tv Heritage Foundation Hosts a Discussion on Welfare Reform CSPAN August 16, 2016 11:46pm-1:09am EDT
is tax a fee on anybody who uses a martphone to make withdrawal from a banker to pay bill, and you know, we've all seen, you know, your cell phone uponhas those tax upon tax tax. in the know, living eveloped countries and such, having the internet penetration, the use of smartphones in countries, i think there's an issue with the taxes.s for the what is your take on that industry? >> i agree with the asian megha ctive and i think may have a lot of other examples. structure t telco today i see it in india. making a callt of is nearly zero, less than one per minute, no matter
where you make long distance or short distance. importantly, 900 million carry, most of the people a phone, including if you are at very ttom, which is interesting. smartphone prices are dropping $500. nd if you have a candy phone, dropping close to 10-$15. no contract, no service charges, nothing. you can go to the shop, buy $10. your monthly bill could be less $2.n of course that kind of supports the ability to connect and that liberalized the agriculture, migrant population, and improved the connectivity tremendously. upon at's the foundation which new services can be built, banking or otherwise. but i think that's just one example. i'm probably not sure if i'm question directly or not but connectivity, be it
mobile or physical, in your home offices is a very critical part of digital transformation a society. affordability of mobile plan is a critical component of that. >> thank you. say that in o africa, we find that there is penetration of mobile telephones and they're being you're probably going to know more about the subject than i do, but for in developing countries, i'm not really sure what the -- what the incentive added on. when e see, for example, we looked at bills of not individual users but, for example, companies is that some additional items actually do add on quite a bit but that's keeps them on that
from, for example, it usually in a remote ey're area or if they happen to be from a foreign part of the example, outside of cities, it keeps them from accessing these services but good question and i'm not really sure if you had a lot of examples for developing countries. concede to some of my colleagues and we can pick up on the discussion afterwards if you'd like. say the best study on digital drive,f, apply on i.t. products and services. brazil imposes on tional taxes and tariffs products, it diminishes annually year.g gdp to drop each we do that for 126 countries. challenge. >> i think we are at the hour of say so i think we must thank you to the audience for
wonderful participation and questions and i want you to join esteemed king our panelists this afternoon. [applause] this event will be online at the itf web site within 48 hours. thank you. announcer: tomorrow night, a technology and innovation from this year's tech crunch conference. app developers, and activists. that's 8:00 p.m. eastern. preview. over re are already 250,000 lists on the platforms. you can million the different they go in from the days. author akira, who many of you not to have heard of, is an adult film star. the comb fagzting of physical stuff and emotional stuff that you go through before that. you asked anyone in this room hey, could you
what me a quick essay on it was like on your way to the truck? oh, are you serious? but if you were to ask, could you just list your thoughts on the way here? it comes out easier. we expected it to be a little more practical but it's list yoursonal if you favorite hikes. you're saying a lot about you. that comes out in the margins even on the recommendation list. nnouncer: watch the tech runch disrupt conference from new york city here on c-span. up next on c-span, the conversation on the 1996 welfare reform bill environmental law bill in by president clinton. later congressman frank wolf on the religious fighting in at some of a look the indicators on whether cities ill be successful in the future. c-span's "washington journal"
live every day with news and you.cy issues that impact coming up wednesday morning, katerine board, editor in chief libertarian t the monthly. she'll talk about gary johnson's andidacy and the future of libertarian movement and terrell star, national political correspond for fusion about his fusion, the media outlet geared towards a diverse millennial audience. in a spot light on magazine segment, scott anderson, writer for new york times magazine joins us to iscuss his future on the fracturing of the arab world since the u.s. invasion of iraq. c-span's "washington journal" beginning live at 7:00 a.m. eastern wednesday morning. the discussion. marks 20 this month years since president bill clinton signed the welfare reform bill into law. a look back at the
1996 measure, the heritage foundation and the american hosted thisnstitute event. >> good afternoon. heritage the foundation at our douglas and auditorium. for those online, >> i would like to remind our internet viewers you are welcome to send questions and comments at any time. you can e-mail the speaker. in-house e.orgfor the assignments. check our cell phones and other mobile devices. they have been silenced as a courtesy to our presenters. we are pleased to go host this program with our friends at the american enterprise institute and thank them for their special participation in this 20 year anniversary
discussion. hosting our guests is jennifer marshall, vice president for the institute for families, community an opportunity. she is also an andrew lich fellow she is a fellow. heritage. she oversees our research on a variety of issues to determine the strength and character of american society. she edits our annual index of culture and opportunity, copies of which are available in the foyer for you that tracks key economic trends and indicators of economic opportunity and if they are on the right track. join me in welcoming my colleague. jen. [applause] jennifer: thank you, john, and thanks to you who could be here with us today in mid-august. we appreciate you making your way over. next monday, august 22, march the 20th anniversary of welfare reform. on that day back in 1996, president bill clinton signed
the personal responsibility and work opportunity act based on a policy proposed by the republican congress in a 1994 contract with america. welfare reform has been widely hailed as one of the most significant domestic policy successes in the last half-century. participation in the temporary assistance to needy families program dropped by more than half. poverty rates among single mothers felt a historic lows. for decades before the reform welfare dependence grew without significant reduction of party reduction in poverty rates. contrary to what president lyndon johnson at hoped for when he enacted the original war on poverty programs back in 1965. welfare reform in 1996 was an important milestone in the ongoing effort to help more americans overcome poverty and dependence on government welfare. recently some have asserted welfare reform actually
