John Ashcroft

Mr. ASHCROFT

Mr. ASHCROFT. Indeed, I am happy to yield.

Mr. ASHCROFT

Mr. ASHCROFT. It is addressed to the Honorable Richard C. Shelby of this body and to me. It endorses the effort to increase the flexibility for States in the Food Stamp Program and the block grant program. Now, reference has been made to the safety net for nutrition; that we need to help citizens who are in real need; we need to deliver and meet that need effectively. Reference has been made to the potential--and I do not understand this--of an irrevocable, one-time decision by Governors to abandon food help to their citizens. I do not know of any Governor that has that kind of authority, and I do not know of any government anywhere in the United States that can make irrevocable decisions to abandon things. The political process operates. People with needs know their way to the State capital. It is easier to get there than it is to the National Capital. Welfare recipients have the right to vote. This body and the U.S. Congress in the last session provided a special means of registering welfare recipients so that they would be given a right to vote, their voice would be heard, making their voice heard in a place close to them, the State capital, instead of demanding that they come to Washington to have their voice heard, and demanding that they find their way through 900 pages of Federal regulations appears to me to be an important thing. Let me just additionally say it was indicated no one has the ability to know what the future holds if we were to have a block grant to the States. I can tell you what the future holds if we do not block grant this to the States. The future holds the same kind of problems that we have had in the past with entitlement spending that continues to build the program. When the Federal program is an entitlement program, it is in the interest of the State to build the program. States administering the program without a financial stake in the program keep shifting people into the program; it brings money to the State automatically. It is part of the pernicious impact of this Federal system of welfare which has resulted in a growing portion of our population being dependent on Government rather than a shrinking portion of our population being dependent on Government. It is a simple question. Do we want more welfare and less independence or do we want more independence and less welfare? The structure of the way we deliver benefits should not be designed to increase welfare as it is now. It should be designed to increase independence. I believe the opportunity made available to the States of this country through a block grant so that States can formulate their own rules and they know they are operating within a limited amount of resources is exactly what we need. An entitlement system simply is absent the kind of incentive for reduction in the problem. We need to reform welfare, not to grow it. People in my State, when they spell reform, spell it r-e-d-u-c-e, reduce. It is time for us to reduce welfare. So with all due respect for my distinguished colleagues from Vermont and from Indiana, who have indicated that it is important to have an entitlement program that is open ended, I think it has the wrong structural incentives. One last point that I would make. My respected and distinguished colleague from Vermont, Senator Leahy, mentioned we could not consider this program to be an incentive for illegitimacy. I do not think it was designed to be an incentive for illegitimacy. But the fact of the matter is that the more children you have in the family, the bigger the benefits are. And in the context of a benefit that can be changed into cash with unfortunate and inappropriate ease, I think it is undeniable that we have simply exacerbated the problem. Mr. President, I reserve the remainder of my time.

Mr. ASHCROFT. I ask unanimous consent that Senator Gramm of Texas be added as a cosponsor of this amendment.

Mr. ASHCROFT. I urge the Members of this body to include, in real reform for welfare, reform of the biggest of the welfare programs, the Food Stamp Program.

