Whatever the amounts may be, we believe that allocation should be made in accordance with the standards described above.

Finally, the states and, in particular, the state education agencies, have a key role to play in accomplishing school integration. The states are in a unique position to bring about urban-suburban cooperation and metropolitan planning. We urge that the efforts of state educational agencies in this area be given clear direction through adoption of state-wide, long-term integration plans, and intensified by active promotion of such plans.

The local role. We have emphasized that more money alone will not suffice. Accomplishment of the goal of meaningful educational opportunity for all will require exercise of enlightened and courageous leader

III. THE WELFARE SYSTEM

Introduction

The Commission believes that our present system of public assistance contributes materially to the tensions and social disorganization that have led to civil disorders. The failures of the system alienate the taxpayers who support it, the social workers who administer it, and the poor who depend on it. As one critic told the Commission: "The welfare system is designed. to save money instead of people and tragically ends up doing neither."

The system is deficient in two critical ways:

First, it excludes large numbers of persons who are in great need, and who, if provided a decent level of support, might be able to become more productive and self-sufficient.

Second, for those who are included, it provides assistance well below the minimum necessary for a humane level of existence and imposes restrictions that encourage continued dependency on welfare and undermines self-respect.

In short, while the system is indispensable simply because for millions-mostly children-it supports basic needs, drastic reforms are required if it is to help people free themselves from poverty.

Existing welfare programs are a labyrinth of Federal, state and local legislation. Over 90 percent of national welfare payments are made through programs that are partly or largely federally funded. These reach nearly 8 million persons each month:

2.8 million are over 65, blind or otherwise severely handicapped.

3.9 million are children in the Aid for Dependent Children Program (AFDC), whose parents do not or cannot provide financial support.

1.3 million are the parents of children on AFDC. Of these, over one million are mothers and less than 200,000 are

ship by local government. The programs which we have proposed can succeed only if imaginative and effective use is made locally of funds provided by the Federal and state governments. Mayors, city councils, school boards and administrators must lead the community toward acceptance of policies which promote integration while improving the quality of education in existing, racially segregated schools. The cooperation of their suburban counterparts is no less essential.

This responsibility is not limited to public officials. It is shared by the private community-business and professional leaders, clergymen, and civic organizations. Attainment of the goal of equal and integrated educational opportunity will require the leadership, support, talents and energies of the entire community.

fathers; about two-thirds of the fathers are incapacitated. Only 60,000 fathers are in the special program called Aid To Families with Dependent Children (Unemployed Parents) (AFDC-UP) operating now in 22 states.

Among all welfare programs, AFDC and AFDC-UP have clearly the greatest impact on youths and families. in central city areas; for this reason, they will be the principal focus for discussion here.

State and local governments contribute an average of about 45 percent of the cost of supporting the AFDC program, with each state setting the level of grants for its own residents. Accordingly, monthly payments vary widely from state to state. They range from $9.30 per AFDC recipient monthly in Mississippi to a high of $62.55 in New York. In fiscal year 1967, the total annual cost of the AFDC program, including Federal, state and local contributions, was approximately $2 billion, providing an average of about $36 monthly for each recipient.

This sum is well below the poverty subsistence level under almost any standard. The National Advisory Council on Public Welfare has commented:

The national average provides little more than half the amounts admittedly required by a family for subsistence; in some low-income states, it is less than a quarter of that amount. The low public assistance payments contribute to the perpetuation of poverty and deprivation that extend into future generations. Over the last 6 years, despite the longest sustained period of economic progress in the history of this country, the AFDC caseload has risen each year while the unemployment rate has fallen. Cases increased nationally by 319,000 during fiscal year 1967 and will, under present HEW estimates, increase by another 686,000 during the fiscal year 1968. The burden of welfare and the burden of the increases will fall principally on our central cities. In New York City alone, 525,000 people receive AFDC support and 7,000 to 10,000 more

are added each month. And, it is estimated that in 1965, nationwide, over 50 percent of persons eligible to receive assistance under welfare programs were not enrolled.33

In addition to the AFDC program, almost all states have a program of general assistance to provide minimum payments based largely or entirely on need. During calendar year 1966, the states spent $336 million on general assistance. No Federal funds have ever been available for this program. In fact, no Federal funds have ever been available for the millions of unemployed or underemployed men or women in the United States who are in need but are neither aged, severely handicapped nor the parents of minor children.

