Neoliberalism and the Democratic Party: welfare "reform"

Since the Democratic Party's remarkable cave-in during the January government shutdown crisis, I've been thinking a lot about important turning points for the Democratic Party that created such a strong sense among the party's Congressional representatives that they have to continually surrender to Republicans on important matters of policy. Even as the Republicans have become more and more aggressive in jamming their their preferred policies through, even when it means altering the rules of the game, both formal and informal.

One of the main programs identified with the Clinton Administration, even its "signature legislative achievement," (Jordan Weissmann) was called welfare reform. Not only was it substantively important. It also was a major concession in which the Democratic Party accepted the long-time conservative and Republican framing of a critical social and economic issue.

"Welfare" is one of those words that are benign in its routine daily usages but can take on negative political connotations in a polemical context. If someone says, "Parents have to take care for the welfare of their children," that has a straightforward meaning, a benign one of well-being. But "welfare" as applied to any kind of social program has a very negative connotation for conservatives, e.g. "loafers," "lazy black people."

The term has generally been applied to income-support payments for the poor. But the Republicans are trying now to expand the (for them) pejorative term to unemployment insurance, Medicaid, Medicare and even Social Security. The term "entitlement programs" also has a similar connotation for them. The latter term was a conscious propaganda innovation of conservatives. Both "welfare" and "entitlement programs" are used to promote an unfavorable attitude toward any kind of program that provides some kind of solidarity or economic support in hard times for ordinary working people.

And, like so much in American politics, criticism of "welfare" was highly racialized, with white conservatives (and some liberals) portraying it a program used and abused by black people. Even though a majority of "welfare" recipients were always white.

The Clinton reform, signed into law in 1996 and taking effect in 1997, replaced an income-support program for parents of minor children called Aid for Families with Dependent Children (AFDC). The replacement program was known as Temporary Assistance for Needy Families (TANF). One of the features of the bill that achieved an important conservative goal is that it gave states much more discretion of the amounts and qualifications for receiving TANF assistance.

The 2016 "Retro" video from The New York Times recounts the history of the 1996 reform from the perspective of its 20th anniversary, Welfare and the Politics of Poverty 06/07/2016. Unfortunately, YouTube is not allowing the video to be embedded at this writing. The video provides numerous examples of the kind of polemical rhetoric used at the time. And the narrator's script appears to be sympathetic to it, despite it's being associated with the "liberal" New York Times. And, of course, there's some Both Sides Do It thrown in.

It quotes St. Reagan declaring, "Welfare has proliferated and grown into a Leviathan of unsupportable dimensions." And it shows Bill Clinton adopting a similar framing, if less hysterically expressed: "Welfare should be a second chance, not a way of life." It was also the case that Clinton emphasized the importance of work opportunities for welfare recipients. In theory, that was a position that liberals and progressives could share. But in practice, any kind of active job programs were not a serious part of the policy mix.

It's important in the context of its effects on Democrats to note that Clinton twice vetoed Republican-backed welfare reform bills on the grounds they were too punitive. But in 1996, he signed one that was quite draconian in its terms and effects. The video quotes Ron Haskins, who was one of the drafters of the Republican bill that Clinton signed, still praising Bill Clinton two decades later for signing it (after 4:00). "Think of a Democratic President that would sign a welfare reform bill like that. President Gore wouldn'a done it. Kennedys would never have done it. There are many Republicans that wouldn'a done a bill as tough as the one that was passed in 1996."

Notice that the narrator in this 2016 film refers to the pre-1996 AFDC as a "once sacred entitlement." Who had considered it sacred is not clear. Conservatives were never among them.

Jared Bernstein recalled the various themes in the welfare reform debate in Reforming Welfare Reform The American Prospect 12/19/2001:

What was Congress trying to achieve? Different people had different goals, and the law reflects these differing views. For some the 1996 law was largely about cutting welfare caseloads or reducing spending; for some it was about promoting work; for some it was about broadening state flexibility, reducing federal authority, and curtailing individual rights; and for some it was about reducing out-of-wedlock births. For much of the public, though, the goal was that people who were able to work should do so. Many in the progressive community shared this goal but feared that the law's approach--freezing federal spending, ending individual rights, imposing time limits, creating strong incentives to cut caseloads--would mean that instead of helping parents enter and progress in the labor force, states would simply restrict assistance for families that needed help. And many progressives feared the consequences if public assistance was denied to families with the weakest labor market prospects in a low-wage labor market that was already failing many of its participants.

Throughout the 1996 debates, discussion of one goal was conspicuously lacking: There was much talk about the need to promote work and reduce welfare, but little discussion of the need to reduce poverty and promote the well-being of low-income families. Instead, both conservatives and, to a great extent, the Clinton administration, created a picture in which the principal problem was seen as too many families on welfare for too long. The obvious solution was to cut caseloads by getting families to leave welfare. [my emphasis]

Apart from any considerations of social solidarity or humanitarian concern, one of the benefits of such income-support programs is that they have "countercyclical" effects. When the economy is expanding, as it was doing in the mid-1990 with the tech bubble and further in the 2000s with the real estate bubble, more people can get jobs and the payments on income-support programs act as a restraint on what economists and the business press like to call "overheating" of the economy. During recessions, the payments expand and provide a stimulative effect to the economy, helping to prevent deflation and shortening the length of the recession. The human and economic-policy cost of the TANF reform became very evident during the Great Recession.

Analyses on the destructive economic effects of the Clinton welfare reforms are in no shortage.

Jordan Weissmann, The Failure of Welfare Reform Slate 06/01/2016:

Despite being home to one of the nation’s most crushing child poverty rates, the state [of Arizona] has all but stopped giving cash assistance to its needy. During 2014, for every 100 poor families with children in Arizona, just 8 families received aid. And even that tiny fraction is likely to shrink. Last year, while trying to chip away at a $1 billion budget deficit, lawmakers lowered the maximum amount of time Arizonans could receive welfare payments before being kicked off the rolls permanently — it’s now just 12 months. ...

The death of welfare in Arizona isn’t an exception; the program has shriveled just as badly in many other states, especially across the Deep South and West. Even in most of the states that are more generous than Arizona about giving benefits to the poor, welfare has still dwindled during the postrecession era. That’s because its funding was never designed to grow along with inflation—or with the U.S. population. For all intents and purposes, welfare is becoming a zombie system rather than the bridge from poverty to work that its reformers envisioned.

And, of course, it was the signature legislative achievement of Bill Clinton’s presidency. [my emphasis]

After 10:35 in the video, we hear Bill Clinton express the vain hope by which he justified signing the bill to Democrats: "After I sign my name this bill [TANF], welfare will no longer be a political issue." Which was true in the sense that the Democratic President had stopped fighting for Democratic priorities and Democratic constituents on "welfare," instead surrendering to the Republican side. A segment from 2014 shows Clinton in 2014 saying that he couldn't have foreseen that there would be a Tea Party movement that would try to scapegoat poor people, i.e., "that would believe, one more time, that poor people are the problem in America."

Which I would have to say if laughably unconvincing. Especially since there were plenty of Democrats in 1996 who did foresee such a thing. It didn't require any special visionary talent to do so. And in the real world, it did nothing of consequence to slow down the radicalization of the Republican Party. If anything, such a consequential surrender on Clinton's part only encouraged it.

But Clinton in that same segment still insisted in 2014 that TANF "did far more good than harm."

The 1996 welfare "reform" was a major step in the neoliberal neutering of the Democratic Party. That was one of the most significant steps on the road that led the Democrats to the historic losses at all levels in 2016. Including Hillary Clinton losing the Electoral College vote to the Orange Clown.