Jimmy Carter photo

The President's News Conference

August 06, 1977

Held at Plains, Georgia


THE PRESIDENT. As I pledged during my campaign for the Presidency, I am today asking Congress to totally scrap our existing welfare system and to replace it with a Program for Better Jobs and Income, which will provide job opportunities for those able to work and a simplified, uniform cash assistance program for those who are unable to work due to disability, age, or family circumstances.

In May--I think May 1--after almost 4 months of intensive study, I said that the welfare system was worse than I had expected, and I stand by that conclusion.

Each of the individual programs has a high purpose and serves some needy people. But taken as a whole, the system is neither rational nor is it fair, and the welfare system is antiwork and antifamily. It's unfair to the poor and wasteful to taxpayers' dollars.

The defects of the current system are very clear. First of all, it treats people differently who have similar needs, and eligibility requirements vary for each separate program. Second, it creates exaggerated differences in benefits based on where people live. Third, it encourages the breakup of families. In most cases, two-parent families are not eligible for cash assistance, and a working father can most often increase his family's income by leaving home.

It also discourages work. In one Midwestern State, for example, a father who leaves part-time employment paying $2,400 a year and goes to a full-time job paying $4,800 a year, can actually lose more than $1,250. At the same time, well-intentioned efforts to find jobs for current recipients of welfare payments have floundered and been ineffective.

And finally, the complexity of current programs and regulations tends to waste, fraud, redtape, and errors. HEW has recently discovered even Government employees unlawfully receiving benefits and numbers of people receiving benefits in several different communities.

There is no perfect solution for these difficult problems, but it's time to begin. The welfare system is too hopeless to be cured by minor modifications; we must make a complete and clean break with the past.

The program that I propose today to the Congress does just that. It will provide for jobs for those who need work, a work bonus for those who do work but whose incomes are inadequate to support their family. It provides income support for those who are able to work part-time or who are unable to work due to age or physical disability or who need to care for little children 6 years of age or younger. It provides an earned income tax credit to strengthen work incentives and to provide tax relief for working families who have been hard hit by payroll tax increases.

If enacted by the Congress, this new program will have major benefits. It will significantly reduce the number of people who rely on welfare payments primarily by doubling the number of singleparent families who are supported primarily through work. Twice as many single-parent families will now be supported by work. It will insure that work will always be more profitable than welfare and that a private job or a public job not supported by the Federal Government will always bring in more income than a special job created with Federal funds. It will combine effective work requirements, strong work incentives, improved private sector placement services, and the creation of 1.4 million jobs. Those who can work will work. And every family with a full-time worker will have an income substantially above the poverty line for the first time.

This program will provide increased benefits and more sensitive treatment to those in need. It will provide simplicity by consolidating the current assistance programs, all of which have different eligibility requirements.

This new program will provide strong incentives to keep families together rather than tearing families apart and offering the dignity of useful work to the heads of families.

This program will reduce fraud and error and accelerate efforts to assure ,that deserting fathers meet their obligations to their families.

This program will also give substantial financial relief--S2 billion--to hardpressed State and local taxpayers.

In my May 2, 1977, statement, I established as a goal that the new reform system involve no higher initial cost than the present system by making the new program more rational and efficient. Therefore, Secretary Califano, who is here on the stage with me, outlined a tentative, no-cost plan which embodied the major reforms we are seeking. It was a good plan.

After careful consultation with State and local leaders, Members of Congress, and many other interested persons throughout the country, we've now provided $2.8 billion in added benefits.

These additional funds will be used to make important improvements in our original plan--increased fiscal relief, as I've already outlined, for local and State governments, particularly those that have borne a heavy financial burden in the past.

Incentives which strengthen family ties have also been added. A deduction for child care will permit and encourage single parents to take work which will lift them out of poverty.