increased the number of people in the most dire straits. others catherine eden and luke schaeffer's a after reform more than one million families are surviving on lesson two dollars per person per day in america. today our panelists will evaluate those assertions and explain why getting the facts right and learning the right lessons from the 1996 welfare reform are essential to building on its success for the good of more people. understanding the nature of poverty in america is essential to effectively help those in need, particularly those in the most extreme need. our panel today includes three leading experts on the subject. robert rector is the senior research fellow in welfare studies here at the heritage nation. a leading national expert on welfare in poverty and he played a major role in the 1996 reforms. his work focuses on a range related issues including how the
erosion of marriage has contributed to poverty. dr. bruce meyer's mccormick foundation are better at the university of chicago school of public policy studies. he holds a phd in economics from m.i.t. and his research focuses on poverty and inequality, tax policy and government safety net programs such as unemployment insurance, food stamps and medicaid. he evaluates the accuracy of various government surveys relevant to our questions here today. we are particularly grateful dr. meyer was willing to rearrange his vacation plans to make a detour and be with us today. robert zar is the fellow in party studies at the american enterprise institute. before joining aei , he was the commissioner of new york city's human resources administration. the largest local services organization in the united states. he administered 12 public assistance programs. he was the new york state commissioner of social services
and helped to make the state a model for welfare reform implementation. his comments today will help us focus on what this debate means for at the programmatic level. when you join me in welcoming robert rector. [applause] mr. rector: ok. 20 years ago that sweet bill 20 years ago next week, president bill clinton, president bill clinton signed the welfare reform act that changed the program and and tanif notably imposed requirements on some of the recipients for the first time in the history of the welfare state. at the time the act was signed the left basically said it would cause an immediate and drastic increase in party in the united in poverty in the
united states. they predicted 1/5 of all families with children would have substantial drops in income. some 2.5 million people would quickly be thrown into poverty. senator daniel patrick moynihan infamously predicted this act would leave children sleeping in the streets, scavenging and garbage bins, and being picked up frozen in the morning. those doomsday prophecies were quickly put to rest when the act very soon produced record drops both in black child poverty and party months ago mothers. -- and party among single that clommorreally has remained quite silent for many years now. close to two decades. recently in the last two or three years, essentially the moynihan claims have been resurrected. there is a new group, particularly the book: two dollars a day by catherine eden
and mark luke schaeffer planning that while poverty may have gone down, there is a group of the very bottom that is in very dire conditions with 3.5 million children living on less than two dollars a day. that is the third world global poverty level. there is a group of the very bottom that is in very dire conditions with 3.5 million children living on less than two dollars a day. 4% of families in any given month or down in these dire conditions. bloomberg goes as far as to say they are millions of american families whose incomes are lower than disabled beggars and ethiopia. we will examine the truth of that assertion during this panel. let's start by getting the slide -- there we go.
this is the case load in blue. the line on the left, the second line is welfare reform in 1996. at the height of that program, we had roughly one in seven children in the united states and rolled in it. welfare reform comes along, and by imposing work requirements onto the caseload, they caseload quickly drops by 60%. the left said that would, in fact, result in a disaster. let's look at that, at what the consequences were. before that, if you have the handout, we need to review briefly three concepts about poverty we will be talking about here today. normal, official poverty, which, for a family of three, is around $19,000 in income expenditure per day, which translates to a $17.44 per person, per day. eep poverty, de-
which comes to having an income half of the official poverty level, which comes to around $9,000 per year and around $8.75 per day. finally, we have the concept that has been recently introduced into the debate of extreme poverty, which is roughly 1/10 of the official poverty level. it is less than $2000 per year, and about two dollars per person per day. the claim before us is that 4% of all families with children in any given month have incomes that are down at this extreme poverty level, which would be considered poor by a global un standard. first of all, we can look at a simple official poverty based on income over the last 20 years. the columns on the left, the red is pre-welfare party. these are families -- let me back up. 90% of the caseload in the
population are single parents. if you want to judge the impact, you have to look at the impact on the poverty rate of single parents. that appears on the left of the chart. we see that, over the last 20 years, based on income, the official poverty as a client before welfare by about 3% for this group, after welfare by about 4.5%. the right-hand column is interesting because these are households without children, based on the normal current population survey. over the last 20 years, in households without children, a group unaffected by welfare reform, official poverty has gone up, both before welfare and after welfare. sort of exactly the opposite of the normal narrative, which is somehow welfare make things worse. welfare seems to have made single parents better off than the rest of the population.
now, ede and schaeffern take a survey called the survey of income participation. they look at that and find in that survey they can find a population that appears to have less than two dollars per day per person in income. but that same survey also provides a lot of other data. the next thing i did was to take the exact population that allegedly lives in extreme poverty on less than two dollars and look atper day, what the same survey tells us about how those families actually live. what we find is, when we look at the population that they defined as living in extreme poverty, we see in the survey, 86% of the households in extreme poverty had air-conditioning and they are houses or apartments, 2/3 of
them own a computer, 90% have a cell phone, and about 88% have a dvd player, or digital media recorder, or some similar device. we go to the next chart, and we see in the same survey, if you ask these families who are allegedly subsisting on less than two dollars per day, at any time during the previous four months, did you often not have enough food to eat? 1% of the population in extreme poverty say that they often did not have enough food to eat. despite the fact they allegedly have two dollars per day in income, only 1% of them were evicted from their houses or apartments during the previous year. if we look closer at food consumption, this is the survey. that tiny orange sliver. 1% said they often didn't have enough food to eat in the previous four months. 8% say they they sometimes didn't have enough food to eat.
