sightings of “Maria!”: At a motivation class in 1997 the instructor asked students for examples of how the program had helped. I thought: interview skills? self-esteem? A hand flew up: “It really helped me with the interview for Dateline NBC!”
197 social work as farce: OIC also marched Opal through something called the Harrington-O’Shea Career Decision-Making® System Revised, a list of ninety-six like-dislike questions compiled by two Boston psychologists. Opal reported that she would like to “write a novel,” “perform scientific studies,” or serve as “a mayor or senator.” She would not like to “drive a large truck” or “carve animals out of wood.” With that, the test detected an interest in social issues and suggested a future as a dean of students or probation officer. Opal wrote that she’d rather be a chemist.
201 Robert Lee’s arrests: Interviews with Opal, Chicago court records.
202 crack’s American debut: Michael Agar, “The Story of Crack: Towards a Theory of Illicit Drug Trends,” Addiction Research and Theory 11, no. 1 (2003): 3-29; see also the history of crack on the Web site of the Drug Enforcement Administration.“I could do anything”: “My Secret Addiction,” Ladies’ Home Journal, Nov. 1994, 162.
behavior of addicts: Interviews with Ric Curtis, Francine Feinberg, Jerome Jaffe, George Koob, Michael Massing, Thomas McLellan, Anne Paczesny, Luigi Pulvirenti, and Pat Tucker. Also helpful is the 1998 Bill Moyers series on PBS, Close to Home, available at http:www.pbs.org/wnet/closetohome/home.html (accessed May 26, 2004).
paradigmatic cocaine experiment: Michael A. Bozarth and Roy A. Wise, “Toxicity Associated with Long-term Intravenous Heroin and Cocaine Self-Administration in the Rat,” Journal of the American Medical Association (1985): 81-83.
206 poor record of leading to employment: Brock, Butler, and Long, “Unpaid Work Experience for Welfare Recipients,” 3. One reason the early experiments failed to predict the later plunge of the rolls may have to do with scale; the declines came in part from changes in street and bureaucratic culture, which don’t occur until the new rules are broadly applied.
207 unusually generous: Shortly before the program began, Tommy Thompson (who was first elected promising benefit cuts) pushed through a 20 percent hike, raising the community service jobs to $673 a month. In doing so, he overrode the objections of his aides and Republicans in the legislature. “It’s brought in a lot of opponents and advocates to help make the system work,” he said. Thompson’s politically savvy move was one example of the kind of positive political dynamic Clinton had hoped the welfare bill would encourage. At the same time, W-2 drew some criticism on the Left for abandoning the practice of paying more to larger families. AFDC paid $440 a month to a mother with one child, and additional children raised the figure to $517, $617, and $708, up to $963 for a mother of ten. In paying a flat $673, the CSJs amounted to a pay raise for anyone with three kids or less—about 90 percent of the caseload. However, a few women with very large families lost significant ground.
207 preview of W-2: DeParle, “Getting Opal Caples to Work,” NYTM, August 24, 1997.
12. HALF A SAFETY NET: THE UNITED STATES, 1997-2003208 Nine out of ten: For jobs and children, 1996 Green Book, 473; for fathers and education, interview with Donna Pavetti.“God, not government”: Joe Loconte, WSJ, Oct. 6, 1995.
209 “The debate is over”: Clinton, remarks in St. Louis, Aug. 12, 1997, PPP-1997, vol. 2, 1087.Rudolph Giuliani planned: Robert Polner, Newsday, May 12, 1998. “Life works if you work”: Thomas L. Gais and others, “Implementation of the Personal Responsibility Act of 1996,” in Rebecca Blank and Ron Haskins, eds., The New World of Welfare (Washington, DC: Brookings Institution Press, 2001), 46.
About three-quarters made applicants look: Pamela A. Holcomb and Karin Martinson, “Putting Policy into Practice,” in Alan Weil and Kenneth Finegold, eds., Welfare Reform: The Next Act (Washington, DC: The Urban Institute, 2002), 9. They found diversion programs in thirteen of seventeen sites studied.