We've added up to 300,000 additional jobs, part-time jobs, for single-parent families with school age children. If adequate day care is available, such parents will be expected to take full-time jobs. And the earned income tax credit for working families, administered through the revenue system, has been expanded to provide tax relief for many who receive no income assistance, who work, and who have been hard hit by payroll tax increases.

So, with these improvements the program will help turn the low-income Americans away from welfare dependence with a system that is fair and fundamentally based on work for those who can and should work.

This Program for Better Jobs and Income stresses a fundamental American commitment to work, strengthens our family, respects the less advantaged in our society, and makes a far more efficient and effective use of our hard-earned tax dollars.

I'll now answer questions about this program. I have on the stage with me Joe Califano who heads up the Department of Health, Education, and Welfare, and Ray Marshall, who heads up the Department of Labor--two of the major Departments, along with Treasury, that will administer the new program.

And I'd like to also say that the House of Representatives yesterday--Speaker Tip O'Neill announced that a special welfare committee will be set up to implement the legislative work on this program for better jobs and income.

I'd now like to recognize Mr. Wes Pippert [Wesley G. Pippert, United Press International].



Q. I know that this is intended, Mr. President, to be a news conference on the all-important subject of welfare reform.

THE PRESIDENT. Yes, it is.

Q. But I do feel compelled to ask about something else that has just arisen that is also important. Budget Director Bert Lance has acknowledged that he received another big loan from a bank in which his own bank had an interest-free account.

Now, when did you become aware of these matters? Have you asked him for an explanation, and does he still have your full confidence?

THE PRESIDENT. Well, let me answer this question, and then I would like to have questions on the new system that I'm proposing, because some of the specialists on welfare programs have come down from Washington to both ask and answer questions. But I'll be glad to answer that question.

I became aware of the Comptroller's interest in the loan at the New York bank about, I guess, a week or 10 days ago. The Comptroller is conducting an inquiry with Mr. Lance. I've not talked to Mr. Lance about it. My understanding is that the inquiry is proceeding thoroughly and that all information concerning the loan will be made .available to the public.

Mr. Lance, as you know, answered questions about this yesterday. He's much more familiar with it than I am, and I can only say that any information that is available that is known by Mr. Lance, by the Comptroller, will be made available to the public.

I know little about the details of the loan, but I have full confidence in both the Comptroller and Mr. Lance to handle it properly.

Now perhaps a question about the new program for better jobs and income.


Q. Mr. President, you said your program is designed to move people from welfare to work?


Q. But you're projecting increased costs in the future. What will be the first year in which your program will actually reduce the total cost of welfare, and how low might it go?

THE PRESIDENT. Well, it's hard to say. Some estimates have shown that we might reduce the rolls for AFDC. [Aid to Families with Dependent Children] as much as 50 percent when all of the part time jobs that we envision are made available to families.

We will present this program to the Congress today in hopes that--by next spring, perhaps, is the target date that the Speaker has announced yesterday-that it might be passed into law. The full program will not possibly be implemented until fiscal year 1981, which is October of 1980.

However, in the meantime, the jobs part of the program will be initiated as rapidly as possible. And also, of course, the earned income tax credit, which will help working families, will be initiated along with tax reform much earlier, perhaps within the next 18 months or 2 years.

We obviously see that every time you provide a new job for a person with our present stimulus package--public works programs, public service jobs, the Youth Employment Jobs program that we initiated yesterday--a total package of $21 billion--that you put people to work and take them off welfare.

So, I think that this new program for both better jobs, more jobs and better income for those who do work will have an immediate impact, although it can't be fully effective until October of 1980.

Q. .Could I follow up?


Q. Do you know what year though actual payout from the Treasury for welfare will go down, the actual money leaving the Treasury?

THE PRESIDENT. I don't believe that that question can be answered. I might say that immediately following this press conference, Joe Califano and Ray Marshall will be able to answer specific questions.

I doubt that even they, though, who are experts in this subject, can tell you exactly which year the welfare payments will be reduced and how much. But the primary impetus of this whole bill is to make sure that it's always profitable for a family to take a job.