The dimensions of this "pool" of poor but unassisted individuals and families either ineligible under present programs or eligible but unenrolled-is indicated by the fact that in 1966 there were 21.7 million nonaged persons in the United States with incomes below the poverty level as defined by the Social Security Administration. Only a third of these received assistance from major public welfare programs:

[T]he bulk of the nonaged poor live in families where there is a breadwinner who works either every day or who had worked a part of the year, so that the picture that people have of who the poor are is quite a different thing from an analysis of the poverty population. And what we have done in effect is carve out, because of our categorical approach to public assistance, a certain group of people within that overall poverty population to give help to.

34

Seventy percent of the nonaged poor families were headed by men, and 50 percent of these held full-time jobs and 86 percent of them worked at least part of the year, so that the typical poor family is much like the typical American family, except they don't make enough money. And they have been historically excluded from the AFDC program. The gaps in coverage and low levels of payments are the source of much of the long-term dissatisfaction with the system. The day-to-day administration of the system creates even sharper bitterness and dissatisfaction, because it repeatedly serves to remind recipients that they are considerd untrustworthy, ungrateful, promiscuous and lazy. Among the most troublesome statutory requirements and administrative practices and regulations are the following:

First, in most states benefits are available only when a parent is absent from the home. Thus, in these states an unemployed father whose family needs public assistance in order to survive, must either abandon his family or see them go hungry. This so-called "man-inthe-house" rule was intended to prevent payments to children who have an alternative potential source of support. In fact, the rule seems to have fostered the

"Testimony before the Commission of Lisle C. Carter, Jr., Assistant Secretary for Individual and Family Services, Department of Health, Education, and Welfare.

"Ibid.

breakup of homes and perpetuated reliance on welfare. The irritation caused by the rule is aggravated in some states by regular searches of recipients' homes to ferret out violations.

Second, until recently all amounts earned by adult welfare recipients on outside jobs, except for small allowances for expenses, were deducted directly from the welfare payments they would otherwise have received. This practice, required by Federal law, appears to have taken away from many recipients the incentive to seek part- or full-time employment. The 1967 amendments to the welfare laws permit retention of the first $30 earned by a recipient each month and onethird of all earnings above that amount. This is a start in the right direction but does not go nearly far enough. New York City has, for example, begun experimenting with a promising program that allows welfare mothers to keep the first $85 of earnings each month and a percentage of amounts above that.

Third, in most states, there is a residency requirement, generally averaging around a year, before a person is eligible to receive welfare. These state regulations were enacted to discourage persons from moving from one state to another to take advantage of higher welfare payments. In fact, they appear to have had little, if any, impact on migration and have frequently served to prevent those in greatest need-desperately poor families arriving in a strange city-from receiving the boost that might give them a fresh start.

Fourth, though large amounts are being spent on social service programs for families, children and young people, few of these programs have been effective. In the view of the Advisory Council on Public Welfare, the inadequacies in social services:

are themselves a major source of such social evils as crime and juvenile delinquency, mental illness, illegitimacy, multigenerational dependency, slum environments, and the widely deplored climate of unrest, alienation, and discouragement among many groups in the population.

A final example of the system's inadequacy is the brittle relationship that exists between many welfare workers and the poor. The cumulative abrasive effects of the low levels of assistance, the complicated eligibility requirements, the continuing efforts required by regulations to verify eligibility-often by means that constitute flagrant invasions of privacy-have often brought about an adversary relationship between the case worker and the recipient family. This is intensified. by the fact that the investigative requirements not only force continuing confrontations but, in those states. where the same worker performs both investigative and service functions, leave the worker little time to provide service.

