Need for the Family Assistance Program – controversy over the AFDC

When President Nixon took office in 1969, issues pertaining to poverty and welfare in the United States had been at the forefront of many political discussions, largely stemming from prior President Johnson's proclaimed "war on poverty" in 1964. Welfare and social insurance had been a federal responsibility as early as the 1930s when state-sponsored welfare was replaced with "social security" networks headed by the Federal government which included commonly considered aspects of welfare support such as unemployment benefits, workers' compensation, and veterans' payments. The Social Security Act of 1935 dictated welfare as a "layered system" in which five "layers" of income protection – ranging from private insurance, social insurance, and categorical assistance – acted to reduce the threats of poverty. Those that created the bill hoped that the act would create a dynamic that would not only reduce the amount of poverty in the nation but in doing also reduce the need for social insurance as more and more citizens became able to support themselves free of welfare aid.^[3]

However, by the 1960s, a program that had been created with the Social Security Act of 1935 to support families at risk, the AFDC (Aid to Assist Families with Dependant Children), had only continued to expand. From 1965–1970, the AFDC experienced an expansion of 110 percent, and its rapid growth had become a heated topic of debate for both the Democratic and Republican parties as welfare costs for the government increased.^[4] By the time Nixon came into the presidency, the projected cost of the AFDC was 6 billion dollars annually, straining already tight state and federal budgets.^[5] The rapid expansion of this program stemmed largely from the liberalization of its requirements through the 1950s and early 1960s, in which the eligible age for a child to be a dependant to 21, and the eligibility of families whose primary 'breadwinner' had been unemployed for long periods of time. At the time of Nixon's FAP speech in 1969, the primary beneficiaries of the AFDC were families who had undergone a breakup through divorce, desertion, or illegitimacy – which were decisively more common than families needing assistance for unavoidable hardships like the death of a father.^[6]

The rising costs and liberalization of the AFDC not only caused congressional backlash but also brought with it racially charged and negative responses by states burdened with increasing numbers of AFDC recipients. Indications within Congress and the public began to hint at a perception of rising welfare issues to be a largely minority or immigrant issue. Legislation was passed in Louisiana which declared children born out of wedlock or families cohabiting without an official marriage license to be inadmissible for AFDC benefits. Around 6,000 families were dropped, only 5% of whom were of Caucasian background. In 1961, aggravations revolving around the AFDC came to a head in the small town of Newburgh, New York in what popularity became known as the 'Battle of Newburgh'. Facing a sudden spike in welfare applicants due to tough economic conditions during the winter of 1961, City Manager Joseph McDowell Mitchell placed the blame on this rise in welfare costs primarily on immigration into the city. Mitchell proposed changes to the AFDC which included a requirement of proof that the beneficiary was entering Newburgh with a work position, a change to aid divvied out by voucher rather than cash, and denial of aid to those not working or to new children conceived while the family was receiving welfare assistance.^[7]

While Newburgh was only a small town of 30,000, the controversial proposals made by Mitchell received national attention, and polls conducted by Gallup showed that up to 74% of the population surveyed agreed with Mitchell that welfare should only be given to immigrants who came with a definite job opportunity and means of work. Further Gallup polls in 1964 found that over 50% of participants believed a 60-day residency should be required before an individual could be able to apply for AFDC welfare. Many also began to attribute the need for welfare as laziness, or a combination of misfortune and laziness. A common idea that began to spring up in discussions was the split between those 'deserving' or 'undeserving' of welfare. Highlighting this split was the notion that those 'undeserving' of welfare assistance were largely not working and instead coasting off of the benefits received. Some believed women were having children precisely to play the system and further the benefits they were receiving from AFDC.^[7] Indeed, this cultural divide between the deserving and undeserving would continue to underscore public opinion on welfare not only as the AFDC was debated, but in later moments as well in discussions of Nixon's FAP.^[8]

Despite public frustration and debates over adding restrictions to the AFDC to control costs, there was still a large number of the public who considered poverty aid to be a universal, basic right. A 1964 Harris poll found that 68% of participants believed the Federal government had a responsibility to ensure basic human rights and a minimum livable wage to its citizens, reaffirmed by 73% of participants in a later 1969 poll. Poverty and inequality had been raised as an issue by Johnson in 1964, and pressure was continuing to be placed on the Federal government to alleviate rising national poverty rates. Instances of riots and public disgruntlement plaguing the 1960s were connected to a welfare system not adequately supporting the needs of the population.^[7]

