Arkansas: Flexibility for Failure

Arkansas: Flexibility for Failure

By Richard Huddleston

Vol. 18, No. 1, 1996 pp. 3-5

Courtesy of the Republican-controlled Congress, welfare reform block grants will soon be coming to Arkansas and other states. States will have unprecedented flexibility to set eligibility criteria, choose funding levels, and set program priorities.

One common feature of these new block grant programs: states are not required to run their own programs.

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Instead, the states can turn them over to local jurisdictions. They would also permit private companies, non-profits, and charitable or religious organizations to run welfare programs. Ideally, such flexibility could enable states to experiment and redesign programs to better serve local needs. In reality, neither states nor local jurisdictions are equipped to shoulder these new responsibilities.

Under these plans, Arkansas, like other states, in-stead of the federal government, would now be deciding who is eligible for assistance. The state could establish criteria to encourage, for example, two-parent families or better assist grandparents raising their grandchildren. It would also be able to offer new incentives for participants to seek and hold onto jobs, such as not counting any income earned during the first year or so of a new job or penalizing recipients for saving assets.

Conversely, the state could define eligibility so tightly that much of its case load disappears. Provisions of the block grants allow the state to limit how long families can receive welfare, subject, for example, to a sixty-month maximum. An extremely short time period would have a devastating impact on the poorest of the poor–those who are the least employable.

The block grant proposals would also give Arkansas wide latitude in determining how much it wants to spend on welfare. Although the block grants will freeze federal funding for welfare, the state is not obligated to make up the difference.

Under the vetoed congressional plan, the state was required to spend only 75 percent of its average annual expenditure. As an incentive to spend at least that much, for every dollar the state spends less than that, its federal block grant would be reduced a dollar.

States would have more flexibility in defining spending priorities, too. Arkansas could spend as much as thirty percent of its welfare block grant funds, for example, for other state programs with block grants, such as those for child protection or social services. And with few exceptions, Arkansas could use the block grant money in any way that accomplishes the grant’s goals, including ending dependency on public assistance, reducing the incidence of out-of-wedlock births, and maintaining two-parent families.

The new grant programs include a few prohibitions on spending federal funds and eliminate or greatly weaken some of the current federal requirements. As mentioned above, states would no longer be required to offer cash assistance under any circumstance. Nor would states have to provide as much job training and child care services to Aid for Families with Dependent Children (AFDC) recipients, or transitional Medicaid assistance to recipients who get jobs and leave the welfare rolls.

If state leaders are truly sincere about welfare reform, they will need to address three issues: child care, health care, and employment. The state will have to provide child care and health care to keep people employed once they leave the welfare rolls. Families making minimum wage or slightly more simply cannot afford these services.

Employment is a more complex issue. The state could try to get recipients to take any kind of job. Some states, notably Wisconsin, have used job search programs and aggressive case management to move recipients into low-wage positions on the assumption that any job is a good one for someone who doesn’t have one. But that approach does not improve the economic prospects of children and their families. A full-time minimum wage job

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pays substantially less than the official poverty line, which was $15,141 for a family of four in 1994. Another option is for the state to offer education and training so recipients acquire work skills and are employable on a long-term basis. This approach, however, has its own shortcomings. Job training programs, especially those administered by government, are expensive and have had mixed results. In the end, a combination of the two approaches will be needed.

In our rush to reform the welfare system, our approach must allow the public to participate in the debate, especially those directly affected by the change. If we do not do so, the reform process will surely fail.

Richard Huddleston is a research analyst with Arkansas Advocates for Children and Families in Little Rock, Arkansas.