When Neoliberals Declared War on the Poor

Homeless encampment on abandoned overpass, Portland, Oregon. Photo: Jeffrey St. Clair.

For Bill Clinton and Dick Morris polls were everything. Morris developed what he called a “neuro-psychological profile” of the American voter, and established an iron rule that no initiative could be undertaken by the White House unless polling showed an approval rating of 60 percent. By constant polling, he concocted what he called a “values agenda,” for Clinton. At the top of the list was affirmative action. “Mend it, don’t end it” was the mantra, which meant, in practice, destroy affirmative action from the inside while professing support for the general principle.

Next came TV violence. Intimidate the networks, Morris advised, into adopting a “voluntary” system of ratings for TV shows and movies. Soon media executives were summoned to the White House for a session with Clinton and Al Gore. Simultaneously Clinton pushed for the installation of the so-called V-chip in all new TV sets, which would allow parents to block all offensive material. Next came teen pregnancy, an issue pounded on by the Clinton White House, even though the rate had been falling. Education: go after tenured teachers, an attack increasingly popular in Morris’s focus groups, and demand that at least they be tested. Youth: advocate school uniforms and curfews for teens. Gay marriage: on Morris’s advice Clinton embraced the Defense of Marriage Act, a purely grandstanding piece of legislation that preemptively barred gay marriages from recognition under federal law for any purpose. Immigration: the poll numbers were off the chart, and the Clinton White House duly set a goal to double the number of turn-backs by the Immigration and Naturalization Service–among other things, enlisting the Labor Department to help speed the pace and breadth of workplace raids. Taxes: Morris believed that Main Street America was now playing the market, so that a 20 percent reduction in the capital gains tax rate would be hugely popular.

But there were two issues that towered above the rest in Morris’s assaying of public opinion: welfare and crime. In the 1992 campaign, Clinton had pledged to “end welfare as we know it.” In 1993, Gore had urged Clinton to declare war on welfare as part of the first 100 days and had implored the president to let him lead the charge. After all, Gore argued, he was one of the few Democratic senators to have supported a welfare-to-work law narrowly approved in 1988, forcing states to require parents getting welfare checks to work at least 16 hours per week in unpaid jobs. But Hillary thought an attack on welfare would divert energy from her health care package, and Gore lost the battle.

By 1995 the welfare rolls were shrinking, from a peak of 18 million in the recession of 1991 to about 12.8 million. Defenders of the system in Clinton’s cabinet, Labor Secretary Robert Reich and Donna Shalala of Heath and Human Services, argued that the total budget for Aid to Families with Dependent Children was a tiny fraction of the federal budget; indeed, it was only 14 percent of the amount devoted to Medicare, a middle-class entitlement. The real problem, they argued, was the lack of training for the chronically underemployed and unemployed.

Reflexively hostile to welfare and fortified by Morris’s polls, Clinton pressed ahead. The administration began granting waivers to states to implement their own onslaughts on welfare, feature “workfare” requirements, time limits and “family caps”, a punishment for women who dared to have more than the approved number of children the government would help support. Through 1995 and early in 1996 the Republicans had passed and sent to Clinton two bills to dismantle the federal welfare system. He vetoed both, but in his veto messages he stressed that he agreed with much of their content in principle. Peter Edelman, a high-level official at HHS, described this as “the squeeze play”, whereby Clinton would reap approval from Democratic New Dealers for standing up for poor kids while at the same time signaling that in the long run, he’d throw the mothers of those kids off the rolls altogether.

As they approached the Democratic convention in the summer of 1996, Clinton was floating on Morris’s magic carpet. Assisted by staggering blunders by Newt Gingrich and a lackluster opponent in Bob Dole, Clinton was ahead by no less than 27 percent in the polls. The Republicans were eager to wrap up their legislative work before the conventions in July and August. They pushed through a welfare bill arguably worse than the ones Clinton had vetoed previously. Many Democrats on the Hill believed that Clinton would veto this bill, too. But Senator Daniel Patrick Moynihan of New York had more sensitive political antennae. He warned, “I’ve heard that the leaders of the cabinet recommended a veto but that the president remains under the sway of his pollsters.”

On July 30, 1996, Clinton mustered his cabinet to hear arguments on whether or not he should sign the Republicans’ bill. One by one his advisers said he should not. No’s from people like Shalala and Reich came as no surprise. But similarly disapproving were not only Leon Panetta but Laura Tyson, his chief economic adviser, Henry Cisneros of HUD and even Treasury Secretary Robert Rubin, who said that too many people would be harmed by the bill and that it show an act of political courage to veto it.

Not trusting Shalala’s department to produce objective assessments of the consequences of the bill, the White House staff had commissioned a survey from the Urban Institute, a DC think tank. The numbers were dire. The bill would push 2.6 million people further into poverty–1.1 million of them children. In all, the Institute predicted that 11 million families would lose income. That was the best-case scenario. In the event of a recession (which would come in 2001), the numbers would be far, far worse. In that fateful cabinet meeting Rubin invoked this study, and the numbers seemed to find their mark with Clinton, while Gore remained mute.

