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Adamson: Early warning signs on welfare reform

Welfare reform legislation has become a defining triumph of the Republican ascendancy that began with the 1994 congressional elections. Welfare needed reforming, primarily because it had introduced the behavioral principle of "moral hazard" - the economic term for the universal human penchant for seizing upon incentives that reward the worst instincts - to low-income working folk who needed it least.

Of course Congress, perhaps in despair of ever getting a concept like moral hazard across to the electorate at large, reformed the welfare system for other reasons, primarily that it cost too much. Reminders that corporate welfare cost more carried no weight, not before the Enron collapse revealed just how far Congress will go in providing corporate welfare, and not after.

The nationwide purging of the welfare rolls has been cause for unconcealed celebration in Congress and elsewhere ever since. During that time Wisconsin, for instance, where welfare reform got its start under then-Gov. Tommy Thompson, current Secretary of Health and Human Services, has more than halved its welfare caseload, from 45,000 families down to 21,000.

But that huge drop has, ironically, cost the state money, somewhat compromising the very reason given out publicly for overhauling welfare in the first place. Wisconsin closes the books on its fiscal year this June. A legislative report in that state reveals that Wisconsin Works, the state's name for "welfare reformed," will have cost Wisconsin $707.8 million in this just-finished fiscal year. Aid to Families With Dependent Children, or AFDC, the brand name of welfare before it got branded anew as welfare-to-work, cost Wisconsin $430.9 million in its final year, despite more than twice as many families on welfare as we then knew it.

In all fairness, so we're reminded by Associated Press reports, a smidgen of that $276.9 million increase is attributable to inflation. But there is no doubt about where the lion's share of the increase comes from: child care. Demand for it has grown because Wisconsin requires adults in the program to either work or get job training in return for child care and a welfare check. To meet the 160 percent increase in demand, the state spends five times more on "welfare reformed" than it did on the old welfare.

While thanking the stars that so many watchdog groups and individuals demanded child care provisions when welfare reform was being debated, we may also note that the state, arguably, will be on solid ground if it insists that job training for welfare-to-work parents is an investment, whereas AFDC simply cut a check and left them waiting for the next one, without skills development or even the incentive to develop.

Provided monitoring proved that newly skilled parents were actually landing jobs that paid a living wage, we might buy that argument. Indeed, there is indirect evidence for it in the Census Bureau findings that fewer children live in poverty today than prior to welfare reform, and that the child poverty rate has remained stable while the overall poverty rate has inched upward from its recent record low.

But long before such indications can be considered definitive here drops the other shoe. The General Accounting Office now reports that child care funding has fallen in half the states, almost all of which are in a phase of fiscal difficulty. Temporary Assistance to Needy Families funding (TANF), which supports welfare-to-work programs tailored by the states, comes from the federal government; and so the immediate impact here is not on welfare families but on the working poor who lean on non-welfare resources of the states. Rep. Benjamin Cardin, D-Maryland, fears that many of those working-poor families, instead of being rewarded for work as the system intends, will slip down again into the welfare system, further increasing child care and other costs in states like Wisconsin.

At this point, we can bring all of this home to Indian country. The Native percent of closed-case TANF families - families that were on TANF and left the rolls for whatever reason - is somewhat higher nationwide than our proportion of the overall population (1.8 percent), whereas it would be about 1 percent if it were in keeping with our percent of population. But the Native percent of closed-case TANF families in states with comparatively large Native populations is dramatically out of keeping with our percentages of population in these states: 28.8 percent in Alaska, 10.7 percent in Minnesota, 39.1 percent in Montana, and 74.4 percent in South Dakota. So we know that Native families probably lead the nation in leaving TANF rolls, as a percent of population.

Knowing that enables us to make a pretty solid assumption that Native families who have left TANF rolls are, at least to some degree, relying on state child care subsidies. For while Native families receiving child care subsidies are not tracked separately, the number for all such families is also highest in the same states that have the highest percentages of Native closed-case TANF families.

Indian country has good reason to heed the questions these numbers raise. With child care subsidy funding already on the decline, how many states will continue to shoulder the burden as Wisconsin has? With the national economy stagnant, how many jobs will there be for welfare-to-work parents? When does a good investment go bad, and how can we prevent that?

Rebecca Adamson is president of First Nations Development Institute and a columnist for Indian Country Today.