To abolish the new poverty
The problem of poverty was transformed during the '70s. But the real nature of the change is not likely to emerge from the cliche-ridden debate between those who believe the nation has forgotten its poor and those who claim their problems have vanished.
Those who concentrate on the "unsatisfied needs of the poor" fail to recognize that the 44 major income transfer programs grew two-and-a-half times as fast as wages during the '70s. By the end of the decade, some $200 billion of grants and services were being distributed to some 50 million individual recipients.
Those who argue that poverty is no longer a critical issue ignore the fact that there are still people who are barely surviving: that there have been deaths in recent years from starvation, heat, and cold. More seriously, the "culture of poverty" remains intact and has, in some ways, become stronger.
President Reagan's solution is to cut programs piecemeal, showing little apparent understanding of the combined impact of the various cuts. The results could be destructive both for individuals and for whole classes of people. It is all too certain that the smart and the crooked will be able to adjust. As usual, the weak and the honest will bear the brunt of the retrenchment.
A possible solution to this critical dilemma was proposed almost two decades ago: a guaranteed income for all.m It was to be based on simple clear-cut principles. The guaranteed income was to be seen as a right, like social security, which would carry responsibilities with it.
In 1969 President Nixon proposed a guaranteed income, which he called the family assistance plan. The bill was defeated. Too many in Congress refused to acknowledge the obvious: that America had already taken a commitment to prevent people from starving and that a guaranteed income would merely bring order into what was and remains a highly fragmented welfare system. Opposition also came from those who approved the idea in principle but wanted higher levels of income than could be provided.
Failure to grasp this nettle opened up the floodgates for additional costs in the 1970s. More and more programs were enacted to cover specific needs.
Many programs that were started to help the poor have been distorted so that they support the middle class; in addition, much of the money appropriated for the poor is paid to middle-class bureaucrats who administer the programs.
The amount of money individuals or a family receive depends not only on their rights but on whether they are informed about existing programs and on whether they are willing to apply for available funds.
It is clear, on the one hand, that schemes and crooks receive far more than they should. On the other hand, many of those who are truly in need never apply for benefits.
This picture is bleak enough. Unfortunately, the mess is still getting worse , for more and more of the greedy and crooked now gain additional money from the underground economy; they do not report their earnings either to the IRS or welfare case workers, and they still claim public assistance. Because a growing number of people feel that they are being treated unfairly by the society, they feel less and less shame in taking money where they can. This feeling is not limited to welfare recipients.
The whole trend has recently brought sounds of alarm from several quarters, one of them the President's Commission for a National Agenda for the '80s. In its impressive but largely ignored report, issued just before President Carter left office, the commission agued for a guaranteed annual income as a "sort of permanent, effective reform that would obviate the need for new crash programs . . . lead to substantial administrative savings," and permit "a meaningful reform of social security . . . since that program would be free of its welfare burden."
Why are we unwilling as a society to take the advice of the presidential commission? First, there is a tendency to stress the difficulties of a guaranteed income while we minimize and even ignore the costs and problems of existing programs that it would replace and that together add up to an informal, uncoordinated, messy, and unattractive way, in which incomes are guaranteed. Second, bureaucrats tend to resist simplification of programs that destroy jobs and empires.
We must break through these barriers. Transfer payments are now a major reality and will continue as far into the future as we can see. The case for rationalization of the welfare system is overwhelming.
But rationalization is only the beginning. Profound changes are needed. Patterns of rights andm responsibilities must be established in this twilight of the industrial era, where computers and robots will replace more and more workers. A guaranteed income, which would abolish complete poverty, is the first step toward a new social contract that will undergird the new social era we are entering.