Then And Now: The History of Welfare Reform And The “Free Lunch” Myth
The Politics of Welfare
In the 1920’s, a period aptly deemed the “roaring 20’s,” America prospered. The stock market soared and the construction business thrived. For most people, life was good. But one day (October 29, 1929) altered the course of history.
The Great Depression was a dark time for American families. Businesses closed and basic necessities were scarce. The most vulnerable members of society, the elderly, children, and single mothers, were barely surviving.
Four years after it began, more than 13 million Americans were without a job. Husbands and fathers abandoned their families, homelessness grew exponentially and the “American Dream” faded into hopelessness and despair.
With local and state governments running out of resources, lawmakers desperately sought out an answer to the problem. That answer came in 1935 when the federal welfare system was born. In the years since the idea of welfare has changed little.
However, as you’ll see, the purpose of welfare has been dramatically altered. From Roosevelt’s “New Deal” to the rise of the “free lunch” myth, we are taking an in-depth look at the politics that drives welfare reform.
The New Deal
With charitable giving in sharp decline, and local and state resources depleted, everyone looked to the federal government for help. On January 4, 1935, President Franklin Roosevelt heeded the call and announced his plan in the State of the Union address:
“The time has come for action by the national government to provide security against the major hazards and vicissitudes [uncertainties] of life.”
As part of his “New Deal” package, the president created the unemployment and old-age insurance programs. He also called for programs that would provide benefits for poor single mothers and children, along with other needy persons.
Through his plan, Roosevelt permanently made the Federal government responsible for the security of all Americans. A decision he soon regretted, as he felt it tore at the very heart of what makes Americans so resilient:
“The lessons of history, confirmed by the evidence immediately before me, show conclusively that continued dependence upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fiber. To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit. . .”
Time and politicians would prove him right.
The Welfare Revival
In the 1960’s, sweeping social changes revived government entitlement programs. The Civil Rights movement called attention to the economic and environmental struggles of African-American families.
The post-war economy of the 40’s and 50’s continued into the 60’s. In that time, the U.S. GDP had increased fivefold as American corporations positioned themselves to meet both foreign and domestic product demands.
Soon, however, the focus would shift away from the thriving parts of America to the “invisible.” In the earliest part of the decade, the poverty level for a family of four was defined as an annual income under $3000.
Rural parts of the country, minorities, low-wage and unskilled workers, immigrants, and single mother households were most at risk. And thanks to social activists, the nation’s poorest communities would take center stage.
Although, the new president had a different idea how to address the issue.
The New Frontier
In 1960, a well-to-do Massachusetts senator narrowly defeated Republican Richard Nixon to become president. To the surprise of many, John F. Kennedy was not the type of Democrat that Americans were familiar with.
Because of his young age and inexperience, JFK enjoyed few legislative victories. But the ones he did win were significant in changing the landscape of the welfare system. One of Kennedy’s first successes came in 1962.
The “Manpower Development and Training Act” created the first job-training program in the U.S. That same year, his administration increased federal funding to local welfare programs for job training and placement via the “Public Welfare Amendments to the Social Security Act.”
At that point, JFK understood that welfare needed to come in the form of a hand-up, not a hand-out. In a special message to Congress, Kennedy affirmed that welfare was not a cure to societal problems:
“…Merely responding with a “relief check” to complicated social or personal problems–such as ill health, faulty education, domestic discord, racial discrimination, or inadequate skills–is not likely to provide a lasting solution. Such a check must be supplemented, or in some cases made unnecessary, by positive services and solutions, offering the total resources of the community to meet the total needs of the family to help our less fortunate citizens help themselves.”
Sadly, in 1963 Kennedy was assassinated. His beliefs about the purpose of welfare died with him.
The War On Poverty
Vice President Lyndon B. Johnson assumed the presidency after the death of JFK. However, he would not continue the welfare policies of his predecessor. Johnson soon discovered that “freebies” equaled votes.
Returning to the New Deal policies of FDR, reforms Kennedy moved away from, President Johnson proposed a “War on Poverty.” In his 1964 State of the Union address, he made the subject of his poverty crusade clear:
“Unfortunately, many Americans live on the outskirts of hope–some because of their poverty, and some because of their color, and all too many because of both. Our task is to help replace their despair with opportunity. This administration today, here and now, declares unconditional war on poverty in America. Our chief weapons will be better schools, and better health, and better homes, and better training, and better job opportunities to help more Americans, especially young Americans, escape from squalor and misery and unemployment.”
LBJ assumed, wrongfully, that expanding the federal government’s role in education and healthcare would reduce poverty. For minority families, the alleged focus of Johnson’s war, the results were devastating.
In 2014, 50 years after the War on Poverty began, Project 21 leadership network highlighted its failures. Not only had poverty rates remained nearly the same, but welfare had negatively impacted the groups it was supposed to help.
Project 21 spokesman Derrick Green, explains the devastating consequences saying:
“The disastrous effects of the government’s management of anti-poverty initiatives are recognizable across racial lines, but the destruction is particularly evident in the black community. It effectively subsidized the dissolution of the black family by rendering the black man’s role as a husband and a father irrelevant, invisible and — more specifically — disposable. The result has been several generations of blacks born into broken homes and broken communities experiencing social, moral and economic chaos. It fosters an inescapable dependency that primarily, and oftentimes solely, relies on government to sustain livelihoods.”