but 90% said they always had enough food to eat during the previous months. purple says we would've liked to have better food, but they certainly had enough food to eat. what is this? how can these households have less than two dollars a day, but they all have air-conditioning, and computers, and dvd players, and enough food to eat? the answer to that is the government survey measures income badly. they have done this all along. they particularly measure badly at either tail of the income distribution. when you are talking about a group that sits allegedly in extreme poverty, they are way down in the tail of the distribution. the simple fact is, when the surveys asked income and the
family is getting welfare or has off the books earnings, they don't tell you about it. on the other hand, you could ask them, how did you spend money? they tell you something very different. they will tell you -- in every government survey for decades when you look at poor people, they report spending at least $2.40 for every dollar of income they apparently have. why should the expenditure data be better than the income data? the expenditure data is very detailed. they don't just say, how much did you spend this month? they say, how much did you spend on tunafish? it is very detailed. they spend several hours making these expenditures. when you look at the families in extreme poverty, what you find is they are in fact spending $25 for every dollar of income they ostensibly have. what we did was go to another survey called the consumer expenditure survey.
we looked at every record of every family with children for the last 30 years. based on their quarterly self-reported expenditures. was 270,000 observations. on the basis of those 270,000 observations, we found 60 that reported spending less than two dollars per day. 60 out of 270,000. although they are trying to tell us one in 25 families tries to live on two dollars a day, based based on their self-reported expenditures, the number actually looks like that. one family out of every 4400 are spending less than two dollars a day. and most of those families resided in public housing where they did not have to pay rent. why is there this huge disparity?
part of the reason that schaeffer and eden get large numbers is when they say 3.5 million children, they basically don't count any welfare as income at that point. food stamps are not counted. tax credit is not counted. once they count income, it falls down to about 1.2 million children who extensively -- ostensibly have less than two dollars a day. the problem is they are using the sip data, which is fairly normal. when you look at the data, what you see is, like most government surveys, welfare benefits are grossly underreported. on a typical month, the survey is missing over 20 million benefits per month that we know are paid out by administrator records, but are not being picked up as benefits received.
what they are actually doing is using a survey which is missing 20 million welfare benefits then they arend concluding there are roughly 1.2 million children who don't have any welfare that month. it makes absolutely no sense at all. you can't possibly use a survey that has gross reporting gaps to try to make these very tiny calculations about people, the number of people that don't have welfare. what they are reporting is not conditions in the real world, but simply gross underreporting gaps in the survey. it is like someone who is a pair of glasses with cracks in it. they look out on the world, and they confuse the cracks in their lenses with reality. they look up and say, oh my goodness, the sky is full of fishers and it looks like it's
about the fall. it is not out there in the sky. it is right there in the survey instrument. another way of characterizing this is, if you use the instrument for the services, it is like trying to use a fork lift for brain surgery. you radically cannot do this with the survey. when you go to the consumer expenditure survey, which is much better about picking up the actual resources of the families have, it shows you a very different picture. very briefly, i will go to that. this is consumer expenditure survey data going back to the late 1980's. the red line is welfare reform. the green line is the official party rate based on expenditures for single-parent families. the group affected by welfare reform. what you see there is quite contrary to conventional wisdom. the official poverty rate, about $17 per person per day, drops dramatically after welfare reform, and continues downward
until the great recession, which is the gray bar on the left. where it starts to go up again. but that is largely due to the very weak economy and not welfare reform. interestingly, the blue and red lines at the bottom, the red line is married families with children, a group largely unaffected by welfare reform. their poverty rate is largely unchanged during this period. and the blue line is households without children. their poverty rate is largely the same. it is clear that this does not seem to be a general economic factor. it does not seem to be anything in the consumer expenditure survey. it seems in the group affected by welfare reform, you have a substantial downward trend in official poverty. the final chart, deep poverty. i can't measure extreme party because it is 60 out of 270,000 observations. it is effectively zero and you cannot have trends in zero.
but you can look at the list of this condition, which is is families that don't have two dollars a day, but they have about $8.50 per person per day. about half the poverty level. the red line is welfare reform. the green line is single parents with children. what you see is a steady and substantial decline in deep poverty for single parents with children that starts with welfare reform, and the overall deep poverty rate is substantially lower and continues downward until the recession, where it kind of levels off and grows up slightly. but a very substantial decline. that can be compared to the red and blue lines that are two groups unaffected by the welfare reform, the deep poverty rate for those groups has essentially remained unchanged during the same period. this is exactly the opposite story you are getting from the
left at the present time, which is that somehow after welfare reform, deep or extensive poverty went up, and it went up in particular for the group affected by welfare reform, single parents. in reality, when you look at the consumption, it is exactly the opposite. to summarize, when you look at the survey data that is being used to proclaim children live with less than two dollars per day, the actual living conditions in those families in no way resembles anything that you would consider extreme deprivation. they look like fairly ordinary poor families. when you look at consumption, you see these families are spending over $20 for every dollar of income. when you look at 30 years of consumption data, you can virtually find no families
whatsoever that spend less than two dollars per day. when you look at the trend lines, what you see is in the group that is supposedly victimized by welfare reform, both regular party and deep poverty have been going down relative to the rest of the population. the key idea of welfare reform was that welfare should not be a one-way handout. able-bodied adults who receive benefits from the government should work or prepare for work as a condition for receiving aid. over 90% of the american public agrees with that assessment. that policy, when it was put into effect 20 years ago, it not only reduced dependency, but also reduced poverty. the problem is we reformed only one program out of 80. it is time to take the same principles and apply the more broadly. jennifer: thank you, robert.
