Welfare reform: Let the experiments begin

September 30, 1996|By Neal R. Peirce

HAILED AND dreaded as the most profound shift in federal social policy in six decades, the welfare bill of 1996 goes into effect tomorrow. Are we ready? Do we know what happens now?

No. Uncertainties reign, and all states' situations differ. But a set of deep, tough issues will be getting attention.

Number One: Are Americans, in their states and localities, up to forging a social contract determining what the privileged owe the poor? For decades issues of income redistribution, of equity in society, have been left to the federal government. It's been an easy out, leaving state and local governments off the hook.

No more. Now we'll have to decide for ourselves. Foundations, universities, nonprofits ought to be organizing public dialogues to address the issue. So far they aren't. But it's too vital to leave to state legislators alone.

Issue Two is related: Are states too cold-hearted, too preoccupied with highways and business development and college funding, to give a darn about the poor?

Many critics say so. But governors and legislatures in Wisconsin, Michigan, Minnesota, Nebraska, Ohio and other states have already been struggling with reform in welfare and its sister program, Medicaid. Some of their innovations -- job assistance for parents, transitional day care, medical coverage -- suggest a lot more generosity (and foresight) than the bill Congress passed.

All states will be obliged to focus on welfare now. Local media will be set to pounce on them if they turn a cold shoulder and leave mothers and children sleeping on grates.

For a generation, Washington looked more generous because it could pay through deep deficit spending. No more. The current press for budget-balancing, the enormous weight of entitlement spending and paying for past deficits have dramatically altered the setting.

Question Three: Is Washington really giving up control of welfare? Trying to prove its toughness on welfare recipients, Congress inserted multiple conditions -- five-year benefit limits, for example, or aid cutoffs for recipients not working after two years.

University of Wisconsin political scientist Donald Kettl suggests that Congress and the executive branch may be psychologically incapable of letting loose of controls and regulations, even as we hold states responsible.

Local option

Next question: Will states share design of the new welfare systems with their counties and cities? Don't count on it -- unless localities, and preferably whole metropolitan or rural regions, form collaborations, tap talent in their local businesses, nonprofits and universities, and come up with ingenious new approaches.

If they do, says Mary Sue Barrett, president of the Metropolitan Planning Council in Chicago, there might be greater efficiencies, more imaginative formulas. But there must be grass-roots demand, she says: ''Citizen activism can create political cover to let legislators provide more decision-making at the local and regional level.''

Will there be new providers of welfare services? Quite likely. Already, governments hire a mass of nonprofit service providers -- social-service agencies, hospitals, nursing homes, community-development corporations -- to perform these tasks. Richard Nathan of the State University of New York describes this as the ''nonprofitization movement.''

As states experiment, even more groups may join the mix. For the record-keeping and management side, states seem ready to hire some of the country's biggest number-crunching firms -- Lockheed Information Systems, Anderson Consulting, Electronic Data Systems (founded by Ross Perot) -- to do the job. The contract for Texas alone is projected at more than $500 million a year.

''Soft''-hearted policy folks tend to be horrified by the entrance of the big for-profit firms; ''hard''-headed people say it's terrific -- for once we'll have clear accountability and a record of real results. Already there are promising models, such as Peter Cove's America Works, which helps welfare recipients into sound work slots, but doesn't collect a fee until they stay put for six months or so.

New York's Metropolitan Transit Authority has announced plans to hire thousands of welfare recipients to clean the city's grimy subway trains and buses. The hope is a cleaner system than the city has had in generations.

The deal could still be wrecked by an upcoming transit workers' union vote, because MTA has set aside possible union slots for workfare recipients. Mayor Rudolph Giuliani objects to part of the MTA proposal. But it fits a pattern: He's already put more than 100,000 welfare recipients to work at tasks from clerical work to cleaning parks.

One of the futures of state- and local-administered welfare may indeed be schemes of public work, or supplements to below-par incomes poor folks receive. A public which abhors the idea of paying people for zero labor may find this appealing. It's an example of the new social contract we'll be searching out.

Neal R. Peirce writes a column on state and urban affairs.

Pub Date: 9/30/96

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