Washington: The Culture of Poverty
In the world of the poor neither conservative nor liberal solutions seem to work as predicted
DURING RONALD REAGAN’s whirlwind first few months in office it was clear that he was bringing about many more changes in the federal government than is usual for a first-term President in peacetime. But at the time it was difficult for one to grasp what all the changes added up to. Three years and several rounds of legislation later, it’s possible to sort out some of the results of 1981—especially in social-welfare programs, where Reagan’s changes have fully taken effect. Reagan has always insisted that the cutbacks made in the budgets of these programs have eliminated a lot of unnecessary federal spending but that they have not hurt anyone truly in need. Is he right? What difference has his being President made in the lives of people dependent on the social-welfare system?
In order to answer these questions, one ought to look first at how the cutbacks in social programs fit into the big picture of deficits, tax cuts, and increased defense spending. The best way to do this is to compare the current federal budget with the imaginary “baseline” of what the budget would have looked like if Reagan had adopted no new policies. The baseline used here was devised by the Congressional Budget Office. The Urban Institute, a nonprofit center for policy study, in Washington, D.C., drew from it the figures that follow.
For the current fiscal year, which ends September 30, the government is spending $25 billion more than the baseline amount on defense, for a total of $235 billion. The interest payment on the federal debt is $108 billion—$9 billion more than the baseline—because the debt itself is $128 billion higher today than it would have been without Reagan’s changes. All other federal spending this year comes to $48 billion less than the baseline amount, leaving a net decrease in spending of $14 billion. But Reagan’s tax cuts have reduced the government’s revenue by $93 billion. Thus the federal deficit is $74 billion greater this year than it would have been if Reagan’s policies had not been put into effect.
Reagan sometimes says that he has not cut domestic spending absolutely but has only put a brake on what had become an uncontrolled rate of growth. He says that if Congress had approved all the cuts he wanted, the government would be spending less and the budget would balance. These arguments don’t withstand scrutiny. As Reagan says, domestic spending is still growing, though at a slower rate than when he took office. But according to the Reagan Administration’s own estimate, if domestic spending is adjusted for inflation, the dollar amount is actually lower this year than it was in fiscal 1981.
The argument that there wouldn’t be a deficit if Congress had enacted all of Reagan’s budget cuts depends on adding up the cuts proposed and rejected each year. This calculation yields a huge total. But many of the rejected cuts have been put forward year after year, and so they should be added only once—not three times. The Office of Management and Budget (OMB) reported early this year that Congress had passed half of all the budget cuts suggested by Reagan since 1981. (The OMB defines these suggested cuts loosely; for example, it includes reductions in Social Security benefits that Reagan never formally proposed as legislation.) If all of the budget cuts recognized by the OMB had been made, the deficit would still be enormous. If you lump together all of the apparently sacrosanct areas of the budget—defense, interest payments, and programs like Social Security and Medicare—only $171 billion is left from which to reduce a $190 billion deficit. The programs exclusively for people with low incomes will cost $61 billion this year—far less than the deficit.
Part of the rationale for the Reagan Administration’s prediction in 1981 of a balanced budget by 1984 was the anticipation of $40 billion a year in what was mysteriously called “additional savings,” to be proposed later. “I can tell you, those numbers came from expected cuts in the Social Security and Medicare areas,” Lawrence Kudlow, who was then the OMB’s chief economist, says. “We thought in terms of a combined reduction from 1982 to 1986 of ninety to a hundred billion dollars.” In May of 1981, when Richard Schweiker, then the secretary of health and human services, proposed cutting $9 billion a year from Social Security spending by reducing the benefits available to early retirees, the Senate unanimously passed a resolution expressing its disapproval, and the Administration backed off. Kudlow says, “After the firestorm, it was virtually impossible to make up that forty billion dollars a year in savings.” One reason for the Administration’s retreat from the Social Security cuts was a set of findings by Reagan’s pollster, Richard Wirthlin. Kudlow says, “The polling showed the majority of Social Security recipients were significantly above the poverty line and mostly Republican. Sixty to sixty-five percent arc not poor, and of that group a significant majority was tending to vote Republican. That was the source of the heartburn.”
Another way to make up the deficit would have been to cut “tax expenditures”—deductions and preferences like the home-mortgage interest deduction, the oil-depletion allowance, and the interest deduction on automobile loans—which together cost the government more than $300 billion in revenue each year. But many of the beneficiaries of these tax breaks are affluent and Republican, and so the Administration never tried this strategy. Kudlow says, “It became pretty’ clear we were going back to the areas of least political resistance—that is, the poverty programs.”
THE BUDGETS OF two such programs have grown during the Reagan Administration, as a result of legislation proposed not by Reagan but by others. The budget this year for Supplemental Security Income (SSI), cash grants to the disabled, is $600 million more than the baseline amount, and the monthly SSI payment has increased by $20. The budget of the Special Supplemental Food Program for Women, Infants, and Children, which was increased in 1982 and 1983, is now $77 million above the baseline. Every other program for the poor has lost funds.
