher average unemployment rates...
...Current agitation over social security relates to the rising level of payroll taxes and the adequacy of trust funds to finance future benefits to a rising population of pensioners, not to the legitimacy of the program itself...
...In more dignified language, absenteeism declines and productivity improves...
...As the White House sees its prospects, "We will be going to Congress at the outer limits of political possibility...
...In its more belligerent mode, the new alliance between big government and giant business is promulgated by dangerous politicians like John Connolly, our Man in the White Stetson, who are prepared to junk civil liberties and representative institutions the better to preserve their own dominion...
...Unemployment and the fear of its increasing incidence have many other dispiriting influences upon the politics of social action...
...A handy case in point is Hooker Chemicals, a subsidiary of Occidental Petroleum...
...In the first edition (1968) of his The Unheavenly City (Boston: Little, Brown), he had this to say: It would be premature to conclude that the lower-class child must be introduced to normal culture almost from birth if he is ever to succes in school...
...The public worries about welfare cheaters...
...His aims were and are the appropriate, the minimum objectives of an affluent community traditionally devoted to equality of opportunity and even sometimes to equality of condition...
...The upshot is political paralysis, drift to the political right, intractable inflation, and imminent recession of unpredictable depth and duration...
...Often enough environmental regulation is a useful pretext for closing an elderly plant in a declining market...
...Medicare and Medicaid became disastrously expensive because a victorious coalition of physicians, hospitals, and health insurers defeated any attempt to modify financial arrangments...
...In the summer of 1969, President Nixon startled Congress and his constituents by recommending an ambitious Family Assistance Program (FAP...
...Intervention was inadequate in the allied case of Title I grants to improve the education of children in impoverished school districts...
...The bills are just coming in for past injuries to the natural environment and for past failures to maintain the social overhead...
...Health Insurance Cards will 423 entitle their owners to a variety of hospital and physicians' services...
...The stream of innovation began with Kennedy jobtraining schemes and widened in 1964, 1965, and 1966, the anni mirabili of the Great Society, with enactment of statutes covering education, health, the cities, housing, nutrition, and poverty...
...Coalitions shift from issue to issue and the absence of full employment sets former allies against each other...
...The machinists, led by the imaginative William Winpisinger, are an encouraging exception...
...The underclass subsists in isolation from the mainstream economy...
...For in a conservative political environment the natural consequence of meager economic growth, of stability or actual decline in the real income of white- and blue-collar families, and of intensified job anxieties is an ever-more ferocious scramble for individual and group advantage...
...But even funds disbursed in the right places were often ineffectively spent, because less attention was paid to the special needs of 418 urban blacks and Hispanics than to the shortage of money under which their schools labored...
...In its present frame of mind, Congress seems as likely to take favorable action as it is to welcome any statement from the White House other than a promise from Mr...
...GNP rises when more cigarettes are sold...
...The apparent fifty-fifty split between employers and employees of contributions to social security trust funds probably pleases a good many people...
...In spite of these major concessions, Kennedy's program has been greeted as excessive in size and cost and radical in conception...
...Friedman himself regards these cash payments as complete substitutes for food stamps, Medicaid, public housing, and social services...
...As Gunnar Myrdal has pointed out, the crucial measure of a society's stage of development is the size of its underclass—its population of unemployed, casually employed, and miserably employed and its cadres of addicts, hustlers, petty criminals, and long-term welfare recipients...
...It is a comfort not to young, casual, illegal, and migratory workers who infrequently qualify for the benefits but to white- and blue-collar office and factory employees, occasionally joined by laid-off civil servants, managers, and 414 professionals...
...The bills for welfare, food stamps, Medicaid, and unemployment benefits rise even faster than unemployment rates...
...429...
...By this criterion, America in 1964 was less developed than Japan, Western Europe, and Myrdal's Scandinavia...
...Better still, in the corporate view, factory and office workers, alert to threatened layoffs and plant shutdowns, are unlikely to nag management and unions leaders to make work more interesting and less threatening to health and personal safety...
...In short, according to the criteria applied to previous ventures in social welfare, the Great Society did at least moderately well...
...Few major corporations pay their fair share of property taxes...
...Once again, New York City's condition typifies that of many older cities...
...The Burger court has severely limited the conditions under which class actions can be filed...
...By world standards, American taxes are comparatively light, and the public sector of the economy is smaller than in Western Europe and Scandinavia...