As was stated by Lisle Carter, Assistant Secretary of Health, Education, and Welfare, in testimony before the Commission:

[W]e think [it] is extremely important that welfare recipients begin to feel that the welfare worker is on their side instead of on the side of the agency. There have been statements made that the welfare workers are among the most hated persons in the ghetto, and one of the studies shows that the recipients tend to feel that what the worker says is something that cannot be challenged. Nowhere do you get the feeling that *** the worker is there to really go to bat for recipients in dealing with the other pressures that they face in the community. One manifestation of the tension and dissatisfaction created by the present system has been the growth of national and local welfare protest groups. Some are seeking to precipitate a national welfare crisis, in part by bringing on the welfare rolls so many new recipients that America will be forced to face the enormity of its poverty problem. Others, often composed of welfare recipients or welfare workers, seek expanded welfare programs and attack day-to-day inequities in the administration of the system.

On the other hand, many Americans who advocate better housing, better schools, and better employment opportunities for disadvantaged citizens oppose welfare programs of all kinds in the belief that they subsidize people who should be working. The fact is, as we have pointed out, that all but a small fraction of welfare recipients are disabled because of age, ill health or the need to care for their children. Even more basic is the fact that the heads of most poor families who can work are working, and are not on welfare. For both of these groups of people in need-those who cannot work and those who can and do—the problem in at least one vital respect is the same: lack of sufficient income to provide them with the kind of base on which they can begin building a path out of poverty, if not for themselves, at least for their children.

An altered and expanded welfare system, by extending support to more of those in need, by raising levels of assistance on a uniform national basis, and by eliminating demeaning restrictions, could begin to recapture the rich human resources that are being wasted by poverty.

Basic Strategies

In framing strategies to attack welfare problems, the Commission recognizes that a number of fundamental questions remain to be answered. Although many of the present inadequacies in the system can be identified, and specific changes recommended, long-term measures for altering the system are still untested.

A first strategy is to learn more about how welfare affects people and what its possibilities are for creative use. We endorse the recommendation of the Advisory Council on Public Welfare for greatly expanded research. We also commend the experimental incentive programs being carried out through the Department of Health, Education, and Welfare and the Office of

Economic Opportunity, as well as the Model Cities program through which some cities hope to develop integrated programs of income supplementation, job training and education. We further commend the President's recent creation of a Commission on Income Maintenance Programs, which may provide answers to the complex problems here presented.

Despite the questions left open, we believe that many specific inadequacies in the present structure can and should be corrected.

■ The most important basic strategy we would recommend is to overhaul the existing categorical system to:

(a) Provide more adequate levels of assistance on the basis of uniform national standards.

(b) Reduce the burden on state and local government by financing assistance costs almost entirely with Federal funds. (c) Create new incentives to work and eliminate the features that cause hardship and dependency.

(d) Improve family-planning and other social services to welfare recipients.

■ Our longer range strategy, one for which we can offer only tentative guides, is the development of a national system of income supplementation to provide a basic floor of economic and social security for all Americans.

Suggested Programs

Overhauling the Present System

To repair the defects in the existing categorical system is not simply a matter of changing one or two aspects. Major changes are needed in at least seven

areas.

Standards of Assistance

The Federal Government should develop a minimum income standard for individuals and families enrolled in AFDC. The standard for AFDC recipients should be at least as high as the subsistence "poverty" level periodically determined by the Social Security Administration. Only a few states now approach this "poverty" level, which is currently set at $3,335 for an urban family of four. Amending legislation should, if feasible, also permit cost of living variations among the states and within "high-cost" areas in each state.

