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Box 7, Folder 12, Document 7

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FOR RELEASE UPON DELIVERY THURSDAY A.M. NOVEMBER 13, 1969 Statement of JOHN W. GARDNER, Chairman The Urban Coalition Action Council As Presented By GEORGE C. McGHEE Sp~cial Representative of the Chairman before the Ways and Means Committee United States House of Representatives November 13, 1969

Mr. Chairman, your committee is faced with an extraordinary opportunity .

The time has come to discard the existing patch-

wo rk o f ine ffective and in many ways destructive public assistance programs.

You have the opportunity to replace them with a national

s y stem of i ncome maintenance that will help people to help themselves but preserv e individual dignity in aiding those left behind by society. The Nee d Th e ne e d i s manifest.

This Committee knows all the facts and

statistics of pover t y. You know the cos t of wel f are , but y ou know also the great c o st to society of human negl e ct.

The c h i ld who se hea lth n e eds are

denied early me dical a t tent i on b e c ause o f pove rty may s u f f e r a lifelong handicap and become a life l o ng burden to the community. The child wh ose attitudes a nd moti v ation are sha ped by the p athology of extreme poverty may become a ·delinquent or d e r e li ct or addict



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and end up as a burden on society. - to be compared with the human cost.

The cost to society is not But those who calculate

social costs (and someone must) know that for society the day of reckoning alway s comes.

It requires a lot of money to maintain

jails, to rehabilitate addicts, to support the victims of early neglect.

We can serve human values and social providence at

the same time by making such casualties less likely. Many Americans sincere ly believe that people living in poverty are people who don't want to wo rk -- or people who don't want steady work.

In other words, able-bodied loafers.

way from the truth.

That is a long

Of the 25 million persons living below the

poverty line, 15 million are either under 18 or over 65. Of the remaining 10 million, 9 million fall within the scope of the Admin is tration's family assistance proposals (as being adults in poor famil i e s that include children). that 9 million.

Let us look at

The Adminis tr ation estimates that 7.9 million are

already worki ng, but earn too little to bring them above the poverty level, o r are the wives o f such men , or are disabled, or are women who must stay home becau se of very y oung children.

That leaves

1.1 million adults who the Adminis trat i on feels can significantly help themselves and would thus be required to register fo r jobs or work training

600,000 men and 500,000 mothers of school-aged

children. I emphasize those facts because they suggest the limits of what we may e xpect from the work requirement .

Those who cherish

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the false notion that the welfare rolls are made up chiefly of able-bodied loafers could easily imagine that the present p rop osals will b r ing a sharp reduction in the rolls .

If they

believe th a t , t h e y will end up disappointed and angry, because it won't happen .

Most people who now receive welfare or would

receive it under the new p r oposals are not candidates for the j ob marke t.

As the a bov e f igures indi c a t e , ei ther they are

already . working or they are too old, too young, disabled, or mothers of young children. I n e e d not d e al at length with the we ll-know shor tcomi n gs o f the present welfare system (or non-system).

In 7 0 % o f the f amilies

r eceiving benefi t s the fath e rs are a b s e nt from the home.

To t he

degree t h at the welfare sys t e m has helped t o c r eate such a situ ati o n it endangers t h e fabric o f o u r family based soci ety .

And clear l y a

sy s tem in wh ich a n American in one state can re ce i ve o n l y one eighth of that which his fellow citizen with the s ame need receives in another state falls far short o f any reasonable standard of equity. The level of wel f are benefits paid in most states clearly will not help any chi l d to escape from poverty.

We know , from

official statistics , that in only two o f the states do AFDC families receive aid at the $3,500 a year (for a family of four) poverty level, and in less th an half (21) do they approach 75% o f the poverty threshold.

The average for all states and the District of

Columbia is almost $1,20 0 below the poverty line.

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Before we consider how the present system might be improved, I'd like to comment on what may or may not be expected from a welfare program. The poverty that makes a public assistance program necessary is rooted i n a variety of historical and contemporary conditions: discrimination, the pathology of the urban and rural slum, inadequate education, insufficient job opportunities in the locality, low pay in jobs not covered by the minimum wage, inadequate social insurance benefits, inadequate provisions for manpower training and so on. No welfare program can cure those underlying conditions.


can only deal humanely with the consequences. If we are to get to the root of the problem we shall have to do so t h r o u gh e d ucation, health and nutrition programs, the creation of j ob o pp o r tunities , the elimination of slum conditions and similar me asures . We must n ot , for e x ample , imagine that the aid to the work ing p oo r cont ai ned i n the present proposals is in any sense a substitute for increases i n and e x tension of the minimum wage .

All parts of

the political spec t rum would agr ee , I suppose , that i n t h e long r un an adequate minimum wage is h ealth ie r t han a Fede ra l wage subs idy. Legislative Proposals Now Mr . Chairman , I sh a ll s p eak to the l e g is l at ive pro p o sa l s b e f o r e y ou .


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The Urban Coalition Action Counc i l believes that the Presiden t has put

forward an e x tremely important and on the whole

well-desi gned se t o f p ropos a ls .

The Counc i l also belie ves t h at

the prop osals could b e strengthened at several crucial points. Let me be g i n by statin g very briefly what it is about t h e prop osal s th a t s t rike us a s valua ble. F i rst , we wou ld offer a general wo r d o f p r aise f or the empha sis on c hildre n tha t is at the heart of t he prop osals under discu ssion . It ' s a bout time . Second , we would e mphas i ze that if t h e propo sal s are acc ept ed, t he Federal Gove r nment wi ll for the fir st time in history ac cept r e spons i bi l ity for pro v i ding a minimum l evel o f payment t hroughout t he nation a nd f or fin a n c ing it.

