The Circuit Court as they go up to the supreme court. The area that is most likely to percolate up is not another pregnancy case then this issue of coverage theres been either makes decisions at the District Court level, not a lot of the Appellate Court ruling but they have started to bring more litigation just last week they filed the first two cases alleging that the discrimination so theres a lot of activity in that area and that a couple bad rulings on the issue of liability for harassment and just to show i think there are a lot of decisions being made under the new standard that are kind of all over the place. And so thats not the only thing that generally its when theres a lot of disagreement among the circuit. Thank you, joann, for writing this book. Plus the [applause] remember to buy multiple books. You can always find a friend that might want one. Thank you. [inaudible conversations] [inaudible conversations] good afternoon and welcome to the auditorium at the Cato Institute. Appreciate you coming out today. This is a really important topic. I have the book for him here for the human cost of welfare by phil harvey and lisa conyers. For those of you following us online you can follow on twitter 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 antipoverty programs. Federal, state and local governments spent an additional 300 billion on those and other programs. That means 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. What have we really accomplished over the period of time . If you use the Census Bureau official poverty numbers, the rates have barely budged. And even if you use th sort of alternative measures which are more accurate and taking to account the taxation and other things, you find that progress against poverty really stalled out somewhere in the 1970s and its pretty flatter ever since. We are spending more getting fewer and fewer results that as bad as that is for taxpayers into the fiscal Balance Sheet of the u. S. Government, the problem is that its bad for the People Living in poverty because not only are we spending money and not helping them in many cases we may be making their situation worse or at least thats the case argued by phil and lisa in their book. Of the people in poverty and welfare tell their own stories. So we will have some conversation and get you involved as well. It raises awareness about liberty and freedom in the United States and is the author of a number of other books including what every child want to cover social marketing is revolutionizing the contraceptive use around the world into government, with the government is doing that you dont know about. On the case lisa conyers is the director of the studies for the Liberty Project and she works on topics like welfare policy, inequality and Civil Liberties it has a bachelors degree from George Mason University from the university of maryland and is a consultant and ghost writer work on policy issues. Its a terrific book we will be signing later on we will start with phil harvey. [applause] thank you for being here what started out to be a rainy day which is good and thanks to the Cato Institute for making it possible and a special thanks to michael tanner. Hes written, studied, lectured on subjects relating to welfare and poverty in the United States and his work has greatly informed our book and we are especially grateful to him for that. We will talk a little bit 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 workforce participation and the United States and the extent to which people on welfare feel trapped in many cases and are trapped in a cycle of welfare and poverty and independence and we will discuss briefly the benefits that is one of the principal reasons for that feeling and that sensation of entrapment that so many lisa interviewed. First lets take a quick look and go ahead and take a look at the relationship between welfare spending and defense spending it seems to me given the fact that america spends almost as much as the rest of the world on defense the fact that welfare expenditures are overtaking have often overtaken already and are destined to overtake the defense spending even more as the years go by means that we have come a very long way indeed. It is now a larger obligation then defend. The next slide shows the inverse correlation between the increases in welfare expenditures and this is a particularly steep increase. Make the point and the re the re is the workforce participation that is the percentage of adult americans that are either working or looking for work. This doesnt prove causation but we think that the correlation between the two items is not entirely coincidental. As mike mentioned the welfare spending is now 700 billion a year. And our feeling after doing the research and doing over 100 interviews with welfare beneficiaries is that the cost to us as taxpayers while its very high isnt as bad as the cost being paid by the beneficiaries of this program and i will explain why we feel that way. Two principal reasons for this sense of being trapped in poverty which people hate, of being dependent on the government which people hate, two of the main reasons are the benefits cliff and the culture of the welfare system itself. The benefits cliff is that point as precedent by people receiving welfare payments and other benefits as the point with which they earn too much money they are going to lose their benefits perhaps unpredictably and perhaps suddenly. The rules are there but they are very complicated and hard to figure out. One woman that was interviewed including her caseworker said no, no. You are earning a little money now we have to cut your benefits. That woman was afraid to earn any money at all. Exactly the opposite of what i think people in poverty want to do themselves in exactly the opposite of what we would like for them to be able to do. I should interject that this cycle of poverty and dependency is not true of all welfare beneficiaries. The safety net for