- The Washington Times - Sunday, April 17, 2005

When Ronald Reagan and I were reforming California’s welfare system in 1971 our legislative opponents screamed that we were “losing” federal money. In their eyes, each time we removed a non-needy person from the welfare rolls we were forfeiting the federal matching money for that person. The fact of the matter was that we were saving both state and federal money. Through the years I found that few governors had Mr. Reagan’s courage to withstand the charge of “losing federal money” by finding jobs for their welfare mothers. As a result, the nation’s welfare rolls grew in good times as well as bad. Worse, millions of mothers and their children were consigned to dependency on welfare.

Back in 1971, I concluded that the solution was to reverse the financial incentives to the states. I proposed replacing the open-ended federal matching program with finite block grants, removing the federal controls, requiring work, and letting the states devise ways to get their families off of welfare dependency. When a job was found for a welfare family, the state would keep rather than lose the federal money.

Inthemid-1990s almost all welfare experts, includingthe Urban Institute and Sen. Daniel Patrick Moynihan, predicted that if these policies were enacted the states would “race to the bottom” with their welfare benefits and within a year there would be “a million children starving in the streets.” I challenged them to “tell me what governor and state legislature would do this.”

Finally in 1996, a Democratic president signed the Republican-initiated welfare reform which repealed the 1935 Aid to Families with Dependent Children program and replaced it with Temporary Aid to Needy Families. The open-ended federal match was gone, and finite block grants, with a work requirement, were in place. We had succeeded.

Now, nearly nine years after enactment, this landmark law has been recognized as an historic success. The nation’s welfare rolls have been cut in half and millions of mothers are self-supporting and free of dependency. The program’s cost has remained steady instead of growing each year. The dire predictions of the “welfare experts” did not come to pass. The states have proven they can be trusted to do the job and they have been freed of increasing dependency on federal funding of family welfare.

It is now time to free the states from increasing dependency on federal funding for three more open-ended welfare entitlement programs: Supplemental Security Income for the Disabled, Medicaid, and food stamps. It is well documented that all three programs are rife with waste and fraud.

A bit of history. Back when I was welfare director in California in 1971, I found that many on the welfare program for the disabled were not disabled at all. “Hippy” doctors in the San Francisco’s Haight-Ashbury district were putting young able-bodied men and women on the welfare rolls by declaring them “disabled.” My department looked at each individual case, determined those not disabled, and, after fair hearings, removed them from the rolls. Then, in 1973, the federal government took the authority for this program from the states and created Supplemental Security Income for the Disabled. I strongly believe that a program this big, requiring delicate judgments as to who is and who is not disabled, can only be handled effectively at the state and local levels of government.

Medicaid is another open-ended federal matching program like family welfare was before the 1996 reform.Once again, in order to get more federal matching money the states are expanding eligibility to more and more non-needy persons.And they are getting in trouble. New governors and legislatures are struggling to deal with eligibility decisions made by their predecessors simply to get the federal match. If they try to make cuts they are accused of “losing federal money.” In other words, most states are growing more dependent on federal funds just like those welfare mothers in 1996 simply because of the incentives of the open-ended federal matching program.

Food stamps are another form of income for needy people just like family welfare and Supplemental Security Income for the Disabled. Using the same logic, it would make sense to repeal the current federal eligibility requirements and give the states block grants of food stamps to distribute as part of their other welfare programs. With finite blocks of food stamps the states will make sure that they go only to the truly needy, since the funds will be limited and they will control eligibility.

I predict that most governors will oppose block-granting these programs because they don’t want the responsibility of cutting out waste and taking the heat for it. But, they should follow Ronald Reagan’s example: He took the heat in welfare reform, he succeeded and he was elected President.

Robert B. Carleson is chairman of the American Civil Rights Union and was special assistant to President Reagan for policy development. He was U.S. commissioner of welfare in the Nixon-Ford administration after serving as director of the California Department of Social Welfare under Governor Reagan.

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