Latest Welfare Concern: How to Make Work Pay

Slashing the welfare rolls may have been the easy part: Government officials are now girding for a new clash over welfare reform centered on the plight of working poor Americans who left public aid but continue to struggle in poverty.

The newest ranks of working poor are the product of welfare policies that have steered recipients into the work force and set time limits on how long they may collect public aid. Such workers can be found toiling in restaurant kitchens, sweeping office buildings, attending the bedridden and engaging in countless other labors that pay at or near the minimum wage.

Their numbers have grown--perhaps by 1 million or more--at a time when the overall poverty rate has declined and many low-income workers have been edging up the economic ladder.

“They’re playing by the rules. They’re doing what they can to help their families,” said Isabel V. Sawhill, a poverty expert at the Brookings Institution in Washington. “The question becomes: What do you do for them? How do we make work pay?”

It is a question being asked increasingly in Congress, which must decide this year whether to alter the huge changes in welfare it began in 1996. Already, some lawmakers are proposing billions of dollars more for child care and financial rewards for states that reduce poverty.

The White House would continue funding welfare at its current level of about $16.5 billion and also reinstate certain provisions, including a $2-billion fund to help states through hard times, which expired last year.

But unlike the rancorous debate of the 1990s, when Congress turned vast control over welfare policy to the states and ended lifetime entitlement to benefits, the new discussion is noteworthy for areas of agreement as well as areas of dispute.

Many Republicans and Democrats want welfare reform to stay on course, with work remaining the preeminent goal. Democrats have become more amenable to conservative initiatives aimed at encouraging marriage and family stability among the poor. Republicans have become much less frustrated with the welfare system and more sympathetic to beneficiaries, who are increasingly likely to work for part of their income.

“Ironically, welfare reform may have the best chance for bipartisan agreement of any issue this year, which shows we’ve come a long way in the last six years,” said Bruce Reed, president of the Democratic Leadership Council and a top advisor to President Clinton on welfare reform in the 1990s.

Nonetheless, evidence that many former beneficiaries still struggle with poverty is at the heart of an ideological schism, dividing those who wish to plow new public resources into welfare from others who argue the program doesn’t need fixing. Funding for welfare reform will run out at the end of September, sparking new conflicts as members hash out plans to renew the program.

Among the areas in dispute:

* Requirements for work and education. The Bush administration wants to stiffen the work rules, which states found easy to meet under the 1996 law. But critics, citing the steep climb faced by former recipients, want more time spent on education and training to count as time spent on the job.

* Taxpayer-supported child care. The rush of low-income single mothers into the workplace has sparked huge new demands for child-care services. A welfare bill by Rep. Benjamin L. Cardin (D-Md.) would hike spending on child care by more than $11 billion. The Bush administration wants to hold the line. (Current expenditures are about $4.8 billion, more if such programs as Head Start are counted.)

* Poverty reduction as a goal of welfare policy. Democrats would make cutting poverty the official goal and pay states bonuses of millions of dollars for progress. The Bush administration has responded with a more vague goal of improving “child well-being.”

“We now need to turn our attention to reducing poverty levels and promoting advancement in the work force,” Cardin said, introducing the Democrats’ first major legislation in the new round of welfare reform.

The administration sounds cooperative. Health and Human Services Secretary Tommy G. Thompson recently told Congress that the administration wished to “help those families that have left welfare to climb the job ladder and become more secure in the work force.”

Census Bureau surveys suggest the total number of working poor, including many who have never been involved in welfare, actually declined during the 1990s boom. But evidence suggests that many single mothers who left the welfare system for jobs--or combine welfare with private employment--are far from secure.

Vanessa Brown, a single mother in Philadelphia, recalled that when her employer went belly up last October, she and other former welfare recipients were hit with a sudden crisis.

“I can’t tell you how many people were crying when we walked out of there,” said Brown, 35, of the customer service firm that hired many former welfare recipients. “They’re relying on boyfriends and family. Some of the girls are living in bad situations just to survive.”

Brown, who had been making $8.84 an hour, qualified for unemployment benefits, but they will run out shortly. “I’m up in the air about how I’m going to support myself,” she said.

Out of 2.8 million families that left welfare in the late 1990s, six in 10 former adult recipients now work at least part of the year, studies suggest. Typically, they earn $7 to $8 an hour. Many lack health-care benefits and do not qualify for unemployment insurance if they lose their jobs.

In addition, many of the working poor have not entirely left welfare, a striking if little-noticed development since the 1990s. Of the 2.1 million adults on welfare last fall, 1 in 3 were doing at least some work, according to the Health and Human Services Department. The total of new working poor--those whose personal circumstances have been affected by welfare’s stricter rules--is possibly as high as 1.2 million adults, Sawhill said.

“An increasing percentage of the poor are working poor,” said Sawhill.

In particular, many states claim they need more money for services--including child care, transportation and training--to help hard-pressed working people stay afloat.

“We’re almost a victim of our own success,” said Sheri Steisel, director of human services policy at the National Conference of State Legislatures. “As more and more parents go to work, they need more and more child care--to ensure that they’re reliable employees.”

Some of the emerging skirmishes go beyond resources to basic philosophy about welfare. For example, some advocates of the poor would like to make more flexible the time limit for which a person can get benefits--which typically has a lifetime cap of five years--so that the clock would stop ticking for those recipients who are getting a paycheck in addition to their welfare payment.

But on the other side, defenders of the current approach argue that easing the time clock would weaken a crucial incentive for people to enter the work force.

“I think it would be a huge mistake for there to be any backsliding on time limits,” said Wade F. Horn, assistant Health and Human Services secretary for children and families. “It ain’t broke. Show me it’s broken.”