Transcript of Proceedings
Compassionate Welfare Reform: Empowering Charities and Private Citizens
IMPLEMENTATION OF COMPASSIONATE WELFARE REFORM:
ISSUES AND ANSWERS
MR. FUND: Could we please be seated?
I'm John Fund. I'm on the editorial board of the Wall Street Journal and I would like to welcome you here. This panel will be discussing some of the more practical aspects of how the charitable tax credit would work.
I believe that we are here at the birth of an idea whose time is coming. And I believe that we are on the threshold of an entirely new approach to helping those in need, as Arianna mentioned. My own personal experience with this goes back to my college days when I was a counselor for the Comprehensive Employment and Training Act, which was the Federal job training program.
While I was a counselor I met a very aged Catholic priest named Lou Wetzel who reminded me that there had been a different approach to helping people at a time when this country was far poorer in resources but far richer in spirit. And he reminded me of something which is very important. The victors always rewrite the history books. The people who believed in government takeover of social responsibilities, a government takeover of compassion have rewritten the history books. We have lost the entire history of a different approach to solving these social problems.
There was no golden age of fighting poverty. There was a great deal of distress and hardship in our past. But Fr. Wetzel reminded me that at a time when our country was probably one-eighth as rich in resources, we probably were eight times more involved in terms of our communities in helping people.
So, we have to at least learn the lessons from that history. And I believe that the lessons of that was that in order to help people most you need to combine warm hearts with hard heads, compassion must be married with personal responsibility.
Marvin Olasky has rescued this history in his marvelous book, The Tragedy of American Compassion, which I commend to you. He said there, and I think it's something we all should remember, that the major flaw of the modern welfare state is not that it's extravagant with money but that it's stingy with the help that only a person can give: love, time, care and hope. The impersonal government dole, I might add, does nothing to cure the poverty of the soul that mires so many people in self-destructive behavior.
There is clearly a dissatisfaction with our current methods of helping people. I have spoken on this subject before audiences totalling 15,000 people. And I have posed to them a thought experiment. The thought experiment goes like this.
Imagine that suddenly either because you were very successful in business or because you won the lottery or received an inheritance, imagine that each and every one of you suddenly was $100,000 richer. And because you were a compassionate person and wanted to help your fellow men and women, you wanted to tithe 10 percent of that, $10,000 to help those in need.
And I asked my audience this, is there anyone in this room who would use that $10,000 by writing a check to a government welfare program? Out of 15,000 people, I only had one person raise their hand and it turned out that person was hard of hearing.
Something is clearly wrong with an existing system when not one person that I addressed would take additional resources of their own and plow them into the existing programs.
After I asked that question, I asked a second question, which is, how many of you, in your local communities, in your local zip code, as Bob Woodson would have it, how many of you know a social welfare program that is actually helping people better their condition without creating undue dependency? About two-thirds of the people raised their hand.
So, clearly, in those two questions, we have both an analysis of the problem and the prescription. People are completely dissatisfied with existing programs, yet, many know of programs that do work and they probably would contribute some that $10,000 to if they had a greater opportunity to do so.
I believe the welfare bill that just passed a few months ago is only less than half of the job. It is dismantling, in part, part of the 60-year federal welfare structure that we have created. But we all know what's coming, the horror stories about unmet needs, the children at risk, we all know those horror stories are coming. It is incumbent upon all of us who want to see a more effective way of helping people and helping them help themselves, I might add, it is incumbent upon all of us to come up with the second half of the solution, and the charitable tax credit, I believe, is at the center of that.
Now, we've also been told, of course, that money is not everything. And Arianna pointed out the importance of volunteerism. And I really believe that if people become more connected to these programs in their communities that more of them will volunteer their time and their energies, as well as their money.
And there is some evidence for this. The Beacon Hill Institute has conducted a survey of hundreds of nonprofit organizations and by 51 to 12 percent these nonprofit organizations said that people would volunteer more to their organizations if they knew more about their mission.
By 40 percent to 20 percent, they said that people would volunteer more if they made contributions to their organizations through, perhaps, a vehicle like the poverty tax credit.
So, here we have at least the genesis of changing the culture of expectations that Bob Woodson talked about. And just as our federal system that our Founding Fathers bequeathed us meant that the states and localities would create laboratories of democracy to try out these solutions, so too, do I think a charitable tax credit could create laboratories of compassion. Because let's be honest: most welfare spending in the foreseeable future is going to be channeled through the traditional government agencies.
We also know that there are many reformers who work in those government programs who know they are not working, they're not truly effective. By creating a competitive structure, a parallel competitive structure that can challenge them and show them what does work in the communities, we can force the government welfare programs to rethink their mission, to rethink their program, perhaps downsized, perhaps transfer some responsibilities, and, perhaps even, yes, shame them into change.
This panel is going to, of course, address the practical aspects of that and we have some very distinguished people. Leading off will be David Tuerck. David is with the Beacon Hill Institute. David is, I think, one of the people who has been most effective in organizing this program. Prior to joining the Beacon Hill Institute, was and currently is a professor and chairman of the Suffolk University Department of Economics. He holds a doctorate in economics from the University of Virginia, where his dissertation advisor was James Buchanan, the Nobel Laureate who is familiar to many of you.
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