Toward a Working Welfare System

Friday, Aug. 15, 1969

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WHAT America needs now," the President told the nation last week, "is not more welfare, but more 'work-fare.' " On the wings of that Nixonian neologism, the President proposed the first fundamental overhaul of the U.S. welfare system since it was created 34 years ago. The key element to the reform was a "family-assistance system." Although Nixon pointedly denied it, the notion is very much like a guaranteed income—with one'crucial difference. For the ablebodied, willingness to accept "suitable" employment or vocational training would be the quid for the quo of assistance. In essence, Nixon notified the nation that his Administration is prepared to help those of the nation's 9.7 million relief recipients who try to help themselves.

With congressional approval, Nixon's cure for welfare woes could go into effect in 1971. Under its provisions, federal assistance for the aged, the blind and the disabled would continue unchanged, except that benefits would be increased. A uniform floor of $65 per month for all such recipients would be established, with the Treasury chipping in 25% of the cost in excess of $65. The largest and most controversial segment of the present welfare system—aid to families with dependent children (AFDC)—would be eliminated.

The proposed substitute introduces a standard federal welfare minimum for the first time and would raise basic benefits in the 20 states now paying less than that figure: $1,600 a year for a family of four, with an extra $300 for each additional member. The basic allowance would be reduced as private income increases, but the family would be allowed to keep more of its earnings than at present. When the family of four reaches an income of $3,920, all federal assistance would end. Benefits paid by local or state authorities, however, could be added to the total.

This family would be allowed $720 in earned income without suffering any reduction in the maximum federal subsidy of $1,600. (The $720 constitutes what the government considers the cost of working, such as transportation, clothes and lunches, for a year.) For a family of four, the descending scale of federal subsidy—apart from any state payment—would work this way:

Earnings Benefit Total

720 1,600 2,320

1,000 1,460 2,460

2,000 960 2,960

3,000 460 3,460

3,920 0 3,920

At the core of the concept is the desire to get as many welfare recipients as possible working. Only mothers of preschool children and those physically or mentally incapable of holding a job would be exempted. When an ablebodied, but unemployed father applies for federal assistance under the Nixon plan, he would also have to register with a local employment service. If "suitable" work or job training is available, the applicant would have to accept. If he refused, his portion of the federal grant ($500) would be eliminated. The remaining federal funds would be made available to the mother and children through a trustee or a local welfare agency. To make vocational education both more available and more attractive, the Nixon plan calls for the creation of 150,000 new federal job-training slots (raising the total to more than 1,000,000) and the payment of $30-per-month stipends for those who enroll.