Mr. ASHCROFT. I thank the Chair. Mr. President, I am pleased to ask the Members of this body to vote in favor of endowing the States with the opportunity to substantially reform the welfare system, the single largest component of the welfare system, which touches almost 1 in every 10 Americans, and to do so by providing the resources to the States so that their legislatures and their Governors can make the resources available to truly needy individuals in a way that is far more efficient, is far less likely to consume additional resources. This is an idea which is welcomed by the States. Let me read from Governor Thompson's letter sent to my office. Senator Ashcroft's amendment allows the maximum level of state flexibility while preserving the anticipated level of federal financial support envisioned in the leadership bill. In addition, the transferability of funds from the food stamp block grant to the AFDC block grant, which is common, is of critical importance to States like Wisconsin. Wisconsin, as you know, has been a leading State in welfare reform. One of the reasons it is important that we have the kind of transferability and that we put AFDC and food stamps both into block grants is that, if you leave one Federal program as an entitlement without any limit as to the spending involved and you put another Federal program into a block grant, States can shift people from one area to another, pushing people into one area and elevating the Federal responsibility in order to curtail the responsibility of the State. This would distort the allocation of resources. It simply would not be appropriate. We need to have the discipline and the management tools necessary for these programs to be administered appropriately and honestly. You could understand that if the AFDC Program, which is a shared program between the State and the Federal Government were to be block granted, and you maintained an entitlement in food stamps, that it would lead States to shift people from the limited area of State assistance to the unlimited area of the entitlement. The distinguished Senator from Indiana has indicated that they hope to have savings of a substantial amount as a result of reforms that have been added to the program. Of course, we have seen these reforms year after year and time after time. We had major food stamp legislation in 1981 and then in 1988 and several times it has been adjusted in this decade. We have also seen what the chart shows: That food stamp consumption goes up and up. It is anticipated that food stamps will rise. Under the Dole bill, food stamp consumption is supposed to go up. SSI is supposed to go up. It is anticipated that AFDC will remain low. [[Page S 13341]] Surprise, surprise. The Dole bill, the leadership bill, provides that AFDC would be a block grant where the incentives would exist to keep the program down. And the anticipated rises here, frankly, by CBO are not rises that project any cost shifting, sending people from this category into these categories. That is not the reason for the rise, that is just another projection. But if we make this a block grant program and it is limited and we say that these continue to be unlimited in entitlement programs, the natural tendency will be for States to start shifting clients from this client base over into these categories. As I suggested, these categories are likely to be increasing even further. I believe that the people of this country have called upon us to reform welfare. To ignore the largest single welfare program in terms of people that it touches in this country and to say that it is off the table, and to call it some kind of a safety net, and to say we cannot trust local officials or State officials to be compassionate in the administration of these funds, and to say that we prefer the Federal bureaucracy, and that somehow there is greater compassion in this body and the Congress than there would be at State capitals, I think is to miss the point. The point should be that we should be focused on reforming the welfare system. We will not get great reform if we say to States, ``Well, you can opt into a block grant but, on the other hand, if you do not opt into a block grant, we will let you continue in an entitlement program.'' ``In an entitlement program'' means you can continue to get money for all the people you can possibly find to qualify. The incentives for cost reduction in that environment, the incentives for caseload are substantially lower than they would be in the setting of a block grant. Not only would the incentives be substantially lower, but compliance costs, for complying with these 900 pages of regulations, still exist. You still find yourself in a system with about 24 percent friction in the system--the fraud, the abuse, the high administrative costs. It has been estimated that perhaps the leadership bill would take 90 pages out of the 900 pages of regulations. Some suggestion has been made, well, the States would not know how to come up to speed on this. After all, they could not do this in a couple weeks, they could not make this transition. The truth of the matter is that States have had to administer this program covered over with the redtape of the Federal bureaucracy for years for the last quarter century. They know this program better than the Federal officials do. There are not that many food stamp employees in the country that are not State and local governmental employees, but they know what they are working under and they know how it is burdening the system and they know the additional costs. It is that additional cost that has caused them to say, if we could have this program as a block grant, we could serve people far more carefully and far better. So I believe that our responsibility is a responsibility to really reform welfare. Our responsibility is a responsibility to avoid cost shifting. Our responsibility is a responsibility to recognize that we have been working with a failed system.

Mr. ASHCROFT. May I inquire of the Chair the time remaining?