To many in Congress, it was clear that the answer was not to restrict the AFDC, but rather reform it. The AFDC was plagued with numerous inequalities not only among its recipients but between states. In 1968, 26 states did not pass the threshold for welfare support from the AFDC that allowed families to be above the 'poverty line'. Families in New Jersey could receive up to 332 dollars a month, whereas some families in Mississippi were receiving a comparatively meager 55 dollars a month. The AFDC also overwhelmingly denied access to assistance to families who had an employed head, even if their overall income still placed them below the poverty line. In 1966, this excluded around 12 million families from access to the AFDC. As such, there were fears that the AFDC created instances of dependency for those unable to work, as well as disincentivized families on welfare assistance to find work. In 1967, legislation pushed for a work-incentive phase (WIN) to AFDC, which required families currently on the program to participate in job/work training to continue receiving benefits.^[9] By early January 1969, the Nixon Administration had installed a committee to study the welfare system and propose changes, culminating in the eventual announcement of the FAP in August 1969. Nixon's plan envisioned a welfare system that ventured not only to fix welfare dependency and rising costs for the government, but also aimed to combat rising inequality within the welfare system and afford income assistance as a basic, universal right.^[7]

Nixon's political motivations

Motivations to reform welfare and introduce the FAP were not only grounded in moral terms of eradicating poverty in the United States. As documents were opened in the Richard M. Nixon Presidential Library (RNPL), it has become clear that much of the reasoning behind Nixon's proposal of the FAP may have come from an attempt to appease the worries of a predominately white lower and middle working class. Nixon highlighted this as his 'Northern Strategy' – efforts to garner votes and support from blue-collar workers in industrialized states where the working class was predominantly white. Nixon viewed this group of people as his 'silent majority' – a ticket to winning popularity from a larger majority of Americans. Nixon therefore objectively took a moderate/centrist stance in his implementation of the FAP, noting that conservatives would likely find issues in welfare reform, especially if it blurred racial lines. In this context, the FAP was largely chosen as it redistributed welfare benefits to the working-class poor, who were largely Caucasian in ethnicity.^[4] Indeed, one estimate indicated that there would be a shift in the ethnicity of beneficiaries from 51.7% non-white in the 1969 AFDC program to 38.6% non-white in the FAP program by 1972.^[10] By creating an entirely new system of welfare reform, Nixon was also separating himself from liberal policymakers like former president Johnson, gaining him an edge politically. The FAP also addressed both leftist qualms with the AFDC over inadequate welfare assistance and welfare inequality while also addressing criticisms of the AFDC from the right over welfare dependency and disincentives to work. By proposing the FAP, Nixon hoped he could not only garner praise from liberals seeking more egalitarian welfare reform but also appeal to a new kind of veiled, latent racial conservatism.^[4]

Initial proposal

The initial proposal of guaranteed income by the Nixon administration would include all poor families – "working poor," "dependent," and poor families headed by a male. The benefit level would not be reduced for families currently enrolled in the AFDC, for states were required to compensate for the difference between the proposed minimum payment and the state's current benefit level. States would be receiving federal assistance, so none would be required to supplement the incomes of the working poor.^[20] The essential details of Nixon's initial plan included the following:

1. Only families with unmarried children under 18 years of age or 21 if still in school, would be eligible for the benefit under the FAP.
2. A family of 4 with no other income would be eligible for a maximum of $1600 in June 1972 dollars ($10,163 in March 2021 dollars).
   • The same family of 4 would see no change in the amount of benefit up to the income of $720 ($4,573 in 2021 dollars); and
   • Any other income beyond $720 would be taxed at the rate of 50% until the break-even point or until a point where the benefit would fall to zero, $3920 ($24,900 in 2021 dollars), except:
     • For the earnings from Veteran's pension and certain farm payments as these are taxed at 100%;
     • For children's earnings, welfare payments, and other applicable payments as these are not taxable; and
     • For some child care expenses which would also be excluded from income calculation.
3. Families in possession of resources amounting to over $1500 ($9,528 in 2021 dollars) and a home, personal household goods, and other resources or properties considered essential to the family's self-support would be ineligible for the FAP benefits unless they dispose of excess possessions at a specified rate.
4. For the purposes of the FAP eligibility, a family is defined to only include family members who are related by blood, marriage, or adoption except in the case of a stepfather who shall be considered to be a member of the family. The following category of people have been excluded from a family unit:
   • Members not living in the same household, in-laws, grandparents, and 20-year-old adults not in school whose income information may be unavailable to the other family members;
   • Members of the Armed forces and their spouses and children;
   • Recipients of aid to the aged, aid to the blind, and aid to the permanently and totally disabled, and their dependents;
   • Although the income period is set to be one year, for the purposes of calculating the FAP benefits, the family's current quarterly income is taken into account.
   • Any over or underpayments are to be fixed upon detection.
5. Refusal of taking on "suitable" work or training – that is, registering with the state employment service – by able-bodied family members including single women may result in the reduction of the FAP benefits.
   • The women heads of families who are not in the full-time workforce and whose youngest child is over 6 years old.
   • Mothers whose youngest child is under 6 years old are exempt from meeting the work requirement.^[21]

