Oneof the most important issues to face the new mayor of the District of Columbia is Welfare Reform. There are currently 16,000 families and 45000 people on Temporary Assistance for Needy Families (TANF) living in the District of Columbia. Each of these families receive $15,000 in cash benefits seriously straining the District’s budget. Other cities have made considerable progress in solving the welfare dependency conundrum. After decades of championing the rights of the poor, Council member Marion Barry has called for for stringent new controls. His proposal to limit benefits is a radical departure for him. He is now proposing what he once would have called draconian approaches. Let’s take him at his word.
So what has been learned since the passage of the bill in 1995? What has contributed to the whopping reduction in the welfare caseload across the country but not in DC? Here are the headlines.
Work First: Having failed for decades as a strategy to cut the rolls, it was recognized by President Clinton, Speaker Newt Gingrich, and Congress that people should be offered a job, not expensive remediation as a beginning effort to wean them from dependence. Work First assumes that there may be barriers to employment that need to be addressed.
However, welfare recipients are given the opportunity to go to work and the social and training services are then provided as needs arise. Work-First was enshrined in “The Personal Responsibility and Work Opportunity Reconciliation Act” of 1996. In this bill education and training were given the boot as a first strike in welfare to work, which for decades had failed to reduce the rolls.
The response by program operators, and advocacy groups will predictably be to reject this approach. There is simply too much public money going down their drain for an acceptance of a new and productive way.
Where work first has been adopted by other cities rolls have dropped sharply and recipients have been rescued from marginality.
Pay-For Performance Contracting underpins the success of work first. This was pioneered with governments a quarter of a century ago.
Rather than paying for programs regardless of their effectiveness they were advised to get what they paid for when contracting for welfare to work. Pay-for-performance pays for itself over time in reduced welfare costs and reinvigorated citizens.
The Welfare Industrial Complex will savage supporters of this. Program providers will claim that as non-profits they can’t be held to conventional standards of accountability.
As the founder of America Works, which has an office operating in the District of Columbia and others throughout the country I can be accused of self-interest. But what has benefited me has benefited my employers as well.
In New York where this change was mandated for not for profits and for profits as well, in the first full year after that change, the city doubled the number of recipients who got jobs and kept them. Remarkably, the city spent one-third less on training and placement services.
With Work First and Pay For Performance Contracting The new Mayor and responsible civic leaders can turn the city’s welfare debacle into a model of success. This is a turnaround situation with a proven roadmap for a win.
It will not be politically easy. But the most vulnerable citizens, the taxpayers and employers will all be the beneficiaries. In this era of citizen demands for frank and honest solutions, the leaders who have the courage to accomplish this might just win reelection.
Peter Cove is the Founder of America Works.
