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The Welfare Reform Conundrum

Analysts agree that public assistance needs changing to be 'a second chance, not a way of life'

`OK, class, what do you think?'' Virginia Kellogg demands. Standing next to her is Tina, a welfare recipient in her 20s dressed in her Sunday best. The classroom, with its bare white walls and harsh florescent light, is filled with 40 to 50 other women, mostly black, all similarly decked out.

``Work! Work!'' they chant, meaning that, in their view, Tina is suitably attired to go to a job that she doesn't yet have but hopes to get after attending this welfare-to-work class.

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Ms. Kellogg, who teaches the class in the no-nonsense manner of a college football coach, interposes sharply: ``I picked up on something that you didn't see. Can anybody tell me what it is?'' A long pause. ``No? Her skirt is too high for a job interview and possibly too high for a job. Professional presence is what you're after. Keep it plain and simple, class,'' she booms out.

Not everyone is sold on the gospel, yet. Karen, who's sitting in the back, volunteers that ``if you have high self-esteem, anything you wear, you look good in.''

Kellogg pauses a minute to let that heresy sink in. Then she asks whether the class agrees with Karen. A few scattered ``yeah's'' and ``nah's'' echo around the room. Having given the class its say, Kellogg makes no bones about what she thinks of Karen's opinion: ``Now I don't agree with that at all.''

``When do you wear your fad outfits?'' Kellogg demands sternly. ``After 6 p.m.! Until 6 p.m., you're dressing for that employer, not for yourself!''

So it goes in this ``job readiness'' class run by Project Independence in Prince Georges County, Md., just over the state line from Washington, D.C. Kellogg and other teachers here instruct their students, ranging in age from the teens to the 40s, in the basic skills needed to leave welfare and find work: taking care of their children, dressing for success, overcoming substance abuse, managing personal finances, even ``spiritual development.''

Project Independence is one of 50 state programs created by the 1988 Family Support Act to train welfare recipients to enter the workforce. At a cost of roughly $600 million to the federal government, such programs enrolled about 7 percent of adult welfare recipients last year. President Clinton wants to expand that number dramatically. These job training programs form the foundation for his ambitious pledge to ``end welfare as we know it.''

Welfare reform appeals to President Clinton for both political and policy reasons. Politically, the issue was a sure winner for him last year, burnishing his credentials as a ``New Democrat.'' His pledge to limit welfare recipients to two years on the dole is popular whenever he reiterates it.

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As for policy, reams of research suggest that welfare is in drastic need of an overhaul. Aid to Families with Dependent Children (AFDC), the main cash-granting United States welfare program, originated in the New Deal as a handout for widowed mothers.

During the '60s it expanded exponentially to serve mothers who were never married or were divorced. Last year, AFDC enrolled 13.6 million people and cost the federal government $22.2 billion. Among other major welfare programs, food stamps enrolled 27.4 million people at a cost of $24 billion, while Medicaid covered 32.6 million people and cost the federal government $68 billion.

But as Daniel Patrick Moynihan, then assistant secretary of labor, first argued in 1965, the programs exacerbate the problem they are trying to address - inner-city poverty.

In slightly exaggerated form, this is Senator Moynihan's argument: AFDC and dozens of other welfare programs - Medicaid, food stamps, energy assistance, and public housing - reward single motherhood and joblessness. Benefits are drastically reduced if an AFDC recipient gets married or finds a low-paying job, but a recipient who has more children receives more money.

This perverse system of incentives has contributed to a large increase in pregnancies among unwed teenagers (up 35 percent from 1980 to 1990), three-quarters of whom wind up on welfare within five years of giving birth. As Mr. Moynihan pointed out, it is a self-perpetuating and vicious cycle: Teenagers have babies who, in turn, have babies when they become teenagers. And a significant number of them become dependent on government handouts.

The solution seems to lie in welfare reform. Most analysts, of whatever political stripe, agree with Clinton's statement that ``welfare should be a second chance, not a way of life'' and that public assistance should encourage the formation of two-parent families. There is even some agreement - among the experts, if not the general public - that it will cost billions of dollars to get people off welfare, because the government will have to pay for transitional child-care, medical care, and job training. Solutions miles apart

Given this unusual degree of agreement between liberals and conservatives, welfare reform should be easy to accomplish. It isn't. A host of obstacles - from congressional intransigence to the poor record of welfare-to-work programs - stands in the way of achieving Clinton's goal.

Perhaps the key problem is that, while many liberals and conservatives - Democrats and Republicans - now have a common definition of the welfare problem, their solutions are still miles apart.

``The sticking point, no pun intended, is what stick should be used to get recipients off welfare,'' says Steve Scott, a scholar at the liberal Urban Institute in Washington.

Conservative Republicans and centrist Democrats generally favor cutting off a significant share of recipients' welfare benefits if they spend more than two years on the dole. If people on welfare can't find private-sector jobs, conservatives often argue, make them perform public-sector work at the minimum wage. Liberal Democrats, who form a large and powerful bloc in the House of Representatives, reply that ``workfare'' equals ``slavefare.'' Liberal groups already have fired a shot across the bow of the administration on this issue.

``The duration of the stay on welfare should not be subject to arbitrary time limits that could threaten the lives of poor women,'' Patricia Ireland, president of the National Organization for Women, told the president's welfare-reform task force at a public hearing in August.

But as Charles Murray suggested in his seminal 1984 book ``Losing Ground: American Social Policy, 1950-1980,'' unless welfare recipients face the specter of imminent starvation, there appears to be little chance that a significant number of them will find jobs. The record of welfare-to-work programs has not been encouraging. Project Independence is typical.