...A decade of sustained full employment would substantially narrow existing wide differentials between the earnings of these groups and those of white males...
...Kansas City, Missouri, pegged benefits at $2,040...
...Resources will be too few simultaneously to enlarge property incomes, preserve mass living standards, guarantee steady employment to the majority of the work force, and maintain the protections of even a curtailed welfare state...
...Within the business community, only economic fundamentalists advocate true depression as a moral purgative...
...Patients can use their card by free choice of an accredited Health Maintenance Organization or insurance company...
...If full employment were a stable and predictable feature of labor markets, extraordinarily high wages would have to be paid to toilers in restaurant kitchens, laundries, filling stations, car wash emporia, and other humble occupations...
...In the decade that began in the late 1960s, New York City lost 600,000 manufacturing slots...
...When news is slow, some newspaper is certain to run a gaudy series about welfare families living it up in the Waldorf-Astoria and driving to welfare centers in Cadillacs...
...Bad enough...
...Substitution of synthetic fuels, an increasingly popular solution, will vastly improve this country's leverage against OPEC but it is unlikely that it will very much reduce the resource costs of energy...
...Once more the usual coalition of labor unions, church groups, and liberal intellectuals floated a measure that featured national economic planning for full employment, defined a right to a job, and allowed any individual to sue in federal court to enforce his/her claim to an appropriate job...
...Such allies as labor unions and black groups in past and present struggles for comprehensive health coverage, fullemployment legislation, and the civil rights landmarks of the 1960s now quarrel over the incompatibility in the presence of substantial unemployment of two valid principles—the seniority clauses in collective-bargaining agreements and the affirmative-action goals pursued by women and minorities with the support of the Office of Contract Compliance, the Equal Employment Opportunity Commission, and other federal agencies...
...Liberal Congressmen and George Wiley's National Welfare Rights Organization decried the benefit levels, approximately twothirds of the official poverty line, as disgracefully meager...
...Programs that aid moderate-, middle-, and upper-income Americans are popular...
...And blindness and disability are individual tragedies of birth, crippling accident, or chronic illness, not defects of character...
...In the end the unmourned 95th Congress adjourned without action on any welfare reform measure...
...As a result, real income has been declining, even before taxes and still more steeply after them...
...The evidence, however, seems to point in this direction...
...tell them that you are surprised they have not revolted before...
...Finally, there is the instructive history of full-employment legislation...
...Justice Blackmun, one of four Nixon members, asserted in 1971 that welfare departments were entitled to require compulsory home visits by social workers as a condition of continued eligibility for benefits in spite of Fourth Amendment prohibitions of unlawful searches and seizures and associated guarantees of the "rights of the people to be secure in their persons, houses, papers and effects...
...To these complaints the liberal response has been half-hearted to the verge of nullity...
...economy growing far more rapidly than ours expect to accommodate all of these claims...
...Even in adjacent states, the disparities defied logic...
...Prophecy is a mug's game...
...it is a matter, from the economic standpoint, of the more consequential intractabilities of shuffling paper and processing data...
...PBJI Mark II sets national minimum benefits for families of four at $4,654, approximately 65 percent of 1979's $7,200 poverty line...
...Accordingly, one of this season's safer prophecies is congressional rejection of the son of PBJI and the grandson of FAP...
...Revulsion against welfare is premised upon old and new conservative grounds...
...No comment appears necessary...
...Galbraith's 1958 contrast between private affluence and public squalor—in The Affluent Society (Boston: Houghton Mifflin)—is not less relevant now than it was in the Eisenhower era...
...It editorially warned that Humphrey-Hawkins 424 might be an entering wedge for national economic planning...
...A major political battle is now shaping up over possible limitation on multinational freedom to close domestic plants without notice or explanation and shift operations to lowercost havens...
...Under pressure from the AFL-CIO, UAW, and Senator Kennedy, the Carter administration has at last submitted a disappointingly small health program that promises protection against catastrophic illness and some liberalization of Medicare and Medicaid...
...Intact families will be covered in all 50 states...
...It shoves upward the wages of ill-paid workers in situations scarcely less precarious than that of the unemployed...
...A medical group that collected young and health subscribers would receive fewer dollars for each one than a plan that treated pensioners and the chronically ill...
...The Public Interest, hospitable for years to demonstrations that regulation is not cost-effective, has new allies in journals like AEI's Regulation and Heritage's Policy Review...
