White House Misjudged the Cost of Welfare Reform, Analysts Say

Congressional budget experts say the White House underestimated the price of its original welfare reform plan by miscalculating demand for child care from single mothers who would be required to work.

The Congressional Budget Office said the White House also overstated the savings it expected to wring from several federal programs to finance its reforms.

Although the Administration has not decided whether to push its welfare plan when Republicans take over Congress, Friday’s study is significant because it documents the high price of changing the welfare system to encourage work.

The White House estimated the cost of its plan, which would push increasing numbers of women into work and training programs, at $9.3 billion over five years. The CBO put the cost at $11.8 billion and said much of the difference was due to higher child-care costs.

The budget office also said that the Administration could expect to save only $6.9 billion--not the $9.3 billion it expected--through a variety of spending cuts, including restrictions on aid to immigrants, drug addicts and wealthy farmers.