The Libertarian Party of Alabama

a message from Craig Goodrich Candidate for US Congress, 5^th District

Welfare: Robbing the Rich to Rob the Poor

August 1, 1996 - The Congress has passed another "welfare reform" program, with much fanfare, and Bill Clinton, who was elected on the promise to "end welfare as we know it", has hemmed and hawed to his special-interest constituency and will probably sign it, with even more fanfare. [It was signed just before the Democratic Party Convention. -- cg]

We've been here before. The complex amalgam of programs we call "welfare" has been the constant subject of political speechmaking and propaganda at least since Lyndon Johnson's Great Society legislation, which introduced such programs as food stamps and Medicaid while vastly increasing direct Federal appropriations for existing programs such as AFDC.

Throughout the 1980's, Republican administrations attempted to "tighten up" eligibility requirements for welfare. Still, the level of spending continued to rise and so did the number of recipients.

In 1988, the system was "reformed" by the Job Opportunities and Basic Skills (JOBS) Training Program. Said Senator Moynihan (D-NY), its principal sponsor, "For 50 years the welfare system has been a maintenance program. It has now become a jobs program." Sound familiar?

Still the spending continues to rise. At the Federal level alone there are there are more than 100 overlapping federal anti-poverty programs - for example, there are 12 different programs providing food, administered by five separate federal departments and one independent agency. Total welfare spending in the US is more than a quarter of a trillion dollars a year. Since Johnson's federalization of welfare in the 1960s, we have spent nearly four trillion dollars on these programs, enough to buy up all of the assets of the 500 largest corporations in the country - yet America's poverty rate is now higher than it was in 1965.

Who has profited from those trillions of dollars? Who has benefited?

Certainly not the poor. It has removed normal economic incentives to a responsible lifestyle - job, stable family relationships, planning for the future, and so on - and created an inner-city society where unwed teenage mothers drop out of school to set up housekeeping on a bare subsistence income while teenage young men, freed of any family economic responsibility and deprived of wholesome male role models, turn to gangs and crime.

Certainly not the country, which sees its community institutions - churches, charities, even the family itself - increasingly displaced by government edicts, mandates, taxes, and regulations, while huge areas of its cities become unlivable wastelands.

And certainly not the taxpayer, who foots the bill for all this while having to listen to the professional poverty advocates, ever eager to be generous with other people's money, nag him that still more is needed.

Who, then? Studies show that 70% of the Federal welfare budget goes not to the poor but to the bureaucrats - the department managers, clerks, lawyers, paper-shufflers, politicians, and consultants - who run this maze of programs. The "welfare mother" that conservatives blame for taking your money - and that liberals chide you for not caring enough about - sees only thirty cents for every dollar the government takes from you to help her! Government-run welfare programs are robbing the "rich" (i.e. anyone with a steady job) and frittering away the funds they claim are for the poor!

What would you say if you learned that your church was taking 70% of its collections for the poor and spending it on staff and luxury offices for the pastor and his assistants? You'd be outraged, of course; typical overhead for private charities is around 12%, with seven-eighths of contributions going directly to help the cause to which you are giving.

And you do give. Americans are the most generous people on earth; we contribute about $125 billion annually to private charities, even though government takes away nearly half our income before we have a chance to give anything to anyone.

Now, if we just had an additional $125 billion, and could get it directly to those in need as efficiently as private charities do, we could provide more funding for fighting poverty than all current Federal, state, and local government welfare programs combined!

The Libertarian Party is pledged to return the Federal government to its Constitutional role, radically cut spending, and repeal the income tax.

Would you give twice as much to charity, if you never had to pay Federal income tax again?

The government welfare system is destroying human beings, wrecking our cities, and wasting our money. The Republicans think they can reform the system with even more rules. The Democrats think they can reform the system with even more tax dollars. Libertarians know that a charitable, compassionate society can flourish only when individuals voluntarily contribute their time and money to help other individuals, and that taking money from one person by force and giving it to another destroys these virtues rather than strengthening them.