...Employers and their employees will share costs...
...Even so, 415 Milton Friedman and his followers support income maintenance in the preferred form of a negative income tax set at levels modest enough to avoid damaging work incentives...
...426 0 they strains are increasingly visible...
...Worse still, the claims of the welfare constituency incite predictable emulation by other groups...
...In the next decade, this country may well move in the direction of plutocracy...
...Why the resistance to full-employment legislation equiped with sharp teeth...
...Among neoconservatives, Milton Friedman is an extremist...
...Overwhelmingly their disapprobation of government action centered upon welfare, domestically to the indigenous poor and internationally to the poor of other countries...
...The barriers to labor-market entry that already confront young workers are aggravated by the continuing shift from commodity to service production...
...Welfare for the rich is a good deal more expensive than welfare for the poor...
...What distinguished the War on Poverty, model cities, compensatory education grants, food stamps, and Medicaid among other Great Society policies from the old welfare state was deliberate concentration upon the problems of the disadvantaged...
...There was a false dawn during the heyday of the Warren Surpreme Court, in the final half of the 1960s, when the Court's majority visibly moved toward the definition of welfare as a right rather than an act of grace on the part of the sovereign state...
...It is notoriously more difficult to increase service than commodity productivity...
...Within the United States, the shift of industry to the Sunbelt is a microcosm of an even larger movement to low-wage, anti-union, authoritarian states in Asia and Latin America...
...All the same, I shall hazard a guess that, as the realities of the new economic era penetrate mass consciousness, our politics are likely to polarize...
...The traditional conservative case that makes many congressional Republicans (and some Democrats) as well as media allies like the Wall Street Journal comfortable is essentially financial—fear of a growing public sector, intense distaste for the taxes necessary for its support, and apprehension that budget deficits will modulate into intolerable inflationary pressure...
...Accordingly in August 1977, he promulgated his Program for Better Jobs and Incomes (PBJI...
...The evaluators of the Great Society whom I have cited reached mixed or mildly favorable conclusions because they revised sharply downward its proclaimed objectives...
...Although many of the tasks performed by novices in banks, life insurance companies, brokerage offices, and corporate headquarters seem to require no more skill than vanished blue-collar alternatives, the social expectations on both sides seem to be different enough to raise substantial obstacles to the recruitment of high-school dropouts or even high-school graduates...
...The only persistently unpopular portion of the 1935 Social Security Act has been AFDC, welfare in its narrowest sense...
...Unemployment is bad for business and fiscally expensive into the bargain...
...In part, apparent previous gains in living standards have been illusory...
...Carter to deed the presidency forthwith to Teddy Kennedy...
...This generalization stretches far beyond welfare to community action, legal services, Medicaid, and, crucially, to unsuccessful efforts to define full employment as a significant national goal...
...The old welfare state endures and alongside it much of the Great Society—Title I school grants, Medicare, and Medicaid most notably...
...Avoid any attempted solution remotely comparable in size to the dimensions of the problem you are trying to 419 solve...
...As economists demurely phrase these habits, commercial activities often impose external costs upon the community at large or upon specific individuals and groups within it...
...The sourness and fretfulness of today's national mood and the low quality of contemporary political discussion are transitory...
...Working-class and middle-income Americans profit most from social security...
...High tax rates on earnings discourage people on welfare from seeking the ill-paid and unpleasant jobs for which they qualify...
...On the other hand, low 422 rates translate into redistribution of income from the prosperous to their poorer brethren...
...The initial Wagner-Murray Full Employment bill mandated specific presidential and congressional action in each session for full employment...
...With the exception of defense, old-age and survivors' benefits are the most expensive of federal programs...
...Its advocates could wistfully point to the retention of chronologically defined employment targets and the faint and cautious sketch of a potential planning framework...
...From the outset then, the elements in the Great Society targeted to disfavored minorities were vulnerable to rejection by a majority only uncertainly sympathetic with special help to selected groups and readily subject to suggestions that programs were ill-conceived, poorly administered, and unduly expensive— as in fact some undoubtedly were...
...Often they are the occasion of extensive tax evasion and rebellion...
...Typical of the condition was the response of California voters to CBS pollsters' inquiries about the motives for their support of Proposition 13 in June 1978...
