3rd Way: Beyond Welfare Reform

Weekly Standard, The Party of Sam's Club The theme of this section is:

Republicans have long celebrated entrepreneurship and the idea of self-help. But among the very poor, the obstacles to self-help remain formidable. President Bush recognized this in calling for a more "compassionate conservatism." But the language of compassion strikes the wrong note: It speaks to middle-class empathy, not to the aspirations of poor Americans with the drive to succeed. Republicans need to recast their policies for the poor as a self-help agenda, with less emphasis on warm sentiments and more on offering tools for advancement.

Sentiments I agree with as a whole. Like many Republicans I am happy to support a program that helps people to help themselves rather than a 'social safety net' which too often becomes a hammock where the poor can lounge for generations. As to the particular ideas there are two:

One tool that Republicans might consider promoting is a program of wage subsidies, like that proposed by Columbia University economist Edmund Phelps, which would help less-educated single men make ends meet, thereby making them more desirable marriage partners. Given the right boost, poor young men could become working-class fathers. There's no question that a serious wage subsidy would be expensive--Phelps figures up to $85 billion a year--but the cost would be reduced if it lowered incarceration rates and reduced outlays of other government benefits. Far from being a new entitlement, wage subsidies would be an anti-entitlement, with government helping only those who are already helping themselves. Indeed, such a subsidy could be accompanied by further cuts in benefits to those who are fit to work and don't--thus increasing the incentives for holding down a job and raising a family, and leaving shirkers at the mercy of family and friends, or private charity.

And

the GOP needs to find a way to split the difference between the anti-immigration hawks and the advocates of open borders--by predicating any earned legalization program on increased spending for border control and serious sanctions for employers who hire undocumented workers. Would such measures put an end to illegal immigration? Of course not. But they would do something to slow it, and more important, seal a fissure that's opening within the party.

I am unfamiliar with Edmund Phelps proposal, this paper seems to address the basic concepts. The idea here is interesting. One problem that I have observed with many of our social programs as they currently exist is that they are an all or nothing thing. Once your income reaches a certain level, all benefits disappear, often making getting a job or a pay raise economically a bad move. This is definitely not where we want to be and a wage subsidy might help to counter balance that effect. I remain a bit nervous about the concept though, I am not sure that their wouldn't be negative macro-economic effects to such a plan. That being said, the idea is certainly worth exploring. As for the idea of amnesty coupled with greater border enforcement and sanctions on employers of illegal immigrants I think that is exactly the right approach. I also agree that it needs to be done all at the same time.