What would you think of a doctor who prescribed the same treatment to
every sick person he treated, whether the patient had a cold or lung cancer?
Yet, isn't that the way we handle welfare today? The fourth-generation welfare
mother, the educated person temporarily on hard times, the drug addict,
the man who is simply incapable of holding a job - they're all treated pretty
much the same by federal welfare policy.
But they aren't the same. They're more than case numbers; they are people,
individuals. Not surprisingly, a comprehensive study by Mary Jo Bane and
David Ellwood of Harvard University found that poor people are just as diverse
as nonpoor people. They have diverse reasons for being poor and respond
to diverse incentives.
So just as in medicine, the better the provider knows the recipient, the
more likely that welfare funds will be spent in a way that benefits both
the individual and the community. Giving block grants to the states to handle
their own welfare programs is a step in the right direction, but it only
transfers welfare responsibility from a federal bureaucrat to a state bureaucrat.
A much more fundamental change is needed. We must break free of the idea
that only government - at whatever level, federal, state or local - holds
the answer to social problems. Generally it's not so. It certainly isn't
so in the case of welfare.
Thirty years of experience and scholarly studies confirm that the current
welfare system discourages work and encourages dependency, single motherhood
and the breakup of families. People may complain about the monetary cost,
but the real cost is the social and psychological cost in lives damaged
or destroyed, children deprived of opportunity, increased crime and violence,
and the creation of a permanent underclass of people with no hope.
Where welfare is concerned, there is already a better answer than government
programs. There is mounting evidence that private charities do a better
job of getting aid to those who need it most, encouraging self-sufficiency
and self-reliance, strengthening the family unit, and using resources efficiently.
Private charitable efforts are not insignificant: In 1991, private charities
provided more than $100 billion in cash and $76 billion in volunteered time
for health, education, and welfare.
The best private charities believe that most people can and should support
themselves and their families. They tailor aid accordingly. They get aid
to those who need it most and provide help without encouraging dependency.
They encourage or require aid recipients to contribute labor to the charity
itself. One might say private charities take just the opposite approach
from government welfare: whereas it often takes a long time to get on government
welfare rolls, it is easy to stay on. Conversely, it is easy to get aid
from a private charity, but hard to keep getting it.
Government programs spent about $350 billion on means-tested welfare programs
last year - the federal share being about $240 billion. Instead of talking
about reducing welfare spending, why not channel these funds to the private
charities or local government programs that do the best job of helping the
poor? Instead of sending these billions to Washington, let each taxpayer
decide which anti-poverty effort to support. Here's one way this could work:
Create a dollar-for-dollar tax credit for individual contributions to anti-poverty
programs operated either by state or local governments or by private sector
charities. That is, for every dollar individuals give to such programs,
up to say $3,000 - which is about what the median household now pays in
federal income taxes - they could take a dollar off their tax bills. One
estimate is that this could move a large portion of the $240 billion the
federal government is spending now to private charities and state and local
governments.
Only one person in three believes they get good value for tax dollars spent
on social welfare programs. But three out of four contributors to private
charities feel their contributions are put to good use. So, almost everybody
who pays income tax would actively think about the best way to provide charitable
services to needy people, and would be likely to pay close attention to
how the private charity - or the local or state government if that's what
that taxpayer chose - is using the money. After all, the poverty programs
would now be run by people in your own home town.
It was early in this century when doctors first understood enough about
medicine to begin customizing medical treatment to fit the patient's needs.
It would be fitting if we could end the century with the same kind of progress
in welfare for the poor.
The National Center for Policy Analysis is a public policy research institute
founded in 1983 and internationally known for its studies on public policy
issues. The NCPA is headquartered in Dallas, Texas, with an office in Washington,
D.C.