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Senate Panel Votes To Let States Run Welfare Plan Ends Guarantee Of Aid For The Poor

Sat., May 27, 1995

The Senate Finance Committee passed legislation Friday that would end the six-decade federal guarantee of support to every destitute American woman with children by transferring vast authority over the welfare system to states.

Only one Democrat, Sen. Max Baucus, D-Mont., joined Republicans in the 12-8 vote, which set the stage for a floor debate next month on what is likely to be one of the most important decisions of the current Congress. The plan, although expected to pass largely intact, is sure to face attacks from both conservatives and liberals.

The bill, like a similar measure passed in the House earlier this spring, would change the $17 billion Aid to Families with Dependent Children (AFDC), the main cash welfare program for children, from a federal program available to every qualified family nationwide to a state-designed and run program funded with lumpsum grants from the federal government, which might not cover all eligible families. Both measures set a five-year lifetime limit for receiving welfare.

“Children will be better served and welfare will be better run if the system is turned over to the state,” said Sen. Bob Packwood, R-Ore., the chairman of the committee and chief author of the Senate plan.

“The argument that we are abandoning our responsibilities does not wash.”

Democrats challenged that assumption, however, criticizing Republicans for removing the safety net from poor children that has been there since the New Deal. The Republican-dominated panel, however, quickly rejected three alternative Democratic proposals - which would all continue to guarantee benefits to all eligible families - before approving the GOP plan.

Senate Majority Leader Bob Dole, R-Kan., disputed Democrats’ fears that states would let children suffer. He assured lawmakers that if the measure did have a negative impact, “we’ll be back here in a year or two doing the opposite of what we’re doing today.”

The Senate proposal freezes AFDC spending at the 1994 level of $16.8 billion, saving $9 billion over five years, compared to projected spending under current law. Estimates of the total savings over five years from the Senate bill, which also overhauls the Supplemental Security Income program for disabled children and drug addicts, and cuts some welfare benefits to immigrants, range from $26 billion to $31.5 billion.

While providing states with the same amount of money, the plan dramatically ratchets up the number of recipients required to be in training and work programs and mandates that the states provide child care for them.

By 2001, 50 percent of the caseload would be required to be in training programs.

But the Congressional Budget Office estimated that only six states would be able to do so.

John Topogna of CBO told the Senate panel that by the year 2000, states would have to spend $10 billion of the $16.8 provided to pay for child care and training programs if they wanted to meet requirements.

He suggested most of the states are likely to take the penalty for not meeting the requirement - a 5 percent reduction in their block grant - instead.

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