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Transcript of Proceedings

Compassionate Welfare Reform: Empowering Charities and Private Citizens

a conference sponsored by
The Beacon Hill Institute
and
the David R. Macdonald Foundation


held on
Thursday, December 12, 1996
Caucus Room, Cannon House Office
Building, Room 345, Washington, D.C.
10 a.m. to 1 p.m.
©Beacon Hill Institute, 1996-1997. All rights reserved.

MR. FUND: I think this is only the beginning of the impact this idea I think will have on the debate in society.

We now are going to have a very short blessing from a gentleman from the Salvation Army and then we will move to the speeches by Senator Coats and Congressman Kasich.

MAJOR BELL: I am Major Don Bell from the Salvation Army. Let's pray.

Father, we thank you as we examine new ideas, we thank you for the representation of this room of individuals who are interested in the welfare of their fellow man, interested in reaching out and effectively serving others and making a difference in lives. We pray that as we gather around these tables, as we accept this food that you would bless it and that you would give us inspiration for effective reform and for effective revival of those who we seek to serve.

Amen.

[Recess.]

MR. TUERCK: I would like to go to the keynote speakers for their addresses for today's forum. The first of which will be delivered by Senator Dan Coats of Indiana, and, the second by Congressman John Kasich of Ohio. I will be introducing Senator Coats. He will introduce Congressman Kasich.

Senator Dan Coats is a junior Senator from Indiana which he has represented in the Senate since 1989. He has earned the reputation as a compassionate conservative, strong on family values, strong on military matters and prudent on fiscal issues.

Along with Congressman Kasich he is the author of the Project for American Renewal in which he writes, as follows:

"The institutions we seek to empower are Protestant, Catholic, Jewish and of no particular faith. A riot of pluralism. These institutions have the resources denied to government at every level, love, spiritual vitality and true compassion."

The Washington Times has called him a player, a thinking man's conservative.

It's with great pleasure that I welcome our co-host, Senator Dan Coats.

[Applause.]

SENATOR COATS: David, thank you very much and thanks to all of you for being here today. I'm really pleased with the amount of interest that's shown in what I think is an issue that will be first and foremost, at least prominent, in the debate in the Congress and, hopefully, a debate throughout the country.

I couldn't help but be moved by the testimonies of the individuals who spoke this morning about the transforming events in their life that occurred in the Center for the Homeless in South Bend. That story is a story that could be repeated in thousands of sites across this country where people, who you never read about in the paper or see on the evening news, are doing remarkable work in communities, in individual lives and making a difference in those communities and those lives in a way that we don't see at the Federal level.

I've spent more than a decade examining, first as a Republican leader of the Children, Youth, Family Committee in the House and, now, as the Republican Chairman of the Children, Family Committee in the Senate, examining the Federal effort side-by-side with the private effort. And there are a number of empirical studies that document the difference but you don't need empirical studies to witness and observe the difference.

A visit to a Federally run facility providing either homeless care or addiction care or you name the social dysfunction that it's trying to address, versus a visit to a private, non-government organization, will absolutely convince you of the difference.

The effectiveness of that organization, the utilization of volunteer help, the ability to impose a series of standards and values that government is limited or prohibited from imposing, the concept of tough love, both of those words being essential, both tough and unrestricted love, has given us examples of the remarkable differences that can occur at the Government versus the non-government level.

Now, I don't want to spend much time here addressing the questions that were raised earlier. I thought we had two very effective panels that presented the case for, and in some instances, the case against the charitable tax credit and I don't want to repeat those arguments.

Let me discuss just very briefly here before I turn it over to my colleague, John Kasich, that what I see as a little bit of the political dynamic.

We've heard a lot of rhetoric and a lot of talk in this last campaign about the need for bipartisanship to come together, to find the common ground, find that center. The President has talked extensively about that both before and after his reelection. Finding a specific way of translating that rhetoric into reality is the challenge that's before us. There's been a lot of rhetoric and a lot of talk about how we ought to be able to do this and how we can find issues to come together on.

And I'm suggesting today that surely on the issue of providing effective compassion to those truly in need is an area where we ought to be able to find some common ground.

There are three essential facts I think that we need to acknowledge first. One, that the welfare state, by almost every measure, has failed to provide the kind of effective relief and compassion that many had hoped for, many with good intentions had implemented, that we have funded to the extent of literally trillions of dollars over the past 30-some years. There is a compassion fatigue in America, where Americans have willingly given of substantial tax dollars to the Federal Government in an effort to deal with the problems of poverty and problems of the poor and many of the social dysfunctions in this country.

And yet, the consequence and the results of all of that have been a disillusionment and a compassion fatigue regarding the effectiveness of those expenditures. We hear from the Beacon Hill group that nearly 67 percent of the Federal dollars never reach those below the poverty line. We see just through our own personal experiences, the ineffectiveness of many of the Federal programs and the lack of results.

