UNITED STATES: Scrapping Welfare Could Prove Expensive

By Farhan Haq Reprint | | Print |

NEW YORK, Aug 6 1996 (IPS) - Ending welfare is not merely cruel — it is potentially costly as well, warn defenders of the U.S. federal welfare system, which President Bill Clinton has promised to scrap.

Both Democrats supporting Clinton and the Republicans who control both houses of Congress contend that the welfare system wastes money and have reached agreement to cut some 55 billion dollars in federally guaranteed programmes.

Most notably, Clinton promised last week to sign a bill that ends Aid to Families with Dependent Children (AFDC), a 61-year-old federal cash entitlement to poor families that was a cornerstone of President Franklin Roosevelt’s New Deal.

Under the new system that Congress approved, the 50 states will be allowed to devise their own welfare programmes. They may require welfare recipients to work after two years of receiving benefits, and will drop most people from welfare rolls after five years — ending welfare “as a way of life,” as Clinton has put it.

But will the scrapping of welfare save money? Black economist Glenn Loury, a former fellow at the conservative American Enterprise Institute, argues it will not.

Instead, he contends, the United States may suffer from “the Samaritan syndrome”: that is, privately funded groups may spend more to prop up charities.

At the centre of Loury’s argument is the idea that no country as wealthy as the United States will turn away from the needs of the poorest. Richer members of the public would rather contribute more to charity and to groups aiding the most vulnerable populations — which, Loury argues, will ultimately be more expensive than the current federal welfare system.

“It’s going to cost us more,” agrees Philip Coltoff, executive director of the Children’s Aid Society, of the scrapping of federal welfare. “This country is not ready to allow children to be abjectly hungry and to starve.”

Other experts warn of another factor that could boost the cost of cutting welfare: the threat of social explosion.

“This measure is likely to fuel levels of discontent,” particularly among black and Latino groups who form a substantial plurality of welfare recipients, argues professor Ron Walters of Howard University. Those groups, he says, have been singled out by politicians for all the failings of the welfare system.

“Blacks are beginning to get the message,” Walters argues. “People have been getting vilified for decades.”

At worst, Walters says, the targeting of blacks and Latinos for such large budgetary cuts could lead to riots, much as perceptions of police unfairness sparked rioting in Los Angeles and other cities in 1992, following the acquittal of four white police officers for the beating of motorist Rodney King.

But even without the worst-case scenario, experts argue, the sweeping nature of the welfare cuts could provoke a rise in crime and other social ills.

Ten percent of all U.S. families will lose some income as a result of the cuts, says Deborah Weinstein, director of the family income division of the Children’s Defense Fund. She argues that no- one has yet spelled out how those lost funds will be replaced.

Former New York Governor Mario Cuomo says that ending welfare wuthout sufficient job training to replace it will cause “more of all the things that abject poverty brings.” Among them, he says, are increases in homelessness, crime and domestic violence.

A rise in criminal activity certainly should be expected, Walters says. “There will be more people in the underground economy,” he contends, since few of those cut from the welfare rolls can be expected to find jobs easily. “That alone means that crime will go up.”

Other provisions in the welfare bill may be more directly tied to social problems. Coltoff notes that one part of the bill requires mothers seeking benefits to identify the fathers of their children — a requirement, he notes, that may force fathers into a family responsibility they do not want to honour. “We’re liable to run into a lot of wife abuse and child abuse” from the requirement, he predicts.

Some activists who have tried in vain to urge Clinton to veto the welfare bill have made even more dire predictions.

“What are welfare mothers who cannot find work supposed to do for family income when time limits expire?” asks Hugh Price, president of the National Urban League. “Do we want desperate mothers to turn to panhandling, or drug dealing, prostitution and other forms of criminal activity? Are these the ‘family values’ Washington has in mind?”

Clinton, however, believes the current welfare bill, while flawed, offers stronger incentives to get recipients to work than two previous versions which he vetoed.

“The new bill is strong on work,” Clinton explained last week. “It provides four billion dollars more for child care so that mothers can move from welfare to work, and (it) protects their children by maintaining health and safety standards for day care.”

But Coltoff argues that the funding agreed to for childcare “will handle only 25 percent of day care needs.” He adds that “the bill doesn’t provide any money for the construction of new day care centres” — although, he argues, demand for day care will certainly increase if the roughly 13 million people on welfare now face a choice between working or losing benefits.

The dilemma over the costliness of making the proposed welfare system work can be seen in the opposition to the welfare bill by New York’s mayor, conservative Republican Rudolph Giuliani.

Giuliani argues that, to care for the neediest while federal welfare is pulled away, New York City will have to provide 720 million dollars in assistance funds. That is roughly a two percent increase in the city’s 31-billion-dollar budget.

Other cities are complaining loudly about similar problems in providing services if the cuts go through, with many already pleading for assistance from the Samaritans Loury sees on the horizon.

The irony, adds Coltoff, is that AFDC and other welfare programmes formed less than two percent of the federal budget. “The savings is probably less than the cost of one nuclear submarine, or one aircraft carrier,” he says.