210 “culture of improper deterrence”: Shortly after becoming the New York City welfare commissioner, Jason Turner began converting the city’s thirty-one welfare offices into so-called “job centers,” with a heavy stress on diverting would-be applicants. City officials said that front-line workers merely were supposed to make sure that applicants had considered alternatives to welfare, like using food banks or soup kitchens. But city workers often refused to give out applications during a person’s first visit to the office, in violation of the law; they did so not only for cash aid but for Medicaid and food stamps, too. While the city called such incidents isolated, District Judge William H. Pauley III found “system-wide failures” and wrote that the “evidence indicated that job centers were failing to timely process applications . . . erroneously denying food stamps and Medicaid applications, [and] failing to allow individuals to apply for benefits on their first visit to a job center.” Turner may not have helped his cause when he said in a deposition, “We acted first and worried about the consequences later.” One of the plaintiffs was a homeless woman, pregnant with twins, who was skipping meals as she waited more than a month for food stamps. Lakisha Reynolds vs. Rudolph Giuliani, U.S. District Court, Southern District of New York, July 21, 2000.
210 two-thirds of adults lost Medicaid: Pamela Loprest, “How Are Families that Left Welfare Doing? A Comparison of Early and Recent Welfare Leavers,” The Urban Institute, B-36, April 2001, 5. The data covers 1997, a low point in the health insurance story, which made modest improvements with time. The share of former recipients with Medicaid or other subsidized insurance rose from 36 percent in 1997 to 48 percent in 2002, in part because states did a better job of enrolling eligible families and in part because of the new state Children’s Health Insurance Program, which in some states covered adults, too. (2002 data from author’s communication with Loprest.)Among children eligible for food stamps: Bob Greenstein and Jocelyn Guyer, “Supporting Work through Medicaid and Food Stamps,” in Blank and Haskins, eds., The New World of Welfare, 347.
211 three-quarters had full-family sanctions, half-million cut off: Dan Bloom and Don Winstead, “Sanctions and Welfare Reform,” in Isabel V. Sawhill and others, Welfare Reform and Beyond: The Future of the Safety Net (Washington, DC: Brookings Institution, 2002), 50-51. Some of those penalized ignored their assignments because they already had jobs. But on average, they had less education, less work experience, and more problems with domestic violence and physical and mental health than did other people leaving the rolls. They also wound up with lower employment rates. While sanctioned families can return to the rolls, often after a waiting period, the overwhelming majority do not. See also LaDonna Pavetti and Dan Bloom, “State Sanctions and Time Limits,” in Blank and Haskins, The New World of Welfare, 261.a third of New York City’s caseload: Interviews with Seth Diamond, Swati Desai, NYC Human Resources Administration.
212 Utah found half had problems: DeParle, NYT, June 30, 1997.thirty-three states spent more on child care: Mark H. Greenberg, CLASP, testimony before U.S. Senate Committee on Finance, March 19, 2002. Wisconsin spent four times as much on child care as it did on cash benefits.
213 earnings disregards: Wisconsin was the rare state that did not let recipients keep at least part of their checks once they got regular jobs.collecting child support: Analysis of HHS data by Vicki Turetsky of CLASP. From 1996 to 2002, the share of child-support cases in which the government made a collection rose from 20 percent to 49 percent.
213 half the adults, 30 percent of kids were uninsured: Bowen Garrett and John Holahan, “Welfare Leavers, Medicaid Coverage, and Private Health Insurance,” The Urban Institute, B-13, March 2000, 3.eligibility for SCHIP and Medicaid: Author’s communication with Edwin Park, Center on Budget and Policy Priorities.
37 percent adults uninsured: Author’s communication with Pamela Loprest of the Urban Institute, who derived the data from the National Survey of America’s Families.
mother of two leaving welfare: David T. Ellwood, “Anti-Poverty Polic
y for Families in the Next Century: From Welfare to Work—and Worries,” Journal of Economic Perspectives (Winter 2000): 187-98.
214 seven states cut the rolls by three-quarters: It depends upon what years you choose, but from January 1993 to June 2000, they are Colorado, Florida, Idaho, Mississippi, Oklahoma, Wisconsin, and Wyoming.states with more unemployment: Robert E. Rector and Sarah E. Youssef, “The Determinants of Welfare Caseload Decline,” The Heritage Foundation, May 11, 1999.
prominent economists: June E. O’Neill and M. Anne Hill, “Gaining Ground? Measuring the Impact of Welfare Reform on Welfare and Work” (Manhattan Institute, July 2001); Rebecca M. Blank, “Declining Caseloads/Increased Work: What Can We Conclude About the Effects of Welfare Reform?” Economic Policy Review (Federal Reserve Bank of New York, Sept. 2001), table 2.