some people works the way that its supposed to. You lose a job, you go on food stamps for three, four, five months and then you go off. Thats part, that aspect of the Safety Networks the way that its supposed to. I dont think we want to imply that welfare is a trap for everyone for a significant number. It is not. But we now see more and more people are up for three, four, five or six years and that is the population we are concerned about in the population that is frankly miserable. But all of us want to be able to say i did that. I raised a family. I supported my family. I got my kids into college and played the saxophone. But we all need that earned accomplishment to make that worthwhile. That is exactly the element that is missing to depend heavily on welfare. In one of my recent news expressed end to read because it illustrates to end on a positive side. This is a woman from decatur illinois. I remember like it was just today. 177. But it was mine i take it home to show it to the kids to make me feel good inside. Diapers tollways shoes or clothes and they need me to provide for them and gives me pride to do that. Of that encapsulates the best human part of this dilemma. As the lady suggest, most of the time but the air in the accomplishment is a job for herb most people is paid working and though welfare system is conspicuously bad and getting people out of welfare and into work. A man named angel been on welfare many, many years and was just a greek about this back and says if you go to the Welfare Office they should post jobs and are available in this community. But they dont is says need help with food stamps . Medicaid assistance . Nothing about jobs. And that is the other aspect of this form of entrapment because the whole system including recruiting government workers to sponsor being donates for seniors to get them to sign up for food stamps. There has been some push back recently i am glad to see that recruiting is taking the business a little too far but the psychology is more welfare and nothing about jobs and work. The only program that has jobtraining and job placement is the of program the replaced aid to dependent families and children in 1996 and that has become very, very small. Only two 3 of the total welfare package. So they have overtaken it. There is one program in the system one big program the earned income tax credit that does require that benefit and it shows the way to greatly improve the system we should be able to come up with ways to make the situation better. Banks. [applause] first of all, banks for coming out today. And also the Cato Institute. I will talk briefly about the philosophical underpinnings of the book. And then to speak the methodology and then we will open to questions. Because basically the philosophy is to have the right with the pursuit of happiness but if they have the right to pursue happiness what does that mean . Well and happy or not . So that is a question you want to answer with this book. So as far as happy discos we have the a. D. What we do for a living to solve actualize with that earned success Arthur Brooks talks about. And they all talk about happiness like what do we need . If i were to ask you are you an artist . Teacher . Writer or a policy analyst . That is what were doing with our lives. And if we agree it is how we earn our way then what does that system will like a those parameters . So that is the underlying philosophy there are plenty of charts for the policy wonks also a deeply philosophical thought. What we found out is to put people in that position that it is risky to go to work. So it is strict and hard to deal with. So when you hear that people are working the problem is they are told they can work a few hours a week gore a month. A lot of people were tripped up over the rules. But then they left them in a position so though whole psychology the value of the programs becomes greater. So for example, the director of health and Human Services and did an example of a woman in this position and what it would look like. And then to live in the suburbs getting cash, food stamps, additional food, housing, off shift and off year after and close to 59,000 per year to replace those benefit so somebody wants to go to work with it doesnt cover that valued the make our rational decision based on the incentives to not work. And that is scary maybe weve been given short term that is okay they are getting support but we are telling them not to work also with the disability system you are told not to go to work for perot so to take those that are disabled so that is the underlying philosophy of the book. In the welfare systems get in the way of that. But briefly i will tell you i did a lot of policy analysis to wanted to do what that was a little different. And how they play out in real life. So i traveled all over the country with a specific request in what they are living on. So then we took those stories for policy analysis. In thinking that is in the contribution. And were delighted to do it. I will open for questions. [applause] one of the really bad things that are actually in the system. So i incurious what you learned about why people are pour. Well get the big debate academically right now. To be based on racism and sexism and then to say it is bad behavior. That they have done bad things and their allies made mistakes and made those decisions and that is why there pour. The airport because they dont have any money. But it is a very complicated subject sir cbs saw people who made that decision where nobody would hire them or they have addiction in issues they cannot hold the job. I dont think there is anyone that with the travels made it interesting because there was a lot of jobs lost during that time i was traveling and people said you didnt talk about this but there is no jobs available. What of my supposed to do . But the vast majority of the people that i interviewed would much rather be working for cry heard over and over i would much rather be