who need it. you are going to see much, much greater waste. >> i just want to echo others and thank you for what seems to be a an extraordinarily important work. >> thank you so much. >> you can pass on this if you want. when the governors calculate that they can play these games, i think they are calculating that if what they are doing becomes public, the citizens in their state are not going to vote them out. i think it speaks horribly about our culture that our country at this point in time and i wonder if you have any comments on that? >> in part i do hope awareness matters as we become more aware of these practices that we will be outrage to the point where we hold our elected officials accountable to do what's right and to use money intended to

help the vulnerable but unfortunately too often the most vulnerable among us don't have aloud voice in the political process. i think we are all responsible for that, to help increase that choices we have become aware and help those individuals who are more vulnerable to us to become more and gauge in the process to work together. notice sounds like a kumbaya moment but i do think we are all connected and we are all vulnerable and we need to work together. but foster child affected in baltimore affects all of us and i hope we can start to realize that again. >> you brought all of our attention -- over here. you brought to our attention a lot of the murky practices of different federal organizations and private organizations with a

certain shadowy game that they play in creating revenue. do you believe that regulation or oversight can tackle this issue or has it become such a large problem on the federal level? >> i'm optimistic that we can fix and improve these problems. it's not going to happen overnight but i do very much think we can improve it. sometimes it will require comment sounds like a dirty word in some populations that more regulation but to clarify regulation and clamp down. if you have medicaid funds that are claimed for an older american than that money is intended to help them has a north american. i think that is very present. we just need to make that more clear. the same thing with the practices with foster children. child support is going to make a broader change because there is

a federal and state law. i know that many of the leaders of child support agencies around the country agree with what i'm saying. they realize that so much of what is called child support is owed to the government. this is being collected and it's harming kids and they are said ever do at the federal level to improve the rules with the office of child support abortion and there has been very good progress along those lines at the federal level. the problem then is if you can get the states to act on those opportunities. much of what is happening at the federal level is giving states options that they can take to make improvements so it falls back to us to inform our state leaders about why these changes are helpful and necessary. in maryland as an exam for one of the things maryland could do is and this gets a little complex, but the way in which we collect child support for low

income populations the most we get is through tax intercepts. usually the money, they are sometimes money that goes to the government and some goes to a parent if the child is in foster care for a while and some is owed to the family. usually the family gets their money first. the family first policy. there is a tax intercepts which is the most successful way they go after the money. there is legislation in maryland that simply going to say if this money is collected let's pay the kids first. pay the kids in the family before the state gets theirs. not saying you have to give away or obligation but to pay the family first and again ahead of the state stood up against that bill and made what were incorrect statement saying they were giving up this money when

it wasn't the case. was just shifting who collects it. i know it gets into too much detail but we need to be aware. we need to be aware of what's occurring and hold folks accountable for doing the right thing. >> first of all went to thank you for the work you are doing. i heard you want to be pm w., shout out. >> thank you. >> i was intrigued by the things that i heard. i was disappointed but not surprised. i have a child that is now an adult that is disabled and the challenges that i went through to get social security for a known disability that he has had since he was very small but very complicated and hard. we hear that states are going through nothing. i'm a retired federal employee.

the social security administration knows this is happening. the social security administration forward ever reason is colluding with the state to make this happen and i would argue and i'm going to buy your book that i would argue that there is sufficient regulation in place now to hold hold -- to make this practice stopped. this is my question to you. when you are dealing with situations like this, we always want to save the states are doing x or at the states are doing y. the states are doing nothing as individuals are making calculated decisions and until we have individual accountability like the young lady said over here, nothing will change. you do say you are hopeful. i understand the politics of this that these corporations pay

legislators who then make sure that their interests are taking care of but if you follow the money both up and down until the get campaign finance changes for political officials who get the money you cannot stop the corporate influence on these and this is just for the low-hanging fruit. what are your comments to the political aspects and the companies actually controlling the politicians by money? >> of course i agree with you when you say are used the phrase this day. the state is made up of people and the response ability lies with our state leaders who are aware of that these practices are occurring and sometimes they inherit them and continue from prior administrations though that doesn't make it okay. ..

