INCOME MAINTENANCE POLICY: AN ANALYSIS OF HISTORICAL AND LEGISLATIVE PRECEDENTS Lyndon B. Johnson School of Public Affairs The University of Texas at Austin Vol. II LYNDON B. JOHNSON SCHOOL OF PUBLIC AFFAIRS POLICY RESEARCH PROJECT REPORT Number 28 INCOME MAINTENANCE POLICY: AN ANALYSIS OF HISTORICAL AND LEGISLATIVE PRECEDENTS Volume II ofa Report byThe Welfare Reform Policy Research ProjectLyndon B. Johnson School ofPublic AffairsThe University ofTexas at Austin1978 FOREWORD The Lyndon B. Johnson School of Public Affairs has established interdisci­plinary research on policy problems as the core ofits educational program. A major part of this program is the nine-month policy research project, in the course of which two or three faculty members from different disciplines direct the research of ten to twenty graduate students of diverse backgrounds on a policy issue of concern to an agency of government. This "client orien­tation" brings the students face to face with administrators, legislators, and other officials active in the policy process, and demonstrates that research in a policy environment demands special talents. It also illuminates the occasional difficulties of relating research findings to the world of political realities. Occasionally a project of broad scope will generate enough information for more than one volume. Four volumes on topics related to welfare reform and the income maintenance system have resulted from the research conducted in 1977-78 for the Texas Department of Human Resources. These topics range from an analysis of the impact of the Carter welfare reform proposals on the existing system, to an examination of historical and legislative prece­dents, to analyses of contemporary relevant issues. In combination> the volumes provide a comprehensive view of a complex and vital policy area. It is the intention of the LBJ School both to develop men and women with the capacity to perform effectively in public service and to produce research which will enlighten and inform those already engaged in the policy process. The project which resulted in this report has helped to accomplish the former; it is our hope and expectation that the report itself will contribute to the latter. Elspeth Rostow Dean PREFACE The four-volume Welfare Reform .Project Report results from policyresearch conducted by the LBJ School of Public Affairs during the 1977-78academic year. It was supported in part by the Texas Department of HumanResources (DHR) and had the twin goals of assisting the Department inmeeting its future staff needs for policy analysts and providing LBJ Schoolstudents the opportunity to work hand-in-hand with public and private sectorofficials in developing, assessing, and implementing policies and programs inthe human services area. The specific task was to aid DHR in developing andtesting an independence-fostering approach to the delivery of publicassistance and employment services. The Family Independence Plan (FIP), asconceived by DHR officials, was the approach developed and refined duringthe course of the research activities reported on herein. FIP is a comprehen­sive service delivery mechanism for overcoming barriers that reduce servicesunder existing entitlement programs. A key objective of the welfare reformproject was to develop a fundable proposal for field testing, administering,and evaluating a demonstration FIP program.The scope of income maintenance policies and programs required projectparticipants to familiarize themselves with a number of topics in order toplace "welfare reform" in perspective and to develop alternative approachessuch as the FIP. The four-volume report reflects the broad scope of our work.Volumes I and II provide background information and analyses that areessential if one is to offer substantive welfare reform alternatives. Volume IIIcontains analyses of three issues that have particular relevance for Texas.Volume IV describes in detail the FIP concept. It also contains the FIPproposal as well as the evaluation design for the demonstration project.Additionally, a number of support documents and materials were prepared byproject members in refining program concepts and guidelines for the FIP,including demographic and labor profiles of the proposed test sites. The fourvolumes are : I. "Linking the Carter Welfare Reform Package to the IncomeMaintenance System" II . "Income Maintenance Policy : An Analysis of Historical andLegislative Precedents" v III. "Analyses of Contemporary Welare Reform Issues: .Sexual In­equities; Regionalism and Fiscal Relief; and Undocumented Aliens' Impact on theWelfare System" IV. "The Family Independence Plan: An Alternative Welfare Re­form Approach" Many individuals and agencies assisted in this effort. The Research team expresses its appreciation for their time, especially the DHR staff. Lodis Rhodes, Ph.D. Project Director POLICY RESEARCH PROJECT PARTICIPANTS Crawford B. Bunkley III, B.A. (History), Brown UniversityHenry Burgin, B.A. (Political Science), University ofHoustonBrenda Kay Cornish, B.S. (Economics), The University ofTexas atArlingtonJames T. Dimas, B.A. (Political Science), Knox College C. DeAnn Friedhohn,B.A. (Government), The University ofTexas at AustinMitchell Goldstein,B.A. (Political Science), Nonhwestern UniversityPaul E. Hilgers,B.A. (Political Science), Whittier CollegePatrick Johnson, B.A. (Government), The University ofTexas at AustinClarence Bernard Little,B.A. (Political Science), North Texas State UniversityEdward T. Sponberg, B.B.A. (Marketing), The University ofTexas at Austin Dr. Lodis Rhodes, Project Director, Assistant Professor ofPublic Affairs,Lyndon B. Johnson School ofPublic Affairs, The University ofTexas at Austin Augusta M. Villanueva, Project Manager, Research Associate, Lyndon B.Johnson School ofPublic Affairs, The University ofTexas atAustin vii TABLE OF CONTENTS iii FOREWORD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v PREFACE.......................... .. . . ............ POLICY RESEARCH PROJECT PARTICIPANTS. . . . . . . . . . . . . . . . vii PART ONE. INCOME MAINTENANCE POLICY SINCE 1930: THE CONTEXT FOR WELFARE REFORM ................ . Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Public Welfare Policy . . . . . . . . . . . . . . . • . . . . . . . . . . . . . . . 9 Economic Development Policy. . . . . . . . . . . . . . . . . . . . . . . . . 31 Manpower Policy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Guaranteed Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Another Approach: Public Jobs. . . . . . . . . . . . . . . . . . . . . . . . 55 Successful "Welfare Reform": Food Stamps, 1970-1977. ....... 64 Congressional Changes: 1970-Present . . . . . . . . . . . . . . . . . . . . 66 Congressional Changes: Consequences and Implications . . . . . . . . 70 Congress and the Future ofWelfare Reform . . . . . . . . . . . . . . . . 73 Bibliography............................... . ..... 75 PART TWO. FORMULATION OF SOCIAL POLICY: BY CRISIS, BY REASON, AND BY APATHY . . . . . . . . . . . . . . . . 79 Executive Summary . . . . . . : . . . . . . . . . . . . . . . . . . . . . . . . . 81 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 Policy by Crisis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 Policy by Reason: Evaluation and Reform . . . . . . . . . . . . . . . . . 88 Retreats: Policy Through Apathy. . . . . . . . . . . . . . . . . . . . . . . 89 Implementation and Effects of Federal Social Programs: Evolution of National Attitudes. . . . . . . . . . . . . . . . . . . . . . 90 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 Bibliography............. . .. . .... ..... ........... 95 PART THREE. THE HUMPHREY /HAWKINS BILL, CET A, AND THE URBAN POLICY INITIATIVE AS THEY RELATE TO WELFARE REFORM ................................ 97 Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 Introduction..................................... 100 Background of Humphrey/Hawkins, CETA, Urban Policy ....... 105 The Changing Perspectives of the '70s .............. . ..... 118 The Issues for Comprehensive Welfare Reform .............. 132 Bibliography............... . ..................... 135 LIST OF TABLES TABLE 1: Public Opinion and the Federal Response. . . . . . . . . . . . . . 85 TABLE 2: Income Maintenance System . . . . . . . . . . . . . . . . . . . . . . 103 TABLE 3: Community Development-related Federal Programs Prior to 1974 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 TABLE 4: Department of Defense Employment, by Category, 1961-68, as of June 30 of Each Year ................. 116 TABLE 5: Sequence of Fund Allocation Process for Hold-Harmless, Period 1974-80 ............................... 126 TABLE 6: Sequence of Fund Allocation Process for Full Formula (Year Six) .................................. 127 PART I INCOME MAINTENANCE POLICY SINCE 1930: mE CONTEXT FOR WELFARE REFORM CHAPTER CONTENTS EXECUTIVESUMMARY............ . ................... 3 4INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PUBLIC WELFARE POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Precursors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 The Social Security Act-The Administration's Proposal . . . . . . . . . . 11 Congress and the SSA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Expectations and Developments-1935-1960 . . . . . . . . . . . . . . . . . 21 The Public Welfare Amendments of 1962. . . . . . . . . . . . . . . . . . . . 22 Developments-1962-1967 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 WIN ........................ .. .................. 26 ECONOMIC DEVELOPMENT POLICY. . . . . . . . . . . . . . . . . . . . . . . 31 Origins of Economic Development . . . . . . . . . . . . . . . . . . . . . . . . 31 Area Redevelopment Act (ARA) . . . . . . . . . . . . . . . . . . . . . . . . . 31 Public Works and Economic Development Act of 1965 (PWEDA).... 35 38MANPOWER POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Manpower Development and Training Act (MDTA). . . . . . . . . . . . . 38 Economic Opportunity Act (EOA). . . . . . . . . . . . . . . . . . . . . . . . 40 4 7 GUARANTEED INCOME. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Family Assistance Plan (FAP): 1969-1970 ................... 47 H.R.1: 1971-1972 . .. ................................ 50 ANOTHER APPROACH: PUBLIC JOBS . . .................... 55 Origins ................ . .......... .. ............. 55 Manpower Act of 1970................................ 56 Emergency Employment Act of 1971 (EEA) ................. 58 Public Works: 1971 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 "Jobs Now". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 CETA ........................................... 61 SUCCESSFUL ''WELFARE REFORM": FOOD STAMPS, 1970-1977 64 Program Changes. . . . . . . . . . • . . . . . . . . . . . . . . . . . . . . . . . . . 64 Reasons for Success . . . . . . . . . . . . . . • . . . . . .. . . . . . . . . . . . . . 65 CONGRESSIONAL CHANGES: 1970-PRESENT . . . . . . . . . . . . . . . . 66 Membership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Committees and Subcommittees ................ . ......... 67 The Democratic Caucus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Procedural Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Visibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 The Budgetary Process . . . . . . . . • . . . . . . . . . . . . . . . . . . . . . . . 70 CONGRESSIONAL CHANGES: CONSEQUENCES AND IMPLICATIONS . . . . . . . . . . . . . . . . . . . . . 70 A More Responsive Congress? . . . . . • . . . . . . . . . . . . . . . . . • . . . 71 A Resurgent Congress? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 "Better" Public Policy? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 CONGRESS AND THE FUTURE OF WELFARE REFORM . . . . . . . . . 73 BIBLIOGRAPHY ........ : . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 INCOME MAINTENANCE POLICY SINCE 1930: IBE CONTEXT FOR WELFARE REFORM EXECUTIVE SUMMARY Tiris report analyzes the development of income maintenance policy since 1930. The Congressional legislative process provides the context for analyzing policy development in this area and for assessing the likelihood that Congress will pass President Carter's welfare reform proposals. The analysis focuses on the development of cash payment, manpower, food stamps, and early economic development policies and programs. It is guided by three major premises. First, the present and future course of income maintenance policy depends to a great extent on programs and proposals of the past-the incremental policymaking premise. Second, Congress as an institution has grown in size and complexity, the associated effect being a decrease in the likelihood that comprehensive legislative reform can be achieved in any area. Finally, Congressional consideration of welfare reform has focu8ed on three basic issues: (I) the concepts of guaranteed jobs/guaranteed income; (2) bene­fit levels-that aie -both equitable and -adequate; and (3) the criteria used to determine eligibility for benefits and/or services. Following from the first premise: historically, Congress has taken an incremental approach to policy-legislation before Congress at any given time rarely contains anything new. In this report, this pattern is traced from the early 1930s to the present, discussing the legislative evolution of: the Social Security Act of 1935 and its subsequent amendments; the Public Works and Economic Development Act of 1965 ; the Manpower Development and Training Act of 1962; the Economic Opportunity Act of 1964; the welfare reform proposals of the Nixon Administration; the Manpower Act of 1970; the Emergency Employment Act of 1971; the "Jobs Now" proposals of 1972; the Comprehensive Employment and Training Act of 1973;and Food Stamp reforms since 1969. These legislative initiatives and the resultant progams highlight key issues in the development of income maintenance policy and how it has changed over time. The first major issue was resolving whether or not the federal government should provide any kind of income maintenance (welfare assistance). Passage of the Social Security Act in 1935 resolved that issue. While the Act affirmed federal responsibility for direct income maintenance assistance, it transformed the issue into defining the type and magnitude of aid the federal government should provide for its citizens. All welfare reform efforts since passage of the Social Security Act have been attempts to answer this question. The analysis indicates that the future of welfare reform appears not very bright, but only if one limits reform to comprehensive change. However, incremental changes such as federalization of cash payment programs and expansion of the earned income tax credit are feasible "reform" measures. In this context, it is unlikely that President Carter's welfare reform proposals will make it through Congress without being subjected to changes-changes that will alter the look but not the substance of reform. Inasmuch as the President's proposals are logical extensions of longstanding income mainten~ ance concepts and welfare issues, they do not represent abrupt departures from previous decisions and policies. INTRODUCTION This report analyzes the development of income maintenance policy since 1930. It uses the Congressional legislative process as the context for analyzing policy development in this area and for assessing whether or not the Carter Administration's proposals for comprehensive welfare reform can survive the process. The analysis focuses on the development of cash payment, manpower, food stamps, and early economic development policies and programs. These comprise a relatively small portion of the income mainten­ance system as described and illustrated in Volume I of the Welfare Reform Policy Research Project Report. The analysis is based on three distinct but related premises: an incremental approach has been taken to policymaking; the legislative process has a complex nature; and Congressional considerations of welfare reform proposals have focused on three areas (to be described later). The intent in analyzing each legislative initiative is to identify the key events which, more than any others, determined the ultimate form of income maintenance policies. In some cases, these events resulted from the role played by Congress; in others, the presidency in particular and/or the bureaucracy in general; and at least one case is examined where interest groups outside the formal legislative process played a key role. As