Spending Per Recipient Has Risen Since Enactment of Welfare Reform
By Barbara Vobejda
The Department of Health and Human Services, releasing the first full year of state financial reports since enactment of the law, offered the figures as evidence that states had not slashed spending on welfare programs, as critics of reform had predicted.
"There has been no race to the bottom in state welfare spending," said HHS Secretary Donna E. Shalala in a speech yesterday at the American Enterprise Institute.
Shalala pointed to falling welfare caseloads as an early indication of success under the law, which requires recipients to work and limits the number of years they can be on the rolls.
Welfare caseloads have declined 30 percent since 1994. But state spending has not fallen at the same pace, declining 18 percent over the same period. The precise figures for average benefit per recipient were not available yesterday from HHS.
The 1996 welfare law ended a guarantee that any eligible family would receive a cash benefit and turned over more control of welfare programs to the states.
Under the law, states were required to continue spending at least 80 percent of what they spent on these programs in 1994. That provision, known as "maintenance of effort," was included in the law to ease concern that states could use new discretion over spending to slash benefits.
"Maintenance of effort is doing exactly what we intended it to do . . . providing a floor" for spending, said HHS spokeswoman Melissa Skolfield.
Skolfield said four states had increased their maximum benefit levels since the law passed, five states had decreased those benefits for some recipients and the remainder had generally left benefits unchanged.
But Shalala also cautioned in her speech that it is not clear how many of those leaving the welfare rolls are moving into jobs and toward self-sufficiency.
"What we don't know is precisely what is happening to all of these former welfare recipients," she said.
Steve Savner, senior staff attorney at the Center for Law and Social Policy, a Washington group that tracks welfare policy, said he is concerned that states are competing to reduce their caseloads without adequate information about the fate of former recipients.
"It may be right that there's no race to the bottom in terms of state spending," he said. "But the race states are engaged in is to cut their caseloads. That's an easy number states can report and say everything is rosy."
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