January 14, 1973

Daniel Moynihan and President-elect Nixon: How charity didn't begin at home

By PETER PASSELL and LEONARD ROSS

THE POLITICS OF A GUARANTEED INCOME

The Nixon Administration and the Family Assistance Plan.

By Daniel P. Moynihan.



ackstage from the White House's bully pulpit is a bully blackboard, where Ivy League professors hold special tutorials for newly elected Presidents. The curriculum changes with the times. Kennedy learned the blunt methods of 20th-century technocracy. Many disillusionments later, Nixon was schooled in the more circuitous arts of 19th-century statecraft. Professor Kissinger explained the balance of power while Professor Moynihan elucidated the mysteries of Tory radicalism.

The lessons stuck. On Aug. 7, 1969, President Nixon remarked that he had been reading a biography of Disraeli and of Lord Randolph Churchill. "Tory men and liberal policies," the President reflected, "are what have changed the world."

On Aug. 8 President Nixon announced the Family Assistance Plan, promoted by Daniel P. Moynihan, then his Assistant for Urban Affairs (and recently appointed Ambassador to India), over the opposition of many of the President's most conservative advisers. It would meet the most irksome of American problems--poverty--with the most direct and radical of solutions: money. All families with children would be eligible for a minimum stipend; no longer would the absence of a "man in the house" be a precondition for welfare.

A Republican President, elected in significant measure out of distaste for the dependent poor, thus proposed the adoption of a guaranteed income. F.A.P. was a kind of domestic trip to China, a triumph of pragmatism over ideology.

Or so it seemed at the time. Mr. Moynihan's new book, "The Politics of a Guaranteed Income," recounts how applause came from all corners: The Christian Science Monitor, Business Week, The Vicksburg Post, The Ottumwa Courier. 'TWO UPPER MIDDLE CLASS REPUBLICANS," ran a telegram quoted by Moynihan, "WHO WILL PAY FOR THE PROGRAM SAY BRAVO." Not until the Peking voyage was a Nixon initiative to receive such wide enthusiasm. In March of 1970, F.A.P. sailed through the House Ways and Means Committee, 21 votes in favor to three conservative Democrats opposed. A month later the full House concurred.

But that proved to be the end of the line. In the summer of 1970 conservatives on the Senate Finance committee riddled H.E.W. Secretary Robert Finch with hostile questions and helped force his resignation. The Administration revised the bill and began losing the liberals. The decisive defeat, on a Finance committee vote of 10-6, united Oklahoma New Populist Fred Harris and liberals Eugene McCarthy, Albert Gore and Clinton Anderson with the most mossy-backed of the reactionaries. For two more years the Administration kept moving the plan to the right at the expense of support from the left. Currently F.A.P. reposes in a state best described as malign neglect.

What went wrong? Most of Moynihan's eloquent, polemical book is devoted to an exhaustively researched attack on the liberal opposition. To be sure, he does not spare the right (and is impressively blunt in recounting Nixon's own self-defeating partisanship in 1970--the year of Carswell, Cambodia, Scammon and Wattenberg). But the intriguing question--for the reader as for Moynihan--is why the left helped kill the guaranteed income.

Part of the answer is that it wasn't much of an income: $1,600 for a family of four plus $800 in food stamps. This was more than a handful of states gave their poor, but much less than 1970 welfare levels in the big Northern states. On the other hand, states would have been able to supplement the F.A.P. minimum payments with the Federal Government picking up part of the tab. A "grandmother" clause would have assured current welfare recipients no reduction in benefits. F.A.P. supporters argued that states traditionally generous would remain so. Liberal opponents feared the outcome of putting the whole system up for grabs at a time of inflation, rising taxes and free-floating disgruntlement.

Aside from money, controversy centered on work requirements and work incentives. Until the mid- sixties, welfare recipients stood to lose at least a dollar of benefits for every dollar they earned working; even more, if they happened go be unlucky enough to just miss the income cutoff for public housing. Welfare legislation in 1967 reduced the direct take-back to two dollars in three, but left in much of the perverse incentive to shun work. A family might still inch its way over a bureaucratically defined poverty line, and thereby lose a thousand dollars in Medicaid benefits.

