The MacNeil/Lehrer Report; Welfare Reform

ROBERT MacNEIL: Good evening. Eight former secretaries of Health, Education and Welfare yesterday proposed drastic reform of the nation's welfare system, directly counter to President Reagan's desire to turn such welfare back to the states. The former secretaries represented all administrations from Eisenhower to Carter. Their united approach grew out of a three-day conference they attended last year. Their statement denounces the hybrid welfare system they all helped develop and administer. They condemned its inequities, said it trapped poor people in the poverty cycle, fostered the breakup of families, even possibly contributed to teenage pregnancies. Rather than turn welfare back to the states, as Reagan's new federalism proposed, the eight secretaries said the basic cost of welfare should be borne by Washington. Tonight, with two of those former secretaries and a top Reagan administration official, the right way to welfare reform. Jim?

JIM LEHRER: Robin, at the heart of the new proposal are the words minimum and uniform. The current welfare system has little of either. For example, the federal government pays 54% of the costs of the Aid to Families with Dependent Children program, but the states are free to set their own benefit levels. Mississippi, for instance, pays $120 a month to a family of four with no other income, while Vermont pays a similar family $601. The eight ex-HEW secretaries would change that. The federal government might pay the full cost of AFDC but, in exchange, would require all states to set the same minimum benefit level. A state could pay more to a family if it wished, but not less. Why those eight former HEW secretaries think this is a better way of doing it is what we get first, beginning with Arthur Flemming, HEW Secretary in the Eisenhower administration, later chairman of the Civil Rights Commission, now director of the National Coalition for Quality Integrated Education. Dr. Flemming, why is there a need for a national minimum welfare benefit?

ARTHUR FLEMMING Well, growing out of my own experiences as a secretary of Health, Education and Welfare, I feel that if we are going to treat those who qualify for Aid to Families with Dependent Children in a fair and equitable manner, there should be a minimum floor below which no one will be permitted to fall, no matter where that person may live in this country. It seems to me that is consistent with the concept of a United States of America. It seems to me that is consistent with the concept that this is a national community and that the federal government has an obligation and a responsibility to all who are a part of that national community. Now, if we are going to set that floor, of course, then also the federal government should play a very significant role in the establishment of standards for eligibility and for payment. On the other hand, I feel that the states should have the opportunity of building on that floor, that the federal government should be willing to participate in the cost of additional payments up to a particular limit, and I also feel that the states should have the opportunity of administering the program, subject to the federal guidelines and subject to post audit on the part of the federal government to determine that there is adherence to the guidelines. In this way we can be assured of the fact that justice prevails in connection with the implementation of this program and with the acceptance of this obligation and responsibility on the part of our nation.

LEHRER: Is it your position that justice does not now prevail?

Dr. FLEMMING: Yes. And I think the statistics that you used in introducing me illustrate that particular fact. I do not feel that that is a just situation.

LEHRER: Now, why is that unjust if the people in Mississippi want to pay one thing and the people in Vermont want to pay another?

Dr. FLEMMING: Because it seems to me that the people in Mississippi are entitled to far better treatment than is represented by that particular figure because they are a part of the United States of America, and the United States of America has the capacity, the capability and the resources to ensure the fact that they are given far better treatment than is indicated by that. Then also, on the question of standards, for example, when I was Secretary I was confronted with legislation passed by the state of Louisiana that said that in connection with the Aid to Families with Dependent Children that any family that had more than one illegitimate child in it could no longer qualify for that program, in spite of the fact that the federal government was then paying 80% of the cost of the program. That seemed to me to be unjust, and I took action designed to withhold those funds unless that situation was corrected. That's a role that I feel the federal government should play.

LEHRER: Finally, let me ask you this. You and your colleagues say that the present system encourages family breakups and encourages or contributes to the incidence of teenage pregnancy. How does it do that?

