American Dream

by Jason DeParle

  242 $300-a-day habit: Opal Caples, CHIPS petition, March 13, 2000, 2.

  243 Maximus went on a grander binge: Unless otherwise noted, spending details come from LAB, “Administration of the Wisconsin Works Program by Maximus, Inc.,” and accompanying letter of transmittal, July 28, 2000. In yet another instance of governmental disarray, the audit citing program abuse was addressed to state senator Gary R. George, who later pleaded guilty to federal conspiracy charges after receiving kickbacks from OIC.Maximus agreed to repay: DWD news release, Oct. 13, 2000.

  244 “I have permission”: 1998 interview with George Leutermann.a $60,000 PR chief: Interview with Bridgette Ridgeway. One of the smiling kids in the Maximus ads was her son, for which he was paid a shoot fee. “The W-2 families didn’t want to participate,” she said.

  Leutermann covered the bases: The fuller list of Maximus donations includes African World Festival ($5,000); Bastille Days Festival ($5,000); Black Education Hope Fund ($3,875); Black Excellence Awards ($500); The Charlie Lagrew Fiddle and Jig Contest at Indian Summer Festivals ($2,500); Juneteenth Day Street Festival ($1,100); Mary Church Terrell Club ($3,350); Milwaukee Minority Chamber of Commerce ($1,000); Milwaukee Urban League ($2,750); NAACP ($1,000); Project Equality of Wisconsin ($1,700), Spirit of Truth Worship Center ($2,000); Friends of Women’s Studies ($500). (LAB audit, July 28, 2000.)

  245 golf balls: The golf balls, though not in the auditors’ reports, were cited by an anonymous Maximus employee interviewed by The New York Times and became a shorthand for the spending spree; Nina Bernstein, NYT, Feb. 22, 2000.“sad or dark tones”: Memo from Randle Jackson, Sykes Communications, May 19, 1998, in author’s files.

  Melba Moore: David Mastran, the Maximus CEO, defended the Moore concert as an example of the kind of unconventional activity privatization was meant to foster. “We were told, ‘You guys in the private sector can do things that we can never do—we want you to think outside the box,’ ” he said in an interview. “Well, maybe it was stupid . . . [but] I thought it was a great idea.” While legislative auditors found fault with it, he said, a state welfare official had given verbal approval ahead of time.

  “painted from Day One”: Interview with George Leutermann.

  payment to Thompson’s cronies: The consultants were Phil Prange, a longtime Thompson campaign fundraiser, and John Tries, a former cabinet member. While the consultants’ invoices were not directly charged to W-2, state law allowed Maximus to recoup $8,500 in corporate overhead said to relate to their work. Steven Schultze, MJS, Aug. 15 and Oct. 14, 2000.

  245 “on the lops”: Memo from Leutermann to Holly Payne, July 7, 1998. For advice on how to work the convention, Leutermann also hired a publicist named Julie Jensen, whose husband, Scott, happened to be the Republican Speaker of the Assembly until his indictment a few years later on political corruption charges. Memo from Julie Jensen to Leutermann, May 20, 1998.

  246 “My department bought”: Interview with Bridgette Ridgeway.OIC to Employment Solutions: LAB, “Administration of the Wisconsin Works Program by Employment Solutions Inc., and Other Selected Agencies,” Feb. 16, 2001.

  her own “vigilant efforts”: Stewart resigned under fire three weeks later, but her successor, Jennifer Reinert, continued to defend Maximus. While auditors concluded that Maximus had overcharged the state $500,000, they also said the company failed to claim $1.6 million to which it was entitled—its disarray had cost it $1.1 million. Citing that finding, Reinert said of Maximus: “They were as much victims of sloppy bookkeeping as we were.” Steve Schultze, MJS, Oct. 14, 2000.

  78 percent failed: Memo from George Leutermann to Holly Payne, Oct. 11, 1998.

  247 attendance at MaxAcademy: Interview with Keith Garland.Maximus reduced payments: LAB, “Wisconsin Works (W-2) Program: An Evaluation,” April 2001, 54-55. Statewide, only 4 percent of the caseload suffered full sanctions.

  move away from Jason Turner’s theory: The subtle philosophical shift even found doctrinal expression when the state scrapped a controversial policy known as “Light Touch.” Reflecting Turner’s zeal for deterrence, the policy told caseworkers to offer “only as much service as an eligible individual asks for or needs” rather than “every support available.” In practice, the vague dictum encouraged caseworkers to withhold information about Medicaid and food stamps—both federal entitlements—and the food stamp rolls fell faster in Wisconsin than in any other state. Under fire from two federal investigations, the Thompson Administration eased its deterrence efforts. In 2002, Thompson’s Republican successor, Scott McCallum, formally canceled “Light Touch,” and by 2004, under a Democratic governor, Jim Doyle, the original W-2 philosophy had shifted 180 degrees. While Turner called for “securing the front door,” the new program manual advised, “W-2 shall be participant friendly.”