Mr. ASHCROFT. The question we debate today is not whether or not there will be assistance to individuals who are in need. The question we debate today is whether or not that assistance will be delivered by State officials who are proximate to the problem or whether we are going to persist with a one-size-fits-all system in Washington, DC, which is characterized by the highest administrative costs of any welfare program, rampant fraud and abuse, and 900 pages of excessive Federal regulations. I have not proposed ending the ability of States to meet the needs of their people. I am proposing enhancing the ability of States to meet those needs. The distinguished Senator from Vermont talked about the needs in the event of earthquakes, floods, or other natural disasters. And the distinguished Senator from Indiana, for whom I have great respect, talked about needs in times of recession. I believe those are needs, those are legitimate needs, those are times when people legitimately need assistance, and I believe that assistance can best be rendered if we ask those at the State level to effect those programs they can effect to provide delivery of the services. I might point out that the proposed amendment does not diminish the funding available for food stamps. We took the CBO numbers, the projections under the Dole bill and said those would be the amount of the block grant. This is not a debate over the amount of resources that will be available. This is a debate over whether that resource will continue to be delivered through a one-size-fits-all bureaucracy that has failed in Washington, DC, or whether we are going to empower States that have substantial ideas on what they can do to deliver this program. Let me quote to you what Gerald Miller says, director of social services for Governor Engler in Michigan. ``Under a block grant,'' he said, ``States could deliver services more cheaply and efficiently without cutting benefits.'' Miller contends that if the food stamp program remains unchanged, it will have to be cut to meet deficit reduction targets. If the food stamp program were to be made into a block grant,'' he said, ``I don't know one Republican Governor who would cut benefits to one client. The distinguished Senator from Indiana indicated that Republican Governors or Governors in general might not be in favor of these kinds of amendments. I am pleased to just say that I know of one Governor, Gov. Tommy Thompson, who is a leading Republican Governor and one of the leading proponents of welfare reform in the country. I have his letter dated September 11, 1995, which I will submit for the Record. [[Page S 13338]] I ask unanimous consent that it be printed in the Record.

Mr. ASHCROFT. Mr. President, I yield so much time as I might consume.

Mr. ASHCROFT. May I inquire as to the remaining time on both sides?

Mr. ASHCROFT. A vote for this amendment is a clear and principled stand for the limits of the Federal power and the need for State control. A vote against this amendment is also clear. It is a clear statement against the rights of people to control their own destinies, their own lives, in a way that is free from the intermeddling of nearly 1,000 pages of regulation, micromanaging what happens in States, interfering with their ability to meet the needs of their citizens. We are in the midst of a long and substantial debate. It is a necessary debate on welfare. Passions are high. Rhetoric is high. Progress is slow. It is time for us to make real progress on a major welfare program. Every so-called welfare reform for the past two generations has had a couple of things in common. They have resulted in more people being trapped in the web of dependency; and second, they have resulted in more bureaucracy. We need not rearrange the deck chairs on the welfare bureaucracy again. We need to make substantial changes. We cannot afford half measures. The poor cannot afford half measures. We are about to fundamentally change AFDC. We are about to fundamentally change a number of other smaller welfare programs. It seems we are just happy to tinker around the margins with food stamps. I believe food stamps are welfare. They are the largest--they serve more clients than any other welfare program. They provide an incentive to illegitimacy, just as AFDC does, by providing more payments with more children that are brought into this world while on welfare. They are a part and parcel of the welfare system which seeks to help but actually hurts. I do not know how it is that block grants can make sense for everything else from AFDC to job training but not for food stamps. Yet, given all this, the leadership bill makes involvement in the food stamp block grant optional while simultaneously creating a disincentive for individual States to choose to operate under the block grant. By removing Federal entanglement, it is my hope we can begin to eliminate the fraud, cut down on waste, the high administrative costs, and make it possible for States to take action which helps move people from welfare to work. If we succeed where others have failed, we must be bold and consistent. I do not think we need to wait 7 years to determine whether a food stamp block grant is desirable. Washington's one-size-fits-all system has not worked. Continuing a system that entraps people in dependency will do nothing more than to sow the seeds of future disaster. I reserve the remainder of my time.

Mr. ASHCROFT. I thank the Chair. I yield myself such additional time I may need to conclude my remarks.

