DOMENICI NEWS: WELFARE REFORM BILL PASSES SENATE...AGAIN.

FOR IMMEDIATE RELEASE                    CONTACT:  CHRIS GALLEGOS
July 23, 1996                                      (202) 224-7082

WASHINGTON -- For the third time, the Senate today passed major legislation to reform the American welfare system into a state-run program to move welfare recipients into jobs, Senator Pete Domenici of New Mexico today announced.

Domenici, chairman of the Senate Budget Committee, voted for passage of the Welfare Reform Act, which is the first part of the 1997 budget reconciliation process. He co-managed the bill as it was debated in the Senate. The bill passed 74-24.

The welfare reform bill will now be referred to a joint Senate-House conference committee where differences in the Senate and House-passed welfare reform bills will be reconciled.

The bill is the third effort by the Senate to pass a welfare reform program. President Clinton vetoed the first two efforts.

"If ever we had a chance to say to Americans, as America's economy grows we want you to be part of it, profit from it, and have a dream, this is it. This bill is an opportunity for welfare recipients of the past to participate in a real future and for us to never again have welfare people among us that we think we are helping when, in fact, we have been hurting them. Let them share in the dream also. That's our hope, that's our wish and that's what we believe history will say about this effort," Domenici said.

"Our current system is not working," Domenici said. "The law that has been on the book for decades is out of tune with our times. It makes people feel dependent and neglected. It's time that it be changed."

The bill represents, he said, a fundamental change in our welfare programs by overhauling the American welfare state by imposing a five-year time limit on benefits for all able-bodied recipients.

"This bill does what Americans have said they demand from responsible welfare reform. It provides for the basic needs of the truly needy at a reduced cost to the taxpayer, while placing the decision-making closer to home," Domenici said.

"Frankly, kids are us. This bill is about our kids. If anyone thinks the children that are under the welfare system are getting a good deal today, then I don't know what could be a rotten deal, because they are getting the worst of America. The current law perpetuates among their adult relatives and parents a system of dependency and a system that lets parents think less of their children because they think less of themselves," he said.

Domenici said the Senate has built into the bill provisions aimed at protecting children, in particular keeping Food Stamps as a separate federal entitlement program, adding funding for child care and development block grants, and sustaining current Medicaid protections.

Domenici said the bill meets the basic principles he advocated when entering into the welfare reform debate last year, namely: Welfare reform should reflect the unique needs of each state, providing needed funding for those states with large poor populations and/or fast-growing populations; Ends welfare as it is now known, and changes it into a program that is a helping hand and not a way of life; A system that meets the basic needs of its recipients, including job training and child care; and, Able-bodied men and women should be moved off the welfare rolls and into the work force.

Like previous welfare reform measures, this legislation contains a funding formula originally drafted by Domenici and Texas Senator Kay Bailey Hutchison that will give states, like New Mexico and Texas, additional federal support because they have fast population growths. The plan would allow for a 2.5 percent annual increase in the grants for "growth" states.

The funding formula would mean New Mexico would get approximately $945 million over six years as it crafts a welfare program tailored to meet the needs of New Mexicans.

The bill also includes a "maintenance of effort" provision that Domenici helped broker to guarantee that states continue to support and contribute to the welfare system.

With the maintenance of effort language, a state would be responsible for contributing 80 percent of the total amount it paid into the federal welfare system in 1994. A state would then be able to save up to 20 percent of its welfare contribution, while still having a stake in the program.

For example, if New Mexico paid $53 million in welfare payments in 1994, the state would be required to pay 80 percent, or about $42.4 million, under the new formula.

"By keeping accountability at the state level, we will ensure that states act responsibly as they move to reform the program in a way that takes care of the needy and in a way that will allow them to reduce the burden on taxpayers," Domenici said.

At Domenici's request, the amendment draws strict guidelines on what counts as state's legitimate efforts toward the welfare program. Instead of the original broadly written language ("any other program for low-income individuals"), the Domenici language strictly defines what counts toward that effort--in this case, cash benefits or vouchers, child care, job training assistance, and administration. In this way, states could not use welfare funds for unrelated activities, such as road construction.

In addition, the bill also contains a Domenici-authored provision to give states the option to determine the benefit level for babies born into welfare families. The amendment dropped a federal mandate that would have prohibited states from making additional cash payments to these children.