officials know that we know and try to help stop those practices but the one particular process that you mentioned how the agencies are taking resources from foster children, there doesn't have to be a legislative change. it could be we could very much fix it from the legislation but the agency could do it right now or the state could do the right thing right now so i'm hoping people become aware of what has to happen. the social security

administration on the panel ju july 12 with elected officials from congress and folks that have been former commissioners in the social security administration. but it is an uphill battle. >> i want to echo everyone else's sentiment and thank you for being here. my question is the motivation a lot of the states are using whiskeys practices and strategies. there is one based on the state of maryland. annapolis definitely has an appetite for this particularly with governor o'malley with income tax increases and county

governments increasing property taxes. so in the states that are fiscally more prosperous in a sense and have the means to raise revenue is in that issue one of the revenue shortage in trying to get these funds but more of a fundamental issue in the orality, priority, and basically a moral issue some people just don't matter. and in addition to that, there are corporations benefiting from the practices. practices. so, in that sense it might be just a system in itself that is broken. >> th >> the priorities are incredibly important and want a state that is faced by the services that

need a state assistance to get cut and i think that's very unfortunate because it hurts all of us. if you look at the history and taxation to raise revenue for the general taxation is low for them it's been in the past and we are in expanding, growing, complicated society. there are greater and greater needs to be in the government needs funding for the services that we need, so i hope at some point taxes don't become a dirty word anymore. it's one of the most patriotic things we can do.

>> you've thrown a lot of problems at us, and they don't seem to be all of the same clo cloth. conflict of interest problems with the state or private agencies serving as the representative payee at the same time they are supposed to be protecting the interest of the client seems to be a pretty significant problem, but there's an easy fix for that. >> it's whether that comes from the federal government or the state government or the courts. the politics of social welfare is also being addressed by issues around guaranteed income.

we could avoid all of this if we had a check for everybody for a certain amount of money and see how they can sink or swim on their own without entitlement. the example of the solution i think that is one of the elements in the room when problems like this do get raised. the privatization issue you've identified by and just wondering how. maybe in terms of the democratization of the human service planning not to look like at the community level and

whether we should be tackling them one-on-one. just in the comments but you enlisted people with disabilities have some special advantages over the general welfare. how do you bring the issue so you are not just mugging the waters further or catering to the strongest interest groups. there's the more humanistic society but apparently this is the other social welfare societies where we could count on the government to be more protective of the public interest.

>> you are right talking about the multi-volume set. the scope you are initiating and that disagreement among us is a good thing. we need to start a dialogue. there's a phrase i'm probably going to butcher this. it's on the lines of if you had an hour to fix the problem trying to understand the problem because too often we are quick to want to rush forward before we stop and look at what's happening. so, most is looking at the problem. one set of problems. and i hope that does spur discussion and how we can start solving. i want to continue to do that but these are the things i'm

thinking about and it's a hard discussion. i do think some of it should be simple. again when we disagree how to structure programs for the vulnerable populations, we ought to be able to agree money that is structured and put forth should be used as intended regardless of the politics, we should be able to agree. but thanthank you to the questi. it's great to see you. >> there's so mucthere is so mue outraged about in the book. i'm not a lawyer as you know, but how can it be legal? there are so many broad issues on this narrow issue o ratio ofe

states becoming representative pes for foster children or children in foster care and not even telling them take all the money. in your book you mentioned an example of a child that should have inherited the representative payee refused to pay. >> about a 220-dollar mortgage with habitat for humanity home. >> so that could have been for the child that was lost for that reason. >> how can this be legal, and is there a litigation strategy that's possible that finds the

right chord to take this to? spinnaker love that question and i don't think it's legally and i do think there are litigation strategies. i've been involved in some pretty substantial litigation. maryland represents what i described earlier and then also involved in the cocounsel for the bureau and in that case we had some success where we did find the court of appeals which was the top court in maryland that found the foster care agency was violating foster children's constitutional due process rights failing to provide notice. but at least they found this was a violation of the constitutional process and now the notice that is provided for the attorneys that received the notice they can challenge the

state when the state seems to become a payee and they can put forth a family member organization could hav you coula child advocacy organization serving as a payee in a voluntary capacity. but i agree i think that it is illegal and there are many other layers of this argument but it's a fiduciary obligation and i hope more lawyers across the country during the claim. most people don't know what's happening. when the dew would know unfortunately part of the problem is many of them don't have lawyers they have advocates in the guardian ad litem's. the caseloads take an enormous amount of time.