I wo u l d have bee n v e r y proud had

I been a ble to es t a bli s h that princ iple d u r i ng my tenu r e a s Secretar y of He a lth, Edu cation and We l fare.

It is a h istori c step .

Al l the det ail s o f the p resent proposal s fad e in s ignificance compared with that ma jor a dva nce in Federal p olicy . Th i r d, the Coali t i o n Action Council rega r ds the u ni f o rm n ational standards of e l igib i lity and the great l y broadene d cove r age as enormously he l pful.

Of spe c i a l s i g n ificance i s the inclu sion of

the wo rking poor f or the fir st time .

The complete ornrnission o f t he

working poor is surely o ne of t h e s trangest a noma l ies of t he present system.

A society which va lues work shou ld surely make some

provision for the six million adults who work full-time, year round, and yet cannot earn enough to bring themselves above the pove r ty line.


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Fourth, we welcome improvement and broadening in the incentive to work.

In 1967 your Committee pioneered in the move to correct

the disincentive to work inherent in the welfare system, and I am sure that further steps to this end must strike you as wellconsidered. Fifth, we applaud the proposed assistance to families with unemployed fathers living at home.

Every critic of the existing

system has commented on the fact that in states without provision for AFDC-UP, fathers have to leave home to make their families eligible for welfare. Mr. Chairman, those strengths of the President's proposals are great indeed.

They could lead us on to an immeasurably sounder

and more equitable system of income maintenance.

But if the promise

of the proposals is to be realized, they must be strengthened at a number of p oints. Can a national commitment to help impoverished families be met by a program which guarantees uniformity throughout the country only with respect to the first $1,600 of benefits for a family of four, even with the commendable inclusion of food stamps?

No doubt the

level was based primarily on what the Administration believes it can afford under present budget constraints.

I would like to assume

that the President's ultimate goal is to increase that figure until it reaches the poverty level.

But he has made no provision for

such an increase and, even with the proposed state participation , there is no incentive whatever for states to raise their benefit


levels .

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Indeed, they are not required to raise them beyond

the July 1969 level.

If state supplementation is to be required,

the legislation should provide an incentive for states to increase the supplementary benefits (e.g. by Federal matching above the $1 , 600 floor). As the best long-term approach, however, I urge the Congress to make prov ision for a nation-wide increase in benefits to the poverty level over a specified period of time .

The $1,600 floor

proposed by the President can serve as a sound starting point for such a phased program . Adequate provision should be made for "one-stop" administration of the proposed Federal-state system.

The uniform national eligi-

bility standar ds s h ould help to eliminate the possibility of dispar i t ies i n admi ni str ation among the states , which is so c l early a prob l e m in the p re sent programs.

However, under the Preside n t's

p r oposal , i f a state chose to cut its supplementary payments o r to di s regard Fe dera l s tan da r ds for such p a yments, the Federal requ i re ments wou l d be very ha r d t o enforce .

It may be necessary to fi nd

a more enforceab l e Fede r al sancti on , such as admini str ativ e intervention. The improved benefits for t he aged, d isable d and blind are a welcome step.

It may b e , h oweve r, t hat o ur ultimate g o al should

be a single income maintenance system which provides for uniform adequate assistance for alT of our impoverished citizens, including needy individuals and couples without children.


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It should probably be recognized that we are moving toward Federal assumption of the full cost of welfare programs.

At a time

when the nation as a whole is experiencing unprecedented prosperity, state and local governments are facing fiscal crisis.


dependent upon an inelastic tax base, they face inflation-linked increases in service expenditures compounded by spiraling welfare costs.

Given the elasticity of its tax base, and the economies of

scale and efficiency offered by Federal administration, a shift of the welfare burden to the Federal Government is clearly one means of resolving the fiscal dilemmas of state and local government. The fiscal relief offered by this shift would enable state and local governments to direct greater resources to those functions they are best fitted to finance and administer. Another point at which the President's proposals must be strengthened is the part having to do with the work requirement. The legislation should specify job standards and wage rates for "suitable employment".

If this ·is not done, the legislated work

requireme nt could end up providing a steady supply of forced labor to employers who provide substandard wages and wo rking conditions. The possibility of abuse by local employment services should be minimized by extremely careful definition of what constitutes a "refusal to work", and perhaps also by some system of Federal inspection . The exemption from the work requirement granted to mothers with children under 6 and to mothers if the fathers are living in the home


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should be extended to mothers with children over 6.

It may be

quite feasible for such a mother to work, and many do.

But the

feasibility depends on factors that she can best judge: her own health, the health (physical and mental) of her children, the presence in the home of adequate mother-substitutes (grandmothers, aunts) and so on.

No bureaucracy should want to second-guess a

mother in such matters. In this connection, provisions for day care should be more explicit.

Federal standards should be set.

No work referral should

be made unless adequate day care is provided.

Responsibility for

and funds for construction of day care facilities should be specified in the legislation. Finally, I would emphasize that there must be provisions for job creation, so that the training opportunities won't be a revolving door into continued unemployment.

The ideal solution is a public

service employment program.

Mr. Chai r man , that concludes my testimony.

I am extremely

gr a teful for t he opportunity to appear before you.

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