[Weekly Compilation of Presidential Documents Volume 33, Number 8 (Monday, February 24, 1997)]
[Pages 198-204]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks in a Roundtable Discussion on Welfare Reform in New York City

February 18, 1997

    The President. I now know that I came here because after a long 
holiday weekend, I needed a little good preaching to wake up for the 
rest of the week. [Laughter]
    Let me thank you, Dr. Forbes, for welcoming me here, and, Dr. 
Washington, for giving me the chance just before we began to walk 
through the beautiful sanctuary upstairs, which I have heard about and 
known about for many years. The legendary story of Harry Emerson Fosdick 
and John D. Rockefeller even made its way to me many years ago.
    I want to thank Senator Moynihan and Congressman Rangel for being 
here, as well as Congresswoman Nydia Velazquez and Congresswoman Carol 
Maloney, thank you for being here. The members of the panel, thank you 
all. I want to especially say a word of thanks to Secretary of Health 
and Human Services Donna Shalala who literally just got off an airplane 
this morning from South Africa, where she went with the Vice President, 
and got off one airplane and got on mine and came here. So if she nods 
out during the ceremony--[laughter]--we will forgive her.
    Let me get right to business. I came here because I wanted to know a 
little about what this church is doing and because I wanted

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to say to the people of New York City and New York what is required of 
us to do together under this welfare reform law.
    By way of background, in the last 4 years and before the law was 
passed, before the law was changed, the welfare rolls in America were 
reduced by almost 2.3 million. I received just yesterday an analysis by 
the Council of Economic Advisers--and that's a record, by the way--the 
welfare rolls had never gone down by that much in a 4-year period 
before--the Council of Economic Advisers saying to me that they thought 
about half of the welfare rolls reduction had come because the economy 
had improved. We, after all, had 11.5 million new jobs in the last 4 
years, and no 4-year period had produced that many before. But about 30 
percent of these jobs had materialized, or this movement had 
materialized, because of the welfare reform efforts already going on in 
43 States, people in the States making an extra effort to move people 
from welfare to work. And about 20 percent happened for reasons that 
cannot be identified. But among other things, we had a 50 percent 
increase in child support collections over the last 4 years, and 
anything of that magnitude always enables some people to move out of the 
welfare rolls and out of the ranks of poverty.
    Now, that's what happened in the last 4 years. In the next 4 years--
I won't go through all the details of it, but Secretary Shalala and my 
staff have provided me with an analysis which says that, in essence, the 
welfare roll law now says that after a certain amount of time, everybody 
who's able to work should be in the work force, and therefore welfare 
can't be for a lifetime. And then there are all kinds of rules and 
regulations and requirements. But the bottom line is we have to move 
about a million people from the welfare rolls to the work rolls in the 
next 4 years. That's about the same number of people we moved in the 
last 4 years, because the average welfare family actually has about 2.5, 
2.7 people in it.
    Now, the problem is, in the last 4 years we had 11.5 million jobs. 
If we can produce 11.5 million jobs in the next 4 years, we'll be doing 
fine. But we have to do it without knowing that for sure. And how are we 
going to do this? That's what I want to talk about today. And more 
importantly, how can we not just move people for 1 month or 2, or 3 or 4 
or 5 or 6 months into a job but how can we help people who have been 
trapped in a culture of dependence and poverty to move to a culture of 
independence, family, and work?
    I think it is fair to assume that whenever you reduce the welfare 
rolls, the people who are most employable move off first. Therefore, the 
people who are left may be more difficult to employ than the ones who 
have already moved.
    I want to talk about just three or four things that we intend to 
continue to do. Number one, we believe that child support collections 
will continue to increase because we've made significant changes in the 
law to help us do that.
    Number two, we have asked the Congress to pass a bill which would 
give employers who hire people from welfare to work or who hire single 
men off food stamps, who have no income and get food stamps, into the 
work force would get a 50 percent tax credit for a salary of up to 
$10,000. So a maximum tax credit--actual reduction of the tax bill of 
$5,000, which is quite a significant incentive.
    Thirdly, we recommend funds to States and to cities sufficient to 
create about 380,000 jobs in the public sector over the next 4 years.
    Fourthly, I would remind you that the existing law provides for now 
more funds for child care than before, $4 billion, and continuing 
support for health care for people who have public assistance and who 
move into the work force.
    Now, in addition to that, if you look at this pattern, I also want 
to point out that the State has some flexibility right now. The State of 
New York, for example, right now, can offer all or part of a monthly 
welfare check to an employer as a wage and training subsidy if the 
employer will hire someone off welfare. For a single man on food stamps 
but with no welfare check, the State of New York can cash out the food 
stamps and give it to the employer as a wage and training subsidy under 
the new law.
    Some States--Secretary Shalala and I will work together to give some 
States the flexibility under the old law, and the results, the