There were several possible ways of correcting the problem. The Government could lower the rate at which it penalized welfare recipients' earnings. This would cost money, and would make large numbers of the working poor eligible for the dole--a strategy with political costs as well as advantages, as George McGovern later discovered. Or the law could simply force welfare recipients to work, incentives or no. The difficulty here was that there were very few jobs--especially in an economy with steeply rising unemployment--for untrained welfare mothers. Alternatively, one could create jobs. Congress tried that in 1967 with the "Work Incentive Program" (cheerfully abbreviated as WIN).But by September 1969, only 13,000 welfare recipients had been put to work. Neither local agencies nor Congress has shown much enthusiasm for paying an annual $1,000 or $2,000 per child for day care facilities so that mothers could work off their welfare payments on $3,000-a-year jobs.

Faced with these uncomfortable alternatives, the Nixon Administration chose a bit of each. F.A.P. would cut the penalty rate from two-thirds to one-half of every extra dollar earned by the poor while on welfare; all welfare recipients would be required to register with the United States Employment services for work and would be docked $500 if they refused. New WIN jobs and day-care facilities would be promised.

No one expected the work requirement to work, least of all the President. "I don't care a damn about the work requirement," he told Moynihan, "This is the price of getting $1,600." Again, as McGovern belatedly found out, the only way to promote welfare changes was to call them workfare.

But the price Nixon paid for a vague and unstructured work requirement was to exacerbate liberal fears. Mothers of small children, it was argued, might be ordered to work regardless of the adequacy of day-care facilities or the appropriateness of the job. To make matters worse, hard-won rights of judicial review for welfare recipients would have been curtailed by the Nixon bill.

Evaluating these fears is a problematic task, which Moynihan does not systematically attempt. In a thick, complicated book he finds little space for the detailed arguments raised by the liberal opposition. His focus, instead, is on motives. The liberals, he charges, could not permit fundamental change in the welfare system for they were too beholden to their constituencies of social workers, self-seeking spokesmen for the underprivileged and existing welfare recipients in high-payment states.

A more sympathetic phrasing could be constructed on the same evidence. F.A.P. offered epochal gains for the Southern poor at the price of a change in the rules with uncertain consequences for the mothers and children on welfare in the North. Liberals chose to be strategically conservative.

What lesson is to be learned? Moynihan, though defeated in this instance, draws a happy conclusion. Quoting W.H. Auden, his epigraph states the theme: "In the prison of his days/Teach the free man how to praise." His opening and closing chapters offer praise for the American political system, which can broach (and, Moynihan trusts, one day accomplish) "fundamental reform" such as the substitution of F.A.P. for welfare. That a Republican President could offer F.A.P. and carry with him a fair portion of conservatives, Moynihan contends, testifies to the system's remarkable capacity for change. That liberals could help shoot it down is but a regrettable example of the frustration and delay inherent in any great project of revision.

But from Moynihan's own premises--of the validity of nonideological, pluralist politics--a rather different conclusion can be derived. Liberal opponents of F.A.P., in Moynihan's estimation, betrayed the pluralist system by selling out the unrepresented poor in favor of the organized recipients of welfare. But what was this except pluralism at work? F.A.P. might have altered the lives for the worse of the one poverty constituency that had some clout. What could be more natural than for this group, and the Senators who sought its favor, to hold out for greater protection? Moynihan can claim the liberals broke the pluralist rules of the game only by denying the financially dependent poor as a legitimate group. He ridicules the demands of the National Welfare Rights Organization for a guaranteed income of $5,500 or $6,500--demands which in other circumstances would be seen as normally inflated openers in a bargaining process. He even allows himself a little rhetorical incredulity whenever a liberal opponent of F.A.P. suggests that $2,400 is peanuts. Beggars, the tone suggest, can't be choosers. No one appreciates a panhandler with an "exact change only" sign.

No doubt this is political reality--most people assume that dependency is a sign of personal weakness as well as social failure, and conclude that welfare is a matter of charity rather than rights. The very idea of a Welfare Rights organization sounds fishy. As a short-term political strategy, there is much to be said for a policy of thankfully taking whatever you can get. Half a crust is better than none.

But it was precisely this political reality that spurred some liberals to oppose F.A.P. So long as a guaranteed income is seen as charity, they reasoned, its levels will be stingy and its administration unjust. F.A.P., they contend, was conceived in the spirit of welfare and could not escape. Perhaps (as we would guess) this fatalism was overdone, but it is a view which Moynihan merely reinforces. There is an ancient and honorable British working class tradition of not trusting Tories.

Peter Passell and Leonard Ross teach economics and law at Columbia University. Their book, "The Retreat From Riches: Affluence and Its Enemies," will be published next month.