Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: MONDAY, January 3, 1994                   TAG: 9401030040
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-1   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

WELFARE COSTS RISING

A draft report by the inspector general at the Department of Health and Human Services says the federal government spends $6 billion to $8 billion a year helping states deliver food stamps, Medicaid and monthly cash benefits under the Aid to Families with Dependent Children program.

The HHS investigators said federal administrative costs increased by 43 percent between 1987 and 1991, from roughly $3.4 billion to $4.9 billion, while the number of recipients in the three programs increased on average by 18 percent, from 53.3 million to 62.5 million.

"The data do not support the contention that rising administrative costs are the result of expanded program responsibilities," the investigators say in their report, obtained by The Associated Press under the Freedom of Information Act.

The report also found that the federal government's share of benefit payments under AFDC, Medicaid and food stamps is growing quickly: from $45 billion in 1987 to $79 billion in 1991, an increase of 74 percent.

The states and federal government generally split the administrative costs of welfare programs in half. The investigators say, however, the federal government cannot determine what it is paying for at the state and local level without a considerable investment in auditing and monitoring, and those costs would be prohibitive.

In a separate report, the inspector general's office says the system states use to charge the federal government for those administrative costs has "degenerated into a highly technical accounting and allocation maze."

That report also suggests that consultants are taking advantage of outdated federal policies to reap bigger payments for the states.

The investigators say the system must be changed or administrative costs will continue their "accelerated growth and remain burdensome and costly to audit."

President Clinton's welfare reform task force promises to tackle the welfare bureaucracy - a web of programs with different and often inconsistent requirements overseen by different federal agencies and congressional committees.

"The simplification of assistance programs at all levels of government has been the `holy grail' of welfare reform - always sought, never realized," the task force says in a draft report. "The reasons are many . . . yet everyone agrees that recipients, administrators and taxpayers are all losers due to the current complexity."

As a first step, the task force recommends that AFDC and food stamps adopt the same rules for assets and income.

Now, AFDC recipients are allowed to have just $1,500 equity in their car, but families on food stamps are allowed to own a car with a fair market value of up to $4,500.

An AFDC family may have no more than $1,000 in assets, while families on food stamps may have up to $2,000 worth of resources such as savings accounts, and the limit rises to $3,000 when a household has at least one member who is 60 or older.

A senior administration official, speaking on condition of anonymity, says the task force is banking on savings from streamlining the bureaucracy to pay for the president's welfare reforms.

The task force also hopes to "change the culture" of the welfare office from one of enforcing seemingly endless rules to helping people become self-sufficient.

"Instead of exploring ways to give people access to the education, training and employment opportunities they need to become self-sufficient, the welfare system is driven by numbingly complex eligibility rules," the task force said.

The task force, in a series of public hearings around the country, heard from welfare recipients who said the welfare system was dehumanizing.

Roxanne Betke of Chicago told of waiting in the welfare office for more than five hours before seeing her caseworker.

"My children get hungry, tired and frustrated," she said at a hearing in August. "There is nowhere for them to be children. There is nowhere to nurse my baby privately. Even the washrooms are inaccessible. And when it is my turn, I am insulted and feel rushed and not allowed to ask any questions. This hurts my feelings and embarrasses me."