Chief of HHS Objects To Governors' Proposal
By Judith Havemann
Health and Human Services Secretary Donna E. Shalala told Congress yesterday the nation's governors' bipartisan plan to reform welfare and Medicaid fell short on protecting children and providing a real guarantee of quality health care for the poor.
Congressional Republicans have embraced the governors' plan to shift much of the responsibility for caring for the poor to the states as a possible way of breaking the impasse over the budget that has paralyzed Congress for months. But Shalala testified yesterday that the administration could not support the proposal "in its current form."
She laid out the administration's conditions for reforming the programs in the most detail to date. And she said that while the differences between administration goals and the plan approved unanimously by the governors three weeks ago may appear large, "We can work them out in 24 hours if everyone got to the table."
The governors proposed to eliminate the long-standing guarantee of welfare benefits for eligible Americans, require most recipients to go to work and cut off welfare benefits after five years.
They would curb spending on the Medicaid health insurance program for the poor and give themselves new flexibility to determine who should get health care and what they would be entitled to receive, while retaining many of the guarantees in current law.
Congressional reaction was mixed. Conservative Sen. Charles E. Grassley (R-Iowa) said he thought "from the attitude being expressed . . . it was business as usual."
Sen. Daniel Patrick Moynihan (D-N.Y.), a liberal opponent of efforts to eliminate the entitlement to benefits, portrayed the issue in stark racial terms for the first time.
Moynihan said nearly 5 million children would be cut off assistance under the governor's plan by 2005 because their parents would have exceeded the five-year time limit on benefits.
"Half of these children, 49.3 percent, will be black," he said. "To drop 2,414,000 children in our central cities from life support would be the most brutal act of social policy we have known since Reconstruction."
Shalala suggested that Moynihan had based his calculations on the faulty assumption that the governors' plan would not work. Many current long-term recipients would get jobs, she said. Also, states could exempt one of every five families from the cutoff under the governors' plan.
Sen. Carol Moseley-Braun (D-Ill.) said the plan might lead to a civil rights suit because it clearly "would have a disparate impact on African American children."
Leading governors said Shalala's objections to their plan did not represent an insurmountable obstacle. "This is the National Governors' Association effort to move the ball down the field," said Colorado Gov. Roy Romer (D), one of the chief negotiators of the agreement. "This is a work in progress."
National Governors' Association President Tommy G. Thompson, the Republican governor of Wisconsin, said he thought the "president still believes in our plan, and the secretary should get on board like her president and the Democratic governors."
House Republican leaders are considering attaching the governors' proposals to a bill to raise the debt ceiling that must be passed by mid-March.
Finance Committee Chairman William V. Roth Jr. (R-Del.), before whose committee Shalala appeared yesterday, said the committee is so pressed for time that "we cannot go back to square one" and start anew on welfare and Medicaid legislation.
Shalala said one of the chief problems with the welfare bill is that it fails to provide sufficient protection for children. She called on Congress to provide vouchers for children whose parents are cut off welfare and to retain a federal entitlement to food stamps and child protective services.
On Medicaid, she asked Congress to continue a planned phase-in of coverage for poor children between the ages of 13 and 18, to establish a real, enforceable federal guarantee of coverage to a congressionally defined benefit package, to require appropriate state and federal financing of the program and to establish quality standards, beneficiary protections and accountability.
She said the administration is eager to eliminate some of the bureaucracy the governors most objected to, such as the need to get a "waiver" of federal rules to move Medicaid recipients into managed care plans such as health maintenance organizations.
"We have over-regulated these programs," she said.