Deflecting Welfare Applicants
Monday, August 17, 1998; Page A18
The effect has been dramatic. In Florida, as Post staff writers Barbara Vobejda and Judith Havemann reported last week, nearly 70 percent of applicants used to end up on the rolls; now it's just under 50 percent. In Kentucky, the level has fallen from about 75 to just over 60 percent. Two-thirds of the states, including Virginia and Maryland, now employ some form of diversion; the District government may shortly adopt one as well. The national welfare caseload has fallen by more than a fourth in recent years; the deflection of applicants is thought to be among the major reasons why.
The question is whether the deflections are a good thing or bad. They're good if the families being turned away were really not that needy, bad if the genuinely needy are being denied. The answer, which seems likely to blur and plague evaluations of welfare "reform" generally in the years ahead, is that no one knows. The families turned away aren't generally tracked. Some doubtless do all right; that has to be particularly true in an economy that continues to expand. Others don't but, at least in the short run, disappear from official view.
The 1996 bill shifted responsibility for welfare to the states. In the process, it gave them both greater freedom than before to cut the program's cost, and a greater incentive. A state's federal welfare payments used to be based in part on the size of the state's caseload; if the caseload went down, the payments did, too. Now the payments are fixed and otherwise arranged in such a way that a state only gains from caseload reduction. The states have been given not merely permission but what amounts to a standing invitation to cut the rolls. The fear is that, particularly in a less forgiving economy, they'll do too much of it. The diversion story doesn't confirm that fear, but it feeds it.
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