The 1996 welfare reform legislation is set to expire on June 30. While the House has approved a reauthorization bill, the Senate version has not made it out of committee. NationalJournal.com's Josh Kraushaar spoke to University of Maryland professor and AEI’s Joseph J. and Violet Jacobs Scholar in Social Welfare Studies Douglas Besharov about the possibilities of a reauthorization bill passing and how the 1996 legislation has impacted the welfare debate.

Q. I want to talk about the welfare reform legislation that's being debated in the Senate right now. The Temporary Assistance for Needy Families legislation is set to expire on June 30. The House has approved the reauthorization bill, but the Senate bill is still stuck in committee. What happens if the June 30 date passes and the Senate hasn't approved the reauthorization?

A. A week ago, I would have said, "nothing." Like last year, the Congress could've passed a temporary extension of the bill--to keep the process going. That's what they did last year. The House passed the reauthorization bill last year. However just this week, Senator Ron Wyden [D-Ore.] got unanimous consent on the temporary extension of the bill on the grounds that the extension didn't protect Oregon's interest in one technical aspect of the waiver. So I'm giving you the small possibility they'll really have a mess when the bill expires. Ordinarily, the answer is this would be a continuing resolution by unanimous consent as they argue more about what the bill would look like.
 
Q. What do you think the chances are that the welfare legislation would be extended?

A. Last year, I was pretty sure they were not going to come to agreement. This year, I think 50-50 is the best a reasonable person could expect. They may be stuck doing one of these continuing resolutions again. The parties are very far apart on certain key elements--but not so far apart that they couldn't come to a compromise in a nanosecond, like they did with the prescription drug benefit.

Q. What specifically are the main issues in which the Republicans and Democrats don't see to eye-to-eye?

A. Child care--putting more money in, I wouldn't call it an extension, I'd call it an expansion. A very large expansion in child-care funding. The Democrats haven't been too specific--but it looks like they're looking for an increase of $5-10 billion in child care. The Republicans want to keep it around $3 billion. Now within the context of a $400 billion prescription drug benefit, this is a rounding error. I think prescription drugs are an exception to the rule and that the Bush administration is going to hold the line.

Q. Are there any major differences between the House and Senate versions of the reauthorization bill and how do they jibe with the welfare reform proposals that the president has put forward?

A. The House bill largely reflects the president's position--with some changes but not many. The administration's official position supports the House bill. I'm not sure it's even fair to say there's a Senate bill. There was a Senate bill--or a structure of a bill--last year, put together by the Democrats with some consultation with some of the more moderate Republicans on the Finance Committee. It was a funny bill--Democrats were in charge, and Senator [Tom] Daschle [D-S.D.] voted against the bill. This year, I don't think a formal bill that would reflect where the Senate is has emerged. But right now, you'd have to say there is no Senate bill.

Q. There is currently a Republican president and a Republican Senate. Why has the bill languished in committee for so long?

A. I think the answer is there is a group of swing Republicans on the Senate Finance Committee that, as we saw in the tax battle, can be decisive. Two or three swing Republicans prevented much larger tax cuts, and two or three Republicans will reduce the chances of the president prevailing in the Senate on welfare.

Q. Which Republicans would you consider the swing...?

A. Oh, I don't name names. [Sen.] Olympia Snowe [R-Maine] is a key one. I think it's just better to say it's just a shifting group. And it's more accurate to say there's a group of them, and they have different views than the president.

Q. One of the criticisms of the 1996 bill was that it contained loopholes which allowed states to exempt people from work requirements. The reauthorization bill would increase the mandatory work requirements from 30 to 40 hours per week, and it also increases the proportion of the state welfare caseloads that are required to work. Does anything in the reauthorization rectify the loopholes and ensure states would actually enforce those requirements?

A. Yes and no. You are quite correct the current welfare bill has not had the effect on mandatory work that many people expected. It's probably not completely accurate to call that a loophole. The reason is that caseloads declined so substantially. Nationally, the decline is almost 60 percent. And there's something called a caseload reduction credit which gives states credit for people to leave welfare. What is quite misunderstood about the [1996] bill is that it doesn't take the rates as high as the words in the law say. The law said, as you pointed out, 40 hours, 70 percent of the caseload. But enough of the old provisions are there that it would never be that the caseloads have to have that high a participation rate. In our careful assessment, it will be a real requirement, a real increase in participation and work and work-related activities. But it will probably only be a 10 or 20 percent increase.

Q. And you think that will be effective in reducing, or starting another reduction in the welfare caseload?

A. You need to put the entire caseload to work, but I don't think you can. I think if you have an increase [in work participation rates] along the lines of the House bill, that will have the same signaling effect on [welfare] recipients, and I think it will have a very positive effect on caseloads.

Q. Most states are dealing with budget problems--a lot of states are running huge budget deficits. The Bush administration proposal would scale back a high-performance bonus program from the original bill which rewarded states for moving welfare recipients into good jobs. Do you think states will be able to afford to comply with the law?

