A central premise of the new welfare law - that states can move half of their welfare recipients into the work force - now appears unrealistic, according to an analysis by the respected Congressional Budget Office.
The CBO analysis said that Congress did not budget enough money for states to prepare welfare recipients for jobs or community service programs. It estimated the shortfall at $13 billion over the next six years.
Rather than spend the extra money, most states are likely to pay relatively light fines for not meeting their welfare-to-work goals, the report said. States face no fines if they fail to reach another goal of the law: making recipients work for benefits after two years.
The gloomy forecast, coming as states struggle to get welfare plans in place by July 1, reinforces concerns of some state officials and analysts that the work requirements are too tough.
Under the law, states must have 25 percent of eligible welfare recipients working by the end of September.
That requirement increases to 50 percent by the year 2002. But no money was added for that purpose over the federal job-training funds that states already had found inadequate.
“It’s always very unfortunate when a hurdle is set so high that you can only fail,” said Judith Gueron, president of Manpower Development Research Corp., which evaluates jobtraining programs. “All it does is make the public more cynical.”
Rep. E. Clay Shaw Jr., R-Fla., said the work requirements are important to monitor, especially since they were set amid intense partisan bickering.
“The goal was set high and we realize that,” said Shaw, chairman of the subcommittee that wrote the law. “And I think the politics of pushing that legislation drove the process. The Democrats were saying we were ‘weak on work.’ And maybe we did an over-correction.”
But neither the Republican Congress nor the Clinton administration is eager to change the requirements, especially since the welfare caseload is down 15 percent from last year. President Clinton may include $3 billion in his budget to encourage private businesses to hire recipients.
The CBO is being too pessimistic, said Scott Brenner, spokesman for the House Ways and Means Committee. “We think the caseload will continue to drop. It’s just too early. We need to give the bill time to work. Eventually we’re going to see exactly what we need to do to help states get hard-core people to work.”
A spokesman for the Department of Health and Human Services also criticized the CBO analysis, which was written in late December but is just now getting noticed on Capitol Hill. “It is too soon for such dire predictions,” said Michael Kharfen.
CBO officials acknowledge that declining caseloads could help some states meet the work requirements, especially in the first two years. The problem will come in later years when states grapple with three different work requirements:
Among the 300,000 two-parent households needing assistance, 75 percent have to be working 35 hours a week this year. Yet, only 10 states were able to meet an earlier requirement to get 40 percent of those families working.
Starting in 2002, states must show on a monthly basis that 50 percent of those expected to work are doing so for 30 hours a week. That would mean an estimated 1.7 million recipients nationwide - a lot more than ever participated before. States face penalties up to 5 percent of the federal grant for not reaching the goals, but they can appeal them.
States must ensure that parents receiving two years of benefits get jobs or community service jobs. By 2002, that would be as many as 70 percent of all families.
“Because employment programs have had only modest success in reducing the welfare caseloads, states may be reluctant to commit their own funds to such programs,” the report says.
States experiencing the biggest drops in caseloads have often spent a lot of their own money for job placement and training.
For example, Oregon spent $80 million from 1990 to 1994, and since has had a 40 percent drop. “It was four years of up-front investment,” said welfare spokeswoman Janice Babcock. “Now, the benefits have kicked in.”
But most states, like West Virginia, are just tackling the costs. As states adjust, so must federal officials, Health and Human Resources Secretary Gretchen Lewis. “Just because you write it in federal law,” she said, “doesn’t mean it will happen.”