States Get Welfare Reform Bonuses

Rewarding states in which welfare recipients found and kept jobs, President Clinton distributed $200 million in bonus money Saturday to 27 states for doing more than simply cutting welfare rolls.

California, in large part because of its sheer size, received $45 million of the total.

Clinton further refined what it means to succeed in welfare reform, saying that next year’s bonuses will also reward states that get medical benefits and food stamps to low-income families. He said states will be rewarded too when more children live in two-parent families.

In his weekly radio address, Clinton again trumpeted tumbling welfare rolls, announcing that the number of people collecting monthly checks is now less than half that of 1994. Fewer than 6.9 million people--about 2.5 million families--collected aid in June.

The welfare bonus contest, created by the 1996 welfare overhaul, rewards states that move the most welfare recipients into jobs, whether or not they leave the system’s rolls. States are also rewarded when clients keep jobs for at least three months and receive higher wages.

“Most of the people who get jobs are keeping them. They’re getting raises and paying taxes, and teaching their children to honor the dignity of work,” Clinton said.

Each winner’s share of the $200 million is determined by the size of the state’s annual welfare appropriation from Washington.

The money is added to other welfare funds and is subject to the same restrictions. None of the bonus money can be used to cut taxes or build stadiums, for instance, but it can pay for child care or vans to take people to jobs.

The money goes to the top 10 states in four categories, based on data from 1998.

Indiana was No. 1 in placing the most people in jobs. Minnesota had the most people keep jobs and increase earnings, called “job success” (California ranked fourth in this category).

In the third category, Washington state had the most improvement in job placement from 1997 to 1998. Florida showed the most improvement in job success (California tied for eighth in this category).

State reports show that nationally, 1.3 million people on welfare went to work in 1998, with 80% still working three months later.

On average, quarterly wages increased from $2,088 to $2,571, still short of the poverty line but more than they were getting from welfare. These families also are eligible for the earned-income tax credit that helps millions of working families move out of poverty.

Backers of the new welfare rules, which require recipients to work and limit the time people can collect assistance, have pointed to falling welfare rolls as proof of the new law’s success. Opponents fear many of the people leaving welfare may be slipping through the cracks and getting nothing.