American Dream

by Jason DeParle

  Like many people in the welfare world, I made a pilgrimage to Riverside, where the county director, Lawrence Townsend, mixed indelicate asides (“every time I see a bag lady on the street, I wonder, ‘was that an AFDC mother who hit the menopause wall? ’ ”) with odes to work’s spiritual rewards. “Work is education in itself,” he said, citing his own experiences unloading boxcars and shoveling manure. “It is inherently good. It is developmental. It brings hope.” The notion that work is good for the soul runs deep in American life, and the talk of ending welfare revived it. Clinton, though no closer to a bill, was soon sounding similar themes. Putting People First, his campaign book, had mostly framed the needs of the poor in economic terms, but at a black Memphis church in November 1993, he recast the issue as one of a spiritual uplift. “Work organizes life,” he said. “It gives structure and discipline to life. . . . It gives a role model to children.” Elsewhere he told the story of an Arkansas woman named Lillie Harden, whom he had asked what she liked best about leaving the welfare rolls. “She looked me straight in the eye and said, ‘When my boy goes to school and they say, “What does your mama do for a living?” he can give an answer.’ ” That, Clinton was saying, was success.

  Years later, I had the chance to ask Clinton what got him thinking that way. “My life,” he began, with a force that seemed more than perfunctory:

  Because I used to get up in the morning and watch my mother get ready to go to work. And we had a lot of trouble in my home when I was a kid, and she still got up every day, no matter what the hell was going on, and she got herself ready and went to work. . . . It kept food on the table, but it gave us a sense of pride and meaning and direction. . . . I - COULDN’T imagine what life would be like for a child to grow up in a home where the child never saw anybody go to work. . . . I know that it’s sometimes hazardous to extrapolate your own experiences . . . but on this I don’t think it is.

  At some level, of course, Clinton was right: even drudge work can bring spiritual rewards. And a parent’s work can set an example for kids (which is really a separate topic). The issue here involves the larger context: how much will low-wage work alone change the trajectory of underclass life? What if the mothers’ jobs leave them poor? What if they’re still stuck in the ghetto? What if their kids still lack fathers? For a gifted young boy in Hot Springs, a working mother was a source of inspiration. For Angie’s kids (and for Angie as a kid), it was often a source of more unsupervised hours in a dangerous neighborhood. But “work first” was rising beyond program design to the realm of secular religion.

  In December 1993, a month after his powerful Memphis speech, Clinton’s task force sent him a confidential “draft discussion paper” that managed to be both complex and vague. It outlined nine “key features” with “five fundamental steps” plus an added “three features” to make sure the five steps are “only the beginning.” Everyone got a line in. “We must guard against unrealistic expectations” (Softs). “But we must not be deterred” (Hards). The document said nothing of how many people would be involved, what the penalties would be, or how much the program would cost. “The whole question of how exactly the jobs will work is still very much under discussion,” Ellwood said in an interview that day. That wasn’t really his fault. No one was empowered to make a decision, and no one did. “We would like a signal from you,” the cover memo asked of Clinton. The group never got a response.

  “You let loose a lot of forces when you say ‘End welfare as we know it,’ ” Moynihan complained one day. What Clinton let loose was a bidding war, with conservatives pushing ever-broader definitions of “welfare” and more literal plans to “end it.” Clinton’s stance on welfare had maddened the Republicans from the start, largely because he had stolen their issue but also because they judged him insincere. His incendiary verb of choice gave them the weapon they needed. Tommy Thompson made the first showy move, four months into Clinton’s term. Looking to upstage the president, he proposed what sounded like a similar plan but was really the opposite. Clinton had called for two years of education and training followed by a “meaningful community service job.” Thompson proposed two years followed by . . . nothing. Not “two years and work,” but two years and have a nice life. The cold-turkey time limits were restricted to two counties, and Thompson needed federal permission to begin, which was part of the plan’s appeal: it put Clinton on the spot. Clinton could accede and set a dangerous precedent or risk looking at odds with his own promises. After a protracted bureaucratic struggle, Clinton himself gave the green light.