1972 revisions

The Family Assistance Plan was revised in 1972 in an attempt to make it more palatable on the Senate floor. The specific provisions that were changed consist of the following:

1. The new plan replaced food stamps with an increase in cash benefits from $1600 to $2400 ($15,245 in 2021) for a family of 4;
2. The tax rate for income earned changed from 50% to 67%;
3. The requirement for "work" was tightened in a way that required beneficiaries to sign up for full-time work training to increase their chances of employment and their skills;
4. The exemption of work requirement that applied to mothers whose dependent child was under 6 years old changed. Under the newly revised plan, the exemption only applied to mothers if their dependent child is under 3 years old;^[22]
5. The breakeven point for tax-exempt income changed from $3920 to $4320 ($27,440 in 2021).^[23]

Under the new plan, the states received even more fiscal relief from the federal government. They were no longer required to supplement the payments above the established benefit level. The new plan would eliminate the welfare expenditures of twenty-one states and reduce spending for other states significantly. The proposed plan was meant to meet the wishes of both liberals and conservatives but had many features that they could oppose. The cost of the welfare program increased by $6 billion from the costs of the initial plan. The costs of the program concerned many in Congress, but it was not the only obstacle that Nixon had to worry about.^[24]

1969–1970 – Introduction and Revision of the FAP

Seal of the Department of Health, Education, and Welfare

The first formal proposal of the FAP was introduced to the American public in August 1969 when President Nixon set forth his new goals of welfare reform during a televised address. Nixon's FAP was highlighted as a form of 'workfare' in hopes of incentivizing poorer families to continue working rather than seek unemployment welfare benefits. The initial FAP proposal was positively received, as many believed the previous welfare system in place (the ADFC) to be flawed. However, some critics were mixed in their reception. While some believed the requirements to work were either too harsh or not strict enough, others demanded expanded benefits for those in need.

In October 1969, an administration bill was proposed to amend the Social Security Act of 1935 to the House of Representatives. Included in the bill was a preliminary version of the FAP which was introduced by President Nixon earlier in August. The bill was referred to the Ways and Means Committee for approval.

In April 1970, after revisions were completed on its initial proposal, the October 1969 administration bill, still including the FAP, was passed by the House of Representatives under closed rule. The Senate Finance Committee subsequently received the bill for voting and deemed the bill as insufficient due to potential bias towards families already in similar circumstances under the ADFC and continued possible welfare dependency. The committee requested further revisions of the FAP proposal by the United States Department of Health, Education, and Welfare. These revisions were completed in June 1970 and resubmitted to the Senate Finance Committee for consideration.

In December 1970 a Ninety-first Congress meeting was held. The Senate Finance Committee proposed a version of the October 1969 bill that did not include Nixon's FAP. However, the bill did call for the federal government to conduct up to five trial projects (in today's parlance, pilot programs) meant to test the suitability of incorporating the FAP as a welfare program. The bill itself included many other controversial topics, and as such the topic of FAP testing was not given full consideration until the later moments of the 91st Congress. The confusion over multiple other proposals within the bill outlined by the Senate Finance Committee delayed proper discussion around the proposed tests. Ultimately, the meeting of the 91st Congress did not approve the FAP or its testing.^[29]

1971 – The FAP's inclusion in H.R. 1

Number of seats held by Democrats or Republicans in the House of Representatives during the 91st Congress

By January 1971, the FAP had been further revised and made even more complex in the hopes of garnering approval from the Senate Finance Committee. The FAP was included in Bill H.R. 1, another administration bill with the aim of amending the Social Security Act. Bill H.R 1 was put to the House of Representatives for voting. Almost 6 months later, in June, Bill H.R. 1 is passed, this time with the FAP included.