As a critical first step toward raising assistance levels, the Commission recommends that the present provisions under which the Federal Government pays fifteen-eighteenths of the first $18 of AFDC monthly payments be amended to provide that the Federal Government will assume the entire first $15 and the same proportion of payments beyond $15 presently applied to that above $18. Taken together with existing legislation that requires the states to maintain levels of support when Federal assistance rates are increased, the effect of this change would be to raise by over one-third the monthly welfare payments in eight states of the deep South. In Mississippi, payments would be more than doubled.

▪ Extension of AFDC-UP

The Commission strongly urges that the temporary legislation, enacted in 1961, which extends the AFDC programs to include needy families with two unemployed parents, be made permanent and mandatory on all states and that the new Federal definition of "unemployment" be broadened. This program, which reaches the family while it is still intact, has been put into effect in only 22 states. Even in states where it has been implemented, the numbers participating have been small, partly because many states have narrowly defined the term "unemployment" and partly because the number of broken homes makes many children eligible under the regular form of AFDC.

• Financing

Because the states are unable to bear substantially increased welfare costs, the Federal Government should absorb a far greater share of the financial burden than it presently does. At least two methods are worth considering to achieve this end. The first would be to rearrange payment formulas so that, even at the highest levels of payments, the Federal Government absorbed 90 percent or more of the costs. A second method would be to have the Federal Government assume 100 percent of the increment in costs that would be encountered through raising standards of assistance and rendering AFDC-UP mandatory. Under either of these approaches, the share of costs presently imposed on municipal governments should be removed to release their limited resources for other

uses.

■ Work Incentives and Training

In three important ways, steps were taken in the 1967 amendments to the Federal Welfare Act to encourage or compel-welfare recipients to seek employment. Each of these controversial steps had some salutory aspects but each requires substantial further

attention.

(a) Job training.-The amendments provide substantially greater funds for job training. This was in principle a wise step. The amendments also, however, require the states to condition grants to "appropriate" adult welfare recipients on their willingness to submit to job training. Though the Commission agrees that welfare recipients should be encouraged to accept employment or job training, we strongly disagree with compelling mothers of small children to work or else lose welfare support. Many mothers, we believe, will want to work. A recent study of about 1,500 welfare mothers in New York City indicated that 70 percent of all mothers and 80 percent of Negro mothers--would prefer to work than stay at home.35

Podell, Families on Welfare in New York City, Preliminary Report No. 3, "Mother's Education and Employment," p. 7 (1967).

(b) Day-care centers for children. The 1967 amendments provide funds for the first time for daycare programs for children of working mothers. Further expansion is desirable to make centers an effective means of enabling welfare recipients to take advantage of training and employment opportunities. Efforts should be made to insure that centers are open in the evening and that more education features are built into center programs. State and Federal standards that prevent centers from employing subprofessional workers, including welfare recipient mothers, should be removed.

Welfare mothers themselves should be encouraged to set up cooperative centers with one or more mothers tending children of other mothers, and with welfare funds available for salaries. Such "living room" day care can only be effective if the mother taking care of the children can be paid without losing any substantial portion of her own welfare check.

(c) Retention of part of earnings.-The amendments permit an AFDC or AFDC-UP recipient to retain the first $30 of earned income monthly and onethird of the balance. Both the sums that can be kept without penalty, and the percentage of the balance that can be retained, should be raised substantially to maximize incentive to work. Some experimental programs are now going forward, but expanded efforts are needed to test different combinations and approaches. These programs should be supported at all levels of government.

Removal of Freeze on Recipients

The 1967 welfare amendments freeze, for each state, the percentage of children who can be covered by Federal AFDC grants to the percentage of coverage in that state in January, 1968. The anticipated effect of this new restriction will be to prevent Federal assistance during 1968 to 475,000 new applicants otherwise eligible under present standards. In the face of this restriction, states and cities will have to dig further into already depleted local resources to maintain current levels. If they cannot bear the increased costs, a second alternative, less feasible under existing Federal requirements, will be to tighten eligibility requirements for everyone, or reduce per capita payments. We strongly believe that none of these alternatives is acceptable, and that the freeze should be eliminated. ■Restrictions on Eligibility

The so-called "man-in-the-house" rule and restrictions on new residents of states should be eliminated. Though these restrictions are currently being challenged in the courts, we believe that legislative and administrative action should be taken to eliminate them now.

