This welfare dustup in the Presidential election, as I said earlier in the week, generates a lot of heat as an argument while being irrelevant to the actual issue. Newt Gingrich, the architect of welfare reform in the 1990s who has been employed by the Romney campaign as a spokesman, admitted last night that there’s no proof that the waivers provided by the Department of Health and Human Services would lead to direct cash payments to beneficiaries, which it wouldn’t:
COOPER: You’ve got to come back to this because it did sound like you were saying earlier, and I want to just try to clarify this. You do think that the actual wording under Obama’s plan, you wouldn’t have to work, you wouldn’t have to train for a job, they just send you your welfare check, that is not factually correct?
GINGRICH: We have no proof today, but I would say to you under Obama’s ideology it is absolutely true that he would be comfortable sending a lot of people checks for doing nothing. I believe that totally.
That’s not true at all, as the Obama campaign has made clear, saying that the waivers would only be granted if the work requirement improved above the current standard. But that gets us to the question of whether direct cash transfers to needy individuals would be good policy. It’s certainly not the policy that either Presidential candidate prefers, but it has some substantial backing in intellectual circles:
But it’s worth noting that a lot of people on both the left and right have proposed doing exactly what Romney falsely attacks Obama for (not actually) proposing: solving poverty by just writing checks. Milton Friedman, the libertarian Nobel laureate economist, proposed a version of this idea called a “negative income tax,” in which every household would be given a check for a set amount, such that some people actually had a negative tax burden. That got picked up by the Nixon administration, in particular then-aide and future U.S. Sen. Daniel Patrick Moynihan, and Congress almost passed a version of the proposal. George McGovern proposed a $1,000 tax credit for every man woman in child during his 1972 run against Nixon, which he called a “demogrant”. So in 40 years, we’ve gone from both major party candidates supporting just writing people checks, to the very idea that a candidate would support that being the subject of an attack ad.
Despite the current unpopularity of the idea — commonly known as a “basic income” when it takes the form of an unconditional payment to all citizens — among policymakers, it has some adherents among intellectuals, including Charles Murray of AEI – of The Bell Curve and Coming Apart fame – and the political philosopher Philippe van Parijs. It’s also been adopted as a poverty reduction measure in Brazil and Namibia, with promising results.
It’s a testament to the rightward policy shift in this country that a basic income bill can only get two cosponsors in the House. Because this is not seriously considered as an option, it doesn’t have any real policy framework behind it. There’s no sense of whether a basic income plan would replace something like the Earned Income Tax Credit or other low-income programs, perhaps even all of them. There’s just no real study of this.
All we do know is that welfare reform only succeeded in the sense that it dramatically reduced the assistance for the needy in the time that they most desperately needed it. That’s certainly what Gingrich wanted out of it, and then-President Clinton complied. Both parties are on the record, not just for the work requirement, but for the block granting of the program, which eliminated its elasticity during a crisis. And so a legitimate discussion of the issue and the damage inflicted on the poor gets shunted aside.
A side note: I recognize that the Romney ad is really more about racial coding than any policy. Nonetheless, it’s worth highlighting the underlying policy issue.
UPDATE: More from Josh Eidelson at Jacobin. This is absolutely true:
What’s gone nearly unnoticed is the zeal with which the Obama campaign stoked the same resentments in its pushback. A campaign statement charged that Romney “petitioned the federal government for waivers that would have let people stay on welfare for an indefinite period, ending welfare reform as we know it, and even created a program that handed out free cars to welfare recipients.” Only Obama can protect us from a Republican regime of hand-outs and Oprah-style free cars for the undeserving poor.
On a Tuesday afternoon conference call, the campaign again hit Romney for having been wobbly on time limits, which deputy campaign manager Stephanie Cutter called “the core of the bipartisan welfare reform.” (Hence politicians’ insistence on measuring the policy’s success by how many people ceased getting benefits, and their refusal to even track what happened after that.) Campaign Policy Director James Kvaal fleshed out the free car attack in near-pornographic detail: Romney’s program “paid for the cost of their insurance, deductions, tax, title, registration, repairs, even their Triple A membership. And if the people who transitioned to work later lost their jobs and went back on welfare, they were allowed to keep their free cars. In one year alone, Romney’s Wheels for Welfare program cost Massachusetts tax-payers 400,000 dollars.”