Welfare Is the New Work

Stephen Moore
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Posted: Aug 02, 2016 12:00 AM
Welfare Is the New Work

Two recent news stories highlight how pernicious the welfare state has become in America today.

The first was an announcement by the feds that food stamps can be used to have groceries delivered right to a recipient's door. Service with a smile. The Obama administration says it is too much of a hardship for those on welfare to actually travel to the grocery. What's next, cooking the meal for them? If only the DMV would do home deliveries for driver's licenses.

The second story was about the hullabaloo over a proposal by Maine Gov. Paul LePage to prohibit food stamp recipients from using their food aid to purchase junk foods, such as sugary soft drinks and candy bars. He says that the state has an obesity problem and that he will "implement reform unilaterally or cease Maine's administration of the food stamp program altogether." The Obama administration rejected his request, and leftist activists act as if saying that a welfare recipient can't buy a pint of Ben & Jerry's ice cream at taxpayers' expense is a violation of civil liberties.

The welfare/entitlement state of mind has spiraled out of control in America. No one is lifting a finger of opposition. The cost of welfare is now well over $1 trillion a year. Food stamps are so ubiquitous that they have become the new standard currency in many inner cities in America.

It was only a few years ago when House Minority Leader Nancy Pelosi opined that putting more people on unemployment insurance is one of the "best ways to grow the economy." Which is more astonishing, that she believes this lunacy or that she would be dumb enough to say it out loud?

We are in the seventh year of a so-called recovery, yet 45 million Americans depend on taxpayers to put food on the table. This is roughly 5 million more than when President Barack Obama took office. Medicaid rolls have exploded by more than 10 million, and Obama openly boasts about how many people he's moved into the program. The number of unemployment insurance beneficiaries has fallen, thank goodness, but the number of Americans collecting disability insurance has continued to climb. Wow, this is some recovery.

Disability rolls are growing even as worker safety has hit an all-time high. Shouldn't safety and automation mean fewer disabled workers? The reality, as everyone in the welfare industry knows, is that food stamps and disability are the new welfare. Neither of them requires work in exchange for benefits.

No one wants to admit that the ease of entry into the welfare state and the generosity of the benefits are big reasons labor force participation has collapsed. Why work?

Welfare expert Peter Ferrara notes that a big instigator for the welfare state expansion has been the decimation of welfare reform laws enacted in 1996. "It's infuriating that a law that worked incredibly well in lowering costs and getting the unemployed into the workforce has been largely gutted," he concludes.

As a result, the Census Bureau tells us that most families that are in poverty have no one working. Poverty is still widespread in America not because wages are too low but because fewer poor people have a job. If there are no wages earned at all, it is impossible to get out of the poverty trap.

Welfare incentivizes non-work in many other ways. Larry Lindsey, who was an economic adviser to President George W. Bush, reports that "when families with children making between $20,000 and $50,000 attempt to have a second earner go back to work, the effective tax rate on the extra earnings -- including lost government benefits ... is between 50 percent and 80 percent." So a $12-an-hour job can return as little as $2.50 an hour of extra income. Why work?

Democrats in Congress have vociferously opposed putting even baby teeth back into work-for-welfare requirements. Even modest workfare requirements are denounced as anti-poor. So even a proposed federal law mandating work for food stamp recipients who are non-disabled adults without kids got shot down.

We know that changing welfare laws can have a very positive impact on getting recipients back into the workforce and off welfare. In North Carolina, when unemployment benefits were reduced and the number of weeks of benefits was limited, entry into the workforce shot up.

In Maine, we saw a similarly remarkable result from work requirements. According to a Heritage Foundation report, the number of food stamp recipients fell by 80 percent there when able-bodied adults without dependents were forced to work.

This result was in line with the federal work-for-welfare requirements enacted in 1996. Caseloads fell by more than half, and costs of aid tumbled.

So why aren't Republicans pushing workfare for all federal welfare recipients? Some are afraid that they would be viewed as hardhearted or even cruel. But getting people off welfare and into a productive job is not just a way to reduce costs but also a proven way to rebuild broken lives and move people into the mainstream. There is dignity in work. There is despair in welfare. After three generations of the failed entitlement state, hasn't welfare done enough harm to the very people it was supposed to help?