Читать книгу The Workfare State - Eva Bertram - Страница 9

CHAPTER 2

Welfarists Confront Workfarists: The Family Assistance Plan

As the 1968 presidential race took shape, welfare reform emerged as an unavoidable campaign issue for both parties. In addition to congressional complaints about AFDC’s rising price tag, a growing chorus of opposition arose from state and local officials facing grave fiscal crises.¹ These included prominent Republican governors from states such as California, New York, Illinois, and Pennsylvania; more than one-fourth of the AFDC caseload burden was carried by these four states alone.² “If you were going to run for President of the United States, you had to have a welfare reform program,” said Martin Anderson, who became research director for Richard Nixon’s campaign in 1968. But if welfare policy was familiar territory for the Democrats, it was, he observed, a “somewhat treacherous issue for a Republican candidate.”³ Anderson and other staffers were charged with developing policy proposals to aid the poor. Nixon’s team produced plans combining program improvements and work measures, and the campaign staff believed they had achieved their goal: “The Democrats lost an issue, the press seemed baffled, and Nixon was very pleased with himself.”⁴

On November 5, with the long economic expansion of the 1960s slowing, Johnson standing on the sidelines, and the country divided over war in Vietnam and racial tensions at home, Nixon won a narrow victory against Hubert Humphrey. The limits on the new president’s power were clear from the outset. Democratic majorities controlled Congress, 243–192 in the House, and 58–42 in the Senate. Nixon had run a carefully calibrated race, touting a long list of positions designed to appeal to the “forgotten middle” in American politics. These included law and order in America’s cities and a peace strategy for Vietnam. On the social welfare front, Nixon called for returning power to state governments—a reaction to what he saw as the excesses of the Great Society—and a commitment to “liberate the poor from the debilitating dependence on government.”⁵

The president’s conservatism led many to assume that he would follow the path charted by congressional passage of WIN, consolidating a shift toward greater work obligations for AFDC recipients and further restricting the reach of public assistance. Instead, Nixon’s advisers crafted a plan to expand cash support for the poor and take public assistance reform well beyond the confines of AFDC. The most striking feature of Nixon’s Family Assistance Plan (FAP) was its radical proposal to guarantee an income floor for all poor families, including two-parent working families. After a three-year struggle in which the proposal came surprisingly close to passing, FAP died in Congress. A small avalanche of expert opinion and analysis followed, seeking to make sense of its rise and fall.⁶ But with a few notable exceptions, much of the scholarly literature on U.S. social welfare soon came to regard the politics of FAP as a footnote to history, a story about the reform that never happened—an interesting tale, but one largely irrelevant to the development of American social policy.⁷

The political significance of FAP, however, lay not in the content or fate of the failed Nixon initiative, but in the reaction to the proposal, particularly among the Southern Democrats who had begun to assume a more assertive role in shaping federal policy on work and welfare. The battle over FAP triggered a broad conservative shift in welfare policy at the federal level, reflected not only in the defeat of FAP (1969–72) but also in the creation of new work-based initiatives in its wake (1971–75). The Southern conservative drive for reform began with the WIN amendments to AFDC in 1967. But it was during the struggles over Nixon’s FAP that a coherent alternative to New Deal welfarism emerged, an American brand of workfare that would change the basic functions of public assistance for poor families.

The core features of and contrasts between welfarist and work-based models of social provision have been charted and assessed in comparative studies by a number of scholars, such as Jamie Peck.⁸ But how and why does a welfarist system change into a workfarist one? This chapter and the next focus on the politics that produced such a shift in U.S. public assistance programs in the early 1970s. Two distinct approaches to U.S. public assistance had emerged by then, with different guiding principles, ends, means, and measures of success.⁹ Under New Deal welfarism, the guiding principle was government entitlement. The end of public assistance was to provide a basic safety net for certain groups of eligible poor Americans; the means toward this end was cash and in-kind assistance. Work might be encouraged and supported (as in the Kennedy–Johnson reforms), but these were not central strategies at the federal level and, above all, were not to undermine the larger end of guaranteeing a safety net. The measure of success was the policy’s ability to provide income assistance to those who were eligible. Under workfare, in contrast, the guiding principle was not government entitlement, but market incentives. The end of public assistance was to promote, require, and reward work among all poor adults who were physically able to perform it, and the means was mandatory work requirements and job training or preparation. The primary measure of success was the policy’s ability to ensure workforce participation, reduce reliance on government assistance, and leave to the market the functions of job allocation and wage setting.

Both approaches had deep roots in Anglo-American poor relief policies. Welfarism was rooted in the principle that those who were poor and unable to provide for themselves should receive some measure of government assistance; workfare grew out of the English poor law principle that relief should not intervene in the logic or incentives of the market. It was welfarism that had formally governed federal public assistance policies since the New Deal. The WIN amendments had signaled a shift. Debates over the Family Assistance Plan would now clarify the direction policy would take.

The FAP debates concerned the relationship between welfare and work, and between public assistance and the labor market; they boiled down to two issues. Should the welfare poor work, and if so, what policies should be used to encourage or require this? And should the working poor receive welfare, and if so, what policies would ensure that they continued to work? It was in the struggle over FAP in the late 1960s that income assistance for the working poor was first placed on the national policy agenda, leading ultimately to the creation of the Earned Income Tax Credit (EITC) in 1975.¹⁰ It was also in these years that aid to the welfare poor (through AFDC) was roundly discredited in favor of aid to the working poor, and the rise of the EITC became linked to the decline of AFDC. Driving both developments were the strategies of the Nixon administration in promoting FAP and the fervent opposition to its passage among Southern Democrats.

Strikingly, the origins of work-based public assistance in the politics of Nixon’s FAP followed a sequence that would be replayed twenty-five years later, in a new round of political fights that led to workfare’s culmination in the mid-1990s under President Bill Clinton. In each case, a president envisioned a broad package of reforms that contained a mix of elements for poor families, including liberal welfarist measures and work supports. He wrapped the package, however, in tough rhetoric about promoting work and ending welfare, and marketed it as workfare. Congressional conservatives seized on the rhetoric of workfare and recast it in tougher terms, both in public debate and in proposed policies. Core welfarist elements of the president’s plan collapsed—and conservatives helped secure a further shift toward workfare. This chapter starts with the evolution of FAP’s guaranteed income concept, then turns to the internal debate that took place within the Nixon administration over work and welfare, and to the heated political struggles over the proposal that unfolded on Capitol Hill and around the country.