Congress now considers President Carter's welfare reform proposal, the Program for Better Jobs and Income (PBJI), what stands out is that it contains virtually nothing new. Like most proposals, it embodies and builds on concepts and programs that have been considered by Congress in the past. Congress rarely approves any measure it has not seen in some form before. Income maintenance provides a classic example of incremental policymaking, borrowing from and depending on the past to build for the present and future . This observation shapes the first premise, that of incremental policymaking. A number of factors are related to the second premise: the complexity of the legislative process, especially in social policy areas. First, legislative consideration of income maintenance policy strikes at the core of the most fundamental values held in this country, such as work, equality, personal liberty, and self-determination. In contrast, policy areas such as defense are rather more "technical" in nature and are more "easily" resolved. Second, committee jurisdiction over welfare legislation is a constant source of friction and has produced some perplexing legislative arrangements. For instance, the Revenue Committees both in the House and Senate retain original jurisdiction over Social Security programs. Can this primary concern with revenue avoid affecting Social Security programs adversely? In recent years, Congress has dealt with complex issues such as welfare reform via special subcommittees. But this adds more obstacles to the passage of legislation, and its value is somewhat dubious. The presence of the Rules Committee in the House further complicates the legislative process. Prior to a change in how the Rules Committee is formed, it was the burial ground for many social policy initiatives. Authorized programs cannot be effective unless they are adequately funded. This means the appropriations process is crucial to any development of policy. Welfare programs by their very nature require the government to disburse public funds for which there is no readily apparent good, except the relative welfare of individuals. In contrast, defense spending, now in the range of $120 billion, produces a good which is very evident: protection of the United States and its allies. Welfare programs (excluding retirement benefits) require but a fraction of the amount spent on defense; yet $100 million in welfare expenditures is more likely to prompt prolonged debate than would a comparable defense expenditure. The particularistic and parochial interests of many members of Congress contribute to the complexity of the legislative process in the area of social policy. Debate centers not only on what a given program can provide a particular legislator and his/her constituency, but a more intense ideological battle over the "proper" limits of federal intervention in state and local affairs. This is especially true in the area of program administration, where the question is: "Who can best determine the needs of a particular area of locale-the area or the federal government?" A final factor related to complexity of the legislative process in recent times is the changing relationship between the Executive and Legislative branches. Part of this change concerns welfare policy initiatives. Beginning with FDR, the public increasingly accepted the notion that the "President proposes, Congress disposes." As a result, programs and policies have come to be associated with a President rather than with Congress. In some cases, this is a reflection of reality; in others, it is a distortion of fact. Until recently, Congress could perhaps be described best as a frustrated body, fighting to keep what few programs it had developed. This battle exploded during the Nixon years as Congress endured impoundrnent of funds, executive imple· mentation of revenue-sharing in_' manpower programs, and a moratorium on housing programs. In a forceful display of institutional unity, it has sought to reassert itself vis-a-vis the president-a trend that continues even today. Another part of this changing relationship concerns the rise of Congres· sional oversight of Executive agencies, departments, and programs. Relegated to a lesser voice in policymaking, Congress has attempted to gain ground in the battle with the President and Executive branch through a more thorough scrutiny of their functions. In some cases, this has resulted in program adjustments as a consequence of Congressional investigations and hearings. In any case, it has brought Congress more in touch with the administrative realities faced in the daily operation of income maintenance programs. The third premise of this analysis is that Congressional consideration of welfare reform proposals has focused on three basic issues: the concepts of guaranteed jobs/guaranteed income; the equity and adequacy of benefit levels in any proposal; and the categorization of eligible recipients for any program. These issues (along with, more recently, that of fiscal relief) have shaped the greatest portion of Congressional action in welfare reform proposals. The first of these is discussed in different ways, but basically involves federal responsibility to provide, or guarantee, a minimum income or a job. The question of benefit levels equitability and adequacy arises as a battle over how much the federal government should provide in the way of assistance to maintain a minimum standard of living. The third consideration, categori· zation, involves a simple but provoking question: Who should be eligible for welfare benefits, and on what basis? Underlying this concept is the traditional dichotomy of "deserving" vs. the "nondeserving" poor. Any or all of these considerations have stymied more than one Congressional attempt to reform the welfare system. A brief chronology of the programs to be discussed and their substantive impacts on income maintenance policy follows : .1932 Emergency Relief and Construction Act-First federal relief measure enacted to deal with the Great Depression. Little intrinsic or precedent value. 1933 Federal Emergency Relief Act (FERA)-Most significant of the "New Deal" programs. First program to transfer responsibility for a large number of citizens from state and local to the federal government. Most important, eligibility determined by need and need alone. Income Maintenance Policy Since 1930 1935 Social Security Act (SSA)-Marked a retreat from FERA by condition­ing benefits on criteria other than need. Provided Old Age Insurance, Old Age Assistance, Aid to the Blind, and established legal framework for Unemployment Insurance. ·Also provided Aid to Dependent Children (ADC) which became the backbone of public welfare policy. 1946 Employment Act of 1946-A policy statement with little substance. Established Council of Economic Advisors. 1961 Area Redevelopment Act-Addressed the problems of "depressed areas." Provided public work programs, retraining of jobless workers, and long-term credit to new industries in depressed areas. Set a precedent for economic development programs. Later incorporated in Public Works and Economic Development Act of 1965. AFDC-U-Aid to Families with Dependent Children (formerly ADC) expanded to include children of the able-bodied unemployed. Contained a precedent-setting work requirement for unemployed fathers. 1962 Public Welfare Amendments of1962-Expanded provisions of the 195 6 SSA Amendments. Emphasized a "services" approach to rehabili­tating welfare clients. Provided Community Work and Training program (CWT) and authorized federally funded day care for children of AFDC mothers enrolled in the program. Few significant results. Manpower Development and Training Act (MDTA)-Provided retraining for technologically displaced workers. Shaped largely by the activities of the American Vocational Association. Had only limited success because offered little help to the hard-core unemployed. Later incorporated into CET A. 1964 Economic Opportunity Act (EOA)-Consolidated a number of previous ideas and programs under the framework of Community Action Programs. Also followed the "services" approach tak~n by the Welfare Amendments of 1962 and MDTA. Established the Work Experience and Training program (WET) to replace CWT. EOA's effectiveness was checked by local political problems. EOA was also incorporated into CETA. 1965 Public Works and Economic Development Act (PWEDA)-Consolidated the approaches taken by three previous programs toward economic development. PWEDA incorporated ARA and two related measures, creating a program which survives to date. 1967 Public Welfare Amendments of 1967-Their most significant provision created the Work Incentive program (WIN), which was based on the experiences of CWT and WET. Was a Congressional response to the rising public assistance rolls. Attempted to force AFDC mothers to take employment and training, thus reclassifying them from "deser­ving" to "nondeserving" poor. 1969-1970 Family Assistance Plan (FAP)-Passed by the House, killed by the Senate in 1970. Guaranteed a minimum income for eligible families with children. Implanted the notion of a guaranteed income. Manpower Act of 1970-Passed by Congress, vetoed by Nixon. Would have earmarked manpower funds for the creation of public jobs. Constituted formal recognition of guaranteed jobs concept. Food Stamps Revision-Established uniform national eligibility stan­dards. Provided free stamps to the poorest households, thus guaranteeing an in-kind income to certain individuals. 1971-1972 H.R. I -Established the Supplemental Security Income program (SSI), and an F AP-like program on a demonstration project basis. Thus established a guaranteed income for the aged, blind, and disabled. Emergency Employment Act-A counter-cyclical measure creating public jobs whenever unemployment reached 4.5%. Maintained public service employment in locales with greater than 6 % Income Maintenance Policy Since 1930 unemployment. Codified concept of guaranteed jobs. Later incor­porated into CETA. Public Works Acceleration Act of1971-Passed by Congress, vetoed by Nixon. Would have created public jobs in high unemployment areas in conjunction with a massive public works program. Nixon instead chose to sign the Emergency Employment Act. "Jobs Now"-A Democratic initiative in Congress to create a huge number of public jobs; never came to consideration. 1973-1977 Comprehensive Employment and Training Act of 1973 (CETA)­Consolidated the existing manpower programs under a decentralized administrative structure. Revised in 1977 to provide a comprehen­sive youth program. Food Stamps-1913: Ordered to be implemented nationwide by 1974 with a semiannual cost-of-living adjustment. 1977: Massive revision of the program, eliminating the purchase requirement. Resulted in a more welfare-oriented program in which the bonus value of coupons was available free of cost to those households which qualify. PUBLIC WELFARE POLICY Precursors Prior to the Great Depression of the 1930s, Americans traditionally believed insuring against old age, unemployment, and other economic hardships were the responsibility primarily of the individual himself, of his family, and of state, local, and private charitable institutions. Retirement pension systems di~ exist for isolated groups in the community-federal employees under Civil Service, some state and local government employees, small numbers of workers covered by pension plans through their jobs-but for the bulk of society, there was no systematic program to generate income after retirement and no organized program other than charity, to counter other economic hazards. This fact was made painfully evident to the nation by the Depression, when millions had to depend upon federal emergency relief to avoid starvation. In overwhelming the resources of state and local relief agencies, the Depression demonstrated " ... the inadequacy of locally· detennined relief policy in a society increasingly influenced by national economic forces" (Salamon, p. 98). Inadequate local relief efforts prompted many, including welfare profes­sionals, to question the American ideai of self-help; urging federal unemploy­ment relief, not as, a matter of charity, but as a matter of right. The American Association of Social Workers, one of the first groups to get involved, took an active part in organizing a series of Senate hearings before the La Follette-Costigan CoITlffiittee on unemployment relief. Despite the grave economic situation, the pleas of social workerS and others, -and the Committee's findings that federal aid was needed, President Herbert Hoover finnly opposed " ... any direct or indirect government dole .... " Thus he rejected all proposals for federal aid, and restricted federal involvement to inspirational appeals for the mobilization of local resources through private charities and local governments (Salamon, p. 100). Hoover based his opposition on the contentions that federal aid would: (I) impair the credit and solvency of the federal government, (2) delay the natural forces at work to restore prosperity, and (3) be unconstitutional, violating local responsi­bility and states' rights. In 1931, Hoover, trapped by his loyalty to the ideal of self-help, vetoed a bill sponsored by House Speaker John Garner and Senator Robert Wagner which would have provided $2.6 billion for a federal public works program. The attitude of the Hoover administration regarding its responsibility for public relief was exemplified by a Cabinet member's suggestion that the White House_ urge restaurant owners to save table scraps for the "worthy unemployed" (Trattner, p. 233). The only federal relief measure enacted during the Hoover years was the Emergency Relief and Construction Act of 1932, passed by Congress with Hoover's acquiescence. The Act provided a program of loans to the states at 3 percent interest for use in relief activities. As many of the hardest hit states were close to exhausting their constitutional borrowing authority, however, this Act had but limited impact on the situation. As a result of federal inaction, the Spring of 1933 found the American republic facing a serious threat. "Disorder spread and talk of revolution was heard; many desitute and starving citizens had nothing but contempt for the government and the system that was responsible for their plight but did little to alleviate thier distress. Then came the inauguration of Franklin D. Roosevelt as thirty-second President of the United States" (Trattner, p. 234). Roosevelt brought to the Presidency a new perspective, having devised numerous relief programs for the citizens of New York as Governor of that state. Unlike Hoover, FDR believed man had a responsibility for the well-being of this fellow man, and that in a civilized society the government could provide financial assistance to its destitute members as a matter of right and justice. Under his direction, a national welfare policy began to emerge. IO Under the auspices of a "New Deal," the Roosevelt Administration designed relief measures to pull the national economy from its nose dive, and keep food in the stomachs of the citizenry. Such measures included the Civilian Conservation Corps, the Public Works Administration, the Civil Works Administration, the National Youth Administration, and the Works Progress Administration. One of the earliest and most significant New Deal programs was the Federal Emergency Relief Act (FERA). For the first time, assistance was extended on a broad scale to the able-bodied poor in the form of grants-in-aid to the states. These grants were to be used for emergency unemployment relief, with need and need alone the prime determinant of eligibility. FERA made $500 million in federal funds available to the states for emergency work programs, and some cash assistance to the unemployed. The transfer of responsibility for relief of a large number of citizens from local and state governments to the federal government was the first milestone FDR was to set in the course of public welfare policy in the United States . . The Social Security Act-The Administration's Proposal Without a doubt, one of FDR's most significant achievements was the successful passage of the Social Security Act of 1935 (SSA). Described with such glowing terms as, "a landmark in American History" (Trattner, p. 241), "a new phase of national history" (Salamon, p. 87), or the "most important welfare bill ever passed" (Congress and the Nation, vol. I, p. 1225), SSA in reality was not the complete break with tradition many believe it was. While the significance of this measure should not be underestimated, its final form was largely determined by political compromise and past public welfare traditions. The categorical approach embodied in the Act actually represented a retreat from the liberal, comprehensive language of FERA. Salamon (pp. 89-98) identifies three basic elements that have been present in traditional American public relief since at least the colonial era. Briefly, they are (I) the concept of categorization (the dichotomy between the "deserving" and the "nondeserving" poor), (2) the idea that relief must be designed not to ioterfere with the private labor market, and (3) the conviction that the responsibility for charity belongs at the local level. To a certain extent, as we shall see, these elements were embodied in and helped determine the shape of the Social Security Act as passed in 1935. Moreover, with the exception of unemployment insurance (which by 1934, had been enacted only in the state of Wisconsin), the specific provisions of SSA were not novel. "They were influenced by or were based upon previous or existing federal and state statutes .... " Examples of federal relief statutes predating SSA were the ~heppard-Towner Act of 1921 (providing federal matching funds to states for the establishment and improvement of maternal and child health facilities and services) and the Federal Emergency Relief Act, which was mentioned earlier. 