Ethan Allen Institute


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    Welfare Reform Battle Renewed
    Does the Obama proposal to issue waivers for the strong work requirements for welfare recipients threaten to fatally undermine the 1996 welfare act? Perhaps more importantly, does the assumption of waiver authority by the Administration presage government by executive decree? (August 2012)

    Vermont's Feeble Welfare Reforms
    Vermont comes in last of the 50 states in a new study on the effectiveness of five years of welfare reform. Why? Because liberals viewed work as an unconscionable burden on the welfare population. (November 2004)

    Helping Albert
    Vermont and federal taxpayers are spending over $61,000 a year each to support and control 1,850 developmentally disabled Vermonters. The policy is not only expensive, but it also leaves the people involved isolated and dependent on state-paid caretakers instead of fostering choice and autonomy. (September 2004)

    The Godzilla of Child Care
    How about this: a giant state-created nonprofit mega-corporation handing out $300 million to 12 regional nonprofit corporations that will organize and control child care, preschool, and medical programs for children 0-5. That's the Godzilla that Gov. Douglas has taken the first step to create. (September 2004)

Welfare Reform Battle Renewed
(August 2012)

A campaign ad by Republican presidential candidate Mitt Romney has brought the long-dormant issue of welfare-to-work back to the political center stage.

Romney saw an opening when on July 12 the Obama administration’s Department of Health and Human Services (HHS) issued an “information memorandum” to state welfare-plan administrators regarding “waiver and expenditure authority.” The memo said the Department wanted to give states more flexibility in meeting welfare-to-work requirements in order to “allow states to test alternative and innovative strategies, policies, and procedures that are designed to improve employment outcomes for needy families.”

HHS Secretary Kathleen Sebelius contends that she has the legal authority to waive compliance with the work requirements of the landmark 1996 welfare-reform law, known as “section 407”, even though Congress in 2005 declined an appeal from a number of governors (including Jim Douglas) to enact such an authority..          

Here’s how “welfare” – now known as Temporary Assistance to Needy Families (TANF) - works. Each state submits to HHS a plan spelling out how it proposes to meet the requirements set forth in the 1996 act. HHS approves the plan, and makes payments to the state to finance it.           

HHS has statutory authority to waive a long list of provisions of the 1996 act if the state’s plan proposes alternative ways of achieving the overall goals of welfare reform. But at the time, Democratic President Bill Clinton was waging war against the “heartless” work requirements insisted upon by the Republican House. In fact, Clinton twice vetoed work-based welfare reform bills before reluctantly signing the 1996 act - over howling liberal opposition.           

Knowing all this, Congress put the work requirements into a separate section of the Act – section 407 – specifically designed to protect them from being waived by any future liberal administration. It also provided that states that put more than 30 percent of their TANF participants into something other than actual work (“getting ready for work”) would lose some federal funding.

The Vermont ReachUp (TANF) plan says that all participating adults, unless granted a deferral, shall be required to fulfill the work requirement spelled out in their Family Development Plans when they are work-ready. If the participant refuses to work when work-ready, the department shall reduce or terminate his or her payments.

Obviously “work-ready” offers some exit ramps. Participants who are too sick to work, or who have dependent children and no available day care, are deferred from working. So are participants engaged in a list of activities related, sometimes tenuously, to work (such as job-seeking, completing high school, and on-the-job training/work experience). Gov. Douglas in 2003 opted Vermont out of a community service work requirement where regular jobs are not available.           

Romney and other Republicans hammered the HHS memo, charging that Obama “with a very careful executive action, removed the requirement of work from welfare”. A Romney campaign ad declared “You wouldn’t have to work and wouldn’t have to train for a job. They just send you your welfare check.”           

Chimed in Newt Gingrich, who was Speaker when the welfare-to-work bill passed in 1996, “Why would any everyday American believe that [HHS Secretary Sebelius], if she makes it optional, is going to enforce a work requirement?” An indignant Obama campaign spokeswoman offered a denial from former President Clinton, though other Democratic figures might be more widely renowned for truth telling.