A. This is Washington. What meets the eye is not the truth. The welfare bill has been a bonanza to the states financially--caseloads are down 60 percent. But the federal block grant is exactly where it was six years ago. Basically, the states are getting the same money now as they did when the caseloads were almost twice as high. So they have a great deal of excess money. It's just that they've spent that money on other things, that money is committed. That's why they're claiming poverty when it comes to the new bill's new requirements. It's as if I come to the bank and take out a mortgage because I need to fix my house and pay my mortgage rent. I take out the loan, then I realize that I don't need all this money because I have a tenant downstairs. So I use the money I take out of the bank for a loan and use it for something else. Now the tenant leaves and the bank says we want your money, or we're going to foreclose. And the state doesn't have any money left. And the answer is they don't have any money left not because they went broke but because they spent the money on something else. That's the situation here. The states are in dire shape, but it's because they committed the welfare money that would otherwise be available for this program to other activities.

Q. So you're saying they can afford to implement it, but financial mismanagement has led these deficit and economic problems state-wide?

A. Whether it's New York under the Republicans or California under the Democrats, our state governments seem to have been under the conclusion that there would never be a recession, that the stock market would never go down, that they could keep increasing spending willy-nilly. Now that those inevitable eventualities occurred, rather than cutting back on spending, they're saying they're broke.

Q. The big debate right now in the Senate is that the Democrats want expanded child care funding as part of the welfare reauthorization while Republicans are emphasizing mandatory workforce programs. You've supported both those policies. Is there a way to reconcile the two, especially with budget deficits and financial mismanagement, as you said?

A. Both these things involve numbers, not philosophy. The easier answer is there's always a compromise. One side wants $3 billion and the other wants $10 billion. You ought to be able to compromise somewhere around $5-7 billion. And that's what one would kind of expect in a situation like this. When and if the parties are ready to compromise, they can find a compromise. But that requires parties that want to compromise.

Q. And ideology is prevailing over pragmatic dialogue?

A. It's politics. Both parties are eager to have as many issues as possible in the next round of elections. The Republican base may be energized by complaints that the Democrats didn't let welfare reform go through. And the Democratic base may be energized by complaints that Republicans didn't increase child care. And it depends on whether you think one side or the other would rather have a small victory or be able to complain about a big defeat.

Q. In your 2002 essay on "The Past and Future on Welfare Reform" you wrote that the economic expansion and expanded aid to low-income families was almost, if not more, important in decreasing the welfare caseload as the actual welfare reform bill itself. Are you concerned that an economic downturn or recession could create a rise in welfare recipients? What should be done about this?

A. I sure am concerned. Number one, two things have happened that are surprising. This downturn has affected the middle-class perhaps more than the folks at the bottom, while unemployment is up. It's clearly hitting the middle class as much or more than low-income Americans. Secondly, and this is something that totally surprised me, young mothers, single mothers who lost their jobs in the recession are substantially less likely to go back on welfare than they were five to 10 years ago. Now, supporters of welfare reform say: "Aha! You see, welfare reform really works. Even in a recession, people don't go back on welfare." Opponents of welfare reform say the states are being mean and nasty, not letting those folks get back on. I think it is a little bit of both, but I think mostly it is that welfare reform has succeeded in delegitimizing welfare even among poverty populations. And we may be seeing a major shift, a much less willingness on the part of mothers to go back on welfare. This may be a long-term change.

Q. And the long-term implications?

A. Mostly for the good, if you believe work is better than the dole. Not as good if you think that the most important thing in the child's future development [depends on] how many hours [a mother spends] in the household.

Q. The Democrats have been arguing that expanded money for child-care programs is an essential part of the welfare reauthorization bill. Do you agree with that, and what role does child care play in the debate?

A. That's really a bait-and-shift. That's really not true, and they know it. There is enough money in the system now. The argument, even though the Democrats won't say it, is about expanding child care going further into the lower-middle class. This money won't go to welfare recipients. It will go to people higher up in the Democratic natural constituency.

Q. So you're saying what the Democrats are debating is extended welfare for the lower middle class and not for the people who truly need welfare?

A. I wouldn't use the word welfare because, even though that's what it is, I'd rather call it a giveaway. But I think they are trying to hook the lower-middle class on more of these social benefits funded by your friends in Washington.

Q. Finally, Sen. Bob Graham, D-Fla., has sponsored a provision which would allow recent legal immigrants and immigrants' children to receive the full federal Medicaid funds and would reverse the provision in the 1996 welfare reform bill that barred many legal immigrants from receiving the Medicaid funds. What's the importance and relevance of this amendment?

A. The House has been much more negative than the Senate in providing aid to immigrants, and the administration has been somewhat more favorable. I wouldn't have the slightest idea how to predict how the chips will fall on this one. My own personal view is that Medicaid coverage is different than cash welfare and even food stamps. These folks are here, and assuming they're here legally, they're stuck in our health care system--which is so crazy, no one can afford it without the help of the government or an employer. So, if they're here legally, I don't see how we don't provide some kind of help. But that's very different from food stamps, very different than welfare.