Only by getting the government completely out of the welfare business can we effectively help the unfortunate through hard times and help the poor build productive lives. "Reform" has always just spent more of your money and compounded the problem. The Libertarian Party wants to help America recover its traditions of voluntary charity, individual involvement, and community spirit that for the first 150 years of the country's existence helped the needy better their lives.

Only the Libertarian Party will do what has to be done.

Craig Goodrich for US Congress Mark Thornton for US Senate Harry Browne for President

from the testimony of Michael Tanner
Director, Health and Welfare Studies
Cato Institute
before the Finance Committee of the United States Senate March 9, 1995

In discussing welfare reform it is important to understand the magnitude of the failure that has been our welfare policy.

... If it was merely a question of wasted money, there would be cause for concern, but no crisis. After all, the money that the government has wasted on welfare pales in comparison to what it wastes on many other programs. However, the real welfare crisis lies in what the system is doing to our society.

Consider some of the results of our welfare system:

Illegitimacy. In 1960 only 5.3 percent of births were out of wedlock. Today nearly 30 percent of births are illegitimate. Among blacks, the illegitimacy rate is nearly two-thirds. Among whites, it tops 22 percent. There is strong evidence that links the availability of welfare with the increase in out-of-wedlock births.

Having a child out of wedlock often means a lifetime in poverty. Approximately 30 percent of all welfare recipients start because they have an out-of-wedlock birth. The trend is even worse among teenage mothers. Half of all unwed teen mothers go on welfare within one year of the birth of their first child; 77 percent are on welfare within five years of the child's birth.

More than half of AFDC, Medicaid, and food stamp expenditures are attributable to families begun by a teen birth.

The non-economic consequences of the increase in out of wedlock births are equally stark. There is strong evidence that the absence of a father increases the probability that a child will use drugs and engage in criminal activity. Nearly 70 percent of juveniles in state reform institutions come from fatherless homes.

... Of course women do not get pregnant just to get welfare benefits. ... But, by removing the economic consequences of a out-of-wedlock birth, welfare has removed a major incentive to avoid such pregnancies. A teenager looking around at her friends and neighbors is liable to see several who have given birth out-of- wedlock. When she sees that they have suffered few visible consequences ..., she is less inclined to modify her own behavior to prevent pregnancy.

Proof of this can be found in a study by Professor Ellen Freeman of the University of Pennsylvania, who surveyed black, never-pregnant females age 17 or younger. Only 40% of those surveyed said that they thought becoming pregnant in the next year "would make their situation worse."...

Until teenage girls, particularly those living in relative poverty, can be made to see real consequences from pregnancy, it will be impossible to gain control over the problem of out-of- wedlock births. By disguising those consequences, welfare makes it easier for these girls to make the decisions that will lead to unwed motherhood.

Current welfare policies seem to be designed with an appallingly lack of concern for their impact on out-of-wedlock births. Indeed, Medicaid programs in 11 states actually provide infertility treatments to single women on welfare.

Dependence. While the average stay on welfare remains relatively short, nearly 65 percent of the people on welfare at any given time will be on the program for eight years or longer. Moreover, welfare is increasingly intergenerational. Children raised in families on welfare are seven times more likely to become dependent on welfare than are other children. Professors Richard Vedder and Lowell Galloway of the University of Ohio, found that, if you compare two individuals with incomes below the poverty level, an individual who does not receive welfare is two and a half times more likely to be out of poverty the next year than an individual who receives welfare.

Crime. The Maryland NAACP recently concluded that "the ready access to a lifetime of welfare and free social service programs is a major contributory factor to the crime problems we face today." Welfare contributes to crime by destroying the family structure and breaking down the bonds of community. Moreover, it contributes to the social marginalization of young black men by making them irrelevant to the family. Their role has been supplanted by the welfare check.

In the long-term, Congress should end all federal funding of welfare. In the short-term, Congress should end the entitlement status of welfare and return control of welfare programs to the states with as few strings as possible. Congress should resist the temptation to impose conservative mandates on the states in lieu of liberal mandates. ...

End federal welfare programs

Congress should avoid the temptation to try to "reform" the welfare system. There is no evidence that any of the reforms currently popular with either liberals or conservatives will be able to fix the system's fundamental flaws.