...It is an inescapable fact of American political experience that the portions of the welfare state that are most nearly universal are, if not actually applauded, at minimum tolerated...
...I have lingered in some technical detail on welfare because it is paradigmatic...
...A sensible person can't really expect to eliminate poverty, but it is surely a good thing to reduce the number of poor people...
...Insurers will be encouraged to increase profits by controlling cost and improving the efficiency of their administration...
...His suspicion of many antipoverty programs echoes Irving Kristol's vendetta against his alleged New Class of disaffected university graduates with a vested interest in the preservation and extension of a welfare state that confers income and status upon them as its administrators...
...Although these dollars purchased some additioal health care for the elderly and medically indigent, an extremely large percentage of the money, by common agreement, improved the incomes of doctors, dentists, and other providers of health services...
...Thus at best, in the absence of other major interruptions of petroleum shipments by OPEC, Americans in the company of Europeans and Japanese confront a future of limited opportunity for improvement in living standards, narrower paths of upward mobility, and heavier pressures upon existing social benefits and union gains...
...German and French workers endure much heavier payroll taxes to finance health care as well as pensions than do Americans...
...No wonder the multinationals are the most fervent advocates of free trade...
...Thus the story of first Nixon's and then Carter's plans to rationalize AFDC needs to be understood within the existing ideological constraints upon social progress...
...If, as it is reasonable to do, the $14.2 billion allocated to federal employees' retirement is lumped with social security, total retirement benefits exceed defense expenditures...
...An occasional short spell of full employment is "tolerable" as long as all parties fully understand that the situation is exceptional and temporary...
...None of us is completely consistent...
...Irving Kristol interrupted the Public Interest's usual run of autopsies on the Great Society long enough to publish in 1974 a special issue, and he invited Eli Ginzberg and Robert M. Solow, two economists of moderately liberal viewpoint, to edit it...
...A Texas family of four was instructed to scrape by on $1,608...
...Leon Keyserling and Bert Gross who in the 1940s worked on the original Full Employment bill were actively engaged in drafting and negotiating HumphreyHawkins...
...Pat Moynihan, by then New York's junior senator, sponsored the Administration bill in the-upper chamber but within weeks began to criticize the very legislation he had sponsored...
...Get some poor people involved in local decision-making, only to discover that there is not enough at stake to be worth bothering about...
...The politics of OPEC have hastened the end of an era of cheap supplies of energy...
...The long struggle over the mission of the legal services program focused on the dispute between conservative advocates of individual assistance and comparatively radical partisans of structural change...
...Benefit payments will rise for 800,000 families in 13 states (most of them in the South), some additional federal money will make its way to New York and other Northern jurisdictions...
...As its incompatibility with a business-dominated polity becomes apparent, I expect that Americans will look far more kindly upon the sort of democratic planning for an equitable society that today seems no more than utopian vision...
...Some of the money somehow leaked to middle-class areas...
...The legal and political establishment was quite willing to enlarge the availability of free legal help to poor individuals on a case-by-case basis...
...Planning boards at the state level will promulgate hospital budgets...
...Unchecked, the tendency of entrepreneurs is to use the natural environment as a dump and the public sector as a source of free *Gross National Product measures the dollar value of goods and services that either pass through markets or, as in the important instance of public services, can be analogized to such goods and services...
...By the time the negotiations were over and the essential compromises reluctantly accepted, not much was left of the original measure...
...In the short run, the best that Americans can expect is an opportunity to transfer an increasing portion of any economic growth that actually occurs to Middle Eastern suppliers...
...Even less doubt that local and national politicians were able to emasculate innovations that threatened to redistribute political power and channel jobs, funds, and prestige to some unfamiliar addresses...
...Congress created two of the more talkative bodies of the ensuing years: the Joint Economic Committee of Congress [which is not allowed to sponsor legislation] and the Council of Economic Advisers...
...In the longer run, I have confidence in the enduring power of the first tradition...
...His Godkin lectures at Harvard, delivered shortly before he joined the new Administration, are the manifesto of the movement...
...In other words, it turned out about as any sensible person should have expected...
...Americans now accept redistribution from young to old, healthy to sick, able-bodied to disabled, and civilian to veteran...
...Some of the same actors played in this revival...
...And so on...
...Senator Kennedy— whose popularity, it appears, stems substantially more from his family name than from endorsement of his public postures upon health, taxes, and strategic arms limitation— at times appears to be the last traditional Democratic liberal, unrepentantly confident of the capacity of public policy to resolve social disputes, and willing to raise funds to finance the policies...
