Diary

Your Underreported, Completely Depressing Stimulus-Related Story

Courtesy of Michael Tanner:

One of the most important changes of the Clinton-era reform law was replacing the individual entitlement to welfare with a block grant to the states. In the old system, the more people a state signed up for welfare, the more money it got from Washington. The block grant broke this link, creating an incentive for states to help people become self-supporting.

But, as The Post’s Charles Hurt has reported, slipped into the stimulus bill is a provision establishing a new $3 billion emergency fund to help states pay for added welfare recipients, with the federal government footing 80 percent of the cost for the new “clients.”

Plus, the bill would reward states for increasing caseloads, even if the growth came because the state had loosened its requirements for recipients to work.

This is radical change. States that succeed in getting people off welfare would lose the opportunity for increased federal funding. And states that make it easier to stay on welfare (by, say, raising the time limit from two years to five) would get rewarded with more taxpayer cash. The bill would even let states with rising welfare rolls still collect their “case-load reduction” bonuses.

In short, the measure will erode all the barriers to long-term welfare dependency that were at the heart of the 1996 reform.

In other not-so-surprising news, bad policy consequences come from passing a nearly 1000 page stimulus bill that spends nearly $800 billion of taxpayer money when Representatives, Senators, and the President and his staff don’t even take the time to read the bill.

Happy Stimulus.