The meeting came to an end and Clinton, Panetta and Gore headed for the Oval Office for a private session. All accounts agree that, first, Panetta again made the case for a veto, laying particular emphasis on an appalling provision in the bill that would deny legal immigrants federal assistance, such as food stamps. Finally, Gore broke his silence and urged Clinton to sign.

Clinton, Morris and Gore prepared a press statement, delivered by the president later that same day. Clinton admitted that the bill contained “serious flaws” but went on to say, “This is the best chance we will have in a long time to complete the work of ending welfare as we know it.” No one at the press conference quizzed Clinton on this curious claim. After all, the election was only about three months away. By early fall of 1996 it was clear the Democrats had a chance of regaining the House. Would not that recapture afford a better chance of crafting a welfare bill not compromised by Gingrich and the others?

To this day many Democrats in Congress become incensed on the topic of what Clinton did. One the eve of a Democratic convention, with Gingrich already ensconced in the national imagination as the Bad Guy, Clinton had just made common cause with him, thus undercutting all plans to campaign against the Gingrich Congress. As for Al Gore the consensus was that he was looking ahead to a possible challenge in 2000 from his old rival Dick Gephardt. With Morris’s polls showing that an attack on welfare scored well over the 60 percent bar, Gore would have the advantage over Gephardt or any other liberal challenger.

Suspicions about Gore deepened as the fall campaign proceeded. The president and vice president argued that it was crucial that they be re-elected so that they fix the problems with the welfare bill they had just signed. The problems here concerned not the welfare bill itself but the denial of federal services to legal immigrants and a slash in the food stamp program. In October of 1996, with the presidential election no longer in doubt, Democratic candidates came to the Democratic National Committee urgently seeking infusions of cash to help them in the crucial final weeks. Finally, Senator Christopher Dodd of Connecticut, then the general chairman of the DNC, organized a meeting with Clinton and Gore. Dodd explained that the two were home safe and there was a chance to recapture the House. Clinton seemed amenable to a release of funds. Gore adamantly disagreed. On one account, Gore was the only person in the White House to oppose this transfer of funds from the presidential campaign to congressional races. It’s a measure of how a number of Democrats view Al Gore that some participants in that meeting felt that the only explanation for his conduct was that he did not want the Democrats to re-take control of the House because victory would elevate Gephardt to Speaker of the House.

The cynicism may not have stopped there. Why did Clinton and Gore decide to sign on to that third Republican welfare bill? The only major difference from the previous ones came in the form of the denial of federal services to legal immigrants and a $2.5 billion cut in the food stamp program. It’s likely that these two Republican add-ons were what allured the White House, because (as noted above) Clinton could then turn to the liberals saying they needed him to be re-elected so he could repair part of the damage wrought by the very bill he had just signed. In fact the White House probably could have insisted the riders be dropped, because Dole desperately wanted a legislative victory under the Republicans’ belt.

The welfare bill ended a federal entitlement that had been a cornerstone of the New Deal. It capped the federal contribution to welfare programs at $14.6 billion a year and hands the money over in block grants to the states to distribute as they see fit. The main requirement was that the states agree that welfare recipients can spend no more than a total of five years in their lifetime on welfare. It allowed states to adopt even harsher standards. Finally, under the old system, welfare money came to the recipient as cash. Under the new system, the money could be given to intermediaries, for possible conversion to other services such as housing or food. Al Gore particularly liked this provision. In Atlanta in May of 1999, he told an audience why:

“It allows faith-based organizations to provide basic welfare services. They can do so with public funds–without having to alter the religious character that is so often the key to their effectiveness. We should extend this approach to drug treatment, homelessness and youth violence prevention. People who work in faith-and values-based organizations are driven by their spiritual commitment. They have done what government can never do: provide compassionate care. Their client is not a number but a child of god.”

In other words, treat welfare payments like school vouchers. Gore had just laid out the welcome mat for Bush’s faith-based initiatives.

Not long after Clinton signed the welfare bill, judgment came from Senator Moynihan, who had begun his service to the state back in the sixties with sermons about the “pathology” of the black family and now, bizarrely, was defending the system he’d denounced for years. Even this man of all seasons and all masters was shocked: “It is a social risk no sane person would take, and I mean that. If you think things can’t get worse, just wait until there are a third of a million people on the streets It’s not welfare reform; it’s welfare repeal.”

Hugh Price, president of the National Urban League, called the bill “an abomination for America’s most vulnerable mothers and children” and accused Clinton and the Congress of defecting from a war on poverty and “waging a war against poor people instead.”

