Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, January 12, 1995 TAG: 9501130025
SECTION: EDITORIAL PAGE: A15 EDITION: METRO
SOURCE: RAY L. GARLAND
DATELINE: LENGTH: Long
This prompted a spate of letters to the editor. One woman expressed the frustrations of many: "When you have a welfare system that keeps you comfortable and gives you enough money - more than minimum wage - then who wants to work?"
An angry social worker tossed out a few phony statistics to support a contention that "the upper class is producing poverty, and current politicians have been hired ... to keep the focus off real issues and to cut programs ... that would help boost people out of poverty." She said that only 1 percent of the federal budget goes for programs to assist the poor, and between 2 and 3 percent of the state budget. Were it only so.
Gov. George Allen's Commission on Citizen Empowerment (a neat euphemism for making people on welfare work) used a figure that I quoted in last week's column and then wondered if it could be accurate. The report stated that in the current fiscal year, Virginia will spend $4.2 billion on various programs to assist the poor.
That sounded high, but leafing through the budget just submitted confirmed that number in black and white. And this excludes all state spending for education and law enforcement. While it counted food stamps, now costing about $475 million a year, it didn't include federal housing subsidies or a variety of other federal programs that flow outside state and local budgets.
Half of that $4.2 billion is represented by a single program, Medicaid, which pays hospital, doctor and drug bills for indigent patients.
Now for what most people mean when they talk about welfare. For the fiscal year beginning July 1, Allen proposes $234 million for Aid to Families with Dependent Children and $44 million for other categories of relief. The cost of administration for all programs, including Medicaid, is pegged at $435 million a year, or 10 percent of total spending.
Leaving food stamps aside, which are entirely funded by the federal government, and excluding all categories of education and law enforcement, state spending on the poor is not 2 or 3 percent of the budget, but more than 20 percent.
Federal spending is complicated by the fact that so much of it passes through state budgets and shouldn't be counted twice. But the most conservative estimate of federal spending to assist the poor and the afflicted is not 1 percent of the budget, but closer to 25 percent. And that leaves out several major categories, such as Medicare, where people persistently refuse to recognize massive subsidies for present beneficiaries as any form of welfare.
There seems some correlation between the rate of unemployment and the number of welfare recipients, but not much. The overall trend is unmistakably higher. In 1970, there was a monthly average of 87,000 AFDC clients in Virginia. In 1994, it was 192,000. Had that risen only with population growth, it would have been about 60,000 less. While cash benefits haven't kept pace with inflation, the figures seem to tell us that the number of people receiving welfare will rise irrespective of job opportunities.
A woman with two children fully integrated into the state's welfare system receives a package of tax-free benefits worth about $14,000 a year. Chances are, she can't earn as much. But even if she makes more, the new cost of taxes, housing, child care and health insurance will probably make it worth a lot less than welfare.
For able-bodied recipients, the Allen plan would limit AFDC benefits to no more than two years in any five-year period. Some form of work or study would be required during those two years, but the plan does offer 12 months of "transitional assistance" after that. The problem is Congress is now taking this issue up in earnest and it might be wise for the state to await the outcome before trying to implement a new program.
House Speaker Newt Gingrich made a sensible observation on the unrealism of expecting present beneficiaries to go cold turkey. He suggested that benefits such as Medicaid should be continued for those leaving welfare rolls.
This raises an interesting debate on the social worker's claim that the upper class is "producing poverty." Certainly, when a person is working hard and still can't maintain a decent standard of life, it seems very wrong. But our whole society relentlessly seeks the lowest cost, and isn't prepared to pay a "just" price that might lift the wages of the lowest-paid.
There are various remedies the government could attempt, such as regulating prices and wages. But these have proved of dubious value in the past, and the public would hardly welcome the use of the police power of the state to raise the price of a "Whopper" so that Burger King could pay its workers the $12 an hour they need. And if it did, many restaurant jobs might simply disappear.
That said, many Americans need some blend of work and welfare to achieve that decent standard. But the example of those millions of Americans working for low pay and making it without welfare mocks the defense that some make for those on welfare just as capable of working.
Those millions of working poor without health insurance deserve to be able to buy into Medicaid on a sliding-payment scale. And it shouldn't be hard to devise a system that gives those on welfare the incentive to gain a lot by taking even the lowest-paying jobs.
Of all the delusions of liberalism deserving a decent funeral, perhaps the greatest is that the hired uplifters of the poor can earn the gratitude of their clients by handing out benefits.
Ray L. Garland is a Roanoke Times & World-News columnist.
by CNB