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preliminary results are quite encouraging. The State of Florida has just 
announced a program to try this.
    How are we going to get all these people jobs? Let me give you some 
numbers. This country has 826,000 private sector business employers with 
20 or more employees. A lot of them have a lot more than 20 employees. 
We have 1.1 million nonprofit organizations; many of them are large 
enough to hire someone else. We have 135,000 religious--churches, 
synagogues, mosques, and others with 200 or more members. Obviously, if 
half that many--50 percent of them hired one person, we could get there. 
And a lot of the big companies can hire more than one.
    The point I want to make is that this is a manageable problem--if 
you look at the tax credits, if you look at the cash incentives that the 
States can offer, it's a manageable problem. But it will not work unless 
out of this we create what Dr. Forbes talked about at the beginning, in 
this partnership of hope here.
    We have got to create a community-based system, supporting work and 
family, to make welfare a transitional program that is a program of 
support and movement to independence. The way the law is written, we 
have several years to phase in what has to be done, but we've worked out 
the numbers. We think we have to move another million people from the 
welfare rolls into the job market, which would reduce the overall rolls 
by about almost 3 million if we did that, with the children. So that's 
the background. Those are the incentives we can bring to the table. But 
we have to have your help to set up this network.
    Let me just say one other thing that has particular impact in New 
York and five or six other States. I think it is imperative that in this 
budget we are about to pass, that Congress include the provisions that I 
have recommended to restore benefits to legal immigrants who have been 
damaged and have health and other problems through no fault of their 
own. And I assure you I intend to fight hard for that, and I know that 
your delegation will, but we need your support. The Congress needs to 
understand that there are an awful lot of people who came here legally 
who are not on welfare, who are out working, who are paying taxes, and 
who wound up getting hurt and needing disability or health benefits 
through no fault of their own. And I think it's a mistake to cut them 
off. And so we're working on that, and I'd ask for your help on that.
    I'd like to turn the program back over to Dr. Forbes, but let me 
just say again, we've moved about a million people into the work force 
in the last 4 years and reduced the welfare rolls by 2.3 million. To 
meet the requirements of the law, it is a calculation of the Department 
of Health and Human Services, we have to meet another million in the 
next 4 years. We may or may not create 11.5 million new jobs in the next 
4 years. If we did it twice in a row, it would be something for sure. 
Whether or not we do, we're going to have to do that. We can only do it 
if churches, nonprofits, and private employers make maximum use of tax 
credits, if the cities and States get the funds that I recommended to 
hire people in the public sector, and if the States provide the kind of 
flexibility to private employers everywhere in America that some have 
done in some places.
    You should know that Indiana and Wisconsin reduced their welfare 
rolls by 40 percent in the last 4 years--40 percent--by aggressive 
efforts and without particularly ungenerous programs either, just 
aggressive efforts. This can be done, and I need your help to do it. And 
I do think it's part of all of our mission in life, Doctor, to do this, 
anyway.
    Thank you.

[At this point, Rev. Dr. James Forbes, senior minister, Riverside 
Church, introduced Rev. Dr. Brenda Stiers, executive minister of the 
church, who said that the church has tried to respond to the needs of 
the poor in the past and will continue to do so through the Partnership 
of Hope, a program designed by the church to bring together business, 
government, and community service providers to move welfare recipients 
permanently into the labor market. Earl G. Graves, CEO, Black 
Entertainment magazine, then explained that African-American churches 
and businesses have already done their fair share of helping the urban 
poor, and it is unrealistic for the Federal Government to expect them to 
provide the necessary job training, education,

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child care, and health care needed to move welfare recipients into the 
work force. He added that new welfare legislation has destroyed the 
poor's safety net, and he thought it was irresponsible for the 
Government to abandon its obligation to provide opportunity to all its 
citizens.]