In December 1971, Senator Herman Talmadge proposed an amendment to the current welfare system in place, the AFDC, to include a plan that incentivized work and required anyone over the age of 16 on the system to either begin work-related education or training or become employed. As a result, considerations of alternate methods of welfare reform to the FAP began to be debated.^[30]

1972 – Removal of the FAP from H.R. 1

In June 1972, the inclusion of the FAP in H.R. 1 was at the center of many debates and negotiations. A compromise for the FAP was proposed by Senator Abraham Ribicoff, which would merge the FAP and his own plans of guaranteed income. A letter was sent to President Nixon in 1971 which denounced the FAP's plan of 'workfare' as well as any version of H.R. 1 which included the FAP as an unacceptable approach to welfare reform. In the same month, President Nixon approved a twenty percent increase in old-age and survivor's insurance benefits. Supporters of the FAP feared this may have decreased the likeliness that there would be a vote in favor of keeping the FAP as part of the amended H.R. 1 Bill, as it may have served to dissuade potential support amongst more conservative politicians who did not wish to see large changes to the government's role in public services.

By September, the Senate Finance Committee had released a newly revised H.R. 1 at over 900 pages in length. The FAP was voted to not be included in this amended version of the bill. The committee instead chose to have it replaced with a 'workfare' plan put forth by Senator Russell B. Long. This plan was heavily supported by all Republican members of the committee. By October, voting on H.R. 1 had begun. On October 3, the guaranteed income plan proposed by Senator Ribicoff was tabled 52–24. On October 4, the Senate also decides to drop the 'workfare' proposal by Senator Long. Tests of the Nixon FAP, Ribicoff's guaranteed income plan, and Long's 'workfare' were instead included in the bill.

The next day, on October 5, H.R. 1 passed with a vote of 68–5. However, by the time President Nixon signed the bill on October 30, the proposal for these tests had also been removed from planning, despite the Senate having authorized funds for testing earlier in the month. When H.R. 1 was put in action, no marked changes to welfare in America developed and ADFC remained largely intact. After over three years of development, negotiations, and revisions, the FAP was entirely removed from consideration.^[31]

Legislative expectation

The Family Assistance Program was predicted by leading political commentators to receive positive reactions from various groups including the American public, specific groups related to workers, and political parties, for the following reasons:

• The Family Assistance Program was designed to provide welfare benefits for people by the government for American prosperity.^[37]
• The FAP was intended to increase marriage rates with an increased family income from one working husband.
• The FAP was intended to as an implementation of "workfare" to inspire Americans to work.^[38] The Nixon administration also had thought that public perception of FAP would have bipartisan support, as Democrats would support a welfare expansion while Republicans would consider it as basic income simplifying the welfare system, an idea associated with the right-leaning economist Milton Friedman. Among local state officials, the FAP was viewed positively as a method of cutting local spending on welfare as the federal government would pay for the program. The United States Chamber of Commerce had opposed the FAP based not on welfare expansion but because of their fear that the working poor would be too dependent on welfare, decreasing working productivity.^[39]

Media/public polling

The FAP was well received by the public according to public polls. In 1970 some public opinion polls by Gallup showed support as high as 65%, particularly when the survey question had emphasized work incentives in the FAP.^[40] The Nixon administration also received 2700 letters and telegrams, which they identified as mostly from middle-class Americans, in which over 80% of them expressed enthusiastic support for the FAP. Another 10% of them had certain reservations and notes on improvements but also supported the proposal.^[40]

Media across the United States also reacted positively to the FAP. The White House estimated the initial four hundred editorial press coverage and concluded that over 90% of them had a positive assessment of Nixon's plan. Most argued in favor of the FAP citing a need to reform the existing welfare system which they declared that it was a failure. Among the editorials that were uncertain of the FAP, they argued that Nixon would not be able to achieve an effective rollout for this plan throughout the United States. Additionally, they also feared that this would increase government expenditures, expanding the national debt.^[41]

Race/region

The FAP was expected to be well received in the South, where African Americans, who did not receive as many welfare benefits in proportion to white Americans, would welcome the program.^[37] Among the 52% of the U.S. population obtaining the FAP, two-thirds of them would have been impoverished African Americans.^[42] Additionally, one of the biggest factors in deciding the amount of benefits from the FAP a family could receive was based on the family size. As African Americans in rural regions had on average a larger family size compared to white families living in urbanized regions, the FAP disproportionately benefited Black families.^[43] Among African Americans, people living in the South supported the FAP as it would vastly increase their minimal income, while northern Americans feared the FAP could cut existing welfare.^[44] Nevertheless, the FAP raised concerns for white Americans as they resented that Black people, especially in the rural South, could receive more benefits that could increase their living standards. For white people, this meant that the FAP could increase civil rights for Black people, such as education and speeches. It also aroused the fear of increased civic participation by Black people.^[42] In 1968, the U.S. Commission on Civil Rights predicted that political participation by Black people especially in the South would increase once Black people were able to become more economically self-sufficient.^[45] Thus the Southern Democratic establishment, the conservative Democrats, opposed the FAP as they thought giving a universal basic income could equalize the power among African Americans and white Americans in the South. As the conservative Democrats controlled the Senate Finance Committee, the FAP would ultimately be rejected in 1971.^[46]