Other Features of the System That Should Be Altered or Strengthened:

(a) Clear and enforceable rights.-These include prompt determinations of eligibility and rights to administrative appeal with representation by counsel. A recipient should be able to regard assistance as a right and not as an act of charity.

Applicants should be able to establish initial eligibility by personal statements or affidavits relating to their financial situation and family composition, subject to subsequent review conducted in a manner that protects their dignity, privacy and constitutional rights. Searches of welfare recipients' homes, whether with or without consent, should be abandoned. These changes. in procedures would not only accord welfare recipients the respect to which they are entitled but also release welfare workers to concentrate more of their time on providing service. Such changes would also release a substantial portion of the funds spent on establishing eligibility for the more important function of providing support.

(b) Separation of administration of AFDC and welfare programs for the disabled. The time that welfare workers have available for the provision of services would be increased further by separating the administration of AFDC and general assistance programs from aid to the aged and physically incapacitated. The problems of these latter groups are greatly different and might better be handled, at the Federal level, through the Social Security Administration. Any such change would, of course, require that programs for the disabled and aged continue to be paid out of general funds and not impair the integrity of the Social Security Trust Fund.

(c) Special neighborhood welfare contact and diagnostic centers. Centers to provide the full complement of welfare services should be combined into the multi-purpose neighborhood service facilities being developed by the Office of Economic Opportunity and the Department of Housing and Urban Development. Federal funds should be provided to help local welfare agencies decentralize their programs through these centers, which would include representatives of all welfare, social, rehabilitation and income-assistance services.

(d) Expansion of family planning programs.Social workers have found that many women in poverty areas would like to limit the size of their families and are either unaware of existing birth control methods or do not have such methods available to them.

Governments at all levels-and particularly the Federal-should underwrite broader programs to provide family planning information and devices to those who desire them. Through such programs, the Commission believes that a significant contribution can be made to breaking the cycle of poverty and dependency.

Toward a National System of Income Supplementation

In 1949, Senator Robert A. Taft described a system to provide a decent level of income for all citizens:

I believe that the American people feel that with the high production of which we are now capable, there is enough left over to prevent extreme hardship and maintain a minimum standard floor under subsistence, education, medical care and housing, to give to all a minimum standard of decent living and to all children a fair opportunity to get a start in life.

Such a "minimum standard of decent living" has been called for by many other groups and individuals, including the AFL-CIO, major corporate executives, and numerous civil rights and welfare organizations. The study of the new Commission on Income Maintenance Programs and the Model Cities program will be of particular importance in providing direction. We believe that efforts should be made to develop a system of income supplementation with two broad and basic purposes:

To provide for those who can work or who do work, any necessary supplements in such a way as to develop incentives for fuller employment;

To provide for those who cannot work and for mothers, who decide to remain with their children, a minimum standard of decent living, to prevent deprivation and aid in saving children from the prison of poverty that has held their parents.

Under this approach, then, all present restrictions on eligibility other than need-would be eliminated. In this way, two large and important groups not covered by present Federal programs would be provided for: employed persons working at substandard hours or wages and unemployed persons who are neither disabled nor parents of minor children.

A broad system of supplementation would involve substantially greater Federal expenditures than anything now contemplated in this country. The cost will range widely depending on the standard of need accepted as the "basic allowance" to individuals and families, and on the rate at which additional income above this level is taxed. Yet if the deepening cycle of poverty and dependence on welfare can be broken, if the children of the poor can be given the opportunity to scale the wall that now separates them from the rest of society, the return on this investment will be great indeed.