The Political Origins of the “Income Floor”

The intellectual and political history of both the Family Assistance Plan and the Earned Income Tax Credit began with the notion of providing a “floor” under the income of the working poor. The proposal originated not with the Nixon White House but with earlier generations of economists, analysts, and planners, and it had conservative as well as liberal roots.

In 1943, while working briefly at the Treasury Department, conservative economist Milton Friedman observed that the poorest workers confronted a host of tax-related inequities and work disincentives.¹¹ Friedman later proposed that the working poor be permitted to claim a refund on their 1040 tax forms equal to the amount the family income dropped below a certain point. When a family’s income rose measurably above this floor, they would pay taxes; but when income dropped below the floor, they would receive a refund from the government. Friedman believed that this approach would curb poverty more efficiently and less expensively than the existing welfare system. The concept, in short, was pro-work, anti-tax, anti-welfare, and anti-bureaucracy. The principle of a “negative income tax” was not new among economists, but it was Friedman’s 1962 book Capitalism and Freedom that won it a place on the political map.¹²

Despite Friedman’s credentials, most political conservatives found the idea of providing a government-backed income floor anathema, seeing it as another costly and misguided expansion of the welfare state. During the Johnson years, the guaranteed income principle was promoted primarily by liberal welfarists. Liberals came to the idea from a very different starting point, emphasizing the logic of entitlement and social rights that had gained prominence in the 1960s. Advocates advanced various schemes for providing a guaranteed income, from negative income taxes to European-style child or family allowances.¹³ The Johnson administration’s own poverty research, meanwhile, was turning up some disturbing facts that argued for a new approach. A large portion of America’s poor was slipping through the cracks in the safety net. The Planning and Evaluation Unit at HEW concluded in 1966 that at least 60 percent of needy Americans received no benefits from the nation’s main antipoverty cash assistance programs, including AFDC and Old Age Assistance (OAA), as well as Social Security. A sizable percentage of this group were working and poor—particularly families with children.¹⁴

By the mid- to late 1960s, a number of American economists and analysts were actively promoting income floor schemes. A 1968 petition urging Congress to adopt a “national system of income guarantees and supplements” was signed by some 1,300 economists from almost 150 institutions. Leaders in the social work community also signaled their support, encouraging “income as a matter of right … at a uniformly adequate standard of living” in a position paper released by a National Association of Social Workers conference.¹⁵ Confronted with the problem of the working poor, many liberal economists and Democratic policymakers turned first to traditional minimum wage strategies—but the income guarantee idea was gaining traction among analysts within the administration, particularly at the Office of Economic Opportunity (OEO) and HEW. Prompted by his advisers, President Johnson appointed various task forces to examine the guaranteed income concept, and the OEO launched pilot programs to explore its effect on the incentive to work. In 1968, even OEO director Sargent Shriver endorsed a version of the idea.¹⁶ But President Johnson was unconvinced.¹⁷ By the end of his presidency, the proposition had not gained broad popular support, Congress was skeptical at best, and Johnson remained committed to his own Great Society strategy of providing opportunity and services to the poor.¹⁸

When Nixon entered the White House, there was thus little reason to expect the guaranteed income idea to command attention beyond academic circles or government research commissions, even less to expect that it would be elevated to the national political agenda by a Republican leader. The wheels were set in motion when Nixon decided to take on welfare reform, in part to score points among Republican governors, lawmakers, and middle-class voters (especially Southern white voters) frustrated by the welfare system and its rising rolls.¹⁹

Shortly after the 1968 election, he tapped Richard Nathan, a Brookings Institution researcher who had worked on pre-election planning for the Nixon team, to head up a Transitional Task Force on Public Welfare. The Nathan task force suggested that an income floor be created under AFDC families nationwide, to be fully paid by the federal government. This would mean higher benefits in poor states (particularly in the South) and relief for state budgets. Arthur Burns, the president’s chief domestic policy adviser, objected to the idea, arguing instead for cutting welfare rolls and costs. But Nixon’s HEW secretary Robert Finch and urban affairs adviser Daniel Patrick Moynihan, a former assistant secretary of labor in the Kennedy and Johnson administrations, convinced the president to back the idea of a nationwide guaranteed standard for AFDC benefits.²⁰

This itself would have marked a significant welfarist policy departure, particularly for a Republican president. Yet the administration would go further. A task force of staffers from HEW (including John Veneman, the new undersecretary) and the Budget Bureau reached agreement on a more far-reaching plan as an alternative to Nathan’s, then set out to win the approval of the president and his key cabinet members for what would become FAP.²¹ Conceptually, the breakthrough made by Nixon aides was to take a radically welfarist proposal—a guaranteed income for both working and nonworking poor families—and market it as work-based welfare reform.

The outlines of the administration’s proposal emerged gradually. FAP would extend a guarantee of income to all poor families—with one or two parents, working or nonworking. A family of four with no other income would receive an annual minimum federal grant (ultimately set at $1,600), which could be supplemented by the states. Those who worked would receive an earnings disregard for the first $60 they earned monthly, and then see their benefits reduced by 50 percent for each dollar of earned income. Able-bodied family heads, with some exceptions, would be required to accept work or training positions, or lose their portion of the family’s benefit.²²

Throughout the spring and summer of 1969, the debate within the administration was heated. Arthur Burns presented a more limited plan, offering fiscal incentives to states to increase benefit levels. Members of Nixon’s cabinet and inner circle lined up on one side or the other. Moynihan was a vocal advocate of FAP, Burns its staunchest critic. HEW secretary Finch and Nixon aide John Ehrlichman supported the FAP approach. The Treasury secretary, CEA chair, and budget director preferred the Burns plan. This internal opposition to the plan, along with early reports of Republican objections in Congress, almost sank it—and forced various adjustments to the proposal after a protracted internal debate over the purposes of public assistance.²³

Welfare, Work, and Markets: The Internal Debate

Much of the discussion within the administration addressed familiar issues of rising welfare rolls and costs, benefit levels, and the question of welfare reliance—issues that had been at the center of the debate since the 1967 WIN amendments. But administration officials were also grappling with new and more fundamental questions about the relationship between welfare and work. What were the implications of making poor families on welfare work, and of providing welfare to those who were working but still poor?

