Welfare Reform Stamps Varied Imprint on States

New policy will grant flexibility but impose new burdens

Historic welfare-reform legislation, which cleared Washington this week, represents an enormous change in the role of states in social-service policy.

No more will Uncle Sam write all the rules when it comes to providing for the nation's poorest. States will have much more flexibility to design welfare programs as they see fit - but they'll also have a much greater responsibility for shouldering the costs.

It's a brave new role that not all states may be ready for. Indeed, the whole welfare bill represents something of a leap into the unknown - for President Clinton, for Congress, and for millions of beneficiaries, as well as officials in 50 state capitals.

Will new time limits on benefits push recipients to look for work, as intended? Will enough employers hire people who have been on the dole for years? What occurs if a recession swells the ranks of the unem-

ployed? Experiments carried out in some states have provided only hints at the answers to these and other important questions.

"We really have no idea what's going to happen," says Sandy Danziger, a University of Michigan sociology professor and welfare expert.

Passage of the welfare bill came amid a last-minute congressional drive to approve a number of important pieces of legislation before lawmakers flee Washington for their summer recess. The sprint of activity included bills to fight terrorism, raise the minimum wage, and make health insurance more easily available to millions of Americans.

But welfare reform was clearly the sequoia in this legislative forest. It has been a signature issue for Mr. Clinton, who campaigned in 1992 on a promise "to end welfare as we know it." In vowing to sign a welfare bill into law, after vetoes of two earlier plans passed by the GOP-led Congress, Clinton may have deprived presumed GOP nominee Bob Dole of a powerful political issue. The White House's welfare acquiescence has riven Democrats, however, with liberals bitterly denouncing the president's decision. Furthermore, Republican legislators can now return to their districts and point to the welfare bill as evidence that theirs was not a "do-nothing" Congress, after all.

The welfare reform is historic because of its basic, underlying philosophy. No longer will national welfare be open-ended income maintenance for the poor; instead, families will be limited to a lifetime total of five years of benefits. Recipients will have to work or do community service in return for their checks.

Welfare will be abolished as a federal program. Instead, states will receive annual federal block-grant payments, lump them with their own money, and design and run their own welfare systems.

The bill also makes most legal immigrants who have not become citizens ineligible for food stamps and government Supplemental Security Income (SSI). This provision - combined with other food stamp trims - accounts for more than half the legislation's projected $55 billion in federal spending reductions over the next six years.

TO supporters, welfare reform represents an opportunity for the states, as well as an end to welfare dependence and a boost for the concept of self-sufficiency. "This is a remarkable vindication of the direction we're trying to help all of America get to," said House Speaker Newt Gingrich.

But opponents are predicting dire consequences; the Urban Institute, for instance, estimates that the bill will push 1.1 million children in the United States into poverty.

It's not clear that states will be ready for the new responsibilities being thrust upon them. Indeed, a Congressional Budget Office study predicts that only a very few states will be able to meet the welfare bill's ambitious goal of moving half of current welfare recipients into the work force by 2002.

Furthermore, state welfare administrations will have to shift their bureaucracies toward tracking the length of time that recipients have been on welfare and the duration and seriousness of their employment. "It's going to impose enormous implementation problems," Ms. Danziger says.

Urban areas may face even bigger challenges than the states do. Local officials across the country, Republican and Democrat alike, are up in arms about the bill's reduction in services for legal immigrants.

The sudden removal of these residents from food-stamp and SSI rolls will throw an enormous burden on city soup kitchens, homeless shelters, and assistance programs. New York, for instance, has a provision in its state Constitution that mandates care for the indigent; New York City's Republican mayor, Rudy Guiliani, is complaining loudly that welfare reform will cost his metro area $720 million in additional costs over the next six years.

Los Angeles County, facing a similar state law, estimates a sudden $263-million hike in its own costs. "It's really the local governments who have no one to shift the problem to. That's why we're hearing so loudly from mayors," says Evelyn Brodkin, a University of Chicago social-service expert who opposes the welfare-bill changes.