Family Assistance Plan

The Family Assistance Plan (FAP) was a welfare program introduced by President Richard Nixon in August 1969, which aimed to implement a negative income tax for households with working parents. The FAP was influenced by President Lyndon B. Johnson's War on Poverty program that aimed to expand welfare across all American citizens, especially for working-class Americans. Nixon intended for the FAP to replace existing welfare programs such as the Aid to Assist Families with Dependent Children (AFDC) program as a way to attract conservative voters that were beginning to become wary of welfare while maintaining middle-class constituencies. The FAP specifically provided aid assistance to working-class Americans, dividing benefits based on age, the number of children, family income, and eligibility. Initially, the Nixon administration thought the FAP legislation would easily pass through the House of Representatives and the more liberal Senate, as both chambers were controlled by the Democratic Party. In June 1971, the FAP under the bill H.R. 1 during the 92nd Congress, passed in the House of Representatives. However, from December 1971 to June 1972 H.R.1 bill that included the FAP underwent scrutiny in the Senate chamber, particularly by the Senate Finance Committee controlled by the conservative Democrats, while the Republicans were also reluctant on passing the program. Eventually, on October 5 of 1972, a revised version of H.R.1 passed the Senate with a vote of 68-5 that only authorized funding for FAP testing before its implementation. During House-Senate reconciliation, before Nixon signed the bill on October 15, 1972 the entire provision on FAP was dropped. The FAP enjoyed broad support from Americans across different regions. Reception towards the program varied across racial, regional, income, and gender differences. The FAP is best remembered for beginning the rhetoric against the expansion of welfare that was popular during the New Deal. It initiated the support for anti-welfare conservative movements that became mainstream in American political discourse during the Reagan era.

Background

Need for the Family Assistance Program – controversy over the AFDC

When President Nixon took office in 1969, issues pertaining to poverty and welfare in the United States had been at the forefront of many political discussions, largely stemming from prior President Johnson's proclaimed "war on poverty" in 1964. Welfare and social insurance had been a federal responsibility as early as the 1930s, when state-sponsored welfare was replaced with "social security" networks headed by the Federal government which included commonly considered aspects of welfare support such as unemployment benefits, workers compensation, and veterans' payments. The Social Security Act of 1935 dictated welfare as a "layered system" in which five "layers" of income protection – ranging from private insurance, social insurance, and categorical assistance – acted to reduce the threats of poverty. Those that created the bill hoped that the act would create a dynamic that would not only reduce the amount of poverty in the nation, but in doing also reduce the need for social insurance as more and more citizens became able to support themselves free of welfare aid.Lampman, Robert James. 1969. ''Nixon's Family Assistance Plan''. Vol. 57-69;57-69.;. Madison: Institute for Research on Poverty, University of Wisconsin. pp 1-5.

However, by the 1960s, a program that had been created with the Social Security Act of 1935 to support families at risk, the AFDC (Aid to Assist Families with Dependant Children), had only continued to expand. From 1965–1970, the AFDC experienced an expansion of 110 percent, and its rapid growth had become a heated topic of debate for both the Democratic and Republican party as welfare costs for the government increased. By the time Nixon came into presidency, the projected cost of the AFDC was 6 billion dollars annually, straining already tight state and federal budgets. The rapid expansion of this program stemmed largely from the liberalization of its requirements through the 1950s and early 1960s, in which the eligible age for a child to be a dependant to 21, and the eligibility of families whose primary 'breadwinner' had been unemployed for long periods of time. At the time of Nixon's FAP speech in 1969, the primary beneficiaries of the AFDC were families who had undergone a breakup through divorce, desertion, or illegitimacy – which were decisively more common than families needing assistance for unavoidable hardships like the death of a father.

The rising costs and liberalization of the AFDC not only caused congressional backlash but also brought with it racially charged and negative responses by states burdened with increasing numbers of AFDC recipients. Indications within congress and the public began to hint at a perception of rising welfare issues to be a largely minority or immigrant issue. Legislation was passed in Louisiana which declared children born out of wedlock or families cohabiting without an official marriage license to be inadmissible for AFDC benefits. Around 6,000 families were dropped, only 5% of whom were of Caucasian background. In 1961, aggravations revolving the AFDC came to a head in the small town of Newburgh, New York in what popularity became known as the 'Battle of Newburgh'. Facing a sudden spike in welfare applicants due to tough economic conditions during the winter of 1961, City Manager Joseph McDowell Mitchell placed the blame on this rise in welfare costs primarily on immigration into the city. Mitchell proposed changes to the AFDC which included a requirement of proof that the beneficiary was entering Newburgh with a work position, a change to aid divvied out by voucher rather than cash, and denial of aid to those not working or to new children conceived while the family was receiving welfare assistance.

While Newburgh was only a small town of 30,000, the controversial proposals made by Mitchell received national attention, and polls conducted by Gallup showed that up to 74% of the population surveyed agreed with Mitchell that welfare should only be given to immigrants who came with a definite job opportunity and means of work. Further Gallup polls in 1964 found that over 50% of participants believed a 60-day residency should be required before an individual could be able to apply for AFDC welfare. Many also began to attribute the need for welfare as laziness, or a combination of misfortune and laziness. A common idea that began to spring up in discussions was the split between those 'deserving' or 'undeserving' or welfare. Highlighting this split was the notion that those 'undeserving' of welfare assistance were largely not working and instead coasting off of the benefits received. Some believed women were having children precisely to play the system and further the benefits they were receiving from AFDC. Indeed, this cultural divide between the deserving and undeserving would continue to underscore public opinion on welfare not only as the AFDC was debated, but in later moments as well in discussions of Nixon's FAP.

