Cost of jobs may hinder welfare plan

January 30, 1994|By Jason DeParle | Jason DeParle,New York Times News Service

WASHINGTON -- President Clinton's pledge to make welfare recipients work could require a much larger public jobs program than previously acknowledged, according to a confidential paper that is the subject of sharp dispute inside the administration.

A preliminary estimate prepared by the Department of Health and Human Services suggests that 2.3 million people could be subject to the work requirements when the program is fully implemented. To put them all to work would require three to four times the number of jobs the administration appears willing to create.

No one is contemplating a program that large and expensive, and several administration officials dismissed the computer projection as a preliminary one that greatly exaggerates the problem.

One administration official, giving what he called the first reliable estimates of the work program, said the government would ultimately need to create between 500,000 and a million jobs, an undertaking that is itself virtually unparalleled in the last half-century.

But other welfare analysts, inside and outside the government, havecalled the estimate of 2.3 million a useful benchmark that illustrates the difficulty Mr. Clinton faces.

Mr. Clinton pledged last week to send Congress a bill this spring that would offer training opportunities for welfare recipients and require those still on the rolls after two years to join a work program. The government would either subsidize private jobs or provide community service positions in the public sector. The jobs would probably pay the minimum wage.

Mr. Clinton is under considerable pressure to proceed with his welfare program, even though many in the administration fear the move will bring a congressional fight and may stall the debate over universal health care.

Report is uncirculated

The paper suggesting the need for 2.3 million jobs has not circulated among most of the 32 members of the working group charged with drafting Mr. Clinton's plan. It was discussed at a meeting at the Department of Health and Human Services on Jan. 14 and disclosed by an official who opposes the work program, arguing it could cost a lot of money without helping poor people.

"They've always said this program is going to work so well that they wouldn't have that many people hit the two-year wall," the official said. "Now they're beginning to see that this is a real problem."

The debate about the number of jobs is crucial to the welfare plan's success. A large public jobs program could prove expensive and unwieldy, and it would unleash the opposition of union members, who fear that low-paid welfare recipients will displace them from their jobs.

But a program that fails to provide enough jobs would not fulfill Mr. Clinton's pledge to "end welfare as we know it." A shortage of jobs would mean that welfare recipients, instead of joining a work program at the end of two years, would simply join a waiting list. They would continue to receive benefits.

Study called misleading

The 2.3 million figure is the department's best guess, based on a complex computer model, of the number of people who would exhaust the two-year limit if current welfare policies do not change.

David T. Ellwood, an assistant secretary of health and human services, said the projection was highly misleading because it does not take into account other policies intended to reduce the welfare rolls. He called the projection merely a first step in building a more sophisticated computer model.

Subsequent computer runs, for instance, have tried to gauge the extent to which welfare rolls would decline if Congress passes universal health care. The rolls are expected to shrink because some people stay on welfare simply to get medical care.

Other variables

Other administration proposals intended to reduce welfare rolls include the expansion of training programs, increased efforts to collectchild support payments, a campaign against teen-age pregnancy and the expansion of tax credits for low-income workers. The estimate also does not take into account the deterrent effect of the work program itself; some welfare recipients facing the work requirement would probably choose to leave the rolls.

"Numbers like 2 million or more are irrelevant because they don't take into account policy changes that are already under way," said Mr. Ellwood.

Wendell E. Primus, a deputy secretary of health and human services, concurred, calling the number of 2.3 million "completely irrelevant."

Mr. Ellwood, who used to teach anti-poverty policy at Harvard University, came to the administration with a reputation as one of the academic world's most accomplished modelers. Still, other analysts have doubted his assurances that the numbers will remain manageable. They note that he is trying to gauge the effects of programs that either may not pass or may not work as intended.

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