215 Creek County: Dana Milbank and Christopher Georges, WSJ, Feb. 11, 1997.white families left faster, blacks and Hispanics outnumbered: DeParle, NYT, July 27, 1998; “Temporary Assistance for Needy Families Program: Fourth Annual Report to Congress,” May 2002, ch. X, 190.
$59 billion more: Douglas J. Besharov and Peter Germanis, “Toughening TANF: How Much? And How Attainable?” University of Maryland School of Public Affairs, Welfare Reform Academy, March 23, 2004, 53.
216 state spending, New York to New Mexico: DeParle, NYT, August 29, 1999.trip to the Delta: DeParle, NYT, Oct. 16, 1997.
217 factors that shape state policy: Joe Soss and others, “Setting the Terms of Relief: Explaining State Policy Choices in the Devolution Revolution,” American Journal of Political Science 45, no. 2 (April 2001): 378-95
218 Oregon presented a contrasting view: DeParle, NYT, Nov. 20, 1997.talk of childhood molestation: DeParle, NYT, Nov. 28, 1999.
220 twenty states met the work rate: HHS, Office of Family Assistance, “TANF Work Participation Rates, Fiscal Year 2002,” April 25, 2003.states reported that 61 percent: “Welfare Reform Reauthorization: State Impact of Proposed Changes in Work Requirements, April 2002 Survey Results,” National Governors Association/American Public Human Services Association, 7.
13. W-2 BUYS THE CRACK: MILWAUKEE, 1998223 Opal admitted using cocaine: Interviews with Opal Caples and Darlene Haines.forgery: State vs. Darlene Haines, Case #2001CF000403, Milwaukee County Circuit Court; interview with Megan Carmody, assistant district attorney.
224 Opal’s collapse: Interviews with Opal Caples, Jewell Reed, and Kenny Gross.
226 failed to pick up the girls: On April 15, 1998, someone filed a child-welfare complaint warning, “Ms. Caples had a cocaine addiction and had abandoned all her children at day care while on a crack binge.” (CHIPS petition, March 13, 2000, 2.)caseworker knew nothing of her addiction: Opal’s computerized case notes, instantly available to any caseworker, contained three references to drug use over the previous eighteen months. There is “a conflict with her . . . treatment” (Aug. 19, 1996); she is “attending her treatment program” (Sept. 12, 1996); and “[s]he has just completed . . . her treatment program” (Dec. 23, 1996).
222 Sonya Gordon: In an interview, Gordon explained she was a “retention specialist,” whose job was to prepare the case for the “AODA”—alcohol and other drug abuse—“specialist” by talking to Opal and her former employer about why she had lost her job. She spoke to neither. An additional note of folly entered the case when another OIC worker gave Opal a $400 “job access loan” under a program meant to help workers keep their jobs. “You really don’t qualify for it if you’re not working,” Opal said. “It wasn’t hard. I just went in and filled out my papers.”
229 an investigator arrived: Interview with Opal Caples; CHIPS petition, March 13, 2000, 2. The investigation was triggered when Opal left the girls at day care, but a month passed before the social worker arrived.“The unborn child”: Sam Martino, MJS, June 17, 1998.
14. GOLF BALLS AND CORPORATE DREAMS: MILWAUKEE, 1997-1999230 “The Company’s services”: Maximus, Inc., 1997 Form 10-K, Securities and Exchange Commission.welfare cartel: In describing the agencies’ cooperative spirit, the consultant, George Gerharz, told me: “This is the biggest small town in America—you don’t screw each other.”
230 Goodwill Industries: It ran the program through a subsidiary, Employment Solutions, Inc., which operated two Milwaukee regions and was therefore the state’s largest W-2 agency. The agency run by the YWCA was called YW Works.
231 Maximus thought to have an edge: The Wall Street firm Donaldson, Lufkin & Jenrette, for instance, credited the bill with “creating vast opportunities for the private sector” and called Maximus “ideally positioned to benefit from the expected surge in outsourcing.” (Maximus, Inc., Company Report, DL&J, Aug. 22, 1997, 14, 1.)Mastran’s stake: Adam Cohen, Time, March 23, 1998.
Maximus had to start from scratch: Among those Maximus employees who spoke on the record were Jose Arteaga, Keith Garland, Mona Garland, George Leutermann, David Mastran, Bridgette Ridgeway, and Michael Steinborn.
232 “plan to replicate”: Pete Millard, Milwaukee Business Journal, July 7, 1997.employees would pose: When CNN called to ask if the program offered clients tax advice, Maximus staged a class for the cameras. Keith Garland, the Maximus manager who conducted it, told me, “that’s the only workshop I’ve ever done.”