great question and i do hope that we both try to improve district policy advocacy and legislatiothispart of policy add legislation and litigation to bring the case forward. >> one more question. >> i am unable to remember when i seen such a combination of brilliance, compassion, humility for one person it's quite amazing. [applause] i just do what my mom tells me to do. i appreciate that comment.

i try to work hard and i care about things. i can't not see those issues that i've encountered. it's the vulnerable populations dealing with these issues. when i'd seen the kids to go through the circumstances they go through and come out and find a level of success and happiness and care about others, that's heroic. i'm just trying to report the facts but i appreciate the comments very much. >> thank you one more time for coming out. [applause]

up at the front of the bookstore we will be here

or the facebook page, facebook.com/booktv. good afternoon and welcome to the auditorium at the cato institute. appreciate you coming out today. this is a really important topic. i have a book for him here for the human cost of welfare by phil harvey and lisa conyers. for those of us following

online, you can follow along at cato events or the human cost of welfare. the u.s. federal government last year spent roughly $688 billion to fund more than 100 anti-poverty programs. the state and local governments rather spend an additional $300 billion on those and other programs. the government is spending close to a trillion dollars every year fighting poverty. if you want to go back to 1965 when lyndon johnson declared war on poverty, we spent some 22 or $23 trillion fighting poverty.

but what if we really accomplished over the period of time. the poverty rates have barely bunchebudged and even if you use alternative policy measures which are more accurate and take into account defined the progresprogress really stalls ot somewhere in the 1970s. we are getting fewer and fewer graceful. as bad as that is for taxpayers and the fiscal balance sheet of the u.s. government. not only are we spending money and helping them but in many

cases the may be making the situation worse. and at least that is the case that is argued by phil and lisa in their book. to talk about the studies they've done and the people they talk to the fantastic opportunity given the actual voice to people living in poverty and people on welfare to tell their own stories. they will have a conversation and get you involved as well. phil harvey is the chief sponsor of the liberty project which is an advocacy group that raises awareness about liberty and freedom in the united states. as with the government is doing that you don't know about. he writes for the huffingtonpost another publication in the

profiles that have appeared in the chronicle and philanthropy and mother jones. we are at a cross-section there in the publications. the chairman of the board and lisa conyers, the director of policy studies for the liberty project she works on topics like welfare policy, inequality and civil liberties. she has a bachelor's degree from george mason university and a masters in management from maryland and as a consultant and ghost writer that focuses on economic and public policy issues. this is a terrific book and there will be a signing later on. if you haven't bought one already i urge you to do it. in the meantime let's hear from the offer authors and start witl harvey. [applause] thank you for coming out and being here for what started to

be a rainy day. thanks to the cato institute for arranging this and making it possible and a special thanks to michael who has written, studied, lectured on subjects relating to the welfare poverty in the united states and his work has greatly informed or both. we are especially grateful to him for that. we will talk today about the basic issues outlined in our book, issues related to welfare and its problems. we will talk about the welfare state and the extent to which the united states is becoming one. the correlation between the rise

in welfare and the drop in the work force participation in the united states, the extent to which people on welfare feel trapped and in many cases are trapped in a cycle of welfare. it's one of the principal reasons for that feeling and sensation of entrapment that so many interviewed express. first, let's take a quick look at the relationship between welfare spending and defense spending in the united states. it seems to me given the fact america spends almost as much as the rest of the world put together on defense, the fact