Despite public frustration and debates over adding restrictions to the AFDC to control costs, there was still a large number of the public which considered poverty aid to be a universal, basic right. A 1964 Harris poll found that 68% of participants believed the Federal government had a responsibility to ensure basic human rights and a minimum livable wage to its citizens, reaffirmed by 73% of participants in a later 1969 poll. Poverty and inequality had been raised as an issue by Johnson in 1964, and pressure was continuing to be placed on the Federal government to alleviate rising national poverty rates. Instances of riots and public disgruntlement plaguing the 1960s were connected to a welfare system not adequately supporting the needs of the population.

To many in congress, it was clear that the answer was not to restrict the AFDC, but rather reform it. The AFDC was plagued with numerous inequalities not only among its recipients but between states. In 1968, 26 states did not pass the threshold for welfare support from the AFDC that allowed families to be above the 'poverty-line'. Families in New Jersey could receive up to 332 dollars a month, whereas some families in Mississippi were receiving a comparatively meager 55 dollars a month. The AFDC also overwhelmingly denied access to assistance to families who had an employed head, even if their overall income still placed them below the poverty line. In 1966, this excluded around 12 million families from access to the AFDC. As such, there were fears that the AFDC created instances of dependency for those unable to work, as well as dis-incentivized families on welfare assistance to find work. In 1967, legislation pushed for a work-incentive phase (WIN) to AFDC, which required families currently on the program to participate in job/work training to continue receiving benefits. By early January 1969, the Nixon Administration had installed a committee to study the welfare system and propose changes, culminating in the eventual announcement of the FAP in August 1969. Nixon's plan envisioned a welfare system that ventured not only to fix welfare dependency and rising costs for government, but also aimed to combat rising inequality within the welfare system and afford income assistance as a basic, universal right.

Nixon's political motivations

Motivations to reform welfare and introduce the FAP were not only grounded in moral terms of eradicating poverty in the United States. As documents were opened in the Richard M. Nixon Presidential Library (RNPL), it has become clear that much of the reasoning behind Nixon's proposal of the FAP may have come from an attempt to appease the worries of a predominately white lower and middle working class. Nixon highlighted this as his 'Northern Strategy' – efforts to garner votes and support from blue-collar workers in industrialized states where the working class was predominantly white. Nixon viewed this group of people as his 'silent majority' – a ticket to winning popularity from a larger majority of Americans. Nixon therefore objectively took a moderate/centrist stance in his implementation of the FAP, noting that conservatives would likely find issue in welfare reform, especially if it blurred racial lines. In this context, the FAP was largely chosen as it redistributed welfare benefits to the working class poor, who were largely Caucasian in ethnicity. Indeed, one estimate indicated that there would be a shift in the ethnicity of beneficiaries from 51.7% non-white in the 1969 AFDC program to 38.6% non-white in the FAP program by 1972. By creating an entirely new system of welfare reform, Nixon was also separating himself from liberal policy makers like former president Johnson, gaining him an edge politically. The FAP also addressed both leftist qualms with the AFDC over inadequate welfare assistance and welfare inequality while also addressing criticisms of the AFDC from the right over welfare dependency and dis-incentives to work. By proposing the FAP, Nixon hoped he could not only garner praise from liberals seeking more egalitarian welfare reform but also appeal to a new kind of veiled, latent racial conservatism.

Specific provisions of the Family Assistance Plan

Initial proposal

The initial proposal of guaranteed income by the Nixon administration would include all poor families – "working poor," "dependent," and poor families headed by a male. The benefit level would not be reduced for families currently enrolled in the AFDC, for states were required to compensate for the difference between proposed minimum payment and the state's current benefit level. States would be receiving federal assistance, so none would be required to supplement the incomes of the working poor. The essential details of Nixon's initial plan included the following:

# Only families with unmarried children under 18 years of age or 21 if still in school, would be eligible for the benefit under the FAP.
# A family of 4 with no other income would eligible for a maximum of $1600 in June 1972 dollars ($10,163 in March 2021 dollars).
#* The same family of 4 would see no change in the amount of benefit up to the income of $720 ($4,573 in 2021 dollars); and
#* Any other income beyond $720 would be taxed at the rate of 50% until the break-even point or until a point where the benefit would fall to zero, $3920 ($24,900 in 2021 dollars), except:
#** For the earnings from Veteran's pension and certain farm payments as these are taxed at 100%;
#** For children's earnings, welfare payments and other applicable payments as these are not taxable; and
#** For some child care expenses which would also be excluded from income calculation.
# Families in possession of resources amounting to over $1500 ($9,528 in 2021 dollars) and a home, personal household goods and other resources or properties considered essential to family's self-support would be ineligible for the FAP benefits unless they dispose of excess possessions at a specified rate.
# For the purposes of the FAP eligibility, a family is defined to only include family members who are related by blood, marriage or adoption except in the case of a stepfather who shall be considered to be a member of the family. The following category of people are excluded from a family unit:
#* Members not living in the same household, in-laws, grandparents, and 20-year-old adults not in school whose income information may be unavailable to the other family members;
#* Members of the Armed forces and their spouses and children;
#* Recipients of the aid to the aged, aid to the blind, and aid to the permanently and totally disabled, and their dependents;
#* Although the income period is set to be one year, for the purposes of calculating the FAP benefits, the family's current quarterly income is taken into account.
#* Any over or underpayments are to be fixed upon detection.
# Refusal of taking on a "suitable" work or training – that is, registering with the state employment service- by able-bodied