What are citizens to make of all this? Romney and the Republicans are right to be suspicious at any attempt by liberal officials, serving a president who as a state senator denounced the 1996 act, to offer the states “flexibility” on enforcing the act’s work requirements. They are also right that there is no authority in that act for an HHS Secretary to exercise waiver authority over the stiff work requirements of section 407.           

On the other hand, no state has yet applied for a waiver, and Sebelius has forcefully stated that “we will not accept any changes that undercut employment-focused welfare reforms that were signed into law fifteen years ago.” So it’s a bit early to sell the claim that Obama wants to” create a nation of government dependency”.           

What is troubling about the episode, aside from the campaign exaggerations, is Obama’s declared position that he will do anything and everything he can by executive action, and Congress be damned.  In that context, his offer to the states to waive the demanding work requirements of section 407 looks like one more example of a president trying to get what he wants without action by Congress.

Vermont's Feeble Welfare Reforms
November 2004

In 1992 new Gov. Howard Dean embarked on an ambitious welfare-to-work reform. Initially frustrated by liberals in the Vermont Senate, Dean was finally able to get an authorizing bill passed in 1993, but with a host of restrictions that made Vermont’s “reforms” very feeble indeed.

Three years later Congress passed and President Clinton (after two vetoes) signed the landmark 1996 welfare reform legislation. The act required states to tie benefits to job training and work. Low-wage workers in welfare programs could continue to receive some benefits until they improved their job skills, moved up to better paying jobs, and left the program. Hard core non-compliers faced the “sanction” – no more welfare checks.

Despite carping from liberals who viewed a work requirement as unfair punishment of the needy poor, the 1996 act has been a sparkling success. In five years welfare rolls decreased from 4.4 million to 2.1 million. Nearly three million fewer children are in poverty today due to the increase in earnings by their single parents as a result of moving from welfare to work.

On October 19 the nonpartisan Cato Institute released a comprehensive study rating the 50 states on their progress in implementing welfare-to-work programs. The study looked both at the structure of each state’s reforms and at the five year outcomes, such as reductions in welfare caseloads.

Cato found that the highest-ranking states required recipients to actually go to work within a relatively short period of time, or face the loss of benefits. They capped the welfare checks so that having a new baby while on welfare didn’t substantially increase the welfare checks. They required unmarried teenage mothers to live with a parent or guardian, not in a taxpayer-subsidized apartment of their own.

How did Vermont do? Said the report, “Vermont received the lowest of the failing grades including the lowest grade on implementation of structure reforms required of a successful state welfare program.” Vermont’s grade of 21 was 15 points below that of the 49th state, Missouri. The top four states scored 71 points or better on a scale of 100.

Why did Vermont fare so badly? The answer to that is a little complicated. From 1994 to mid-2001 Vermont operated under the Federal waiver that preceded the 1996 act. Thus for the first four years of the period Cato studied, Vermont was playing by different (and more liberal) rules.

For most of that period Vermont’s program contrived lots of excuses for recipients to avoid actually working. One third of the caseload was simply exempted from any work requirement. For the others, caseworkers had to determine that each person was “job ready”. If not, he or she went into an assortment of readiness, education, training, preparation and job search programs instead of actually performing w-o-r-k.

PSanctions for refusal to work, after exhausting all the training and readiness options, kicked in only after 15 months of not working for two parent families and 30 months for single parents. Even then, Vermont concocted the “sanction” of paying landlords, fuel dealers, and utilities directly, instead of writing the welfare check to the individual. This had the effect of freeing the recipient of the nuisance of making payments, rather than seeing an end to his or her welfare support.

With the expiration of the waiver program, Vermont’s sanctions have been significantly toughened. But after all the explanations, and after giving due credit for successes in helping many people to become self-sufficient, it is clear that Vermont’s liberal policies during most of the period studied caused the state to fare very poorly compared to the “tough love” policies of other states, notably A-rated Wisconsin.

Wisconsin’s “Work First” program diverted as many people as possible from ever starting to collect benefit checks. Those who were enrolled spent little time with “work readiness” and other such non-work programs. They simply went to work, and learned early that the better they performed, the sooner they would move up to better jobs.