This year the budget for Aid to Families with Dependent Children (AFDC), popularly known as “welfare,”is $1.3 billion lower than it would have been without any cuts—a 13 percent reduction. The budget of the food-stamp program has been cut by $2 billion—about the same percentage. The budget for Medicaid, which provides medical care to the poor, has been cut by $1.3 billion, or 5.9 percent. The budget for housing assistance has been cut by $482 million, or 4.3 percent.
The cuts in the budgets of programs aimed at amelioration rather than subsistence have been deeper still. A compensatory-education grant program, for the schools that disadvantaged students attend, has lost 17 percent of its funds, and a child-nutrition program, which subsidizes meals at schools and day-care centers, has lost 28 percent. Public Service Employment—the chief program of the Comprehensive Education and Training Administration (CETA)—has suffered the biggest single line-item cut engineered by the Reagan Administration to date: $4.5 billion, or 99 percent. A program to fund day-care centers has been merged with two others into a Social Services Block Grant, and the combined budget reflects a cut of 22 percent. The Community Services Administration has given way to the Community Services Block Grant and has lost 40 percent of its funding in the process.
It wouldn’t be fair to say that all these cuts have arisen solely from the impulse to save money without alienating Republican voters. The argument behind them is that many poverty programs provide assistance to people who don’t need it, and that these programs can be cut back heavily while leaving intact the parts that do help the poor.
For years conservatives had described the government’s programs for the poor as a kind of smorgasbord of cash and inkind benefits: a poor person could shop around and accumulate a welfare check here, food stamps there, a disability pension, perhaps a housing allowance, medical insurance, and so on. Those who were clever could put together a package more lucrative than a full-time job, and thus, conservatives said, the government was playing a cruel trick on people who did work. “We wanted to reestablish the bright line between working and not working,” one Administration official says.
All the cutting that has been done in programs that were created to meet basic needs has been animated by a desire to get anyone who is not absolutely poor off the rolls. Households with incomes in excess of 130 percent of the federal poverty standard are now ineligible for food stamps. In the welfare program the income of a step-parent must now be counted as part of the household’s income, and a household income greater than 150 percent of the amount established by the state government as the “need standard” renders a household ineligible for benefits. Eighteenyear-olds who have finished high school can no longer be counted as dependents in the calculation of a household’s welfare benefit. For both the welfare and food-stamp programs there are new limits on a recipient’s total assets. The government’s commitments to build new public housing have been severely curtailed, on the grounds that public housing is available to such a small minority of those eligible that it is really just a favor to a lucky few. For much the same reason the portion of income that a recipient of a federal-housing subsidy has to pay in rent has been raised from 25 to 30 percent.
The conservative view of the poverty programs that do not directly give money, food, or housing to the poor is even more skeptical, which is why the cutbacks in these programs have been deeper. Most were started between 1965 and 1975, and grew out of a conviction shared by planners in the Johnson and Nixon administrations that there is a cycle, or culture, of poverty. Poor families, especially in the black ghettos of the big cities, break up, and their members go on welfare. The children are poorly educated, ill nourished, and in every way discouraged from entering the work force when they grow up. If the government provides these people with only basic subsistence, they will never be able to look forward to the rewards of work and a stable family.
So the argument went. In response, programs were started to allow poor children (and their mothers) to be well nourished; to improve their education; to prepare them for the work force by teaching “job skills”; to encourage welfare mothers to work. As the governor of California, Reagan was one of a small minority of Republicans who opposed such programs, and when he became President, they became his prime targets. He has often said that they cast the federal government in a social-engineering role that goes beyond its rightful charter, and that they don’t really help the poor (who would do best to get the government out of their lives), but instead help middle-class social workers— the beneficiaries of “the social pork barrel” in David Stockman’s damning phrase.
The elimination of the public-service jobs provided by CETA, which conservatives had considered make-work, noshow projects run by poverty hustlers, is a classic example of Reagan’s efforts to rid the government of its function as a ladder out of poverty. But because CETA had already been the subject of a hundred local exposés by the time it was abandoned, the loss of its funding has not been the most controversial of the many cutbacks made under Reagan’s banner. That distinction belongs to the abandonment of a feature of AFDC known as the “earned-income disregard.”
Before the social-reform wave of the late 1960s, eligibility for welfare was determined mainly on the basis of income and family size. If a welfare mother went out and earned ten dollars, the law required her caseworker to reduce her welfare payment by ten dollars; in other words, the marginal tax rate on her earnings was 100 percent. Most experts thought that this rule was a major cause of the cycle of poverty, because as a result of it people on welfare had no shortterm financial incentive to work.
To correct this flaw, Congress in 1969 created the earned-income disregard. Thereafter when a caseworker computed the amount of subsistence for which a welfare mother was eligible, he could “disregard”—that is, deduct—the first $30 of monthly earnings plus a third of any earnings beyond that. (In the welfare world the program is universally known as “thirty and a third.”) Under the new rule a welfare mother who worked had an appreciably larger net income than one who didn’t.
