New Welfare Limits Could Be Aimed First at the Young

WASHINGTON —  A Clinton Administration task force is likely to recommend initially imposing the President’s two-year limit for welfare benefits on young recipients exclusively, while leaving millions of older people to collect public assistance as usual, senior officials said.

The officials argue that phasing in the proposed limit in this manner would be more effective and less costly at the outset--and would send a clear message of changed expectations to the next generation of welfare recipients.

But the proposal also risks attack from critics who maintain such a gradual approach fails to fulfill Clinton’s campaign promise to “end welfare as we know it.”

Under the plan, which is emerging as the clear preference of a task force preparing the Administration’s welfare reform recommendations, only new applicants and current welfare recipients born in 1970 or later would be required to work after two years on the rolls. Recipients who could not find jobs in the private sector would be given government jobs.

If the plan went into effect in 1995, the two-year limit would apply initially to all recipients 25 years old or younger. Each year, the time limit would automatically extend to new applicants one year older. By the year 2000, anyone 30 or younger would face the requirement to work after two years on the rolls.

The prevailing view in the task force apparently is to wait until the new system has been in operation several years before deciding whether to extend the work requirement to all other welfare recipients, though officials acknowledged that the decision could be reversed when it reaches Clinton’s desk.

“I think the proper thing to do is to see how well the system has performed,” said a senior Administration official. “Then in a few years’ time you say: ‘What additional resources are we going to need to (expand the requirement?)’ and do it then.”

Administration officials maintain that focusing resources on a relatively narrow group at first would increase the likelihood they could find jobs in the private sector and hold down the potentially enormous costs of creating public jobs for them.

Those officials also argue that such a move is more likely to change the “welfare culture” and diminish dependency over the long run by targeting limited resources at one clearly delineated group, rather than diffusing efforts across the 5 million families now receiving public assistance.

“We think it is critical to break the cycle of welfare dependency by focusing on the next generation,” said one ranking White House official. “It is important to send a clear unmistakable signal to a defined group of people.”

But Rep. Rick Santorum (R-Pa.), head of the House GOP task force on welfare reform, said in an interview that a work requirement limited to younger recipients doesn’t send a strong enough signal. “It doesn’t get at the long-term dependent population at all,” he said.

Another factor being considered by the Clinton task force is that a phased-in approach based on age would moderate the costs of welfare reform at a time when the Administration is struggling to pay for it by finding offsetting budget cuts.

Senior officials still say the welfare-reform plan could cost from $4 billion to $7 billion after five years, with an age-based approach likely to be nearer the $4-billion figure, sources said. Clinton has promised to forward his reform proposals to Congress this spring.

Preliminary estimates show that by 1999, about 2 million of the 4.7 million families expected to be on the welfare at that time would have been phased into the work requirement.

However, many of those younger recipients would not have been on the rolls for two years by then, and exemptions would be offered to those with very young children or disabilities. As a result, by 1999 the plan would require the government to find private or public jobs for about 300,000 welfare recipients, a figure senior officials say is within the capacity of Washington to fund and the states to manage.

The plan would place the younger recipients at the front of the line for job training, education, and child care, officials said. As a result, some officials acknowledge, the plan may raise questions about whether the Administration is establishing a two-tier welfare system, with younger recipients operating under an entirely different set of rules that demands more responsibility but also provides more opportunities.

Under the Administration proposal, states would have the freedom to impose the two-year limit more broadly, as several have already requested.

The task force’s plan is based on a proposal recently put forward in the New Republic magazine by Paul Offner, the top legislative aide on welfare reform to Senate Finance Committee Chairman Daniel Patrick Moynihan (D-N.Y.). With that pedigree, Administration officials believe that their proposal would be attractive to Moynihan, probably the most influential legislator on welfare issues.

In contrast to the Administration plan, a House Republican proposal would impose a two-year limit on all new welfare recipients who enter the system after the legislation is passed. The work requirement would be extended in 1999 to all welfare recipients who entered the system before the law went into effect. As a result, by 2001 anyone who had received welfare for at least two years would be required to work.

“If this is a way to create opportunity for people, why deny anybody the opportunity?” Santorum asked.

