by Tom Corbett
Don was considered an intellectual, a creative and imaginative manager, and someone who sought to delegate important responsibilities to staff. I recall once going into his office to have him sign off on some research proposals that were going off to the federal government. As he began to sign them I asked him if he needed more time for review or perhaps a verbal summary. “No,” he said, “I trust you. Besides, I know where to find you.” Another time he told me that he wanted us to take chances, to be creative. When I looked at him with incredulity, he did add a caveat. “The only thing I ask is that if you really screw up, come and tell me first. I will back you, but I don’t want to be blindsided.” In effect, he had also given us a green light.
Okay, I thought, I have just fallen down the rabbit hole and come up in policy wonk heaven. Hell, we appeared to be free to dream up whatever mischief our imaginations might spawn, and our courage would permit. It was just a little like being a teenager who was given the keys to Dad’s car and his credit card to boot. Could a trip to juvenile court be far behind?
Many of the details are lost to history and a decaying memory. But I do recall a pattern that emerged. Bob and I would meet at IRP and brainstorm some possibilities. Basically, we scoured existing ideas that were in play in Washington or could be borrowed “off the shelf” from the existing academic literature. So, we looked at the tax structure to see if it might be altered to be more favorable to low income families. We started playing with the Earned Income Tax Credit concept that was still in its policy adolescence back in the 1970s. Could that concept somehow be imported into Wisconsin as a state reform initiative to help the working poor? What about tax credits for employers to hire job seekers with less skills and experience. These so-called wage bill subsidies were theoretically persuasive even though their performance in improving targeted labor demand was questioned by many. And what about the progressivity of the state tax code at the low-end of the income distribution. Were we exposing the poor to positive tax liabilities?
We also looked at what was going on with Carter’s reform effort, what became known as the Program for Better Jobs and Income (PBJI). Several IRP affiliates were involved in that effort, Eugene Smolensky for one. While PBJI was destined to falter and fail, as so many others had in the past, there had been a lot of attention paid to jobs programs for welfare-type families. These were the first ripples in what would soon become a tidal wave of change.
Beyond that, we had access to some of the best thinking that had been done on the large scale Supported Work projects and the so-called Income Maintenance Experiments (IME). These were rigorous studies on the effects of alternate welfare guarantees and work incentives on seminal client behaviors like labor supply, marriage, and related outcomes of societal interest. It was hoped they would answer fundamental concerns about the behavioral consequences built into welfare programs. IRP had been instrumental in developing the experimental designs used to evaluate the IME interventions. You must remember that this was an era, now long past, when even some politicians looked to experimental research for answers.
Other suggestions might come from IRP affiliates. For example, John Bishop, a labor economist and post-doc at IRP, gave generously of his time on labor market issues. Finally, Sue McGovern did an exhaustive study of the General Assistance program, an income transfer for impoverished individuals and childless couples. And there were the usual subjects covered by every reform effort, how high child care costs; and the possible loss of health care after leaving welfare for work might impede a sustained move to independence. In a relatively short time, we had a smorgasbord of challenges, ideas, and possibilities.
The question was, what should we do with all these possibilities? There was a lot of back room vetting with staff and with key officials like Mary Ann. I do recall one meeting with Don Percy and some of his top staff. I personally was looking for some feedback on what would sell or not. Where were the boundaries? So, I started throwing out modest ideas first. Don lapped them up. Emboldened, I started throwing out bigger ones. He seemed to get even more excited. With each one, he would ask questions and then turn to Ron Hunt, his top budget analyst and say something like, “Ron, come up with some figures on that one.” Each time, Ron’s head would drop just a little more.
At one point, I recall thinking, this is not working! I am getting zilch useful feedback here. So, I threw out the stupidest idea I could think of, at least from a political feasibility perspective. “And maybe we could envision a State Health Service for poor people, sort of like the British System.” When he turned to Ron for numbers on that one, I realized I had better avoid this poor budget guru for the next month or so. My final image of Ron that day was as he slowly walked down the hall, his head shaking in disbelief. In any case, it was clear that no one was going to put us on a short leash.
On occasion, we did reach out to other state departments, like the Department of Industry, Labor, and Human Relations (DILHR), which now is the Department of Workforce Development (DWR). We also talked with the tax people, the Department of Revenue (DOR). One day, I discovered that the deputy of DOR was attending the IRP holiday party. Pat Lipton was an ABD from the UW Economics Department and her spouse was on the UW faculty. So, I introduced myself and suggested that I meet with her and her boss. It struck me as wise to chat with them before recommending all kinds of crazy changes to the state tax system.
Her boss, the secretary of the department, was Dennis Conta. Ironically, he was my former Peace Corps training director just a little over a decade earlier. When I returned from India to Milwaukee, I helped him get reelected to the State Assembly. The only time I have ever done hands-on politicking. I was beginning to think this was a small world indeed. In any case, we nominally had a sympathetic ear at DOR.
