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The public policy blog of the American Enterprise Institute
AEI’s Robert Doar recently wrote a must-read piece on “10 welfare reform lessons.” Prior to joining AEI, he was commissioner of New York City’s Human Resources Administration. He oversaw a 25% reduction in the City’s welfare caseload and the transition to work of more than 500,000 public assistance applicants and recipients. Here, Doar answers a few questions about his article and experiences.
Your first lesson is “Always promote personal responsibility.” Why is “accepting responsibility for one’s own future the vital first step to moving up”?
Personal responsibility is vital because government’s powers are limited. Government can’t set the morning alarm clock, or make someone turn away from drugs, or put love in someone’s heart. In order to help someone in need, government needs the client to at least make an effort to help themselves. Most poor Americans are willing and able to do those things and they do them all the time – but the minute government begins to act as if those first steps of personal responsibility are not essential, then more clients look to government for those answers as well – and even the best-run government can’t deliver those.
I want to be clear here – personal responsibility is not the only thing that is needed. Government, community, and family all need to help people who make all the right decisions but still face hurdles. So communicating to people the importance of their decisions is not the only answer, but it is part of the answer.
“From 1995 until the end of 2013, New York City’s cash-welfare caseload shrunk from almost 1.1 million recipients to less than 347, 000,” you write. What’s the next step in reducing that number even more?
That’s tough. People do run into hard times and sometimes need to turn to government for help. In a city of more than 8.4 million people, there are going to be some people that need help getting back to work – hopefully for only a short time. I suppose if our entire culture changed and there was much less willingness to turn to government, and much more active and effective charitable institutions, then perhaps the number of people in need of cash welfare from the government could be reduced further. It would also help if a much greater percentage of children were born into married, two parent families. That would definitely bring the number down further.
You stress the importance of work. How can we get more people into jobs?
It starts with having a vibrant economy that offers jobs – not just in booming cities like New York but in struggling places like Detroit or parts of rural West Virginia or too many other parts of our nation. And that is why I believe that if you care about the poor, you need to support policies that lead to robust job creation – of all kinds of jobs — low skilled and high skilled. Here I am a little out of my expertise, but I have found generally that lower taxes and less regulation lead to more jobs. Big government infrastructure investments that build important things also create jobs and I like them when they are managed correctly. And I believe that certain essential government functions – sanitation, parks, police, the armed forces, and, yes, social services should be well staffed, especially on the front lines.
Out of the 10 lessons you provide, which two are the most important and why?
I would rather say four: welfare programs should require work; reward work; and promote two-parent, married families as the best way to raise children. And our government needs to do a better job at stimulating job creation and economic growth.
Your data showed more than 25% of cash-welfare and food-stamp recipients and more than 35% of Medicaid recipients were non-citizens or children of non-citizens. You mention the “sponsor recovery” process in your article, which is rarely enforced by agencies. Could you elaborate on what this process is and what might happen if it was properly implemented?
For many legal immigrants, a key ingredient of their application for citizenship is the identification of a citizen sponsor who must sign a legally binding affidavit of support which specifies that the sponsor will provide necessary support to maintain the non-citizen at an annual income of no less than 125% of federal poverty guideline. Under the law, whenever a sponsored noncitizen receives federal means-tested public benefits such as Medicaid, cash welfare or food stamp benefits, the administering agency that provided the benefit must request repayment of the benefit costs from the sponsor.
In 2009, the General Accounting Office wrote a report (GAO-09-375) that states very clearly that federal law requires states to pursue recovery from sponsors of non-citizens who receive assistance, but no state was actually complying with that requirement. The reason, GAO reported, was the absence of clear guidance from federal oversight agencies.
In New York City we decided to do what the law required – even if our state and federal oversight agencies weren’t interested. Not only did we feel obligated to pursue recovery, but we also felt the sponsors themselves who signed a form clearly stating that this was an expectation would want their government to enforce the requirement.
We even instituted a good faith exception so that if the sponsor could show that they themselves were too poor to comply, they could be excused. But many of the people we wrote to and asked to reimburse us for the assistance, complied without us having to do anything more than ask.
I believe this provision of federal law should be implemented across the country. First, it would show that the government means what it says when it enters into an agreement with a sponsor of a candidate for citizenship. And second it would make clear that government-provided welfare should not be looked to first when a candidate for citizenship is in need. But rather the person who has agreed to sponsor their citizenship should do what they said they would do – provide aid to the person they have proposed for citizenship.
I love that our country is a nation of immigrants. And I believe strongly that we should be more welcoming of newcomers to America. But people should not come to America to get on welfare and if we have a program which requires a sponsor in the citizenship process and that clearly states the responsibilities of the sponsor, we should enforce that requirement.
The way we reward work is with various forms of assistance that help make work pay – such as refundable tax credits, child care assistance, food stamp benefits, and public health insurance and I have supported those because, for a variety of reasons, wages at the low end of the wage scale are not sufficient by themselves to provide adequate support for families.
But, there is a delicate balancing act that needs to be attended to where the government provided rewards for work can sometimes replace work as people begin to feel that additional effort will lead to a large reduction in benefits. My view is that more earnings should lead to less assistance and a marginal tax rate of as high as 75% still leaves the worker better off for taking on the additional work. But I am afraid that the Affordable Care Act may significantly increase the extent to which more work could lead to being financially worse off as they lose subsidies for health care coverage. This is a problem that needs very serious attending too. Thankfully, we have institutions like AEI watching that very closely.
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