We're trying to make sure that that job is available for every family to have--at least the head of that family--a job available, preferably in the private sector where the income would be highest; secondly, in the public sector without Federal supplement; and third, if necessary, public service jobs to be provided for and paid for by the Federal Government on a temporary basis--about a year--with a good strong training program involved.

Under the present system, quite often it is a serious sacrifice, quite often, financially, for a family to get off welfare and go to work.

Under this program, whenever a person goes to work, it's financially advantageous to them. And at the same time, there's a strong impetus in this program to hold a family together.

Miss Compton [Ann Compton, ABC News].


Q. How much money and how much energy are you willing to expend to get fraud out of the system, considering that very often fraud is less expensive to go ahead and pay rather than to try to get rid of?

THE PRESIDENT. The benefits to be derived from eliminating fraud will be realized long before this entire program is implemented. Every time you simplify a system and remove the complexities you eliminate one chance of fraud.

Secretary Califano told me this morning that the estimated degree of fraud in the food stamp program, for instance those who are not eligible to draw food stamps who do, those who get overpayments-amounts to about 17 percent.

So, in addition to the benefits that will be derived when this entire program goes into effect, we have an excellent chance to realize savings from the elimination of fraud of about $1.3 billion within the next 2 or 3 years just by simplifying, making more effective administration, a closer cooperation between the local, State, and Federal governments, and the computerization of the existing program, in preparation for the full implementation of this one.

So, how much the fraud savings would be after this full program goes into effect, I can't say. Before the full program goes into effect, though, the savings would be about $1.3 billion per year.

Q. But after the program gets going, how much money are you willing to invest at that point to make sure that fraud is done away with, after the program is under way?

THE PRESIDENT. Well, I can't answer that question, but I can say that whatever amount of money you put into the program to eliminate fraud, either in redesigning computer systems, simplifying the system, putting in more auditors, working closer with the State governments, you get a tenfold return on that expenditure, at least. Perhaps Secretary Califano has a better estimate.

Do you? Would you say---

SECRETARY CALIFANO. I think that's right, Mr. President. We'll actually both be saving money and eliminating fraud and error.


Q. Mr. President, you indicated initially that you were very concerned .about keeping the cost of welfare reform at the current cost. But now it is going to cost $2.8 billion more. What changed your mind that it couldn't be done?

THE PRESIDENT. Well, in order to exercise tight discipline on the whole subject and to make sure that people just didn't add on new programs that were attractive, I required the Departments involved-Treasury, Labor, and HEW--to devise a complete program for me with absolutely no cost, which they did. And this was presented to the American public in outline form the first part of May.

Since May, for about 4 months, the Secretaries involved have been consulting with Governors, with mayors, with Members of Congress, and with private interest groups and analyzing in the computer programs how additional costs could be mirrored in improved benefits to the Nation.

As I said, we will now have about $2 billion in tax relief for local and State taxpayers. That is part of the advantages.

In addition, we have provided about 300,000 jobs that we did not anticipate at the 'beginning in May which would permit single-parent families, a mother or a father with small children, say 6 to 14 years old, to go to work part-time and to guarantee that they would have an opportunity to go work part-time or, if family day care centers are available, to work full-time. That obviously did cost more.

So, in the additional costs that we are putting forward, we are providing a much stronger incentive to work, providing more jobs for people and providing tax relief for local and State governments.

Q. What about your dream of balancing the budget, sir?

THE PRESIDENT. This program will not be incompatible with that dream to balance the budget.


Q. Mr. President, you had considerable advice, strong advice from key Members of Congress to delay this package.


Q. In your interests of working well with the Congress and establishing that good working relationship, why did you decide not to accept their advice?

THE PRESIDENT. Well, I might say that neither one of the Members of Congress with whom I consulted this past week urged me personally not to go ahead with the program. In their interviews with the press later, they said it might be better to wait.

