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The Truth and Consequences of Welfare Reform

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from: Jonah Edelman
to: Ron Haskins and Mickey Kaus

That Dreadful W-2 Program

Posted Tuesday, Nov. 16, 2004, at 12:47 PM ET

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Dear Ron and Mickey,

Given DeParle's stark portrait in American Dream of the economic hardships Angie and Jewell continually face despite hard work, I find it difficult to see the range of programs you list, Ron, as anything other than a good start. You ask how much more taxpayers should be expected to spend on these working families. My answer: enough to lift them out of poverty.

It's just plain wrong for people like Angie and Jewell to work so hard but barely stay afloat—particularly as the richest 1 percent get $89 billion in tax breaks they don't need every year.

And beyond being just, ensuring that hard-working Americans like Angie and Jewell end up with more money in their pockets makes good economic sense. By reducing federal payroll taxes (a tax cut for need rather than greed), enabling low-wage workers to pursue more training and education, or getting more states to make the Earned Income Tax Credit refundable, we could accomplish two things: We create more financial stability for millions of working families and stimulate the economy by putting more money in the hands of people who will spend it right away and, very often, in economically disadvantaged areas.

I don't understand why any elected official who values work and wants to create a wealthier nation would oppose such common sense strategies.

That said, I accept Ron's conclusion that in a period that combines unparalleled federal deficits with an amazing level of indifference (or obliviousness?) to the higher interest rates, lower rates of economic growth, and inflation caused by prolonged federal deficits, additional government funding to lift low-income workers' wages will be unlikely.

So then what?

Ron suggests encouraging marriage as a way to increase incomes. As for how to do that, Mickey says he's sticking with the idea that "the need for mothers to work will itself encourage marriage over the long run." I don't buy it, but maybe Mickey will explain his thinking further in his next response. I'm intrigued by Ron's idea of providing unmarried couples with counseling, job training, relationship education, and other services to help them move toward marriage. Given the significantly greater economic well-being of two-parent families, we should try anything and everything we can to encourage them. I'm totally uncomfortable, however, with Ron's proposal to spend $3 billion on such unproven programs, based on a worry that early stage programs might end up being just as incompetent and corrupt as the Milwaukee agencies that administered the W-2 program.

While every agency profiled in American Dream comes through as mediocre, DeParle's in-depth account of Maximus, a national company that profited handsomely in the wake of the 1996 welfare bill, is particularly damning.

While initially assigning more than 100 welfare recipients to each caseworker, Maximus spent hundreds of thousands on public relations, millions on marketing (including Maximus water bottles, visors, coffee cups, and golf balls), and executive George Leutermann—whom Nightline adoringly profiled—put his wife, his son, and his niece on the payroll, along with his mistress and his mistress's mother. Maximus' useless MaxAcademy motivation classes were seldom attended, except for the days when the media or state administrators showed up—the agency had employees stand in as welfare recipients. An internal Maximus analysis 10 months into the implementation of the W-2 program found that 67 percent of its clients had no work assignments and 46 percent of the clients had no assignments at all, work or otherwise. "I had no clue we were in that kind of shape," Leutermann later said. Evidently, neither did the Ford Foundation or Harvard's John F. Kennedy School of Government. They gave W-2—a program that the story's lone committed caseworker, Michael Steinborn, called "a farce" and "sickly comic"—an Innovations in Government Award.

The W-2 program featured, in DeParle's view, a "scandalous absence of casework." Early on, in one of the saddest episodes in American Dream, Angie and Jewell's cousin Opal, the story's tragic character, calls the Opportunities Industrialization Center to get back on the welfare rolls. Neglecting to look at her file, which would have told her of Opal's addiction to crack cocaine, Opal's new caseworker, her third in a year at that point, tells her to go look for a job. After selling off her possessions, she calls back and admits she's addicted to drugs. At that point, Opal falls into a "bureaucratic black hole," waiting two months to attend a low-budget treatment program. DeParle poignantly describes what happens next:

Out of food and facing eviction, Opal started calling OIC three times a day. But she couldn't even leave a message; her caseworker's voice mail was full. She couldn't reach a supervisor, either. OIC had a $57 million contract and about half the cases it had budgeted for. You'd think someone could answer the phone. (I once called an OIC worker and got a voice mail that advised, "Try to call only once a week.") Finally Opal just walked in, asking to talk to someone. Had a caseworker ever gone to her home, she could have seen all she needed to see: no food, no furniture, three frightened kids. Had the receptionist even looked in the file, she would have known that the thin, disheveled woman seeking help was a mother on drugs. Instead, she said the office didn't see walk-ins. She told her to make an appointment.

Given the awful record of casework in American Dream and states' tight budgets, I find it hard, Mickey, to share your faith that if the feds further tighten work-participation rules, many states will rise to the occasion and help the most troubled mothers who have been left idling on the rolls. One of the unanswered questions in all of this, it seems to me, is what should happen to this less employable group.

I look forward to your thoughts on this, Mickey and Ron, and to your ideas about a topic I didn't get to again: what to do about the men.

Jonah

dialogues
entries
123456789
from: Jonah Edelman
to: Ron Haskins and Mickey Kaus

That Dreadful W-2 Program

Posted Tuesday, Nov. 16, 2004, at 12:47 PM ET
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Jonah Edelman, Ph.D, is executive director of Stand for Children, a citizen voice for children with affiliates in four states. He lives in Portland, Ore. Ron Haskins is a senior fellow in the economic studies program at the Brookings Institution and senior consultant at the Annie E. Casey Foundation in Baltimore. Mickey Kaus, a Slate contributor, is author of The End of Equality.
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Remarks from the Fray:

This is a rather odd dialogue. A book that generally approves of welfare reform comes out, and to discuss it, slate selects three people who...generally approve of welfare reform. There's some quibbling about the details, perhaps--Edelman seems to think welfare reform is going a bit too fast, and Haskins seems to think it isn't going fast enough--but nobody seems willing to argue that welfare reform was a step in the wrong direction.

This can't possibly represent a complete consensus among commentators and experts that welfare reform was a good thing. All three panelists take a moment to rail against writers from the "left" who defend welfare as we knew it. I don't think these people are a myth, and I certainly don't think they're all idiots with nothing interesting to say.

--afaderman

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(11/16)

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