Three years after this statement, Project 21 leaders praised President Donald Trump for implementing policies that are restoring hope to black communities. Communities such as the five American cities we listed here, all but decimated under Democratic leadership.
But before there was President Trump, there was the “free lunch” myth.
No, the computer keys didn’t get stuck. TNSTAAFL is the acronym for “There’s No Such Thing As A Free Lunch.” The term originated in the 40’s but was made relevant to economics in 1975 by author Milton Friedman.
Friedman, considered one of the most influential economists of the 20th century, demolished the “free lunch” myth. He totally contradicted the notion that government could provide goods and services at no cost to anyone.
Listen to Friedman explain:
As you know, Democrats like Bernie Sanders perpetuate this myth. They entice citizens with offers of free health care or free college tuition, knowing full-well that it isn’t free. American workers and business owners foot the bill through higher taxes.
Much the same way welfare is funded.
The federal government, or politicians if you will, create and enact the policies, but it’s the people who pay for them. Welfare, in a way, is a convoluted game of give and take that literally creates dependence on government.
In the 1980’s, Ronald Reagan attempted to change the liberal welfare narrative.
Reagan and Government Dependence
Next up, President Reagan was also adamantly against the “nanny state.” Despite being an actor turned politician, Reagan understood that a successful government encourages citizens to be independent and self-sufficient. According to Reagan, big government was not the answer to poverty.
In his 1986 State of the Union, the president addressed the need for government and private industry to work together. He also stated that the “welfare culture” was a crisis for American families.
”We must revise or replace programs enacted in the name of compassion that degrade the moral worth of work, encourage family breakups and drive entire communities into a bleak and heartless dependency.”
Among Reagan’s reforms to the welfare system were requirements that able-bodied individuals work and that they learn to manage resources effectively. But just like they do today, Democrats opposed the changes.
And if they weren’t opposing welfare reform, they were promising to end it.
An End to Welfare
Soon after, in 1992, Bill Clinton made the lofty promise to “end welfare as we know it.” Well, as you are aware, that didn’t happen. When it came down to it, Clinton vetoed two GOP welfare reform bills before signing the third into law in 1996.
The “Personal Responsibility and Work Opportunity Reconciliation Act” promoted a welfare-to-work initiative. So, those receiving aid would be required to work and the duration of their benefits would be time-limited.
Then, also included in the legislation were incentives for states to move people off welfare and into the workforce. Better childcare funding and tougher child support enforcement laws were written into the package as well. Still, nothing really changed.
A decade later, Clinton’s reforms were all but erased.
Hope and Change
Even more recently, in 2007, a junior senator from Illinois thought “hope and change” was what America needed. The following year, Barack Hussein Obama took the oath of office to become the nation’s first African-American president.
In his second term as president, Obama ended work requirements for welfare recipients. The economy, or rather his economy, was in a recession. Sadly, businesses were crushed under the weight of high taxes and burdensome regulations.
Worse still, the job market was dismal and unemployment levels reached new heights. Obama’s answer to the economic downturn was more welfare and bigger government. As a result, Congress and Republicans knew that answer was wrong, but Obama didn’t care.
So, sidestepping Congress, which he often did, he issued a new policy directive to the Department of Health and Human Services. That directive, unlawfully we might add, allowed states to waive work requirements.
All told, welfare spending increased more than 50% under Obama. Most of that increase, 32%, occurred in his first term. Sad to say, things only got worse from there as Obamacare took hold. You can read more about how that disaster turned out here.
With the exception of Clinton, Democrats have a long history of allowing welfare to balloon out-of-control. For decades, programs like food stamps, Medicaid, and Temporary Assistance to Needy Families, have served as band-aids to cover the damage from Democrats’ failed economic policies.
Thankfully, President Trump is taking a different approach.
The Trump Era
To get Americans off welfare, the economy must prosper, and the job market must grow. Personal accountability for one’s own situation in life can’t be shrugged aside. If you think about it, these are things a businessman like Donald Trump understands.
Just a few days into his second-year as president, Mr. Trump has taken great strides to end government hand-outs. As a result, the economy is booming and his tax cuts are creating more jobs and community investments.
In addition, while he has not taken on welfare reform directly, his policies have already reduced unemployment and the number of people receiving food stamps has declined by 2 million. The latter is due in part to Trump’s immigration policies.
Furthermore, between 2015 and 2016, illegal immigrants living in California received $1.3 billion in welfare assistance. Considering they aren’t supposed to be eligible for these programs, we feel safe calling this system “broken.”
Fortunately, the brokenness isn’t going unnoticed. Later on, President Trump reversed Obama’s policy directive and work requirements are no longer waived for welfare recipients. Additionally, he informed states that they can require able-bodied, working-age adults to work for Medicaid.
All in all, this is a step in the right direction.
In any case, you can see that politics has directly influenced the role of welfare in society. Now, nobody thinks that public assistance will end completely. And really, it shouldn’t. Most hard-working Americans know what it feels like to need a hand-up in difficult times.
As we’ve seen, time has proven that it should never be used as the proverbial “carrot-on-a-stick” to keep people dependent on the government. Ultimately, that kind of welfare is the enemy of everything that makes America great.