Unfortunately, we did run into some headwinds there. A comparable study group was looking at the state’s tax system. Another IRP affiliate, Martin David, was on that one. They were beginning to argue that the state taxation function should focus only on collecting revenue and not stray toward extraneous policy purposes. The tax system was fair game for all kinds of reformers who wished to motivate desired behaviors without expanding the size of government. I sympathized with those arguing for a policy neutral tax system except, of course, when it impinged on the policy purposes of interest to me. I chatted with Martin about my concerns, but inexplicitly he chose to stick to his own principles. Go figure!
But some of the best fun was selecting ideas and running them past the committee. Bob couldn’t do it because he was a member of the committee. The person hired as nominal head of the committee staff was an ABD student in Sociology named Sandy Wright. She was competent and hardworking and smart, but also quite reserved, even shy. So, I typically (always) got the nod to do the staff talking at official meetings. At some of the meetings I might go on for extended periods in what was a give-and-take tutorial. For example, I would explain what wage bill subsidies were, why they might be important, and some of the pros and cons. Then I would review the glazed looks on some of the panelist’s faces.
Except for Bob, few on the committee were terribly conversant with what was, even back then, a substantial litany of possibilities on welfare reform. Besides, nothing was straightforward, even the simplest idea had pros and cons that had to be carefully assessed. The process proved a wonderful learning opportunity. To repeat my favorite bromide from Bud Bloomberg, my old UW-M professor, you don’t really understand something until you need to explain it to others. Thus, my original hope that this project would prove an effective heuristic opportunity for me proved quite prescient. Surely, I learned more doing this than in many of my classes.
Some of the real fun came out of the blue. One day, I was walking through the hallowed halls of IRP when Irv Garfinkel, the director at the time, and Maury Macdonald, an IRP affiliate, cornered me by the receptionist’s desk. Now Irv was rather striking looking. He was thin and angular of stature, bearded with his hairline receding from what always struck me as a
slightly larger than life forehead. He would never be confused with a Fortune 500 CEO but looked great as the slightly mad scientist. That aside, he was passionate about both good research and good public policy. He was also a scholar of great integrity who would be led by the data even when it conflicted with his priors. When he did grab onto an idea, though, he quickly became a runaway train. I could see it in his eyes, he had an idea. Oh no, I thought.
With considerable excitement, he launched into a discussion of a set of child support reforms. Not only did he have ideas for improving child support collections for needy children, he was proposing that the government, in effect, guarantee a minimal amount of child support; even if the obligations from the absent parent were never collected. He would eventually sweep all this up under the mantle of the next evolutionary stage of social insurance. We had social insurance for the elderly, why not for vulnerable children?
I don’t think I absorbed it all in that moment. For one thing I knew immediately where he was going with all this. He got there soon enough. “Could I sell this to the Wisconsin Reform Committee?” My mind had already begun to frantically search for ways that this might be packaged in a politically saleable way. Despite Irv’s enthusiasm, my initial reaction basically was “this is nuts.” In a way, though, he did have some say over my future in IRP even though, in the academy, notions of hierarchy are loose at best. Still, I thought it best to say, “Irv, this certainly sounds promising, and I will think hard on it.” Little did I know at the time that this hallway meeting eventually would launch a child support revolution in Wisconsin and beyond. It would also add fuel to future welfare conflagrations that would beset the state.
I certainly needed additional tutoring from Irv but eventually got around to vetting the child support ideas with the powers that be. I can still remember the initial look on Mary Ann Cook’s face. It clearly read, “This is nuts.” I always found Mary Ann one of the more engaging public servants I have met. She had an inexhaustible font of knowledge about programs, and about how government worked. She also had this agile mind that typically operated at warp speed. I thought I was a quick study, but she would exhaust me in a half hour as she careened from subject to subject making insightful comments and issuing lightening quick witticisms. Her “this is nuts’ expression was not to be sneezed at. I also could hear her unstated comment, “Sure, I brought you in as an idea guy, but not to be the totally nutty idea guy.”
Funny thing about new and nutty ideas! With time and massaging, they begin to make sense. Mary Ann, with that quick and agile mind, soon absorbed the main elements of the proposal. Irv could be persuasive. I am not sure she bought it as much as gave the green light to try it out on the committee. When we did present it, with ample help from Irv, at least one important member responded with considerable enthusiasm. Tom Loftus, our rising legislative star, eventually took it on as part of his future legislative agenda.
In 1979, we published a final report though, if you looked carefully, you would see the year 1978 on the front cover despite numerous edits. If that were our only error! For its time, I would say that it was a remarkable document. In one way or another it covered most of the issues that grabbed and kept our attention. The press we received was also positive for the most part. Over time I wondered why there had not been more negative reactions. Perhaps the comprehensiveness of the ideas muted latent animosity as readers got lost in the labyrinth of ideas and proposals.
Simple reform ideas such as let’s impose workfare or let’s raise cash guarantees invite easy ideological categorization and attack. Our report had something for everything. Among other things, the report contained ideas for reducing poverty among low-income populations, for incentivizing the poor to work more and for employers to hire them, for ensuring that absent parents meet their obligations to their children, and for agencies administering public assistance and workforce programs to collaboratively work together. There was something for individuals drawn from various parts of the political spectrum to love and to hate. It probably helped that the hard lines that were to develop around the welfare debate had not set yet congealed into bitter, ideological camps.