111 addition, by 1934, twenty-seven states had old age pension systems as well as laws providing cash assistance to the blind; and forty-five states had widow's pension laws {Trattner, p. 239). SSA, then, was not totally new. In addition to these historical facts, a number of events in the political and administrative arenas determined the shape the Act was to take, and unwittingly, many of the problems that have plagued the Social SecuritY programs ever since. The first of these started with the drafting of the bill. The original proposal was drafted in 1934 by FDR's appointed cabinet­ level Committee on Economic Security {hereinafter CES) headed by Labor Secretary Francis Perkins. Their proposal contained essentially two programs which reflected the tradition of categorization-one was for employable individuals {traditionally the "nondeserving" poor), the other for nonem­ployables {traditionally the "deserving" poor). The proposal, however, had a twist to it-its program for the "nondeserving" was considerably more elaborate than that for the ."deserving" poor. Prior to the enactment of FERA, economic relief had been targeted almost exclusively to the nonemployable. The preeminence of the "employable program" in SSA reflected the economic situation of the day, and FDR's concern with getting people back to work. Elements of the "employable program" included: I) a jobs program to provide public employment whenever private employment fell off; 2) a system of unemployment insurance for industrial workers; 3) old age insurance ; 4) a temporary program of old age assistance to cover the aged until enough contributory taxes (by which both old age insurance and unemployment insurance were to be financed) had accumulated in the trust fund to make old age insurance self-financing. "While these four elements were presented as separate programs, it was clear that the Committee-and the President-perceived them as a single integrated package that would work as a unit" {Salamon, p. 104). Unemployment Insurance (UI), for example, was intended to be the first line of defense in times of joblessness. In the event that the worker had exhausted his UI benefits and was still unable to find a job through no fault of his own, he was to receive work relief through the jobs program-not continued cash assistance. The public employment program, then, was not to function as a "principal line of defense" during depression times only, but was to serve as a Income Maintenance Policy Since 1930 back-up system at all other times as well. SSA, as originally conceived, was to provide a comprehensive approach to job security; an idea that would reemerge more than one-third century later under the label of "guaranteed jobs." Unfortunately, the legislative gristmill made this ideal fairly short-lived in 1935. The programs for the unemployable and the hard-to-employ were less generous. They consisted of matching grants-in-aid to states to provide aid to the blind (AB) and aid to dependent children (AOC). As originally conceived, SSA was to provide economic security for those employed and able to contribute. The major concern of CES throughout was providing insurance against the hazards of unemployment and old age. The Committee never considered "unemployables" as a whole, to present a problem of economic security requiring federal attention (Salamon, p. 106). In fact, the inclusion of AB and AOC (which have come to dominate our needs-tested public assistance policy) was in a sense accidental. Originally, no provisions had been made for them in SSA, and it was only through the "special pleadings" of representatives of two or three federal agencies (most notably the Children's Bureau of the Department of Labor) in the summer of 1934, that they were ultimately included by CES in the legislation (Salamon, p. 106). It is interesting to note also that when FERA staffers drafted the AOC title of SSA, they provided a definition of "dependent children" sufficiently broad that it could have authorized aid to virtually every needy family having a child under age 16. "Under this definition, not just the incapacity or absence of the father, but also his inability to find employment or the failure of his jobs to 'provide the family with a reasonable subsistence' could qualify a family for federally-support cash assistance" (Salamon, p. 112). The Committee, however, opted for a narrower definition ~f "dependent child." The defµiition adopted included only children whose fathers were deceased, incapacitated, or permanently absent from the home, presumably because the wider definition would too drastically alter the Act's focus on economic security for contributing members of the work force . In bypassing the .working poor and the unemployed, they also upheld one of the traditional elements of American public relief identified earlier-the notion that relief must be designed not to interfere with the private labor market. The implications of their decision merit consideration. Had they chosen the broader definition, much of the criticism and dissatisfaction that arose in later years from AOC's inequity and perverse family·splitting incentives would never have come to pass. The children of the unemployed would not have had to wait until 1961 (when the definition was expanded to include them) to receive federal benefits. The point is a moot one, however, for in 1935, the expanded definition of "dependent child" might not have received Congressional approval. Politics was also central to the United States becoming one of the few major industrial nations having contributory old age insurance. President Roosevelt insisted both UI and old age insurance be self-financing through a payroll tax. He acknowledged that the decision was not based on economic considerations, but rather on political ones. ... those taxes were never a problem in economics. They are politics all the way through. We put those payroll contributions in there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there no damn politicians can ever scrap my Social Security program (Salamon, p. 108). While the Social Security system lives on, so does a negative consequence of the contributory provision which was saddled on the poor with its incep­tion. As the amount of tax levied on a worker (and subsequently the level of benefits collectable upon retirement) depend upon the worker's wages while employed, the contributory tax provision has had the unfortunate effect of keeping the working-poor poor in retirement also. Before moving on to consider the role Congressional politics played in determining the ultimate shape of SSA, why legislators acted as they did, and the consequences of the Congressional action, a brief examination of a final aspect of the Administration's bill is warranted. In drafting the bill, the framers included a very unusual appropriations clause. It provided for a permanent, open-ended authorization, which meant Congress would not have to authorize appropriations annually, as is the case with nearly all other government programs. Parenthetically, it also means substantial increases in federal deficit spending. The result is that " ...the appropriations committees have only a proforma control over the amount of money to be made available" (Steiner, p. 61). The acceptance of a matching formula by the House Ways and Means Committee, the Senate Finance Committee, and the Congress (through periodic amendment to SSA) acts as an authorization to appropriate. Once this commitment has been made, Congress has really obliged itself to make available whatever funds are necessary to meet the formula. Funds are then disbursed to states by the Treasury in whatever amount is necessary to cover the respective state caseloads under the sharing formula for a given program. This provision has had far-reaching consequences, which will be dealt with later. For now, suffice it to say that the uninhibited growth displayed by the welfare system in the 1950s and 1960s was largely a result of Congress' lack of practical control over appropriations for ADC. Steiner (p. 62) credits the " ... absence of an annual or even occasional dispute over appropriations... " to the " ... planned or fortuitous wisdom of the .draftsmen of the SSA in providing for an open~nd, permanent authorization.... " Congress and the SSA This section reviews three aspects of Congressional involvement with SSA. Reviewed first are the general Congressional attitudes toward the Act; followed by consideration of some ways Congressional acquiescence helped determine the final form of the legislation; and finally, an examination of the ways and reasons the original content and purpose of the Act were altered through Congressional action. The Social Security Act was passed in August 1935 by overwhelming majorities in the House (371 to 33) and Senate (77 to 6). Three major factors may be identified as being central to the bill's legislative success: 1) the widespread economic hardships caused by the Depression; 2) the personal prestige of FDR and the huge Democratic majorities in both the House (319) and Senate (69); 3) the relative moderation of the final proposed legislation. Specifi· ~: . a) Its major provisions provided only for the aged, the unemployed, and the needy child. A controversial system of national health care (which had been proposed by CES) was deleted from the bill and no provision for the disabled was requested. b) It provided only a moderate level of benefits. While this enraged some liberals, it pacified many conservatives. c) Direct administration and many program decisions were left in the hands of the states in every program except old-age insurance. d) Old-age insurance and UI were to be self-financing through a payroll tax which fell most heavily on low income workers. This was intended to curb conservative opposition (Congress and the Nation, vol: I, pp. 1225-1228). Initial passage of the act was essentially a Democratic achievement. Some Republicans opposed the entire concept, objecting in a general way to what they believed would be the heavy cost to the federal government and business, and the shift of power and responsibility for relief from state and local to the federal government. In fact, a clear majority of Republicans in both Houses voted to kill the old-age insurance system completely. Generally speaking, Republicans objected· to old-age and unemployment insurance because they believed: 1) the system was of questionable constitutionality; 2) the provisions of the Act would endanger the growth of commercial. insurance; 3) the Act would impose heavy payroll tax burdens, thus discouraging business enterprise and draining off into a trust fund money which would be better left to help stimulate buying power and counter the Depression; ., . , ) 4) the trust fund was unlikely to be kept sound by a spendthrift Democratic administration; S) the SSA would ultimately require every individual to wear a "dog tag" containing his Social Security number, which would eventually lead to every individual being given a number at birth by which he would be known instead of having a name; and 6) that it would be administratively unfeasible to keep wage records for a working population as large as that proposed to be covered by the . federal old-age insurance system (Congress and the Nation, vol. I, pp. 1227, 1231). While the majority of Democrats favored the insurance approach to income security, most Republicans preferred the "public assistance" or charity approach used in the AB and ADC components of the program. Their affinity for this approach resulted from the fact that it left administration of benefits directly in the hands of the state and provided aid only to the indigent. Generally speaking, by 193-S two divergent interests had surfaced among the groups directly involved in the development of the SSA. The first was composed of Congress and the political leaders in the states pushing Congress, whose main objective was the establishment of a program of federal aid for old-age assistance. For the other group-the nonpolitical specialists in social security-a system of unemployment insurance was the most important goal to be pursued at the time (Steiner, p. 18). President Roosevelt, being a man of great political sensitivity, proposed a legislative package that took cognizance of this fact. At FDR's insistence, the Social Security package was framed as an omnibus bill, and throughout the legislative process the President was to insist that this package not be broken up. The consequences of his action were significant in several respects. First, it is generally conceded that the Old Age Assistance (OAA) title carried the remainder of SSA. While the other titles had failed to generate much congressional support, the passage of old-age assistance was the preeminent concern of most congressmen in regard to the income security, Income Maintenance Policy Since 1930 question. By making enactment of the OAA title contingent upon the successful passage of the entire program, FDR saw to it that titles lacking political support also became law. Edwin Witte, Executive Director of the Committee on Economic Security from 1934-1935, acknowledged this when he wrote, " .. .I doubt whether any part of the Social Security program other than the Old Age Assistance title would have been enacted into law but for the fact that the President throughout insisted that the entire program must be kept together" (Witte, pp. 78-79). Thus FDR's insistence on the matter (and Congress' acquiescence) was probably responsible for federal provision of aid to the blind, unemployment insurance, and aid to dependent children. Enactment of the ADC program (which became the most expensive, cumbersome, and problem-ridden of those provided by SSA) was, therefore, more a function of fate than intentional action by Congress or the Administration. As we have seen, the program that became the backbone of public welfare policy in the U.S. was included in the Administration's original proposal "by accident" and reluctantly passed by Congress only that OAA might be enacted. Witte related that in 1935, "there was little interest in Congress in the Aid to Dependent Children" and had it not been for the fateful incidents just described, " ...nothing would have been done on this subject..." (Witte, p. 164). This lack of Congressional interest is further evidenced by the fact that the legislators only provided one-third matching funds for ADC, while state funds were matched on a 50-50 basis for OAA and AB. Congressional acquiescence played a major role in determining the future of welfare policy in America in another way. The open-end authorization, to which we alluded previously, raised severe criticism in Congress during the original hearings on SSA in 1935 (Witte, p. 77). However, despite this, the provision was ultimately left in the final draft of the legislation. The net result of this Congressional passivity was the unforetold geometric growth of the ADC program between the 1950s and late 1960s. When SSA was originally