Behind Nixon's Welfare Showdown

...They feel the $1,600 minimum is low, and the work-training provision has an odor of indenture about it...

...The plan is being criticized by liberals on two principal grounds...

...I fear you will have nothing like the options I am sure you hoped for...

...It does contain the implied commitment to income maintenance for Americans in need...

...The work requirement thus was retained, but with application to relatively few, and with financial incentives to soften the compulsion...

...The President planned his announcement for the week of July 14 —before leaving on his round-the-world trip...

...Behind Nixon's Welfare Showdown By Daniel Schorr Washington In coming months and perhaps years, it will be debated whether President Nixon's plan for welfare reform represents a progressive concept wrapped in conservative verbiage or a punitive proposal disguised in do-good garb...

...There are also questions still to be answered—perhaps when the legislative language is written in September...

...But the President still vacillated...

...At this session, only three Cabinet members spoke out for the welfare plan—Secretaries Finch and Shultz, and Antipoverty Director Donald Rumsfeld...

...As it would work out, a family of four would have an income of $3,920 before Federal aid ceased...

...If your extra money goes down that drain, I fear in four years' time you really won't have a single distinctive Nixon program to show for it all...

...Nixon, apparently accepting the argument that one important new program of his own was politically more valuable than the expansion of previous programs, issued directives to stretch out or reduce existing projects...

...Not necessarily conclusive, but highly relevant, is the fact that the President himself considers, with some exhilaration, that he has taken a bold, adventurous step in the course of which, for once, he has overridden his more conservative advisers...

...And then, as they earned more, there would be no loss of benefits for the first $720 a year, and after that a reduction at the rate of 50 per cent of their earnings...

...In the District of Columbia, it is estimated that 80 per cent of welfare mothers have preschool children...

...Therefore I am doubly interested in seeing you go up now with a genuinely new, unmistakably Nixon, unmistakably needed program...

...He sent Nixon a memorandum putting the argument in political terms calculated to appeal to the President: "I am really discouraged about the budget situation in the coming three to five years...

...Where the Finch-Moynihan plan urged a uniform Federal standard of assistance to families and incentives to the working poor, Burns favored a system left in the hands of the states, linked to revenue-sharing and stressing a requirement for work or training as a condition for assistance...

...Must a welfare recipient accept any job offered, anywhere...

...Opposed on financial and economic grounds were Secretary of the Treasury David Kennedy, Budget Director Robert F. Mayo and Paul McCracken...

...George Romney, Secretary of Housing and Urban Development, was dubious?his was one of the older programs that would suffer...

...The plan is still, however, not a social reformer's dream, but a piece of social engineering combined with political craftsmanship...

...How many states will supplement the bare $1,600 minimum...

...In the Family Security System (later altered to Family Assistance System), meanwhile, the scale of payments for the working poor was drawn so that the first $60 of earnings would be "disregarded"—that is, not deducted from the Federal payment at all—and thereafter 50 per cent of earnings would be deducted...

...The final discussion, therefore, was put off until Nixon's return and was held, with some acrimony, at a full-dress Cabinet session at Camp David, Maryland, on August 6?two days before the already advertised Presidential address on radio and television...

...Still, despite all these objections and questions, one must not lose sight of some essential advances...

...Vice President Spiro T. Agnew was against it...

...Further, by providing a $30 monthly bonus for those in training, incentive was added to compulsion...

...Will there be any recourse for a welfare recipient who is told to rake leaves or to become Mrs...

...And if, as many think, the Administration has underestimated the cost of its venture at $4 billion for the first year, will it be ready to accept a higher expenditure...

...And all this from a President elected by the welfare-hating "forgotten" middle-class American...

...This is an effort to Federalize the patchwork welfare system...

...In seven months in office, it was the first time President Nixon had made a commitment on a major issue in favor of the liberal wing of his Administration against the virtually united opposition of the conservatives...

...chairman of the Council of Economic Advisers...

...Able-bodied adults (except mothers with preschool children) would be obliged to accept work or training under penalty of losing their $500 allowance (but not the allowance for their children...

...His mind was already made up...

...It would help to erase the invidious line between working Americans and welfare Americans...

...Is that $1,-600 payment to be used as a justification for withdrawing food stamps...

...It would expand coverage from 10 million to 22 million Americans...

...And he prepared to unfold his new welfare scheme...

...This way, in 1972, we will have a record of solid, unprecedented accomplishment in a vital area of social policy, and not just an explanation as to how complicated it all was...

...In its essence it would deal in different ways with three categories of needy Americans: 1. For the aging and handicapped, it would provide a Federal minimum payment of $65 monthly...

...We can afford the Family Security System...

...This is the natural instinct of the Congress, and it is hard for the President to resist...

...It is instructive, first, to review the welfare program's evolution since May, when I wrote in these pages ("The Politics of Welfare," NL, May 12) of an impasse between the proposal of Robert Finch, Secretary of Health, Education and Welfare, and Daniel P. Moynihan, the President's urban affairs adviser, on the one hand, and the counterproposal of Arthur Burns, the President's economic counselor, on the other...

...Even more, I fear that the pressure from Congress will be nigh irresistible to use up what extra resources you have on a sort of 10 per cent across-the-board increase in all the Great Society programs each year...

...For weeks a showdown was avoided while a battle of memorandums proceeded—comments sent to Nixon, distributed to the contestants, countercomments...

...Early in June Moynihan, recalling how the Administration's program to combat hunger had been stored away until suddenly pried loose by political necessity, decided that once again the time had come for dramatic pressure...

...Will the jobs be available, and of what kind...

...This, from all accounts, was the turning point...

...There are other questions...

...2. For families, it would provide $500 each annually for the first two members, $300 each for children?or $1,600 for a family of four...

...But there were further complications, including now the alarm of Cabinet officers and agency heads who felt their programs were being shortchanged in favor of an untried and controversial venture...

...Once you have asked for it, you can resist the pressures endlessly to add marginal funds to already doubtful programs...

...When asked who would have been the fourth, in addition to the three Secretaries who had advocated it, he said he thought that Defense Secretary Melvin Laird would have gone along...

...Shultz's recommendation, based on his experience with manpower programs, was a work-or-training requirement, mitigated by exempting not only the handicapped, but also mothers with preschool children...

...3. For families of the working poor, not now on welfare, there would be supplements to bring them up to the same $1,600 level...

...Nixon had called the Cabinet meeting not for a decision, but simply for a briefing...

...In this phase, the most significant contribution was the intervention of Secretary of Labor George Shultz with a proposal intended to bridge the philosophical gap between the "guaranteed income" and "work or starve" extremes...

...Jones' house servant...

...He later told intimates, cheerfully, that had he called for a vote, it would have been eight to four against the plan...