>> you are going to hear i'm going to echo many of the themes that robert has emphasized. i will have a little bit of a different take in terms of what were the policy changes. let's see. i need to get my presentation up. >> ok. great. so, we are here to talk about the 1996 welfare law and extreme poverty. i want to begin by putting the
1996 law in perspective. it was part of a long list of policy changes i have put on this slide roughly in chronological order. one will have a distorted view if you look at just the single program, because our safety net is constructed from a large set of programs, and those that were previously on one program now are often on a different program. now, as a result of these changes, changes in the the itc -- the eitc, medicaid expansions, food stamps replaced by snap, general assistance being expanding, as a result of these changes, we are spending
more than ever. >> here we go. we are spending more than ever on those at the bottom. this slide indicates expenditures in 1996 and 2011. those were the years that are emphasized in the eden and schafer work. in their work, they say that welfare is dead. by that, they mean there isn't much being spent on welfare. well, if you take a look at these numbers, you see that we used to have a bunch of $20 billion programs. now snap is three times that big. ssi has doubled. unemployment insurance at the time they were looking was more than four times as big as it was
in the earlier years. the eitc has more than doubled. i didn't put down numbers for the child tax credit, or medicaid. child tax credit went from about zero to $30 billion. medicaid went from about $150 billion to $300 billion. i think it is fair to say that the reports of the death of welfare are greatly exaggerated. when the popular press, and even my academic colleagues, look at poverty, they tend to measure income. to measure income, we rely on the current population survey or cps, or the survey of program participation, or sip. the cps is the source of our official party numbers. the sip is the source of the
data used by eden and schafer. these surveys are so flawed through poverty measurement that they should be abandoned and less linked to administrative data. you heard a version of that from robert, and i will emphasize that as well. using a slightly different analogy than he did, income surveys are measuring cups riddled with holes. the holes are the benefits and other transfers that are not reported in the survey. and if water is leaking out of hole, it often makes a family appeared poor, even when they aren't. i will go into these in detail shortly, but first let me launch into some good news. the consumer expenditure survey provides actual living standards and indicates what people are actually spending on things like
food and housing, and it reflects cash transfers from others in savings. in work i have done with jim sullivan, we find strong evidence that low consumption is more closely associated with deprivation than low income. looking at consumption gives you a better idea of people's living standards. what i am going to show you is what we call well-measured consumption, rent, utility, gasoline, percentage of the value of cars, and the rent equivalent of old homes. rent and food at home, that they home, are the bulk of spending at the bottom, and those are fairly easy to report. people know their rent, the know about what they spend each month on grocery bills.
here is the pattern of spending by single mothers. we focus on single mothers because they are most affected by welfare reform. here, i am reporting the spending by households adjusted for inflation and family size. it shows the changes since 1990, when welfare reform was just getting started at the state level. what you see is that consumption at various percentiles, the top two percentiles here are the fifth and 10th percentile. consumption at each of the percentiles went up steadily. at the bottom, it went up by leveled off around 2008, and has not unfortunately increased much since then, but it is at a level 50% higher than
what it was in 1990, when welfare reform at state level was getting started. we see clear evidence that those at the bottom are not being left behind. there's strong evidence that the numbers are misleading or just wrong. when i showed you is consistent with evidence from other sources. if you look at the biggest expenditure of households, housing, you can do that with the american housing survey. if you look at the bottom 20% of single mothers, which is a group well below the poverty line, line,low the poverty their living unit has more rooms, more square feet, more veterans. it's more likely to have
air-conditioning and other appliances than it did when welfare reform was passed. leaks and peeling paint are down. that living conditions , and very objective measures, show that those at the bottom are doing better than they were when welfare reform was passed. what are the problems with the income data i am telling you to dismiss? well, it's that the people no longer want to report their income to household surveys, so if you look at the cps, the source of official income data, 63% of general assistance recipients don't report that they receive. 44% of those getting general
assistance in the sip used by the eden and schafer report, 61% of those do not report, and unfortunately, we do not have comparable numbers but probably a lot of people that report. 43% of recipients do not report in the cps, and a substantial share of other program recipients do not report in the survey of income program participation. now, these problems are getting worse, which is important because one of the emphases in the eden and schafer work is how the number of people who are living on two dollars a day is going on. what i think the evidence indicates is going on is that there are bigger holes in the data. since 2000, on average, we
missed about 36% of 10 half dollars, 39% of unemployment insurance, 46% of workers compensation program in the sip. and the trend is that about seven percentage points, in addition, are missed every 15 years, and this has been a long-term trend going on for about 15 years. -- about 30 years. 15 years is the period in which eden and schafer are looking. those numbers that i just reported are including dollars that the census bureau imputes or guesses at, and that has doubled for most programs since 1990. if you look at our main cash
welfare program, i have already about a third of people do not report their benefits at all. well, of those that are recorded in the survey, 40% of those by -- gues guest at by the census bureau. only 41% of the dollars reported in the survey are directly reported by recipients. the others were either completely missing or made up by the census bureau. the evidence i just went through shows the failure to capture government programs, but what about informal earnings and transfers from families and friends? those are even harder to capture. here, let me quote from the
introduction from cathy eden's first book -- "making ends meet shows that almost all poor single mothers supplement their regular income with some combination of off the books employment and money from relatives, others in the fathers of their children. few keep a record of such income. even if they knew the annual total, they would not necessarily report it to the census bureau." so those are sources of income that we really are not ever going to get with income data, but with consumption data, you have a chance of looking at something that reflects those sources of income. when people in the past looked at the bottom of the distribution, they tended to ignore the data, at least for the bottom few percent, so blank and cheney, for example, argued
that those data are likely to be errors and we should ignore them. if you do a calculation similar to what robert rector did, but you look at the bottom 5% of the income distribution of single mothers, and you look at their spending, so this is not going down quite as far in the distribution as he did. you find that their spending average is 6.3 times their income. their spending is about the 40th percentile, even though their income is in the bottom 5%. >> now, let me see if we can get -- great.
