Public Assistance: the Growth of a Federal Function

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Public Assistance: the Growth of a Federal Function Public Assistance: The Growth of a Federal Function ADVISORY COMMISSION ON INTIRQOVERNMLNTAL RELATIONS Washington, D.C. a July 1980 For sale by the Superintendent of Documents, U.S. Government Printing OWce, Wnshlngton, D.C. 20402 Foreword TheAdvisory Commission on intergovernmen- amine particular problems impeding the effec- tal Relations was established by Public Law 380, tiveness of the federal system. The 1976 renewal which was passed by the first session of the 86th legislation for General Revenue Sharing, Public Congress and approved by the President on Sep- Law 94-488, mandated in Section 145 that the tember 24, 1959. Section 2 of the act sets forth the Commission: following declaration of purpose and specific re- I11 sponsibilities for the commission: . study and evaluate the American federal fiscal system in terms of the allocation and Sec. 2. Because the complexity of modern coordination of public resources among fed- life intensifies the need in a federal form of eral, state, and local governments including, government for the fullest cooperation and but not limited to, a study and evaluation of: coordination of activities between the levels (1) the allocation and coordination of taxing of government, and because population and spending authorities between levels of growth and scientific developments portend government, including a comparison of other an increasingly complex society in future federal government systems. (5) forces years, it is essential that an appropriate agency likely to affect the nature of the American fed- be established to give continuing attention to eral system in the short-term and long-term intergovernmental problems. future and possible adjustments to such sys- It is intended that the Commission, in the tem, if any, which may be desirable, in light performance of its duties, will: of future developments. 1) bring together representatives of the federal, state, and local governments for the The study, The Federal Role in the Federal Sys- consideration of common problems. , tem: The Dynamics of Growth, of which the pres- 5) encourage discussion and study at an ent volume is one component, is part of the Com- early stage of emerging public problems that mission's response to this mandate. Staff were are likely to require intergovernmental co- directed to: (a) examine the present role of the fed- operation, eral government in the American federal system; 6) recommend, within the framework of (b) review theoretical perspectives on American the Constitution, the most desirable alloca- federalism, the assignment of functions, and gov- tion of governmental functions, responsibili- ernmental growth; and (c) identify historical and ties, and revenues among the several levels political patterns in the development and expan- of government. sion of national governmental domestic activities. Pursuant to its statutory responsibilities, the This case study on the federal role in public assis- Commission, from time-to-time, has been re- tance is one of seven prepared by Commission quested by the Congress or the President to ex- staff pursuant to this assignment. Abraham D. Beame Chairman Acknowledgements IV This volume was prepared by the Government dolph assumed the monumental task of preparing Structure and Functions section of the Commis- the manuscript. sion staff. Cynthia Cates Colella, analyst, had re- The contribution of Dr. Kirsten A. Gr~nbjergof sponsibility for the research and preparation of Loyola University of Chicago is much appreci- this case study. Other members of the Govern- ated. Dr. Gr~nbjergprovided significant criticism, mental Structure and Functions section including comments, and information. In addition, the re- Dr. David R. Beam, project manager, Timothy view and comments of Dr. Michael A. Colella Conlan, now of Harvard University, and Carol were extremely valuable. Full responsibility for Monica1 reviewed the manuscript and made help- content and accuracy rests, of course, with the ful suggestions. Delores Dawson and Arnette Ru- Commission and its staff. Wayne F. Anderson Executive Director David B. Walker Assistant Director Contents Introduction: The Matter of Definition and Scope Part I. The Sorry Roots of Public Assistance: Poor Law From Elizabeth I to Herbert Hoover Poor Law: The English Tradition Poor Law: The American Variation The Local Burden The Evolution of State Charity Seventy-Nine Years of Federal Denial The Changing Realm of Poverty: Crisis as Impetus for Growth Part 11. Reinterpreting The Welfare Clause: A Critical Redefining of the Nature, Scope, and Intergovernmental Aspects of Public Assistance, 1933-35 A New Definition of the Federal Role Altering the Structure of Intergovernmental Relations The