enacted, the public assistance titles (OAA, ADC, and AB) were expected to wither away as the OASI component became self-financing through the accumulation of a trust fund. Legislators expected the number of people requiring public assistance to decline to the point where the residual population requiring such assistance would be small enough to be handled by the states without federal aid. We will return to the "withering away" thesis later. Much to Congress' dismay, however, rather than withering away, the public assistance caseload mushroomed. In addition, the reason for depen· dency increasingly became the father's "absence from home" rather than death. In 1940, for example, 42 percent of the fathers of ADC children were dead. As of 1961, death and incapacitation together only accounted for 25 percent of all ADC fathers. By 1967, only 17.5 percent of ADC could be attributed to death or incapacitation of the father. While there is no consensus among scholars on the cause of this "dependency explosion," it is usually attributed to a combination of factors, including: a b~ic change in the family patterns of the poor produced by urbanization, pressures of the job market in connection with the family-splitting incentives of the welfare system, a rise in illegitimacy, and increased participation prompted by better welfare benefits (Salamon, p. 122). As the ADC rolls continued to swell, Congress was relatively helpless to control the size of annual expenditures on the program through means other than reducing the matching formula-a direct result of the open-end authorization provision. In favorably reporting a supplementary appropria­tion of $159.6 million for public assistance in May 1964, the House Appropriations Committee acknowledged itS helplessness. ''While it is distressing to see this program costing more every year," the report said, "there is practically no control that can be exercised via· apprropriations" (Steiner, p. 62). While it cannot be stated with any certainty that the ballooning of the dependent population would not have occurred in the presence of Congres­sional control, the authors believe the mechanism of an open-end authoriza­tion-written into law with Congressional acquiescence-served to foster a passive attitude among Congressmen in regard to the welfare question. With control of appropriations beyond their grasp, Congress may have become complacent during the 1940s and 1950s, resulting in a willingness during those years of relative inaction with regard to the welfare problem, to simply sit by, and wait for the public assistance need to wither-as they had been told it would. So long as the open-end authorization automatically increased the annual appropriations to accommodate the influx of ADC clients, the need for legislative action failed to make itself apparent. The program therefore escaped Congressional scrutiny. The final aspect of Congressional involvement with SSA to be considered here concerns the ways the legislation was affected by Congressional action and politics. While the bill Congress passed in 1935 was largely the same in content as the bill proposed by the Roosevelt Administration, legislative action upon several elements of the proposal had the effect of substantially altering the original intent of the package. The first step enabling legislative alteration of the proposed package was, ironically, taken by FDR himself. At the advice of budget officials, he split the public jobs component from the rest of the package and introduced them as separate measures. As stated earlier, in the original scheme public jobs were to be an integral part of the economic security plan, serving as a "primary line of defense" against the problems of unemployment. Income Maintenance Policy Since 1930 Although both measures were passed in 1935, splitting the two left the public jobs component vulnerable. The public jobs program functioned as per the original intentions of the President through the early 1940s. With World War II, however, the economy returned to full employment and by 1943 Congress had terminated both the direct relief and public works programs of the New Deal, including the jobs program originally designed as part and parcel of SSA. Congress thus deleted " ... permanently, but apparently unconsciously, one of the central elements of the original economic security design, ... limiting the government's capacity to cope with the problems that were to face it in the postwar era" (Salamon, p. 113). It is significant to note that a similar public jobs program was not re-enacted until 1971 in the form of the Emergency Employment Act (EEA). If Roosevelt's public jobs provision had been left intact, it is entirely likely that the perverse labor market conditions spawning EEA in 1971 would have been less severe-if occurring at all. Regional politics in Congress served to extract yet another tooth from the original proposal which might otherwise have provided the type of compre­hensive, national coverage envisioned by FDR and the Committee on Economic Security. In the Administration's proposal, FERA would have been given authority to ensure benefit levels in all programs nationwide as were sufficient to provide "a reasonable subsistence compatible with decency and health" (Salamon, p. 114). Furthermore, they were to have responsibility for ensuring no criteria other than age and need were used in determining eligibility for OAA. However, conservatives in Congress took exception to both provisions; commencing the battle over benefit adequacy and eligibility that has carried on to the present day. Edwin Witte relates that the bill was "bitterly attacked" by southern members of the House Ways and Means and Senate Finance Committees, " ... on the score that it vested in a federal department the power to dictate to the States to whom pensions should be paid and how much .. jt being very evident that at least some southern senators feared that this measure might serve as an entering wedge for federal interference in the handling of the Negro question in the South. The southern members did not want to give authority to anyone in Washington to deny aid to any state because it discriminated against Negroes in the administration of old-age assistance" (Witte, p. 144). Accordingly, all clauses dealing with supervisory control by the federal government were toned down, allowing states to set virtually any eligibility criteria beyond the federal requirements of age and need, and to set benefit levels as low as they wished, without losing federal matching funds. "Similar provisions were incorporated in the ADC program, thus fastening onto the welfare system the state-by-state disparities that have been the target of reformers ever since" (Salamon, p. 114). Thus, rather than the comprehensive, integrated approach to income security sought by FDR, Congressional action and acquiescence determined the Social Security Act would be something less. What emerged from Capitol Hill was a disjointed relief "system" providing old age and temporary unemployment insurance only to those actively attached to the industrial labor force, and a series of unconnected and largely uncontrollable cash assistance provisions offering limited benefits to selected categories of the dependent poor, on terms defined by the states. In its final form, the Social Security Act of 1935 provided the following: 1) Old Age Insurance-A contributory insurance program for the aged; it was the only program administered directly by the federal government. This program became Old Age and Survivors Insurance (OASI) after the Amendments of 1939, and Old Age, Survivors, and Disability Insurance (OASDI) after the 1956 Amendments. 2) Old Age Assistance-A charity program to help the indigent aged who did not qualify for Old Age Insurance, or whose benefits were too low to sustain them. 3) Aid to the Blind-A charity program to help the blind, it was identical to OAA in its provisions. Both provided fifty percent matching funds to the States. 4) Aid to Dependent Children-This was the third charity program. Organizationally, it was identical of OAA and AB, but it provided only one-third matching funds to the States. 5) Unemployment Insurance-The SSA did not establish a UI program directly, but rather effectively forced the states to set up programs by means of a tax offset device under which an employer was forced to pay a three percent payroll tax. Nearly all his contributions were refundable in the form of a federal tax credit, however, if his state had a UI program in which he participated. Every state had enacted such a program by 1937. 6) Minor Programs-SSA included a series of minor programs providing federal aid to the states for expansion of public health, vocational rehabilitation, and maternal and child welfare services. Income Maintenance Policy Since 1930 Expectations and Developments-1935-1960 Following passage of SSA in 1935, America found itself in a "welfare doldrum" that was to last for better than a quarter century. Few substantive changes in welfare policy took place during this period; the present section is devoted to an examination of reasons for this inactivity. The newly enacted social security legislation was greeted with mixed emotion by America. Many conservative members of society viewed SSA with great skepticism. They felt it was too radical, too leftist, and violated the American ideals of self-help and individual responsibility. The vast majority, however, accepted the Act, and so implicitly accepted the basic tenets of the Act: that destitution, rather than a question of individual weakness, was a fundamental economic and social problem; that a large number of people had a right (which could be legally enforced) to public benefits; and that failure to provide such benefits was economically and socially shortsighted. In the postwar era, even the Republican Party came to accept the SSA as a whole, the old-age insurance system (to which they had been adamantly opposed) notwithstanding. During this period, significant changes in welfare policy were limited almost exclusively to changes in the benefit formulae of SSA programs, and extension of coverage under those programs to a wider universe of people. A possible exception to this was enactment of the Employment Act of 1946. This Act, aside from establishing the Council of Economic Advisors, however, was a policy statement that produced few tangible accomplishments. Explanations for this acceptance of the status quo are varied. To begin with, the postwar era saw a widespread belief in mass prosperity sweep the nation. "Just as in the 1920s most Americans thought that prosperity existed and that there was little or no poverty. The general image of the nation, once again, was that of an affluent society with the highest standard of living in the world which gave everyone its fair share. Why engage in reform?" (Trattner, p. 251). Another reason for the inaction was the "withering away" thesis alluded to earlier. To recapi,tulate, there was a near universal belief among politicians in 1935 that as old-age insurance became self-financing, the program would cover an increasing number of people on public assistance, and after a number of years, as the economy improved, state and local governments would be able to assume the burden for the residual number of persons requiring such aid. However, such was not the case. While the OAA recipient rate did decline by a third between 1945 and 1966, the ADC recipient rate doubled (Steiner, p. 25). Explanation of "where we went wrong" can be found in a variety offactors <;:ongress did not foresee in 1935. First, inflation made benefits inadequate for those .depending on social insurance. In addition, death of the father was replaced by illegitimacy and desertion as the real hard-core problems of AOC-there was no social insurance for these risks. Furthermore, the UI component of SSA was designed to protect against temporary unemployment-it could not protect a · worker rendered permanently obsolete by a machine. Finally, need for public assistance was increased by migration of southern Blacks to northern industrial states, who then found the combination of technology and discrimination to be overpowering (Steiner, p. 24). Another reason for the failure of public assistance to wither away is the propensity of any government institution to perpetuate itself. In short, once government machinery is put into place, it usually remains there. That legislators eventually began to take cognizance of this tendency is evidenced by a comment made by Senator Eugene Millikin during the Senate Finance Committee's Hearings on the Social Security Amendments of 1950 (which, incidentally, changed AOC to Aid to Families with Dependent Children [AFDC] by adding an allowance for caretakers of dependent children). "It has always been our theory," said Milliken, "that as we increased the benefits under the contributory system we could decrease the amount of public assistance. Personally, I think that is sheer theory. I do not think it will happen much becaw~e the States are building up large public assistance pensions and there will be all sorts of pressures to continue the system alid personally, I believe it will be continued" (Steiner, p. 23). A final partial explanation for the Congressional neglect of the growing problems of public welfare prior to the 1960s was advanced by Steiner. It is as simple as it is poignant: " ... public assistance introduces problems of race, of sex, of religion, and of family relationships. It is hard to think of four areas most American politicians would rather avoid" (Steiner, p. 4). The Public Welfare Amendments of 1962 Rather than being the "most far-reaching revision of our Public Welfare Program since it was enacted in 1935," as President Kennedy proclaimed them, the Public Welfare Amendments to SSA in 1962 really embodied nothing new. In reality, they were a political response to the continued swelling of the public assistance program which "was in more serious trouble than ever before in its history" (Steiner, p. 4 7). The previous programs and political considerations which shaped these amendments will be the subject of this section. Momentum for revision of the public assistance titles of SSA was sparked by a crackdown on "welfare chiseling" in New Burgh, New York that attracted national attention. The investigators "discovered," among other Income Maintenance Policy Since 1930 things, the phenomenal swelling of the public assistance rolls, increasing incidence of benefits being paid to ineligibles, and the rising patterns of illegitimacy and desertion among welfare clients. In 1960, the Department of Health, Education and Welfare's Advisory Council on Public Assistance took cognizance of the tendency of family desertion among unemployed fathers, "because they see no other way to get their hungry children fed" (Sundquist, p. 126). The Council's subsequent recommendation that AFDC benefits be extended to children of the unemployed was proposed in legislation by the newly elected President and passed by Congress in 1961 as a temporary measure. This provision, together with the New Burgh incident, provided the basis.for a "face lift" of the public welfare program. Following temporary extension of AFDC benefits to children of the unemployed (AFDC-U), Secretary of HEW Abraham Ribicoff assembled an ad hoc "reappraisal" committee composed of twenty-three leaders in the social welfare field, to make recommendations for a revamping of the welfare system. The Committee's final recommendations emphasized provision of preventive and rehabilitative services to welfare clients by social workers as a "cure-all" for the problems of welfare. "As practitioners in the field of social work, its members were convinced that the road to reducing the incidence of family breakdown and dependency lay through the expansion, upgrading and more intensive use of their profession" (Sundquist, p. 128). The recommen­dations of the Committee, which were incorporated into law, thus sef the tone for the ''services" approach to welfare reform that dominated most of the 1960s. Recommendations of Ribicoffs Reappraisal Committee included: the retention of the AFDC-U program as a permanent measure, the elimination or drastic reduction of residency requirements, a stepped-up program of grants for the training of social workers, and above all, a positive approach in terms of preventive, rehabilitative, and supportive services to the needy. The primary