what did eden and schafer do? they used income data that i have party told you you should ignore and robert has emphasized as well. they repeatedly make choices that exaggerate extreme poverty, first, they do not count any -- in-kind transfers. they used a short time period in the worst month and the comparable home. they use a price that overstates insulation so the income cutoffs they use rise too fast. and they do not look to see whether low income means low spending, means really a low standard of living, and most importantly, they use broken income data that is beyond repair. that leave us in
terms tanf reform? let me just mention this briefly, existing block grants may be insufficiently responsive to economic downturns and provide states too much spending latitude, but that is an open question. worker requirements probably could be improved. besides family living standards and work, we should also be thinking about nonmarital fertility, which is way too high. unfortunately, we lack good evidence that making welfare or -- more work centered decreases nonmarital fertility, but even small reductions would be important given the costs of nonmarital fertility that are so high.
ok, concluding, i think we could have a productive discussion about how the safety net, including the program, should be reformed, to make sure that work is encouraged, but statements about the rise in extreme poverty are based on faulty data and should be dismissed. conservatives should the knowledge that a programs have reduced deprivation, but liberals should knowledge that we are spending more and more and not always spending it well, so let me stop there and that robert continue. >> thank you. >> thank you very much for having me. it is an honor to be here and thank you to robert for your work on this over many years. as jennifer said, i would like
to bring the perspective of the practitioner, the commissioner of new york, and how to react between back-and-forth between scholars and data and poverty rates? i would tell you it plays a large role in our life. that welfare commissioners like myself and in new york have to weigh about the conventional in sum, the common wisdom, the media wisdom about the data. to the extent that there is a misleading perception driven from one important work, it can be a real problem, so it is important that we have work like bruce's and robert's and others and have called into question this perception that those at the very bottom and in the wake of welfare reform are worse off than they were. my conclusion after looking at it is that a fair reading would conclude that it is not true, that welfare reform to not increase poverty among the very poor and single household homes in the united states.
allowing that perception to be part of the dialogue severely undermines credibility of people who in other circumstances would say and want to say we have to follow the evidence and pay attention to data and have evidence-based policymaking. from my perspective, it is important that we get fair, careful readings of this not driven by ideological objective to tarnish or undermine the undoing of the cash entitlement that came with welfare reform in 1996, and i think to some degree that is what it is about. that there is an element that was never happy with the ending of the welfare entitlement and they would like to find ways to bring it back. the second point i went to mention is one that was echoed in both presentations, and it is sometimes not clearly understood, and that is the role of tanf in the broader
statement. it is a small program among many others. as bruce said, we assist people in need through jobs programs, snap, public health insurance, child care tax credits, subsidies, the long list, and in understanding or discussion of safety net policies for the poor, the very poor, need to take into account the role that all of those play. in most of the time, commentators on both sides, when they went to reduce material hardship or increase work, will talk about how all of the things have led to reduction of poverty, except when their objective is to tarnish the program. all of a sudden, all of the burden of responding to recession falls on the temporary assistance for new families program, which is only a small program affecting certain population. that reminds me of when i was commissioner in new york city at
the beginning of the great recession and i remember one of those meetings where the deputy mayors called together the key players and wanted to know, what are you going to do? things are getting bad. what are you going to do to respond because of the recession? we went around the room and those who talked about unemployment insurance talked about that person is snap, good -- food stamps, and i talked about what we would do in public health insurance, we talked about that, and someone said, what about tanf? i said, we will see because part of what happens when a recession hits people seek assistance for , the need they have at that time given their circumstances, so many people go to unemployment insurance first and that is all they need and then they might need snap and then they might need public health insurance or they might get a tax credit benefit that allows them to muscle through a difficult time. it takes a long time to have to
turn to the cash welfare program. people say that in the wake of the recession, it barely budged, therefore, it was unresponsive or the safety net was unresponsive but it is false. it is not consistent with the way the programs work. people work through these programs to the extent that they need them and the program is the last stop on the bus and not necessary because of the programs rush to their aid in their wake. we do have one small quibble with robert rector and i hesitate to say this, but one of the distinctions in the language we use, did you notice robert says post welfare poverty and pre-welfare poverty and welfare applies to all forms of assistance. i believe that is correct. in the world i come from, there is a distinction between what we would call cash welfare and what we would call work support. the theory is, whether you buy it or not, is that something is
welfare and has a negative connotation when it doesn't support working people, when it supports able bodies that not working and then it is cash welfare and that is what we reform as welfare. the other form is work support. they may also undermine the work incentive and have consequences that are not necessarily good, but the idea of other forms of assistance that increase wages, we do not often called welfare. i did want to make that point because in the distinction, we need to understand that we reformed one program and we expanded a lot of others. bruce made that point. some of those do not promote work to the extent that they should we should be talking about that and not be talking about undermining or changing the program that helps lead a lot of people into work and out of poverty. the next point i went to make is
