Historical Background

In the Anglo-American tradition, children in households that cannot support them have long been considered among the "deserving poor" who are thought to merit public support.^[1] In the United States the institutions for such support have changed over time. In the nineteenth century widows unable to support their children frequently had to give them up. In the twentieth century, at the prodding of reform groups, several states enacted guidelines for "widows' pensions." Local options were allowed, and the discretion of local administering officials was generally broad. This precedent of state and local control exerted a fateful influence on the organization of the public assistance and unemployment insurance programs established by the Social Security Act of 1935. Both the officials (many of whom were from Wisconsin) who dominated the executive initiatives and numerous state congressional delegations were anxious to shield peculiarities of existing state programs from federal intervention.^[2] So, unlike social security, both public assis-

tance and unemployment insurance were constituted as state programs under loose federal guidelines.^[3]

From 1935 through 1962 Aid to Dependent Children (ADC), as the program was then known, was managed by the Bureau of Public Assistance under the direction of SSB/SSA. The national government set standards—generally procedural rules—and provided a portion of program funds. In essence ADC made transfer payments, with the titular beneficiaries being children in households whose adults were unable to support them. By and large these households were headed by unmarried, divorced, or widowed women who had few, if any, vocational skills and little experience in the labor market.

SSB officials prefered social insurance to public assistance. They saw the latter as an exceptional response to the Great Depression, and they thought that the need for ADC would gradually wither away. But to officials' consternation, the use of ADC increased in the late 1940s and accelerated in the 1950s. Between 1950 and 1960 the number of children in the program increased from slightly less than 1 million to over 2.5 million; during the 1960s repeated efforts to slow program expansion were met by a nearly identical increase in the number of families served. Although the relative importance of various factors contributing to this growth was disputed, much of the growth during the sixties is attributable to an increase in the proportion of eligible families making use of the program.^[4]

SSA officials were severely pressed to account for these trends.^[5] The Depression was long over and yet use of ADC was higher than ever. Based on the experience of ADC's predecessors, particularly state-initiated widows' pensions, officials had at first assumed that ADC would serve primarily a population of children whose fathers had died. When survivors' benefits were added to social security in 1939, it seemed reasonable to project that ADC would wither away, given the economy's long-term capacity to provide new jobs and the continuation of public employment efforts. The withering thesis reflects as well the limited scope of earlier local and state-level relief efforts that the federal government was now beginning to coordinate and help fund. These local programs had made relatively little effort to plumb the depths of social disadvantage. Widows' pensions, for example, went almost exclusively to white wid-

ows, and even among this group a variety of explicit and tacit restrictions limited claims. SSA's view also reflected naivete with respect to social disadvantage. SSA executives understood episodic social hazards such as aging, disability, illness, and even unemployment, but they were far less aware of the size and problems of the nation's socially disadvantaged underclass. They did not contrue "the poor" as a focus for public policy; their primary concern was keeping the elderly and others with records of regular self-support from joining the poor.

But by the mid-1950s it was clear that divorce and desertion, rather than widowhood, were accounting for the growing numbers of women that ADC served. Some observers argued that ADC in effect encouraged desertion by restricting eligibility to households with no able-bodied adult male—even as the national economy hindered males with relatively modest job skills (thus a high proportion of minority males) from finding steady employment and wages sufficient to support a family. While most ADC recipients were (and still are today) white, the proportion of minority recipients was increasing, and in the large cities they were becoming a highly visible and concentrated group. Through the early 1960s ADC appears to have served to a considerable degree as a substitute for unemployment insurance for these families: as nonwhite male unemployment increased or decreased, so did ADC cases.^[6]

The problems of family instability among households on the economic fringes of society were far more complex and intractable than those the program's initiators had foreseen. In 1962 the program was renamed and transferred to a new bureau, roughly the coequal of SSA, within the Department of Health, Education, and Welfare. The new AFDC included a variety of social services—family planning, basic adult education, child-care, vocational rehabilitation, and employment assistance—designed to increase the likelihood of employment among adults in recipient households.^[7] After 1962 a series of new programs—AFDC-UP for unemployed fathers, Community Work and Training (CWT), Work Experience Training (WET), and Work Incentive (WIN)—combined AFDC benefits and job training with the ultimate objective of enabling families to become self-supporting. As we will see later in this chapter, these new efforts all foundered on a combination of inadequate labor market opportunities, design features that created weak work incentives, and problems particular to program recipi-

ents. Despite these failures, reformers clung to an implicit version of the withering thesis. They persevered in the objective of reducing the AFDC recipient population.

Both the population designated as impoverished by federal guidelines and the population that uses AFDC have fairly high rates of turnover.^[8] Thus while poverty and AFDC usage are transitory conditions for many, the pools of persons experiencing poverty and AFDC usage over the span of a decade are quite large, about a quarter of the American population in each case.^[9] Furthermore, AFDC serves recipients with two distinctive patterns of use. Most recipient households use the program episodically to cope with a given social hazard—the loss of a job or separation of parents—whose resolution generally leads to leaving the program.^[10] For the most part these households have modest resources in the best of times, and their need for public assistance can be prompted by relatively modest hazards. In addition, parents in these households are frequently among the nearly one-third of the American work force to whom unemployment benefits are not extended.

Although public perceptions of widespread persistent use plague AFDC, less than 3 percent of the U.S. population, disproportionately urban and black, persistently use AFDC, and persistent dependence (relying on AFDC for over half of family income) is less than one-half of this level.^[11] Over the course of a decade persistent users constitute about one-sixth of AFDC recipients; but at any given point in time persistent users typically constitute a bit over half of the program's beneficiaries, and some of these households depend on public support for lengthy periods of time.

Implicitly recognizing the inadequacy of the withering thesis, the Nixon administration sent a version of a guaranteed-income plan to Congress in 1969.^[12] This proposal, known as the Family Assistance Plan (FAP), would have reduced the national government's payments to AFDC recipients in high-benefit states (California, Massachusetts, and New York, for instance) and would have provided help to the working poor who did not qualify for cash-transfer programs.^[13] Revisions of this plan were eventually defeated in Congress.

President Carter came into office on a campaign pledge of welfare reform, but his administration proved similarly unable to elicit congressional enthusiasm and support. Carter's proposal, Program for Better Jobs and Income (PBJI), resembled FAP in

many respects, although it was more ambitious with regard to employment and coverage (childless couples and single adults were included).^[14]

The Reagan administration has been concerned largely with reducing the national government's financial support for AFDC.^[15] It has also encouraged states to experiment with various workfare options. From the recipients' perspective, the single most important change has probably been the four-month limitation on allowing beneficiaries to keep the first $30 of earnings and one-third of the remainder. After four months—once limited work-related (including child-care) expenses are deducted—most earnings are offset by reductions in benefits.

In sum, little improvement has been made in the policy or design of public assistance in the last two decades. By and large recipients, program personnel, political leaders, organized interests, and the general public have little good to say about AFDC, but as yet there has been no consensus about how to reform the program. The 1988 legislation that emerged from conflicting ideas in Congress unfortunately deviates only slightly and unimportantly from the practices of the recent past.