In 1981 Congress restricted the time during which any welfare recipient could benefit from the earned-income disregard to four months, and also reduced other allowable deductions, such as work-related expenses, from a welfare recipient’s earnings. The idea for these cuts came from Robert B. Carleson, who was then a special assistant to the President for policy development and earlier had been Reagan’s welfare director for the state of California. Carleson points out that Reagan had testified before Congress against the earned-income disregard as long ago as 1972, so nobody should have been surprised when Reagan reduced the benefit.
Nevertheless, people were surprised. Reagan’s own chief domestic-affairs adviser at the time, Martin Anderson, had written a book on welfare in which a major theme was that what amounted to a high marginal tax rate on earned income served as a work disincentive. After Congress approved Reagan’s proposal, many predicted that tens of thousands of the working mothers who were about to lose their eligibility for AFDC (because their incomes would be too high without thirty and a third) would respond by quitting their jobs and re-entering the welfare culture. Because eligibility for AFDC brings with it eligibility for Medicaid, anyone who needed and couldn’t afford medical care would have a further incentive to stop working and get back on welfare. The rolls would swell, and the poverty cycle would become even harder to break.
SUCH WERE THE theories being debated in Washington about the impact of the cuts. To try to find out whether either the conservative or the liberal view was right and what difference the cuts had made in practice, I read the studies that had been done on the effects of the cuts and also interviewed people in the welfare system— both recipients and social workers. Welfare benefits vary widely from place to place, because each state sets its own standards of need and the stipends to be paid (the cost is split equally with the federal government). I went to Bridgeport, Connecticut, where the welfare program and other social services are among the most generous in the country, and Houston, Texas, where they are among the least generous.
What I found fitted none of the theories satisfactorily. The effects of the cutbacks that have been made in ladder-out-of-poverty programs were the hardest to judge. It seemed that these programs had, in an inefficient way, provided many people over the years with enough money and training to make the transition from poverty to the working class. But the ghettos in Bridgeport and Houston, where poverty programs had been in full flower for more than a decade, were extremely dispiriting places— poor advertisements for the aggregate success of the government’s efforts.
As for the subsistence programs, it seemed to be true, as conservatives have charged, that recipients usually put together complex, extensive packages of benefits, but in Houston, at least, such packages were necessary if a person was to meet the most basic demands of food, clothing, and shelter. In getting rid of the slack in the system (cutting off the tops of subsistence programs and tightening up their bureaucracies and the rules for eligibility) the Administration clearly has hurt the “truly needy”—especially those who live in states where the benefits are low. When Reagan initiated his famous welfare reforms in California, he withdrew funds from the upper margins of many programs, but he also raised the minimum benefit. For the nation it has been all cutbacks, no raises. In Houston, it seemed to me, people on welfare were living right at the lower limit, and sometimes past the limit, of decency, especially with respect to food and medical care.
One of the people I went to see there was LaVerne Chatman, a forty-eight-year-old welfare mother who was living in a crummy apartment complex near the Scott Street welfare office. I got there early on a spring afternoon. Young men with narrowed, bloodshot eyes were hanging around in the parking lot, passing a bottle in a brown paper bag. Inside the apartment Mrs. Chatman and three of her daughters, Gwendolyn, Jacqueline, and Sandra, were sitting on furniture that had obviously been thrown away by somebody else, watching soap operas on a battered black-and-white television set. There was a dirty green carpet on the floor. The three daughters, who were barefoot and dressed in cutoff jeans and T-shirts, looked as if they hadn’t been outside yet; Mrs. Chatman, also barefoot, had on a faded yellow housedress. Babies in diapers wandered in and out of the room.
Mrs. Chatman told me that ten people were living in her five-room apartment: five of her thirteen children, Gwendolyn’s two children, Jacqueline’s child, and Sandra’s child. She paid $375 a month in rent, which included all her utilities—a much better deal than she’d had at her previous apartment, where the rent was $315 and utilities weren’t included. She had moved after her gas and electricity had been cut off.
The household’s income was as follows: Gwendolyn was getting $148 a month from AFDC, and Jacqueline and Sandra $128 each. Mrs. Chatman had two children who were still minors, and the three of them got $738 a month in survivors’ insurance from the Social Security Administration, because the children’s father is dead. That stipend was the family’s great good fortune. Social Security is vastly more generous than welfare; the comparable AFDC check would have been only $148—what Gwendolyn got. The whole household received food stamps worth $192 a month. The family’s total income was $1334 a month, or $16,000 a year— $11,500 after the rent was paid.
The main impact of the Reagan Administration on Mrs. Chatman was that her family’s food-stamp allotment had been cut in January from $371 a month to $192. That loss was chiefly the result of one of many technical changes that were barely noticed by politicians and the press. Each household is now allowed only one food-stamp allotment. Whereas previously Mrs. Chatman’s three daughters could put in for their own food stamps and increase the family’s total take, the family was now issued a batch worth roughly half as much.
The food stamps came on the seventh of every month, and Mrs. Chatman would buy a 202-pound frozen Super Special Family Pack from Homestead Meat Company, a packing house twenty miles from her apartment. For $169 she would get sixty pounds of scrawny fryer chickens and ten pounds each of chuck steak, smoked sausage, tripe, turkey necks, pork bones, chitterlings, and pig’s feet, along with some hot dogs, rice, sugar, Crisco, and other small portions of meat. Not having a car, she paid her nephew another $15 in food stamps to pick up the package. With the remaining $8, she would buy vegetables.