The New Deal welfarist model of assistance provided no guidance here, because New Dealers had drawn a line in federal policy between work and welfare, creating social insurance programs for employable Americans and public assistance programs for needy “unemployables.” Yet AFDC was now providing assistance to recipients who were employable (through AFDC-UP), and states were required to refer eligible recipients to work programs (through WIN). The latter policy change concerned many liberals, just as the former worried conservatives. The FAP plan proposed a further breach of the New Deal distinction, by providing public assistance not only for the employable poor (including some AFDC parents)—but for the already employed poor.

Political leaders confronted a major juncture in U.S. public assistance. Recent initiatives threatened to violate age-old poor law principles governing the relationship between assistance and labor markets, posing new dilemmas for policy. The passage of WIN, combined with increases in in-kind assistance in the 1960s, created one dilemma. Various social welfare programs now offered recipients more economic security than many jobs in the low-wage labor market, even as WIN sought to move them into that labor force. This undermined the long-standing “less eligibility” principle, which held that welfare assistance should never exceed the gains from the lowest-paid form of wage labor.²⁴ Now, policymakers wondered how to restore this balance: by requiring work and cutting benefits to the welfare poor? By providing aid to the working poor?

The prospect of aiding the poorest workers posed its own dilemma. It violated another poor law imperative, against the provision of “relief in aid of wages,” aimed at preserving the principle of non-interference in the market system.²⁵ The concern was that providing public aid to the lowest-paid workers would lead them to work less—or not at all. It would distort the market’s ability to set the price of labor, by supplementing market wages. Nixon’s advisers now debated whether assisting these workers would be an effective way to reduce their poverty—or whether it would only draw them out of the workforce and onto the welfare rolls, undermining market mechanisms.²⁶ FAP took a bold stance on these thorny issues, by simultaneously strengthening the entitlement to aid at standardized levels, adding work requirements for the welfare poor, and extending assistance to the working poor. Within the administration, both supporters and opponents of FAP recognized that the stakes were high.

An opening salvo in the internal administration battle over FAP arrived on the president’s desk in mid-April 1969. It was a memo from Burns’s deputy Martin Anderson about the consequences of aiding the working poor, and it began with an ominous quote from Santayana: “Those who cannot remember the past are condemned to repeat it.” The remainder of the memo consisted solely of lengthy excerpted passages from Karl Polanyi’s discussion in The Great Transformation of the controversial Speenhamland public assistance system, in effect in England from 1795 to 1834.²⁷ “The justices of Berkshire,” the excerpt began, meeting in Speenhamland in May 1795, “in a time of great distress, decided that subsidies in aid of wages should be granted … so that a minimum income should be assured to the poor regardless of their earnings.” Anderson underscored Polanyi’s contrast between the previous Elizabethan poor law system and the Speenhamland arrangement:

Under Elizabethan Law the poor were forced to work at whatever wages they could get and only those who could obtain no work were entitled to relief; relief in aid of wages was neither intended nor given. Under the Speenhamland Law a man was relieved even if he was in employment, as long as his wages amounted to less than the family income granted to him by the scale. Hence, no laborer had any material interest in satisfying his employer … [and] the employer could obtain labor at almost any wages, however little he paid; the subsidy from the rates brought the workers’ income up to scale.²⁸

Anderson was drawing a parallel between Speenhamland and FAP’s (and later the EITC’s) provisions to aid the working poor. The memo drove home what he saw as the flaws within the Speenhamland system. Among other problems, it contained disincentives for employees to devote adequate work hours and for employers to pay adequate wages—and thereby “prevented the establishment of a competitive labor market” until it was abolished in 1834.²⁹

Anderson’s conclusion was clear: nothing less than the existence of a functioning capitalist order was at stake in the battle over FAP and its proposal to aid the working poor. The implications were troubling enough that the president requested responses from several of his aides, and a flurry of memos followed. Moynihan expressed annoyance: “It seems absurd to trouble you with controversies concerning the post-Napoleonic economic history of Britain, but if you like….” He argued (with supporting evidence) that economic historians had rejected several of Polanyi’s conclusions about Speenhamland.³⁰ More to the point, Moynihan and other FAP advocates acknowledged the issue of adequate work incentives for lowwage workers and assured the president that FAP addressed it.³¹ Any program that reduced cash assistance by a dollar for each dollar earned in wages—as Speenhamland did—would indeed reduce the incentive to work by imposing too high a “tax” on earnings. FAP, however, would reduce benefits by only 50 percent of earned income, rather than by 66⅔ percent (as under AFDC) or 100 percent (as under the old AFDC or the Speenhamland system).³²

Labor secretary George Shultz, a FAP supporter, echoed the point about the tax on earnings. He then sought to widen the debate, pointing out that the Anderson memo productively exposed “the deficiencies in welfare proposals that entirely overlook labor market forces.”³³ Shultz wanted to shift the focus from workers—and the potential disincentives to earn—to FAP’s potential impact on the actions of employers. Drawing another point from the Polanyi excerpt, Shultz warned that a wage subsidy, such as that under Speenhamland (or FAP), could distort the labor market in a way that encouraged employers to keep wages low. If wage subsidies induced workers to remain in jobs that paid too little, employers would not face appropriate market pressures to raise wages or restructure jobs. Speenhamland, Schulz wrote, “made it unnecessary for employers to maintain wages in order to compete for manpower.”³⁴

Shultz added presciently that this problem could be exacerbated by a plan that combined work requirements for welfare recipients with wage subsidies for low-wage workers, particularly in the absence of training and other measures to ensure workers’ upward mobility in the job market. He made the case that the combination of compulsory employment and the absence of training programs was a potential trap for poor workers and boon for employers: it meant that the system would generate a steady supply of low-skilled, low-wage labor, with little means of exit through higher skills and job mobility. “Employers who paid substandard wages could be assured that their labor pool would not be depleted through the process of upward skill mobility,” Shultz wrote. He challenged the position of many conservatives by suggesting that to avoid these problems, “welfare programs must maintain a principle of free choice with respect to labor force participation.”³⁵

