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E N Q U I R E R   O P I N I O N
Sunday, March 23, 1997
Show me
the (welfare) money


BY PETER BRONSON
The Cincinnati Enquirer

I think I found $460 million that belongs to taxpayers, but nobody knows how to return it.

It's in a strange Twilight Zone where welfare reform is working beyond our wildest dreams - and politicians are afraid voters might find out.

The story starts with Arnold Tompkins, director of Ohio's Department of Human Services, who described Ohio's Amazing Shrinking Welfare - caseloads down 33 percent since 1992, falling 2 percent each month.

''So show me the money,'' I said.

Instead, he showed me one of those black holes to another dimension where government works backward.

Ohio has cut welfare rolls by 60,000 since 1992, to 191,000 cases.

''So why is the budget rising? Where are the savings?'' I asked.

Look at your tax cut, Mr. Tompkins replied. Ohio's budget to feed the poor is so fat it paid for a $400 million income-tax cut in 1996. This year, welfare wealth will provide the sock-drawer cash that lawmakers always find just in time to relieve budgeting pain.

And that's because our broke federal government is sending states hundreds of millions more than they need for shrinking welfare rolls.

Under 1996 welfare reforms, Congress promised to pay Ohio $728 million each year for five years, for an AFDC replacement called ''Tan-iff'' (Temporary Assistance to Needy Families).

To get that, Ohio has to cough up a $416 million ''Maintenance of Effort,'' for a total of about $1.14 billion.

But Ohio's smaller welfare load costs only $685 million - leaving a $460 million surplus.

Gov. George Voinovich wants to set aside $75 million - in case of recession, break glass. But that still leaves $385 million, and the cash-pot grows every month as welfare rolls shrink.

Ohio is not alone. Wisconsin leads the nation by cutting its caseload in half since 1993. Nationally, the decline is 1 percent per month. A House Ways and Means Committee report on caseload declines in the past year showed: Ohio, 7 percent; Kentucky, 4.4 percent; Indiana, 12 percent, Oregon, 23 percent; Wisconsin, 28 percent.

If all states matched Ohio, savings could top $200 billion in five years.

Jason Turner, designer of Wisconsin's reforms, said that contrary to all the ''End is Near'' predictions from welfare-reform critics, Wisconsin Gov. Tommy Thompson now boasts that benefits to families have increased, because the welfare pie is shared by half as many cases.

''Now I'm waiting for the next (governor) to come along and say 'We are spending less because we are eliminating welfare, period,' and return it to taxpayers. If Gov. Voinovich did that, it would be enormously popular,'' he said.

Ohio has cut taxes, but it was unusually candid for Mr. Tompkins to credit welfare. The political survival instinct is: Don't ask, don't tell.

Congress won't ask for money back ''because they have been too savaged by demagoguery on Medicare,'' said Robert Rector, welfare policy analyst for the conservative Heritage Foundation. Instead, President Clinton has asked to spend $21 billion more on welfare.

''What's happened is we have basically blown away most of the liberal mythology about welfare,'' Mr. Rector said. Welfare reform does not cost more; but nobody wants to admit the savings.

''The establishment is very desperately trying to ignore this because anyone who looks will say, 'Boy, you guys were totally wrong, weren't you.' They don't want the American public to find out.''

And states won't tell.

Revealing the hidden treasure would start a feeding frenzy among state agencies. It's easier to quietly move it to other pockets. And if Ohio returned the money to reduce $5 trillion in federal debt, welfare agencies and advocates ''would string us up,'' Mr. Tompkins said.

States are also stashing cash for a recession. ''If you think turning back that money would go to deficit reduction, you have a lot more faith in Congress than I do,'' said one Ohio official.

''Almost all states are coming to the same situations with caseloads falling and reaping a windfall,'' Mr. Rector said. ''And if you think caseloads are declining now, you haven't seen anything.''

When Wisconsin required work for welfare, caseloads dropped sharply. All states have to require work by 2002.

Before reform, states had perverse incentives, just like welfare recipients. The more people on welfare, the more welfare money they got. Surpluses are intended to make states work harder to get people off welfare.

The excess can be spent on welfare related causes - such as school vouchers for kids on welfare. It creates ''hidden tax cuts'' by padding state budgets. But if the surplus is used to create new entitlements, ''That would be a disaster,'' said Mr. Rector.

''If you are in the enviable position of reducing spending because people don't need assistance, why cast about for new ways to make people dependent on something else?'' Mr. Turner agreed.

Citing Hamilton County demands for more day-care spending, Mr. Tompkins said that opening the welfare spigot defeats the purpose of reform.

It's a paradox.

Welfare reform puts millions of people to work. It works so well that states can afford tax cuts and still grease loud squeakers like Ohio's universities.

But we can't turn down the federal faucet that has taken welfare budgets from rags to riches, because Congress is afraid to confess to success.

Peter Bronson is editorial page editor of The Enquirer. Call 768-8301, or write to 312 Elm Street, Cincinnati, Ohio 45202.


 
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