    The President. Let me say, with all respect, I don't think it's that 
simple. I don't think it's accurate to say that this bill destroys the 
safety net for poor people. It maintains a Federal guarantee for poor 
women and children for nutrition, a Federal guarantee for health care, 
spends $4 billion more on child care, and says, simply, that if you are 
able bodied, you cannot stay on welfare forever without going into the 
work force. And the way the work participation requirements were put on 
States, by the year 2000 about 40 percent of all the able-bodied people 
in the welfare--able-bodied adults have to be in--have had some work 
experience within a given 2-year period. That's what it says.
    Now, I hardly--and when you consider the fact that the welfare 
population, Earl, is different than it used to be and that there are 
some people who are on it perpetually, I think it is a good thing, not a 
bad thing, that we did that.
    Number two, I do not think it is so simple to say that at any given 
moment in time there are a fixed number of people who have to be hired 
by all the employers in America, and if they hire a few more, they're 
all going down the tubes and lose money. This bill that I have proposed 
will give a 50 percent tax credit, up to $5,000 a year, for people who 
hire people. That means you can hire somebody for $10,000 a year and, in 
effect, the out-of-pocket cost to you is less than the minimum wage.
    I met a man with only 25 employees in Kansas City, and 5 of his 
employees were former welfare recipients. And they were happy at work, 
and he was happy with them. And he only hired them because he figured 
that the marginal cost of hiring them, since he got the welfare check as 
a wage subsidy for a couple of years, lowered his risk of adding to the 
work force. And sure enough, when he added to the work force, he 
generated some more work and it turned out to be a profitable decision 
for him.
    I talked to a former Governor last week who's back in private 
business, who's got a small business, who told me once I explained the 
proposal to him that he would now go hire three or four people from the 
welfare rolls because it lowered the marginal cost of adding employees 
to him. And there is no reason to believe, if we all work on this, that 
we can't create another million jobs over 4 years without bankrupting 
businesses and that it wouldn't be better for people who otherwise are 
going to be permanently dependent on welfare.
    And it is not true that we have withdrawn all supports. We are 
spending more on child care. I want to also spend $3 billion on public 
service related jobs to create over a third of a million there. And the 
health care and the nutrition guarantees are still there. So I think it 
will be a good thing if we make this work, but there is no automatic 
system for doing it, and that's why we need your help.

[Ruth Penn, a fifth grade teacher who grew up in the welfare system and 
later attended college, suggested a program that empowered welfare 
recipients and pledged to give back to a system that had helped her in 
the past. Ted Lewis, director, Executive Recruiting for the Americas, 
reiterated the need for job training and education programs to help 
welfare recipients become successful in the work force. Public 
assistance recipient Nilda Roman explained that under the new 
legislation, she would be forced to leave college to meet work 
requirements. She added that many people were forced into jobs without 
sufficient training.]

    The President. Let me say this, first of all, I agree with what you 
said about people being in college--I don't think--people who are going 
to college who are full-time students. We are looking at whether--if 
there's some way to get--to deal with that because I don't think people 
should be pulled out of college. I agree with that.
    Secondly, for one thing, you just--from the point of view of the 
State of New York, this is a--we need to--we're trying to work this out 
because the States basically have control of this. The State of New York 
would be much better with you as a college grad

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uate, which is the point you tried to make. So I believe that.
    Now, the other problem is these training programs essentially are 
all run by the States and the cities. But I will do some--you've given 
me some things that we need to obviously do some work on. We need to 
make sure that there is an adequate training and preparation. That's one 
of the things I know that you've talked about what you can do here 
because an awful lot of people who move from welfare who are just thrown 
into these jobs don't last because they were never prepared for them in 
the first place, and they're traumatized as a result of it. And 
oftentimes, just basic preparation of a few months can make a--a few 
weeks even--can make all the difference in the world. So we'll go back 
and do--we will pay some more attention to that.
    But on the college education thing, I think you're right, and I 
think we ought to find some way to accommodate that, and we're working 
on that.

[A participant explained that in order to move New York City welfare 
recipients into the labor market, local companies must remain in the 
city and officials must work to generate new jobs. He concluded by 
stressing the significance of the Intermodal Surface Transportation 
Efficiency Act (ISTEA), which helps provide affordable public 
transportation for the working poor.]

    The President. If I could just make one point on that. Next to 
education and child care, the thing we hear most all around the country 
from people who seek to move from welfare to work or very often even to 
go to college is whether they have adequate transportation. And this 
ISTEA Act that Lou just mentioned, which is--it took me a long time to 
remember what all those little letters were for. But the bottom line is, 
I asked the new Secretary of Transportation, Rodney Slater, to look at 
that to see that we were allocating enough money in here not only for 
mass transit but also for the appropriate subsidies to make sure that 
poor people could have access to this. Otherwise they won't be able to 
get to work.
    And this is an interesting opportunity for New York to make an 
alliance with smaller cities. For example, there was just a study on 
Atlanta, which said that in something like 80 percent of the entry-level 
jobs in the city of Atlanta were filled by people who lived in low-
income neighborhoods in Atlanta. In the suburban towns outside, just 
that touch Atlanta, only 55 percent were. And it was clearly the result 
of the inadequate ability of low-income people to access transportation 
to get there.
    So this is a huge issue, Lou. It's a huge issue for welfare reform 
and basically for the integrity of poor families to be able to sort of 
aspire and move and do things.
    Senator, were you going to say something about this?
    Senator Daniel Patrick Moynihan. Yes. We very much appreciate your 
endorsing the existing formula, Mr. President. [Laughter]
    The President. Is that what I did?
    Senator Moynihan. Wyoming, Montana----
    The President. I thought we could do a little better on mass 
transit.
    Senator Moynihan. The newspapers out there, did you hear that? 
[Laughter]
    The President. Never misses a lick. [Laughter]