Other memos exchanged in the internal debate over FAP reflected a different concern: administration officials worried about the negative reactions of low-wage employers to the FAP measures. If the federal government offered too many opportunities (through job training) for workers to move up to better-paying jobs, disrupting the low-wage market for labor, these employers would surely object. A draft report by Moynihan’s Urban Affairs Council said, for example, that training programs must be voluntary, because “employers of these persons paying them low wages would greatly resent the government coming in and luring, to say nothing of forcing, these low-paid employees to training programs…. Thus, required training programs might create serious disruptions in local labor markets.”³⁶

White House officials also debated the likely costs of such a program. Many FAP advocates wanted to lowball the numbers. Others urged a candid and realistic assessment of the potential impact of assisting low-wage workers—pointing precisely to the consequences conservative opponents feared. Some workers, they argued, could indeed be expected to work fewer hours or to quit altogether. “The possible responses of the working poor are not really accounted for,” wrote Shultz in one memo regarding cost estimates. “Those eligible for [FAP] earn income of about $3.3 billion, which they might choose to forego in some significant measure in preference for [FAP] payments or training allowances.”³⁷ This prospect, of course, was what worried conservatives, particularly those from states with sizable low-wage sectors—such as Southern states.

Underlying but largely unaddressed in this internal debate were deeper issues about work-based public assistance and labor markets. Who should carry the burden of assisting the working poor—the government, through an effective wage subsidy (such as FAP or the EITC), or employers, through higher wages? What was the combined impact of wage subsidies and work requirements on the low-wage labor market itself? Would the supply of workers from the welfare rolls, combined with the wage subsidy from the government, artificially sustain and even increase the number of low-wage jobs in some local labor markets? Would these policies help construct and fuel an oversized low-wage labor market?

The Battle over FAP

Despite opposition from many in his administration and his party, Nixon ultimately approved the proposal, and administration advocates rolled up their sleeves to decide how to pitch and promote the initiative on Capitol Hill and in the press.³⁸ FAP’s political legacy began to take shape with the strategic choices the Nixon team made.

On August 8, 1969, Nixon presented his new plan in a nationally televised speech. The president might have made many different arguments to promote FAP. Canadian leaders in the late 1960s and 1970s, for example, defended similar programs on the merits of aiding workers and meeting the needs of the poor through universal assistance programs.³⁹ In the U.S. context, this would have meant constructing a welfarist argument for extending public assistance to an entirely new needy population. But Nixon elected to build his case for FAP on the failed record of AFDC, and to try to convince liberal welfarists and conservative workfare advocates alike that his plan was better. The president began with a broadside attack on the existing AFDC system, calling it a “colossal failure,” a small Depression-era program that “has become a monster in the prosperous sixties.”⁴⁰

Nixon captured the objections of both conservatives and liberals to AFDC, saying, “It breaks up homes [a shared concern of conservatives and liberals]. It often penalizes work [conservatives]. It robs recipients of dignity [liberals]. And it grows [conservatives].” The president’s attack on AFDC then merged seamlessly into a new argument about the working poor.

The present system often makes it possible to receive more money on welfare than on a low-paying job. This creates an incentive not to work; it also is unfair to the working poor. It is morally wrong for a family that is working to try to make ends meet to receive less than the family across the street on welfare. This has been bitterly resented by the man who works, and rightly so—the rewards are just the opposite of what they should be. Its effect is to draw people off payrolls and onto welfare rolls—just the opposite of what government should be doing.⁴¹

Honest labor and the working poor were thus honored as morally superior to cash assistance and the welfare poor. The solution? Pass FAP, and under the president’s plan, “the program now called ‘Aid to Families with Dependent Children’—the program we normally think of when we think of ‘welfare’—would be done away with completely.”⁴² Criticism of AFDC had echoed through Washington for years, but never had the program been so condemned at the core by the nation’s leader. Nixon’s decision to use the presidential bully pulpit to excoriate AFDC in order to promote FAP would have a lasting impact: although FAP would collapse, AFDC would never recover.

In contrast to AFDC, the president emphasized, FAP would include working families: “For the first time, the government would recognize that it has no less of an obligation to the working poor than to the nonworking poor; and for the first time, benefits would be scaled in such a way that it would always pay to work.”⁴³ FAP’s work requirement was underscored for the benefit of conservatives, in part to distinguish between FAP and other guaranteed income schemes that conservatives loathed. What would FAP mean, Nixon asked, for those “who can work but choose not to? Well, the answer is very simple. Under this proposal, everyone who accepts benefits must also accept work or training provided suitable jobs are available.”⁴⁴ The sole exceptions would be those unable to work and mothers with very young children. In fact, FAP’s work requirement was hardly rigorous (as administration officials were quick to point out to liberals). Even if an able-bodied parent refused to work, the rest of the family would continue to receive benefits.

The core elements of Nixon’s strategy thus emerged in his opening speech. He would promote FAP as a “solution” to the existing welfare crisis and sell the proposal using the language of work promotion and enforcement. Nixon believed that the plan’s work requirements and incentives, along with the promise of fiscal relief, would appeal to business, to moderate and conservative policymakers, and to state and local officials. He expected the measure’s new national standards and guaranteed support for the poor to appeal to a broad liberal coalition, including labor, the social work community, welfare rights activists, and civil rights leaders, particularly those concerned about conditions in the South. But political support would prove elusive.⁴⁵ In the short run, Nixon’s strategy would fail, contributing to FAP’s defeat. In the long run, the strategy would reconfigure welfare politics, strengthening the drive for a vision of workfare defined not by FAP supporters but by its opponents in Congress.