There are obviously some differences that still exist between myself and Chairman Al Ullman in the House and Chairman Russell Long in the Senate. But I think that compared to the overall program those differences are quite minor in nature.

I think that what Chairman Ullman objected to was the supplementing of income for families who work being based on the number of children in a family. Obviously, this is already done, because when you file your income tax return, you get a credit for each child so that you can pay for that child's life.

The second thing is obviously the food stamp program that we presently have. It's based on the number of people in a family. That's a difference of opinion between ourselves and Chairman Ullman. That has not been changed. Chairman Long has questions about how small a child should be in the family before the mother is encouraged--or the father, if it is a single-parent family--should be encouraged to go to work. And I think that the 6-year level is the proper level. I agree completely with that. I think maybe Senator Long would like a lower age. But I think that by the time the child is enrolled in school, that if a part-time job is available to the parent, or if a full-time job is available to the parent, with day care center services, that that parent ought to be in the expected-to-work category.

But those differences, which are sincere, compared to the overall breadth of the program, are relatively minor. And since we were quite ready, since all our plans had been made to reveal the programs to the other Members of the Congress, and since they did not request me personally to delay the program, we decided not to.

Q. Any idea as to why they would apply this indirect pressure, come out after talking with you when they had an opportunity to ask you to delay it personally.

THE PRESIDENT. No, I think they--

Q. And yet they left the impression that they did ask that?

THE PRESIDENT. No, I can't answer that question. I think that there are many Members of the Congress who would like to see this plan modified to mirror their exact desires. And of course, the Congress now will have a chance to go to work on it. I've been very pleased at the action that the Speaker announced yesterday in setting up a special committee, because in the past there have been several committees in the House directly responsible for welfare, in the Senate also three committees.

And I think in the case of energy legislation in the House, where the Ad Hoc Committee on Energy was set up, this expedited the process greatly. And the Speaker has set a target date for House completion on this very complex welfare program to be next spring. So, I think that the leadership in the House and Senate are ready for the legislation to be introduced. They'll have adequate time now to work their will, and I hope we'll be able to work compatibly.


Q. In your opening statement you mentioned the practice of welfare fathers leaving the family so that the family will indeed get more welfare benefits. How will your proposal counter that? What is there to keep the family together?

THE PRESIDENT. Well, now there will be no penalty on a family if the father lives in the household. If, say, a two-parent family with children exists and a job is available to that family through public service jobs or through the Employment Security Agency a private job is available, if the parent refuses to take the job, then those parents would lose their welfare benefits. We would then provide adequate payments for income maintenance to meet the needs of the children. But there would be a strong and very heavy financial incentive to that family, both to stay together and also for the mother or father who's the head of the household to work.

So, now, as you well know, if a father gets a job and moves out of the house or pretends to move out of the house, then the family's income is greatly increased. Under this proposed system, that would no longer be the case.


Q. Mr. President, one of your predecessors, former President Nixon, proposed welfare reform. Senator Long essentially killed it. Senator Long has indeed been critical of your proposal so far, and conservative groups also criticized your proposals. My question is, without this conservative constituency, where is your constituency to reform, and who will support this?

THE PRESIDENT. My belief is that Senator Long will support the program. The chairman of the subcommittee in Senator Long's committee is Senator Pat Moynihan. He was extremely complimentary about the program as it was outlined to him. There's strong support for the program in the House. Every single State government has been consulted in depth about this program. And I would say it was overwhelmingly supported.

Families will be benefited. The ones who want to keep families together will .be benefited. Almost all of the recipients of aid who are not able to work will be better off under this program. And I think this is part of the American way of life. To not only emphasize the desire for others to work but to provide jobs for them to be able to work is an integral part of this program that will make it politically attractive. I have very great confidence that this program, in its basic form, will be adopted by the Congress next year.


Q. Mr. President, during your campaign you promised that you would lift the entire welfare load off New York City as soon as possible. This program contains substantial fiscal relief for New York, but still leaves them paying a great deal of welfare costs at the local level. How soon do you think it will be possible to lift the entire load off New York City, as you pledged in the campaign?

