speech by Richard Nixon

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In 1935, President Roosevelt introduced welfare programmes. There were unemployment compensation and aid for dependent children (AFDC). By 1960, it was very clear that those programmes were undermining the work ethic and hopes of the poor; see also Citizen’s wage, with commentary on the misconstruing of property, ownership and subsidy

This undermining was ably set out by Charles Murray in 1984. It was primarily caused by very large marginal tax rates on the working poor. Such systems are still destroying the poor in most western countries, over 40 years after Richard Nixon's attempt to introduce a citizen’s wage (guaranteed income). His system applied to families with children.

A major problem is selling such a system in an environment of puritanism. However, Nixon’s plan was very positively received by the population, including the middle classes who always end up paying for such schemes. But leftist and black racist interest groups managed to stop his plans.

The unions would be less ‘necessary’/powerful. The race baiters would lose their handouts and constituencies. These are, of course, constituencies of the left.

Of course a citizen’s wage [CW] involves some disincentive for those prepared to live on a small income rather than work. (It has been confirmed empirically, that the disincentives certainly rise with the marginal tax rates (for example, NIT), in many systems this approaches infinity!)

A negative income tax (NIT) is, of course, a step away from a citizen’s wage.

“The experimental NIT [negative income tax] produced disappointing results. The work disincentives were substantial and ominously largest among the youngest recipients. Marital breakup was higher among participants than among the control group in most of the sites. No headlines announced these results, but the NIT quietly disappeared from the policy debate.” [p. 8, In our hands]

For extended details, see chapter 11 of Losing Ground: American Social Policy 1950-1980 by Charles Murray, Basic Books, 1984. This is one of the seminal books of the twentieth century. The central message is that welfare causes poverty and social dysfunction. [This book by Murray is reviewed at linked page.]

Nixon sold it as a negative income tax (NIT) by requiring that a 50% tax would apply to the guaranteed income when earnings of more than $60 ($720 per annum) were reached. He also added work requirements that would apply to the main responsible adult in the family. Thus, it was not a very harsh standard.

Germany and the UK are now once more trying to bring in a more rational system of citizen’s wage. Some more recent actions.

(Nixon also started to wind down the Vietnam war, and he opened rapprochement with China - so he was driven from office!)

related document : citizen's wage

[The politics of a guaranteed income, D.P. Moynihan, 1973, pp. 220-226]

Introduction by Daniel Moynihan

Thus, at the outset of the public debate, there arose a tension between symbol and substance that was never to be allayed. The proposal was a guaranteed income, and there was no work requirement. As the Social Security Administration Fact Sheet explained, "Employable recipients must accept training or employment or lose their portion of the family's benefits." (My emphasis.) That is to say, there was to be a penalty for refusing to work: $300 in the bill sent to the Congress, raised to $500 by the Committee on Ways and Means. Refusal to work lowered the amount of the income guarantee. Nothing more. It would have made little sense to try for more, even had any of the principals been much disposed to do so. The essence of the Shultz proposal was that incentives could be established that would draw recipients into the labor market as a result of their own calculation of benefit. Only a naif would think that such an out come could be obtained in any other way. The president could exhort, the Congress could demand: welfare administrators were not going to cut off welfare payments. On balance, then, it seemed fair to describe the very considerable work incentive built into the program as a work requirement, and to hope it would be understood.

And so the matter conc1uded. On August 8, 1969, in a television address, Richard Nixon undertook to change the history of social welfare, of his own party, and possibly of the Nation. His address dealt with four matters. He asked that they "be studied together, debated together, and seen in perspective," but the heart of the matter was welfare.

Speech by President Richard Nixon

Good evening my fellow Americans:

As you know, I returned last Sunday night from a trip around the world—a trip that took me to eight countries in 9 days.

The purpose of this trip was to help lay the basis for a lasting peace, once the war in Vietnam is ended. In the course of it, I also saw once again the vigorous efforts so many new nations are making to leap the centuries into the modern world.

Every time I return to the United States after such a trip, I realize how fortunate we are to live in this rich land. We have the world's most advanced industrial economy, the greatest wealth ever known to man, the fullest measure of freedom ever enjoyed by any people, anywhere.

Yet we, too, have an urgent need to modernize our institutions—and our need is no less than theirs.

We face an urban crisis, a social crisis-and at the same time, a crisis of confidence in the capacity of government to do its job.

A third of a century of centralizing power and responsibility in Washington has produced a bureaucratic monstrosity, cumbersome, unresponsive, ineffective.

A third of a century of social experiment has left us a legacy of entrenched programs that have outlived their time or outgrown their purposes.

A third of a century of unprecedented growth and change has strained our institutions, and raised serious questions about whether they are still adequate to the times.

It is no accident, therefore, that we find increasing skepticism—and not only among our young people, but among citizens everywhere—about the continuing capacity of government to master the challenges we face.

Nowhere has the failure of government been more tragically apparent than in its efforts to help the poor and especially in its system of public welfare.

TARGET: REFORMS

Since taking office, one of my first priorities has been to repair the machinery of government, to put it in shape for the 1970's. I have made many changes designed to improve the functioning of the executive branch. And I have asked Congress for a number of important structural reforms; among others, a wide-ranging postal reform, a comprehensive reform of the draft, a reform of unemployment insurance, a reform of our hunger programs, a reform of the present confusing hodge-podge of Federal grants-in-aid.

Last April 21, I sent Congress a message asking for a package of major tax reforms, including both the closing of loopholes and the removal of more than 2 million low-income families from the tax rolls altogether. I am glad that Congress is now acting on tax reform, and I hope the Congress will begin to act on the other reforms that I have requested.

The purpose of all these reforms is to eliminate unfairness; to make government more effective as well as more efficient; and to bring an end to its chronic failure to deliver the service that it promises.

My purpose tonight, however, is not to review the past record, but to present a new set of reforms—a new set of proposals—a new and drastically different approach to the way in which government cares for those in need, and to the way the responsibilities are shared between the State and the Federal Government.

I have chosen to do so in a direct report to the people because these proposals call for public decisions of the first importance; because they represent a fundamental change in the Nation's approach to one of its most pressing social problems; and because, quite deliberately, they also represent the first major reversal of the trend toward ever more centralization of government in Washington, D.C. After a third of a century of power flowing from the people and the States to Washington it is time for a New Federalism in which power, funds, and responsibility will flow from Washington to the States and to the people.

During last year's election campaign, I often made a point that touched a responsive chord wherever I traveled.

I said that this Nation became great not because of what government did for people, but because of what people did for themselves.

This new approach aims at helping the American people do more for themselves. It aims at getting everyone able to work off welfare rolls and onto payrolls.

It aims at ending the unfairness in a system that has become unfair to the welfare recipient, unfair to the working poor, and unfair to the taxpayer.

This new approach aims to make it possible for people—wherever in America they live—to receive their fair share of opportunity. It aims to ensure that people receiving aid, and who are able to work, contribute their fair share of productivity.

This new approach is embodied in a package of four measures: First, a complete replacement of the present welfare system; second, a comprehensive new job training and placement program; third, a revamping of the Office of Economic Opportunity; and fourth, a start on the sharing of Federal tax revenues with the States.

Next week in three messages to the Congress and one statement—I will spell out in detail what these measures contain. Tonight I want to explain what they mean, what they are intended to achieve, and how they are related.

the address for this document is https://www.abelard.org/briefings/nixon_speech_guaranteed_income_citizens_wage.php

5220 words
prints as 15 A4 pages (on my printer and set-up)