I saw Mrs. Chatman on the twenty-sixth of the month, and the Family Pack had already run out. With the $363 of her Social Security check that was left after the rent, she could buy some food, but she also had to pay for everything she needed other than rent and the Family Pack—toilet paper, soap, milk, laundry, clothing—and the money went pretty quickly. When it did run out she could sometimes borrow a little from her brother, or let the family live on beans, rice, and hot dogs until the seventh came around again.
This was a common story in Houston. Nobody I met who had been leading a stable enough life to get on welfare and food stamps claimed to be hungry, but nearly all said they usually ran out of food stamps and had to live on beans and rice for the last week or so of the month.
(Dr. George Graham, a professor of nutrition at Johns Hopkins University and a member of Reagan’s task force on food assistance, says that such a diet “does not automatically mean you’re malnourished.” Rice and beans are good sources of protein, he says, though fresh vegetables and fruit “do tend to complete the requirements in your diet.” Meatless meals are not necessarily unhealthy, according to Dr. Graham, but he says that “you may feel psychologically hungry, because it’s not what you’re used to.”)
Of Mrs. Chatman’s thirteen children, besides the three who were welfare mothers themselves, two were in high school and one was out of school and looking for work. One son was in the Army, and had vowed never to return to Houston; another was in the Navy. Their basic-training graduation pictures hung on a wall of the apartment. Another son was a construction worker in Houston. Two daughters were married, with families of their own. One son had died of sickle-cell anemia as a child, and another had been shot and killed by his girlfriend during a quarrel. Welfare mothers whose children are all older than five are required to register for the federal Work Incentive program and to look for jobs, but Mrs. Chatman said she couldn’t—she had allergies and high blood pressure, and dizzy spells made it hard for her to stay on her feet. (High blood pressure is a common malady among American blacks, and its effects on them tend to be severe and difficult to control with drugs.) She had applied for disability payments and been denied, and was waiting for a decision on a rent-assistance grant.
The architects of the Reagan Administration’s changes in the welfare and food-stamp programs might look at Mrs. Chatman’s circumstances and make several points. Isn’t $16,000 a year in taxfree government benefits pretty generous, and pretty close to the median family income, even for a family of ten? Why don’t the three daughters who are on welfare get jobs, and leave their kids with Mrs. Chatman? If not that, why don’t they chip in more of their welfare money to the family food budget? If food is such a problem, why are none of them thin? And finally—the inevitable awkward question—why couldn’t the daughters have been responsible enough to avoid having children out of wedlock?
I asked Mrs. Chatman some of these questions. When she spoke about her daughters on welfare, her attitude was one of exasperation and resignation. They were not living as she might have hoped, and they were not as helpful as they might have been, but what could she do—turn them out? She preferred to answer by pointing to the successes of her other children.
Although the picture I saw was one of the classic multi-generational welfare family, statistics consistently show that very few people spend their whole lives on welfare. Gwendolyn, Jacqueline, and Sandra would be rarities if they continued through life without ever working, and, of course, their siblings were not on welfare. Mrs. Chatman herself was about to be forced out of the system; in May, when her second youngest child would turn eighteen, her Social Security would be reduced to $369 a month, and three years later, after the eighteenth birthday of her youngest child, it would disappear. (The Reagan Administration has eliminated a provision that would have allowed the grant to continue if the children went on to college.)
One further question, for which there is no room in serious policy analysis, is this: Why ask these people, and not most of the rest of the beneficiaries of government spending, to bear the sacrifices that national fiscal responsibility entails? Why pick on them?
IN BRIDGEPORT welfare payments are about three times as high as those in Houston, even after a big raise in Texas’s welfare payments that took effect last fall (following fourteen years without any increase). When I visited Bridgeport last spring, a mother with one child was getting $368 a month; one in Norwalk, twenty miles away and adjudged to have a higher housing cost, was getting $427 a month; in Houston the payment was $128 a month. The welfare payment for a mother with two children was $453 in Bridgeport, $527 in Norwalk, and $148 in Houston. Food stamps, which are issued by the federal government and based on national standards of need, made up some (but far from all) of the difference. In Bridgeport it was possible to find welfare mothers living lives close to the kind that we think of as middleclass. Mary Ziou, for instance, lived with her two children in a pleasant second-story apartment in a working-class neighborhood. She had gone on welfare in 1978, after her ex-husband had stopped making child-support payments. She got a welfare check for $339.75 on the first of the month, another for $113.25 on the sixteenth, and $127 a month in food stamps, for a total of $6,960 a year—$2,796 more than a welfare mother with two kids in Houston would get in a year. Her rent was $320 a month. What was left over was not a princely amount, but it was enough, if carefully managed, to live decently—or, to put it another way, to create a scene that would give Edwin Meese apoplexy. In Bridgeport even caseworkers, to whom the poor are no abstraction, complain that welfare mothers with five or six kids make more from the government than they do.