The $16-million Maryland program enrolls about 12,000 AFDC recipients, only 15 percent of about 80,000 recipients statewide. Although virtually all welfare mothers with children over age 3 are supposed to enroll, there are so many exemptions in the law that many who sign up do so voluntarily. They are the most motivated among welfare recipients, those who are usually on AFDC for less than two years.

People like Jackie Banks. Ms. Banks is 32 years old and has two daughters, aged 9 and 13. Like about 60 percent of AFDC recipients, she has a history of working. But she left her government job because of personal problems, including drug addiction. Then she got a part-time job but found it wasn't enough to support her family. So she signed up for public assistance, which offered her not only a stipend she could live on but also medical care and other benefits. Determined to stand on her own feet, however, she enrolled in Project Independence in September 1992.

In August, her perseverance paid off: She landed a good job with the US Postal Service, starting at $11.45 per hour plus full benefits. Banks, who says her career goal is to become a ``congressperson,'' gives Project Independence some credit for helping her on her way.

``All the programs were helpful, but I already knew what I wanted to do,'' she adds.

But motivated individuals like Jackie Banks, who sees welfare as a temporary stop-gap between jobs, do not represent the ``welfare problem.'' Those who have spent less than two years on AFDC account for only 7 percent of the approximately 5 million adults enrolled in the program at any given time. Sixty-five percent of AFDC recipients have been in the program, on and off, for eight or more years. And there is no evidence that the long-termers are helped by programs such as Project Independence.

``We've had pretty good success,'' says Charlene Gallion, statewide director of Project Independence. She says the program placed 2,400 people in jobs last year - a success rate of about 20 percent. But that's misleading. Many of those people, like Banks, might have been able to find work on their own. There has been no scientific study of whether Project Independence enrollees are more successful in finding work than a randomly selected sample of AFDC recipients. Given the normal flux of the welfare rolls, the 20 percent placement figure may represent no more than normal shifts in the AFDC population.

The few scientific studies of welfare-to-work programs that have been done show that, at best, they have only a marginal impact. For example, the independent Manpower Demonstration Research Corporation in New York recently released a survey of California's program, called Greater Avenues for Independence (GAIN). The study found that GAIN, through a two-year program of training and job placement, increased single parents' average earnings to just $2,712 - hardly enough to lift a family off the welfare rolls.

The best results were achieved in Riverside County, where the GAIN project placed recipients in jobs, not long-term training. But even in Riverside, single parents were making just $3,414 after two years in the program.

``No government training program has been able to substantially increase the earning capacity of trainees and move them into better-paying jobs,'' says Robert Rector, a welfare-policy expert at the conservative Heritage Foundation in Washington. ``And it won't be successful this time around.'' Task force appointment delay

For that reason, Mr. Rector says he believes that little will come of Clinton's welfare-reform pledge. In fact, he and other welfare reformers already see the administration, faced with formidable barriers, trying to renege on its pledge to completely overhaul welfare.

Since taking office, the administration has called for increases in many conventional welfare programs but has not provided any additional funds for workfare. At the same time, the administration unsuccessfully asked Congress to delay implementing the only mandatory work requirement of the Family Support Act, a provision that applies to unemployed fathers in two-parent AFDC households.

Perhaps the most discouraging signal to welfare reformers is how long it took the White House to appoint a task force on the issue. Clinton promised on Feb. 2 to appoint the task force within 10 days. But it wasn't until June 11 that the administration announced the formation of a 27-member Working Group on Welfare Reform, Family Support, and Independence. The group is led by Bruce Reed, a young White House domestic-policy aide, and Mary Jo Bane and David Ellwood, two former Harvard University professors who are now assistant secretaries at the Department of Health and Human Services.

The task force has held a series of public hearings across the country (the next one is scheduled for Sacramento, Calif., on Oct. 8) and is due to issue a report in a few months.

Although it's not clear exactly what the report will recommend, the early signs are that task-force members will emphasize that a two-year time limit shouldn't be instituted unless a wide range of expensive support services are in place to help people get off welfare.

Instead of a two-year time limit, Messrs. Ellwood and Reed emphasize two short-term goals. First, improve child-support collection from fathers by the welfare system, the Justice Department, and the states. Second, ``make work pay'' by further changing the tax system and extending some welfare benefits to reward the 5 million working-poor families. Radical reform needed

All of those steps have some potential to improve the lives of welfare mothers, but none of them will dramatically transform the public-assistance system in the way that the administration has pledged. ``It's night and day from the Clinton position,'' says one congressional aide who has followed the issue closely.

Still, administration aides insist that they remain committed to radical reform. As evidence, they point to the president's expansion of the Earned Income Tax Credit for the working poor and the planned overhaul of the health-care system. Both, they insist, are preconditions for ``ending welfare as we know it,'' because they make the transition to work easier for AFDC recipients.

``It's easy to talk about how bad the system is and how hard it is to fix it,'' says the bearded, intense Ellwood. ``My fear is that because it's so hard we'll do nothing. The president's call is for us to do the best we can, because everyone agrees the present system doesn't work.''

Nobody is cheering harder for the administration to succeed than welfare recipients themselves.

In her classroom, Virginia Kellogg asks the welfare mothers: ``How many of you feel comfortable being on welfare?'' Not a hand shoots up. When she asks how many favor a two-year time limit on welfare, almost everyone nods in assent.

``If they help us with day care and job training and put you in an internship, two years is enough time. There's no excuse,'' says Yvette Bryant, who first went on AFDC when she was pregnant. ``If you continue to stay on welfare, your children will be on welfare, and they'll get their education from the streets.''

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