  248 just type something in the system: In another sign of the distance between W-2 theory and practice, Turner was unaware that the policy manual allowed caseworkers to write employability plans and put them in the mail. “Is that what some of them were doing?” he said. “Making something up and putting them in the mail—that’s crazy. That’s not how it’s supposed to happen. Oh shit, that’s a surprise to me.”

  248 the award administrators: The Ford/Harvard evaluation shows how hard it is for outsiders to know what’s really happening inside a program, and by extension how little reliable information there may be about welfare programs nationwide. To assess W-2, the Innovations program sent a respected researcher, Julie Boatright Wilson, on a two-day visit to Wisconsin. Wilson, a former New York state official, is a lecturer at the Kennedy School, and she had written a detailed economic and demographic study of Milwaukee. That is, she arrived with an experienced eye. In a whirlwind visit, she interviewed seventy-five to one hundred people, including George Leutermann, Paula Lampley, and Becky Redmond, the MaxAcademy speaker featured on Nightline. “I was struck by the extent to which the front-line workers believe in the program,” she wrote in a confidential report. Citing W-2’s “institutional culture” as its greatest strength, she praised caseworkers for their “problem-solving” and their “can-do attitude” and the state for “monitoring outcomes rather than process.” Among her concerns was that the program might have too many people in community service jobs.

  249 “a pitch man”: Pete Millard, Milwaukee Business Journal, Feb. 14, 2000. Leutermann’s problems began at the beginning of 2000 when Mona Garland, the manager he had blamed for the early casework problems, quit and filed a racial discrimination complaint with the Equal Employment Opportunity Commission. David Mastran, the Maximus CEO, told me the company paid to settle her case and those of four other Milwaukee employees. Garland also strafed the company in the press, calling its presence in Milwaukee a “travesty.” Soon after, the New York City comptroller, Alan Hevesi, challenged the company’s $100 million deal, saying that Maximus had gained an unfair political advantage in the contracting process. With that, storms were under way in both cities, with Leutermann caught in both. He stopped running the W-2 program in the summer of 2000 and left the company in 2001.When I talked to Mastran, he offered what he called a “Yogi Berra” defense of the company’s problems. “We made mistakes,” he said, “but we didn’t do anything wrong.” That is, he conceded the problems in personnel (“In all our projects, we never had personnel problems like we had up there—it was out of control”) and accounting (“guilty of being inept”), but stressed that none of its transgressions had reflected a conscious attempt to defraud the state. “I don’t say we were looked at with a microscope,” he said. “We were looked at with a proctoscope. And no one indicted us.” In part, he blamed the problems on growing pains (“It’s night and day now”); in part, on the lack of state oversight; and in part on Leutermann (“His head got too big”). He also argued that for all its problems Maximus performed as well as or better than the competition and sent along some data to make his case. The data covered later years, but my subjective sense is that he’s probably right when he
says, “relatively speaking, we were a top performer” from the start; on the surface the only place that elicited more confidence was YW Works. The numbers he sent showed the agencies with fairly similar outcomes, which is consistent with my sense that the operational differences between them were minor. To the extent W-2 “worked,” it seemed to do so more as a general welfare deterrent than as a service delivery machine.

  249 Kenny resisted Opal’s claims: The following year, Kenny failed to appear at a paternity hearing, and the court issued a default judgment, naming him the father.

  15. CASEWORKER XMI28W: MILWAUKEE, 1998-2000253 clients liked Michael: Interviews with clients Shelley Block, Opal Caples, Juanita Dotts, Dinah Doty, Kim Hansen, Angiwetta Hills, Melina Scott, and Angela Wilkerson.

  254 “More of the success”: Jason Turner and others, “Wisconsin Works: Draft, April 1995,” proposal to Secretary Carol Skornicka, 30-31.Pathways: Suzanne L. Wagner, Charles Chang, and Toby Herr, “An Unanticipated Story of Caseload Declines: The First Two Years of the Pathways Case Management System in Oswego County, New York” (Chicago: Project Match, July 2002). Despite the shortage of personalized attention, people leaving the rolls often say they were treated fairly—in one Wisconsin survey, for instance, the ratio was 67 percent yes versus 32 percent no. DWD, “Survey of Those Leaving AFDC or W-2: January to March 1998: A Preliminary Report,” Jan. 13, 1999, 11.

  one in five changed regions: Caseload analysis from DWD, supplied at author’s request.

