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States Face Day of Reckoning on Welfare

By Judith Havemann
Washington Post Staff Writer
Monday, September 15 1997; Page A01

After a year of basking in public acclaim for dramatically reducing the nation's public assistance rolls, states will face the first official test of their welfare reform programs on Oct. 1.

Many of them will fail.

With the day of reckoning only two weeks away, numerous states are far short of having 75 percent of their easiest cases – families with two parents in the home – engaged in work activities as the law requires. Even the most successful states hope only to squeak by.

Officials expect most governors to easily meet another October requirement: moving 25 percent of their entire welfare population to work activities. They view this achievement as far more noteworthy because it involves many more recipients.

But the goal for two-parent families was seen by Congress as a crucial test of states' commitment to work requirements, particularly because it focuses on couples who can share child care and divide the mandatory hours of work between them.

In effect, the first serious measurement of welfare reform shows that a harsher reality stands behind the illusion of easy success: Moving a substantial number of recipients from welfare to work is not going to be as automatic or painless as it initially appeared to some. Indeed, states that fail to meet these standards could face severe financial penalties; in California's case, federal money could be cut by $185 million as punishment.

When Congress enacted the reforms last year, it replaced a federal guarantee of assistance for the poor with a new system giving states vast flexibility to design programs that move recipients into jobs. In return for their newfound freedom, states were given strict standards for putting people to work.

The requirements that take hold Oct. 1 are only the beginning. By 2002, the states are expected to have moved fully half of their clientele into some kind of job activity, and those that fail could lose up to 21 percent of their federal funds.

Officials in California, Connecticut, Maryland, Nevada, Alabama, Louisiana and Maine all said they will miss the first year's minimum goal for two-parent families. Some states, including California, may even have difficulty meeting the 25 percent rate for all families.

Virginia officials say they are unsure whether they will meet the deadline, in part because the number of two-parent families is rising. In the District, welfare director Jearline F. Williams has testified that the city is "on target," but a spokesman for the division said that, in months of welfare discussions, she has never heard the two-parent rate mentioned.

In Maryland, state welfare officials hope to avoid a potential $11 million penalty for failing to get enough of their roughly 350 two-parent families into jobs. They are considering moving these recipients off the federal rolls entirely and paying for their benefits with state money. "We have historically had a lot of problems with compliance among this group," said Lynda Fox, deputy human resources secretary. "We think they may have many hidden disabilities, not only a lack of education, but actual functional illiteracy."

So far California has only 20 percent of its 138,000 two-parent caseload working, instead of the required 75 percent. State officials say they won't make the deadline because their new welfare reform plan does not officially start until next January, in large part because a divided state legislature spent much of this year fighting over its parameters.

"In the current year, we are stretching everything we can to try to make it," said Bill Jordan, chief of the employment programs branch for the California Department of Social Services. "Obviously, we are hoping to be allowed a fair amount of flexibility."

At the opposite extreme is Alabama, which blames its inability to meet the two-parent deadline on the fact that it has so few cases to begin with. The state has been able to get only 11 of its entire 52 two-parent family statewide caseload into work activities. Because the number of families is so few, the loss of a job or a broken-down car in a single family can sabotage the state's entire rate.

"It is almost ludicrous for the federal government to make a serious issue of this," said Joel Sanders, Alabama's welfare reform director. "It is a lot of energy for a goal that may not be attainable."

Officials in several states also say that, although two-parent welfare families have built-in advantages of child care and shared responsibility for work, they are surprisingly disadvantaged. Many of them are what welfare specialists often call the hard core – those with few job skills or having other disadvantages that make them particularly difficult to move off public assistance. The mere fact that two adults living together have been unsuccessful in holding even one job is almost by definition evidence of the difficulty they pose to caseworkers. Nonetheless, these are exactly the people the act seeks to help become self-sufficient.

Although states are pleading for greater latitude before penalties are assessed, there is a corresponding concern among some Republicans on Capitol Hill that the welfare law already has been weakened enough by subsequent legislation and that states must be held accountable to the letter of the law if welfare reform is to truly work.

Sen. Lauch Faircloth (R-N.C.), founder of a "Preserve Real Welfare Reform Working Group" in the Senate, said one of the problems with the old welfare system was that "for 30 years we gave nothing but leeway."

"States that don't meet the requirements should be assessed the penalties," he said. "This is such a small portion of their caseload [that] there is no reason they can't meet it. The two parents are even allowed to split the 35 hours they are required to work! Anybody who can't find 17 and one-half hours of work a week is not trying," he said.

Douglas Besharov, a scholar at the conservative American Enterprise Institute, said the failure of states to meet the two-parent work rates "does not augur well" for the entire welfare reform effort.

"It ought to be easier for a state to get one parent of a two-parent household to work than the only parent," he said. "I am surprised and concerned."

But other analysts saw trouble ahead over the work requirements long before the welfare legislation was passed. The Congressional Budget Office said early in 1995 that few if any states would meet the strict work rates, which rise to 50 percent for all families and 90 percent for two-parent families in the coming years. Instead the budget office estimated that the federal government would save money on the requirement, because states would simply swallow whatever penalties were imposed.

States face the potential loss of up to 5 percent of their annual federal welfare payment or block grant for failing to meet the work requirements in the first year, with penalties increasing annually. For Connecticut, it could mean the loss of up to $20 million.

The federal Health and Human Services Department, which has yet to issue regulations detailing how work rates will be counted and how fines will be assessed, says it will look at states' success on a "case-by-case" basis.

Critics of the welfare law say the early glimpse of compliance reveals less about states than about the statute. "This is not an indictment of states, but an indictment of the law for being unrealistic, and an indictment of HHS for not getting the rules out to the states so they know what they are operating under," said Wendell Primus, a former Clinton administration welfare official who resigned in protest over the signing of the welfare measure.

© Copyright 1997 The Washington Post Company

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