The Stealth Repeal of Welfare Reform

It is cruel, Mr. President. It is corrupt. It is wasteful, it is unjust. And it is delusional.

What I am talking about? I am talking about the reports from Benjamin E. Sasse and Kerry N. Weems, Mickey Kaus and from Robert Rector that your stimulus bill is repealing welfare reform.

All reports agree that the provisions in the bill that remove incentives to the states to reduce welfare caseloads will result in expansion of welfare programs. The bill will result in a return to the status quo ante 1996. And that is wrong.

I think it is fair to say that nowhere, Mr. President, did you say that you would be turning back the clock on welfare reform. I am talking about the rotted, dysfunctional welfare system that had been a national scandal for 30 years before President Bill Clinton signed off on the landmark reform bill in 1996.

The Obama administration has no mandate to roll back welfare reform. None at all.

This is wrong, Mr. President. It is cruel, corrupt, wasteful, unjust, and it is deluded. Let us count how this is so.

1. Cruel: Let’s roll the Ellwood and Jencks chart from their 2004 report on welfare. Need I say more? It is cruel to destroy the low-income family in America with your welfare benefits.
2. Corrupt: Let’s face it. We know why liberals like welfare. It is about patronage, about the same as pirate captains sharing out the plunder. Liberals share the wealth because that is how they buy the patronage support of Democratic Party rank-and-file voters. And then, of course, liberals get to award themselves big administrative jobs to hand out the loot. Pensions too. This is corruption, pure and simple.
3. Wasteful: I could go on and on. There is the waste of taxpayers’ money. There is the waste of the lives caught up in the “poverty trap” of welfare. There is the waste of talent in the people who supervise and administer the programs. There is the waste, dare I say it, of scarce global resources at a time when we are trying to save the planet.
4. Unjust: It is a gross injustice to force Americans to pay for this expansion of welfare. There’s a penalty for injustice, and it catches up with you in the end.
5. Deluded: Yes, liberals. Go ahead. Make my day. If you think that this is just a cute little sweetener for your friends, you don’t understand what you are doing. Let us leave aside the record of thirty years of social science, of political philosophy, of simple decency and common sense, all of which thunders that government welfare is a terrible idea that devastates lives. There is the simple politics of it. Government welfare is very unpopular with the voters. They hate it.

There is only one thing to say about the monstrous repeal of welfare reform by the Obama Adminstration and the Democratic Congress.

This shall not stand.

The SNL Administration

I haven’t watched prime-time TV for 15 years. But I know that back in the day Saturday Night Live developed the concept of “not ready for prime time.” Not that I ever watched the Not Ready for Prime Time Players. (But I did just check Google to make sure I had my facts straight.)

It was common knowledge that the Clinton administration was not ready for prime time in 1993. And now it is looking like the same is true of the Obama administration.

Certainly the Obamites have swung and missed at three pitches in a row. First of all there was the “stimulus” bill that isn’t. Then there was President Obama’s first prime-time press conference. (A non-political friend call and said: R-O-O-K-I-E!)

Now we’ve just had to go through Treasury Secretary Tim Geithner’s not-read-for-prime-time performance on completing the bank bailout. Writes Larry Kudlow:

On Tuesday morning, stocks opened down about 75 points in the wake of Obama’s pessimism. But stocks really started to tumble when Tim Geithner stepped to the microphone. He totally bombed in his debut.

Geithner had no real plan to deal with the problem of unmarketable toxic assets on bank balance sheets. He offered no new architectural structure, no good way to remove the toxic assets, no clear pricing or funding proposals, and no meat on the bones.

Look. I’m a conservative and a partisan Republican. I have no debt and cash in the bank. What do I care if the Obama administration totally tanks and fails to fix the most important government program of all: the government-run and government-dominated credit system? Hey, all this stumbling and bumbling has energized the Republican base like you couldn’t believe.

(Yes. Forget the idea that the banks are private. Banking has been a government-regulated business since whenever. And it has been totally in the pocket of government ever since the Federal Reserve System was formed in 1913.)