Mr. ASHCROFT. Thank you, Mr. President. I yield myself 10 minutes, and I ask to be notified when the 10 minutes has expired. Mr. President, we are debating this week a very important topic, and it is not the future of a series of governmental programs, not the role of the Federal Government in providing for a social safety net. We are not debating how much money we will save. What we are debating this week is nothing less than the lives of millions of American citizens. The welfare program, as it is currently constituted, has entrapped millions of Americans and has robbed literally generations of their future. What we are debating is whether we will continue to subsidize the current system, which may feed the body, but it numbs the spirit. It is a system which traps people in a web of dependency, places them in a cycle of hopelessness and despair. It is a system which promises a way out, but punishes those who try to find the way out. Today's welfare system is heartless and cruel; it is unfeeling, it is uncaring. Whatever we do, we must remember those facts, and we must remember the faces that are the portraits of suffering that have been drawn on the canvas of American history by our welfare system as it is now constituted. Welfare's failure is evident in many programs. Nowhere is it more evident, though, than in the Food Stamp Program. Food stamps, part of the Great Society's war on poverty. Today, food stamps is the country's largest provider of food aid. It is also, arguably, the Nation's most extensive welfare program. Last year, the program tried to help more than one out of every 10 Americans at a cost of nearly $25 billion. As the chart behind me illustrates, spending on food stamps has increased exponentially since becoming a national program in the early seventies, a quite dramatic and rapid increase. It has not been a function of population growth alone. This expansion is the result of fraud and abuse, compounded by oversight, as well as a variety of other factors. This stack of papers in front of me on the desk to my left is a stack of the 900 pages of food stamp regulations that States are forced to comply with in trying to help individuals find their way to independence and out of the despair of the welfare trap. It is important to note that we have tried to reform welfare on previous occasions and tried to reform food stamps, as well, in the process. The last real attempt at reform was in 1988, and you do not have to have particularly strong analytic skills to see what has happened since 1988 in the food stamp program: The program has skyrocketed. A 1995 General Accounting Office report, a 1995 GAO report, found through fraud and illegal trafficking in food stamps, the taxpayers lost as much as $2 billion a year. Mr. President, $2 billion a year is a lot of money. That would average out to $40 million per State. That is close to $800,000 a week, per State, all across this country. Furthermore, despite GAO's conclusions that the resources allocated for monitoring retailers was grossly inadequate, in other words we have not had the kind of enforcement that GAO says might be appropriate, the Food and Consumer Service officials still uncovered 902 retailers involved in food stamp fraud last year alone. That is where food stamps, which are designed to help people with nutritional needs, are used to acquire any number of other things that are not part of the design for food stamps. In February 1994, the Reader's Digest chronicled fraud and abuse in an article entitled the ``Food Stamp Racquet.'' One example was Kenneth Coats, no relation to the occupant of the chair I am sure, but owner of Coats Market in East St. Louis. It seems Mr. Coats paid as little as 65 cents on the dollar for food stamps and then cashed them in at full value. During a period of 18 months he redeemed $1.3 million, enabling him to pay for his children's private schooling, with enough left over for $150,000 in stocks, five rental houses and a Mercedes. If that were not bad enough, Reader's Digest reported that this was not Mr. Coats' first attempt at defrauding the American taxpayers. Ten years earlier his market was disqualified from participating in the Food Stamp Program because of fraud, though he was only disqualified for 6 months. Obviously, he was back in business. And at 65 cents, paying welfare recipients and cashing them in with the Government at obviously the face value, he made quite a bit of money. Now, there are stories of food stamp fraud and abuse to be found in every State in the Nation. There is a lot to like about the Food Stamp Program but there are many ways in which this so-called ideal transitional benefit has been a problem. They are a stopgap measure. They serve the people. They serve children. They serve the elderly. But there is a lot to dislike about the program which we have already discussed. It is because we want to change this system to help people and to empower States that I am today introducing this amendment. Mr. President, we can do better. My amendment would fundamentally change food stamps. Instead of having a system run and administered by bureaucrats in Washington, my amendment would return responsibility for the Food Stamp Program to the States. It would do it with an important qualifier: It would do it still allowing funding for growth at the CBO projected levels for the next 5 years. Unlike the present system, however, this block grant would give the States an incentive to improve the program's performance and efficiency. It would accomplish this by allowing any and all savings achieved by the States to be applied to help more people who are really in need. This approach, if adopted, would have enormous advantages. One, it would allow States to spend available resources on the people who need food, rather than on feeding the bureaucracy. It would make it possible to reduce some of the costs. The highest administrative costs in welfare, 12 percent, are in the Food Stamp Program. Second, it would allow the States to coordinate their efforts in assisting the needy. So much of the problem we have now is when we shift welfare burdens from one quadrant of the welfare equation to another. The leadership's bill would maintain many of the complicated regulations which have frustrated State efforts to help individuals in need. I think we need to give States the flexibility to administrator need in accordance with the needs of the needy and the State rather than in accordance with the 900 pages of Federal regulations. Third, a clean block grant to the States will work to end the fraud and abuse which have cost the taxpayers billions. I think this is so because when the State has a block grant and it reduces fraud and abuse, it gets to keep the money which has been involved in the fraud or abuse. There will be a real incentive for the States to drive down the costs associated with fraud and abuse. It is true that the leadership bill in this measure has some incentives but they are not incentives which would thoroughly match the incentives of a block grant, the structural incentives of providing for savings and allowing the States to recoup the savings in their entirety. Finally, States can provide individualized assistance. They know their welfare recipients' needs. They can coordinate thoroughly on their own terms their welfare programs. We have real welfare reform. It is time for us to understand that reforming this, the largest of the welfare programs which touches more people than any others, should be a part of that reform. We have heard a lot about devolution, that term that means we need to reduce the size and scope of the power of Washington. Well, we need to change the way in which Washington has affected the welfare system by stopping the arrogant assumption that Washington knows best, particularly in such a significant program. Every American has had an experience at some time or another with the abuses that are involved in food stamps. Federalism has one of its hallmarks of trusting Government close to the people. It is time [[Page S 13335]] for us to do that with the Food Stamp Program.