Meanwhile, the southern states were also expected to receive the most benefits out of the FAP. The South on average received less welfare benefits from the government compared to the North. The Department of Health, Education and Welfare (HEW) yielded different proportions of welfare benefits to each different region. Approximately 38% of the funds went to five northeastern regions, another 13% were used for California, and the other 32% were paid for fourteen regions located in northern areas while the southern states could not receive funds from other welfare policies. According to the estimation by HEW, 52% of the U.S. population who most benefited from the FAP would be from the South. President Nixon intended to eliminate regional discrimination through the program as well.^[42]

Labor market

The reaction to FAP by business owners was mixed. The main concern business owners had with the FAP was an increase in average income would incentives people to opt for lower-wage jobs. As the FAP would supplement earnings for low-income families, the labour could concentrate on jobs with lower wages as people would be satisfied with working in menial jobs with lower pay.^[47] Additionally, small business owners also worried that people with FAP benefits would demand higher wages and better working environments in the future. On the other hand, owners of large businesses welcomed the FAP because they anticipated an increase in labor supply by males, especially in the low-wage sector.^[48] On the other hand, organized labor supported the FAP as it could contribute to an increase in the minimum wage and ameliorate social insurance for laborers. From the perspective of organized labor, the program was considered an opportunity to reinforce labor unions by increasing labor supply. Organized labor groups were more inclined to support the FAP because those in skilled labor positions, often white males, did not feel threatened by increasing amounts of unskilled labour.^[49]

Ideologically, for moderate business leaders and organizations that did not hold low-income citizens responsible for their poverty, the FAP was popular as they thought it could quell urban violence as a form of their contribution to social justice. In contrast, conservative business owners also favored the FAP as they believed that this was a tough stance against welfare that could detach people from welfare assistance.^[39]

Gender

Women thought the FAP, like previous welfare programs, emphasized the role of males in the family as welfare was determined by labour participation. This meant women, who had irregular jobs with low wages or who stayed at home to focus on household affairs, had to be economically dependent on their male family members. This increased male economic power in proportion to female economic power. This lowered the value of female labour participation as it reinforced male power and dominance over female family members.^[50] Thus the government responded to potential inequality between male and female earnings by proposing a daycare system alongside the FAP that could encourage mothers to participate in job training and employment. However, the funding only allocated $858 per year per family ($5,450 in 2021), when the HEW estimated daycare costs to be $2000 per year per family ($12,703 in 2021) and did not suggest clear plans regarding its management. Additionally, daycare system beneficiaries would also experience a cut in their FAP funding.^[51]

Welfare professionals

Daniel Patrick Moynihan, in his 1973 book The Politics of a Guaranteed Income: The Nixon Administration and the Family Assistance Plan, devotes much space to the opposition to FAP by what he characterizes as middle- to upper-middle class welfare professionals. These were individuals who constituted, in the words of a Life Magazine editorial of the time, a "'vast welfare bureaucracy," 170,000 employees with a "built-in resistance to change…'"—and whose salaries were heavily responsible for the costs of that system—as well as others benefitting less directly.^[52]

Moynihan portrays them as a self-aware interest group who "did all in their power to insure that a guaranteed income was not enacted."^[53] To some extent, this was for ideological reasons: "The poor were to be helped through strategies that would lead to individual improvement and collective self-realization, with a considerable degree of elite direction…," and a plan simply to give money to the poor "was a threat to this strategy, and perceived as such."^[54] It was also, however, a response to a proposal that threatened their authority and incomes.^[55] Their opposition consisted to a large extent in factual misrepresentation of FAP.^[56] At times, however, it involved overt appeal to their own self-interest.^[57]

Moynihan also suggests that a desire to placate the newly arisen National Welfare Rights Organization (see above), who were hostile both to FAP and to welfare professionals themselves, influenced the profession's activities.^[58]