that the welfare expenditures are now overtaking have with that are often overtaken already and are destined to overtake the defense spending even more as the years go by and the future. we have come a long way indeed to becoming a welfare state because it is now a larger obligation then defense. the next slide shows the inverse correlation between increases in welfare expenditures. this is a particularly steep increase. the food stamp program is

skyrocketed more than some of the others that makes the point that are in line as a workforce participation that is the percentage of adult americans that are either working or looking for work. this doesn't prove causation but we think that the correlation between the items is not entirely coincidental. as mike mentioned the spending of the federal leveat the feders $700 billion a year and our feeling after doing the research for a hundred interviews with welfare beneficiaries that the cost to us as taxpayers while

it's very high is not as bad as the cost being paid by beneficiaries. in a sense of bein the sense ofn poverty which people hate about being dependent on the government which people hate. the benefits and the culture of the welfare system itself. the people preceding welfare payments the point at which they earn too much money they are going to lose their benefits perhaps unpredictably and perhaps suddenly. they are very complicated and hard to figure out.

we have to cut the benefits. it's exactly the opposite of what people in poverty want to do and the opposite of what he would like for them to be able to do. this cycle of poverty and dependency is not true of all welfare beneficiaries. the safety net for some people works the way that it's supposed to. you lose a job, you go on food stamps, get another job and go off. the aspect we don't want to

imply that that is a trapped for everyone. we see more and more people for three, five, six years and that is the population that we are particularly concerned about and the population that is frankly miserable. people that are concerned with welfare issues of the dangers involved and we are seeing some of the dangers taking place today. one of the most articulate spokespersons on the subject was president franklin roosevelt who referred to the relief as it was called then as a subtle narcot narcotic. it's a very insightful description undermining dignity

and self-respect we must preserve self-respect. he understood the dangers and was very concerned about them. what is the financial dependence thabut have these negative effes it's because all of us want to accomplish things in life. all of us want to be able to say i did that. i raised it family come it is expressed in many different ways. but we all need earned accomplishment to make our lives worthwhile and that is exactly the element that is missing in

the lives of those who depend heavily on welfare. one of the women expressed this fact extremely well and i just want to read her quote. it's on the side of working its way out. i remember the first paycheck like it was yesterday $177, not much, right, but it was mine and i took it home. we needed diapers, shoes, clothes and need me to provide for them and it gives me a lot of pride to do that.

the answer to the need and the accomplishment is a job not for everybody but for most people it is paid work and the system, the welfare system is conspicuously bad at getting people out of welfare and into work. one of the people we encountered was on welfare for many years and he was just angry about this fact. he said you go to the welfare office they should post jobs. they should on the bulletin board and be available in this community. they don't. you go in on a bulletin board bd and says you need help with food

stamps, you need medicaid assistance, nothing about jobs. that is the other aspect of this form of entrapment. the whole system including recruiting government workers and sponsoring being overnights for seniors to come in and sign up for food stamps. the psychology of the system is more welfare programs and nothing about jobs. the only program that has a job training and job placement component is tnf that replaced back in 1996 and the program has

become very, very small it is only two or 3% of the total welfare package now. so thesfor these other programse overtaken it and they do not have work components. there is one program in the system, the earned income tax credit which does require work and earnings in order to enjoy that benefit. we think that shows the way to greatly improve the system and using that as a model we may be able to come up with ways of making the situation a whole lot better. thanks. [applause]

i just have one slide. pretty simple. first of all i just want to thank everybody for coming out today. it's a great way to start the week and i want to than thank ml again for having us and the cato institute. i'm delighted to be here, and i'm going to talk briefly about one of the philosophical underpinnings in the book because it is based on a pretty philosophical idea. then i will speak briefly about the methodology of how we did about and how i did my travels and open up to questions from michael and from you guys. the reason i picked this slide is basically the philosophy behind the book is we have the right to life, liberty and the pursuit of happiness but what we are interested in is the pursuit of happiness. the idea is if we have the right