(And if you wonder why bankers get all those bonuses, remember this. State and local government workers earn about 50 percent more that comparable workers in the private sector. So why shouldn’t government sponsored enterprises like the banks earn more than ordinary mortals too?)

But the fact is that the people who are going to be hurt by all this are the Democratic faithful. They are the people who got suckered into mortgage loans they couldn’t afford. The people who work in retail. The people who work at the less desirable trades in construction.

So I do care. And I wish that the Obama administration would get its act together, stop playing politics, and get the economy back on track. It’s not that hard. First of all, we’ve got to do Stage 2 of the bank bailout. We’ve got to get the bad loans off the books of the banks. We did that after the S&L meltdown (another Democratic program that went south). Secondly, it wouldn’t hurt to throw a lifeline to small business. Try something like a cut in the FICA tax, the tax on jobs. Try lowering the corporate income tax rate.

But let’s do one thing right now. Let’s stop throwing money at the Democratic establishment. They get 20 percent of GDP to play with already, and have just about zero accountability. So why load ’em up with more? They’ll just waste it.

Stimulus: Administrative vs. Incentive

The good thing about the Obama administration is that it gives the nation a clear experience of the difference between the two political parties.

Like the “stimulus” package. It clearly reestablishes the Democratic Party as the party of the administrative solution. Got a problam? Design a program and administer the people and resources needed through a bureaucratic, political process.

By comparison, here is Republican Newt Gingrich’s 12 Point Plan, which almost 100 percent pure incentive.

1. Payroll Tax Stimulus. Cut FICA, the tax on jobs.
   
   
2. Real Middle-Income Tax Relief. Reduce the marginal tax rate of 25% down to 15%.
   
   
3. Reduce the Business Tax Rate. Match Ireland’s rate of 12.5% on corporate income tax.
   
   
4. Homeowner’s Assistance. Provide tax credit incentives to responsible home buyers.
   
   
5. Control Spending. This begins with eliminating Congressional earmarks and wasteful pork-barrel spending.
   
   
6. No State Aid Without Protection From Fraud.
   
   
7. More American Energy Now. Explore for more American oil and gas, plus clean coal, ethanol(???), nuclear power and renewable fuels.
   
   
8. Abolish Taxes on Capital Gains. Match China, Singapore and many other competitors.
   
   
9. Protect Our Right to Vote in the Workplace. We must protect a worker’s right to decide by secret ballot whether to join a union.
   
   
10. Replace Sarbanes-Oxley. This failed law is crippling entrepreneurial startups.
    
    
11. Abolish the Death Tax.
    
    
12. Invest in Energy and Transportation Infrastructure.
    

Notice the difference between this plan and the president’s plan for admininstrative distribution of government handouts for this administered idea or that administered idea; this cash handout versus that cash handout? It’s the difference between an administrative world-view and an incentive world-view, between the notion that you must lay out the specifics of what you want to do, and the idea that you only need to lay out the incentives and people will respond positively and competently.

It all goes back to my Two Nations concept. We really are two nations here in the United States, between whom there is no understanding and no sympathy. Take any difference: Venture Nation versus Tenure Nation. Contract Nation versus Power Nation. The difference between conservatives and liberals is as clear as day.

Or take today’s example: Incentive Nation versus Administrative Nation.

Let's Be Serious, Mr. President

It’s sometimes hard to remember, but governments are instituted among men for serious reasons. The principal reasons are to secure peace at home and abroad and provide a platform for people to go about their daily lives and earn a living.

In the modern era, that means a functioning credit system. As long as the credit system is sound, then everything else will fall into place.

So when the Obama administration put off the announcement of Bank Bailout Part II, to clear the decks for Senate passage of the so-called stimulus bill, you could say that it demonstrated as clearly as can be where its priorities lie.

First of all we service the Democratic faithful with a trillion dollar bonus. Then we fix the economy. Thanks, Mr. President.

Mr. President: I am sorry to say this, but you are wrong. You are making a terrible mistake.

