Commentary

No Welfare Reform For The District

“Welfare as we know it” has been ended, right? Well, not in the District of Columbia. Even as President Clinton was signing the new welfare reform bill with one hand, with the other he was simultaneously granting the district a 10-year waiver that exempts it from most of the requirements in the new welfare bill, including time-limited assistance and certain work requirements.

The waiver for the district’s “Project on Work, Employment, and Responsibility” (POWER), submitted in early August, was rushed through the Department of Health and Human Services’ “fast track” waiver approval process just three days before Clinton signed welfare reform into law. As a result, welfare reform will have only a minimal impact on welfare dependency in the district and an even smaller impact on the district’s welfare spending.

For example, the welfare reform bill calls for a five-year lifetime limit on welfare benefits. Not under the district’s waiver; there would be no cut-off of benefits for any district resident who could not find a job that pays more than welfare benefits. The most unfortunate aspect of this exemption is that the district, aided and abetted by the Clinton administration, is sending a message that the rules will not apply to its residents and that cash assistance is still an entitlement.

While one of the big selling points of the new welfare reform law was its requirement that welfare recipients work in exchange for benefits, the district’s waiver defines work activities so liberally as to be meaningless. Attending a job-training program or engaging in job search (i.e., looking for work) will be enough to satisfy the district’s work requirement. Thus, welfare in the district will remain pretty much as we know it. Yet few welfare systems are as badly in need of reform.

Despite the fact that one of six district residents is on welfare, more than a third of district children still live in poverty. Out-of-wedlock births have reached alarming proportions. Of the district’s more than 50,000 children in welfare families, 83 percent were born out of wedlock and 10 percent come from broken homes. Only a mere 1 percent of Aid to Families with Dependent Children (AFDC) households contain two parents. Long-term dependency is increasingly the norm as is second and third generation welfare dependence.

The district has followed the liberal route of trying to solve its welfare problems with money. On a per capita basis, the district has the highest federal social welfare program spending in the nation. Of the 50 states and district, the district ranks

* first in per capita federal spending on AFDC, food stamps, Medicaid, housing assistance, job training under the Job Training Partnership Act, and community development;

* second on Medicare and state employment services;

* fourth on compensatory education for disadvantaged children;

* fifth on Supplemental Security Income and the social service block grant; and

* twelfth on child nutrition programs.

The value of the full package of welfare benefits in the district (including cash assistance, food stamps and nutrition assistance, housing assistance, Medicaid, and so on) totals more than $22,745 per year for a single mother with two children. Because welfare benefits are tax-free, a working person would have to earn nearly $14.00 per hour to take home an equivalent paycheck. Indeed, the district’s welfare package is the fifth most generous in the nation. Is it any wonder that so many recipients make the rational choice of welfare over work?

The welfare reform bill fell far short of what is necessary to truly end welfare as we know it. But the district, with the complicity of the Clinton administration, seems unwilling to make any change in the status quo.

The district government is setting up a social time bomb that the rest of the nation will, most likely, be responsible for defusing. In 10 years, the district’s waiver will expire only after it will have promoted and perpetuated a failed and reckless system. And at that time, the federal government will be called upon to bail out the district again. By that time, the damage may be irreversible.

Naomi Lopez is an entitlement policy analyst and Michael Tanner is director of health and welfare studies at the Cato Institute.