Few signs of FAP’s fate were evident in the initial glow of public reaction following President Nixon’s address, however. Ninety-five percent of editorials nationwide were “favorable” toward FAP, according to an HEW survey, and nearly all of the major newspapers in the nation’s twenty-five largest metropolitan areas were “enthusiastic.” The New York Times described FAP as “a bold attempt to transform” the welfare system. Business Week said that FAP “is far more than just an ingenious compromise of opposing viewpoints. It is a new and promising approach to a problem that never could be solved in the framework of the old system.” And The Economist said, “President Nixon’s television message on welfare reform and revenue sharing may rank in importance with President Roosevelt’s first proposals for a social security system in the mid-1930s, which were the beginning of America’s now faltering welfare state.”⁴⁶

Public opinion seemed to echo the editorial sentiment. Indeed, the permanent staff at the White House could not remember any domestic issue drawing a public response so enormous and unanimous. Some 2,757 letters and telegrams arrived between August 9 and September 10. More than 80 percent voiced unqualified support, and only 9 percent expressed flat opposition. A favorite among the White House staff was the telegram that read simply: “TWO UPPER MIDDLE CLASS REPUBLICANS WHO WILL PAY FOR THE PROGRAM SAY BRAVO.” Gallup began polling public opinion a week after the president’s speech. The results reflected strong bipartisan support for “President Nixon’s welfare reforms.” Of those familiar with the proposal, 65 percent were favorable toward FAP; 20 percent were not.⁴⁷

On closer examination, however, an unmistakable pattern emerged. Press reports and polling data revealed that the strongest expressions of support focused on the president’s promise that FAP would replace the existing welfare system—not on the reform measures contained in the plan. The enthusiasm was less a vote for FAP than a vote against AFDC and related welfare programs: FAP had been packaged, presented, and received as a “solution” to the perceived welfare crisis. The Detroit Free Press editorial expressed a prevailing sentiment: “The status quo is no answer—so the President’s attempt, complicated and controversial as it is, is a better way to go.” Similarly, the focus of the positive telegrams pouring into the White House was almost exclusively on FAP’s promise to reform current welfare policies. “FAP was an extraordinary departure in proclaimed public policy, for which there was virtually no public demand, and with which there was no familiarity,” Moynihan later observed. But “the president had one large advantage: he was proposing to supplant the existing welfare system, which was widely regarded as a failure and about which something had to be done.”⁴⁸ Nixon’s strategy played to this advantage. His pitch for FAP ensured that it arrived on the public agenda and seized the spotlight not on its merits as an innovative plan to aid working as well as welfare poor families, but as an alternative to an unpopular welfare system.

* * *

Before long, cracks began to emerge in the initial foundation of public support. Attacking AFDC’s failures, it turned out, provided little basis for building consensus on what should replace it. Liberal welfarists saw AFDC as inadequate and degrading; conservative workfare advocates saw it as overly generous, too costly, and pauperizing. As a result, despite the president’s efforts to ensure that FAP contained something for both conservatives and liberals, his repeated attempts to reach out to one side succeeded primarily in alienating the other.

The policy agenda of business leaders, policymakers, and others in the conservative camp focused on the need to limit benefits and tighten work requirements, rein in rather than expand the welfare state, and, above all, avoid a guaranteed income. After an extensive outreach effort by the administration, some business organizations pledged grudging and conditional backing.⁴⁹ But the strongest voices in the business community opposed FAP. It was not true welfare reform, in their view, and demanded far too little of the welfare poor. Karl Schlotterbeck of the U.S. Chamber of Commerce warned the House Ways and Means Committee that FAP contained “the beginning of a national guaranteed income arrangement,” and Chamber members fanned out in Washington to lobby against it.⁵⁰ In testimony before the Senate Finance Committee, Paul Henkel of the Council of State Chambers of Commerce concurred: “We support welfare reform but not guaranteed income.” He urged lawmakers to take steps to “[tighten] up work and training requirements for welfare recipients.”⁵¹

Business leaders particularly opposed FAP’s provisions for the working poor. They worried that any guarantees of cash assistance for these workers might lead them out of the workforce and onto the welfare rolls. The answer to the problem of working poverty, Schlotterbeck insisted in Senate testimony, was economic growth, not welfare-state expansion.⁵² In a full-page advertisement in the midst of the congressional debate in April 1970, the Chamber of Commerce decried FAP as a tool for higher taxes and a plan that “would triple our welfare rolls. Double our welfare costs.”⁵³ Many state and local government officials joined conservatives in expressing skepticism about FAP, objecting in particular to its projected costs.⁵⁴

Above all, conservative leaders feared the plan was a “gigantic giveaway which could further reward the indolent,” said Representative Lawrence Williams (R-Pa.),⁵⁵ and that it would “make the whole nation into a welfare state,” according to Senator Russell Long (D-La.).⁵⁶ A number of conservatives felt particularly betrayed by what they saw as the administration’s mis-characterization of FAP as a tough work-based program. Columnist James Kilpatrick spoke for many conservatives when he wrote in early 1970, “President Nixon served up his welfare proposals last August, wrapped in a package of pretty rhetoric and tied with a bow of conservative blue. Sad to say some of us who should have known better were fairly swept off our feet. I hereby repent.” Although Nixon originally emphasized “the idea of ‘workfare’ instead of welfare,” a closer look at FAP showed that of the nearly ten million recipients on the rolls, the vast majority would be exempt under FAP because they were children, elderly, mothers of preschool children, sick, or disabled. As a result, Kilpatrick said, “only 500,000 prospects remain for the work-or-starve demand” that was so appealing to him and other staunch workfare advocates. Worse yet, the plan to aid the working poor would double welfare rolls and costs. These newly assisted working-poor families, he argued, “would be the permanent poor feeding like parasites on the body politic unto the end of time.”⁵⁷

Liberals were also disappointed by FAP’s plans for the working and welfare poor. Many were initially drawn to FAP by the rhetoric of expanded entitlement and the promise of an “income floor” under all poor families. FAP looked good “at first blush,” acknowledged Frances Fox Piven and Richard Cloward in 1971, then at Columbia’s School of Social Work. But as liberal reformers took a second look, they saw that its main initial effect was to assist the needy in some of the nation’s poorest regions, such as the South, where existing benefits were quite low. FAP offered virtually nothing to welfare families in the industrial, high-benefit North and West—where recipients were most numerous and well organized—except a new work requirement. Liberal activists expressed their frustration with FAP’s hollow promise of an income floor to their congressional allies, through an organized campaign of phone calls, letter writing, public hearings, and private meetings.⁵⁸

FAP missed its mark with liberals in part because support for the working poor was not a top priority for the liberal welfare reform coalition in the late 1960s. In the politics of labor rights and social provision after the New Deal, much of the organizing and advocacy for workers remained distinct from advocacy for the poor on public assistance. And liberal activists who were focused on the economic conditions of workers—such as trade union leaders—had serious concerns about the FAP strategy of income guarantees.