concern of the Committee was clearly the noneconomic needs of the dependent; the theory being that breaking the cycle of dependency could best be achieved tluough changing the attitudes and characteristics of the client him/herself. The Reappraisal Committee's recommendations were incorporated into a bill, endorsed by Kennedy, and billed by Ribicoff as a new comprehensive approach to welfare. As he told the House Ways and Means Committee: We have arrived at the moment when only comprehensive changes will suffice. The bill now before you embodies such changes.. .! don't think what we are asking Congress to do is to appropriate funds for a stale old policy that everybody was unhappy with. Now we are saying-we have turned around and finally brought in a new philosophy in welfare (Steiner, p. 39). However, the ideas being pushed as comprehensive changes ~rid landmarks were not new. To begin with, the SSA Amendments of 1956 had altered the declaration of purpose of the public assistance titles to make the attainment of self-care for public assistance recipients a goal to be pursued by the States through the provision of state services to the needy. To this end, the federal government would provide matching funds on a 50-50 basis to states choosing to provide such services. It is significant to note that provision of social services as a state goal was included in the 1956 Amendments also as a result of efforts by the social work profession (Sundquist, p. 126). Indeed, one of. the main indictments of the "services" approach made in the late 1960s was that it appeared to be more beneficial to the middle class social workers than to the dependent poor. In reality then, the Amendments of 1962 only added "the furnishings of 'rehabilitation' as a major purpose" to the goals of self-help, self-care, and maintenance of family life spelled out in the 1956 Amendments. This addition was more "gimmicky than substantive" (Steiner, pp. 41, 46). The 1962 Amendments also raised the federal share of the matching formula to 75 percent. This was the only real change made in the area of prevention and rehabilitation. Another "change" made by the Amendments of 1962 was the provision of federal support for the training of public assistance personnel. The Reap­praisal Committee hailed this as a great step forward (Steiner, pp. 41-42). In fact, a five-year program establishing an 80-20 federal matching formula for this exact purpose was included in the Amendments of 1956. However, the Appropriations Committees declined to appropriate funds for this program in 1958, 1959, 1960, and 1961. When amending the 1961 AFOC-Ulegislation, the Senate Finance Committee increased the federal share of training cost to 100 percent-but again, funds were never appropriated (Steiner, p. 41). Thus, rather than being an innovation, the Amendments of 1962 only continued a program that was never allowed to get off the ground in the first place. Of the provisions of the Public Welfare Amendemnts of 1962, the most innovative was perhaps the authorization of federal funds for Community Work and Training programs (CWT). Even this was not completely new, however. In embodying the principle of work relief, CWT was patterned loosely after the Works Progress Administration of the New Deal (Steiner, p. 43). The real significance of CWT lies in the fact that as an employment and training program for welfare recipients, it provided a model for the Work Incentive program (WIN) and the Work Experience and Training program (WET) in the later 1960s. This evolution will be discussed in detail in the next section. A final "innovation" of the Amendments of 1962 was the enactment of a day-care program for the children of AFOC mothers engaged in employment Income Maintenance Policy Since 1930 and training. This program could have been a giant stride forward in breaking the dependency cycle; however, Congressional politics resulted in its becoming an albatross around the neck of future day-care programs. The new legislation authorized $5 million for day care in 1963 and 10 million annually thereafter. However, the 1963 appropriations were lost when the 87th Congress adjourned without enacting the first supplemental appropriations bill for 1963. This bill was blocked by Chairman Clarence Cannon in the House Appropriations Committee because of a long dispute between himself and the Chairman of the Senate Appropriations Committee over the respective rights of the Houses. By the following year when the bill was considered, "the whole day care idea seemed to lose its steam in Congress" (Steiner, p. 44). With its political support diminished, the bill was helpless when the Senate moved to cut its appropriations in half in 1964. The House cut appropriations again in 1965, and the Senate added a requirement for state matching funds that same year. By 1966, the program originally scheduled to get $25 million in its first three years ended up with only $10 million. Day care has been woefully underfunded ever since. Even the original $25 million figure would probably have been inadequate-but it was at least a step in the right direction. In setting the trend for scant funding of day care in the years 1962-1966, Congress placed a major constraint on the ability of later programs, such as WIN, to free AFDC recipients from the duties of child care for the purposes of employment and training. · Developments-1962-1967 Following passage of the Public Welfare Amendments of 1962, the "service" approach embodied therein was extended to other areas of the federal government's effort to eradicate poverty, most notably in the field of manpower policy. These developments will be considered in a subsequent section. "Social welfare policy" as we have defined it, however, fell into another period of relative inaction from 1962 to 1967. As Congress waited for the Amendments of 1962 to make a significant dent in the number of AFDC recipients, as the social work profession had predicted, the situation of the urban poor continued to deteriorate. In the early 1960s, the AFDC roles began to expand even more rapidly than before; but with the unemployment rate hovering around 5.5 to 6.0 percent, "this expansion did not cause much concern-it could be attributed to unemploy­ment" (Clague and Kramer, p. 21). In 1965, the economy's upswing continued, dropping the unemployment rate to 4.5 percent. In 1966 and 1967, the µnemployment rate declined to 3.8 percent. With the reduction of unemployment to this level (acknowledged by most economists to be "full employment"), Congressional concern arose over the fact that in good times and bad, the AFOC rolls continued to swell. Specifically, while the rest of the economy was going back to work, the number of families on AFOC had risen from 1,014,000 (with 3,160,000 children) in 1964, to 1,208,000 families (with 3,742,000 children) in 1967 (Clague and Kramer, p. 21). The increase in AFOC rolls for 1966 had been 4.5 percent. By the end of fiscal 1967, the AFDC caseload had risen an additional 11.7 percent. This trend continued to accelerate, with increases of 13.2 and 17.7 percent in fiscal 1968 and 1969 respectively (Moynihan, p. 35). Moreover, the increase in the AFDC caseload was accompanied by a comparable increase in the number of poor families headed by a mother. While this was apparent in all poor families, the trend was most pronounced among minorities. At the end of the 1950s, two-thirds of black families in poverty were headed by males. By the end of the 1960s, more than half were headed by females (Moynihan, p. 37). Rather than addressing directly the problems of increased welfare dependency and number of female-headed dependent families, Congressional concern focused on a related phenomenon. There had been a long-standing tendency among poor families for the mother to supplement the family income by domestic service, often through part-time or occasional work. However, AFDC regulations Stipulated that in such a situation, a family's welfare grant was to be reduced by an amount equal to the mother's earnings, " ... so that in effect she was working for nothing. The result was a large-scale withdrawal from the labor force by AFDC mothers. It was this development that led to Congressional hearings and the passage of the 1967 Amendments to the Social Security Act to correct this situation" (Clague and Kramer, pp. 21-22). WIN The Social Security Amendments of 1967 had as their most significant result the establishment of the Work Incentive program (WIN). WIN was not an original idea, however ; as with most welfare programs, it represented incremental revisions and elaborations on previously established programs and policies. Specifically, WIN evolved from and in response to five years of rather fruitless experience with work, training, and placement programs for AFDC recipients. The first of these was the Community Work and Training program (CWT) established by the Public Welfare Amendments of 1962. This program was designed to increase the employability of AFDC recipients " ... by offering them work experience which would help to develop the positive work habits Income Maintenance Policy Since 1930 and attitudes that were required to obtain permanent employment. The purpose of the CWT program was to reduce public criticism of the AFDC program by providing training for the unemployed AFDC recipients over 18 years of age" (Clague and Kramer, p. 22). This experimental effort was funded for two years, during which time program enrollment ranged from 10,000 to 15,000. In 1964, Title V of the Economic Opportunity Act established a larger employment and training program for public assistance recipients. The Work Experience program-subsequently changed to Work Experience and Training program (WET)-was very similar to CWT in its emphasis and methods. Like cwr, the major objective was reduction of the welfare rolls by providing work experience for AFOC recipients, thus preparing them for unsubsidized employment. The program, however, had limited success. In fiscal 1965, first-time enrollments in the program totaled 88,700. The following year, this figure dropped to 84,700. The year 1967 saw WET enrollment decline to 77,100, and in 1968, enrollment dropped sharply to 27,600-or less than a third of the 1965 peak (Clague and Kramer, p. 22). Basically, two problems were largely responsible for WET's lack of success. First was the voluntary nature of the program. Furthermore, emphasis was placed on work experience rather than training, limiting the ability of the program to prepare AFOC clients for meaningful employment in private industry (Clague and Kramer, p. 22). The combination of these faCtors resulted in the program's extremely high drop-out rate and subsequent demise. As a result of the WET experience, Congress, " ..intent upon holding down the continued growth of the AFDC caseload and...disillusioned with the 1962 panacea of services, began to react more forcibly to the problem" (Rein, p. 85). Their reaction was codified in the 1967 amendements to SSA, producing WIN. As originally drafted by the Johnson Administration, the proposed 1967 amendments to SSA called for a work incentive program that was comparatively mild-among other things, it exempted mothers of small children from mandatory participation in the program. However, when the bill reached the House Ways and Means Committee, it was given a major overhaul by Chairman Wilbur Mills. The Committee reported out a bill that did not include many important Administration proposals, and placed major new restrictions on welfare payments. The Committee bill established a mandatory work training program for all AFOC recipients aged sixteen and over. It also provided (inadequate) federal subsidies for day care of AFOC children whose mothers were enrolled in the program. The Amendments of 1967 also raiS:ed the benefit level for OASDI and expanded and liberalized Medicare and Medicaid. In addition, it limited the future proportion of children in each state who could receive AFDC benefits due to absence of the father, to the percentage of such children on the roll in January of 1968. The requirement that mothers of preschool children place them in day care centers and attend job training, and the provision freezing the amount of aid for deserted AFDC children, " ... drew howls of protest from the Administration and Congressional liberals" (Congress and the Nation, vol. I, p. 772). Committee Chairman Wilbur Mills, in defending these provisions, said, "Is it in the public interest for welfare to become a way of life? ... We want the States to see to it that those who are drawing welfare checks...take training and then work .... Is that not the thing we should do?" In defending the Committee action, Mills said Congress faced a taxpayers' revolt if mounting welfare costs were not reduced. Accordingly, he said, ''We on our Committee felt the time had come when the taxpayers want us to be rough, and do not have any doubts in your mind about it, we intend to be rough in a constructive manner.... We intend that anyone capable of working be made to work where possible" (Congress and the Nation, vol. I, pp. 772-773). The bill was passed by substantial majorities in both Houses. Congressional approval of the WIN program with its work requirement had the substantive effect of officially reclassifying mothers of dependent children from the deserving to the nondeserving category of the poor. This move was not unprecedented, for in establishing the AFDC-U program, Congress, while agreeing to provide aid to the families of unemployed fathers, similarly required them to register with the state employment office (or one of the work training programs after their establishment). Refusal to participate in work or training jeopardized the entire family's eligibility for AFDC. By this provision, Congress effectively prevented able-bodied men from ever being considered part of the deserving poor. Thus, enactment of the WIN program can be viewed, for the most part, as arising from four things: (1) the work requirement precedent established by the AFDC-U legislation; (2) the phenomenal increase in AFOC rolls; (3) constituent pressures on Congress to contain the rising cost of welfare; (4) Congressional disillisionment with the "services" approach of the early 1960s. WIN's "bark", however, proved to be a good deal more vicious than its "bite." When measured against its obstensible goal, which was (according to its principal architect, Mills) " ...to see to it that those who are drawing welfare checks... take training and then work ...," the WIN program has been a dismal failure. As of April 1972, only fifteen percent of enrollees had successfully obtained jobs. A study done by Auerbach Associates indicates that " ... only one-half of those who obtained jobs actually did this through WIN; the other half got their own jobs" (Rein, p. 92). Furthermore, only six to seven percent of AFDC mothers have enrolled in the program since its inception (Rein, p. 97). Income Maintenance Policy Since 1930 The reasons for WIN's lack of success can be traced primarily to: (1) Congress' failure to appropriate adequate funds; (2) an unwillingness by the States and the Department of Health, Education and Welfare (HEW) to enforce WIN to the letter of the law; (3) Congressional permissiveness with regard to enforcement. These will be explained briefly below. From the outset, financial limitations placed constraints on Congressional intent with regard to WIN. "Congress was not prepared to spend the huge amount of money that would be required to put every feasible individual through an elaborate system of training and into the labor market. This was especially pertinent in the case of mothers who required high-cost day care services before they could be compelled to participate in WIN" (Rein, p. 85). When adequate funding was not forthcoming, the people responsible for administration of WIN were forced to devise a way to fit an abundance of welfare clients into the relatively small number of WIN "slots" which had been funded. The legislation left selection of WIN participants up to the states (within certain rather loose federal guidelines). States were forced to exercise this selectivity early on, in order to limit the number of AFDC recipients to be referred to WIN. This situation arose because, while there were more than 1,320,000 adult recipients of AFDC in 1967, Congress by 1970 had only authorized 120,000 WIN slots. In an effort to help states pare down the number of people to be enrolled in WIN, HEW established "priority of referral" guidelines. Under these guidelines, the only groups required to be referred to WIN were unemployed fathers receiving AFDC-U benefits, and children over the age of sixteen who were neither in school nor at work. Mothers with children were to be referred on a volunteer basis. By " ... eliminating all mothers from required participa­tion in WIN, HEW severely restricted the intent of the WIN amendment and put all female adult participants in the class of volunteers" (Rein, p. 87). The Congressional objective of rendering AFDC recipients employable was further frustrated by the fact that sanctions applied to people failing to comply with work and training requirements were mild-when they were enforced. Whereas t;.he AFDC-U program called for denying assistance to the entire family should the adult refuse participation, the WIN legislation provided that only the individuals referred and not accepting the referral, or in the program and then refusing to continue (both without good cause) were to be deleted from the AFDC family budget. While Wilbur Mills professed to be "getting rough," this provision reveals the extent to which humanitarian considerations ultimately tempered the final form of the legislation. The lax enforcement of even these sanctions was reported by the General Accounting Office (GAO) in 1970. In a study of sanctions in Los Angeles and Denver, GAO discovered that out of 107 fathers who refused to participate in Los Angeles, the father's share of the AFDC budget was discontinued on only fifty-five cases. In Denver, no payments had been reduced thro~gh J~ly 1970, although ninety-four fathers had refused to participate in WIN (Rem, P· 94). Furthermore, sanctions had never been applied to mothers because of their .. "volunteer" status; and since most of WIN's clientele are volunteer mothen, the sanctions intended to enforce the work requirement were more surface than substance. As Daniel P. Moynihan put it, "If anyone was being forced into training, no one at the executive level of HEW knew about it... " (Moynihan, p. 142). In 1971, Congress, aware of the poor job success rates in WIN, amended the SSA to create the smen, avbtion cadets, etc. J 2 Less than four years of service. · · ' · n 9Four years or less of service, except Army (three years orless). . 