Wisconsin enforced stiff sanctions and tight time limits for people not interested in working. As a result, 67% of Wisconsin’s 2002 caseload were actually working (3rd in the nation.) In Vermont, only 26% were actually working.

A decade of welfare reform in the states has proven that demanding policies to help poor people get on the road to self-sufficiency can succeed. What it takes is a clear-headed focus on the importance of achieving self-sufficiency through productive work, and the determination to cut off benefits to people who could work but would rather not.

Every Vermonter descended from hard working French Canadian farmers, Italian granite workers, Welsh slate miners, Irish railroad builders, and all sorts of other Yankee forebears should instinctively agree with that conclusion.

Helping Albert
September 2004

In FY 2001 the state of Vermont spent $114 million in state and federal money to support 1,850 developmentally disabled Vermonters in the state's Home and Community Based Services (HCBS) program. That comes to over $61,000 per person.

These are not elderly people confined to nursing homes with major health expenses. The "developmentally disabled" are defined as people who, before the age of 18, exhibit a severe, chronic disability, such as mental retardation, that results in "deficits in adaptive behavior." With some assistance, most developmentally disabled people can learn to manage their own lives and as many as a third of them can and do hold paying jobs.

To understand why the taxpayers are paying $61,000 a year to support these 1,850 people, it's necessary to understand how that program works. That was the focus of an Ethan Allen Institute report called "Helping Albert" issued last year.

In 1993 the state closed the Brandon Training School and adopted a policy of distributing developmentally disabled people "in the community". Here's how the state assists "Albert", a 56 year old Vermonter from the Northeast Kingdom.

"Albert" lives in his own apartment, decorated with his own art. He bowls, plays softball, stacks wood and shovels snow. Five mornings a week a mental health worker visits Albert to make sure he eats, takes his medication, and keeps himself and his apartment reasonably clean. Twice a week the worker takes Albert to a fast food restaurant for a breakfast date. The worker accompanies Albert on trips to the laundromat and grocery. Occasionally the worker takes Albert over to Quebec to buy cheap cigarettes. When the worker thinks Albert is fantasizing too much about his imaginary Marine Corps career, she schedules a visit with a state-paid psychiatrist($150/hour).

Since 1996 Vermont has had a very subjective definition of who is eligible for HCBS services. Not surprisingly, the client population has steadily increased.

Once qualified, these persons are installed and closely supervised in community residential homes with no more than four persons per setting. State-funded caseworkers surround clients with services, activities, regulations, and relationships.

Vermont is noteworthy nationally for its policy of maximizing individual home settings among its HCBS clients. With an average of 1.2 persons per home setting (house or apartment), Vermont's ratio is far lower than that of any other state. Vermont policy frowns on "group homes" (more than four)because it wants developmentally disabled people to interact in the broader "community". Critics say that interacting with "the community" really means interfacing with solicitous agency caseworkers who tend to "own" the client and tend to view him or her as a meal ticket.

What's the alternative? Consider the ten highly successful nondenominational Christian Camphill communities in North America. Camphill Village in Copake NY has 230 villagers - 105 of them developmentally disabled - who work in the candle shop, bakery, weavery, bookbindery, garden and wood shop. The total cost per year is under $30,000. Developmentally disabled villagers live in a caring community where they have real human relationships - not in a one-on-one arrangement with a case worker who takes them to McDonald's to "socialize."

There are 120 similar L'Arche (The Ark) communities in 30 countries, 14 in the United States. Some L'Arche communities are self-contained villages or farms like Camphill, but many are dwellings in residential neighborhoods, linked in networks of "joyousness and celebration". HCBS clients who lack ties to the community into which the mental health system discharged them may well prefer to live in such communities of shared responsibility, care, and mutual aid.

Vermont policy does not give them the choice of communities like Camphill and L'Arche, because the reigning social science theory holds that such settings are undesirable and at another level, because giving clients such choices would mean fewer designated agency employees looking after them.

The need to reform this system is slowly bubbling up to the surface of the legislature. Some legislators are concerned not only about the high program costs, but also about the socially isolating effects of current no-choice policy on disabled Vermonters who need and deserve better.