that it has to do with a term called disconnected moms. in the language, the popular language that comes out of works like kathy evenson and schaeffer's, there is a lot of misinterpretation. in some respects, i think intentional. two dollars a day, it was not really about two dollars a day and they are not counting the various forms of other assistance. the connotation that comes with that when you talk about disconnected mom is that they are out there somewhere, not earning or having another source of income with children in the household, and no one is caring for them. there is no connection to the safety net or to caregivers or government officials, and the fact is it is not true. every single one of the disconnected moms is on snap. they are on a large federal program on the state or local
level the issues that the card to buy groceries, with which they can buy groceries, and it comes every month and there is engagement with the caseworker, and virtually all of the children are on public health insurance, which requires the same sort of connection to a large part of our safety net. the tragedy is not that they are on their own and attended to. the tragedy is that the programs to which they are connected is turning a blind eye to the fact that they say i have no means, i have no other income, just give me food stamps. to me, that is tragedy and we ought to be talking about why those programs do not respond to that situation, which is very easy to discover by going out and reaching out and talking about ways we can get them into the labor force. instead, the common response amongst some is that 60 of the program to get cash, too, and still be in as bad shape but
certainly not disconnected in any case. let me put that in more detail. i ran the tanf program in the state and city of new york. it would be very easy for me in new york and easy in my judgment for virtually any administrator of the food stamp program to ask their data people, produce a list, working age, nondisabled, households with children in them, adults that report no earnings. give me the list by zip code. give me the list by city, county, any kind of subdivision, and then you would have in your hand this list of disconnected moms, these folks who are apparently far worse off, and he -- you would know and you would have their address, phone number, and you could go out and do something about it. even better, perhaps, you could
report your activities to the federal government and say, what have we done? now, it is not a requirement are encouraged and we do not know to what extent agencies that have a connection to the families and people that are worried about this group to the extent that they exist could do something about it and i think that is a shame. we could do a lot more there and we will be listening to the language and we are not clear about what it really means. my final point about sort of how a programmatic system would react to this has to do with the benefits and the successes of the welfare act of 1996. i think virtually even people on the left and right all agreed
that for the large portion of the recipients in single-parent on the cash welfare system, and robert deserves a lot of credit for making it happen. the introduction of those requirements led to them, going to work, increasing income and reducing poverty. they chunks, so even when you read in literature from progressive left, big knowledge. yes, our program has to a lot to help the working poor and the working poor's poverty rates have gone down, so they'd knowledge that, and then they turn to this issue concerning the other group. that happens a lot because a new design a program, you will often have the person there, deeply compassionate, as i am, helping people in need as people in this is this has, who will say, what about this worst-case scenario? what about the contingency? what if this happens? and all of a sudden, you
designed a program to make sure that nothing bad happens at the lowest common denominator. when you do that, when you subsidize or design a program that provides an entitlement without expectation, you'll get more people taking advantage of that ms word, and all of the benefits that you derive them introducing the workplace program will be gone, and you have to be careful about that. one of the greatest aspects of welfare reform that i do not think gets enough attention, if said in the weight the previous policy did not, recipients of cash welfare of the united states can go to work. they either already are working or they can. they are capable and they have assets to build on, not just liabilities to care for. in saying that, they went to work and take the challenge. i like to remind people who talk about the history of welfare
reform or the benefits of welfare reform or what newt gingrich or bill clinton did, i would like to remind them that the real heroes of the welfare reform story from 1996 where the recipients themselves, who proved that what others thought about them was not true. that they were capable and could go to work. all i want to make about that is if you design your program to directed to the problem which i think is a floating problem, described by schaeffer, it will underline the benefits of the program you design for all the others who responded to the challenge and went to work and reduced the poverty level. >> thank you for the really helpful presentation to think through the assertions about welfare reform having harmed those who are the least well off in our society, discussing the
problems and data that are used to give that misimpression, the challenges with the data sources and surveys, and what this means that a programmatic level and how to do a better job of helping those low income persons, in general, and particularly those in the most dire need. we would like to open it to the audience to ask questions for a few minutes. they there will be a microphone. we are live streaming this, so wait for the microphones. down in front. the data from the book you have citing appears to have been pretty flawed and a lot of ways. is that due to ignorance or is it deliberately misleading or could you venture to guess? the second question, have you been able to have a one-on-one with these authors with your data and their data and what shakes out? have you had that conversation?