Dr. FLEMMING: Well, as far as family breakups are concerned, the present system disqualifies people where the wage earner, the husband is still at home and is not actually earning funds. And he has the incentive to desert the family in order that the family will qualify for Aid to Families with Dependent Children.

LEHRER: And you would change that?

Dr. FLEMMING: We would change that and permit him to stay in the family and the family would still qualify for Aid to Families with Dependent Children under those circumstances.

LEHRER: Let me ask you this, Mr. Secretary. The question has already been raised, since you all made your announcement yesterday. All eight of you were in this office -- the Secretary of HEW; why didn't you make the changes when you had the power to do so?

Dr. FLEMMING: Well, we didn't have the power as individuals to make the changes. We had the power to make recommendations, and certainly the thrust of my recommendations internally within the administration and to the extent I had the opportunity on the Hill was in this particular direction. Later on, I had the opportunity of supporting, in the early part of the Nixon administration, the Supplemental Security Income program for aid to the aged, blind and disabled, which does take this particular principle and puts it into effect.

LEHRER: Thank you. Robin?

MacNEIL: Now another of the former secretaries group. Elliot Richardson was HEW Secretary in the Nixon administration when similar reform was considered and rejected. Mr. Richardson also held that post under President Ford. He has also been Secretary of Commerce, of Defense and of State, Attorney General, and most recently, U.S. Law of the Sea negotiator, and he is now again a lawyer in Washington. Mr. Richardson, isn't this very similar to the proposal that surfaced in the Nixon administration?

ELLIOT RICHARDSON: It is in some essential respects. The key thing, Robin, is that, as Arthur Flemming just pointed out, one result of President Nixon's welfare reform program was that the so-called Supplemental Security Income program was enacted. This did extend a uniform minimum benefit requirement to the aged, blind and disabled. Insofar as the Nixon program would also have done the same thing for Aid to Families with Dependent Children, we are now in effect recommending that we apply the same approach that would have been applied across the board if the Nixon program had been enacted. It was -- you, I think, mentioned just now that the Nixon proposal was considered and rejected, but only after a major effort on the part of the administration. It was passed twice by the House of Representatives. It would undoubtedly have passed in the Senate if we could ever have gotten the bill to the floor.

MacNEIL: Is the political climate more receptive to such an idea today, to you think?

Mr. RICHARDSON: I don't honestly think it is. On the other hand, perhaps a word or two ought to be said about the fact that there are the -- there are eight of us -- four Republicans, four Democrats -- who have joined in this proposal. We were brought together under the auspices of the Johnson Foundation of Racine, Wisconsin. We were asked to address the problems of welfare in the light of our experience, and to come forward with recommendations. The origin of this conference went back before anyone knew what the position of the Reagan administration would be. Drawing on the concerns we had had with the inequities of the existing system, we quite quickly came forward with a consensus that we should try to do something about it along the lines of present proposal. What its real chances are and when it could get enacted, of course is another question.

MacNEIL: Let me ask it in another way. Could you create a political consensus within the country, among American voters, when, as you pointed out in your statement yesterday, it is attacked equally from the political right for one reason and from the political left for another. It seems to be universally attacked, but for quite different motives.

Mr. RICHARDSON: Well, it's curious how in the United States a given subject will take a high level of priority at a given time and then fade from view. When in the Nixon years we were pressing for welfare reform, it was a subject that had a high degree of visibility and public concern. It's lapsed from pulbic attention in the intervening years, but I think if at any time there can be generated broad public concern with the situation of the least advantaged, then a proposal like this will again come forward, and I think it can command broad public support.

MacNEIL: Well, thank you. Jim?

LEHRER: The Reagan administration response to the ideas of Flemming, Richardson and company, now, from robert Carleson, President Reagan's top adviser on welfare policy. He directed the state welfare system in California when Mr. Reagan was governor, later was the U.S. commissioner of welfare, and is now special assistant to the President for policy development. Well, what do you think of these proposals, Mr. Carleson?