The 2004 legislature created an interagency committee to review the workings of the designated agency provider system, including evaluating "group versus individualized services". Its report is due in December. Hopefully it will give the 2005 legislature the support it needs to give developmentally disabled Vermonters like Albert a lot more choices about living happier and more rewarding lives.

(The full Helping Albert report can be found on this web page under "Publications".)

The Godzilla of Child Care
September 2004

Perhaps the most radical public policy proposal to come along since single payer health care has just had its coming out party in Montpelier. It’s called “Building Bright Futures” (BBF).

Created by “Vermont’s Alliance for Children”, BBF is based on the proposition that “Every family in Vermont has the right to comprehensive high-quality child development services appropriate for their child. Every Vermont community shall nurture the healthy development of young children and strengthen families. To support communities, the State of Vermont will create a unified system for child development services which shares common standards for quality and respects the diversity and uniqueness of individuals and of programs.”

BBF would create a nonprofit organization to control a “unified, sustainable system of early care, health and education for young children and their families.” Somewhat disingenuously described as a “public private partnership”, this mega-nonprofit would sit astride the flow of as much as $300 million a year in taxpayer funding.

Its board would consist of six government employees, two legislators, two parents, and nine others from the “stakeholder” community. It would supervise twelve regional “affiliates”, approve or disapprove their plans, and create a distribution formula to “award” them funding. It would employ and pay the 12 regional coordinators, who naturally would be responsive to the state corporation that signs their paychecks. The nonprofit’s first year budget, including support for the 12 regional coordinators, comes to $1.6 million.

Although the current version of the BBF strategic plan deletes “lobbying” as one of the nonprofit’s functions, the document is perfectly clear about the importance of “grassroots involvement and action activities that build political will in Vermont for a unified, well funded early childhood system.” When fully implemented, BBF will be able to draw on literally thousands of people earning their living from the system to put the heat on legislators to increase funding.

The BBF plan has been gestating for two years or more. Its prime movers seem to be the Child Care Fund of Vermont and the Vermont Business Roundtable. Last year the sweeping BBF proposal was temporarily set aside while the Department of Education promoted its plan for expanding public education to include two more grades (ages 3 and 4). That measure whizzed through the Senate last April but stalled, surprisingly, in the liberal House Education committee. The BBF backers evidently intend to make their proposal the focus for the 2005 legislature.

The Vermont BBF design resulted from technical assistance funding from the North Carolina Partnership for Children, a program begun in 1993. Hailed as a “public private partnership” to avoid the stigma of “more big government”, “Smart Start” contained a provision that only 91% of the funding was to come from taxpayers. In practice, the taxpayer contribution has crept steadily up toward 100%. There is vigorous debate in North Carolina about the claimed benefits of program and the accountability of this “private government” to the public government that must extract the funding from taxpayers.

Those are exactly the questions that Vermont legislators need to start asking. Such a unified statewide system controlling preschools, day care, and medical care for all young children might – might – achieve some efficiencies in the use of taxpayer funding. It will spend millions, create its own delivery network covering the entire the state, crowd out private preschools and day care centers unless they agree to be swallowed up in the system, and almost certainly exclude any program created by religious organizations.

BBF will be controlled from its central office. All of its local affiliates will be kept under the corporation’s bureaucratic thumb. As its plan states, BBF will be “family centered”, but only in the sense that by having young children, families provide the essential rationale for creation of this great unified system. And, naturally, the system will “foster cultural diversity and promote culturally competent practices,” that is, make sure the youngsters are fed politically correct ideas at an early age.

Whatever one thinks about spending more tax dollars on services for children, the Building Better Futures corporation will be a Godzilla unaccountable to our elected legislators and appropriators, unless the legislators can summon the courage to say no to the crowds of BBF-funded employees massed on the statehouse steps demanding bigger BBF budgets.

Is this for real? On August 30 Gov. Jim Douglas signed an executive order establishing a 19-member “Building Bright Futures Transitional Board”, exactly the way the backers wanted. The Agency of Human Services will pay for staff support, and the Board members the Governor selects will get per diems and expenses for attending its meetings. The Board will unveil the enabling legislation for Godzilla early in 2005.