Labor objected to the gains that might accrue under FAP to employers paying low wages, through the combined effect of the work requirement and a government wage supplement for the working poor. Just as business leaders shared Anderson’s worries that FAP would diminish workers’ incentive and imperative to work, labor leaders shared Shultz’s concern that it would eliminate employers’ incentives to raise wages. A week before Nixon released his plan, AFL-CIO president George Meany declared flatly, “The AFL-CIO vigorously opposes the use of federal funds to subsidize the employers of cheap labor.” Three months later, the United Automobile Workers voiced concern that FAP would “freeze present wage levels, and subsidize the sweatshop employer.”⁵⁹ Labor leaders were worried in part about the ripple effect of depressing wages throughout the nation’s wage structure. As a political strategy, therefore, they preferred regulations aimed at business—such as boosting the minimum wage—over increased spending strategies aimed at poor and near-poor workers. Some labor leaders also wanted a government-backed employment guarantee, one that would make the federal government the employer of last resort for all those unable to find work. This, they argued, would aid workers and tighten the job market.⁶⁰

Although their concerns about FAP’s proposals for the working poor were pointed, the liberal coalition directed its strongest opposition at FAP’s provisions for the welfare poor. Many in the social work community backed the principle of a federally provided income guarantee, but they objected to the administration’s work measures as too punitive, and to FAP’s benefit levels as far too low.⁶¹ In its ninety-eighth annual meeting in June 1970, the National Conference on Social Welfare called for an adequate, federally financed income maintenance program for the poor—then sent telegrams to Senate members demanding passage of a plan with benefit levels more than triple those of FAP.⁶²

Welfare recipients and rights advocates organized under the National Welfare Rights Organization (NWRO) were the most vocal in their opposition. After sustained mobilization against the 1967 WIN amendments, the NWRO became the leading critical voice on the liberal left in the FAP debate. The organization wanted a minimum income of $5,500 for a family of four (not the $1,600 income floor proposed in FAP). This would bring the income of a mother with three children to approximately 50 percent above the poverty line, though it would still leave them in the bottom quarter of family incomes.⁶³ The NWRO also objected to FAP’s work rules for welfare recipients. There was a logic behind the organization’s position. The NWRO’s base was heavily Northeastern and urban, and its active core was composed of African American women activists. Two-thirds of its members were from nine industrial states, with a particular concentration in New York City. Not coincidentally, current welfare recipients were concentrated in the Northeast and California. Nixon’s FAP offered little to this constituency. By one government estimate, the net income—in cash and in-kind benefits—of a welfare family of four living in public housing in New York City at the time was $5,665. The NWRO’s demand of $5,500 therefore reflected, in the view of organizers, nothing more than a principled refusal to take a step backward.⁶⁴ This was a logical extension of the welfarist entitlement principle, but it smacked of unreasonable demands to the administration and to conservatives.

Liberal members of Congress shared the view that any proposed reform should ensure gains for families currently on welfare. The administration pointed out repeatedly that FAP would help the nation’s poorest welfare recipients, particularly in the South, and that it would expand assistance to many new recipients. But the fact remained that it would only raise the benefits of approximately 10 percent of current recipients. This led Fred Harris (D-Okla.), a leading welfarist Democrat (and rare Southern liberal), to pointedly question HEW secretary Elliott Richardson when he testified before the House in 1970: “Apart from the ten percent of AFDC families now living in the seven states making the lowest welfare payments, will any existing welfare family be better off?” Richardson’s answer confirmed many liberals’ primary reason for opposing FAP: “No.”⁶⁵

FAP’s work requirement, moreover, did not play well among liberals. If conservatives read less into Nixon’s workfare rhetoric than the Nixon administration intended, then liberals read more into it—seeing a tough and punitive demand. Some used familiar arguments to challenge the premise itself, particularly for mothers of young children: these parents, they argued, were entitled to remain home to care for their children, if they so chose. Many of these advocates accepted the value of encouraging and creating opportunities for work—but like many New Deal welfarists a generation earlier, they believed work should be voluntary, and that any work obligations should not undermine the basic safety net. Testifying on behalf of three national religious bodies, John Cosgrove told Congress, “Mothers of school aged children should be given the choice of taking care of their children or accepting jobs or training.”⁶⁶

In addition to challenging FAP’s work requirement, a number of liberal lawmakers and advocates demanded a debate on the consequences of pushing AFDC recipients into the existing low-wage labor market and the terms under which they would be integrated into it. It would be unconscionable, Representative Ronald Dellums (D-Calif.) argued on the House floor, to “provide an incentive for people to get off welfare” and have them join the “40 percent of the labor force in America who … earn between $5,000 and $10,000 a year and … are the working poor.”⁶⁷ Incentives to work, they suggested, should come from better conditions and guarantees in the job market—not from punitive policies imposed by government. Abraham Ribicoff, former secretary of HEW and now a Democratic senator from Connecticut, pushed for “a strong program of public service employment” in jobs with good working conditions and “opportunities for career advancement.”⁶⁸

Liberal advocates concurred: “Persons should not be referred to jobs paying less than the Federal minimum wage,” Cosgrove told Congress, and FAP should “be accompanied in special legislation by a higher minimum wage with broad coverage; renewed efforts to end discrimination, a fully-funded low-income housing program; and recognition of the Federal Government as the employer of last resort to ensure that there are in fact jobs for which people would be trained and to which they could be referred.”⁶⁹ Absent safeguards regarding wages and conditions, the work requirement “would only serve to create a pool of cheap labor,” testified other liberal and labor leaders, undermining wages and working conditions for all workers.⁷⁰ AFL-CIO legislative director Andrew Biemiller also demanded that Congress protect welfare recipients facing work requirements by including provisions stating that the employment must be suitable and that it must pay either the prevailing or the minimum wage, whichever was higher.⁷¹