Our work touched on the elements of welfare that make the doing of policy so seductive and compelling. There are no easy answers. It is almost impossible to propose solutions that can satisfy all objectives satisfactorily. In addition, you cannot simultaneously appease all the stakeholders involved. You must deftly weave through the politics without doing too much harm. As the old saying goes…if it were easy to do, it would have already been done.
Some of the contributing complications are technical in character. Take, for instance, the iron law of welfare, a challenge that forced economists to run up the white flag of surrender by the 1970s. In theory, most early reforms of income support programs wanted to accomplish three goals: 1) improve the economic well-being of poor families; 2) improve labor supply through properly incentivizing work, and 3) satisfy target efficiency objectives by targeting benefits only on poor families. Other worthy policy goals might be added such as cost, target population saturation, and administrative efficiency among others; but let us keep this relatively simple.
In the real world, there were inevitable tradeoffs. Perhaps we could start with improving the economic well-being of our struggling families. We might consider raising welfare guarantees…the amount a family will receive if they have no other income. Immediately, we begin to worry that our generosity will take away the adult client’s incentive to work. No problem, we can lower the tax rate on earnings (the benefit reduction rate) by reducing their benefits in the face of earnings by less than a dollar for every dollar earned, maybe by much less. Such a policy would make work more economically attractive. But that increases the break-even point or the effective income level at which welfare benefits fall to zero. Damn it, we would now discover that too many non-poor families are getting welfare. This sacrifices the target efficiency goal. We can play around with other policy options that involve different welfare guarantees and varying marginal tax rates on earnings, but we never seem to be able to satisfy all three objectives simultaneously. The lesson here is simple. Welfare reform, like all “wicked” policy issues, involves tough choices and often irresolvable conundrums.
The stakeholder issue is equally confounding. Joseph Califano, secretary of the U.S. Department of Health and Human Services which housed welfare reform called welfare the Mideast of domestic policy. There were many players in this political sandbox, and most were digging themselves into inflexible ideological or partisan positions. You wanted a political fight back, then take a shot at welfare reform. And the queen of contention in the welfare world was the Aid to Families with Dependent Children program (AFDC).
In AFDC, we were giving out cash to low-income families with children. The federal government first got involved as part of the Social Security Act passed in the depths of the Great Depression, largely to provide fiscal relief to states that had been running small relief programs for “deserving” widows. In the beginning, that noncontroversial program was dominated by white widows. By the sixties and seventies, however, the complexion of the caseload had darkened considerably; and a majority of the caseload now were single women with children who had never been married. In addition, the labor force participation of women was rising by one percentage point a year, year after year. People began to ask, why is this one groups of women exempt from the workplace when other women had been flocking into the labor market?
In budgetary terms, AFDC was pocket change, costing the federal government about $16 billion at its peak. The emotional juice generated by the program, however, was outsized and almost irrational. The program had become a proxy for all manner of concerns to Americans—poverty, work, family responsibility, sex, community decay, family stability, teen pregnancy, domestic violence, and a list that goes on and on. Worried about communism, pollution, sunspots, aliens from outer space, your waistline, a low testosterone level, blame AFDC. Okay, I exagge
rate here but not by much. The program was blamed for many ills and was becoming the source of almost obsessive concern, which was only to accelerate in the coming years.
In any case, our report was now public. What next? The history of study committee reports is not encouraging. Most disappear under the waves without a search plane even being sent out to rescue them. The political news after our report was released was not encouraging. Almost immediately, a Republican governor assumed power taking over from the Democratic predecessor, Marty Schreiber. Surely, given the change in administrations, we would be playing taps over our work by the evening news.
The new Republican governor, Lee Dreyfus, turned out to be a maverick. He came out of nowhere as the former chancellor of a UW campus in central Wisconsin. He was a great communicator, traveling around the state in a bus wearing a red vest and not sounding anything like a politician, nor like a Republican. It was (he was) very refreshing. Shortly after his election, he stunned everyone (well, me at least) first by saying that he would not balance the budget on the backs of the poor, and second by retaining Don Percy as head of the welfare system. Perhaps we might check our pulse to detect any continuing life for our reform ideas.
Bob had decided that he had made enough of a contribution to the public good. I recall the day we walked down State Street (which bridged government and academia) shortly after the report was out. He went on about how much this commitment had cost him among his colleagues. Now he would have to buckle down and make up for “lost” time. Irv Garfinkel, on the other hand, was determined to struggle on. He was committed to the set of child support reforms he had championed. Sometime later, he told me that before committing himself further, he polled several of his closest colleagues about whether his academic prospects would suffer if he committed a lot of time and energy to promoting his child support innovations ideas in the public arena. He told me no one, not a single colleague, encouraged him to do so. The conventional wisdom in the academy is that public service is where scholarly careers go to die. He ignored them all and made it work.