The Congressional Budget Office has estimated that by 1999, the House GOP plan would require about 900,000 welfare recipients to work; the Administration believes that the figure for the GOP plan would be much lower, but still higher than their own age-based plan.

The House GOP approach wouldn’t come cheap: The CBO calculated that by 1999 the GOP bill would cost the federal government $7.3 billion and state governments an additional $4.2 billion. Estimates were not available for the cost to states of the Administration task force’s proposal.

Governors and state welfare administrators have already signaled that states will resist shouldering additional costs for welfare reform.

Alternative welfare-reform legislation introduced by a group of Senate Republicans would immediately impose a community work requirement on all welfare recipients deemed capable of work--a group the sponsors estimate at about 2.5 million people. But most analysts say they consider it impractical to move such a vast number of people immediately into public service work.

The Administration task force is expected to recommend that the work requirement be carried out by providing states with block grants to either subsidize private-sector jobs or to create public-sector employment for welfare recipients.

In the debate over how to phase in a work requirement for welfare recipients, the key constraints are cost and the capacity of the state and federal governments to manage large-scale work programs.

Cost is the most immediate problem. Because the government would provide day care, transportation and additional administrative oversight, requiring welfare recipients to work costs more than allowing them to remain at home.

In a review of the House GOP proposal, the CBO calculated that requiring a welfare recipient to perform community service work would cost $6,300 a year more than providing benefits without work.

That reality has compelled the task force to seek ways to circumscribe the work requirement, at least at first. The President has ordered the welfare planners to produce a budget-neutral plan because, under legislative budget rules, new spending for a federal entitlement program can be paid for only with increased taxes or cuts in other entitlement programs.

Finding those cuts has been difficult. The task force has been examining proposals for capping grants given to states to provide emergency assistance to welfare recipients facing eviction or utility cutoffs, increasing efforts to root out fraud in the Earned Income Tax Credit for the working poor and limiting Social Security disability payments to drug addicts and alcoholics.

The task force, however, has dropped a proposal to tax welfare benefits and food stamps the same way unemployment insurance is taxed.

Currently, people who work part of the year and receive unemployment benefits are taxed on those benefits if their total income exceeds the income tax threshold. The task force considered treating welfare benefits and food stamps the same way, removing the existing tax exemption.

But criticism following public disclosure of the idea by the New York Times convinced Administration officials to scuttle the proposal, which might have raised as much as $4 billion annually.

As many as 40 other ideas are under consideration, sources said.

Beyond the fiscal concerns, Offner and Administration advocates for the age-based approach make three other principal arguments for the idea.

First, officials say, if a huge number of welfare recipients were forced to work at once, the likelihood is that states would be able to place relatively few in private-sector work and would have to create huge numbers of public-sector and community service jobs for them.

Though there is great political demand for welfare recipients to work, one senior official said it is extremely unlikely that Congress will approve a public works program on the scale that would be required. Offner agrees.

Second, Administration officials contend that phasing in the work requirement would allow them to learn from the inevitable mistakes made along the way before extending the mandate to a larger population.

Third, and perhaps most important, the task force has been convinced by Offner’s argument that previous welfare-reform efforts foundered largely because they did not provide enough resources to cover all of the intended target population. For instance, because of limited funds, only 15% of eligible welfare recipients have participated in the job training and work search programs mandated under the 1988 Family Support Act, the last major attempt to reform the system.

Offner argues that reforms are more successful when they focus on a limited group and ensure that everyone in that group participates. That kind of saturation approach has the best chance of changing the behavior of people already on welfare, or those likely to go on the rolls, Offner and his Administration converts argue.

But some question whether the youngest recipients are the best group to target for that intensive treatment. Santorum, for instance, maintains it might be better to focus on older recipients, who are less likely to have very young children and more likely to have some work experience.

Mark Greenberg, an attorney at the liberal Center for Law and Social Policy, said he shares those concerns but added, “One of the virtues of starting with very young parents is the ability to change the message that the welfare system may send to teen-agers.”

That may be especially important for the Administration as the debate over welfare reform appears to shift from Clinton’s campaign focus--how to get people off welfare rolls--to the even more intractable problem of how to discourage young women, who make up a large segment of welfare recipients, from bearing children out of wedlock and entering the system in the first place.