Within weeks three high-ranking officials in the Department of Health and Human Services had resigned: Mary Jo Bane, Walter Primus and Peter Edelman. That was it. Across the length and breadth of the Clinton administration, only these resignations were tendered in principle against this abandonment of the New Deal and the shafting of America’s poor. Afterwards, Edelman missed no opportunity to denounce the bill as a punitive strike against defenseless people. “The bill closes its eyes to all the facts and complexities of the real world and essentially says to recipients: find a job.”

The edict “find a job” was central to the bill and to the mythology nourished by opponents of welfare-that freeloaders with jobs available to them were abusing the system. Of course, there is always some abuse, but study after study had shown that most welfare recipients had looked for jobs and couldn’t find a suitable one or had been on welfare for a limited period, then found a job and got off the rolls. In 1999 a University of Michigan study making an assessment three years after the welfare bill went into effect found that the welfare population faced “unusually high barriers to work: such as physical and mental health problems, domestic violence and lack of transportation.” More than 30 percent of the families on welfare were constrained by disability, a sick child, no child care or an infirm relative. Those that wanted to find work ere faced with narrow options even in an economy hyped as in mid-boom. In 1996 the Congressional Budget Office offered some bleak realities about the reserve army of the unemployed. With an official unemployment rate of four percent (the unofficial rate was roughly twice that, since government figures don’t count frustrated people who have given up looking for work), there were still three to five people needing work for each available job. In the Bush recession, this ratio rose to more than 10-to-one.

In urban areas the job market was even more constricted. A 1998 study in Harlem showed just how brutally competitive the low-wage job market is. Over a five-month period, an average of fourteen people applied for each job opening at a local McDonalds. A year later researchers from the University of Chicago found that 73 percent of those same job searchers still hadn’t found even minimum wage level work.

In many states, there was the last resort of workfare, which compels welfare recipients to accept public jobs, such as highway clean-up or garbage picking with the Parks Department, in return for benefits. Nationally the average benefit for workfare jobs was $381 per month, which works out to $4.40 an hour, or 80 percent of the minimum wage. But in some places it was much worse. Mississippi, for example, required single mothers to work twenty hours a week at $1.38 an hour, and a two-parent household to work fifty-five hours at 50 cents an hour.

On top of this the people in the workfare labor force were denied such basic rights as collective bargaining, unemployment insurance, the earned income tax credit and Social Security credit. States found it to their budgetary advantage to fill job vacancies with these “slavefare” workers. A Senate study in 1996 estimated that the consequences of welfare reform would depress the wages of the working poor by 12 percent.

Allowing the states to freelance their welfare programs resulted in some particularly cruel policies and inequities. Minnesota spent $50 million a year on child care for single mothers receiving welfare benefits who are working or looking for work. New York spends $54 million to serve a population six times as large. Clinton and Gore repeatedly touted the approach taken by Indiana, where welfare reform was instituted by a Democratic governor, Evan Bayh, and his successor in the governor’s mansion, Frank O’Bannon. The pair presided over the shrinking of the welfare rolls in the Hoosier state by 30 percent. There’s no way to know if those people actually found work. It’s possible that the conditions of supervision of welfare recipients simply became unbearable and they left the program and perhaps the state. Under Indiana’s scheme, one missed job-training course meant the loss of a welfare check for two months. A second infraction meant loss of benefits for a year. A third strike and you were out for good.

The Clinton welfare bill also included a provision that allows states to begin drug testing welfare recipients. In theory the provision was aimed at people suspected of having drug problems. Oregon, for example, initiated a testing policy but soon reversed course when recipients began dropping out of the welfare program to avoid giving urine samples. The state found that it was better to stop drug testing, keep people in the program and steer addicts into treatment. Michigan took a different approach. In 1999 the state adopted a mandatory drug-testing policy for all welfare recipients, which prompted a lawsuit by the ACLU. A federal judge ruled in 1999 that the policy was unconstitutional. He noted that in the five weeks of the program’s operation there were positive drug tests in only eight percent of the cases, and all but three of those were for marijuana.

In his 2000 campaign, Al Gore pushed for what he called “Welfare Reform 2”, saying that more remained to be done to weed out cheats and freeloaders. He was particularly vehement in attacking dads behind on child support, vowing that he would make it easier for credit care companies to deny credit to such fathers. This would have come on top of a program, initiated by Janet Reno in her Florida years, whereby fathers behind on their payments get their driver’s license lifted, meaning that they can’t drive to work. In 1995, Clinton, Gore and Morris put into operation a program that saw these father’s mug shots put up in Post Offices, their federal benefits garnished and the IRS sent on their trail. This pattern of inflicting administrative conviction outside the court system and due process is integral to the Clinton/Gore philosophy on crime.

This essay is excerpted from An Orgy of Thieves: Neoliberalism and Its Discontents.

Jeffrey St. Clair is editor of CounterPunch. His new book is The Big Heat: Earth on the Brink co-written with Joshua Frank. He can be reached at: sitka@comcast.net. Alexander Cockburn’s Guillotined! and A Colossal Wreck are available from CounterPunch.