to pursue happiness, what does that mean, what does it mean to be happy and what does it take for all of us to be happy. and then once we decide on that, what does the welfare system have to do with that, will it help us to be happy or amazed at helping the people that are on it lead satisfying lives and pursue happiness or not, so that is the question we wanted to answer in this book. so as far as happiness goes, we are not the first people to come up with the idea that what we do for a living is essential human happiness. what we do to solve actual lives, to get at that earned success the book talks about. and by scholars have all talked about happiness and the whole look at what do we need to come and we all know if i were to ask you argue in art history teacher or a policy analyst, that's how

we identify. if we agree happiness is tied up with what we do for living and how wa living andhow we earn ous the welfare system under those parameters? does it help people be happy or not, so that is basically the underlining philosophy behind this book. there's plenty of charts but that's also a deeply philosophical thought so what we found out when we started looking at the program if they actually put people into positioin theposition where wort rather than a reward. the rules are strict and hard to deal with so when you hear about for example a lot of people on welfare are working, what about the working poor, the problem is

they are being told they can work a few hours a week or a month. they can earn so much that if they go over that, you are off. and i met a lot of people that tripped up over the rules. a gift from an aunt or somebody dies in the family leaving them money. suddenly through all these programs have left them in a position where they had to get back on. it took several months. so the whole psychology of work changes when you are on these programs. the value of the programs become greater than a job yo the job yd get. so, for example phil talked a little bit about the welfare. he decided actually to do an example of a woman that would be in this position and what it would look like. so he took another with two kids living in the suburbs, she would

be getting cash assistance and food stamps, she would be getting wic which is additional food for her and her infant, she would up getting housing and would be on medicaid. adding up the benefits he found hhe would have to earn close to $59,000 a year to replace the benefits. so if somebody wants to go to work and they were offered a job and it's not going to cover those benefits all of a sudden they make a rational decision based on the incentive to not work. maybe in the short-term we think that's okay we are helping them out and they are getting support so that's good. we don't want them to not get support thagivesupport what we m not to go to work. anybody familiar with disability, you know that you are told not to go to work if you get on disability because you have a good chance of losing your benefits if so that's

basically the underlining philosophy behind the pic that we believe we do have the right to pursue happiness and it requires work and welfare systems i get in the way of tha. so, in a nutshell if you've got that you've got the whole premise of the book. briefly, i'm going to tell you as far as my role in the book the study of public policy analyses together but we wanted to do a book different than that which comes out of dc which is heavy on policy analysis but is leading you to assume how do these policies actually play out for the people that are affected. so, i traveled all over the country, the northeast, south, southwest, the pacific northwest, california, i went over the place. i went into soup kitchens and homeless shelters and bus stops, wherever i could find people

willing to talk to me. i asked if they would be willing to talk to somebody writing about welfare whether life is like and surprisingly people were perfectly happy to talk with me and show me the map and what they were doing and what they were living on and how many dollars they got every month. so then we took all the stories and we added them to the policy analysis. as for the buck isn't just a dry food stamps cost this much and this is how it works out and it then goes on with stories from the road as we think of as a unique contribution to this whole field of policy research. and we were delighted to do it. i think i'm done. i'm going to open up questions. i think i've done what i was supposed to do. >> ' >> one of the fascinating things about the book is [inaudible]

these are called lavaliers. >> essentially, you gave a voice to those in the system. we tend to think so i'm curious in terms of this, what you learned about why people are poor. i mean, essentially if you look at the big debate academically at one time it talks about the poverty how it is structural and

based on racism and sexism. so things beyond the individual's control. then there's another side that says its bad behavior on the part of the poor. they have done bad things and made a lot of mistakes and made bad decisions. that's why they are poor. you actually interacted with the poor. what did you see in those regards? >> i think people are poor because they don't have any money. but i think that, you know, it is a very complicated subject and it's everything from the decision making. certainly i saw people that made that decision and ended up in in the position tha position of tho them or they had, you know, addiction issues where they can put a child. there's all kinds of reasons why people are poor. so i don't think there is any one. the reason i did my travels during the recession may be kind of interesting.

