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Welfare Reform A Question Of Money

Tue., July 4, 1995

The thing you have to keep in mind with welfare reform, now stalled in the Senate, is that it has nothing to do with making the poor self-sufficient, elevating the morals of the weak or improving the lot of children born into bad circumstances.

It is about money - and only about money.

The battle over exactly how to distribute lump-sum welfare payments to the states has brought reform momentum to a screeching halt. Senate floor debate on welfare has been put off until late July, perhaps even September.

What happened?

Just a month ago, Congress seemed on the verge of repealing the federal guarantee that those who qualify for welfare will receive it. Aid to Families with Dependent Children, the cash-grant program created in the darkest hours of the Great Depression, was about to be dismantled in the go-go ‘90s.

Republicans such as Gov. Tommy Thompson of Wisconsin had perfected sermons on tough-love for mothers who refuse to work or can’t find jobs. The new federalism demanded cutting federal strings, eliminating entitlements, letting states go their own ways.

Devolution sounded great - until 30 senators from the Sun Belt and the South realized that their states would be big losers in the world after reform.

So, led by Sen. Kay Bailey Hutchison, R-Texas, those senators have come up with a funding formula that would increase payments to 36 states while stripping money from 14 states whose legislatures have made greater efforts to help the poor.

Washington, under the Sun Belt plan, would lose a higher share of its current federal allocation than any other state in the union.

Its funding would drop 40 percent from $432 million a year to $260 million because Washington has a relatively low percentage of poor children and offers more generous monthly welfare payments than many other states do - $546 for a family of three compared with only $120 in Mississippi.

Past good deeds will not go unpunished if Texas gets its way.

Here’s the difficulty the Sun Belt and Southern senators found: The versions of lump-sum block grants approved by the House and the Senate Finance committees would freeze payments to states at the 1994 allocation level for five years.

Neither the House nor Senate bill would adjust grants automatically for changes in population or for increases in poverty, as always has been the case under the Aid to Families with Dependent Children program. As a result, fast-growing states such as Texas, Florida and Arizona would suffer crippling consequences.

Of course, this is the whole point of block grants: You don’t get more money just because needs go up.

But even conservatives have a hard time weaning themselves from federal dependency. Hutchison and her colleagues essentially want a state entitlement to replace individual entitlements.

Under current law, the amount of federal welfare money a state receives depends on a state’s poverty level and on how much the state itself chooses to spend on welfare.

If welfare funding is pegged to 1994, states that have paid relatively generous welfare grants - the Northern industrial states, Washington and Oregon - would do OK. States that historically have starved their poor will be capped to the miserable sums they receive from the federal government now.

But the Sun Belt proposal dumps the freeze, pegging funding instead to the number of lowincome children in each state. Texas, for example, would receive a 50 percent increase in annual funding, going from $507 million to $761 million. Mississippi would move from $87 million to $131 million. But New York would lose $749 million a year.

To cinch a few more votes, the senators set a minimum grant for small states, doubling their current allocation regardless of their need.

Meanwhile, all the GOP reform plans do away with the requirement that states share in welfare financing. Mississippi would get more federal money under the Sun Belt proposal, but its Legislature could cut or even end contributions from the state treasury.

Perversely, Washington citizens would suffer massive funding losses without any assurance that the poorest families in Mississippi would fare even a little better.

Wisconsin Gov. Thompson, to his dismay, is learning that the Senate cares not a whit about his good soldiering in the welfare revolution. Wisconsin would lose $55 million a year under the Southern plan.But he shouldn’t be too surprised. It probably is no small coincidence that if the freeze formula had been enacted in 1988, only two states would have come out ahead - Wisconsin and Michigan, home to Gov. John Engler, the other big proponent of block grants.

The Republicans are tying themselves into knots over this issue.

The toughest critics on the right continue to demand changes they think will cut welfare caseloads - excluding teen moms, limiting family size, rewarding lower illegitimacy rates, etc.

At the same time, conservatives such as Sen. Phil Gramm of Texas are signing on to a plan that would reward states with growing welfare populations.

The problem arises from an ideology that would have you believe that problems of poverty and joblessness would be solved if welfare were just scrapped altogether - or at the very least, if the entire program were offloaded to the states.

Now it turns out, the Senate bashers of Aid to Families with Dependent Children are not willing to live with caps on federal aid. Fairness, all of a sudden, has come to mind. Even the idea is resurfacing that worsening child poverty in El Paso is as much a national problem as it is a Texas problem.

What do you know? This bit of conscience - fed by political and fiscal self-interest - might just cause a divided Senate to scrap the reckless blockgrant idea completely.

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