>> what i would say about that is anyone who researches poverty and uses this type of income data knows, and dr. meyer is overwhelmingly great research, in demonstrating this income data is not any good. the more you ask of it, the less accurate answers you will get. in particular, it does no good at either end of the distribution. the farther down you go in the farther up the go, the more you likely you are to get nonsense. from the time i studied this in graduate school when reagan was president, they were people showing up in the census records with zero income for the year and they clearly do not have zero income and you take that -- you cannot take that seriously.
what we have are people attempting to use these studies to measure people with nearly zero income and as dr. meyer explained, they leave food stamps out, and they leave out the informal earnings for the most part, so the data is not any good and they are asking bad data questions that it cannot possibly answer. you can not try to determine whether there are one million children that have no welfare benefits using a survey that is missing 20 million benefits per month. i think they just wanted to get a sensational number and that is what they did. some of the previous research has been good but this book was not. >> others? >> i do not want to question motives. i cannot look into their heart and figure what they are doing. kathye and -- i do know
and luke and i talk to them periodically and appear on panels like this. i have written about them, but i think that there is a motivation that comes from kathy's ethnography research, where she is in the households of folks who are struggling and in need, and i have all kinds of problems facing them. that makes her want to see what does this mean more probably? remember the book is a combination of ethnography and data. the other thing that she did discover, and i think is out there and have not mentioned, is the extent to which states that -- are behaving differently with regard to the current tanf program and the way the office receives or accept people. i think kathy got some examples and god knows, i ran a welfare office, so not everything goes beautifully, and it looked pretty negative. one story is a woman went to the cash welfare office in illinois,
it was a democratic state and mayor and governor, and the program was run by illinois state of welfare, and she stood in the line and got in line at 7:30, and when she got up to see someone about getting assistance, the person said, if you are not in the line before 7:30, we cannot see you today. that kind of thing, there is evidence of that and there is concern and that led her to believe or sense that the absence of the entitlement has led to the states not feeling any pressure, that they had to take at least an application or see someone who came to the door. finally, bruce, and a few others, but more bruce than anyone else, is really some of the evidence about the failures in the response rate and in the accuracy rate, as well as the failure to count benefit. we have really come more firmly
to conclusion that those surveys are really bad they flawed than we did even four years ago. maybe that is an exaggeration, but it seems to me you are stronger now about how bad those surveys are then you might have been three years or four years ago. is that right? >> i think that is fair. jim sullivan and i believe that the income data were not capturing people's well-being quite a while ago, though he did not have what you might call the smoking gun, where we could look and see if when you add benefits to people's income who did not report them, then you really can see that people at the very bottom had much higher income
then it seemed. >> there is one other thing, the $16 billion in 1996 and it is still roughly now and for people $16 billion like that on the left, that is just like the biggest crime of all because of the major social program has not expanded and has not continued to grow. i think that there is a desire to find a way, find an argument for spending more through the tanf program and that might have motivated some of them. >> next question. >> following up on this conversation, myers wrote a nice article about one year ago with response, having guided the income surveys but relying largely on the expenditure surveys. can you tell us why they think the surveys are so good that you told us the responses awful? >> that is a fair question.
so when you look at the income surveys, the problem is that there are so many different sorts of income. we have probably already listed one dozen programs and there are lots of others that matter, too. you have to get all of those, the different sources of income, formal jobs, informal jobs, you need to get transfers from family, friends, fathers of children, lovers. all of those things, it is a tall requirement to get all of those categories because you can have someone that is just relying on a couple of those, and if one or both of those are
not reported, then it puts that person at zero income. on the other hand, with consumption, it is simply -- at least the way we do it -- we focus on rent and food consumed at home, and a few other categories, but those are the ball of spending -- the bulk of spending, and people know their rent. they are happy to report it. they are much less willing to talk about their income. it is just a more sensitive topic. >> [indiscernible] >> some of the best work that is looked at participation in the consumer expenditure survey finds that when you look at the lowest percentiles of income at the zip code level, say look at
the zip codes that have the lowest income, their response rate is slightly higher than the average, so if anything, it looks like the consumer expenditure survey over represents people at the bottom. one way to put this, we are essentially saying the government, the federal and state government spends about over $1 trillion a year on 80 different programs providing benefits and services to low income people, and basically, the government does not know or that money goes. c, therem like the eit are 20 million beneficiaries in the normal current population and they just impute to receives that and they have no idea who gets that money. absolutely no idea, and considering there is a scale -- large-scale fraud in the
program, you cannot make imputation for fraud. they have no idea where that money is going. the basic methodology for these income surveys was invented in 1948, when truman was reelected. it really has not improved any since then. it was a bad survey in 1948, when they were very few government programs, and they were just trying to measure employment. this survey has been flawed for over 65 years. it is time for the government to actually know where it's money goes, and the only way to do that is to do a survey to where you pick up demographic data but then you go to this snap program, ego to the tanf program and you match social security numbers so you know it income came to that house, and what you would find is something dramatically different. you would find that welfare does
raise people's living standards because today's economic resources and the poverty rate would be much lower. you would also find that we are spending a lot more than people on the left would like to pretend we are, which he would at least have truthful data to make decisions on. >> next question. wait for the microphone, please. >> thank you. tyler o'neill from pj media. i would just like to ask if there is a political figure that really stands for the sort of welfare reform that you would like to see and just how disappointing, perhaps, our presidential candidates might be? >> this panel will not be able to engage in electoral politics, so maybe we can think of -- i know there are people instrumental in the welfare reform passage and have been