Pervasive Myth of Temporary Assistance "Employables" vs. "Unemployables" Part 111. Federal Categorical Cash Assistance: From Presidential Initiative to Congressional Policy The Social Security Act of 1935: A Case of Dramatic Federal Expansion Prelude: Creation of the Administration's Bill Social Security in Congress Setting Up The Permanent Program: Administration and Grants, 1936-39 A Preliminary Assessment of the Social Security Act Forces of Nonincremental Growth The Peculiar Determinants of Public Assistance Policy Congress and the Expansion of Public Assistance: The Incremental Approach to Welfare Policy, 1939-78 1939 As a Year of Federal Expansion The War and Post-War Years, 1940-49 More Aid, Less Control: The Federal Paradox, 1950-52 Expanding Public Assistance During the Eisenhower Years Redirection in the Wake of Rediscovery: The Beginnings of Poverty Policy, 1961-63 The Great Society's Domestic War: Divorcing Public Assistance From Poverty Policy Welfare and the New Federalism: The Half-Life of Reform And, Carter So Far: Reorganizing Back to the Beginning Part IV. From Small Potatoes to Market Basket Welfare: The Special Case of Food Food Stamps in Limbo: The 18-Year Gap Agricultural Logrolling and the Birth of a Permanent Program USDA's Burgeoning Welfare Role: How a Different Kind of Welfare, In a Different Kind of Setting, With a Different Kind of Funding Grew Inauspicious Beginnings: The Initial Failure of the Food Stamp Program, 1964-67 "Hunger in America," 1967-68 Program "Explosion," 1969-78 Part V. Picking Up the Remnants of the Better Jobs and Income Plan: The Limits of Reform From H.R. 9030 to S. 3498 Barriers to Reform Presidential Proposal, Congressional Alternatives: Jimmy Carter, the 95th Congress, and Welfare Developing Reform Diluting Reform: A Case of Political "One-'Down'- manship" Killing Reform Welfare Reform in the 96th Congress: A Postscript Part VI. A Summary Assessment of the Federal Role in Public Assistance The Growth of Federal Cash Assistance Forces of Expansion: Influences on the Size and Scope of the Federal Role Policy Development Constraints on Federal Expansion: Fallacies, Presumptions, Costs, and a Powerless Clientele But, Not All Welfare is Created Equal: The Growth of Federal Food Assistance Forces Generating Greater Federal Involvement Policy Development Policy Constraints The Politics of Reform and the Future of Welfare I Actual Federal Outlays for Income Security, FY 1978 I1 Major Features of State Old Age Assistance Laws, January 1, 1935 I11 Major Features of State Aid to Dependent Children Laws, 1934 IV Major Features of State Aid to the Blind Laws, 1935 V Summary of Provisions of the Social Security Act Relating to Federal Grants to States for Major Public Welfare Purposes, 1935 VI Aid to Dependent Children in the Continental United States, 1932-38 35 VII Nonlabor Social Welfare Scale-Correlation with Party 37 VIII Federal Public Assistance Grants, Total to State Governments, Fiscal Years, 1953-1960 49 M Major Provisions of the Food Stamp Act of 1964, P.L. 88-525 80 X Food Stamp Program Overview, 1964-76 82 XI Food Stamp Recipients and Average Monthly Benefits, 1970-77 85 XI1 Program Design of AFDC, SSI, and Food Stamps, September 1977 94 XI11 How Do You Feel About Government Spending On 9 6 XIV Current AFDC and Food Stamp Benefit Levels for a Family of Four, 1979 112 XV Characteristics of State Plans for AFDC 116 I The Organizational Expression of the "Withering-Away" Fallacy I: Placement of the Bureau of Public Assistance, 1935, 1939, and 1953 4 6 I1 The Organizational Expression of the "Withering-Away" Fallacy 11: Replacement of the Bureau of Public Assistance, 1935-78 56 I11 Seasonally Adjusted Quarterly Average Number of Recipients, Food Stamps and Food Distribution Combined 84 IV Seasonally Adjusted Quarterly Average Number of Food Stamp Recipients, Public Assistance and Nonpublic Assistance Categories 86 Introduction: The Matter of Definition and Scope 1 There are a variety of ways in which federal income maintenance programs can be defined, divided, and delimited. At one end of the spec- trum, income maintenance is broadly character- ized in terms of federal income transfer programs. Approximately 182 in number and costing about $250 billion in fiscal year 1977, such programs run the gamut from the Wool and Mohair Pay- ments Program of the Department of Agriculture (USDA)' to the more traditionally "welfare" ori- ented Food Stamps Program also administered by USDA. In addition, at this broad definitional level are included not only cash transfers to persons with inadequate or no incomes but such indirect transfers as tax credits for child care which tend to be more beneficial to middle and upper income families than to the poor.2 A more narrow view of income maintenance is taken by the Office of Management
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