Review: A successful policy that progressives hate

In “Lessons from the Historic Decline of Child Poverty,” Child Trends, a nonpartisan research organization focused on children and youth, reports that child poverty fell from 27.9 percent in 1993 to 11.4 percent in 2019, and deep poverty (households with less than . half of the poverty line) fell from 7.3% to 3.2%. These figures use an adjusted measure of poverty, regional disparities, some of the expenses families face (including taxes) and transfers they receive from safety net programs.
The 1993 starting point is notable because it came before Congress passed the Personal Responsibility and Work Opportunity Act of 1996 (known as “welfare reform”). Welfare reform replaced an open-ended cash-grant program for low-income or no-income parents called Aid to Families with Dependent Children (AFDC) with a less generous, time-limited, and labor-intensive program, ” Temporary help”. Needy Families” (TANF).
The change, progressives predicted, would plunge millions into poverty. Two of President Bill Clinton’s top social service administrators resigned in protest. “In 10 years, if we find kids sleeping on the grill, frozen in the morning, and we ask them, ‘Why are they here, the rascals, terrible for themselves, terrible for each other,’ will anyone remember how it started?” asked then-Sen. Daniel Patrick Moynihan of New York.
Welfare rolls fell dramatically — from 5.1 million families in 1994 to just over 2 million in 2000 — but, as Child Trends shows, poverty was not the result. Instead, teen pregnancy rates fell, more people entered the workforce, and safety net benefits like the Supplemental Nutrition Assistance Program (SNAP, or “food stamps”) and wage subsidies like the Earned Income Tax Credit (EITC) they lost . Child Trends does not include public health insurance coverage in its analysis, but Congress also created the State Children’s Health Insurance Program and the Affordable Care Act.
You don’t have to be a policy expert to make sense of the evidence from more than half a century of the War on Poverty. In the first era, based on AFDC providing money to non-working families, the child poverty rate fell from 28.4% in 1967 to 27.9% in 1993. The second era was driven by welfare reform and characterized by a strong safety net. emphasis was placed on keeping cash to work, the decline was 30 times greater.
Progressives do not celebrate this success. Instead, they complain that “the federal safety net for poor families has been shrunk,” is “virtually non-existent” and is “willfully riddled with loopholes” and “doesn’t want to help.” people out of poverty. When Ron Haskins, a key architect of welfare reform, retired from the Brookings Institution in 2020, progressive policy analyst Matt Bruenig and his spouse, The Atlantic writer Elizabeth Bruenig, released a podcast episode.[expletive] Ron Haskins [expletive] Welfare Reform”.
The model is also useful for the discussion of new policies. When proposals emerged last year that would have given all families unconditional “child benefits” for each of their children, regardless of whether anyone in the family worked, I wrote in the New York Times that a generous new family benefit was good. idea, but it should only go to families with income. Left-wing commentators called the idea “monstrous” and said “I was insisting that some children are important to society in terms of hunger”.

In this view, it seems that either he supports helping the poor with unconditional money or he hates the poor. What policies seem to these critics to be empirically most effective in the fight against poverty.

Child Trends itself provides the most perplexing illustration of the cash-or-bust mentality. Concluding an in-depth report on the positive outcomes of a safety net that saves money for working people, its first recommendation is: “Renew social safety net programs to prioritize the needs of children and determine eligibility based on the needs of the child rather than the characteristics of the parents.”

Perhaps that sounds benign in technocratic parlance. But the authors are quick to clarify what they mean: “Current policies exclude children from all social safety net benefits by establishing eligibility criteria based on parental characteristics, such as work status and immigration status. In contrast, a social safety net has been designed. child poverty alleviation would be intentionally more inclusive by focusing on the needs of children, and eliminating requirements based on the characteristics of other parents.”

In other words, give money to families regardless of whether they are working or not, precisely the logic behind the initial approach of the War on Poverty, which made so little progress. Actually, the logic is attractive and seems quite simple. If people are poor because they don’t have enough money, give them more money and they won’t be poor anymore.

In fact, the Census Bureau just reported further declines in child poverty in 2021 thanks to checks sent out that year by the Biden administration. What could be wrong?

What’s wrong is that the goal of fighting poverty is to move families completely, not keep them in public programs indefinitely, and that can’t happen unless people on assistance are connected to the workforce and start moving up.

Along with measuring child trends, analysts must consider whether families earn enough on their own, without safety net programs, to clear the poverty line. The data there tells the same story. As a measure of poverty that excludes taxes and transfers, the child poverty rate actually rose in the early decades of the War on Poverty, from 27.4% in 1967 to 30.7% in 1993. After welfare reform, this number dropped to 20.3% by 2019.

One problem with unconditional money can be that it creates the wrong incentives. Availability of money reduces the consequences of bad decisions. And not having a clear connection to work reduces the motivation to do better.

Another problem is the unique set of values ​​unconditional money claims about what community members owe each other. According to the traditional American view, everyone has a duty to make productive contributions to society and to support themselves and their families; As a nation, we owe the most to those who are working to support themselves.

But there’s another view of the social contract, succinctly stated by Hal Singer, an economic consultant and Georgetown professor who recently tweeted that the government’s revenue stream is what needs to be done to secure revenue. “follow the law”. If that were true, the American safety net would be stingy and reserving welfare for those who work would be a grave injustice.

What do we owe each other, and how do we help the unfortunate among us? In the 1990s, welfare reform provided a clear answer to that question in principle, and the subsequent decline in poverty provided a clear answer in practice. But over time, instead of learning the lesson well, the progressives forgot it. The political struggle will have to be done again.