Squabbling puts welfare plan on hold

July 10, 1995|By John B. O'Donnell | John B. O'Donnell,Washington Bureau of The Sun

WASHINGTON -- For five months, the juggernaut that would transform the U.S. welfare system moved inexorably through Congress, fueled by solidarity among the new majority Republicans. But in recent weeks, it has slowed to a crawl as Senate Republicans have fallen to squabbling among themselves.

The fight turns on several issues, the most intractable of which is the formula for handing federal welfare money to the states. Whatever happens, Maryland is likely to lose.

Conservatives also insist that any Senate bill have provisions, already adopted by the House, to impose tough work requirements on welfare recipients and discourage illegitimacy. The main welfare bill in the Senate doesn't include those provisions.

Finally, presidential politics looms as two major Republican candidates square off over welfare.

"The Senate bill fails on every major count," says Sen. Phil Gramm of Texas, a leader of the conservative Republican revolt and a presidential rival of Senate Majority Leader Bob Dole of Kansas.

Mr. Dole is a member of the Finance Committee, which approved a less stringent bill than the one adopted by the House. The majority leader had planned on Senate passage in June but has delayed the floor debate as he tries to work out differences among Republicans.

Sen. Lauch Faircloth, a North Carolina Republican, is threatening to filibuster the Finance Committee bill if it doesn't include a ban on welfare payments to teen-age mothers and on additional money for welfare mothers who have more children.

Nevertheless, many Democrats and Republicans believe the fight over money for the states is the toughest nut to crack. Ideological fault lines usually disappear when federal money for home states is involved. This fight is no exception.

Some liberal Democrats who oppose the GOP on most welfare issues have joined Republicans, either to preserve money for their states or to get more.

At issue is the method for slicing up a finite federal pie. The current welfare system guarantees benefits to anyone who qualifies, regardless of the cost to the government.

Separate bills approved by the House and the Senate Finance Committee would end that guarantee. Instead, they would give each state a fixed portion of the pie. The bills would also end the requirement that each state pay a portion of the welfare benefit -- the amount varies from 20 percent to 50 percent, depending on a state's wealth.

During the next five years, the bills would give each state essentially the same amount annually it got in 1994, along with wide discretion in running its own program.

Opponents of that formula say it perpetuates a system that gives widely varying amounts to poor children, depending on where they live. Children in New York, they say, get six times as much as do children in Mississippi.

Those variations result from decisions made by the states, which set their own benefit levels and eligibility criteria. Some states have been reluctant to increase benefit levels because that would require them to spend more of their own money.

But Republicans and Democrats from fast-growing states have decided they don't like the Finance Committee's formula. It would give them only a fixed amount of federal money for a rising welfare population.

"The formula is a rotten formula," Senator Gramm says.

Sensing a windfall for his state, he has joined his Texas Republican colleague, Sen. Kay Bailey Hutchison, to promote a formula that would shift billions of dollars from California and the Northeast to mainly Southern and Western states.

L They argue that the federal government should spend the same

amount of money on each poor child in the country, no matter where that child lives.

"That will allow for the dollars to follow the need," says Sen. Carol Moseley-Braun, a liberal Democrat from Illinois, which would benefit from the formula change.

Florida Democratic Sen. Bob Graham, a Finance Committee member whose proposal to change the formula was rejected by the committee, is also part of the effort.

"In the District of Columbia, a poor child receives three times as much federal money per year -- three times -- as does the same poor child a few hundred yards across the Potomac in Virginia," he told the committee.

Generally, the states that now pay the highest welfare benefits stand to lose the most.

"States that have been putting up their money . . . they would be savaged," says Sen. Alfonse M. D'Amato, a Republican from New York.

The stakes are enormous. Under the Hutchison proposal, New York would lose $749 million -- 32 percent of what it would get under the Finance Committee bill -- in the first year and nearly $1 billion annually within a few years. Its ultimate annual loss would amount to nearly 6 percent of the total national pie of $16.8 billion.

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