4 Includes P.L. 313 and other salaried employees. GS-1 through GS-7 are primarlty clerical and secretarial positions. GS-8 through GS-18 are ~ primarily managerial and professional positions. P .L. 313 covers high~evel scientific and technical positions. 5 Approximated from sample and inventory data. · l6Estimated. NA .. Not available Note: Details may not add to totals due to rounding t ...... ~ ...... Source: U.S. Department of Defense -.l ~ -..: city's program to establish nine requirements in the development of a "comprehensive program." These included: 1) physical improvements of recreational facilities, parks, and land­ scaping; street and sidewalk repairs; street lighting and refuse col­ lection, as well as stores, theaters, and other commercial facilities; 2) housing, particularly for low-income and moderate-income families; 3) transportation; 4) education, particularly for the poor and disadvantaged; 5) manpower and economic development, including creation of jobs in demonstration areas, and recruitment and training of workers; 6) recreation and culture; 7) crime reduction; 8) health, including mental health; and 9) social services and public assistance, including both public and private agencies (Sundquist, 1970). Former Assistant Secretary of Labor for Manpower Stanley H. Rutten­burg has stated that upon leaving the federal government in 1968 "the single greatest hinderance to effective and efficient implementation of national manpower policy was the lack of comprehensive legislation" (Clague and Kramer, 1976). THE CHANGING PERSPECTIVES OF THE '70s Development ofSpecial Revenue Sharing The Nixon Administration ran its campaign on a commitment of "Peace-with-Honor" in Vietnam and a pledge to reorganize the federal bureaucracy. The Vietnam War became the first priority of the federal government and the American people. The period between 1969 and 1972 was a time when the proper role of the federal government in domestic affairs was reassessed. It was a time when sociat scientists were analyzing the major failures of the Great Society programs. It was a time of moratorium on community development activities. The Work Incentive Program was assessed at the same time it was being implemented, leading to the finding that although the unemployment rate had reached a fifteen year low of 3.5 percent, AFDC rolls were still increasing. Thus, efforts were made to increase employment opportunities for AFDC recipients. Patrick Moynihan's development of the Family Assistance Plan (FAP), based on the following four principles, is a case in point. 1) strong incentives to encourage work and training; 2) equity to provide assistance to poor working families; 3) respect for individual choice and family responsibility; and 4) administrative efficiency to earn the trust of the taxpayer. --The final outcome of the above welfare reform proposal was the Talmadge Amendments, causing WIN to apply the work-welfare approach in serving poor families (Levitan, 1977). In 1971, the Public Employment Program (PEP) was established by the Emergency Employment Act of 1971. This marked the first large-scale federal program to create jobs since the Great Depression. Its four basic objectives were: (1) reduce unemployment; (2) provide needed public services; (3) hire specified target groups-unemployed Vietnam veterans, welfare recipients, youth entering labor force , older workers , workers with limited English speaking ability, migrant and seasonal farmworkers, and other disadvantaged persons; and (4) move participants into permanent jobs as set by program guidelines requiring a minimum of 50 percent of the enrollees to be placed on permanent payrolls (Clague and Kramer, 1976). PEP developed as a federal revenue sharing program , helping to lay the groundwork for CETA. Proposal for Special Revenue Sharing On January 22, 1971, President Richard M. Nixon in his State of the Union Message called for an overhaul of the complex system of federal aid to state and local governments. The Nixon Administration had a three-faceted approach: (a) provisions for general revenue sharing, federal money made available to meet the increasing fiscal strains on the states and administered automatically, according to a specific allocation formula ; (b) a plan for reorganization of the administrative agencies into four cabinet-level depart­ments; and (c) a proposal calling for special revenue sharing. General revenue sharing was an idea advanced by Walter Heller in the Kennedy-Johnson Administration to gain presidential support. Special revenue sharing, on the other hand, was designed to place more than 130 existing categorical grants into six functional classifications. These were areas of domestic concern the Nixon Administration viewed as prime recipients of federal support. Included were education, urban community development, urban transportation, law enforcement, rural community development, and manpower training. Thus, the special revenue sharing proposal and definition of its major objectives in 1971 was primarily the product of the Advisory Commission on Intergovern­mental Relations. Three basic factors led to the special revenue sharing proposal. First, the fragmented federal programs described above were the result of social legislation passed in the 1960s. The Great Society programs were each designed to cure a specific national ill. Further, state and local governments had minimal freedom in determining the use of federal funds, oftentimes causing distortion of local priorities. By 1971, there were more than 530 programs auth-orized by categorical grants. Application and maintenance of Income Maintenance Policy: Historical and Legislative Precedents effort requirements created red tape for anyone applying for .federal funds,making grantsmanship a key element in obtaining federal funding.A second factor was the ID.crease in demand for services placed on stateand local constituencies. In 1962, federal aid to states and localities totalledeight billion dollars. By 1972, this figure had grown to thirty-eight billiondollars. The State and Local Assistance Act of 1972 came as a federalresponse to the increasing fiscal need ofstate and local governments.Finally, special revenue sharing was included in the Act to speed up itspassage in Congress. President Nixon had proposed only general revenuesharing along with his reorganization plan for the executive branch. There wasgreat skepticism in Congress surrounding these proposals, especially fromRepresentative Wilbur Mills, Chairman of the House Ways and Means Com­mittee (Nathan et al., 1975). President Nixon was soon forced to revise hisproposals, and special revenue sharing was one requiring reevaluation. Thisdivision represents two views: advocacy offederally controlled programs, and"free" money for state and localities to administer accordingly. Ultimately,however, a compromise between categorical and block grants was reached.The special revenue proposal was billed by the Nixon Administration as adrastic revision in the federal aid system. Objectives ofthe Proposal The proposal's major objective was decentralization of administrativeauthority for federal grants-in-aid. Consolidating the myriad categorical grantsinto functional classifications was also to enhance coordination and reduceduplication of governmental activities. The role of the federal governmentwas to provide technical assistance, perform oversight functions, with aminimal amount of administrative strings. On the other hand, planning anddecisionmaking were left to state and local entities. The underlyingphilosophy behind special revenue sharing is that the federal government isbetter equipped to collect revenues, but that state and local governments canbest determine the needs of their jurisdictions and, therefore, how revenueshould be employed. The original proposal called for an automatic distribu­tion of funds on the basis of tax effort, population, and per capita income.This was intended to alleviate the problems associated with receiving federalfunding. The significance of the proposal was that it established administrativeorganizations geared to local decisionmaking. Its intent was to strengthen theroles of the locally elected officials in carrying out specific functions, andthereby create a flexible, decentralized system of administrative unitsdesigned to implement broadly defined federal programs (Advisory Commis­sion on Intergovernmental Relations, 1971 ). 120 The historical analysis of manpower and community development policy was intended to identify the major programs and the administrative structures designed to implement federal policies. The following section analyzes the development of the structural guidelines implemented in local administrative organizations. Overview ofthe Comprehensive Employment and Training Act (CETA) The Comprehensive Employment and Training Act of 1973 (CETA) provided special revenue sharing funds in the functional area of manpower training. The Act consolidated programs funded by grants under MDTA, DOA, and the Emergency Employment Act of 1971. Rather than directly overseeing more than 10,000 grants, the Department of Labor (OOL) was authorized to administer through general local government units called prime sponsors. The stated purpose of CETA is to provide a flexible system of training, employment opportunities, and other services to the unemployed, the underemployed, and the disadvantaged. Title I establishes a decentralized system of locally administered services designed to develop unsubsidized employment for participants. Additionally, the administrative organization established by Title I serves as the basis for delivering services under all other CETA Titles. Title I is known as Comprehensive Manpower Services (CMS) and . identifies roles and responsibilities of key actors in the administration of manpower services. DOL is responsible for providing technical assistance, reviewing plans, and monitoring the activities of approximately 466 prime sponsors throughout the country. A prime sponsor represents an area, city, or county with a population of 100,000 or more, which is responsible for designing and executing manpower programs within its jurisdiction. Areas outside prime sponsorship are collectively referred to as the Balance of State (BOS). Funds under Title I are allocated on the basis of funding allocated to a prime sponsor the previous year, the number of unemployed, and the number of adults in low-income families. CETA regulations require these funds be used only for: 1) recruitment, orientation, counseling, testing, placement, and follow­up services; 2) classroom instruction in occupational skills and other job related activities, such as basic education; 3) subsidized on-the-job training by public and private employers; 4) payment to persons in training; S) support services such as necessary medical care, child care, and help in obtaining bonding needed for employment; or 6) funding jobs in public agencies eventually leading to .permanent positions. Federal funds are sent to DOL Regional Offices, from where Title I monies are disbursed in four basic ways: I) 80 percent is sent to prime sponsors; 2) IO percent is sent to the Governor's Office; 3) 5 percent is used as incentive monies in local governments forming consortiums to establish prime sponsorship; and 4) 5 percent is retained by the Secretary of Labor for discretionary purposes. Section 107 establishes State Manpower Services Councils (SMSCs) with three main functions: review plans of prime sponsors and state agencies for the provision of manpower services; monitor state manpower activities; and conduct studies and issue reports and documents on their findings. Theoretically, the SMSC recommends to the Governor, state agencies, prime sponsors, and the general public, ways of improving the overall manpower operations. SMSC is the primary source of coordination and support for manpower activities at the state level. It is designed to provide a forum for exchanging information, developing new methods and linkages for services delivery, and assuming an official position on programs and legislation (Texas State Manpower Services Council, 1977). Prime sponsors are required to establish a Manpower Area Planning Council. Council members are appointed by prime sponsors and should represent business, labor, the client community, community-based organi­zations, and agencies responsible for delivering manpower-related services. Advised by the manpower planning council, prime sponsors set forth the order of priorities for services to eligible clients, as determined by a comprehensive manpower plan. Each prime sponsor must submit a plan to the Assistant Regional Director for Employment and Training annually, summarizing CETA program objectives. The plan must include: (a) planned enrollments in the various program activities, (b) population to be served, and ( c) terminations of programs by type. Prime sponsors are further required to provide DOL with information on program activities and demographic and economic characteristics of clients served. This data serves as a tool for comparing planned activities with program accomplishments, and includes additional information on the population being served. Besides client enrollment and termination data, it provides information classified by sex, age, education, ethnic origin, and veteran and labor force status. IfRegional CETA Offices determine prime sponsors have maintained a pattern of discrimination, or otherwise failed to serve their clientele equitably, all or part of the funding may be withheld pending DOL's decision after a period of Humphrey/Hawkins, CETA, and Urban Policy hearings and review. There have been no incidents of this nature in the first four years of the program, however. Prime sponsors have a great deal of freedom in determining the combination of manpower services to be provided under Title I, and in the delivery agents of those services. The major task of prime sponsors is placement of individuals in employment, and eligibility criteria stipulate that participants must reside in the area covered by the plan. Prime sponsors are further encouraged to document, when feasible, that manpower services are reaching those in most need. CET A regulations also encourage special attention to veterans, and all the disadvantaged served by PEP. After accounting for these special cases, prime sponsors are free to set relative priorities among various racial, ethnic, or age groups to be served. Under Title I the types of manpower activities offered (on-the-job training, classroom training, work experience, public service employment, etc.) and the variety of support services provided (outreach, child care, orientation, placement, legal aid, transportation, etc.) are based on the area's skill shortages, labor force characteristics, and manpower needs. Overview ofthe Community Development Block Grant Program (CDBG) In 1974, Congress, under the banner of "New Federalism," enacted the Housing and Community Development Act, authorizing special revenue sharing funds for housing and community development activities for local jurisdictions according to formula entitlement. With decentralization as the major objective, the Act established the Community Development Block Grant Program (CDBG), designed to transfer administrative responsibility for seven folded-in HUD programs from the specialized agencies to the chief official of each recipient jurisdiction. The objective of the transfer of responsibility was to increase the role of locally elected officials in community development activities. The basic intent of the CDBG program is to establish a system for administering broadly defined, decentralized federal programs, with a minimal amount of federal involvement. The role of the federal government is to provide technical assistance and monitor the activities of recipient jurisdictions conforming to federal guidelines. Transfer of responsibility has generally been channeled by creating a new or expanded staff office within the mayor's office, or by locating the coordinating function within one of the city's line departments. While there is variation among recipient jurisdictions concerning the type of transfer implemented, the activities of municipalities must be designed to foster and promote several national goals. These are (emphases added): 1) The elimination of slums and blight and the prevention of blighting influences and the deterioration of property and neighborhood and community facilities ofimportance to the welfare of the community, principally persons oflow and moderate income. 