...But the continuing political stalemate over welfare reform attests to the difficulty of resumed social advance in a centrist Democratic Administration after eight years of Nixon-and-Ford-sponsored retrogression...
...Although such groups as Environmentalists for Full Employment do their best to explain the compatibility of jobs and environmental protection, the political advertising of the large corporations takes the opposite tack...
...The new rates, high by domestic if no other standards, have set off public resistance, partly because inflation has at the same time risen faster than most wages and salaries...
...During recessions, affirmative action is a mockery and average Americans feel too threatened to concern themselves over the condition of fellow citizens in still worse economic condition...
...Not to act is also a choice...
...Lyndon Johnson accepted, possibly because he had no political alternative, a statute that preserved the tradition of fee for services, imposed no effective ceiling on hospital charges, left Blue Cross and Blue Shield in peace, and simply fed billions of additional federal money into the system...
...Sustained full employment, by contrast, embarrasses the business and political establishment...
...Whenever decent jobs at living wages or better are plentiful, recruiters have great trouble coaxing young men and women into our volunteer army...
...A touching faith was in evidence that reading scores would improve in cheerful step with the availability of Title I grants...
...The primary new device is a medical voucher...
...Another pair of evaluators rendered a similar accounting...
...Feel guilty about what has happened to black people...
...Without a volunteer army, how can middle- and upper-class youngsters be spared the rigors of conscription...
...The underclass of the poor will always be with us, unless and until the psychology that defines lower-class status and separates it from the productive middle class is somehow transformed.* *Banfield holds out little hope...
...Why not, asked Moynihan, parlay FAP into a similar Republican triumph...
...Veterans' educational, medical, and pension benefits, the oldest of welfare interventions, are judged legitimate even by those who complain about their costs and administration...
...Those who included AFDC in the Act apparently thought of it as a small, inexpensive, entirely respectable provision for the widows of coal miners and similar worthy souls, proudly striving to raise small children in cruelly straitened circumstances...
...The definition is idiotically agnostic...
...This is not just a matter of the absurdity of enhancing the efficiency of tenors, violinists, and ballet dancers...
...Here is Wildaysky in a testier mood: A recipe for violence: Promise a lot...
...More fortunate Americans can look forward to a somewhat dignified independence of parents who might otherwise become their responsibility...
...It is well to clear the ground of popular misconceptions...
...Even the most detested of their number—Aid to the Families of Dependent Children—delivers a higher proportion of the sums appropriated to recipients defined by statute than do investment tax credits paid to enterprises that would have purchased new equipment or erected new factories, in their absence or than subsidies to corporate farmers and funds to finance the cost overruns of incompetent defense contractors...
...Black earnings will not match those of whites in our time, but how inspiring it is to note (so long as it occurs) an upward drift in the ratio of black to white incomes...
...Indeed, the heaviest neoconservative charge against the welfare state is its endorsement of claims against the community that impede growth, erode productivity, and promote inflation and social discontent...
...Developing and developed societies are engaged in unbenign rivalry for manufacturing markets, under the auspices of multinational corporations...
...Senate conservatives decried the additional cost of the new program...
...Nor is recession a cure for inflation...
...Neoconservatives, of course, also worry about money...
...In time, even political vacuums are filled...
...Unlike their archaic colleagues, they understand that in the grim context of slow or no growth, a measure of coherence in national policy is the prerequisite to economic and financial stability vital to their own interests...
...The real failure of the Great Society must be laid to Lyndon Johnson, to the Congress, and to the public's failure to will the means essential to the fulfillment of the stated ends...
...Although for the time being a majority of the American public appears to prefer the first choice, there is reason to believe and hope that in the longer run the future of the welfare state, in an extensively altered political context, is much less dismal...
...The book that resulted from this special issue —The Great Society (New York: Basic Books, 1974)—reached this summary judgment: The record of the Great Society is one of successes mixed with failures, of experiments that proved themselves at least partly successful and experiments whose returns do not appear to have justified the effort...
...No doctor will be legally entitled to charge more than the rates set in the insurance program in which he chooses to participate...
