For most of us it was just another Thursday, but for millions of people who depend in some way on the federal government for their livelihood October 1, 1981, was Day One of the Year One for Ronald Reagan's America. October 1 was the first day of the 1982 federal fiscal year and thus the first day of the budget that is supposed to stop inflation, decrease unemployment, cut taxes, increase military spending, balance the budget, and protect the "truly needy," all at the same time.
But as John Anderson predicted during the 1980 campaign, they are doing it with mirrors. Already there is growing doubt, even in Republican circles, that Reagan's plan can make good on his promises. Reagan, of course, says that it is too early to judge, but in fact some of the results of his program are already painfully clear.
For the 30 million people in the U.S. officially classified as poor, and many others who are near-poor, October 1 was definitely not just another Thursday. It marked the beginning of major changes in their lives. Starting that day at least 400,000 people, most of whom work at very low-paying jobs, lost the Aid to Families with Dependent Children (AFDC) money that made up the difference between their meager paychecks and their families' basic needs. And since Medicaid coverage is tied to AFDC eligibility, they lost their access to affordable health care as well. Another 279,000 people began seeing their AFDC checks reduced as a result of changes in the program's rules. These changes include counting food stamps and housing subsidies as income when determining eligibility and lowering from 20 to 18 the age to which dependents in school are covered.
October also saw 1.1 million people lose their food stamp benefits and most of that program's 20 million remaining recipients reduced in their allotment. Unemployment insurance payments were stopped for people who have been unemployed for more than 26 weeks, dropping some 50,000 people in Michigan alone, and the few remaining CETA public service jobs were eliminated.
As these measures have gone into effect, evidence has begun to build that state and local governments are going to prove either unable or unwilling to take up the slack. For them to do so would require raising taxes, and raising taxes to aid poor people has never been considered a winning proposition by very many politicians.
Arkansas has already cut its AFDC payments by 25 per cent to make up for the loss of federal dollars to other programs. Arizona is dealing with the cuts by providing "violent incident" training for welfare office workers. And in Miami, Dade County commissioners, apparently oblivious to the lessons of last year's riots, recently refused to appropriate county funds for local juvenile delinquency, housing, health care, daycare, and drug rehabilitation programs that are being eliminated by federal cutbacks. More states and cities are bound to be tempted by such solutions.
It all comes down to the fact that since October 1 life is much harder for a lot of people who have never known anything but hard times. In the last week of September the National Advisory Council on Economic Opportunity, which also died October 1, issued one final report warning that the Reagan program will result in fewer jobs and a higher crime rate and "could lead to social chaos."
The prospects for restoring the economy don't look good either. Although the direct results of Reagan's changes obviously haven't appeared yet, administration spokesmen have admitted all along that the main impact they hope to have on the economy is psychological. They want business people and consumers to believe in their hearts that something is being done and things are getting better.
But it isn't working. All the economic signs indicate that we are heading into a recession. Unemployment has risen steadily for the last three months, reaching 7.5 per cent in September. Black unemployment for September was 16.3 per cent, the highest since the statistics have been kept. Instead of trusting the president's plan and preparing to invest their tax cut billions in creating new jobs, the large corporations have already begun throwing that money around in a spree of mergers and buy-outs.
This trend was epitomized this summer by the bidding war between Seagrams and Dupont to buy Conoco oil company. Dupont eventually won that battle, but now there are reports that Dupont and Seagrams are considering a merger. That kind of concentration of corporate power will make it less and less possible for any government program or citizens' movement to have any impact on economic conditions.
The failure of the economy to respond to his program has already forced Reagan to take further measures. But rather than rethinking his assumptions, the president is simply prescribing a larger dose of the same potentially deadly medicine. The new round of budget cuts Reagan is seeking will make life even more trying for low-income people and will probably begin to directly and indirectly affect middle-income people as well. David Stockman has told Congress that in the next three years it will have to cut the civilian budget "again and again and again."
The administration has even begun to back off from its self-serving promise to maintain a "social safety net." Stockman recently told the House Budget Committee that no non-military program can be considered exempt from future cuts. The rhetoric about protecting the "truly needy" has been downgraded as well. The new phrase is the "dependent poor," a category that includes only the very old, the very sick or handicapped, and mothers of very young children. No longer is any pretense made of any societal responsibility for people who, because of discrimination, poor education, or economic conditions are unable to earn enough to live.
There is, however, a good deal more congressional opposition to the new round of cuts than there was to the first ones. The president is unlikely to get everything he wants this time. And polls are beginning to show that the public is turning against some aspects of the Reagan program. A Washington Post-ABC News poll taken in mid-September (before Reagan's television speech that month) found a plurality of 44 per cent thinking that the cuts in social programs are "going too far" and a 52 per cent majority believing that Reagan's policies favor the rich over middle- and low-income people.
Two other developments in the budget debate could be quite significant in the long run. One is the increasing discomfort felt by many politicians and economists about the administration's mammoth military buildup. After a few weeks of indecision during his month-long summer vacation, Reagan has now firmly decided to, for all practical purposes, exempt the Pentagon from any budget cuts during his term. With high interest rates causing a rapidly growing federal deficit, even some conservatives are starting to say that the current level of military spending is not affordable.
Just a year ago the idea that military spending damages the economy was accepted only by the peace movement, but Reagan's policies have given it establishment credibility. While only a very small beginning, this shift in perception could eventually help open the way for defining national security in non-military terms.
The other positive sign came on September 19 when a coalition led by the AFL-CIO filled the Mall in Washington, D.C., with at least 270,000 people protesting the Reagan economic program. Solidarity Day was the first time in AFL-CIO history that it had sponsored a street demonstration, and the time was certainly right. Reagan's apparently successful breaking of the air traffic controllers' union and his measures to deny food stamps and welfare to strikers are clearly aimed at creating an anti-union climate that could shut off one of the major avenues low-income people have to defend themselves in the Reagan economy.
The size and diversity of the Solidarity Day crowd suggested a possible revitalization of the long-shrinking and timid U.S. labor movement as a force for social justice. But the limitations of Solidarity Day were obvious. The unions studiously avoided taking any stand on military spending; the coalitions labor made for the day are very fragile; and most importantly, it offered no alternative program other than a defense of past Democratic legislation.
These initial stirrings of resistance could moderate the impact of the Reagan policies somewhat in the next three years. But it is still a long road to any vision of a more just future. Despite protestations of remaining liberals, the past is gone. The liberal welfare state did, as the Republicans say, waste money, create self-perpetuating bureaucracies, and foster dependency. But more importantly, it never really met the needs of poor people or addressed the systemic causes of their problems. A return to those policies, even if possible, would not be very helpful in the long run, either for the poor or for our economic crisis. So despite growing misgivings, most Americans still see Reagan's path as the only one available.
But those misgivings do show that the appeal of Reagan's program doesn't come primarily from his millennial rhetoric about a renewed free-enterprise America. The appeal seems to lie more in people's hopelessness about the possibility of a more humane and just social order. Even after Reagan's plan fails, that despair could very easily cause a deeper retreat into an even narrower and uglier pursuit of personal and national self-interest.
Among other things, Jesus asks his community of followers to be the light of the world. That means we are expected somehow to give hope to dark times like these. People who take that call seriously need to be present in the despair of both the economically oppressed and the spiritually impoverished of our nation.
We can bring a measure of light and hope by making visible God's love for the poor and desire for justice and by bearing witness to the ever new possibility of a society of sharing, cooperation, and solidarity in our own lives and in the public arena. Such a vision of human society is certainly the one thing most needed in today's political and economic scene.
Danny Collum was on the editorial staff at Sojourners when this article appeared.
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