2) The elimination of conditions detrimental to health, safety, and public welfare, through code enforcement, demolition, interim re­ habilitation assistance, and related activities. 3) The conservation and expansion of the nation's housing stock in order to provide a decent home and a suitable living environment for all persons, but principally those oflow and moderate income. 4) The expansion and improvement of the quantity and quality of community services, principally for persons of low and moderate income, which are essential for sound community development and for the development of viable urban communities. 5) A more rational utilization of land and other natural resources and the better arrangement of residential, commercial, industrial, re­ creational, and other needed activity centers. 6) The reduction of the isolation of income groups within communi­ ties and geographical areas and the promotion of an increase in the diversity and vitality of neighborhoods through the spatial decon­ centration of housing opportunities for persons of lower income and the revitalization of deteriorating or deteriorated neighbor­ hoods to attract persons of higher income. 7) The restoration and preservation .of properties of special value for historic, architectural, or esthetic ifasons. To assure these goals are attained and maintained, each municipality must submit a single, broad application including a three year summary of community development activities; a one-year action plan; a housing assistance plan (HAP); and a budget. In addition, the application must be accompanied by certification or assurance that in preparing community development activities, the local government has met the following requirements : 1) maximum feasible priority has been given to activities benefiting low and moderate income families, and assistance in slum and blighted areas prevention (emphasis added); 2) information about the program was provided to citizens; at least two public hearings were held and provisions were made for ade­ quate citizen participation; 3) the Davis-Bacon prevailing wage law was complied with; 4) the nondiscrimination provisions of the Act and all other appli­ cable laws and regulations were complied with; 5) the application was submitted to state and area wide clearinghouses for review and comment; Humphrey/Hawkins, CETA, and Urban Policy 6) responsibility will be assumed for meeting environmental review requirements under the Act, and the jurisdiction of the federal courts will be accepted with respect to enforcement of these res­ponsibilities. The allocation criteria for the CDBG program was designed to mitigate the problems of previous project grants and is comprised of two types of entitlement. The first, known as formula entitlement, is a sum earmarked for a particular community, based on its population, housing conditions, and poverty (giving twofold value to poverty). Entitlements are designated to all central cities within a metropolitan area, eligible urban counties, towns, and townships with populations of 50,000 or more . The Office of Management and Budget has the responsibility of designating the "metropolitan areas," as well as their central cities. A hold-harmless entitlement, on the other hand, guarantees communities as much funding during the first three years of the CDBG programs as the annual average of that received under the folded-in grant programs between 1968-1973. If a city's hold-harmless amount is greater than its basic entitlement, it will be phased down to its entitlement level by thirds in a three-year period. However, it it is less than basic entitlement, it will receive its hold-harmless amount the first year and be phased up to full entitlement by 1978. In addition, cities receiving model cities grants will receive full hold-harmless amounts long enough to provide them with the equivalent of five action years. Once this goal is achieved, however, there is a three-year phase-out period for these funds. The Housing and Community Development Act also authorizes discre­tionary grants to smaller communities within metropolitan areas. These are comparable to project grants in that both attract applications from smaller communities in metropolitan areas. Additionally, two percent of annual CDBG appropriations are designated to the Secretary of HUD's discretionary fund. These funds are used for a variety of special projects, as well as to correct inequities resulting from formula allocation. Table 5 identifies the sequence of fund allocation for the hold harmless period between 197 4-1980 . . In addition, Table 6 shows the future allocation pattern after the formula entitlement basis becomes implemented. Its intent is to provide automatic distribution of funds according to the needs of communities. An important component of the application process mentioned above is the Housing Assistance Plan (HAP). This plan was conceived as a major innovation in federal policy, designed to force jurisdictions to coordinate housing and community development activities. It must include the following requirements: TABLES SEQUENCE OF FUND ALLOCATION PROCESS FOR HOLD-HARMLESS PERIOD 1974-1980 Stage l * Annual Appropriation for Metropolitan and Non-metropolitan Areas 2% for Secretary's Discretionary Fund 20% Desig­nated for Stage 2** 80% Designated for Metropolitan Areas Non-Metro­politan Areas Stage 3*** . Formula Allocation I Hold-harmlessI AllocationI Hold-harmless Allocation ----­ !----­ Balance Balance Source: Adapted from U.S. Department of Housing and Urban Development Diagram. * At stage 1, 2% of the total annual appropriation is set aside for the special Secre­tary's discretionary fund. •• At stage 2, the remaining 98% of the total annual appropriation is split in a 4:1 ratio for allocation, respectively, to metropolitan and non-metropolitan areas. *** At stage 3, the amount allocated for distribution to metropolitan areas is divided, part to be distributed on a formula basis, part on a hold-harmless basis; the remain­der (balance) to be distributed on a discretionary basis. The funds designated for allocation to nonmetropolitan areas and divided for distribution either on a hold­harmless or on a discretionary basis. Humphrey/Hawkins, CETA, and Urban Policy TABLE6 SEQUENCE OF FUNDS ALLOCATION PROCESS FULL FORMULA (Year Six) Stage 1 * Total Annual Appropriation 2%for Secretary's Discretionary Fund 20% Desig­nated for Stage 2** 80% Designated for Metropolitan Areas Non-Metro­politan Areas Discretionary Amount for Discretionary Allocations Stage 3*** Formula Allocations to 50 States Allocations &Territories) Source: Adapted from U.S. Department of Housing and Urban Development diagram. • At stage 1, 2% of the total annual appropriation is set aside for the special Secre­tary's discretionary fund. •• At stage 2, the remaining 98% of the total annual appropriation is split in a 4: 1 ratio for allocation, respectively, to metropolitan and non-metropolitan areas. ••• At stage 3, the funds allocated for distribution to metropolitan areas is divided, part to be distnouted on the formula basis, part on a discretionary basis. The funds designated for distribution to nonmetropolitan areas are distributed entirely on a discretionary basis. 1) a survey of the housing conditions; 2) an assessment of the present housing needs and future projections; and 3) a realistic annual goal of the funding and type of housing assistance to be provided. Besides these procedures, the bill outlines four major responsibilities for local officials: 1) authorize their jurisdictio's participation in the program; 2) determine how the application process of their jurisdiction is to be organized; 3) establish "local priorities for housing and community development and how are funds to be used to meet those needs; 4) approve grant applications prior to submitting them to HUD. Given the automatic allocation formula, HUD's role in HAP is unclear. However, the Act explicitly calls for an annual performance monitoring of CDBG activities by the Secretary of HUD. Section 104(d) states: The Secretary shall, at least on an annual basis, make such reviews and audits as may be necessary or appropriate to determine whether the grantee has carried out a. program substantially as described in its application, whether that program conformed to the requirements of this Title and other applicable laws, and whether the applicant has a continuing capacity to carry out in a timely manner the approved CDP. Section 113 of the Housing and Community Development Act calls for the Secretary of HUD to report to Congress within six months after the close of the fiscal year when assistance was provided. The Secretary "shall submit to Congress a report containing: (a) a description of the progress made in accomplishing the objectives of this Title, and (b) a summary of the use of such funds as approved by the Secretary during the preceding fiscal year." The Secretary is further authorized to request reports from recipient jurisdictions. HUD's Community Planning and Development Office of Evaluation is ultimately the mechanism responsible for this task. HUD's monitoring function allows the federal government to assess the capabilities of local governments after they have received initial funding. Evaluation of how funding is administered by local jurisdictions allows the federal government to reduce, increase, or withhold monies if necessary (Nathan et al., 1977). Evolution ofAdministrative Organizations The overwhelming effect of special revenue sharing legislation was the Humphrey/Hawkins, CETA, and Urban Policy establishment of decentralized administrative structures for implementation of broadly defined federal programs in a flexible manner. The degree of flexibility among the various administrative structures varies with the distinctive reporting and application requirements. A basic tenet of this analysis is that the effectiveness of manpower and community development services and programs depends more on the performance of these administra­tive organizations than on the particular type of programs employed. The preceding descriptive overviews identify the roles and responsibilities of key actors within the "expendable tools" of CETA and the CDBG program. Key actors in CETA include DOL, prime sponsors, and members of planning councils. In the CDBG program, the administrative organization consists of local elected officials, line or staff personnel in a city manager's office, and HUD. There are significant differences among cities regarding local interest groups and voluntary associations, and how these define the problems addressed by legislation. Selznick states: The mission of an organization cannot be adequately defined without also determining: (a) its basic methods, the main tools or ways of acting with which it should be identified, and (b) its place among organiza­tions that carry on related activities (1957). His statement highlights the importance of determining how administrative organizations define their functions. In his book Monitoring Revenue Sharing (1975), Richard Nathan, along with others affiliated with the Brookings Institution, developed a new research methodology known as "monitoring research." This involves a number of field researchers performing in-depth monitoring of program activities according to uniform guidelines. Shortly after enactment of the CDBG program, HUD's Office of Policy Development contracted with the Brookings Institution to conduct a program effectiveness study. HUD sought to establish an independent research effort providing data from the earliest stages of program implementation to address major public policy issues as they developed. The results of this study are contained in a report entitled Block Grants for Community Development (Nathan et al., 1977), providing insight into the first year's operation of CDBG. The report shows that local legislators can become more or less active in community development activities of their jurisdictions. Some important contributions of active local legislatures were: (1) providing a forum for general public debate and citizen participation; (2) making minor changes in response to community demands; (3) setting broad policies to guide the chief executive and his subordinates in preparing the application; and (4) resolving conflicts within the general government and between generalists and program specialists competing for CDBG funds. The study also pointed to three major changes in the administration of community development activities : (1) local officials have become more influential in community development policymaking; in fact , local chief executives were the most involved; (2) the CDBG program has prompted administrative reorganization, contributing to more comprehensive planning and policy development at the local level; and (3) by placing localities in charge of decision-making, the CDBG program has stimulated many jurisdic­tions to refine their policymaking process (Nathan et al., 1977). A recent GAO report (1976) analyzed CETA employment and training programs under the first two years of their implementation, with special emphasis on plan forumlation and evaluation methods. The study focused on the activities of CETA's administrative organization and recommended improvements in the following areas: in the workings of planning councils; in DOL's evaluation process; in state and local government data-gathering techniques used for target group selection; in selection of delivery agents; and in identifying shortages of labor skills. These al).d other studies conducted on decentralized federal programs attest to the success of special revenue-sharing legislation in establishing structures geared for flexible, local decisionmaking. More importantly, evidence suggests these structures are only beginning to understand their "mission." However, roles and responsibilities of local officials are still unclear as to how comprehensive manpower services are intended to be vis-a-yis those performed by traditional Employment Services Agencies. Another