No devil in devolution: Governor Engler and Senator Abraham take aim at Robert Rectors views on block grants - two related articles

National Review, August 28, 1995 by John Engler, Spencer Abraham

WASHINGTON, D.C., has demonstrated that it cannot win a war on poverty, despite having spent $5 trillion in the attempt. The best thing Washington could do is get out of the way -- quit hoarding money and power so that our states, communities, and private charities can offer genuine help of the sort the poor need to improve their lives.In recent years, reform-minded governors repeatedly went to Washington and practically begged to be allowed to fix a broken system.

Now, with the 104th Congress in session, there are welcome signs that the days of groveling may soon be over. But, as the NR article by Robert Rector exemplifies, some conservatives, especially inside the Beltway, remain skeptical of my call to get Washington out of the poverty business. They do not think no-strings-attached block grants constitute real reform. They complain that the proposal 1) puts no conservative principles such as work requirement in place; 2) is not fiscally prudent, since one group of politicians is spending money raised by another group of politicians; and 3) plays into the hands of state welfare bureaucracies that supposedly are even more liberal than the federal welfare bureaucracy.Let's examine these assertions.1) Those who complain about the lack of federal control reveal a condescending view of the states. They forget that the fifty governors have at least one credential that nobody in Washington has: we must actually administer the welfare system. We know what needs changing and how to change it.Michigan does not need direction from Washington bureaucrats. Three years ago, Michigan instituted an array of welfare-reform initiatives that is beginning to yield dramatic results.One goal of reform has been to enable welfare recipients to accept more responsibility for their lives and to go to work. Michigan recipients of Aid to Families with Dependent Children must sign a Social Contract that obliges them to work, train for a job, or volunteer in their communities at least 24 hours a week. As a result, the number of Michigan AFDC recipients earning income is up to an all-time high of 29 per cent, compared to just 8 per cent nationally.A second goal has been to shrink the welfare rolls. Again, as a result of our enforced Social Contract, over 60,000 cases have been closed since 1992 because those families are earning enough to be independent. Consequently, Michigan's AFDC caseload has declined to its lowest level since 1973.A third goal has been to keep at-risk families intact. In Michigan, our family-preservation programs have a proven track record of reducing foster care and helping many troubled families work through their problems. If a family cannot stay together, hope need not be abandoned: our adoption reforms have dramatically increased the number of children -- especially minority and hard-to-place children -- finding new homes.A fourth goal has been to lower the illegitimacy rate. Efforts of the public/ private Michigan Abstinence Partnership have helped bring about the lowest teen pregnancy rate here in a decade.A fifth goal has been to save money. Two years after implementation, Michigan's reforms saved taxpayers over $100 million.The argument for federal control seems to assume that wherever the Federal Government has stepped in, it has outperformed the states. That assumption is just plain false.Faith in Washington's ability to solve problems is really based on nothing deeper than Washington's ability to borrow money -- and that faith is what has racked up a national debt of nearly $5 trillion. The states have proved that they are more fiscally responsible.Furthermore, the continuously declining social indicators demonstrate Washington's inability to tackle the problem. Would anybody argue that giving the Federal Government the lead role in welfare has improved the lot of the poor?2) The second criticism from Washington critics is that states receiving block grants won't be fiscally prudent. Please -- spare me. It takes chutzpah for someone in Washington to make this argument. Most governors do every year what has not been done for almost three decades in Washington: balance the budget. The enormous pressure on state budgets will require governors and legislators to do their utmost to spend money prudently.Moreover, the fifty state governments are extremely competitive with one another. If they are allowed to experiment, the competition among them will create what is tantamount to market forces for reform. Those states whose benefits are too generous will bust their budgets, and the politicians responsible will be run out of office. Those states that do not do enough to help the poor help themselves will earn the opprobrium of the media and people around the nation. States will seek public/private partnerships, such as Michigan's partnership with the Salvation Army, to confront the challenge of poverty. They will invite private charities to resume the historically important role they have played in bettering the lives of the poor.3) The third criticism, that state welfare bureaucracies are even more liberal than the federal welfare bureaucracy, is just plain wrong. Activist governors can guide the bureaucracy in their states to implement good policies. Indeed, it is liberal federal rules and regulations that have gotten in our way in Michigan.To give you some idea of just how perverse Washington's incentives have become, consider one case in Michigan. An AFDC client with young children living in public housing refused to take part in our mandatory work program. So we cut her AFDC grant, reducing her income by 25 per cent. What was the result? When her income went down, her Section 8 public-housing subsidy went up, and her Food Stamp allowance went up. That meant the initial sanction for not working was canceled out. She found herself better off sitting at home. Now that's perverse.IHAVE been pushing for no-strings-attached block grants because they will free the states to implement creative reforms that work. But let me be clear. Block grants are not an end in themselves; they are a halfway house in the long road to reform. Ultimately, Washington should get out of the poverty business altogether. The states should raise the money for their own programs, rather than sending taxpayer dollars to Washington for an expensive night on the town. The states should be free to form partnerships with the private sector and encourage private charities to minister to the poor.But democratic action is often a long and cumbersome process. True federalism in the area of welfare will not be achieved in a year or two. We must always remember, as the wise Russell Kirk often reminded us, that politics is the art of the possible. I believe that no-strings-attached block grants are politically achievable in the 104th Congress. At the very least, they will take us much closer to the goal of true federalism than will block grants micro-managed from Washington.