Reform or Cost-Shifting?

It’s ironic that a member of the generation that helped create America’s social welfare system- a system that lifted half the nation’s elderly out of poverty and provided housing, food, and healthcare to millions of children – is now running for President on a platform aimed at dismantling that very system.

But, the deed has already been done [see Washington News & Views]. A few days ago, the U.S. Congress ended a 60-year policy that said American citizens are entitled to a place to live, food to eat, and the other minimal necessities of life. President Bill Clinton is expected to sign this legislation.

Welfare reform is a good idea, embraced by many, if not most, of those on welfare. People don’t want charity. They want to take care of themselves and their children.

But this welfare reform has been enacted against a backdrop of more than two decades of wage erosion for middle- and low-income people; a downward spiral of the quality of public education in inner cities that has increased the numbers of potential workers unprepared for the demands of today’s job market; an increase in low-wage jobs, kept low by the squeeze of automation and globalization; and an abandonment of an urban policy agenda that examines all of these issues (and all of the players, including corporate America) in concert.

This welfare reform says “we’ll help you out for a few years, maybe, but then you have to get a job; you’re on your own.” State waivers not withstanding, without access to living-wage jobs, affordable housing, and healthcare, “reform” may simply become an exercise in cost shifting – from AFDC to Shelter Plus Care, from food stamps to soup kitchens. We hope we’re wrong. And we hope that from those experimental state programs – some of which rely heavily on the experiences and successes of nonprofit, community based organizations – emerges a solution that balances cost-effectiveness with compassion.

Coincidentally, as Congress worked to end programs that, among other things, kept people from becoming homeless, we worked at trying to understand how community groups (with the help of some of those very programs), helped low-income people, people with addictions, and those with disabilities through the interplay of housing and supportive services.

This issue presents an overview of supportive housing by the Enterprise Foundation’s Diane Glauber followed by three profiles of model programs targeted to the low-income population, people with mental illness, and the addicted, respectively. Many of these programs receive funding from the McKinney Act, administered by HUD, as well as Department of Human Services programs and a variety of state programs. The future of the McKinney Act, which had its $1.12 billion budget for FY95 reduced to $823 million for FY96, is not all that certain. Brain Smith [pg. 23] examines two possible roads down which “devolution” may take the act.

Also in this issue, Chester Hartman interviews Wendy R. Sherman, the new President and CEO of the Fannie Mae Foundation. The Fannie Mae Corporation, a government sponsored enterprise [see Shelterforce # 80], has been responsible for helping many low-income people afford homeownership. The foundation aims to increase homeownership by assisting community groups and conducting research. Until recently, the foundation has been an integrated part of the company. Now it is a fully independent organization with a new leader who brings years of experience in progressive social change. Our interview explores her view of the foundation’s role in affordable housing and community development, and the foundation’s future direction.


Harold Simon is the former executive director of the National Housing Institute and former publisher of Shelterforce.


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.