THE CLASS CRITIQUE

THE POLICY:

Citing the need to reduce budgetary deficits, Ronald Reagan, upon taking office, asked Congress to cut billions of dollars from Federal allocations for social programs. Aid for the unemployed and the poor were the primary aim. ReaganÕs policy on welfare and the poor, more than any other policy of his administration, elicited impassioned response from critics throughout the country. A Gallup poll in 1983 found that 82% of Americans held that the PresidentÕs domestic programs Òhelp the richÓ and 75% held that they Òhurt the poor.Ó In 1986, when Reagan implied that the hungry were to blame for their plight, journals around the country echoed a certain rage at what was perceived as the administrationÕs insensitivity. Many others, however, defended ReaganÕs tax cuts and welfare policies. They proclaimed that the cuts only affected those who were not truly needy, and that the welfare system needed to be reformed.


THE LEFT vs THE RIGHT

Nation
November 7, 1981
ÒKeeping Labor Lean and HungryÓ
By Francis Fox Piven and Richard A. Cloward

Piven and Cloward make their argument against ReaganÕs welfare policies on several levels. They first argue that even if the electorat wants less government, Ò... we are left with a case for overall reductions in Federal spending- not a license to sock it to the poor.Ó It is the philosophy that the government should help the poor, they argue, that the Reaganites are against. They support this claim by stating that it is not programs that do not require the applicant to demonstrate need, like Social Security and Medicare, that are being cut. It is instead the programs that do require a means test, such as Medicaid, welfare, low-income housing, workerÕs compensation, public- service jobs, unemployment insurance and the like, that are being cut. Therefore, Piven and Cloward argue, it it the consevative belief that, Ò... in an industrial society, aid to the needy reduces business profits by enhancing the bargaining power of the labor force.ÓPolitical Cartoon 2
They go on to argue that ÒThe promotion of limited unemployment became a major tool (in the late 1960Õs) for stabilizing the economy and controlling inflation...Ó Unemployment, they say, is regulated by the government to bring down wages and lower aggregate demand to smooth the business cycle. However, the expansion of social welfare benefits Òundermined the historic relationship between unemployment and wages,Ó because workers had less pressure to take the first job they could find. Therefore, they contend, by ÒslashingÓ social programs, the Òterrors of being without a jobÓ will be reinstated. By reducing the benefits, the number of people lookin for jobs will be increased and therefore, wages will go down and business profits will go up.
Also, the ÒNew FederalismÓ of the Reagan administration, will move many income-maintenance programs to the states. ÒThe decentralization of income-maintenance programs,Ó argue Piven and Cloward, Òwill also antagonize local taxpayers, especially the working poor, who bear the brunt of regressive state taxes.Ó This pressure, they argue, will demand that the unskilled labor force, consistingly mostly of women, will have to take any job under any conditions, an effect that will be felt by a large spectrum Americans.
Piven and Cloward criticize what they see as the Reagan administrationÕs Òtwo-class view of human nature.Ó The rich, within this framework, Òexert themselves for rewards,Ó while the poor Òrespond to fear and punishment; they must be goaded by hunger, and economic misery makes them more industrious.Ó
The Reagan welfare reforms, contend Piven and Cloward, are a means by which the Federal government can decrease the bargaining power of the unskilled labor force.

Commentary
August 1983
ÒThe Rich, the Poor, and the Reagan AdministrationÓ
By Michael Novak

Novak criticizes the major news media and the Democratic Party for irresponsible claims against the Reagan welfare policy in terms of Òfairness.Ó Novak argues that the same Democrats who insist that the Reagan administration is Òhard-heartedÓ make plenty of money themselves and do not propose to take from the middle-class to give to the poor. Furthermore, he states, when the Carter Administration attempted to equalize incomes to help the poor, the nation was left with an annual rate of inlation of 13%, 7.5% unemployment, and interests rates at 22%. ÒNo one then claimed that Carter was helping the poor.Ó
Novak contends that the Reagan Administration was duly fair to the poor. ÒAs the records of tax payments to the IRS suggest... the top 3% (of income groups) paid five times more in taxes than the bottom 50% combined.Ó Because the tax cuts were proportional to income, Novak argues, one cannot say that one group benefitted or lost more than any other. The largest cuts, furthermore, were to the middle class. And although the rate of taxation for the rich went down, the real dollar amount seems to have increased, alongside the growth of the economy, he states. ÒIs this unjust, unbeneficial, or unfair? It seems, on the contrary, [a] wise policy...Ó
Novak suggests that not only are the rich carrying the nation in terms of federal revenue and investment, but that the poor are recieving more honest dollars under Reagan that under Carter. The one are where Reagan has hurt the poor is through unemployment.The Democrats, Novak contends, also hurt the poor by giving them money on the one hand and taking it away with inflation on the other. Reagan, by reducing inflation, has benefitted the poor. ÒReagan has done more to help the poor than Carter.Ó
Furthermore, in the aggragate, Òfar more is being spentÓ by the Reagan administration on welfare programs than was spent under Carter. In the areas of Social Security, Medicare, and Medicaid, Reagan spent more than Carter. ÒThus, the sharpest accusations about Òhurting the poorÓ cannot plausibly be aimed at these three fundamental welfare programs.Ó
It is the borderline poor, and not the truly needy, Novak argues, that have been hurt by ReaganÕs welfare cuts. ÒAs Roosevelt is sometimes referred to as the liberal who saved capitalism, Reagan may some day be known as the conservative who saved the welfare state intact for the very poor.Ó The poorest, who benefit the most from the reduction of inflation are also those still protected within the welfare system.
Novak ends by stating that Reagan has neither hurt the poor nor helped the rich. He challenges the Amercian public to dig deeper into the Òlarger question posed by the continuing existence of a welfare population whose ranks are not diminishing but appear rather to be swelling...Ó
ÒIn the meantime, intellectual fairness is not being served by allowing partisan passion to inflate and to obfuscate the ÔfairnessÕ issue.Ó

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