  The next move belonged to the House Republicans, who served up their own cold-turkey plan. Again, their idea sounded like Clinton’s: two years followed by work. But once recipients spent three years in the work program, states could totally cut them off, not just in two counties but nationwide. A year earlier, some of the same GOP legislators had released a paper opposing a national time limit plan as an “untested” idea whose “feasibility . . . approaches zero.” So what changed? “Clinton promised ‘to end welfare as we know it,’” explained Representative Newt Gingrich, damp with mock sincerity. “Our bill gives him an opportunity to get the reform process moving.” While Ellwood had come back from the field trips saluting “the great courage” of welfare families, the GOP press conference was thick with talk of drug addicts and cheats. As Representative Rick Santorum put it, “You can cut them off from AFDC permanently—end of story.”

  Then suddenly an attack emerged from a direction not found on most maps: Gingrich’s right. Having rallied around a plan that could cut off more than half the nation’s welfare recipients, the Republicans soon found it called . . . soft. “A cream puff.” “Clinton Lite!” The unlikely force behind this assault was a dour analyst, with an undertaker’s demeanor, who was about to push the debate into uncharted territory. In the welfare world, Robert Rector might be thought of as the anti-Ellwood, his polar opposite in ideology, credentials, and temperament. Ellwood came from a family of liberal intellectuals and - hadn’t left Harvard for twenty-one years. Rector was raised in Lynchburg, Virginia, the birthplace of the Moral Majority, and his résumé included a stint as a worker in a G.E. factory. Ellwood was famously fastidious with data. Rector once published a study saying tens of thousands of poor people had Jacuzzis and swimming pools, after extrapolating from a government survey that had found four. To the poverty establishment, Rector was a joke. But over the next two years, he would exercise far more influence than anyone in the more credentialed world. And remarkably, he proved to be the person who came closest to forecasting the law’s signal result: the stunning caseload declines. Querulous, rigid, provincial, outrageous, Rector was weirdly prescient.

  From his desk at the Heritage Foundation, Rector had something the academics didn’t: troops. His standing with the Christian Coalition and other conservative grassroots groups made him the only welfare lobbyist who could light up the Capitol switchboard. The Gingrich plan spent too much money, he said, and didn’t address the “real” welfare problem, the rise in nonmarital births. Finding two first-term Republicans to sponsor a bill, Rector produced something they called “the Real Welfare Reform Act.” It would end all cash, food, and housing aid to any woman under age twenty-six who had a child outside of marriage. As one of the cosponsors, Representative James Talent of Missouri, put it, “The only way to ‘end welfare as we know it’ is to end welfare as we know it.”

  The idea of simply abolishing welfare had surfaced a decade earlier in Charles Murray’s Losing Ground. But then no mainstream politician would touch it. Now two marquee names signed on, the former cabinet secretaries Jack Kemp and William Bennett, urging other conservatives to seize “an opportunity in the realm of politics” and “discredit the moderate pretensions of the president.” Since conservatives had spent decades calling for workfare, there was a moving-the-goalposts quality to their claim that work wasn’t the “real” issue. Gingrich, no stranger to cynical tactics, complained of “this stampede” to the right, but D
emocrats stampeded, too. The Republicans allowed states to drop people from the work rolls after three years. A group of conservative House Democrats wrote a bill that required it. Welfare was dead, said Nathan Deal of Georgia, and “the stench from its decaying carcass has filled the nostrils of every American.”