Nightline: Transcript, ABC News, Sept. 4, 1997.
233 up to “thirty hours”: Even Jason Turner, who designed W-2 (and then left the state government), was unaware of the “up to” codicil until I pointed it out to him. “That wasn’t the original plan,” he said. “The counties were definitely not allowed to put people in twenty hours—that definitely wasn’t permissible.” Jean Shiel, the official who wrote the manual, said the language was meant to offer “a little bit of flexibility, but not much—we still emphasized it was thirty hours of work.”“limbo”: Memorandum from Mona Garland to George Leutermann, March 3, 1998.
“[M]any job seekers”: E-mail from Mona Garland to Jose Arteaga, April 30, 1998.
“The no-show rate”: E-mail from Paula Lampley to Mona Garland, Oct. 29, 1997.
“Northwestern Mutual”: E-mail from Mona Garland to caseworkers, March 24, 1998.
“virtually no referrals”: E-mail from Steve Perales to Mona Garland, Feb. 11, 1998.
234 more than twice as many: “Distribution of Caseloads by FEP For the Week Ending June 5, 1998,” data supplied by DWD at author’s request.13 Feps, needed 28: Mona Garland memo to Steve Perales, Jan. 14, 1998.
Sixty-seven percent had no work assignments: The comparable figures were 15 percent at Employment Solutions (Region 4); 21 percent at Employment Solutions (Region 5); 33 percent at YW Works and OIC; and 52 percent at UMOS. The statewide average was 38 percent. “Full Participation Exceptions (740RC Report),” DWD, June 26, 1998.
234 46 percent with no assignment: E-mail from Jose Arteaga to four Maximus managers, Sept. 28, 1998.“[O]ur dismal performance”: George Leutermann memo to Mona Garland, June 30, 1998.
236 W-2 Provides the Jobs: The other tier on the W-2 ladder, rarely utilized, involved “Trial Jobs,” in which the state used the welfare grant to subsidize work with a private employer. In January 2000, the breakdown of assignments statewide was 51 percent in Community Service Jobs; 35 percent in W-2 Transitions; 1 percent in Trial Jobs; and 13 percent on three months of paid maternity leave.
238 “professional work environment”: Maximus, 1997 Form 10-K, 2.Maximus work atmosphere: gambling jags and screensaver, interviews with Michael Steinborn; “off the deep end,” e-mail from George Leutermann to Mona Garland, Feb. 23, 1998; “Marine combat veteran,” e-mail from Maximus employee to his supervisor, Feb. 17, 1998; “Monkey Ass away,” memo from Paula Lampley to Phyllis Kirk, Aug. 31, 1998; sex-and-drug peddling scheme, e-mail from Christine Brost to Steve Perales, March 17, 1998 and from interviews with Keith Garland and George Leutermann, who confirmed the credibility of the allegations; “dumb-ass . . . should have paid,” a Maximus employee on the condition of anonymity.
239 practiced what he preached: Leu
termann’s wife, Barbara, ran literacy classes; his son, George Jr., had a summer job; his niece, Twila Hatzinger, worked in PR; his girlfriend was a senior manager; and her mother supervised receptionists. The “rumors and soap operas” memo is dated June 9, 1998. The talk of Leutermann’s affair was so widespread it reached - David Mastran, the CEO, who later said in an interview he considered it “a firing offense” but lacked evidence at the time; given the program’s other problems, he said, it was a “peripheral issue in a bigger storm.” Leutermann, in an interview, didn’t deny the relationship with his subordinate (he is listed on a birth certificate as the father of her child) but said she was hired on merit. “She was basically a brilliant person,” he said. Likewise, he said, “My wife was hired not because she was my wife but because she had a master’s degree in computer education. . . . We didn’t just hire people because they were relatives.”“more than its share of complaints”: E-mail from David Mastran to George Leutermann and others, May 25, 1999; the Swann report, marked in a cover note as a “draft,” is dated June 1, 1999, and was circulated to the senior corporate management.
“living a double life”: Judge Diane S. Sykes, May 1, 1995; transcript of sentencing in Wisconsin vs. Corey Daniels, case #F-950959, Milwaukee County Circuit Court, 14. At a trial that largely pitted his word against theirs, Daniels was acquitted of extorting money from Maximus clients. “I was a little, I wouldn’t say surprised, but I wasn’t sure I was going to come out of there with any acquittal,” his attorney, Douglas Pachucki, told me.
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