The quiet desperation of people like Linda and Ernie Russeau tells much about poverty in America in the bleak fall of 1991. Winter is at hand and the nation is in recession. Homelessness, seemingly chronic and insoluble, is a fact of daily life in most large cities. Unemployment is up, the welfare caseload is up and the number of Americans who live below the poverty line is rising (chart). Taxpayer compassion is in very short supply-and in Washington, as in state capitals all around the country, politicians of both parties are rushing to the aid of the angry and all-powerful middle class. Cutting taxes is the new gospel of political survival, and given the political vulnerability of the nation’s poor, cutting back on welfare is an easy way to do it. “There are few legislators willing to go to the mat for public aid,” says Douglas Dobmeyer, executive director of the Illinois Public Welfare Coalition. “More and more moderate Democrats are trying to sound like conservative Republicans.”
The trend is nowhere more pronounced than in Michigan, where Democratic Gov. John Engler and a bipartisan majority in the legislature imposed drastic cuts in the state’s general-assistance program earlier this year. “General assistance” is a small star in the galaxy of welfare programs: nationwide, only about 1.1 million of 21 million cash welfare clients receive it, and 15 states have weak GA programs or none at all. In Michigan, where Engler took office promising to balance the budget, avert a tax increase and protect state funding for education, the cutbacks permanently eliminated welfare for all GA recipients deemed fit to work. The idea was to save money-about $250 million during the current fiscal year-and force able-bodied adults to get jobs. “Michigan has simply reached the point where we’ve run out of options,” Engler told NEWSWEEK-and Senate Majority Leader Dick Posthumus of western Michigan, a Republican, said, “The taxpayers are saying, ‘Enough is enough’.”
But in Detroit, where homelessness and unemployment are epidemic, the state welfare cuts portend a rolling social crisis. GA provided benefits worth $7.8 million a year to 48,000 residents of metropolitan Wayne County, and all of that income is gone. “It’s estimated that there are 25,000 homeless people in the metropolitan Detroit area on any given night,” says Samuel Chambers, director of the Wayne County social-services department. “If you add 48,000 people to that, you’re tripling the number [of homeless] … There’s no way this community can generate $7.8 million in new money to take care of these people. Even considering the availability of minimum-wage jobs, we don’t believe there’s $7.8 million of anything–public or private charitable contributions– to make up the deficit.”
It would be a mistake to overstate the impact of Michigan’s welfare experiment–but it would be a mistake to understate it, too. Despite widespread predictions that many homeless people will die this winter, Mayor Coleman Young has promised that “no one will starve and no one will freeze” in his city. The state’s aid-to-dependent-children program, which now provides assistance to 678,000 Michigan residents, remains intact: for obvious reasons, Engler and the legislators stopped short of throwing thousands of needy women and children into the winter streets. But Detroiters are now seeing something no one has seen since the Great Depression: scores of homeless people walking through the downtown business district with signs that say “I will work for food.” The unstated goal of the state’s welfare cuts, says Detroit city council president Maryann Mahaffey, was to nudge Michigan back toward the 1930s, when government aid programs did not exist and most Americans made hard moral distinctions between the deserving and the undeserving poor.
And that may be the real problem with Michigan’s welfare experiment. Appealing as it may be to dump loafers off the dole, few experts would agree that the nation’s general assistance rolls include many truly able-bodied adults, or that jobs are available to those who lose their benefits. A majority of GA recipients nationwide are black men in urban areas with staggering unemployment rates. Many are functionally unable to get or hold a job-some because of medical or psychological problems; others lack access to transportation. A few are drug or alcohol dependent. “Most of these people are not lazy,” says Anthony Halter of the University of Illinois. “They may have physical or mental problems, or they may be over age 50. Or they may live in pockets of high unemployment.”
To specialists like Halter, the social costs of poverty are something like a balloon. When politicians and angry taxpayers squeeze the balloon at one end, the social costs expand somewhere else–on the street, in soup kitchens and hospital emergency rooms, or in petty crime. The balloon analogy also describes the increasingly bitter debate between Congress and the states over rising welfare costs. When a state cuts its general-assistance program, there is a large likelihood disabled GA recipients will sooner or later qualify for federal benefits under SSI, supplemental security income. The cost balloon, squeezed smaller by the states, simply bulges out again at the federal end.
This bizarre and messy process-the forcible transfer of welfare costs from the states to the federal government-also works in reverse. Currently, state governments all across the nation are struggling to contain the costs of Medicaid, the joint state-federal medical care program for the poor. Beyond the overall rise in health-care fees, one reason Medicaid costs are soaring is that Congress has repeatedly made more people eligible for the program. Although the U.S. government pays slightly more than half of Medicaid costs on average, many governors and state legislators criticize Congress for expanding the program without regard for the states’ ability to pay. In Illinois, for example, this year’s expansions alone have caused a $250 million explosion in state Medicaid costs, and the state is cutting general assistance to help balance its budget. The irony here is powerful: because Congress mandated better health care for the poor, at least some Illinois residents will lose welfare benefits.
Such state-federal wrangling may already be impeding Congress’s recent attempt to overhaul the American welfare system. That is the Family Support Act of 1988, which requires the states to provide education and job training for adult recipients of AFDC, or aid to families with dependent children. The idea, once again, is to “break the cycle of dependency” by helping welfare mothers get jobs. But the early returns are discouraging. Although Congress allocated $1 billion in federal matching funds for the program in the 1991 fiscal year, the states actually used only $700 million. The remainder, $300 million, never got to its intended beneficiaries, and the states’ hostility toward new federal mandates may be to blame. Meanwhile, the winter of ‘92 is coming on–and for those now falling through the social safety net, like Linda and Ernie Russeau, it promises to be a cold winter indeed.
PRESIDENTS: Percent of Americans in Poverty
FORD ‘75-‘76 11.5 - 12.2 - 12% CARTER ‘76-‘80 12 - 11.8 - 13% REAGAN ‘80-‘88 13 - 15 - 13% BUSH ‘88-‘90 13 - 12.8 - 13.8% SOURCE: CENSUS BUREAU