  255 Wisconsin bureaucracy celebrated: One prominent W-2 supporter, the political scientist Lawrence M. Mead, called the Wisconsin administrators “quite literally world statesmen and stateswomen” who exemplify “their state’s intense faith in the public enterprise.” Lawrence M. Mead, Government Matters: Welfare Reform in Wisconsin (Princeton, NJ: Princeton University Press, 2004), xi.

  260 refer to a more specialized: It turned out that by moving to a shelter, Michael’s client left the Maximus region, so her case was transferred to another agency. Checking CARES a few months later, Michael saw nothing that indicated her new caseworker knew she was using drugs.“always gonna be in the gutter”: Interview with Jai Marin.

  16. BOYFRIENDS: MILWAUKEE, SPRING 1999264 three-quarters worked to thirty-five hours a week: Gregory Acs and Pamela Loprest, with Tracy Roberts, “Final Synthesis Report of Findings from ASPE Leavers’ Grants” (Washington, DC: The Urban Institute, Nov. 27, 2001), Executive Summary; hereafter “ASPE Leavers Study.”employment rates of never-married mothers: They grew from 44 percent in 1992 to 66 percent a decade later. Gary Burtless, “The Labor Force Status of Mothers Who Are Most Likely to Receive Welfare: Changes Following Reform,” Brookings Institution Web site, March 30, 2004; for employment trends, see also Rebecca M. Blank and Lucie Schmidt, “Work, Wages, and Welfare,” in Blank and Haskins, eds., The New World of Work, 70-102.

  265 “Work organizes life”: Clinton at Church of God in Christ in Memphis, Nov. 13, 1993, PPP-1993, vol. 2, 1985.Michelle Crawford: DeParle, NYT, April 20, 1999.

  “Ending of the Black Underclass”: Mickey Kaus, “A Response to My Critics! The case for optimism about the underclass,” www.kausfiles.com (accessed Nov. 8, 1999).

  266 Samuel Brown: Carl Baehr, Milwaukee Streets: The Stories Behind Their Names (Milwaukee: Cream City Press, 1995), 33.a gang of boys: The killing was the subject of dozens of articles in Milwaukee and beyond, starting with Leah Thorsen, MJS, Oct. 1, 2002.

  267 incipient investigation fizzled: Opal’s case file paints a less-than-vigilant picture of the child welfare bureaucracy. It notes that “Ms. Caples admitted to the hospital staff that she had a $300.00 a day cocaine habit and . . . that she had been bingeing two to three days at a time while staying at drug houses.” A social worker met her at Angie’s on Jan. 8, 1999, “but as of January 20, 1999, Ms. Caples had moved” and attempts “to locate Ms. Caples in February of 1999 were unsuccessful.” CHIPS petition, March 13, 2000, 2.

  270 only half of young black men had jobs: Harry J. Holzer and Paul Offner, “Trends in Employment Outcomes of Young Black Men, 1979- 2000” (Institute for Research on Poverty: Discussion Paper 1247-02, Feb. 2002), table 1. The number fell from 59 percent in 1989 to 50 percent in 1999 before bouncing back to 54 percent in 2000, still far below its historical level at the peak of a business cycle.black men in Milwaukee: David J. Pate Jr. “An Ethnographic Inquiry into the Life Experiences of African American Fathers with Children on W-2,” in Daniel R. Meyer and Maria Cancian, W-2 Child Support Demonstration Evaluation: Report on Nonexperimental Analyses (Madison: Institute for Research on Poverty, March 2002), 2:29-118.

  write their own obituaries: DeParle, NYT, Sept. 11, 1999.

  271 If working mothers: Interviews with Marcus Robertson, Mary Williams.Someone Hug Me: Darrell’s first report cards showed a dismayingly familiar picture of uncultivated potential. “Darrell is such a joy to have in class. He works hard and does very well with others,” wrote one teacher. But she pleaded: “Mom & Dad please help Darrell get to school.” Another teacher warned: “Darell [sic] is having difficuties [sic] with all subject areas.”

  17. MONEY: MILWAUKEE, SUMMER 1999282 Had she stayed on welfare: If Angie had gone on W-2 in 1999, she would have gotten $673 a month in cash and $417 in food stamps, or $13,080 a year. Expressed in 2003 dollars, the measure I use throughout this chapter unless otherwise noted, that’s $14,400.

