Welfare Impasse Forces States to Craft Own Plans

The inability of President Clinton and Congress to find common ground on welfare reform has become a fiscal nightmare for some states, a policy straitjacket for others and for a few, a good reason to stall in the face of public clamor for change.

In California, the federal impasse has blown a $1.6-billion hole in the state budget. In Connecticut, it has forced officials to ease a proposed 21-month limit on welfare benefits. In Kentucky, it has allowed state officials to buck a broad national consensus for fundamental reform.

The policy vacuum has created a patchwork quilt of state programs in various stages of reform. Even in states where officials are eager to enact changes, Washington has blocked them from implementing some of the more aggressive policies that they consider essential to halting the intergenerational cycle of dependency fostered by the 60-year-old cash assistance program for poor families with children.

Political operatives in the White House and Congress see short-term political advantage in standing pat. But state officials and policy analysts warn that the deadlock is contributing to a growing conviction in state capitols and living rooms across the country that Washington is incapable of finding solutions to national problems.

Last year, the Republican-controlled Congress approved sweeping legislation that would have given states broad authority to craft their own programs, along with lump-sum block grants to finance them. But the measure was vetoed by Clinton, and an effort this year by a bipartisan group of governors to revive welfare reform appears to be stalled by presidential politics and partisan subterfuge.

The delay--and the prospect that it could continue well past this fall’s elections--is most acute for those governors and state lawmakers who were convinced that a federal overhaul would be enacted and who tailored their own programs accordingly.

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In California, the administration of Gov. Pete Wilson was so confident that Clinton would sign the legislation that it spent most of last year designing a state reform plan based on the GOP plan--and counted projected savings from it in the state budget.

When Clinton vetoed the measure, California was left in the lurch. It now faces a potential $1.6-billion funding shortfall over two years, and its blueprint for a new state welfare system probably will go nowhere unless a reform plan similar to last year’s legislation is enacted, according to state officials.

“The impact is that we can’t reform welfare,” complained Janice Ploeger Glaab, an assistant secretary of the California Department of Social Services. “It shackles us.”

Connecticut revamped its welfare system after obtaining Washington’s blessing. As a condition of approving the plan, the Clinton administration insisted on weakening a 21-month limit on eligibility for cash benefits. It required the state to continue sending checks to supplement the income of participants who obtain part-time jobs.

“We were very much looking to wean people from welfare--to really make that break--and expect them to support themselves. But the feds said, ‘No,’ ” said Claudette Beaulieu, a senior official at the Connecticut Department of Social Services. In Kentucky, the deadlock allowed state officials to ignore the national trend toward “tough love” welfare policies. The state decided to forgo the kind of stringent requirements contained in the vetoed legislation, which would have forced states to push most welfare recipients into the work force after two years and limited lifetime benefits to five years.

“I don’t think there has to be a time limit,” argued John Clayton, commissioner for the Kentucky Department of Social Insurance, the state’s cash assistance agency.

Rather than forcing recipients to work by threatening to cut off cash payments, Kentucky is attempting to nudge them toward the job market by allowing them to collect reduced welfare benefits after they start receiving paychecks. Largely because of the state’s healthy economy, caseloads have dropped 22% over four years--far more than in most states that have attempted their own reforms.

In state after state, officials have complained about the frustration and difficulty of trying to craft new welfare programs when they do not know whether the federal program will be changed.

“It’s sort of like driving on the interstate blindfolded,” said Don Winstead, Florida’s welfare administrator. “It’s no problem unless you run off the road or hit something.”

The number of states waiting for the federal government to move first is fast diminishing.

“The current environment is one that you could allow to paralyze you,” said Linda Wolf, deputy director of the American Public Welfare Assn., which represents welfare directors in all 50 states. “But most states have decided not to be paralyzed.”

In the absence of federal reform legislation, states can submit proposals to the U.S. Department of Health and Human Services seeking waivers from existing law. The process is cumbersome, largely because it was designed to encourage states to try small pilot projects, not to pursue sweeping overhauls.

In Mississippi, for instance, state officials did not count on federal block grants and moved forward with their own reform plan.

“We’ve already changed welfare as you know it,” boasted Larry Temple, deputy director of the Mississippi Department of Human Services. “We’re an impatient lot down here. We may talk slow but we move fast.”

But Temple conceded that it was no easy task persuading federal bureaucrats to permit his state to implement its proposed reforms. Under Mississippi’s program, welfare applicants must begin looking for work on their first day on the rolls and the state subsidizes employers who hire them with money that previously was used for cash assistance and food stamps.

“My knees are still sore from begging,” Temple said. “The novena was 18 months long. It’s ridiculous.”

Despite the problems they face, states have swamped the federal government with requests to revamp their welfare programs. The administration established a fast-track waiver process last year and says that it has granted 58 waivers to 37 states since January 1993.

Indeed, many states have been given permission to pursue what they consider to be ambitious welfare overhauls. More than 30 are limiting eligibility time for cash benefits or imposing sanctions on recipients who do not go to work under specified circumstances.

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Still, states complain that the only way to get a waiver quickly is to embrace the administration’s vision of welfare reform. Divergent plans take considerably longer to receive approval, they say.

And some states have been forced to water down reforms before waivers were granted.

Massachusetts, for instance, wanted a two-year limit on benefits paid to parents with children over the age of 2, with no exceptions. “We believe that for able-bodied people, the dole should end sometime,” said Gerald Whitburn, state secretary of Health and Human Services.

The Clinton administration rejected the state’s proposal. It said Massachusetts could impose the two-year limit only if it exempted families who followed all the rules and through no fault of their own were unable to obtain work.

Massachusetts decided to implement the rest of its reforms, which include requiring most parents to work within 60 days of applying for welfare or face stiff sanctions. But it abandoned the two-year limit in the face of administration opposition.

California officials waited more than 18 months for a ruling on their version of a “family cap,” under which benefits would no longer be increased when babies are born to families on welfare. Ultimately, the administration blocked the state from imposing the cap.

Although similar proposals were approved for 14 other states, the administration noted that California’s proposal went further because it included first babies born to teenagers whose mothers were supporting them on welfare. It offered to approve the plan if that provision were removed, but the state elected to drop the request instead.

Agreeing with the condition would directly conflict with Wilson’s effort to combat teen pregnancy, Eloise Anderson, director of the California Department of Social Services, said in a letter to the federal department.

Under the legislation approved by Congress last year, states would have the authority to implement such policies without federal approval. They subsequently could alter their plans without getting agreement from Washington.

Some state officials and policy analysts said that the growing roster of states attempting their own solutions creates a misleading impression about the true extent of reform in the absence of federal legislation. Because of restrictions imposed by existing law and the administration’s waiver criteria, states have been prevented from undertaking some of the fundamental reforms they believe are needed to let recipients become independent and to transform welfare into a transitional system and not a permanent support system.

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“The change is not nearly as profound or as deep as it would be under block grants,” Wolf said.

A number of state officials said they are concerned about reports that Republicans in Congress are discussing the possibility of avoiding enactment of welfare reform this year, perhaps by combining it with Medicaid reform proposals that they know Clinton would not sign. Under that scenario, Senate Majority Leader Bob Dole (R-Kan.), the presumptive GOP presidential nominee, could blame Clinton for repeatedly blocking reform, despite his 1992 campaign pledge to “end welfare as we know it.”

The prospect is particularly troublesome for states that have been prohibited from implementing key parts of their proposals.

* BLOW TO GOP HIGH HOPES

GOP prospects for a strong Senate majority are dim. A13