of the scholarly literature on U.S. social welfare soon came to regard the politics of FAP as a footnote to history, a story about the reform that never happened—an interesting tale, but one largely irrelevant to the development of American social policy.7
The political significance of FAP, however, lay not in the content or fate of the failed Nixon initiative, but in the reaction to the proposal, particularly among the Southern Democrats who had begun to assume a more assertive role in shaping federal policy on work and welfare. The battle over FAP triggered a broad conservative shift in welfare policy at the federal level, reflected not only in the defeat of FAP (1969–72) but also in the creation of new work-based initiatives in its wake (1971–75). The Southern conservative drive for reform began with the WIN amendments to AFDC in 1967. But it was during the struggles over Nixon’s FAP that a coherent alternative to New Deal welfarism emerged, an American brand of workfare that would change the basic functions of public assistance for poor families.
The core features of and contrasts between welfarist and work-based models of social provision have been charted and assessed in comparative studies by a number of scholars, such as Jamie Peck.8 But how and why does a welfarist system change into a workfarist one? This chapter and the next focus on the politics that produced such a shift in U.S. public assistance programs in the early 1970s. Two distinct approaches to U.S. public assistance had emerged by then, with different guiding principles, ends, means, and measures of success.9 Under New Deal welfarism, the guiding principle was government entitlement. The end of public assistance was to provide a basic safety net for certain groups of eligible poor Americans; the means toward this end was cash and in-kind assistance. Work might be encouraged and supported (as in the Kennedy–Johnson reforms), but these were not central strategies at the federal level and, above all, were not to undermine the larger end of guaranteeing a safety net. The measure of success was the policy’s ability to provide income assistance to those who were eligible. Under workfare, in contrast, the guiding principle was not government entitlement, but market incentives. The end of public assistance was to promote, require, and reward work among all poor adults who were physically able to perform it, and the means was mandatory work requirements and job training or preparation. The primary measure of success was the policy’s ability to ensure workforce participation, reduce reliance on government assistance, and leave to the market the functions of job allocation and wage setting.
Both approaches had deep roots in Anglo-American poor relief policies. Welfarism was rooted in the principle that those who were poor and unable to provide for themselves should receive some measure of government assistance; workfare grew out of the English poor law principle that relief should not intervene in the logic or incentives of the market. It was welfarism that had formally governed federal public assistance policies since the New Deal. The WIN amendments had signaled a shift. Debates over the Family Assistance Plan would now clarify the direction policy would take.
The FAP debates concerned the relationship between welfare and work, and between public assistance and the labor market; they boiled down to two issues. Should the welfare poor work, and if so, what policies should be used to encourage or require this? And should the working poor receive welfare, and if so, what policies would ensure that they continued to work? It was in the struggle over FAP in the late 1960s that income assistance for the working poor was first placed on the national policy agenda, leading ultimately to the creation of the Earned Income Tax Credit (EITC) in 1975.10 It was also in these years that aid to the welfare poor (through AFDC) was roundly discredited in favor of aid to the working poor, and the rise of the EITC became linked to the decline of AFDC. Driving both developments were the strategies of the Nixon administration in promoting FAP and the fervent opposition to its passage among Southern Democrats.
Strikingly, the origins of work-based public assistance in the politics of Nixon’s FAP followed a sequence that would be replayed twenty-five years later, in a new round of political fights that led to workfare’s culmination in the mid-1990s under President Bill Clinton. In each case, a president envisioned a broad package of reforms that contained a mix of elements for poor families, including liberal welfarist measures and work supports. He wrapped the package, however, in tough rhetoric about promoting work and ending welfare, and marketed it as workfare. Congressional conservatives seized on the rhetoric of workfare and recast it in tougher terms, both in public debate and in proposed policies. Core welfarist elements of the president’s plan collapsed—and conservatives helped secure a further shift toward workfare. This chapter starts with the evolution of FAP’s guaranteed income concept, then turns to the internal debate that took place within the Nixon administration over work and welfare, and to the heated political struggles over the proposal that unfolded on Capitol Hill and around the country.
The Political Origins of the “Income Floor”
The intellectual and political history of both the Family Assistance Plan and the Earned Income Tax Credit began with the notion of providing a “floor” under the income of the working poor. The proposal originated not with the Nixon White House but with earlier generations of economists, analysts, and planners, and it had conservative as well as liberal roots.
In 1943, while working briefly at the Treasury Department, conservative economist Milton Friedman observed that the poorest workers confronted a host of tax-related inequities and work disincentives.11 Friedman later proposed that the working poor be permitted to claim a refund on their 1040 tax forms equal to the amount the family income dropped below a certain point. When a family’s income rose measurably above this floor, they would pay taxes; but when income dropped below the floor, they would receive a refund from the government. Friedman believed that this approach would curb poverty more efficiently and less expensively than the existing welfare system. The concept, in short, was pro-work, anti-tax, anti-welfare, and anti-bureaucracy. The principle of a “negative income tax” was not new among economists, but it was Friedman’s 1962 book Capitalism and Freedom that won it a place on the political map.12
Despite Friedman’s credentials, most political conservatives found the idea of providing a government-backed income floor anathema, seeing it as another costly and misguided expansion of the welfare state. During the Johnson years, the guaranteed income principle was promoted primarily by liberal welfarists. Liberals came to the idea from a very different starting point, emphasizing the logic of entitlement and social rights that had gained prominence in the 1960s. Advocates advanced various schemes for providing a guaranteed income, from negative income taxes to European-style child or family allowances.13 The Johnson administration’s own poverty research, meanwhile, was turning up some disturbing facts that argued for a new approach. A large portion of America’s poor was slipping through the cracks in the safety net. The Planning and Evaluation Unit at HEW concluded in 1966 that at least 60 percent of needy Americans received no benefits from the nation’s main antipoverty cash assistance programs, including AFDC and Old Age Assistance (OAA), as well as Social Security. A sizable percentage of this group were working and poor—particularly families with children.14
By the mid- to late 1960s, a number of American economists and analysts were actively promoting income floor schemes. A 1968 petition urging Congress to adopt a “national system of income guarantees and supplements” was signed by some 1,300 economists from almost 150 institutions. Leaders in the social work community also signaled their support, encouraging “income as a matter of right … at a uniformly adequate standard of living” in a position paper released by a National Association of Social Workers conference.15 Confronted with the problem of the working poor, many liberal economists and Democratic policymakers turned first to traditional minimum wage strategies—but the income guarantee idea was gaining traction among analysts within the administration, particularly at the Office of Economic Opportunity (OEO) and HEW. Prompted by his advisers, President Johnson appointed various task forces to examine the guaranteed income concept, and the OEO launched pilot programs to explore its effect on the incentive to work. In 1968, even OEO director Sargent Shriver endorsed a version of the idea.16 But President Johnson was unconvinced.17