  283 how Angie’s finances worked: “On welfare” refers to Angie’s last four-full years on AFDC, 1992 through 1995. “Off welfare” covers her first three years after leaving, 1997 through 1999. She left midway through 1996, making it a unique year that I placed in neither category. Earnings records are from tax returns and the state wage files kept to track eligibility for unemployment insurance; cash and food stamp figures come from state records. Angie’s 1992 and 1993 earnings are estimates based on partial data; all other figures are actual. The numbers have been adjusted for inflation and expressed in constant 2003 dollars.One thing to notice is that even when Angie was on AFDC, her welfare check accounted for only 38 percent of her income. Another 29 percent came from earnings (after taxes); 22 percent from food stamps; and 11 percent from tax credits. If that suggests she wasn’t as “dependent” on AFDC as she seemed, it also explains why taking it away may do less, for good or ill, than either side assumed. A fuller picture of Angie’s finances would have to quantify the contributions of boyfriends and relatives, which other research suggests typically add another 15 to 20 percent, further diminishing the role of AFDC. (See Kathryn Edin and Laura Lein, Making Ends Meet [New York: Russell Sage Foundation, 1997], 44.) Another thing to keep in mind is that Angie’s monthly income was less stable than these multiyear averages suggest. Both of her peak-income years—$26,000 at the post office in 1994 and $27,400 at the nursing pool in 1997—were followed by years with steep losses. Her income fell nearly a third in 1995, when she got discouraged and quit, and by 20 percent in 1998, after her car got stolen. That is, the anxiety of living on sums like these is even greater than the numbers suggest. For more financial data see www.jasondeparle.com.

  Jewell’s earnings rose sixfold: Her box score looked like this:

  ON WELFARE OFF WELFARE

  Earnings $1,900 $12,700

  Tax credits 700 4,000

  Payroll taxes (-100) (-1,000)

  AFDC 7,800 0

  Food stamps 4,400 900

  TOTAL $14,700 $16,600

  Jewell’s 1994 earnings and tax credits are estimates; all other numbers are actual. Amounts expressed in 2003 dollars.

  283 monthly earnings reports: The state stopped requiring the reports in August 1997, a month after Jewell lost her stamps.

  284 earnings may grow with time: For a later look at the finances of Angie and Jewell, see pages 403 and 404.Angie earned at least 50 percent more: In her first three years off welfare, Angie’s earnings averaged more than $16,100 a year. By contrast, a typical woman leaving the Wisconsin rolls earned between about $9,000 and $10,400, as disc
ussed on page 286. Angie’s first two jobs, at Clement Manor and Mercy Rehab, paid hourly wages of $8.33 and $7.46 (in 2003 dollars), placing her squarely in the middle of former recipients nationwide; her annual earnings were higher than average only because she worked more steadily.

  case for encouragement: From 1994 to 2001, annual earnings among the poorest half of single mothers rose from $4,500 to $8,800; earnings among the poorest quarter rose from $1,500 to $3,900. Total income grew more modestly, rising 32 percent to $17,000 for the poorest half and rising 16 percent to $10,000 among the poorest quarter. Over the same years, hourly wages for women at the 20th percentile rose by 14 percent, to $7.79. (Author’s communication with Jared Bernstein of the Economic Policy Institute.)

  As for former recipients, Acs and Loprest found them earning about $8.25 an hour; Elise Richer and two colleagues produced an estimate of $8.20; Ron Haskins came up with about $7.50 (all in 2003 dollars). Converting a midpoint estimate of $7.85 back into late-nineties dollars suggests the average leaver earned about 35 percent above the minimum wage. (Acs and Loprest, “ASPE Leavers Study,” table 3; Elise Richer, Steve Savner, and Mark Greenberg, “Frequently Asked Questions About Working Welfare Leavers,” CLASP, Nov. 2001, 13; Ron Haskins, “Effects of Welfare Reform on Family Income and Poverty,” in Blank and Haskins, The New World of Welfare, 109.)

  285 poverty rates plunged: Among children, the poverty rate fell from 21.8 percent in 1994 to 16.3 percent in 2001; among blacks, from 30.6 percent to 22.5 percent; among Hispanics, 30.7 percent to 21.4 percent; and among people living in single-mother homes, from 38.7 percent to 28.6 percent. In 2003, the poverty threshold was $12,682 for a mother with one child; $14,824 for a mother of two; $18,725 for a mother of three; and $21,623 for a mother of four.