On the day I talked to Mrs. Ziou, a ColecoVision home computer was hooked up to a television set in her living room, and a couple of Fender guitar amplifiers were stacked in the corner. She told me proudly that there was steak in her refrigerator. Mrs. Ziou said that she couldn’t work because of the demands of raising her children, both of whom were in school, but that she was running for a place on the town committee. “I work in the community!” she said indignantly. “I need more help now that I’m running for the town slate.”
In Bridgeport, as in Houston, people on welfare blamed Reagan for everything adverse that had happened to them, but, also as in Houston, the budget changes that had hit individuals hardest were those that had been presented as technical changes, not outright cuts. The step-parent rule and the 150percent-of-need ceiling, passed in 1981, had knocked a high percentage of recipients off the welfare rolls. The federal government’s “quality-control reviewers” used to check the rolls for welfare recipients who were being paid too little as well as for those who were being paid too much. Now they watch only for overpayments, and withhold from the states a corresponding percentage of the total federal subsidy. In effect, this practice serves as an incentive for the states to reduce benefits or to drop people from the rolls.
This year a new system of monthly reporting and retrospective budgeting began, first for welfare, then for food stamps. Income used to be reported infrequently (quarterly or semi-annually in most states), and each month’s benefits were based on projections of income and need worked out during the last visit with a caseworker. When a recipient’s income changed, it was supposed to be reported to the caseworker immediately, whereupon it would quickly be reflected in that month’s benefits; in emergencies, the welfare office might even provide a supplemental payment on the spot. In practice, people on welfare would often report decreases, which would lead to higher benefits, much sooner than they would report increases.
Under monthly reporting, most recipients have to fill out forms detailing their financial situations every month; retrospective budgeting means that September’s benefits are based on July’s report. Thus, it usually takes two months for a welfare check to reflect a change in income. There are no more instant supplements. In theory, the two-month delay should help those whose incomes go up as much as it hurts those whose incomes go down, but in practice, retrospective budgeting is unpopular, because it upsets the entente cordiale under which the welfare system often responded speedily to circumstances requiring a raise in benefits and slowly to circumstances requiring a decrease. Monthly reporting is unpopular, too, because of the complexity of the forms. “The promise to get government regulations off people’s backs has not happened for poor people,” Betty Stevens, who works at a legal-aid agency in Houston, says. “The welfare regulations used to be half a phone book. Now they’re a whole phone book.”
Another technical change is that regular “continuing disability investigations” are required for SSI—the Social Security payments made to people who can’t work because of a disability. Bridgeport conducted its first investigations in 1982, and as a result Eunice Spencer’s SSI checks were stopped.
Mrs. Spencer is a former librarian’s assistant who passed out in the school cafeteria one day five years ago and hasn’t worked since. She is another victim of the scourge of the black ghettos: high blood pressure. When I saw her she was lying in bed looking spent, her bedside table full of pills. She said she was living on food stamps, a federal rent subsidy, and her wits. “To face something like this, you feel like going totally insane,” she said. “Living from day to day, not knowing what the next day will bring. It’s made me a nervous wreck. My mother taught me not to feel hate in my heart, but I feel hate for the President for what he’s done to people.”
THE CUTS IN payments to individuals are minor, in percentage terms, relative to the cuts that have been made in social-service programs. Much of the federal subsidy goes to local social-service agencies. The leading one in Bridgeport is Action for Bridgeport Community Development (ABCD), whose bylaws state its purposes as “identifying and eliminating the causes of poverty” and “enabling the poor to become self-sufficient.” Since 1981 ABCD has laid off 125 full-time employees. “Nothing stayed the same,” the Reverend William O. Johnson, ABCD’s executive director, says. “Employment programs—training for young people—[were) literally gutted. Folks have lost the will, they’ve lost hope. They gutted out the whole hope of the community.”
As I listened to him talk, I couldn’t help wondering,What community? ABCD is across the street from Father Panik Village, a bleak group of low brick buildings separated by small, barren spaces which is by common assent the worst housing project in Bridgeport and probably in Connecticut. The ABCD office is in a converted factory; the windows are covered with a close-mesh steel grating, there is an armed guard at the door, and the parking lot is enclosed by a chain-link fence topped with concertina wire. Inside, the building feels like a cage, “We’ve had twenty-seven break-ins in the last three months,” Johnson told me. “We put up these grates—still, the other night they dropped down through the roof. My guard has two Dobermans. There’s a lot of dope here. It’s drugs, drugs, drugs. You look out the window and see ‘em dealing.”
He sketched out the pattern that had created this mess. No jobs. The men sell drugs—that’s where the money is. Teenage girls have babies and go on welfare. I asked him if anyone makes it out. In the Bridgeport ghetto there seems to be a standard answer to this question, and Johnson gave it: Wes Matthews did. Matthews grew up in the P. T. Barnum project, across town (his mother, Ethel Matthews, is the head of the tenants’ committee there), and now plays for the Philadelphia 76ers. Johnson also has great expectations of Charles Smith, a student at Harding High School, who was being recruited by colleges and would probably one day play professional basketball. Then Johnson named a few people who were making good in more conventional careers—an executive, an organist, a dancer. “That one, he comes home and the pushers meet him and say, ‘Look how much I made today,’ and show him fifteen hundred dollars. ‘How much do you make?'”