THE PRESIDENT. I can't answer that question. I think that the estimate here of financial relief for the States would amount to roughly $175 million for New York. The amount of reduction in cost to New York City under the present stimulus package far exceeds their welfare cost payments. This is brought about by housing and urban development programs, public works programs, and job programs for adults and youth.

But as far as the welfare system, which is being replaced by this new program, the direct benefit that we contemplate to New York would be $175 million.

Q. Could I follow that up? Would you envision in future years, after the program is put into effect, there would be additional dividends to the States and to the cities, such as the $2 billion that's estimated at the start of program? In other words, would they get more beyond the $175 million in the second, third, or fourth year of the program?

THE PRESIDENT. I don't know what my successor and the Congress might do after 1980, but I have to say this, that every time we reduce the unemployment roll, every time we put young people to work, that reduces greatly both unemployment compensation, it reduces welfare payments, and as we care for people with preventive health care programs and cut down hospital costs with the cost containment bill, it cuts down Medicaid and Medicare payments. So, I think the overall thrust of our programs has already far exceeded in benefits what we promised New York City on welfare cost reductions.

But as far as the welfare cost reductions themselves, I think that the most that they could hope for between now and the implementation of this program in the fall of 1980 would be what I've outlined to you. What would happen after that, I have no idea.


Q. Mr. President, in your statement you obviously avoided using the word "welfare" except to say the system was a failure. Does this mean that you believe the word has become so stigmatized that under this approach you are advancing that you hope the word itself would become obsolete rather than rehabilitated?

THE PRESIDENT. Yes, I think there's a great deal of stigma attached to the word "welfare." And I can't shape the vocabulary of the Nation, obviously, but we've decided to call this program, during its work phase, a Program for Better Jobs and Income. And this is what we are trying to do.

I think the people of the country, according to my own interaction with them during the campaign and as President-and also my information derived from public opinion polls is that they don't like the word "welfare," but they do favor the programs that are provided for poor people, both those who work and those who cannot work.

But the abuses are being eliminated in this program, the abuses that people can make more money not working on welfare than they do if they get a job; the abuses that create confusion and complexity and fraud and cheating; the abuses that divide one member of the family from the rest of the family. Those are all being eliminated.

And I think that the elimination of those adverse parts of the present program will do a great deal to restore the beneficial image of the word "welfare" if it is used.


Q. In the interest of those who may have to go to work, can you spell out what the kind of jobs you are talking about, public service jobs, whether minimum wage--something like that?

THE PRESIDENT. Yes. The basic public service job will be at the minimum wage. If a local government or a State government supplements the basic payment for those who cannot work, then they are required to supplement the minimum wage salary.

The reason for that is that we don't want the welfare payment or the income payment for those who don't work to be above what a person could get if they worked. But now this can only amount to 10 percent, approximately 10 percent. So, these jobs will be at the minimum wage or slightly above the minimum wage.

Q. Is this like the WPA--or what kind of public service jobs? Like what occupation? Cleaning up roadsides?

THE PRESIDENT. I think there would be a wide range of jobs, working in centers for the elderly, teachers aides, perhaps, when desired, jobs providing for the beauty and cleanliness of municipalities or the countryside, almost any kind of jobs. I think the delineation of what particular job would be envisioned would depend upon the person's capabilities and the needs within the local community. But there will always be a heavy stimulus to move that person out of the public service job into a permanent job, either in the local or State government or preferably in the private sector.

REPORTER. Thank you, Mr. President.

THE PRESIDENT. Thank you very much. I might add that both Secretaries Califano and Marshall will be here now to answer additional questions and to correct any errors I may have made. [Laughter]

Note: President Carter's thirteenth news conference began at 10 a.m. at the Southwest Georgia Branch Experiment Station, in Plains, Ga. It was broadcast live on radio and television.

Jimmy Carter, The President's News Conference Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/243820

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