Decades of Distortion - Page 12

The Think Tank Factor Continues



The marketing of misleading and reductionist information continues to be a prominent part of the Right's attack on welfare. For example, in September 1995, the Cato Institute, a right-wing Libertarian think tank,46 issued a report concluding that welfare pays far more than a low-wage job in every state in the nation:

The value of the total package of benefits [received by AFDC recipients] relative to a job providing the same after-tax income ranges from a high of $36,400 in Hawaii to a low of $11,500 in Mississippi. In eight jurisdictions...welfare pays at least the equivalent of a $25,000 a year job.47

However, in calculating the benefits that AFDC recipients receive, Cato counted WIC benefits48 which more than 80% of children receiving AFDC do not receive, housing assistance which three-quarters of AFDC families do not receive, and low-income energy assistance (LIHEAP) for which no reliable data exist on the correlation between receipt of the two programs.49 Even in computing those benefits, levels of food stamps and LIHEAP are overcalculated.50 In addition, Medicaid is counted as income for AFDC families in the Cato study, although benefits from this program go directly to health care providers.51

The reverse occurs in the undercounting of income of low-wage families in wage work. Cato does not include employer-provided health insurance or Medicaid although census data show that 62 percent of children living in working poor families receive these benefits. It does not include Food Stamp benefits paid to two million working poor families (80 percent with children), and does not factor in the percentage of working poor who also receive WIC, energy assistance, and housing assistance.52

In spite of these distortions, the Cato study received widespread media attention. It has been cited by New York Governor Pataki and California Governor Wilson, both of whom have ties to the Heritage Foundation53 as justification for AFDC benefit reductions (as much as 26 percent in New York state).54

Similarly, Heritage's Robert Rector argues in support of across-the-board benefit reductions because benefit levels "already put recipients well above the poverty level."55 The Christian Science Monitor states:

Liberals and conservatives alike agree on the problem of perverse incentives that mean a mother receiving...AFDC and Medicaid literally cannot afford to take an entry-level job....56


Using equally inflated statistics, Heritage reports that aggregate government welfare spending over the past three decades is $5.4 trillion in constant 1993 dollars, an annual average of $3,357 for every taxpaying household in the country.57

New Right think tanks are actively involved not only at the national level,58 but regularly brief state-level politicians on welfare policy. For example, a misleading radio ad run by Senator John Warner (R-Virginia) used Heritage Foundation data.59 The previously discussed Cato Institute study, which found that Florida was one of 40 states whose benefits package is worth more than an $8.00 an hour job, was used as the basis for discussion by Florida legislators at a seminar sponsored by the conservative think tank Foundation for Florida's Future.60 The Hudson Institute not only testifies and advises the Indiana legislature on welfare,61 but was retained by Wisconsin's Governor Tommy Thompson to advise the state Department of Health and Social Services on welfare issues.62

The Heritage Foundation publishes an annual guide for media which lists 1500 conservative "experts" catalogued in 70 policy areas, including welfare.63 Thus it is not surprising that Heritage was cited by media sources more than any other major think tank in 1995.64 In addition, Heritage's Policy Review articles on welfare are both cited to and excerpted.65 For an excellent example of how the New Right gradually advances its agenda, remember how Stuart Butler of the Heritage Foundation described the Low Income Opportunity Advisory Board as a critical step in the right direction on welfare reform because it would give states discretion.66 Yet in 1995, Robert Rector of Heritage stated that "waivers are mostly a public relations gimmick:"

We've had a lot of waivers over the last five years, but the welfare caseload has gone up 30 percent and illegitimacy rates are reaching epidemic proportions.67



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