Welfare is a program Americans love to hate. There is widespread agreement that our current welfare system discourages work and paternal responsibility and fails to help people develop the skills and contacts that could lead them to stable employment.
An options paper being circulated by the President's Working Group on Welfare Reform proposes a number of specific policy reforms that will encourage individuals to get jobs.It proposes expanding child-care subsidies, which with higher federal payments from the Earned Income Tax Credit wage subsidies to low-income workers with children, and universal health-care coverage, is designed to ensure that those who work are better off than those who don't.
Second, it expands federal funding for education and training programs for welfare recipients.
So what's the problem?
Candidate Clinton's pledge that after two years, "everyone who can work, should work."
The working group proposes to allow states to choose a variety of options to put welfare recipients to work: They could subsidize private employers, create new public sector jobs and/or create unpaid community work experience programs.
There are problems with each of these approaches.
States already have the option of using welfare funds to subsidize employment in the private sector, but these programs have not proved popular with private employers.
With a national unemployment rate of over 6 percent, and central city unemployment rates three and four times that high, it is hard to envision a scenario in which adult recipients who reach the two-year limit will be absorbed in the private labor market.
There is evidence that large-scale workfare programs are damaging to other groups of low-skilled workers. When local governments are allowed to use welfare recipients as low-wage workers, a financial incentive is created to "downgrade" paid staff positions.
Why pay a $15,000 a year job (and benefits) if you can use a welfare recipient for an extra $300 in supervisor costs?
Since blacks are overrepresented in the lower tiers of the labor market in general and in the public sector in particular, the worker that a welfare recipient would displace is likely to be black, as is the welfare recipient replacing her.
The Working Group is aware of and wants to limit this kind of displacement. It would limit the number of workfare slots states could create and confine their use to the nonprofit sector.
But as the welfare football is passed from the policy wonks to the political advisers, the momentum for a more radical reform is likely to grow. Republicans introduced a bill that requires that welfare recipients who hit the two-year mark work 35 hours a week in return for their grant (even if this means they are working for less than minimum wage).
The estimated $12 billion required to administer such a work program would be funded by making legal immigrants ineligible for government assistance.
The president's own working group has come up with a thoughtful set of policy options to address a seriously flawed system. Let us hope Clinton uses the recommendations to fashion a reform that will make our social policies work for all Americans - including those who elected him.