In particular, Congress should be skeptical of proposed "workfare" schemes. The workfare concept is largely based on the stereotyped belief that welfare recipients are essentially lazy, looking for a free ride. Not only is there no evidence to support such stereotypes, but ... there is no evidence that workfare programs work.

The Manpower Demonstration Research Corporation conducted a review of workfare programs across the country and found few, if any, employment gains among welfare participants. Economists at the University of Chicago's Center for Social Policy Evaluation reviewed the major studies of workfare and welfare-to-work programs and found ... that "mandatory work experience programs produce little long term gain."

Moreover, workfare jobs are not inexpensive. It is estimated that it will cost at least $6,000 over and above welfare benefits for every workfare job created. This represents a great deal of expense for very little gain.

At the same time, Congress should be equally skeptical of proposals for increased job training. ...

As the Manpower Demonstration Resources Project concluded the most optimistic evidence from studies of job training programs, from the 1967 Work Incentive (WIN) Program to the 1988 JOBS program, indicates that "caseload reductions have not been dramatic and increases in people's standards of living have been limited."

Given that there is little likelihood that Congress will be able to "fix" the welfare system, it should begin looking to the day when the federal government gets out of the charity business.

As a staring point, Congress should certainly end the entitlement status of welfare. However, for the long-term, Congress should begin phasing out federal funding for the entire panoply of welfare programs.

... Congress should not attempt to devise a detailed "conservative" welfare program, imposing conservative mandates in lieu of liberal ones. In particular, Congress should avoid mandating work or job training requirements.

... Contributions to Private Charity.

... Private charities are able to individualize their approach to the circumstances of poor people in ways that governments can never do. For example, private charities may reduce or withhold benefits if a recipient does not change his or her behavior. Private charities are much more likely than government programs to offer counseling and one-on-one follow-up rather than simply providing a check.

By the same token, because of the separation of church and state, government welfare programs are not able to support programs that promote religious values as a way out of poverty. Yet, church and other religious charities have a history of success in dealing with the problems that often lead to poverty. And, private charity is much more likely to be targeted to short-term emergency assistance than long-term dependence. Thus, private charity provides a safety net, but not a way of life.

Private charities are also much better able to target assistance to those who really need help. Because eligibility requirements for government welfare programs are arbitrary and cannot be changed to fit individual circumstances, many people in genuine need do not receive assistance, while benefits often go to people who do not really need them. More than 40 percent of all families living below the poverty level receive no government assistance. Yet, more than half of the families receiving means- tested benefits are not poor. Thus, a student may receive food stamps, while a homeless man with no mailing address goes without. Private charities are not bound by such bureaucratic restrictions.

Finally, private charity has a better record of actually delivering aid to recipients. ... In 1994, for example, federal, state and local government welfare spending averaged $35,756 for every family of four below the poverty level. Obviously, the poor did not receive anywhere near this amount of money. In 1965, 70 cents of every dollar spent by the government to fight poverty went directly to poor people. Today, 70 cents of every dollar goes not to poor people, but to government bureaucrats and others who serve the poor. Few private charities have the bureaucratic overhead and inefficiency of government programs.

Make Adoption Easier

... The purpose of eliminating welfare is not to force children into orphanages, but to avoid bringing more people into a cycle of welfare, illegitimacy, fatherlessness, crime, more welfare dependency, and more illegitimacy.

Without the availability of welfare, there will be far fewer out of wedlock births and far fewer children born into poverty. For those women who continue to bear children they cannot afford to raise, most will be able to find financial assistance through private charity. Still, a small minority may remain unable to financially support a child. For these women, adoption must be a viable option. This will entail eliminating the regulatory and bureaucratic barriers that restrict adoption today. ...

Conclusion

We should not pretend that reforming our social welfare system will come easily or painlessly. In particular, ending government welfare will be difficult for those people who currently use welfare the way it was intended - as a temporary support mechanism during hard times. However, these people - almost by definition - remain on welfare for very short periods of time. A compassionate society can find other ways to deal with the problem of people who need temporary assistance to get through hard times. But our current government-run welfare system is costly to taxpayers and - more important - cruel to the children born into a cycle of welfare dependency and hopelessness.

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Goodrich for Congress
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