ROBERT CARLESON: Well, in the first place, they're really not new. I think that both of the former secretaries tonight have indicated, and, as a matter of fact, all of the other former secretaries that brought his forward have been advocating this or something like this for many years. As a matter of fact, that the only time that President Reagan testified before Congress when he was governor was on February 1st, 1972, when he testified against the federalizing or nationalizing of welfare and the Family Assistance plan. So in the first place, it's not new. Thesecond thing is that it has been put forward several times and has been turned down, rejected or not passed by the Congress, twice during the Nixon administration, again during the Carter administration, and at other times in other ways. It isn't going to be accepted. On the other hand, what is it? What it really is is a guaranteed income, and it's based on the concept of a guaranteed income without any work being performed. A lot has been learned since --

LEHRER: They call it a national minimum benefit.

Mr. CARLESON: National minimum benefit, right. But it's a guaranteed income, and that's been pretty well accepted by the experts, the people who know about the subject. But I would say this: what's really important is we've learned a lot in the last eight or 10 years, especially since some of these gentlemen have been in the Cabinet. There was the big Seattle, Denver, New Jersey income maintenance experiments that were conducted nationally -- the most massive experiment -- in effect testing out these kinds of programs. And contrary to the conventional wisdom, we found -- and they found, I should say, that it actually reduced work effort; it certainly didn't increase work effort. It actually contributed to family breakup, which was a surprise to most of the experts in the field, and it created more dependency. So, really, when we talk about welfare reform, we really shouldn't be talking about a program that's going to double or triple the cost of welfare, going to add --

LEHRER: And you think it will do that?

Mr. CARLESON: Oh, yes. It will -- as a matter of fact, the Carter plan, which was even smaller than this, because the Carter plan was talking about 65% of the poverty level, and this is 75%, would have cost to the -- the Congressional Budget Office, I think, said it would cost around $20 billion more in the first year of that plan. Senator Russell Long said that that plan would have cost around $60 billion more within a few years, and this plan is even more expensive.But that's really not the important thing. The important thing is that it will add millions of people to the welfare rolls and bring more people -- millions more people into dependency. And we're going to --

LEHRER: Millions of people who don't deserve to be on the welfare rolls?

Mr. CARLESON: It's not a question of deserve. In the first place, yes, when you have a national system, when you try to run something out of Washington, need is very much different in one place from another place, and also it's different from time to time. It could start next week, and if need starts next week, the benefits have to start next week. But if it ends next month, the need edns, then the benefit should stop. You can't plan and design a uniform program from Washington that doesn't miss a lot of people who are in need, and at the same time meet -- overmeet the needs of other people.

LEHRER: Well, you heard both Mr. Richardson and Dr. Flemming use the words like injustice and inequities that are in the current system. Do you agree with them that those things are in the current system?

Mr. CARLESON: Well, yes. But where we disagree is that we believe -- I believe and the President believes that their solution would make those inequities worse. The kind of welfare reform that has been going on, by the way, for the last 10 years very quietly -- Governor Reagan started it in California in 1971; other states started following it -- has removed a lot of the inequities. Benefits have been going up while people who are not in need have been coming off the rolls. So the system has been improved, but it's not really going to be cured and the inequities aren't really going to be removed until the states are given greater freedom to design their programs to meet the specific needs of their states.

LEHRER: Well, what about the point that Dr. Flemming made? His major point about inequity is, and the example that I used at the top, where they show the discrepancy or the difference between the benefits in various states, you don't see that as an inequity?

