How States Are Revamping Welfare

IN Massachusetts, Gov. William Weld (R) wants to wean people from the public dole by encouraging them to take at least minimum-wage jobs. His carrot: the state will provide child care and health care to any welfare recipient who works.

In Wisconsin, Gov. Tommy Thompson (R) is spearheading a program to put a two-year cap on welfare benefits and require most recipients to work 20 hours a week.

California offers cash bonuses to families on public assistance whose children receive good grades in school.

Across the country, states have become the laboratories for changing the way welfare works - one of the dominant issues of the 1990s.

Increasingly encouraged to do so by Washington and a public more restive about government assistance, more than 40 states from Florida to California are experimenting with ways to get people off the public dole and into the workplace.

The ideas run the gamut: from barring additional benefits to mothers who have children while on public assistance to devising family investment schemes.

But some of the elements, such as the so-called family caps, are highly controversial. Thus, which directions the states go from here will be important. Already they are setting the agenda for much of the debate in Washington, where lawmakers from both parties are pining to revamp the welfare system. The only question is how much and in what ways.

At the heart of every effort across the country are two simple principles: work is the only road out of poverty, and states need flexibility.

Lawmakers from Boston to Sacramento argue that they must be allowed to design programs that reflect their state's specific demands.

The time appears ripe for unprecedented state involvement in the national debate. President Clinton has already waived federal requirements for 20 states implementing programs. GOP Speaker-to-be Newt Gingrich (R) of Georgia has called for ``50 experiments'' on welfare reform.

In a recent meeting with Mr. Clinton, Governor Thompson says he told the president ``I would participate [in reform] if he was willing to grant flexibility to states and not have a closed mind in turning welfare over to us. He tentatively agreed.''

But some politicians and social-policy analysts caution that cutting the federal leash could leave states and needy citizens vulnerable in hard economic times.

Since 1970 the welfare burden has almost doubled. Recipients of Aid to Families with Dependent Children (AFDC), the main public-assistance program, have risen from 7.4 million to more than 14 million, inflating annual costs by $7 billion. States pay from 20 to 50 percent of AFDC and Medicaid. Lumped together, all welfare programs cost the federal government and states about $200 billion a year.

Although states have been able to seek waivers from federal rules since 1962, progress toward reform has been slow.

In 1981, President Reagan signed a law stipulating welfare benefits would be reduced dollar for dollar by any income earned by a recipient. That reduced some of the benefits being paid out. But critics say it also reduced the incentive for people to work.

Then in 1988, Mr. Reagan pushed through the Family Support Act, which included a government-funded training program called Job Opportunities and Basic Skills. The idea was to help people find work. But recession followed soon after, limiting funding, and today only about 12 percent of adults on AFDC are enrolled in JOBS programs.

Waivers on federal welfare rules became easier for the states to obtain under the Bush and Clinton administrations. The result is that reforms have mushroomed in the past four years.

Across the country, state social service commissioners say the heart and soul of welfare reform is making work lucrative. There is no formula. Most programs are too new to judge definitively, but early studies indicate that job placement is more important than job training.

Bob Wyckoff, a spokesman at the Michigan Social Services Dept., argues that the best way to move people off welfare is ``to replace the punitive stick with the incentive carrot.''

Michigan welfare recipients are required to participate in the state JOBS program a minimum of 20 hours a week. In exchange, they are allowed to keep the first $200 of earned monthly income. In this ``social contract,'' Mr. Wyckoff says, 25 percent of recipients are reporting earned income, and 22,000 cases moved off welfare in 1993.

But Eloise Anderson, director of the California Social Service Department, is skeptical of training programs such as JOBS. She argues that putting people into jobs is more important than training them.

``Work. You cannot get around work,'' she says. ``We need to say to people, `Guess what, it's time for you to do some real time in the work place.' And we have to stop demeaning low-wage jobs.''

In Wisconsin, Governor Thompson says the private sector has a responsibility to make reform work and provide jobs.

``In a particular county the private sector has to make an assessment of the jobs that are going to be created in the next five years,'' he says. ``And then with the state paying for the training, the private sector has to train people for actual jobs.''

But many critics question whether the private sector will do enough. Others worry about transferring so much responsibility to the states at a time when congressional Republicans advocate ending aid to unwed teenagers who have babies and placing children of welfare mothers in group homes.

``There is a risk of inadequate funding,'' says Judith Gueron of Manpower Demonstration Research Corporation. ``Problems are not going to go away'' just by transfering programs to the states. States will have to watch to see if Washington washes its hands.''