And, so, surely as conservatives and liberals, Republicans and Democrats, we can come to the conclusion that the current system is not as efficient, as effective and clearly is not making the kind of difference and giving us the kind of return on our compassion investment that any of us had hoped for.

Secondly, I would hope that we could come together in agreement on the fact that we do have an obligation to our neighbor. That whether it's a scriptural injunction or whether it is just the essential goodness of the American people that is so often displayed in times of tragedy and times of war and times of need, that we do have a moral and a personal responsibility to reach out to our neighbor in need and simply reducing and transferring the Federal effort or devolving ourself of involvement in the compassion effort is not an acceptable alternative.

Thirdly, I would hope that we could agree that there are organizations and institutions, as Newhouse and Berger called, mediating institutions that historically and traditionally have reached out and provided effective and compassionate relief that have transformed lives, rebuilt families, restored communities, and provided the kind of effective help that has made a difference in communities across this country. Whether it's Big Brothers, Big Sisters providing mentoring to fatherless children, whether it's the Salvation Army across this country providing assistance to those in need, the gospel missions that are reaching out to the homeless across our country, Habitat for Humanity building homes for low-income, those organizations clearly demonstrate far greater effectiveness at far less cost than the Federal effort.

Because of the overwhelming presence of the Federal effort has often given people either the excuse to say, well, I gave. I gave to the IRS, who gives to HHS and HUD and I spend a great percentage of my money that goes to the Federal effort or the State or government effort in helping the poor.

The need to try to encourage or the series of Federal rules and regulations that have so restricted the ability of these organizations to reach out, we ought to be able to come together and agree that there are institutions in America in virtually every community in America that are providing effective compassion and help to individuals in need.

And, so, the question then becomes is there a means by which we can begin to encourage the support for these institutions as we move away from a failed Federal and government effort towards a more compassionate, effective private effort? The charitable tax credit is the means by which John Kasich and I and others have proposed we accomplish that.

Our proposal is modest. We're talking about a very small percentage, less than 5 percent initially, of the current Federal social welfare effort. We have added a provision which allows the General Accounting Office to monitor how this effort succeeds, to examine the distribution of funds. All the provisions, there are more than 20, in the Tax Code, which guide the direction of 501(c)(3)s and guide the qualifications of 501(c)(3)s will apply to this effort.

And, so, for those who say this is simply opening the door to charlatans who are prying on taxpayers to use the money for illicit purposes, that simply is not the case.

In the end, though, as we move through this process and John Kasich and I believe that we have an excellent opportunity in this next Congress, because these facts, those three facts I talked about, are apparent to so many, both in Congress, and because this unites in a unique way those from different ends of the political spectrum, in the end I think we have to realize that liberals and conservatives must admit to themselves a couple of things.

First, that liberals have to stop equating compassion with the amount of Federal dollars that are spent. Far too frequently we hear and debate on the Senate and House floor the fact one side shows no compassion because it offers a 5 percent or a 10 percent less Federal effort for a particular program than the other. And that the true measure of compassion is your willingness to ever increase a failed Federal funding effort.

But conservatives also need to arrive at a conclusion and that conclusion is to admit that simply reducing the size of government will not solve the problems of poverty. It's only when Republicans and Democrats move beyond these two notions that I believe we can make some true progress in terms of dealing with these questions of suffering and problems of the needy.

So, today, I want to encourage my colleagues on the other side of the aisle and my colleagues on my side of the aisle to begin to reexamine what it means to be compassionate, to begin to reexamine what it means to devolve the government from Federal spending on social programs and to see if we can come together to find an acceptable alternative, a third alternative that supports the unsung heroes and organizations across this country that are truly, effectively providing help to those in need.

I want to encourage the President to join with us in this effort, to take his intentions and his rhetoric and translate it into reality, to follow-up on his statement that the era of big government is over, and work with us in finding a way to, yes, downsize the ineffective Federal effort and up-size the effective private effort.

If the President is truly sincere about bipartisanship the charitable tax credit is a great place to start.

Now, it's my pleasure to introduce my cohort in all of this, someone who has been extraordinarily effective as a member of Congress but is also one of my closest friends and someone whom I have a great admiration for.

John Kasich, as you know, is Chairman of the House Budget Committee and, as such, will be in a very pivotal position to debate and to advance this particular issue. He's been a leader on a number of fronts, and one of the most engaging things about John is his willingness and his ability to be so straightforward and to speak in language that the public responds to and fully understands.

He's been a great ally with me on a number of issues but, in particular, on this one I'm so proud to have him as a equal partner as we move into this next Congress and promote what, I believe, is one of the most important issues we can be addressing.

Please, join me in welcoming John Kasich.


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