Mr. CARLESON: Well, in the first place, there are two or three things wrong with those figures. Because food stamps is 100% federally financed, a lot of states have figured out how to play the game. They keep their AFDC benefits low and their families get more federal food stamp money. If we can take out some of those kinds of things where the states will have the opportunity to determine the benefit levels for both the food stamp and the AFDC program, then you won't have that kind of gaming possible. The second -- and, therefore, if you add in food stamps to the basic benefits, you'll find that the inequities are not that much. But the second thing is that historically those states which have been low-benefit-paying states have been increasing their benefits over the last seven or eight years. It's a very significant increase. Mississippi doubled its AFDC benefits several years ago, and frankly, this is because the people who have to depend on the benefits have the vote; they use the vote, and there have been reapportionments of state legislatures so that the political system is working, and these benefit gaps are closing.

LEHRER: So you just totally reject the concept of the eight secretaries, which is this is a national problem and should be dealt with on a national basis?

Mr. CARLESON: That's correct, and as a matter of fact, that's not new either. President Reagan when he was governor, and I, when I was his welfare director, were saying the same things back in 1971 and before Congress and to then-Secretary Richardson. So neither one of us has changed our position.

LEHRER: All right, thank you. Robin?

MacNEIL: To the two former secretaries, there's a formidable list of points that Mr. Carleson makes. Can we take them individually for clarity? Starting with you, Dr. Flemming, he says that when you add AFDC and the food stamps together, that the discrepancies are not nearly so great and that the low-paying states have been significantly increasing their benefits.

Dr. FLEMMING: Well, first of all, I agree. When you put them together, the discrepancies are not as great, but the discrepancies do continue to exist. And my contention still is that as long as those discrepancies exist, you do have a basically inequitable situation. I have been glad to note that there has been some response to these inequitable situations in some of the states. But I do not believe that the people who live in those states -- today's people who are on Aid to Families with Dependent Children -- should be asked to wait another four, five, 10 years until these discrepancies are wiped out.

MacNEIL: Mr. Carleson?

Dr. FLEMMING: And it seems to me that what we've got underway here is a long, slow process for dealing with the discrepancies.

MacNEIL: Mr. Carleson?

Mr. CARLESON: Well, as a matter of fact, the description of your plan, I think, Arthur, would also take several years to implement. So, but on the other hand, I would say that this has been going on for some time. A lot has been cured, and by the way, there's one other misconception. It's generally believed that people will leave low-benefit states and go to high-benefit states. It sounds logical, except that's not what's happened. The 1970 census and then again in the 1980 census -- the newest census -- we found that people in droves have been leaving the high-benefit states for the low-benefit states. And we're talking about low-income people. So the fact that there are differences in benefits across the country does not mean that there is a tremendous variation in the amount of benefits they get when compared to the situation that exists in the various states.

MacNEIL: Mr. Richardson?

Mr. RICHARDSON: I do think, though, it ought to be pointed out that in the last 10 years there has been an almost 20% drop in real terms in average benefits, and then we're talking here about a two-to-one discrepancy between -- 46% including food stamps in Missippi -- 46% of the poverty level -- and nearly 100% of the poverty level in California. You pointed with pride just now, Bob, to the achievements of the Reagan welfare program in California, and I think Arthur and I would say that the welfare program in California in terms of the benefit levels and so on is much higher than anything we're advocating for the nation. And as far as work incentives are concerned, of course, the point here is that once you accept the fact that it's basically unfair to say that a mother and children are entitled to minimum benefits whether administered by the state or the federal government, and the same mother and children cannot have benefits if there is an unemployed father in the house, you're automatically driven to the question of, how can you create incentives? Now, when you and I were dealing with this subject back during the Reagan [California] administration, we were both exploring the question of how to create work incentives, and the very kinds of things that Governor Reagan was talking about then are the very kinds of things that California has done and that we would like to see done, but on a more uniform national basis.

MacNEIL: Gentlemen, sorry to interrupt. I'd like to hear you, starting with Dr. Flemming, answer Mr. Carleson's point that this will double or triple the cost of the program and will add millions of people to the welfare rolls.