question addresses the choice of target population, particularly CETA's responsibility for the hard-core unemployed. Issues such as these have riddled the effectiveness of CETA and while fragmentation has been reduced, there is still insufficient coordination of local manpower and community development activities. In discussion roles and responsibilities, Phillip Selznick states: a role is a way of behaving associated with a defined position in a social system; .. . role taking connotes an adaptive process, a mode of uncon­scious self-structuring. A decision by the individual how he ought to work .. . an institutional role cannot be won merely by wishing for it or by verbalizing it clearly. It must be founded in the realistic ability of the organization to do a job. The distinctive competence of the organi­zation is the vital factor (l9S 7). Humphrey/Hawkins, CETA, and Urban Policy The CET A system and CDBG program have not yet gained a clear understanding of their "defined position in a social system." They have not gained the "distinctive competence" to facilitate institutional role taking by local officials. Efforts to review the performance of the administrative organizations of CETA and CDBG have produced overwhelming evidence that they are not serving those most in need. One major cause of this failure is the differing definitions of "most in need." The effectiveness of these administra­tive organizations can only be judged against the key principles and goals of a comprehensive income maintenance policy as previously described. In 1977, the CDBG formula was changed to provide more assistance to older and declining cities, and to focus activities on the poor and disadvantaged. The failures mentioned above have contributed to the need of the Humphrey/ Hawkins Bill, renewal and revisions of CETA, and an Urban Policy Statement. These developments will only be effective if they help clarify the proper objectives local officials should use to choose program activities. Development ofan Urban Policy In 1974, the United States underwent the deepest recession since World War II. The northeastern and north central cities were hit the hardest due to their dependence on manufacturing. Almost all manufacturing jobs lost in 1974 (1.5 million) were lost in these two areas (Office of the White House Press Secretary, 1978). This factor contributed to a "thinning-out" migration pattern, making people more mobile and willing to leave inner cities. URPG outlined the following conditions contributing to the inability of cities to deal effectively with their problems: (1) the slow and uncertain growth of the economy; (2) the fragmented nature of governmental authority and responsi­bility; (3) an imbalance in rising costs and fiscal resources; ( 4) racism and discrimination; (5) increasing unemployment due to a mismatch between education and training of the unemployed and the requirements of available jobs; (6) housing and neighborhood constraints; and (7) obsolete develop­ment patterns. These factors have caused deep economic distress for some of America's cities. Jobs move with people, and as people move away from cities, industries follow them. Such problems have led President Carter to initiate the first expressed urban policy in history, assigning the federal government a key role in domestic affairs. The Urban Policy Statement is an amalgamation of previous attempts by the federal government to deal effectively with manpower and community development activities. It is based on the following seven key principles reflecting: (1) the diversity of American cities and problems; (2) a comprehensive set offede_ral commitments and a carefully articulated set of priorities; (3) a commitment of the federal government to play a major or central role; (4) involvement of state anq local govern­ments during every phase of its fonnulation and implementation; (5) the need to strengthen the substate, regional, and metropolitan institutions; (6) a strong and affinnative partnership between the public and private sector; (7) the potentially significant role of the neighborhood and voluntary associations in city building and rebuilding efforts. The Urban Policy Statement includes ten major federal policies, providin strategies for their implementation. Policy statement one says, "The Federal government will administer existing new programs in a coordinated, efficient, and fair manner. All key Federal activities will be evaluated to ensure they are as consistent as possible with the Administration's urban policies." This is indicative of how the federal role has evolved since the first policy statements in the Employment Act of 1946 and the Housing Act of 1949. Even more significant is the section including strategies for implementation. The following strategies are outlined for the first policy statement: arrange frequent meetings of senior officials and staff members from agencies involved in policy to evaluate policy effectiveness; when necessary, give involved agencies the direction to assure a coordinated response to the urban policy; continuously monitor the effects of various agencies to carry out urban policy; review, and if necessary, change programs to make sure they remain consistent with statutory objectives of urban policies (Office of White House Press Secretary, 1978). The urban policy statement outlines the major initiatives to be taken and addresses five major urban needs: (1) improving the operations of federal, state and local governments ; (2) employment and economic development ; (3) fiscal assistance; (4) community and human development; and (5) estab­lishing neighborhoods and voluntary associations. It should be obvious that manpower and community development activities are essential com­ponents of this new policy. Such policy can provide the direction local officials need to make more effective administrative organizations. THE ISSUES FOR COMPREHENSNE WELFARE REFORM Development ofa Comprehensive Manpower Policy The most important component of a comprehensive manpower policy is a national commitment to full employment by all major institutions in society , Humphrey/Hawkins, CETA, and Urban Policy especially private industry. The problems of unemployment are those of supply and demand. There is an increasing supply of workers who need meaningful employment opportunities. There are not enough jobs provided by the regular activities of the labor market as it is currently operating. The labor market does not provide adequate opportunities for skilled workers, much less unskilled, hard-to-employ workers. This creates a disincentive to become skilled, especially if other barriers to employment, such as racism and discrimination, exist. A commitment to full employment may require a shift from capital-intensive economy to a labor-intensive economy. Thus, emphasis must be placed on developing human resources in addition to natural resources . The Humphrey/Hawkins Bill is significant in seeking the required commitment while at the same time addressing the problem of inflation. A shift to a labor-intensive economy has associated costs, keeping private industry from adopting it as a common practice. Incentives must be developed that will attract labor-intensive investments by private industry . One such incentive is provided by the revisions of CETA through a targeted employment tax-credit, encouraging business to hire disadvantaged youth between eighteen and twenty-four. Private employers of yourig, disadvan­taged, or handicapped workers would be entitled to claim a $2,000 tax credit for each eligible worker during the first year of employment and a $1,500 credit the second year. Targeting this tax credit provides a mechanism to gain private sector cooperation with full employment goals. CETA revisions·will also establish the Private Industry Councils (PICs) as planning groups to be included in the CETA system. This is intended to provide more linkages between CETA and private sector opportunities at the local level. The PIC will most likely become a subcommittee of the larger manpower area planning councils. CETA revisions emphasize public service employment as another major stragegy for dealing with unemployment. The private sector simply does not supply enough employment to meet the demand for jobs-thus the reason for a formula that automatically increases the number of PSE slots with the cyclical increases of unemployment. A comprehensive manpower policy should guarantee every person able to work access to the training and skills necessary to obtain meaningful employment. The PSE stragegy has been criticized because is has typically led to dead-end jobs, with no effort to achieve lasting employment. This can be alleviated with cooperation of the private sector and community revitaliza­tion efforts as part of ongoing manpower activities in local jurisdictions. The Role ofthe Federal Government The role of the federal government in manpower and community development activities has evolved dynamically throughout hi~tory. It took the Great Depression to prove to policymakers the federal government could affect the operations of the economy. In the 1960s there were efforts to deal with social problems using a program approach, with direct federal involvement in designing and administering programs. In the 1970s the federal government has discovered it can have major impact on all sectors of the economy through fiscal and monetary policies. This requires the federal government to maintain an indirect role in administering manpower and community development activities. With the advent of special revenue sharing, the federal role hl!s been to provide technical assistance and monitor the activities of local jurisdictions. Moreover, refinement of monitoring techniques continually improves the information systems of local decisionmakers. It is also important that these activities focus on performance of programs, rather than on fiscal or budgetary considerations alone. The federal government must develop and maintain an ongoing system of monitoring able to measure the impact, and explain intentions and problems of program activities, for immediate response by local administrative organizations. Providing technical assistance includes improving information gathering systems and data bases to better understand the diverse needs of a community. This should include clarification of federal objectives and priorities, providing intra-and· interagency conferences or forums for local officials and administrators to "talk shop" and thereby improve services and provide leadership to all administrative organizations. Most importantly, technical a8sistance should improve the ability of local jurisdictions to coordinate manpower, community development, and welfare activities. The federal government must be the catalyst for coordination and consolidation of planning activities ; its role must be one of "constructive cooperation" in efforts to be a positive force in administration. The doctrines of economic individualism and a deep-seated respect for the free-enterprise system are still dominant. A person is expected to "make-it" on his own. Popular opinion maintains there are enough opportunities for one to become independent, but evidence from policy research indicates the contrary (Levitan, 1977). Poverty and unemployment are still regarded as problems of individuals lacking the motivation or the skills sufficient to foster economic independence. Welfare recipients have been stigmatized by society. In an economy based on open and free competition, the labelling effect is detrimental to the self-respect of program participants. Not only is there a lack of respect for federal social welfare programs, but they have been chaotic and confusing to the American people. This is indicative of the need for an indirect federal approach in dealing with social programs. However, it is imperative that the federal government maintain its monitoring efforts and the authority over domestic affairs to ensure cooperation of local jurisdictions. Using strategies such as formula entitlements, federal funds can be channeled effectively to people and places where they are most needed. Thus, it is the federal government's role to ensure the planning and program design of administra­tive organizations in mitigating the negativism surrounding welfare activities. Only then will these administrative organizations become what Phillip Selznick has called the "institution." Institutionalization is a process. It is something that happens to an organization over time, reflecting the organization's own distinctive history, the people who have been in it, the groups it embodies and the vested interests they have created, and the way it has adapted to its environment. To institutionalize is to infuse with value beyond the technical requirements of the tasks at hand (l95 7). This is the stage of development that has yet to occur in the manpower, community development, and welfare administrative organizations in the United States. BIBLIOGRAPHY Advisory Commission on Intergovernmental Relations (1971) Special Reve­nue Sharing: An Analysis of the Administration's Grant Consolidation Proposals. Washington, D.C.: U.S. Government Printing Office, pp. 1-13. Clague, E., and L. Kramer (l976) Manpower Policies and Programs: A Review, 1935-1975. Washington, D.C.: W.R. Upjohn Institute for Employment Research, pp. 1-70. Feagin, J.R. (1975) Subordinating the Poor-Welfare and American Beliefs. Englewood Cliffs, New Jersey: Prentice-Hall Inc., p. 103. General Accounting Office ( 1976) Report to the Congress: "Formulating Plans for Comprehensive Employment Services-A Highly Involved Pro­cess." HRD-76-149. Levitan, S. ( 1977) Work and Welfare in the 1970s. Institute of Policy Sciences and Public Affairs of Duke University: The Ford Foundation. Levitan, S. and G. Mangum (1969) Federal Training and Work Programs in the Sixties. Ann Arbor, Michigan: Institute of Labor and Industrial Relations, University of Michigan, Wayne State University, p. 23. Moynihan, D.P. (1969) Maximum Feasible · Misunderstanding. New York: Free Press. Income Maintenance Policy: Historical and Legislative Precedents Nathan, R.P., A.D. Manvel, and S.E. Calkins ( 1975) Monitqring RevenueSharing. Washington, D.C.: Brookings Institution. Nathan, R.P., et al. (1977) Block Grants for Community Development.Washington, D.C.: Brookings Institution. National Academy of Sciences (1974) Knowledge and Policy in Manpower: AStudy of the Manpower Research and Development Program in theDepartment of Labor. Washington, D.C.: Office of Manpower Research inDepartment of Labor. National Assembly .of Social Policy and Development (1972) Policy State­ment on Income Maintenance. New York: National Assembly for SocialPolicy and Development, Inc. Office of the White House Press Secretary ( 1978) "The Urban PolicyStatement." Unpublished, delivered to Congress by the President's Urbanand Regional Policy Group (URPG), March 27. Piven, F.F. and R.A. Cloward (1971) Regulating the Poor: the Functions ofPublic Welfare. New York: Pantheon Books. Singer, J.W. (1977) "The Latest Humphrey/Hawkins Bill-What Hasn'tChanged is the Name." National Journal, vol. 9, no. 50, pp. 1929-1931. Selznick, P. (1957) Leadership in Administration. New York: Harper andRow. Sundquist, J.L. (1970) Making Federalism Work: A Study of ProgramCoordination at the Community Level. Washington, D.C.: BrookingsInstitution. Texas State Manpower Services Council (1977) 1976 Annual Report to theGovernor. U.S. Congress, House of Representatives (1978) "Statement of Ray Marshall,Secretary of Labor, before the Subcommittee on Employment Opportuni­ties, Committee on Education and Labor." Unpublished, delivered to theSubcommittee on Februrary 22. Wilensky, H.L., and C.N. Lebeaux (1957) Industrial Society and SocialWelfare. New York: Free Press. Yarmolinsky, A. (1971) The Military Establishment. New York: Harper andRow. 136 OTHER VOLUMES IN THE WELFARE REFORM POLICY RESEARCH PROJECT SERIES: Volume I Linking the Carter Welfare Reform Package to the Income Maintenance System Volume III Analyses ofContemporary Welfare Reform Issues: Sexual Inequities; Regionalism and Fiscal Relief; and the Impact of Undocumented Aliens on the Welfare System Volume IV The Family Independence Project: An Alternative Welfare Reform Approach Available from: The Lyndon B. Johnson School of Public Affairs Office of Publications Drawer Y, University Station The University of Texas at Austin Austin, Texas 78712