  To Ellwood’s dismay, support for cold-turkey time limits was growing inside the task force, too. Clinton the campaigner had never contemplated any such thing. His template was two years of aid, followed by a community service job—not a limit on the job itself. The distinction may sound legalistic but philosophically it’s profound: once you establish that even willing workers can be dropped from the rolls, you’ve stripped much of the safety from the safety net. But substantively, Reed argued that without a fixed time limit, people wouldn’t have enough motivation to leave the work program for real jobs. And politically, he argued that “ending welfare” required a fixed end, not what he called a guaranteed job for life. About this time, Ellwood shared a draft of the plan with a dean of the poverty establishment, Henry Aaron of the Brookings Institution, who was so alarmed by the swing of events that he breached bureaucratic decorum. “I am impelled to write you,” Aaron began in a letter to Ellwood, because conditions

  threaten disastrously bad welfare legislation with which you will forever be ashamed to have been associated. . . . A feral mood is loose on the Hill. . . . A Republican-conservative Democratic coalition is likely to send back legislation whose ferocity will confront the administration with a ghastly dilemma. Veto the bill and be labeled as defenders of the welfare status quo or sign a bill that betrays what you . . . stand for.

  Aaron closed with an apology for being “presumptuous,” but presumed a bit further. He suggested that Ellwood resign.

  Rome wasn’t quite burning, but Clinton was still fiddling around; after a full year in office, he was no closer to producing a plan. At the first cabinet meeting of 1994, he aired the political problem. Congressional leaders didn’t want a welfare bill during the troubled heath care debate, but the longer he waited, the more he looked insincere. The group talked of how to seem committed while continuing the stall. I got an account of the discussion, and the Times ran the story under a provocative headline: “White House Seeks a Sleight-of-Hand Strategy on Welfare Reform.” Moynihan erupted. All along he had complained that Clinton was merely playing a game—pledging to end welfare while “appointing people who have no intention of doing it.” After reading of the latest delay, Moynihan walked into the New York Post and delivered the season’s best line: Clinton, he told the tabloid, was using welfare as “boob bait for the Bubbas.” As chairman of the Senate Finance Committee, Moynihan also warned that he “might just hold health care hostage” until the president sent up a welfare bill. Even by the erratic standards of Daniel Patrick Moynihan, this was a curious display of pique. After all, he opposed time limits, the idea behind the bill he was demanding. “Sometimes I do talk too much,” Moynihan told me a few days later. But Clinton was stuck. In his 1994 State of the Union address, he agreed to produce a bill “this spring.”

  Friends’ warnings notwithstanding, Ellwood felt a bloom of optimism. Though he had come into office alarmed at the talk of ending welfare, the field trips had quickened his criticisms of the status quo. Politically, he saw the outlines of a deal: Republicans would spend more to create the jobs, Democrats would demand that recipients take them, and voters would rally around a system that finally reflected their values—Minnesota style. It was a selective reading of the evidence, to be sure, but the Republicans were talking of creating workfare jobs. “I had a sense we were getting incredibly close,” he said. Then he set off to find the money. As a professor, Ellwood hadn’t had to confront such problems. “Many are willing to spend over $1 trillion to protect us from Soviet missiles,” he had written. “Can we not spend a little for social policies?” As a candidate, Clinton hadn’t fully confronted them either. “If you don’t put money in there . . . you cannot crack the welfare problem,” he had said. Gingrich had tackled the financing and addressed it in two ways. He would raise $20 billion by barring legal immigrants from most government programs, a non-starter for most Democrats. Even then, he had exempted about half the caseload, which sparked the wrath of the Right. Congress had just emptied its pockets twice, for the health-care and deficit-reduction bills, and none of the Democratic leaders wanted to dig in again, especially for a welfare plan. “There are things so much closer to members’ hearts,” warned Dan Rostenkowski, the Ways and Means chairman.

