Ford Foundation Panel to Urge Major Changes in Social Welfare System

A prestigious Ford Foundation panel, painting a disturbing picture of problems facing the nation, will call for sweeping changes in the social welfare system from prenatal through nursing home care in a report to be made public today in Washington.

The study group of 12 leaders in education, law, business and the labor movement said broad changes are essential to battle “the divisions in American society (which) have increased in ways that threaten quality of life, peace of mind and the economic future.”

The panel said its specific recommendations constitute “a fundamental restructuring of social policy in America.”

End to Partisanship Sought

“In 20 years, social welfare policy in America has passed from soaring confidence to doubt and retrenchment,” the panel concluded. “There also has been a lot of partisan bickering and ideological warfare. The time has come to rise above this partisanship and to tackle our problems head-on.” The three-year study concluded that welfare recipients who can work should receive benefits for a limited time, but that those who have exhausted their benefits and still cannot find employment should be given a public sector job. “This approach would dramatically change today’s welfare system, which is relatively cheap but open-ended,” the report said.

In other major recommendations, the panel advocated providing sufficient federal funds so all pregnant women have access to prenatal and well-baby clinics, ultimately expanding Head Start so that all poor 3- and 4-year-olds who are not in the program can participate, and making drug and alcohol treatment on demand a reality for all people who need it.

The panel also called for a broad menu of programs designed to keep youngsters in school and to reduce teen-age pregnancy, all coordinated by an inter-agency youth council established in each state and composed of senior officials from educational, job training and human service agencies.

The panel recommended giving the unemployed residing in declining labor markets benefits as lump-sum payments so they can move to other areas of the country where jobs may be more plentiful. And it called for restructuring unemployment benefits so more funds are paid the first few weeks. Benefits would decline gradually as people receive job training.

The 102-page report, titled “The Common Good, Social Welfare and the American Future,” was designed to spark a national debate on the status of the network of key social programs at a time of fiscal austerity. After the report is formally introduced at a news conference at the National Press Club in Washington today, it will be sent to every member of Congress, all governors, big-city mayors and key federal officials.

“Social welfare policy in the United States must be fundamentally reformed and modernized,” the study group said. “Economic, demographic and social conditions have changed, but our social policies have not adapted to these changes.

“More than 30 million Americans live in poverty. About one-quarter of young Americans fail to finish high school. Children who are at greatest risk of failure in school are now the fastest-growing segment of the school population and of the future work force,” it said. “The related phenomena of drug abuse and crime create a dangerous environment in urban America as well as a drain on our economy.”

Lack of Health Insurance

Meanwhile, only about one-third of the unemployed receive unemployment insurance benefits at any point. The report estimated that between 31 million and 37 million people lack health insurance coverage and many others are under-insured. In addition, about half of U.S. workers have jobs that do not provide private pensions.

“As Americans live longer, they are more likely to need protection against the costs of long-term care for themselves and their family members; few are currently prepared for this eventuality,” the report said.

“Such problems signal a mounting social deficit that is as troubling as government budget deficits or the deteriorating physical infrastructure of roads and bridges.”

The Ford Foundation study group said bringing the social welfare system in line with the needs of modern Americans will require public and private efforts, spread over a number of years. “Most of all, it will require a realistic new consensus about our responsibilities to each other, now and in the future.”

The panel called for expanding federal nutrition programs, providing child-care subsidies for lower-income families through changes in federal tax laws, requiring employers to offer a basic package of health insurance coverage to all workers or to contribute an amount for each employee to a public fund that would finance coverage for uninsured workers, and improving federal supplemental security income benefits for the elderly poor.

Combination of Plans Urged

The report strongly emphasized a combination of public and private insurance to cover long-term health care for the elderly and called for greater public and private insurance for home care.

The panel estimated that the total government cost of implementing all of its proposals would be an additional $29 billion a year. It proposed financing this increase largely through taxation of Social Security benefits that exceed lifetime contributions, which would yield about $97 billion in federal revenues over the next five years.

Thus, if a worker contributed $100,000 to Social Security during employment years, any benefits in excess of that amount would be reported as taxable income and the resulting taxes would be set aside in a special fund to provide federal assistance to needy people of all ages.

Such a fund, the study group said, “would reinforce the idea that America is one society with a variety of unmet needs, a place where each group has a stake in what happens to all others.”

“The children and workers of today are also the elderly of tomorrow, and elderly Americans have an immense concern for the well-being of their own and the nation’s children and grandchildren,” the panel said. “A fund that gives concrete expression to that idea would help counter the divisive ‘we’ versus ‘they’ mentality in social welfare policy.”

Members of Panel Listed

The chairman of the executive panel was Irving S. Shapiro, former chairman and chief executive officer of E. I du Pont de Nemours & Co. Panel members were Sol Chaikin, president emeritus of the International Ladies Garment Workers Union; James R. Ellis, a former member of the board of the Ford Foundation and a Seattle lawyer; Robert F. Erburu, chairman and chief executive officer of Times Mirror Co.; John H. Filer, former chairman and chief executive officer of Aetna Life & Casualty Co., and Hanna H. Gray, president of the University of Chicago.

Also, Albert O. Hirshman, professor of social sciences at Princeton University; Vernon E. Jordan Jr., former president of the National Urban League; Eleanor Holmes Norton, former commissioner of the federal Equal Employment Opportunity Commission; Henry B. Schacht, chairman and chief executive officer of the Cummins Engine Co.; Mitchell Sviridoff, former Ford Foundation executive and director of the Community Development Research Center in New York, and Charles V. Hamilton, professor of government at Columbia University.