Senate Panel Passes Welfare Bill Giving States More Authority Over Programs : Legislation: Finance Committee plan makes major changes in AFDC. But it faces several hurdles in the full chamber.

By ELIZABETH SHOGREN

May 27, 1995 12 AM PT

TIMES STAFF WRITER

WASHINGTON —

The Senate Finance Committee passed legislation Friday that would end the six-decade federal guarantee of support to every destitute American woman with children by transferring vast authority over the welfare system to states.

Only one Democrat, Sen. Max Baucus (D-Mont.), joined Republicans in the 12-8 vote, which sets the stage for a floor debate next month on what is likely to be one of the most important decisions of the current Congress. The plan, although expected to pass largely intact, is sure to face attacks from both conservatives and liberals.

The bill--like a similar measure passed in the House earlier this spring--would make major changes in the $17-billion Aid to Families With Dependent Children program, the main cash welfare program for children. Now a federal program available to every qualified family in the nation, it would become a state-designed-and-operated program funded with lump-sum grants from the federal government. All eligible families might not be covered. Both measures set a five-year lifetime limit for receiving welfare.

“Children will be better served and welfare will be better run if the system is turned over to the states,” said Sen. Bob Packwood (R-Ore.), chairman of the committee and chief author of the Senate plan. “The argument that we are abandoning our responsibilities does not wash.”

Democrats challenged that assumption, however, criticizing Republicans for removing the safety net for poor children that has been in place since President Franklin D. Roosevelt’s New Deal. The Republican-dominated panel, however, quickly rejected three alternative Democratic proposals--all of which would have guaranteed benefits to all eligible families--before approving the GOP plan.

Sen. Carol Moseley-Braun (D-Ill.), who offered one of the alternatives, called the GOP plan “abandonment of children under the guise of state flexibility.”

Republicans voted down most of the amendments offered, including one proposed by Sen. John B. Breaux (D-La.) to require states to continue contributing their own money to AFDC, which is now funded jointly by federal and state funds.

“We are saying with this approach we don’t have either the intelligence or the courage . . . to solve the problem of welfare,” Breaux said. “We have an obligation to do something rather than just ship the problem to the states.”

But Senate Majority Leader Bob Dole (R-Kan.) disputed Democrats’ fears that states would let children suffer. He assured lawmakers that if the measure were to have a negative impact, “we’ll be back here in a year or two doing the opposite of what we’re doing today.”

While following the House lead in transferring most control over welfare to the states, the Senate committee rejected several provisions in the House bill that President Clinton and congressional Democrats have found onerous, including requiring states to deny cash benefits to unwed teen-age mothers. In another difference from the House bill, the Senate version retains the current program for shifting recipients from welfare to work, which the House bill would repeal.

“Although there are differences between the House bill and the emerging Senate bill, I am confident we will be able to work together to pass a bill that helps our nation’s poor lift themselves out of poverty while putting an end to a failed federal system that has become more harmful than helpful,” said Rep. E. Clay Shaw Jr. (R-Fla.), chief architect of the House plan.

Quietly, however, drafters of the House plan fumed about their Senate colleagues’ willingness to soften so many provisions in the House legislation. The Senate panel, for instance, unanimously decided Friday to increase from 10% to 15% the number of recipients states can exempt from the five-year time limit.

Secretary of Health and Human Services Donna Shalala said that the Senate plan is an improvement over the House bill but stressed that it does not provide the money necessary to pay for the training and child care that people will need to make the transition from welfare to work.

“It still has a long way to go on what should be the centerpiece of welfare reform: helping people earn a paycheck, not a welfare check,” she said.

Clinton has said he would veto the House version but has not threatened similar action on the Senate plan.

The Senate proposal would freeze AFDC spending at the 1994 level of $16.8 billion, saving $9 billion over five years, compared to projected spending under current law. Estimates of total savings over five years under the Senate bill, which also would overhaul the Supplemental Security Income program for disabled children and drug addicts and would cut some welfare benefits to legal immigrants, range from $26 billion to $31.5 billion.

The plan would ratchet up dramatically the number of recipients required to enroll in training and work programs and would mandate that the states provide child care for them. By the year 2001, 50% of the welfare caseload would be required to be enrolled in training programs.

The Congressional Budget Office, however, estimated that only six states would be able to meet that requirement.

John Topogna of the budget agency told the Senate panel that by the year 2000, states would have to spend $10 billion of the $16.8 billion in federal grants to pay for child care and training programs if they wanted to meet the requirements. He suggested that most of the states are likely to accept the penalty for not meeting the requirement--a 5% reduction in their block grants--instead.

“That’s not most people’s idea of welfare reform,” said Sen. Kent Conrad (D-N.D.).

Packwood said he was surprised by the agency’s estimate and would attempt to adapt work requirements to make them more realistic. But he said that he is not willing to increase the amount of federal money for the program.

The Senate plan is based on the advice of some Republican governors who have argued that states could reform their welfare systems without receiving more money if they are freed from federal rules and regulations. Under the plan, each state would receive whatever the federal government spent in welfare aid in 1994 for its residents.

The measure faces other hurdles before it is passed by the full Senate.

A bipartisan group of senators from the South and Southwest, where populations are growing, complained that this flat-funding mechanism would have “devastating results” in their states. California, for instance, would receive almost $3 billion less over the next five years than it would under current law.

In a letter to Packwood, Sen. Kay Bailey Hutchison (R-Tex.) and 29 other senators said that the formula would cause “severe budget and human consequences in our states.”

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

2 Ways to Reform Welfare

A comparison of the House and Senate plans to reform welfare. The full House has approved its plan. The Senate plan was approved Friday in committee and now must go before the full chamber.

HOUSE:

Cost: $15.4 billion.

Financing: States may transfer up to 30% of block grant funds to other block grants.

Food Stamps: Various refroms saving $19.4 billion.

Child Protection: 22 programs into single block grant.

Child Care: Consolidates seven current programs into a single program.

Legal immigrants: Prohibited from receiving Aid to Families With Dependent Children, Supplemental Security Income, Medicaid, food stamps.

Illegal Immigrants: Barred from all aid except emergency medical services.

Biracial adoption: Prohibits states from denying or delaying placement due to race-matching.

SSI for children: Cash benefits reserved for severely disabled children.

SENATE:

Cost: $16.8 billion.