doing work. And i expect that. I met people that were really trying hard. And in the war on drugs has certainly contributed. Particularly with black men to spend time in jail. You clearly find it harder with the legal work as a result of that. That is another cycle of poverty in incarceration that has added to the poverty cycle in the United States. That is pretty and deniable. Also to make a strong case talk about the marginal tax rate when they earn the money they lose the benefits very quickly in the fact that discourages work with the work immerses welfare trade off and there is also the ohio study that confirmed or rework coming down on that. What would you recommend as an alternative . Some folks of the left said therefore we have to raise wages of the people said we have to cut benefits back down to well lowerlevel what do you recommend as an answer . Baking added is an important part of that it is almost a warrior odd work. That is insane. We should be helping people get out of the system in into paid employment. I did mention that he itc that has the effect to stop wages it is a cumbersome system that requires filing income tax return that is basically designed to refund to low income people in the federal incometax that had been withheld from their wages but now it chops that amount considerably more than has ever been withheld. But it is the right idea because it makes work pay and has contributed substantially out of welfare and into work to take a job that they pay sevener 8 an hour did you get the e atc benefit without cumbersome process that is the right way to go about it so with that plethora of benefits of housing and food is very patronizing to the extent we can give people money to make their own decisions about their own lives to set their own priorities that is also a move in the right direction to subsidize wages is one way to do that. Some states are coming down with the prohibition of buying seafood with food stamps or limit people at 25 a day with from the cash machine. Do you see this approach to be effective the especially the way they have to live. Thats dumb. [laughter] i guess i would agree that a case and make good decisions then they will they dont feel lot of patronizing to do that. And it doesnt seem to be working very well. I know you describe yourself in the booktv opened into new the idea to replace the current pile but one of the big problems is treated as steady here but we cannot make the numbers work. Rand there are two kinds that we need to distinguish in the system that was called in dash incometax that topped up peoples wages that turned out to be a work killer for the simple reason that the hippie were making 9,000 and establish level was 12,000 of the government gives you 3,000 bin you have no incentive to make that 3,000 yourself. Is straight cash benefits the purest form is the Charles Murray plan and the book can our views to give every american ted thousand dollars per year in and nothing else. This is affordable if you dont give it to the truly wealthy. If you give ted thousand dollars a year to millionaires and it does cost too much. And i Avery Michael has written about this in the experiments to make their own decisions. Is to set up soon interesting hypothetical three or four of you want to get together with a shack on the beach spending the rest of your life surfy you can do that. Nobody will tell you how to spend the money. There is no incentive to work or disincentives are for children or in that respect it is neutral. My reservation about that about the power of the relationship between work he and happiness in doing the book and though work there is no guiding him to tell them generally not as happy as people as are but we should test that. But it did show the negative income tax because it did have that discouraging effect and then to go to 5,000 taxfree but to still have problems of the marginal tax rate that is 4 trillion that is truly affordable to make the numbers work. Those approaches that are talked about out there to consolidate the programs with the block grant paul ryan was to go with a small number of programs even though there hasnt been said details in terms of the block grant in this theater the states had to be to continue to qualify. Is that an approach to it be in favor of . What did you do here at that meeting in South Carolina . Was on the Advisory Council for paul ryan with the six of the republican president ial candidates to talk about poverty for half a day. It was cool there really had some energy in the room unfortunately there no longer in the race in nondemocratic side they were invited but chose not to attend. With terms of block grants to the states it was supposed to be welfare to work to be given encouragement in a lot of those programs were triggered over for enforcement in then lo and behold looking at those welfare programs you can find with tickets out to iowa for washington in they adjust accordingly. I do have concerns about that but to giving states more control. So when they talk about it they just the programs. If they have more freedom to do that maybe they would do a better but unfortunately they tended to loosen their requirements instead of tighten them. One of the good things is questions from the audience. But before i will i do ill give you a chance to defend yourself which is the criticism of your book that a certain amount of a victim blaming that he said chile you take a poor person living in the innercity with terrible schooling with that criminaljustice system with the war on drugs no jobs in their neighborhood and then to the area where freddie grey was killed in baltimore. No supermarkets. Though employment opportunities. Pull yourself up by your bootstraps. Is that a fair charge to do that . Our e say they are being badly by doing that . And then we have a bunch of people in the audience into said that was an issue. They would rather be working. In bed to have those jobs available. But when i traveled around