Could there really be “community development” in such a world? Wasn’t leaving the community the road to development? Johnson said, “Twenty-eight years ago I sat in my living room and talked to the most brilliant young minds in Bridgeport—all black. I said to them, ‘Get out of this city. Get out of it.’ And all of them left except one. And the ones who left did ten times better. But now I feel people should stay and fight it.” He did not claim that life in the ghetto had gotten better over the twenty years of ABCD’s programs, but he did say that you have to have the programs, in order to offer a signal of hope to people who would otherwise be offered none at all.
The programs in Bridgeport have had at least some success. Often the story was that the program had not retrieved many of its constituents from poverty, but that it had helped the untrained social-service workers in its employ. Queen Curran, a former welfare mother, is one example. Beginning in the late 1970s she worked half-time in a drop-in social-service center, then full-time there, then for CETA, and finally in the private economy, at the United States Surgical Corporation—a maker of surgical instruments. “I got a job,” she told me, beaming with pride. “When I was on welfare, I looked at my kids and I felt that they’d do what I was doing: be on welfare. I felt they owned me. I didn’t want them to.”
A young black minister, the Reverend Frederick J. Streets, had taken me to Father Panik Village, which he saw as a picture of despair. Then he took me across town to the big P. T. Barnum project—a picture of hope. We ate a lunch of thin stew over rice at a free soup kitchen started by P. T. Barnum’s superintendent, Cecil Young, who had grown up in the project.
After the meal we went to Young’s office. Though it was the middle of the workday, he let himself into the project’s one-story administration building with a key, unlocked his office door with another key, and then locked the door when we were inside. There were heavy grates on all the windows. Reverend Streets told me later that Young carries a magnum pistol under his suit—necessary protection because of the enemies one acquires in the course of thirty years in the projects.
Young told us about his success in getting the soup kitchen started, about his new speakers’ program, and about job training in the projects, which is his field of particular expertise. Like twenty-one other states, Connecticut has a generalassistance program that pays unemployed people who have no children a small welfare allowance—currently $56 a week. Since 1981 a workfare requirement has been attached, meaning that people on general assistance have to do an amount of public work whose value is equivalent to that of their checks. For four years Reagan has proposed a similar national program for AFDC recipients.
Young was Bridgeport’s first workfare director, and he still runs work programs in the projects. “We got guys in the habit of going to work,” he said. “We’re making them feel proud. Productive. Before, they wanted a free ride. Now there’s no free ride in Bridgeport.” It sounded good until he described what they do: “Guys go around checking on abandoned houses. Checking cars. Working in the soup kitchen. Answer the phone. Get signatures on petitions. Or if a car’s in the yard out there, they’ll move it out.”These jobs did not sound like the way out of poverty, or like very good training for any other jobs, especially considering that they were only two days a week. Young explained the problem: “At the beginning, I had a lot of trouble with the unions. But I assured them I wouldn’t hurt their bargaining power. The guys can do anything as long as it’s not infringing on any union.”
MOST STUDIES OF the effects of Reagan’s policies have concentrated on how various income groups have been affected. Most of these show that the poor have felt the tax cuts least and the budget cuts most. A study by the Congressional Budget Office (CBO) last fall showed that in the current fiscal year the average American household would lose $250 in government benefits—cash and in-kind—because of the cuts. But for households with annual incomes under $10,000 the loss was $430. Twentythree percent of American households have incomes lower than $10,000 a year; these households absorbed 38 percent of this year’s cuts in benefits—and 52 percent of last year’s.
After two rounds of tax legislation, households with less than $10,000 in income will pay, on average, $20 less in federal income tax for 1984 than they would have paid if there hadn’t been any changes in the tax laws. The average reduction for all households is $1,090, and for households with incomes above $80,000 a year it is $8,390. Another CBO study, which measured the impact of Reagan’s tax and budget cuts, found that, on average, households saw a net gain of $820, but that $10,000-and-under households saw an average net loss of$390.
Studies of the specific effects of the budget cuts are rare. One reason is that Reagan cut the budgets of several small federal programs that gathered data about the operations of the government. “We can’t look and see how the programs are doing,” Eleanor Chelimsky, the director of policy evaluation at the General Accounting Office, says. “Evaluation offices are decimated. So many cuts have concerned data systems that we can’t tell how effective the rest of the cuts are. It’s ‘Kill the messenger.’
What is known about the effects of the cuts comes from various private studies. Two members of the department of public affairs at Princeton University, Richard P. Nathan and Fred C. Doolittle, used a network of correspondents around the country to find out how state and local governments were responding. Their conclusion was that most governments had “ratified” the cuts rather than establish their own programs to make up the difference, as the Administration had said they would. Nathan and Doolittle discovered that the states were using funds available under the federal Emergency Jobs Act of 1983—a onetime windfall—to replenish the funds of some social programs. On the whole, Nathan and Doolittle found that programs for the poor—welfare, food stamps, and community service projects—had suffered more severe cutbacks than programs aimed at the middle-class had.
