THE GOP WELFARE PLAN : NEWS ANALYSIS : States, in All Likelihood, Will Emerge as Guardians of the Poor : Reform: House, Senate support for current welfare system has so deteriorated that major changes are inevitable. But concern centers on implementation.

TIMES STAFF WRITER

The bitter debate that preceded passage of the House welfare bill, the most ambitious effort to transform social policy since the New Deal, has made one thing startlingly clear: Political support for the current, federally micromanaged social welfare system has utterly collapsed.

The question in the Capitol is no longer whether a radical overhaul of the welfare system is likely, but just how far it will go.

"The status quo is dead," said Rep. Sander M. Levin (D-Mich.). "The only issue is what is going to replace the present welfare system."

Attention now turns to the more cautious Senate, which is expected to shy away from some of the more dramatic features of the House bill. But even in the Senate, lawmakers seem sympathetic to changes that amount to an enormous transfer of power over the nation's vast social welfare establishment.

No matter what form the final legislation takes, one thing is all but certain: States will come out of this debate with far more power over and responsibility for the lives of poor people.

"Clearly the states are going to have more flexibility," said Senate Finance Committee Chairman Bob Packwood (R-Ore.). "How much more I don't know."

Proponents are hopeful that this will inspire a burst of creativity among state policy-makers looking for new ways to care for the poor. But it also could mean huge disparities in the treatment of the poor from state to state. And some fear that Congress' support for welfare programs eventually will erode if it has less to say about how the money is spent.

This year's welfare debate also seems destined to transform the whole purpose of welfare, changing it from a form of income maintenance into a tool for changing people's behavior--discouraging teen-age pregnancy, getting welfare recipients into the work force or both.

The current welfare system is so far out of favor that even the most liberal Democrats in the House felt obliged to call for major changes. All House Democrats supported an alternative that would, for the first time, impose a four-year limit on welfare eligibility and make other changes that, not long ago, would have seemed unthinkably conservative for their party.

The House Republican plan would effect a particularly dramatic transfer of power from the federal government to the states. It would take a wide range of social programs--including nutrition, foster care and child care as well as the basic cash welfare program, Aid to Families With Dependent Children--and turn them into block grants that would give states unprecedented power to design their own programs.

The core of the House Republican plan--the block grant approach--may receive a cool reception from key members of the Senate. "I don't think the concept of just putting all the problems in a box and sending it to the states is likely to survive in the Senate," said Sen. John B. Breaux (D-La.). But Breaux agreed with Packwood that the Senate surely would give states more latitude to tailor the programs to suit their own needs. "What works in Louisiana may not work in California," he said.

Gaining currency is the view that states are in a better position to run social welfare programs because they are closer to the people who are supposed to benefit. That marks a departure from--or temporary suspension of--past suspicion that states would not take adequate care of the poor if they were not forced to meet federal standards.

Congress seems more willing than ever to shelve those doubts about states' ability and willingness to care for the poor for a variety of reasons. For one thing, they are responding to what they see as the anti-government mandate of recent years, especially the 1994 elections.

"In the last couple of elections, people have come here with the idea that the federal government is the villain and that the time has come to break down the system," said Rep. Michael N. Castle (R-Del.).

Shifting welfare responsibilities to the states is an appealing way to save money at a time when the federal government is strapped and many states, by comparison, are flush.

It also ratifies a shift that is already under way. Increasingly, states have been experimenting with new approaches to welfare but have had to ask Washington for permission to depart from federal standards. Without those strictures, some state officials have predicted, a flurry of state-by-state innovation and improvements in welfare is likely.

"We could implement changes real fast and improve the system faster than anybody imagined," said John Truscott, press secretary to Michigan Gov. John Engler.

But the devolution of power to states also risks creating even greater inequities among the states than already exist today.

"There will be good welfare programs and there will be bad welfare programs," said Douglas Besherov, a scholar who specializes in welfare policy at the American Enterprise Institute. "One hopes the bad programs will be few."

That, in turn, could exacerbate concerns that states with generous welfare programs will be overburdened by people migrating from states with less generous benefits.

There also may be a political price for giving states more latitude. Some analysts have warned that the block grant approach could weaken congressional support for welfare. "There would be a weakening of desire of members of Congress to appropriate funds if some states would spend it in ways they don't like," said Gary Burtless, an economist at the Brookings Institution.

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Critics of the House Republican plan also are concerned that states are not equipped to handle the huge new responsibilities they are being handed. Raising questions about giving states more responsibility for child protection services, Rep. George Miller (D-Martinez) noted that about 20 states have run their foster care systems so badly that the courts have taken over the job. "Those are the states that the (Republicans want) to give more say to," said Miller.

Even some Republican proponents acknowledged that the proposed block grants are a gamble. But they think it is a risk worth taking, they said, because the federal system has fared so poorly.

"These programs are so big, I don't think anyone can predict whether states can absorb these block grants and carry them out successfully," said Castle. "Although there is some doubt, we need to try something."

Besherov said it makes sense to give more power to the states if, as seems likely, Congress reshapes welfare to more explicitly serve social objectives, such as encouraging marriage and work. "The federal government sends out checks. It can't do social services," said Besherov. "If you are talking about a program that has to change the behavior of citizens, it should (belong to) the states."

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Answering Questions on Welfare Reform

Q: Does this mean my child will no longer receive his free school lunch?

A: It might. It depends on how each state designs its program, and how it decides to use its block grants.

Q: Will mothers on AFDC have to go to work?

A: Yes, eventually, if this provision survives. The House bill requires them to work after two years, and to lose their benefits after 5 years. But some states could impose more stringent requirements. In Virginia, for example, where a new welfare law goes into effect July 1, welfare recipients will be required to get a job within 90 days, and will lose benefits after two years.

Q: Would immigrants lose their welfare benefits?

A: Yes. Under the House bill, legal immigrants will be prohibited from most welfare programs.

Q: Would teen-age mothers lose their benefits?

A: Yes. Unwed mothers under age 18 will no longer receive welfare. Also, states will not be permitted to provide additional cash payments for parents already on welfare who bear more children.

Q: What is Aid to Families with Dependent Children? What is Supplemental Security Income?

A: AFDC is a program of direct cash benefits to poor mothers with small children. SSI is an assistance program for poor adults and children with disabilities.

Q: What is an entitlement?

A: An assistance program in which individuals automatically receive aid if they meet certain federal guidelines for need, known as a "means" test. Under the House bill, existing social programs would lose their entitlement status.

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