The only thing that is important right now is to finish the business of righting the credit system, to recapitalize the banks and to do something about the toxic debt. That’s what you need to restore confidence in the banks, and get the economy moving again.

But that’s not what the Obama administration has elected to do. And it speaks volumes.

There’s a lot of political hot air venting right now about bankers dealing themselves big bonuses. Although it is small potatoes, it is scandalous. What we have seen in the last year is that the big beasts of Wall Sreet aren’t as big and aren’t as smart as they thought. There’s a simple reason for this. The credit system is not a glorious triumph of the capitalist system. Not at all.

The credit system is a government program, and has been ever since the Federal Reserve Act of 1913.

What does that mean? It means that the government is responsible for the monetary and credit system, and the bankers are just subaltern clerks. It’s the government that mucked up the credit system with its foolish idea that it could shovel credit at low-income homeowners without creating an economy-wide housing bubble. Now it’s the government that must clean up the mess it made.

The fact that the bankers thought it was time to hand out bonuses shows how dumb they really are.

OK, so the bankers are dumb. But the Obama administration is dumber. It would rather focus on increasing Medicaid grants to the states, and building important universities and a thousand other pet projects than fixing the credit system that it broke with its Fannie Freddie catastrophe.

I can’t say that I’m disappointed. I am getting exactly what I hoped for when I voted for Obama.

I felt that it was time for a change from the seriousness of the Bush Administration. Democracy, we know, is the system where the people get what they want: good and hard. And what the people need right now is a four-year demonstration of the unserious nature of the today’s liberal Democratic oligarchy.

It looks like we are going to get just what the doctor ordered.

The How and the What

In government there are two ways of looking at things: how you do things—the process and the image—and then there is the what, the actual policies and ideas that you implement in law and regulation.

President Obama ran as a how candidate, according to Kimberley A. Strassel. He wanted us to judge him on the way he was going to do things.

It was all about how he was going to do it — with bipartisanship and ethics and a new era of "responsibility." Now comes the reckoning. President Obama is being judged not on the what, but the how.

Well, it’s one thing for liberals to talk to themselves about ethics rules and process, and blow clouds of smoke about Hope and Change. But the truth is that government is about force. In our case, it is $5.5 trillion a year of force budgeted or estimated in FY09 at all levels of government, according to usgovernmentspending.com.

So the bottom line is that, what with the gigantic amounts of money swilling around in government, almost anyone who has had something to do with government has got their hands dirty. That creates problems when you advertise, as President Obama does, that all can be fixed with the proper process.

His first full day in office, Mr. Obama imposed the "most sweeping ethics reform in history," barring officials from working on issues on which they’d lobbied in recent years. Then came the realization that a lot of really smart people hadn’t just sat around for years waiting for him to give them government jobs, but had used their expertise for private profit.

You see, it doesn’t matter if you have the most ethical administration in history. If you are shoveling government spending out the door then people are going to lobby big time for a chunk of it. And the senators and congressmen and former senators and former congressmen are going to be right in the middle of all the wheeling and dealing, using their experience and their contacts to help their clients get a piece of the action.

This is what our liberal friends don’t understand. They think that because they are rational and compassionate that their ideas on politics and government programs are rational and compassionate. Put in a proper ethics reform and a few more billion dollars and money will start to flow to the areas with the greatest need.

But they are deluding themselves, of course. Politics is a competitive struggle for power between powerful men and women. The medium of exchange in this fight is government spending for programs. It is ultimately civil war by other means. For all that the language of politics is about helping people, the truth is that it is all about power. And anyone who thinks differently is deluding themselves.

That’s why I say that the welfare state is cruel, corrupt, wasteful, unjust, and the people who believe in it are deluded.

Stimulating Hope and Change

How could it happen? How could all the promises about Hope and Change get buried in the dust of politics-as-usual so quickly? Is it really impossible for our political leaders to do anything without covering it in political chicanery and ethical lapses. Can’t we stimulate the economy without a christmas tree bill that shovels money at every liberal special-interest gropup in the nation?