Dr. FLEMMING: Well, as he said after he gave those figures, that does not necessarily go to the basic issue that we're discussing here. What the cost figure may be depends on how rapidly you move toward certain objectives. The principle that we're urging here is the establishment of a floor. Now, what the level of that floor may be is something that clearly is open to debate and will depend a lot on world economic conditions and on domestic economic conditions. And the cost factor will depend to a very considerable extent on where the floor is established at any given point. The thing that we're urging, over and above everything else, is the establishment of the floor so that there is equitable treatment throughout the nation up to that particular floor. Then also, the cost depends to some extent on what kind of work incentives are built into the program, and we have a series of recommendations that we have built into the program in the interest of encouraging those who are on welfare to go to work and work out a transition period between being on the welfare program and actually becoming a part of the labor market. That does cost, but we think that that's a cost that will pay dividends as far as the nation is concerned.

LEHRER: What's your feelingabout the work-incentive programs that they have recommended?

Mr. CARLESON: Well, those were exactly the same arguments that were used 15 years ago when the so-called work incentives were put into the system, and those work incentives meant we'll let people get their welfare benefits without earning them, and we'll let them keep a significant part of their welfare benefit if they'll go to work. The fact of the matter over the last 15 years has shown that that didn't work at all. The rolls did not go down; the rolls expanded. Actually more people became eligible for welfare. That's when we had the big welfare growth of the late '60s and '70s, and there was really no significant change in work. On the other hand, the guaranteed income, and that's what they're talking about -- the guaranteed income was shown through these massive experiments, which were not conducted by the reagan administration; as a matter of fact, they were conducted by the Nixon, the Ford and the Carter administrations -- proved that it actually contributed to family breakup.Nobody's exactly sure why, but for some reason, when you give welfare to a family with a father who is there and who is working, one of them may decide that they're unnecessary and leave. In the second place, there was a significant reduction in work effort when the guaranteed income was adopted.

LEHRER: Mr. Richardson, what do you say to that? He said that the experiments have shown just the opposite of what you're advocating. In other words, if you do get money under AFDC, if you were to include money to those families where the husband is still there, although unemployed, the opposite effect than what you'd want.

Mr. RICHARDSON: Well, I think there have been some marginal indications that the high hopes that were placed back, 10 years ago, on the work incentives that could be provided by allowing a person previously wholly dependent on welfare to retain a part of the income they earned from a job have been discounted considerably by these experiments. But you're still left with the question, do you cut people off arbitrarily when they get a job at all? Now, I don't think California does that.

LEHRER: Does it?

Mr. CARLESON: No, and neither does the -- neither does the Reagan welfare reforms that we enacted last year, and neither would any kind of a program that I would advocate that the states perform -- getting any job at all, because it would depend on the level and the pay of the particular job.

Mr. RICHARDSON: Well, then we have no difference on that score.The only difference that you really come to then is, do you include families not just where the father is sick and unable to work or not in the home or dead? In other words, do you add families where the father is employable but unemployed and where he's not eligible for whatever reason for unemployment compensation?

Mr. CARLESON: Well, at the present time there is that federal program, and approximately half of the states and the vast majority of the people are already covered when the father is in the home. And through my experiences with the states that don't have that program, I think that most of them would have that program if they could have a work requirement. In other words, to require that individual, that father who is home, to earn the welfare benefit. But up until last year, until the President's program passed last year, the states were prohibited from having a work requirement for those fathers.

Mr. RICHARDSON: Well, we're not quarreling with that. So then what you really find is that the real issue is, would you apply national minimums lower than California's to the nation as a whole, but a program otherwise identical with California's?

LEHRER: I think Mr. Carleson would put the question differently, but I think there's no question that you all disagree on that. Thank you. We have to go. Robin?

MacNEIL: Yeah, Mr. Richardson, Dr. Flemming, Mr. Carlson, thank you for joining us. Good night, Jim.

LEHRER: Good night, Robin.

MacNEIL: That's all for tonight. We will be back on Monday night. I'm Robert MacNeil. Good night.