The heated racial politics of welfare further undercut Nixon’s effort to build support for FAP. The larger civil rights community wavered between quiet skepticism and open hostility toward the Nixon plan, swayed in part by the NWRO’s staunch opposition. Leaders of black social service organizations such as the Urban League—already suspicious of the conservative president—were reluctant to support his plan.⁷² The NAACP did not actively oppose it but would not actively support it, urging significant changes. The Leadership Conference on Civil Rights took a similar stance, underlining concerns about work requirements.⁷³ Black leaders sought to expose the implications of FAP’s work requirements for disproportionate numbers of poor minorities. The black press, along with civil and welfare rights leaders, condemned the expanding effort to force welfare recipients into the job market. A columnist for the Greater Milwaukee Star summarized the concern: “What recourse would there be for Blacks who say they are too sick to work? Who will be the judge? … Why can’t some mothers remain in the home to raise their own children? … What guarantee does the Black recipient have that he will not be forced to take all of the dirty and sloppy jobs available in the sweatshops of industry?”⁷⁴

On the question of work requirements, as on other issues, Nixon thus faced a gaping divide in perception and political positions. Both welfarists and work-farists had coherent conceptions of how to combine work and welfare, but their strategies served fundamentally different ends. Conservative workfarists believed welfare recipients should be required to work in order to reduce reliance on government aid; liberal welfarists argued that recipients had an entitlement to cash assistance and that work should be voluntary. And for different reasons, neither side was drawn toward policy compromise for the welfare poor by FAP’s proposals for the working poor. The Nixon administration’s attempts to mollify both sides on the work question thus proved unable to win over either. On the one hand, Moynihan repeatedly insisted to liberals that the FAP work requirements were not onerous and did not undermine the entitlement of assistance for poor children. He argued that it was all that was politically possible at the moment, and should be seen as a critical step forward, holding out the prospect of building a new kind of antipoverty politics across lines of race and employment status.⁷⁵ On the other hand, President Nixon, in a speech before a conference of Republican governors in April 1971, highlighted the other side of FAP. Displaying his conservative credentials, he said:

I advocate a system which will encourage people to take work. And that means whatever work is available. It does not mean the attitude expressed not so long ago at a hearing on welfare by a lady who got up and screamed: “Don’t talk to us about any of those menial jobs!” … Scrubbing floors or emptying bedpans is not enjoyable work, but a lot of people do it—and there is as much dignity in that as there is in any other work to be done in this country—including my own.

Within hours, the NWRO had fired off a terse press release: “You don’t promote family life by forcing women out of their homes to empty bedpans. When Richard Nixon is ready to give up his $200,000 salary to scrub floors and empty bedpans in the interest of his family, then we will take him seriously.”⁷⁶ Welfare recipients and other liberals emerged more firmly opposed to the president’s plan—and conservatives were no more convinced that his commitment to workfare was serious.

* * *

FAP’s fate was ultimately decided in a protracted legislative battle that extended over two congressional sessions, from 1969 through 1972. More than once, FAP passed the House, and there was a point at which the measure seemed within a hair’s breadth of winning congressional approval. The House Ways and Means Committee first held hearings on the proposal in the fall of 1969, and FAP won the vital (and in many respects surprising) support of Wilbur Mills. FAP was, in his view, a preferred alternative to the revenue-sharing proposals that were then under consideration, and the plan’s work provision assuaged many of his concerns.⁷⁷ Once Mills threw his weight behind the bill, he steered it to easy passage when the House took up the measure the following spring. More than 80 percent of Mills’s fellow Southern Democrats voted against FAP despite his support. Nonetheless, FAP passed the House floor by a vote of 243–155 on April 16, 1970, and prospects in the Senate looked good.

Two weeks later, however, the Senate Finance Committee brought the auspicious early progress to a halt. Chairman Russell Long (D-La.) led the opposition, joined by John Williams of Delaware, the ranking minority member. In a critical round of hearings in April 1970, committee leaders struck a conservative, workfarist position. Lawmakers charged that the plan contained particularly powerful disincentives to work, because it retained the automatic link created under AFDC between eligibility for cash assistance and access to the new and expanding in-kind programs such as food stamps and Medicaid. This automatic link meant, in effect, that when a family earned enough wage income to reach the “cutoff” notch, they immediately lost a significant source of benefits. The extra dollar of earnings that placed the family beyond the eligibility point cost far more than a lost dollar of cash assistance: it also meant the family would lose linked benefits such as health insurance and food aid. This created a logic to earn less than the cutoff point, the senators argued.⁷⁸

This “notch effect” plagued the existing AFDC system as well. But conservatives worried that FAP was worse, because it threatened not only to persuade current recipients to stay on welfare but also to draw current workers onto the rolls.⁷⁹ Like Nixon aide Martin Anderson, lawmakers worried that the combination of FAP’s cash aid and existing in-kind benefits might offer poor workers a better deal than they could find in the labor market. In response to the committee’s concerns about this and other issues, administration officials reworked the legislation. Once again, the revisions earned little additional conservative support and turned liberals already troubled by what they saw as low benefits and harsh work requirements more adamantly against FAP.⁸⁰

Throughout the summer and fall of 1970, the Nixon White House believed that it had the votes to win passage—if the bill could be moved out of the Finance Committee and onto the Senate floor. But Long and others strategically delayed the vote, and the bill stalled in committee.⁸¹ Lacking the support of even a majority of Republicans, FAP needed Democratic votes to pass. Yet in the partisan atmosphere of the fall of 1970, as the nation geared up for a congressional election, few Democrats were in the mood to hand the president a legislative victory. When Vice President Spiro Agnew hit the campaign trail with stump speeches condemning “radical liberals,” resentment surged among liberal Democrats—and FAP’s prospects plunged further. By the time the vote was taken in the Senate Finance Committee on November 20, four liberal Democrats joined the conservatives in defeating the bill, 6–10. These included not only Eugene McCarthy (D-Minn.) but Fred Harris (D-Okla.), who was swayed by NWRO arguments, and Albert Gore, Sr. (D-Tenn.), who was one of the Democrats bruised by Agnew’s attacks. A last-ditch effort to secure a victory on the floor of the Senate also failed, 21–49.⁸²

