“Our States and cities find themselves sinking in a welfare quagmire, as caseloads increase, as costs escalate, and as the welfare system stagnates enterprise and perpetuates dependency.” RN, Address to the Nation on Domestic Programs August 8, 1969
Despite groundbreaking welfare reform in 1996, welfare spending levels in the United States remains disproportionately in favor of those who do not seek employment. A recent study published by the Cato Institute found the current welfare system was 35 states provide more pay than a minimum-wage job, even after accounting for the Earned Income Tax Credit. Fifteen of these states pay an unemployment rate greater than $15 per hour. The study goes on to reveal the existence of 126 separate federally funded programs that target the nation’s low-income citizens.
The full Cato Institute Article can be found here.
Welfare reform was one of Richard Nixon’s highest priorities. He spent his first days in office pushing for “creative and innovative social legislation as soon as possible.” Ultimately, President Nixon wanted to dismantle the costly failures of President Johnson’s Great Society program, with welfare reform being the first leap forward.
“From the first days of my administration I wanted to get rid of the costly failures of the Great Society—and I wanted to do it immediately. I wanted the people who had elected me to see that I was going to follow through on my campaign promises. The worst offender was the welfare system, and welfare reform was my highest domestic priority.” RN, The Memoirs of Richard Nixon
During the first year of Nixon’s presidency the welfare system was a morass of sorts, perpetuated by inconsistency and inefficiency. Welfare payments varied across states, where equivalent families could collect anywhere from $39 to $263 a month. In most states, higher payments were made to families with absent fathers. RN highlights that from 1961 to 1967, 93 percent of families added to the welfare rolls were fatherless. In addition, loopholes in the bureaucracy allowed individuals who made decent wages eligible for benefits. Fraud was undoubtedly a concern given the bureaucratic beast that was the welfare system, as lines upon lines of regulation instigated confusion and unaccountability.
To counter these glaring problems, President Nixon devised a simple yet innovative solution:
“We decided to provide federal financial aid not just to the unemployed poor, but to the working poor. Payments would go not just to families with fatherless children but to families in which the fathers lived at home.” RN, The Memoirs of Richard Nixon
Called the Family Assistance Program (FAP), the Nixon Administration sought to provide a federal income floor by setting nationwide standards and establishing automated payment procedures. RN hoped to cut the bounds of red tape and, in time, eliminate the plethora of social services and social workers employed by the welfare system.
RN understood the intrinsic risk involved with pushing FAP forward. Under his administration’s proposal, the welfare system would incur an increased cost of $4 billion and would make 13 million more people eligible for federal assistance. Daniel Patrick Moynihan, Counselor to the President for Urban Affairs, who decried handing out rewards to those who deviated from traditional family norms, cautioned Nixon against rapid welfare reform. With the Great Society activist constituencies looming large, Moynihan believed a battle over welfare would significantly damage the Nixon Administration.
As it turned out, President Nixon saw FAP pass the House on April 16, 1970. However, between lack of coordinated endorsement from the liberals and opposition from Southern conservatives, the Senate Finance Committee killed the bill not once but twice, first in 1971 and again in 1972. With issues pertaining to Vietnam and the economy taking center stage, President Nixon dropped the push for FAP. It was a proposed system much ahead of its time and the pragmatic approach to issues President Nixon offered ought to be revisited by today’s leaders as the United States seeks a balance in its welfare system.