...According to the Treasury's current estimate, the Internal Revenue Service would collect at least $30.6 billion in extra taxes if homeowners were shorn of tax deductions for mortgage interest and local property assessments, if large donors were barred from subtracting their gifts from taxable income, if assorted subsidies to farmers, shipbuilders, defense contractors, and other corporations were cancelled, and so on...
...In each state, premiums will be higher or lower according to the degree of success in keeping costs low...
...Bright young lawyers who enlisted in the Legal Services offices were effective allies...
...They seem prepared to pay a price in welfare service for the social stability that is equally vital...
...408...
...Alternate with a little suppression...
...employers who hire welfare clients will collect larger tax credits, the earned income-tax credit for the working poor will be liberalized, and 420,000 new public jobs will be created...
...The statisticians ignore improvements in occupational safety, air and water quality, and product reliability...
...309, 91 S.Ct...
...For their part, welfare administrators and social workers fret over inadequate benefits, red tape that denies aid to eligible claimants, and public willingness to allow inflation to erode the real value of allowances...
...During the long 196168 economic expansion, the ratio of black to 425 white income steadily improved...
...The poor productivity record of the American econorpy in recent years is the consequence mostly of lagging capital investment and escalating energy costs...
...n short, the welfare state is a melange of separable initiatives engendered by assorted pressures and interests and responsive to quite distinct constituencies, as often at odds among themselves as united in their claims 416 upon the fisc...
...The split within the business community between Neanderthals like William Simon and Walter Wriston and planners like Felix Rohatyn, David Rockefeller, and the shade of his brother Nelson, is likely to be resolved in favor of the planners...
...Perhaps parents could be bribed to send their children to day care centers...
...All too often, however, corporate arguments ring plausible in their workers' ears...
...Its financing from trust funds, replenished by contributions from employers and employees, has conferred upon the system the reassuringly conservative mantle of private insurance...
...The welfare burden is evidently political and psychological rather than fiscal...
...Wages and working conditions are likely to deteriorate and social programs to shrink in their wake...
...Even Public Interest regulars from time to time concede unexpected merit in the social efforts of the 1960s...
...A lesson of the Great Society experience indeed seems to be that many of its failures, complete or partial, stemmed from too little rather than too much intervention into the operations of private and public markets...
...President Carter's latest proposal would give some aid to families of four earning as much as $9,308 annually, $2,000 above the poverty line...
...In addition, they deploy the sophisticated argot of social science to probe more deeply and gloomily into the roots of welfare dependency...
...their incentive to work will surely be stimulated by much lower levies on possible earnings...
...The crafty Victorian stole or adapted enough of his Liberal opponents' social schemes to ensure a long spell in office for himself and his Tories...
...As the neoconservatives summarize the current condition of welfare, the social pathologies of lower-class behavior have created one large group of permanent clients and another, somewhat smaller but steadily increasing, of equally enduring functionaries...
...No one appears to have contemplated the emergence of relatively large numbers of female-headed families, on and off welfare for years and decades...
...See The Public Use of Private Interest (Washington, D.C.: Brookings, 1977...
...FAP was the major project of the Administration's house Democrat, Daniel Patrick Moynihan, then enjoying a two-year incarnation as White House counselor...
...Those still willing to hold to the liberal identification appear nearly as convinced of the disabling defects of public housing, Medicaid, job training and the residues of the war against poverty as their ostensible conservative antagonists...
...After appropriate scholarly warnings that "information on many questions is totally inadequate" and "the tools of measurement and evaluation are very crude, and the latitude for normative judgment is very wide," they go on firmly to assert "that the 1960s programs and policies and their continuation had a massive, overwhelmingly beneficial impact, and that the weight of evidence convincingly supports this view...
...No question that the Great Society was timid in design and frugal in its expenditures...
...A typical judgment is that of Sar A. Levitan and Robert Taggart, manpower experts based at George Washington University...
...Whatever a person's misfortune, an adequate income makes it easier to endure...
...In arriving at their temperate conclusions, these seasoned observers carefully separate themselves from the rhetoric of unconditional war against poverty and "unreasonable" expectations of quick and dramatic success on any of the major social fronts—education, housing and health, and parity of black/white incomes...
...Unemployment calms the unions and moderates their wage demands at contract negotiation time...
...Money is saved, even the poor deserve free choice in the expenditure of their meager resources, and these resources will thus purchase more satisfaction than any set of choices by the best meaning of welfare bureaucrats...
Vol. 26 • September 1979 • No. 4