The Job Training Partnership Administration (JTPA), Reagan’s smaller-scale replacement for CETA, is the focus of a different study. JTPA is supposed to avoid the kind of make-work projects for which CETA was criticized, by using boards of businessmen to oversee the program, and by requiring the organizations that do the job training to meet a “performance standard”—to prove that they place a high percentage of their trainees in real jobs. The result is a program that is quite small—in Houston there are fewer than 500 JTPA jobs—and that is oriented toward what’s called, in the job-training business, “creaming.” That means accepting into the program people who are most likely to find permanent jobs quickly—high school graduates and the like, as opposed to truly dead-end kids. The programs are “more geared to private-sector needs and not the multiple-problem individual,” says William Grinker, who is doing a two-year, thirty-six-state study of JTPA for a group of foundations. In Houston, where the program has been under way for less than a year, not one person with a JTPA job is from a family on welfare.
BY FAR THE most-studied poverty program—in fact, the only one for which it’s possible to say with some precision how the cuts have affected people—is welfare. Every expert of note except Robert Carleson, Reagan’s former special assistant for policy development, expected that the loss of work incentives—chiefly, the thirty-and-a-third program, the 150-percent-of-need ceiling on income, and most of the childcare and work-related expense deductions—would cause working people on welfare to leave their jobs.
It is possible to find people who have behaved as predicted. For example, I met a woman in Bridgeport who had quit her job as a private-duty nurse in order to get back on Medicaid so that she could afford treatment for her chronic bronchitis. She was living on her welfare checks and doing volunteer work. But the statistics show that her story is atypical and that of the working people thrown off the welfare rolls by the changes, most have not returned. Last year the Research Triangle Institute, in North Carolina, published a study of forty welfare districts; it found that people leaving the welfare rolls after the cuts were actually less likely to return to welfare than people who had left the rolls when all the work incentives were still in place. Subsequent studies have confirmed the finding. Even the liberal Center for the Study of Social Policy reported low rates of return to welfare among those thrown off the rolls in 1981; it found that in New York City more than 80 percent had worked in the twentyseven months since the cuts took effect.
The most ambitious and thorough study of the welfare cuts was published this year by the General Accounting Office. The GAO analyzed all welfare cases in the country and found that Reagan’s cuts have reduced the case load by roughly one seventh—about 493,000 people. It held interviews with 668 people in five cities (Boston, Dallas, Memphis, Milwaukee, and Syracuse) who had left the rolls because their jobs had rendered them ineligible. Again, a low rate of return to welfare was discovered. But the lack of food, gas, electricity, clothing, and medical care was often severe.
The 668 people surveyed had lost as much as $198 a month (the average loss in Milwaukee) in welfare payments. Their earned income was significantly higher (by $176 a month in Boston) than it had been when they were on welfare, because they were working longer to try to make up the difference. Even so, their total household incomes had fallen—by $115 a month in Boston, $264 a month in Dallas, and $246 a month in Memphis. Although the Administration had said that lower welfare payments would be offset by more generous foodstamp allotments, the GAO study found that for most, food-stamp allotments had declined too. According to the study, a high percentage of those dropped from welfare—nearly 60 percent in Dallas— had no medical insurance. In the states where benefits are high, people reported having depleted all their savings since leaving welfare. About a third would not seek treatment of a dental problem, because of the expense. Nearly half said that they were not eating as well. Many said that they were borrowing money and that their utilities were being shut off more often.
Why, then, didn’t these people go back on welfare? Dealing with aggregate numbers, one can only speculate. Certainly, the working former welfare recipients that the GAO studied don’t fit the popular conception of people on welfare. Only about a fifth of the GAO group had been on welfare as children, and they hadn’t gone on welfare themselves until four or five years, on average, after the birth of their first child. Most of them had been working steadily for the same employer for more than three years. More than half were high school graduates. Perhaps the GAO’s subjects represent an unusually self-reliant group within the welfare population which has left behind on the rolls a newly winnowed-out underclass. Perhaps the work ethic is so strong, and the longterm benefits of getting off welfare so obvious, as to outweigh whatever shortterm benefits accrue to staying on it. In any case, the GAO study does seem to show that taking away work incentives does not cause people to stop working, and that it may even encourage people to work more hours.
The Administration was not at all surprised by the finding that work incentives aren’t necessary. It was both proud of the reductions in the welfare rolls and skeptical of the discovery of material deprivation among the working poor. When the GAO briefed officials of the Department of Health and Human Services on the report, the officials strongly challenged the report’s contention that people who had left the welfare rolls were in need. The officials asked, Why didn’t you find out if they smoke? Maybe they spend their money on cigarettes instead of food. Do they really need the money they have lost? Aren’t there people elsewhere in the society who live on less? The Administration seemed to be fixated on absolutely preventing anyone from living the life of Riley on welfare while others, engaged in honest toil, have to struggle.