[Paul Sherry, president and CEO, United Church of Christ, supported a 
partnership between government, business, and churches that would be 
united in educating people about the seriousness of poverty in America, 
in promoting social services such as child care and job training, and in 
instituting public policy initiatives that would lead to a national 
commitment to families and children.]

    The President. Let me say, as I'm sure you know, all the Members of 
Congress who are present here supported the efforts we made last year to 
raise the minimum wage. And that, plus doubling the earned-income tax 
credit, the refundable earned-income tax credit for lower income working 
people, led in 1995, before the minimum wage even went into--we had the 
biggest drop in poverty, in the poverty rate among single women with 
children in 20 years. And so I couldn't agree with you more.
    We have still 20 percent of our kids living in poverty. And it's not 
very complicated. I mean, it's the reverse of why we have low

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ered the poverty rate among our seniors to 11 percent, and it's the 
lowest it's ever been in history because we met a national, common 
commitment to investing in retirement and health care for seniors. And 
one of the things that I earnestly hope we can do is to--in the next 2 
years is to do something really significant to deal with the fact 
there's still 10 million children in our country without health care. 
And they're not primarily people who are presently on public assistance 
because they're eligible for Medicaid.
    But education, health care, and safety are the three big priorities 
that we have for our children. And I think they're all very important, 
and we're nowhere near where we ought to be there.

[A participant commended the President for his commitment to education 
and stated that education is an important step in reducing the number of 
social problems in the country. Ed Lewis, chairman, Essence 
Communications and Essence magazine, explained that in order to compete 
in the global marketplace, corporations must be committed to job 
training and education, but expressed concern that corporate downsizing 
will effect training and education programs. He called for businesses to 
contribute to welfare reform but added that the Government must play a 
major role in helping to train and educate former welfare recipients.]

    The President. Let me just say very briefly, I think you're right on 
both counts. We have five American corporations, including UPS and 
Sprint, Monsanto, Burger King, and somebody I've left out--United 
Airlines--who have agreed to head a national effort to get major 
corporations to hire and train people in good jobs.
    The second point you made, though, is absolutely right, we have to 
have--this will not work unless we also have a floor plan for publicly 
financed jobs for people in training programs in the beginning and also 
just continuing support for higher education. I'll give you an example. 
We've been working very hard for months now to try to get a new 
agreement among the world's nations on telecommunications services, 
giving American companies the right to compete in other countries for 
telecommunications services. We finally got an agreement that was far 
better than I ever dreamed we could get. It is estimated it will bring a 
million new jobs to America--this one agreement--a million new jobs over 
the next 10 years, but not one of those new jobs will be a low-skilled 
job. Every one of those jobs will require a level of skills and 
education that the folks that want to go to work but don't have those 
skills desperately need.

[Ruth Messinger, Manhattan Borough president, explained that under the 
new legislation, college students who receive public assistance will 
have to leave school to meet city work requirements. She advocated a 
program that would allow welfare recipients to work part time at their 
colleges to help them meet work requirements.]

    The President. One of the best things we did in the last session of 
Congress, in the last days, was to add 200,000 more work-study slots. 
There was another 100,000 in my new budget. If they pass we will go to a 
million people on work-study in this country in the next 2 years.
    If we can do that, surely--if you think about the numbers you're 
talking about--you're talking about maybe 100,000 nationwide of the 
million people that must be in the work force--surely we can get some 
consideration for permitting a certain number of hours worked on the 
campus in connection with the legislation. I want to say that I think 
the one thing that I know that is not working the way this thing is 
being applied now is rules that, in effect, force people out of college. 
You know, we're cutting off our nose to spite our face. These are not 
people who do not want to work. So I will work on that for you.
[A participant presented the President with a gift.]

    The President. Thank you.

Note: The President spoke at 11:07 a.m. at Riverside Church. In his 
remarks, he referred to Rev. James Washington, chair, Riverside Church 
Council.

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