Free Minds & Free Markets

Welfare Reform Paved Trail For Obamacare Repeal

Not only can entitlement programs be rolled back, but politicians who do it can even get re-elected.

Wikimedia CommonsWikimedia CommonsHow thoroughly has the Washington press corps forgotten the lesson of Bill Clinton's 1996 welfare reform? Thoroughly enough that at the top of its front page on May 8, The New York Times reported that the Republicans overhauling Obamacare "have been largely silent about one of the most remarkable aspects of what their legislation would do: take a step toward dismantling a vast government entitlement program, something that has never been accomplished in the modern era."

A smart editor once told me to be careful before typing the word never.

In this instance, the Times reporter, Jeremy W. Peters, might have checked his own newspaper's online archive. The August 23, 1996, Times front page reported, "In a sweeping reversal of Federal policy, President Clinton today ended six decades of guaranteed help to the nation's poorest children… With his signature, at a Rose Garden ceremony, the President eliminated a pillar of Franklin D. Roosevelt's New Deal social welfare program."

Maybe to Peters, who graduated from the University of Michigan in 2002, 1996 doesn't qualify as the "modern era." Or maybe he or his editors at the Times are taking a post-modern approach to journalistic accuracy. But to a pre-modern fellow such as myself, who actually was in Washington in 1996 covering the welfare-reform story as it was happening, this is all worth remembering now, because the story is precisely relevant to today's political and policy debates over the possible rollback of Obamacare.

The alarmism is pretty much the same.

Back in the mid-1990s, Sen. Edward Kennedy (D-Massachusetts) described the welfare reform legislation as "child abuse." Sen. Daniel Patrick Moynihan (D-Oklahoma) called it "the most brutal act of social policy since Reconstruction."

Peter Edelman, a Clinton administration staffer who resigned to protest the welfare reform law, wrote in The Atlantic that it would "move 2.6 million people, including 1.1 million children, into poverty…. There will be more malnutrition and more crime, increased infant mortality, and increased drug and alcohol abuse. There will be increased family violence and abuse against children and women." In fact, infant mortality, crime, and domestic violence all declined.

The president of the Children's Defense Fund, Marian Wright Edelman, called the welfare reform bills "fatally flawed, callous, anti-child assaults." She said the bills "eviscerate the moral compact between the nation and its children and its poor."

The warnings from 20 years ago against throwing poor mothers and children off welfare and into the streets all sound a lot like today's warning against throwing Americans off their subsidized health insurance. In both cases, the flawed assumption is that once a federal program is ended, the people who were benefiting from it will be unable to come up with another way to meet their unfilled needs.

In the case of welfare reform, that assumption proved inaccurate. Many welfare recipients—tens of millions of them—started supporting themselves by working at paid jobs. Others relied on private charity, friends and family, or other government programs, such as disability, instead of the old "Aid to Families With Dependent Children," which became "Temporary Assistance to Needy Families."

Some mix of government and market-based solutions will no doubt similarly rise to meet the needs of those who had been receiving health insurance coverage via the Obamacare exchanges or Medicaid expansion.

Perhaps some doctors and hospitals will devote increased hours to charity care. Perhaps community health centers will bear more of the burden. Perhaps pressure will build to ease immigration restrictions on foreign-trained doctors.

Perhaps "medical tourism" will surge for Americans taking advantage of lower-cost procedures overseas. Perhaps insurers will offer lower prices for narrower networks of doctors, or experiment with offering coverage over 20 or 30 year time-spans, like life insurers, rather than over just one year at a time. Perhaps states and employers will solve these problems better than the federal government has. Perhaps some of the people now relying on Obamacare will take jobs that offer health insurance.

Beyond the alarmism and the possibility for outcomes that are better than the warned-of catastrophes, welfare reform and health care have in common some political characteristics. Both welfare recipients and people receiving health coverage via Obamacare exchanges and subsidies amount to a minority of voters, not a majority. After the 1996 welfare reform, both President Clinton and the Republicans who held majorities in the House and Senate in Congress won re-election.

In other words, not only can entitlement programs be rolled back, but politicians who do it can even get re-elected. If The New York Times thinks this "never" happens, it's just wrong.