Undeterred, Nixon vowed to make FAP a “major legislative goal” for the new ninety-first Congress. A reworked FAP once again passed the House, and, once again, stalled in the Senate.⁸³ The revised bill, called H.R. 1, offered some new attractions for both conservatives and liberals. But conservative objections were sharpened by an increase in the basic benefit level, and removal of the stipulation that recipients could be forced to take any job paying standard local wages, no matter how low.⁸⁴ And liberals were outraged by the elimination of the guarantee that recipients would not receive less under FAP than under existing AFDC programs, and removal of the provision allowing recipients to refuse to take jobs that were not “suitable.” The NWRO, moreover, organized a more effective and far-reaching opposition to the bill among congressional liberals this time.⁸⁵

In the Senate, welfarists and workfarists crafted alternative legislative proposals. Liberals lined up behind Senator Ribicoff (D-Conn.), who came forward with a more generous family assistance bill in October 1971 that shored up and strengthened the welfare entitlement. Senator Long of the Senate Finance Committee unveiled his own plan, billed as a true and tougher “workfare” proposal. The Finance Committee—still dominated by a conservative majority—rejected both FAP and the Ribicoff proposal, and approved Long’s workfare plan.⁸⁶

The bill was slow to reach the floor of the Senate, and as months passed, Nixon lost interest in the FAP campaign. When the full Senate finally turned its attention to family assistance in the fall of 1972, the nation was in the throes of another election season, including a vitriolic presidential campaign pitting Nixon against Senator George McGovern (D-S. Dak.), the standard-bearer of the Democratic Party’s liberal wing. In the end, none of the three bills—H.R. 1, the Ribicoff plan, or the Long alternative—earned enough support to pass. The struggle over family assistance was over.⁸⁷

FAP’s Failure and Welfare’s Future

One of the most remarkable conclusions about the story of the Family Assistance Plan is how close it came to becoming law. A legislative proposal that would have remade federal social welfare policy by extending aid to all poor families—working or nonworking, single or two-parent—cleared the House twice with strong margins. According to the White House’s vote count, it may well have cleared the Senate had it been brought to a vote in the summer of 1970; even at the end, in the fall of 1972, FAP might have been enacted if the administration or the Democratic leadership had found the eight votes to reverse the 35–51 outcome on October 4.⁸⁸

Despite its defeat, the battle over the Nixon proposal changed the terms of the debate and defined new political coalitions in the politics of public assistance. FAP had put the working poor on the national political agenda: both sides in the FAP debate agreed that the problem demanded attention. The welfare poor did not fare so well. The sustained attack on AFDC in the campaign for FAP had left the program and its recipients more discredited than ever, and proposals (by liberal Democrats) to broaden welfarist protections, or to defend the principle of choice in the labor market (as Shultz had argued), were rejected.

The dominant explanation for FAP’s defeat was that the proposal was unable to gain adequate support from either liberals or conservatives. Strictly speaking, this is accurate, but it obscures two deeper factors essential to understanding subsequent welfare politics. First, by the early 1970s, the debate over work and welfare was not simply a debate between “liberals” and “conservatives.” It had evolved into a struggle between two competing conceptions of public assistance, each with its own logic for work and welfare. One was welfarism, rooted in the premise of entitlement to cash assistance to all eligible families; a noncoercive approach to work could be accommodated within this framework. The other approach was a modern form of workfare. The idea at its core—that the poor must be made to work—was not new, of course; nor was the policy of work requirements for welfare recipients. But the concept of elevating work promotion and enforcement above and outside of the commitment to the traditional safety net against poverty, and the idea of replacing the logic of entitlement with the logic of work incentives, was just beginning to take form as a full-blown policy alternative to welfarism at the federal level.

The battle over FAP exposed and deepened the political divide between welfarists and workfarists. It also pushed workfarists to more aggressively articulate and advocate for their alternative. The defeat of FAP struck an ideological blow for their position. Workfare would not gain institutional expression until the passage of three legislative initiatives, described in the next chapter. It would not become the dominant approach to public assistance until the passage of the 1996 welfare reform. But it was during the political struggles over FAP that many of the core ideas behind U.S. workfare began to coalesce, along with the beginnings of a political coalition to support it, from state and local officials to Southern Democratic and conservative Republican lawmakers.

A second critical factor in the battle over FAP was the role of moderates and conservatives. The conventional wisdom on the defeat of FAP emphasizes the actions of liberals: the widespread perception was that liberals “lost” FAP in the quest for an even more far-reaching reform. Liberal defections gained far more media and scholarly attention, particularly from those partial to the reform. These observers aimed their harshest criticism at liberal opponents for being too “pure” in their position, or for demanding even more than FAP proposed—and more than was politically feasible.⁸⁹

In fact, a close analysis of the votes undertaken by Lester Salamon showed that liberal support for FAP was extremely strong in the final vote tallies. The critical defection from FAP came from the absence of both conservative and moderate support in the Senate. In the face of a strong conservative challenge in the Senate led by Long and his Republican Finance Committee colleagues, there was a palpable lack of leadership to mobilize support for FAP among moderates. Senate Majority Leader Michael Mansfield (D-Mont.), for example, did not take a position. By the time FAP arrived on the Senate floor, moreover, even the president had distanced himself from it, giving moderates still greater reason to play it safe on the issue. So although more than 70 percent of moderates in the House voted in support of H.R. 1, for example, less than 40 percent did so in the Senate.⁹⁰

The role of moderates and conservatives in FAP’s defeat also supports a core claim of this chapter: by the time FAP came to a vote, there was little common ground in the debate over work and welfare. Policymakers and the public were divided between liberal welfarists and conservative workfarists. Each had moved toward a stauncher position through the late 1960s. The Nixon administration’s strategy of appealing to each side in the FAP debate of the early 1970s only widened the chasm between them. Moderates, meanwhile, were left with little reason to believe that anything would work, and no new middle ground to stand on.

In the end, conservative Senate Democrats played the most decisive role in the FAP battles. FAP had the momentum of a nationally broadcast presidential address and easy House passage when it reached Senate Democrats in the spring of 1970. They tied it down and picked it apart until a successor version of the legislation was finally defeated in the fall of 1972. Southern Democrats then picked up select pieces of the wreckage they had made and fashioned the beginnings of a fundamentally different approach to welfare and work, as the next chapter explains. Their role in creating a workfare alternative was no accident: they had a deep stake in the debate over who received cash assistance, and how. In the process of defending these interests, they would permanently transform the national system of public assistance.