Recommendations for Michigan

Welfare reformers in Michigan should learn from the mistakes of past policies, borrow the best of the good ideas from other states, and implement additional changes tailored to this state's particular fiscal needs and social problems. The Mackinac Center for Public Policy recommends the following:

  1. Cut AFDC payouts by 5 percent, beginning October 1, 1992, to be followed by a further 10 percent a year later, and then a freeze at that level. That would reduce the average monthly per family payment first to $436 and then to $393. At that level, Michigan would still rank well above levels in neighboring Illinois, Ohio, and Indiana.

  2. Place a time limit on continuous AFDC grants. DSS figures showing that about 40 percent of AFDC recipients are on assistance for 6 years or more are unacceptable. A limit of 5 years (60 months) over any 8-year (96-month) period would be a good way to start moving away from welfare as a permanent lifestyle for otherwise able-bodied adults.

  3. Simultaneously, cap welfare benefits for people who move to Michigan to the level of benefits in their state of origin for a period of no less than one year. This would have the obvious effect of reducing or eliminating whatever incentive people now see in moving to Michigan because of our state's relatively high benefit levels. This is likely to be challenged on constitutional grounds, but the complexion of today's Supreme Court suggests it might ultimately be upheld.

  4. Institute a Michigan "Learnfare" program. Wisconsin's program should serve as the pattern here, though we advise that a Michigan plan apply only to parents of children under 10 years of age and to teenagers receiving AFDC themselves. Broadening it to include all children could come at a later date, if the enforcement problems are worked out and if the paperwork can be effectively minimized.

  5. Create new incentives for charitable giving to private groups, including churches, which have their own programs to assist people in getting off public welfare. These incentives could be in the form of tax credits, or a policy of publicly spotlighting particularly effective private programs, or both. Michigan should seek the widest possible latitude from the federal government to permit more experimentation with the privatization of social services.

    Specifically, we propose pilot programs be established in selected counties around Michigan in which churches, religious organizations and other groups would be authorized to provide family mentoring and training in job-seeking and job-holding skills. New applicants for AFDC would be offered the opportunity to select this alternative plan with the expressed goal of moving clients off welfare altogether and into independence in as short a period of time as possible. Individual clients would be allowed to choose which church or other organization he/she would like to work with. Or the client could simply choose to go with the "regular" AFDC program. Funding for these private programs could be totally private if donors would receive a substantial state tax credit for donations.

  6. Curtail additional AFDC benefits to welfare mothers who choose to have more children. This move would send a clear signal that welfare recipients must become more responsible for their sexual behavior. The additional benefit provided when a second child is born into welfare should be reduced from present levels, and no additional benefit should be provided at all for having three or more children on welfare.

  7. Reform divorce laws to discourage divorce. As things stand now, it is easier to dispatch an unwanted spouse than it is to fire an unwanted employee in Michigan. "No-fault" divorce has accomplished little beyond creating more poor, single-parent, female-headed households. The marriage contract, as any other contract, must be respected and enforced so that those who wish to breach it will know that it is a costly endeavor.

  8. Reform paternity laws. New technology makes paternity establishment much easier than was the case even a decade or two ago. However, the mother's cooperation is still needed in establishing paternity. Tougher sanctions, including reduction or even elimination of welfare benefits, should be imposed on women who refuse to cooperate in establishing the paternity of the child they would like taxpayers to support.

    The state should also consider measures to tighten up child support collection as Wisconsin has, and increasing the penalties for abandonment of parental responsibilities to children.

  9. Improve and increase the privatization of child and family services. Michigan has a long history of successful private-public cooperation in this area, with a substantial network of private child and family service agencies. These agencies have proven that they can provide a wide array of services, especially to troubled children and families, with the sort of care and counseling often needed and at a cost that is well below what the DSS bureaucracy can do by itself. The state should aggressively seek ways to professionalize this relationship so that private groups are not subject to the arbitrary rules, unexpected changes in reimbursement procedures, and the absence of master contracts that have hampered the relationship in recent times. A more effective partnership with private agencies will help to hold families together and reduce the long-term welfare burden.

  10. Require that minor mothers remain at home in order to receive benefits, except in those cases where abuse is present. Such a policy would clearly signal that parents and their unwed children who have children themselves owe some obligation to society, and not just the other way around. Responsibility for situations like this should not be entirely that of the taxpayer.

  11. Tighten up work requirements for the able-bodied father in two-parent AFDC homes. Standards should be established and enforced which require fathers to actively seek job training, further education, and/or gainful employment. If nothing else, these men could serve as volunteers in programsadministered by community Voluntary Action Centers or United Way programs, as opposed to remaining idle at home or in the streets. The penalties for leaving the family to escape these rules should likewise be toughened.

  12. Expand education and work requirements for all able-bodied adults on AFDC. As previously stated, all able-bodied adults on AFDC have an obligation to work towards self-sufficiency, and not to regard welfare as a permanent lifestyle. This can be achieved through education, job training, and actual work experience. Anyone who lacks skills or sufficient education should be expected to gain these things as a condition for public assistance.

  13. Reduce the "work penalty" by enacting enhanced Earned Income Tax Credit plans. EITC serves as a wage supplement to parents trying to support families on low wage jobs and rewards self-sufficiency rather than dependence. Michigan legislators and the governor should support expansion of the federal EITC and enact a state counterpart as well.

    Under the federal EITC, the maximum credit now is $1,192 for families with one child and $1,235 for larger families. EITC claimants are also eligible for a maximum credit of $357 if they have a child under one and another credit of up to $428 to cover out-of-pocket health costs.

    The EITC benefits people who want to work without creating a bureaucracy and without adding burdens to employers. Six states (Iowa, Maryland, Minnesota, Rhode Island, Vermont, and Wisconsin) now offer their own EITC as a further work incentive, calculated as a percentage of the federal EITC. Michigan should do the same, as generously as the state's fiscal condition might permit.

  14. Train AFDC adults to help other AFDC adults. For example, AFDC mothers can be trained to provide day-care services to other AFDC mothers who are participating in education, job training, jobs, or volunteer work.

  15. Support the most promising educational reform – competition through choice. A 1991 Mackinac Center report, Educational Choice for Michigan, made plain the case for maximum parental choice in education, including a voucher plan that would involve private schools. Welfare and low-income people desperately need an education system that works, that gives them the opportunity to pull themselves up. No reform promises to accomplish that better than choice.

  16. Continue to downsize state government, encourage privatization at all levels of the public sector, and unshackle the job-creating potential of free enterprise by cutting the tax and regulatory burdens in Michigan. The best "welfare" money can buy is a meaningful and productive job in the private sector. We cannot continue to strangle enterprise in Michigan and be surprised that welfare seems the only resort to so many people.