important in the conversation over the years to speak to. >> i would say the actual person who is the most important to welfare reform 20 years ago was jim tallon, the congressman from missouri, he put welfare reform in the contract for america and essentially designed the programs in the house that later became the ultimate policy, and the goals that we had back then i think are valid goals. they were not to cut welfare spending, not to be people onto the street, but rather to say that welfare should not be a one-way handout, that welfare should assist people who need assistance, but it should also encourage and essentially demand work. more importantly, where i think welfare reform has fallen short were concerned 20 years ago about the percentage of children born outside of marriage, which has continued to
go up and which is the root cause, not only of poverty, but other social problems. we need to do something to address that. i think the next stage is clearly that we need to change these welfare programs, starting c, that penalize mothers and low-income mothers and fathers on the get married. that is a crazy thing to do. if you are to sit down in the abstract, what should we really not do in welfare, it would be, let's put a financial penalty on every low income mother and father when we decide to marry. implementing the programs, what were important characteristics u saw in those that helped
the implementation go forward? >> to me, what matters most is there ought to be, like roberts at 25 years ago, that there be some supercool relationship, that assuming they are able-bodied, that they be required to do something. ork requirements and what is expectations are the most important thing to me. and the willingness to talk honestly about the benefits for children to have active parents and we have to be honest that we are not going to solve all of these problems unless we get some help from the family as well. so those are the characteristics that matter to me the most. i will stop there. > next question. > you talked a lot about the calculation of income, including expenditures. do you also calculate debt,
including credit card debt in he poverty rate? >> you better take this. >> sure. [laughter] sure. when we look at consumption or aybe more properly spending, we do not factor in debt, but let me explain why income is a better way of looking at things, even when people, maybe especially when people are getting into debt. >> you mean expenditures? you said income. >> i'm sorry, thank you. why you want to look at expenditures. thank you. if you have people in debt, they will not be able to spend all of their income.
they will have the scrimp a bit to pay off the debts, and if you look at what they are able to spend on food, housing and other things, event a better measure of well-being. imilarly, if people are living maybe beyond their long-term needs, you would like to know that. you would like to see that if they are living in a nice house, driving a nice car, you would like to be counting that. so in both cases, if you look at what they're spending you are going to get a better measure of their living standards than if you looked at their income in the case when ople are saving and into saving. probably the best two examples
are you have a lot of college students who are really living retty well, even though they ave little income, or you have an elderly couple that own their own home or they own a car and they frankly have a lot of clothes, furniture, so they do not need to spend a lot to be quite well off. they may not be getting any income, but but we look at in the case of the homeowner, we do not look at what they are actually spending. we look at the value of owning the home, and we look at the cars that they own and the value of having a car of a given make, model and year and e know that from data.
>> i want to just jump in. one thing i want to make clear. none of us here say that people at the lower end of the income scale are doing tremendously ell and resent that. we are expanding -- responding to david, rhetoric about what is misleading about what is really happening and we need to be clear and honest about the data and that may lead us to say, they are better off than those other people say they are, and that needs to be done if we formulate good policy. one of the things i think, and i wonder if you will comment on this, if you start zero in 1996 and you look at consumption and rising in consumption and you look at maybe the second or lower middle and compared it to
the bottom, did their consumption rise at the same evel over the periods or maybe the way things have shaken out his consumption has grown and people in the lower middle have not had as much growth or am i rong about that? >> people to the poverty line have had a little less growth well below the poverty line, the people at the poverty line has had more growth than those in the middle, so the lowest growth is at the median. > one last question.
>> hi, i want to emphasize what are kind of the key take aways here, because everything i have seen, people talk about spending trillions and trillions of dollars on the war on poverty and things are not much better now than when we started. using your data you guys have been talking about, how much further are we better off? you sound like things have improved since welfare reform. can you lay out how things have improved, if at all? >> that is a very good question. on normal -- our normal trope is we spent 24 chilean dollars on the war on poverty and the poverty rate is exactly where was in 1967. the reason for that is garbage data, so we spend $1 trillion a year providing cash, food, housing and medical care to lowg social security and
medicare. of that trillion dollars, of normal data, they can about the percent of income. guess what? if the welfare state does not have any effect, it is because they deliberately don't count foot stamps and earned income tax credit as income. they want to exaggerate the number of poor people spend even more money. if it does not count, if you do not counted, it doesn't count. the fact of the matter is even the government cannot spend a trillion a year and have no impact on anybody's living standard. there is a conservative view that bureaucracy sucks up that money but it doesn't. it goes to poor people. it is not really that hard to give free stuff away, but apologies to robert -- [laughter] we give away money to low income people in massive amounts, and when you count
that money, you find that in fact the poverty rate is down, but the problem is that honestly that is not what lyndon johnson was trying to accomplish when he watched the war and poverty. he wanted to shrink, not deal really would the symptom of poverty by giving people free stuff but by the root causes, meaning he wanted people to be self-sufficient and able to have an income above the poverty level without government assistance. you have to take anything lyndon johnson said with a grain of salt, but i think he actually meant that because his image of a good welfare program was a civilian conservation corps in the 1930's, or people went out to shovel dirt, move wheelbarrows to get stronger and healthier. he really wanted people to flourish in our society, not be perpetually dependent. by that measure, the war on poverty has spent a complete flop. people are nmo