My answer is: What do you expect when the government is handing out $5.5 trillion a year in goodies? Here’s the gory details from usgovernmentspending.com.

United States Federal

State and Local Government Spending

Fiscal Year 2009

Amounts in $ billion



Pensions: $891.1

Health Care: $958.2

Education: $873.7

Defense: $806.1

Welfare: $467.7

Protection: $325.0

Transportation: $247.8

General Government: $193.3

Other Spending: $403.6

Interest: $361.7

Balance: $24.3

Total Spending: $5,552.4

Gross Public Debt: $12,969.0

This isn’t rocket science. When government is spending all that money then inevitably the people in politics want to use that money to build political support. If you don’t want them doing that, then you must give them a lot less money to play with.

Now the question is: Did President Obama know all this, but just told the American people what they wanted to know? Or is he just naive, and believed that by introducing new ethics rules he would really clean up government?

It really doesn’t matter. But with every cloud there is a silver lining. By creating ridiculously high expectations for hope and change President Obama has handed conservatives and Republicans a much-needed helping hand. So let’s get the word out to the American people. Do you want government and a governing class that are less corrupt? Then you must start voting for people who will reform government by dismantling the vast patronage system we call the welfare state.

Because the welfare state is cruel, corrupt, wasteful, unjust, and the people that believe in it are deluded.

Welfare Reform, Part 2

Whatever happened to welfare reform? Last we heard, President Clinton had signed welfare reform in summer 1996 after vetoing two bills from the Republican Congress. Democrats had all predicted disaster. But by the year 2000 welfare rolls had dropped to 6 million—from a level of 13 million in 1995—and child poverty had gone down too. After that, silence.

Well, it turns out that, right under our noses, the incompetent Bush administration has been doing welfare reform part 2, and it’s working, according to Steve Malanga in City Journal.

The reason you haven’t heard about this new welfare reform push is that it was implemented in the 2005 Budget Reconciliation Act. These days you can’t reform anything in a regular authorization bill because the liberal moss-backs in the Senate will filibuster any reform of the welfare state. So you slip it in under the radar in the budget process where you only need 51 votes in the Senate.

The new reforms put the states back under the gun to move welfare recipients from welfare to work. Writes Malanga:

The federal government also tightened the definition of what counts in fulfilling the work requirement: no longer would spending time in psychological counseling or in traveling to job training do the trick. And the feds urged states to enroll more welfare recipients with physical or mental disabilities in job-training and job-placement programs.

In case some liberal states didn’t get the point, the Bushies spelled it out for them.

“Individuals who happen to have disabilities should be afforded the same opportunities to engage in work—to find work-related training, work experience, and employment—as those who do not have a disability,” the Bush administration’s Department of Health and Human Services wrote in its new regulations.

As is the common practice, Malanga tells the story of a welfare poster girl, Debra Autry, who had, in social-services jargon, “multiple barriers to work” and “been out of work and on public assistance from more than two decades.”

First they had Autry cleaning out government offices, but she didn’t like that. So she got a job at a Revco drugstsore (later bought out by CVS).

[S]he enrolled in the company’s program to learn how to become a pharmacy technician and eventually began working in that position, which typically pays between $25 and $30 per hour.

Well, that’s nice. Think of that: a former welfare recipient earning $60K a year. But there’s more.

Autry’s hard work inspired her children. Her daughter just earned a degree as a physical therapist, while one son is in college and another is working full-time. “I was on welfare because there were no jobs that interested me,” she recalls. “But once I had to go back to work, I realized there’s a future if you want to better yourself. It was the best decision I ever made.”

Don’t expect to be reading much about this in the New York Times, old chap. After all, this is another success of the Bush administration, and we wouldn’t want people to get the wrong idea.

Unfortunately, we are not yet home free on welfare. Writes Malanga:

Ominously, Democratic foes of welfare reform have gathered power both in Congress and in President Obama’s cabinet.

No doubt. No doubt there are careers, power, and the love of beautiful women at stake.

Like I say. The welfare state is cruel, corrupt, wasteful, unjust, and the people that support it are deluded.