US Overhauls Welfare System

US Overhauls Welfare System

Andrea April Rush was carrying her three-year-old daughter, Amanda, in one arm and her year-old son, Tomlee, in the other as she plodded through a shopping centre in Columbia, Md. At the age of 18, she is not married, has never had a job and relies on welfare payments of about $140 a week to feed, clothe and house herself and her children. Neatly turned out in a bright red blouse and black cotton shorts, she contemplated the radical changes to the U.S. welfare system that Congress approved last week. The reforms amount to the most sweeping overhaul of the American social safety net since Franklin Roosevelt's New Deal policies 60 years ago, and will put drastic limits on how much money is given to the 12.8 million people on welfare in the United States. Rush confessed that she could not follow the intricacies of the debate, but the bottom line was clear. "If I don't get my cheque, I won't have no place to live and no food to eat," she said flatly. "I guess me and the kids, we'll just die. I guess we'll just lie down and die."

The bill passed both the House of Representatives and the Senate after President Bill Clinton defied many of his advisers and announced that he would sign it. It was Clinton's biggest decision on domestic policy - accepting a Republican-sponsored plan in order to fulfil his 1992 campaign promise to "end welfare as we know it." Even he acknowledged that his advisers were divided, with traditional liberals disappointed that a Democratic president would back a plan that will cut federal welfare spending by $75 billion over the next six years. "This bill is not welfare reform, but welfare repeal," said Senator Daniel Patrick Moynihan, a Democrat from New York. "It is the first step in dismantling the social contract that has been in place in the United States since at least the 1930s."

But in an election year with the public mood firmly in favor of cuts to welfare, Clinton made a cold political calculation: positioning himself as a centrist appealing to swing voters who might be tempted by the Republicans' anti-welfare message. By agreeing to sign the bill, he deprived his Republican challenger, Bob Dole, of a stick to beat him with. Dole was left lamely arguing that Clinton had finally agreed to support his ideas on welfare reform. Clinton had more good political news last week: two of his former associates in Arkansas were acquitted of fraud and conspiracy in a trial related to the so-called Whitewater scandal, taking the sting out of an issue that had threatened to grow.

For Canadians, the U.S. debate on overhauling welfare has a familiar ring. In both countries, critics of the system have largely won the broad political argument that giving money to needy people with no conditions attached only encourages long-term dependency on welfare and undermines the family. And in one significant respect, the two countries are going in the same direction. In April, Ottawa gave up almost all control over the $26 billion it provides to the provinces for welfare, insisting only that the provinces not impose residency requirements for recipients. Similarly, the U.S. welfare bill will dramatically reduce Washington's role in social assistance once it takes effect next June. The federal Aid to Families with Dependent Children program will be scrapped. Instead, Washington will give individual states grants and let them design their own welfare programs under strict new guidelines.

But the American changes go much further than those adopted even by the radical Conservative governments of Ontario and Alberta. The bill that Clinton promised to sign will set a lifetime limit of five years of welfare for each family (Canada has no such limits). It will end welfare for legal immigrants to the United States (immigrants to Canada are fully eligible for benefits). And it will require an able-bodied adult to work after two years or lose benefits (in Canada, four provinces are bringing in more limited forms of so-called workfare).

Crucially, the U.S. bill will deny medical insurance coverage, called Medicaid, to adults who lose welfare by refusing to work. Because Canada's medicare system is not tied to social assistance programs, no one on welfare can be penalized by losing health care. And a person who leaves the welfare system to take a low-paying job in the United States may lose medical insurance, while a Canadian who is forced off welfare does not face that risk. "You're still a lot better off in the Canadian system," said economist John Richards, a professor at Simon Fraser University in Burnaby, B.C., and an analyst with the C. D. Howe Institute. "And the biggest difference is that health care is guaranteed."

The U.S. plan includes other major shifts. Child-care services will be provided for single mothers, and housing benefits will be cut to encourage them to live with their own parents. Each year, a higher percentage of each state's welfare recipients must be working at least 30 hours per week, reaching 50 per cent by 2002. States that fail to meet those goals will lose some of their federal funds. New methods will be instituted to find so-called deadbeat dads and make them pay child support. And food stamps - received by 25 million Americans - are to be cut by $4 billion over the next six years. For Andrea Rush, it all means one thing: "A lot of folks in this country are going to be hurtin' bad."

Maclean's August 12, 1996