Europe takes a cue from U.S. welfare reform
August 9, 1996
Web posted at: 1:00 a.m. EDT (0500 GMT)
From Correspondent Margaret Lowrie
LONDON (CNN) -- Great Britain and many European countries are
following in the footsteps of the United States as they
consider welfare reform.
A historic welfare-reform bill just passed by Congress is
expected to be signed into law soon. It turns control of
welfare over to the states and limits benefits. It ends a
six-decade guarantee of open-ended federal aid to the poor.
"I think the American welfare debate is affecting the debate
in Europe. What you're seeing around the world is a sort of
global revolution, a reassessment of welfare states, trying
to make it affordable into the next century," according to
Roderick Nye, Director of the Social Market Foundation.
Britain, long called the "Granny State," is known as a
cradle-to-grave welfare state. But the growing expense of
welfare has some thinking that reform may be necessary.
Welfare in Great Britain differs from welfare in the United
States in that it includes entitlements to the middle class
such as child care, medical benefits and pensions, along with
low-income subsidies for the less-privileged.
While the middle class in the United States agrees there is a
need for welfare reform, there has been popular resistance to
welfare reform in France and Germany where middle class
entitlements would be affected.
"What I think you are going to see over time is a
rebalancing. A rebalancing away from the state, a rebalancing
away from the employer and a rebalancing onto individuals and
their families to provide for their own protection in some
way through insurance, through increased savings -- things of
that sort," Nye said.
In Britain, one-third of the government's yearly
expenditures, or as much as $150 billion, is targeted for
social security and welfare payments.
Much of the welfare budget is funded through taxation, with
the average taxpayer putting $20 a day into the benefits pot.
"People in Europe are tired of paying what they see as too
much tax. And if you're going to get tax rates down, you're
going have to cut spending somewhere. And the most obvious
place to cut spending, because it's such a large part of the
budget, is in social security and welfare," Nye said.
Snitches cut costs
One way Britain is trying to cut spending is by tackling
welfare fraud, which is estimated to cost the country
$5 billion a year.
The "Beat a Cheat" campaign includes a telephone hotline --
some call it a "snitch line" -- to report people fraudulently
benefiting from the system. The hotline received about 16,000
calls on its first day in operation.
"For 50 years in the United Kingdom, the welfare budget has
been growing twice as rapidly as the national income,"
British Social Security Secretary Peter Lilley said.
"We've taken steps, which we believe in the future will mean
it will probably grow half as rapidly as the national income.
So it will be taking a declining share of national income for
the first time for 50 years."
Welfare reform was propelled in the United States not only by
fiscal concerns, but also by worries that the program that
was designed to help people was actually creating
inter-generational poverty and a dependency culture.
"I think if you want welfare reform in Europe, people are
going to have to start taking some of that moral high ground
and not simply just looking at the figures," Nye said.
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