there's no jobs available. so what am i supposed to do, that made it a little bit more complicated. so i guess the answer is for many reasons, but i will say that the majority of the people i interviewed with much rather be working. i heard over and over again i would much rather be doing work and it didn't matter what kind of work, any kind of work than having to be on these programs. some people say there's people out there that don't want to work. i may have expected it to feel that way but i didn't meet people like that. the war on drugs has certainly contributed. the fact that so many young men,

particularly young black men are spending so much time in jail clearly find it harder to get legal work as a result of and that has added another cycle of poverty and incarceration. but it is certainly added to the poverty cycle in the united states. >> that's pretty undeniable. the other thing you make such a strong case for in the book you taltalk that the marginal tax re and the fact that people would be earn a certain amount of money, they start losing the benefits and taxes on that income very quickly. the fact that discourages work many people recall in a study called the the pennsylvania

study is also sort of confirms where we were coming down and you're both really build a home network. what would you recommend as an alternative to that because when we brought up in the study some folks on the left side therefore we have to raise wages or we need more guaranteed benefits of some kind. other people said that we need to cut the welfare benefits back down to a lower level and some talk about the earned income tax credit. what do you recommend as an answer? >> certainly, making welfare point towards work is an important part of that. the present system is anti-work. it's almost a war on work and

it's insane. at the least we ought to be helping people get out of the system and into the paid employment. i did mention the eitc. it has the effect of popping up wages. and that i think it's very good. it's a cumbersome system that requires filing an income tax return i was basically designed originally to refund to low income people any federal income tax that had been withheld from the wages but it now .-full-stop those amounts by considerably more than has ever been withheld. it's the right idea. it makes them pay and is contributed very substantially to getting people out of welfare and into work and to take a job that maybe seven or $8 per hour.

it is in this same process as earning 12 or $14 an hour and i think that's the right way to go about it. i certainly agree with you that this plethora of benefits housing, food, etc. is very patronizing and to the extent we can give people money. it's to set their own lives and priorities that is also a move in the right direction and is subsidizing wages is one way of doing that. >> we have seen some states, kansas and missouri and others come down with the drug testing recipients and the prohibition on buying seafood with food stamps or limiting people to $25 a day taking up the cash machine

at a high speed and so on. do you see this sort of punitive approach as being ineffective or counterproductive in a way that people actually have to live? >> i guess i would agree that people are. they don't need a lot of work to do that in the places it's been tried. open to the guaranteed income to replace the current programs that we have.

we couldn't find a way to make the numbers work, but is that something that you are open to? >> there are two kinds. and i think we need to distinguish the system which was then called negative income tax. it topped up people's wages and it turned out to be a work killer. for the very simple reason that if you were making the $9,000 the established levels $12,000 the government gives you $3,000. under those circumstances, to make that 3,000 yourself you will end up with the same amount of money anyway. the straight cash benefits are the pure form as the plan to

give every adult in america $10,000 a year and nothing else. this is affordable if you don't get igive it to the truly wealtd i think that distinction would have to be made because if you are giving $10,000 to millionaires and everybody in between it does cost too much. but we haven't really tested this at all and i agree with you, michael has written a good deal about this and some experiments on just giving people money and letting them make their own decisions murray sets up some interesting hypotheticals. if you run a shack by the beach and spend the rest of your life surfing you can do that.

there is no incentives to work and no disincentives for work. my reservation about that having found the power of the relationship between work and happiness in doing this book. there is no guiding hand telling them not to work for the people that are not working generally are as happy as people that are so i do have that concern but i think we should test it. >> the study in the 1970s did show with thes these were the ne that had a discouraging effect on work because the marginal tax

rate problem. i know that he would then start taxing above that would still be some sort of problems in the tax rate. and if you try to get the $10,000 that is unaffordable for making the numbers work it seems to overcome. what are some of the other approach is being talked about and things on the republican side to consolidate the programs and the block grant in the state pulverizing wants to do a small number of programs and marco rubio i think suggested that we haven't spelled out everything giving them to the states in terms of the block grant and then having some sort of standards the state had to meet to continue to qualify. >> what did you hear at that meeting in south carolina?