State Fails to Meet U.S. Welfare-to-Work Goal

California has failed to meet federal work requirements for two-parent welfare families, and officials concede that the state is likely to amass millions of dollars in penalties for flunking this early test of welfare reform.

In a memorandum to incoming Gov. Gray Davis, the Wilson administration warned that the state has been assessed $7 million for failing to move a significant number of its more than 140,000 two-parent families into the work force in late 1997, and “is unlikely to meet the required two-parent rate” for 1998.

California has more people on welfare, including more two-parent families on assistance, than any other state. Compounding that is its disproportionately high number of legal immigrants “with significant language barriers and cultural barriers and all sorts of other barriers to full employment,” said Frank Mecca, executive director of the California Welfare Directors Assn.

The penalties are tangible evidence that two-parent welfare families pose a substantial barrier for California to one of the prime goals of welfare reform. Officials do not expect to conform even in 1999, and they intend to challenge the fines, arguing that the state’s welfare population is unique.

“California is a very complicated state,” said new Health and Welfare Secretary Grantland Johnson, “and it’s a much more difficult task . . . in contrast to the challenge confronting other states.”

Two-parent families make up nearly a fifth of California’s welfare caseload. For more than a dozen states, two-parent families make up less than 1% of those on welfare.

Michigan has the next-highest two-parent caseload after California, according to federal government statistics, with 15,077 such families, or a tenth of its caseload. In California, the number is 142,911.

Tough Requirements

The 1996 federal welfare reform act, which liberated states from thousands of serpentine government regulations, also imposed some tough requirements. For example, adults in at least 25% of all welfare families must be working; in two-parent families, 75% of adults must work. States that fail to achieve either goal are subject to penalties.

In the less demanding category of all welfare families, in 1997 California and all other states met the 25% requirement. But for the 75% employment requirement for the two-parent families, California, 16 other states and the District of Columbia fell short.

In fact, California got federal credits for reducing its overall welfare caseload, so it was only required to have 68% of adults in two-parent families working in 1997. But it had only 24%.

Consequently, federal officials in December hit the state with the $7-million penalty. Experts say the total could go as high as $28 million if the state misses its target for this year.

As welfare reform takes hold and states gain more experience with it, the percentage of adults who must work will rise, reaching 90% for two-parent families this year and 50% for all families in 2002.

From its inception, the two-parent work requirement imposed by Congress has been controversial. Organizations such as the National Governors Assn., the Congressional Budget Office and the National Assn. of Counties warned that for some sectors of the country, particularly California, it was unrealistically ambitious.

A California Department of Social Services survey showed that English is not the primary language for more than half of the two-parent families on welfare. In contrast, three-fourths of single-parent welfare families listed English as their primary language.

“There isn’t another state with near the kind of problems California has with its two-parent families,” said Casey McKeever, directing attorney for the Western Center on Law & Poverty, an advocacy group for the poor. “But the two-parent work requirement is such a preposterously high rate that it’s hard to see how any state with a significant caseload would be able to achieve it.”

When Congress passed welfare reform, two-parent families were an easy target for high work participation rates because they were such a small part of the caseload in every state except California, Mecca said.

“So the bar was set high by people who assumed that every two-parent family was an unemployed laborer and a stay-at-home mom,” he said. “And once they set the bar high, it seemed like the debate was over, because to speak against it . . . was attacked as being soft on welfare. So we’re stuck with a rate that’s utterly unreasonable.”

McKeever said federal requirements also demand that adults work at least 35 hours a week. He said many adults from two-parent welfare families are working, but because they put in fewer than 35 hours, they can’t be counted.

Waiver to Be Sought

Bruce Wagstaff, the state Department of Social Services’ deputy director of welfare programs, said the state will ask the federal government to set aside the $7-million penalty, arguing that in 1997 California still had not started its welfare reform plan, known as CalWORKS. That plan was phased in during 1998.

“I think we have excellent arguments to make,” he said. “Our caseload hasn’t gone down as quickly as other states because our economic recovery came later. Our welfare-to-work program was not in place. The composition of our two-parent families in some counties is almost exclusively . . . Southeast Asian refugees who don’t have work experience.”

But Michael Kharfen, a spokesman for the U.S. Department of Health and Human Services, said the federal government is not taking the work requirements lightly.

States have 60 days to challenge the penalties, he said, by asking for a waiver or presenting a plan to show how they intend to push more families into the workplace.

He said federal officials are making it clear that if states really want relief from the 1997 penalties, a corrective plan is the best strategy. “In a sense, we want them to fix the problem, not just get relieved of the problem,” he said.

And he hinted that California’s immigrant situation may not carry much weight with federal officials. He said the immigrants affected by the work requirements have been in this country long enough to gain citizenship and many of them have been the beneficiaries of a federally financed refugee resettlement program that helped acclimate them to the American culture and workplace.

Mecca counters that although the resettlement programs were effective, over the last decade federal funding was cut back so severely that only a small number of refugees benefited.

“It seems hypocritical to me to say they’ve been here awhile, therefore they should be ready to move off aid,” he said, “when, in fact, much of the resources that the federal government promised the states to help acclimate and acculturate those folks was cut.”

Despite the tough talk from the federal government, most state officials are optimistic that the first round of penalties will be forgiven. But they say they worry that in future years, California will continue to rack up penalties and Washington’s patience may wane.

Preliminary figures indicate that California will not meet the two-parent work requirement for 1998. In 1999, when the goal shoots up to 90%, Mecca said, it is doubtful the state will make that, either. “Is it likely that we’re going to meet the rate when it’s 90?” he asked. “No.”

If he’s correct, the Human Services Network of Los Angeles estimates that by the end of 1999, the penalties will rise to $28.3 million.

“I think that the state certainly needs more time,” said Johnson, the new health and welfare secretary who came to his state job from the Clinton administration, where he was a regional director in Health and Human Services.

“But this is not, from our standpoint, just about reducing [welfare] rolls,” he said. “We also want to . . . get folks attached to the labor force and, hopefully, in jobs that enable them to stay off [welfare] and, in the case of parents with kids, to be able to provide for their children.”

* GETTING OFF THE DOLE

Nationwide, welfare rolls are at a 30-year low, but downward trend is starting to slow. A13

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Welfare Families

The work requirements of welfare reform present a greater challenge to California than other states because of its large population of two-parent families on assistance. Here are the states with the largest welfare populations in 1997, the most recent figures available for all states.

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State Total families 2-parent % of total New York 379,734 12,352 3.3 Illinois 193,000 8,230 4.3 Florida 166,034 1,615 1.0 Michigan 147,833 15,077 10.2 New Jersey 98,800 2,100 2.1

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Source: U. S. Department of Health and Human Services, Administration for Children and Families