Photo Credit: Wikimedia Commons

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  • BestUsedCarSales||

    I'm pretty sure everyone died last time, and everyone is going to die this time.

  • Citizen X - #6||

    I was only a teenager in 1996, but i do remember that everyone died. It was pretty rough.

  • Eli Lee||

    How many dead Americans are you OK with?

    You're still a teenager. Morally, that is.

  • Eli Lee||

    You can be sure that people will die from losing health coverage. I hope your sarcasm helps you smirk as people needlessly die.

  • Glide||

    The government could prevent 30,000+ deaths a year by banning motor vehicles. I sure hope you're also in favor of that lifesaving measure too, for consistency.

  • SilentSkies||

    They could also create so many jobs in the horse buggy industry. It's a win-win!

  • Uncle Jay||

    RE: Welfare Reform Paved Trail For Obamacare Repeal
    Not only can entitlement programs be rolled back, but politicians who do it can even get re-elected.

    An excellent idea that doesn't go far enough.
    Let the churches, non-profits and other organizations doll out their welfare dime.
    Oh, and another good idea is to eliminate all forms of corporate welfare as well.

  • BestUsedCarSales||

    I wonder which of those two is less likely.

  • Eli Lee||

    Good luck to you Uncle Jay, I hope you, your friends and family, and no one you know never go bankrupt from medical expenses. Or die because they didn't get checked out.

    Also, you mean "dole" not "doll," my dolly.

  • dschwar||

    Sen. Daniel Patrick Moynihan (D-Oklahoma) called it "the most brutal act of social policy since Reconstruction."

    I wonder who would be more surprised if Moynihan had actually been elected by Oklahomans: Moynihan or the Oklahomans. He fit in quite well in New York.

  • Peter Duncan||

    Perhaps Judge Nap could write a companion piece using only questions?

  • Diane Reynolds (Paul.)||

    I don't know why this made me laugh out loud.

  • NoVaNick||

    Although I am no fan of Obamacare, you can't really compare it with welfare pre-1996. Lots of hard working people end up bankrupt because of medical expenses through no fault of their own. Of course, a lot of this has to do with how the costs of treatment are grossly inflated due to insurance subsidies.

  • Michael Ejercito||

    That is why we need price controls on medical care.

    Many cities in California set the price of paper bags at ten cents, and that did not destroy the paper bag industry. price controls will not destroy the medical industry.

  • swampwiz||

    HA HA, if there one thing we have learned from the disastrous Republican ObamaRomneyHeritageCare "replacement" plan is that the redistribution built into ORHC is very popular.

  • Myk||

    Except this isn't just about the ACA marketplace. This is about all sick people and older people.
    Perhaps I'll be forced into medical bankruptcy and the costs passed onto you with higher prices.
    Perhaps the hospital will take me as a charity case and pass the $36,000/8wk costs on to you with higher prices .
    Perhaps I'll put a gun in my mouth the 4th month after being denied my infusion.
    Perhaps if enough of the 20% of Americans with autoimmune diseases and people between 55-64 who get denied coverage or priced out of coverage decide death is their only option prices will start to come down because the corporate execs decide they have enough money.
    But prices probably won't come down with this method since it hasn't EVER worked that way in the US before. People just went bankrupt and all the costs of forcing them into bankruptcy and then taking them on as charity cases have been passed on resulting in our present situation of being much more expensive than other countries. And yes, some people did pick death rather than go without care. But maybe if we ignore it long enough a free market will fix it this time unlike any time before.
    Hilarious those lower costs overseas get recognition but not the reason for the lower costs. Also hilarious that if price fixing is ever mentioned pharma will close up shop because making $4billion in profit when they wanted $8billion isn't worth their time, yet somehow they're going to magically accept making $4billion because of a free market.

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  • swampwiz||

    Charity care? LOL! The anti-health-care-welfare-state side has LOST! The best they can do is hope to be able to negotiate a good armistice. (I think a system that socializes actuarial risk above some baseline, e.g., the baseline of the typical enrollee in a large corporate employer plan, could work, allowing some *voluntary* free-market aspects.)

    As for the success of welfare reform, it was only because the late '90s were a time of true employee scarcity, thereby forcing employers to hire the bottom of the barrel; we are far, far from that now, regardless of what the "official" unemployment rate may be.


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