It isn’t right to dismiss out of hand the idea that welfare can pay more than a job. The gross income from four fortyhour weeks at the minimum wage is $536; a welfare mother in Bridgeport with three kids gets $532 a month, tax free, plus Medicaid. But in states where benefits are low, the income from welfare is nowhere near that from a job at the minimum wage. In a system with wide disparities between one state and another, a reduction that stings in Connecticut burns in Texas.
The GAO study found that 85 percent of the respondents in Memphis—working people who had lost their welfare benefits—were living on incomes below the federal poverty line. What remains of the working population still on welfare is hardly prospering. I met a welfare mother in Houston named Myrtis Newton, a fried-chicken cook at Ron’s Drive Inn and Bail Bonds (a one-story cinderblock emporium with a couple of gas pumps in front and a sign that says “24 HOUR ARMED GUARD ON DUTY”). She had recently started working parttime for about $3 an hour, bringing home $30 a week, and was angling for a full-time job. Her welfare check was $116 a month, her food stamps amounted to $253, and her rent was paid by the government. She lived in an apartment complex across the street from Ron’s; she had found her job there after the Houston office of the Work Incentive program, whose staff had been cut under Reagan from fifty-four to seventeen people, had failed to find anything for her. Her three sons, aged seventeen, eighteen, and nineteen, were living at home. Her phone and utilities had been cut off for months.
Myrtis Newton had been on and off welfare for ten years. She had five sons in all. The oldest, by her account, was an unemployed drifter, but the second was married, with children, and had a steady job as the manager of Ron’s. Of the three boys at home, one was working, one was doing nothing, and one was in high school. After the Reagan Administration had cut off the AFDC subsidy for children eighteen or older, Mrs. Newton’s check had been reduced twice, when each of the two older boys turned eighteen. In a year she would be off welfare entirely, work or no work.
It was obvious that her circumstances were terribly meager. “My older kids aren’t on Medicaid anymore,” Mrs. Newton told me. “If I take them to the doctor, I pay cash. If they have dental work, I have to pay. They’re all on food stamps, but can you imagine how much $253 would feed four people in a month? We have to eat plenty of beans, plenty of rice, cornbread—we eat like folks on a plantation. I can’t fix meat, vegetables, dessert, or stuff like that. On Saturday and Sunday I try to have meat. I can’t complain, because I’m thankful.”
She had been working more hours lately, and she knew that her next welfare check and food-stamp allotment would be smaller as a result. So her plan was to talk the owner of Ron’s into employing her full-time, even though the job would mean losing her welfare check altogether, and with it Medicaid and therefore regular treatment for her varicose veins and high blood pressure. The day I saw her she had been working so hard, she said, that she had almost passed out over the frying grease. “If working throws me off AFDC,” she said, “I have no choice but to accept it. If you’re making any kind of little money, you’re off.”
IT SEEMS POSSIBLE that a little more money might soon come the way of people on welfare and food stamps. President Reagan’s own task force on hunger, a staunchly conservative group, has recommended slight increases in food-stamp allotments and less-strict criteria for eligibility. This summer Congress, in its tax bill, extended part of the earned-income disregard from four months to a year, raised the income limit for welfare households from 150 to 185 percent of the state’s need standards, and made recipients who leave the welfare rolls in order to work eligible temporarily for Medicaid. The House version of the bill went some way toward establishing a national standard for welfare, but that idea died in conference.
If the government’s charter is only to provide the poor with food, clothing, shelter, and medical care, then these questions of eligibility and equitable benefits are all that need to be settled. Because of the Administration’s handling of the budget, we are not fulfilling the charter completely now, but fulfillment is possible, for probably less than one percent of current federal spending.
If the charter extends further than that, as has been presumed for the past twenty years—if it extends to helping poor people dependent on the government to become self-sufficient, decently educated working people—then the next step isn’t nearly so obvious. Reagan has, by his deeds, renounced that part of the charter. The years of trying to transform communities of the poor which seem to breed failure into communities in the ordinary sense of the word—repositories of friendship, progress, and mature values—seem to be ending.
When the federal government was ardent in its effort to solve the social problems of the ghettos, millions of people, especially urban blacks, left the ranks of the poor. It’s a crude measure, but in the 1970s, 224,000 blacks moved from inside the city limits of Washington, D.C., to the suburbs; in Chicago, 102,000 moved out; in Atlanta, 123,000; in Philadelphia, 55,000; in St. Louis, 67,000. Yet, the problems that the government set out to solve have gotten worse.
The inner-city public schools have continued to decline. The crime rates have until very recently continued to rise. Drug use has become more prevalent. Housing projects have become increasingly unlivable. Unemployment in the ghettos has risen. The percentage of families that are headed by females and thus, according to statistics, are likely to be poor has risen the fastest of all. And as people have moved from the ghettos to the suburbs, they have left the ghettos poorer in terms of human capital.
Any first-hand experience with the world of the poor teaches one to be extremely skeptical of generalizations about it. Even the experts whose theories shaped the policies of the past twenty years are now prepared to say that the culture of poverty is not monolithic, and that they don’t really understand what gets some people out and not others. The continuing decline of the ghettos is a terrible mystery. As long as it remains so, nothing will challenge the urge to shrug and not worry about it that has prevailed since Reagan took office.
—Nicholas Lemann