Larry Summers is having a convenient short-term memory lapse on welfare reform
Larry Summers has some nerve. The economist is ripping Republican’s “cruel” efforts to rein in out-of-control Medicaid spending.
Yet he himself participated in one of the biggest welfare reforms of our lifetime.
In 1996, with Summers serving in his Treasury Department, President Bill Clinton signed into law measures that ended welfare as an “entitlement,” pushed people to go to work, made relief temporary and limited federal funding for state programs.
Sound familiar? That’s what’s the Medicaid changes contained in the just-passed reconciliation bill look like. Then, as now, liberals predicted millions would die or descend into poverty from cutting back welfare. But here's what actually happened: People found jobs, became self-sufficient and prospered. And that’s what will happen again.
On ABC’s “This Week,” Summers, Harvard’s former president, told fellow Clinton administration alum George Stephanopoulos, “The Yale Budget Lab estimates that [the tax bill] will kill, over 10 years, 100,000 people.”
Summers is not alone. Democrats like Sens. Elizabeth Warren (D-Mass.) and Chuck Schumer (D-N.Y.) have spent weeks spewing similar alarms, fearmongering about the impact of President Trump’s tax bill by suggesting that its changes in Medicaid eligibility will cost millions their healthcare coverage and cause a gruesome death toll.
They and their colleagues are becoming increasingly frantic as the president powers forward with his agenda, securing the border, eliminating green boondoggles, lowering taxes and backing pro-business policies. They had hoped that, by scaring voters likely to lose benefits, they might prevent Trump’s key tax bill from passing. They failed, and as a result, the economy will not be clobbered by a $4 trillion tax hike.
But Summers is not a politician. For him, dishing out unfounded hysteria is not a good look, because he knows better. He had a bird's-eye view of just how beneficial welfare reform can be.
Clinton campaigned in 1992 on cutting back benefits programs, but prior to signing the “Welfare to Work” bill in 1996, he vetoed two earlier proposals. He required more than a few pep talks from then-Speaker Newt Gingrich (R-Ga.), who had captured the gavel in 1994 and convinced the president his reelection campaign depended on bringing welfare spending under control.
At the time of signing, Clinton promoted the bill, saying it “gives us a chance we haven’t had before to break the cycle of dependency that has existed for millions and millions of our fellow citizens, exiling them from the world of work. It gives structure, meaning and dignity to most of our lives.” He also said, as he signed the bill, “Today, we are ending welfare as we know it.”
Critics at the time, including some in the Clinton White House, predicted increased poverty and homelessness, much as today’s liberals are forecasting that millions will lose health insurance. The New Republic warned, “Wages will go down, families will fracture, and millions of children will be made more miserable than ever.”
None of that happened. Instead, poverty rates declined and the number of people depending on benefits plummeted. The CATO Institute reported 20 years later that welfare enrollment “declined, from 13.42 million [Aid to Dependent Families with Dependent Children] recipients in 1995 to just 4.12 million people on [Temporary Assistance for Needy Families] last year.”
Even the liberal Brookings Institute reported 10 years in that the welfare bill had caused “a rapid decline in welfare rolls, historic increases in employment by poor, single mothers leaving or avoiding welfare, and the first substantial decline in child poverty since the early 1970s. Poverty among black children and kids in female-headed households reached all-time lows.”
How is it we are never informed by the past? If pushing people to go to work in 1996 worked to alleviate poverty and reduce dependency, why shouldn’t it do so again today?
Summers cites the Yale Budget Lab, which calls itself nonpartisan, for his dire predictions about the changes to Medicaid eligibility. As it happens, the lab’s advisory board is made up of left-wing economists from Berkely and Harvard. It includes Jason Furman, Heidi Shierholz and Cecilia Rouse, all of whom worked for either the Obama or Biden White Houses. It also includes Larry Summers.
At the request of Democrats in the Senate, the lab sent talking points about the impact of various aspects of the budget bill, concluding that “Proposed changes to Medicaid, other health programs could lead to over 51,000 preventable deaths.” Taking just one aspect of the report, they predict, on an annual basis, “11,300 deaths from the loss of Medicaid or Affordable Care Act Marketplace coverage due to 7.7 million people losing coverage.”
It appears that the group assumed that not a single person bounced from the Medicaid rolls would find employment and manage to secure his or her own healthcare coverage. That’s a pretty dark assessment of our fellow Americans. As happened in 1996, liberals may be shocked to find out how capable and self-sufficient their neighbors may be.
In recent days, Summers published an op-ed in The New York Times in which he states, “I don’t remember on any past Fourth of July being so ashamed of an action my country had just taken.” He concludes, “imposing work requirements on a population in need of health insurance does not increase work and does inhibit necessary care.”
Forgive me, but Summers has no way of knowing if that is true.
Perhaps Summers feels guilty that he participated in the Clinton-era welfare reforms, which many have cited as a precedent for the Trump changes. He claims that the Welfare-to-Work program was much smaller, projecting that the new reforms will reduce the rolls by more than 11 million people. Actually, as noted above, the Clinton reforms reduced the rolls by more than 9 million. Adjusted for population growth, that was bigger.
Liz Peek is a former partner of major bracket Wall Street firm Wertheim and Company.