  This was a bind, but a bind of Clinton’s own making, obvious from the start. “There simply is no money. None!” Moynihan had warned Ellwood at their first meeting. Budget rules required that new spending come with offsetting cuts. The biggest programs—Social Security, Medicare, and Medicaid—were politically sacrosanct. That left Ellwood to forage among programs like food stamps and subsidized housing that mostly serve the poor. Substantively, this risked hurting the people he was trying to help. Politically, it gave the plan’s liberal opponents something to attack: work rules were popular but budget cuts were not. In January 1994, Ellwood gave the White House a set of options, one of which would have raised billions by counting food stamps, welfare, and housing assistance as taxable income. After someone leaked it to me for a story in the Times, even Jay Leno got into the act: “If Clinton is going to raise taxes on the poor and cut benefits, what do we need the Republicans for?”

  Politicians tend to be allergic to bad news, and Clinton was more allergic than most. It was March of his second year in office when he finally confronted the budget dilemma, summoning the three task force leaders to a meeting of the cabinet. The group offered him three options, costing from $10 billion to $18 billion over five years. “What’s the least amount of money we could get away with?” Clinton asked. While the previous year he had urged them to be “bold,” he now warned them about the “Tim Valentine problem.” The North Carolina congressman, caught in an increasingly conservative district, had told the president he couldn’t understand why ending welfare would cost money. “You have to meet the burdens of the Tim Valentines,” he said. Ellwood reminded him that the welfare plan had never been designed to save money. But others in the room noticed Clinton getting that glassy-eyed look he gets when his mind has moved on.

  The luxury version was out, but even paying for a Pinto was tough. There’s a dissertation waiting to be written about the attempt to finance the Clinton plan, a process that pitted welfare recipients against half the gold-plated lobbies in town. Since proposed cuts in antipoverty programs had drawn flack, someone suggested “ending welfare for the wealthy” by capping the mortgage-interest deduction on multi-million-dollar homes. The Treasury secretary, Lloyd Bentsen, wasn’t amused. How about financing virtue with vice, a new tax on gambling receipts? Standing on the White House lawn, Senator Harry Reid (Democrat of, hmmm, Nevada), pledged, “I will become the most negative, the most irresponsible, the most obnoxious person of anyone in the Senate.” Cap the tax-free interest on annuities? The American Council of Life Insurance buried the White House in mail-grams. The embarrassing spectacle, which dragged on for months, - didn’t just delay the plan. It sealed its doom. It antagonized Congress. It created a blizzard of negative press. Above all, it forced Clinton into a glacial phase-in schedule. To keep down costs, he agreed to exclude from the whole program anyone then over twenty-two—about 85 percent of the caseload. Even by the end of the decade, only 8 percent of the women on welfare would be working for their checks.

  At the time, the moral of the story seemed clear: presidents always forget how much welfare reform costs. So said many commentators (including me). It was only after witnessing what was yet to unfold that the deeper lesson appeared. Tough welfare-to-work programs - didn’t cost much, after all. They may even cost less, since they cut the rolls. In analyzing the Clinton plan, the Congressional Budget Office said it wouldn’t cut caseloads at all, merely slow their rate of growth by 1.3 percentage points.
In real life, the rolls fell more than 60 percent, and in Wisconsin the declines were about 90 percent. That’s partly because the economy surged and because Congress passed a tougher law. But it’s also because women like Angie responded in an unexpected way, shunning the new hassle-filled system to fend for themselves.

  No one in Washington really saw it coming, but one person had a glimmer: Robert Rector, the anti-Ellwood, the uncredentialed provincial. Rector argued that the experiments predicting tiny caseload declines were flawed precisely because they were experimental. Small programs in which a few people did something modest couldn’t predict large programs in which everyone did something substantial. Work requirements would have to reach a critical mass before people took them seriously, but then Rector predicted two things would happen. Fewer people would apply for aid. And those who did would leave more quickly. Rector made his case as early as 1993, in something called the Journal of Labor Research, where he cited three obscure studies in Washington State, Ohio, and Utah. The Utah work program had cut the caseload an astonishing 90 percent, but it only involved two-parent families, a tiny and less disadvantaged segment of the rolls. (Plus Utah is, well, Utah.) Even Rector had no idea how vast the caseload reductions would be. “I was off by a factor of three or four,” he said.