Mr. ASHCROFT

Mr. ASHCROFT. New York is 50. A State that pays 25 percent of its benefit is able, by paying that benefit, to attract 3 Federal dollars to the State. And, so, if they were to effect a savings and they only got to save the State's part and they had to give the Federal part back, by saving 25 cents for the State they could curtail the flow of $1 for the State; they would curtail the flow of 3 additional dollars to the State. What I am trying to say is that a program which provides reductions, of course, savings--if it is just one for one--is a program which does not provide the same amount of incentives as if you get to keep the amount that is left in the block grant. If it is a one-for-one savings, it is the same for all States. But we want to have States with an incentive to reform the program, and the larger the reward for reforming the program and reducing the roll, the larger the incentive. And it seems to me the incentive is larger under the Dole bill, which provides that you not only get to keep the State's share which you save, but you get to keep a dollar that reflects the State's share for every dollar you save in the Federal Government.

Mr. ASHCROFT. Mr. President, 50 percent, pardon me. I stand corrected and thank the Senator from New York. Fifty.

Mr. ASHCROFT. Mr. President, I think it is well known that States are paying disproportionate shares of the welfare benefits in their States. Some States pay 25 percent or 28 percent of the welfare benefit. Some States pay as much as 60 percent of the welfare benefit. In the event that some States are paying 60 percent, if they save----

Mr. ASHCROFT. Will the Senator yield?

Mr. ASHCROFT. I thank the Senator from Pennsylvania. The suggestion has been made that somehow the incentives for savings persist in this bill. I think it is pretty clear that once you get below 90 percent for every dollar you save, when you would otherwise have gotten $2 for having saved that dollar you only get $1 because the dollar you would save in regard to the Federal Government then is shared back to the Federal Government. The question is, how much incentive do we want to put in this bill to reform welfare? I believe we want to put a substantial incentive in this bill to reform welfare. We want it reformed significantly. I do not think the people want us tinkering around the edge with the program, but they want us to give States broad latitude and broad incentives. My understanding of the Breaux amendment is it would reduce that incentive substantially. To the extent that the incentive for reform is reduced by having the States benefit less financially when there has been reform, I think we will get less reform. I think the question is, do we want a lot of reform? Do we want major reform? Do we want sweeping reform? Or do we want reform that is incremental, and if there are incentives to additional reform they are diminished substantially. In my judgment, we want to provide the maximum level of incentives which is what I believe the Dole bill does, and is the appropriate way for us to move in this manner.

Mr. ASHCROFT. Mr. President, this is the only body in America that is not equally represented by the people of this country. Every State capital has a specific, both in their senate and house of representatives, except for Nebraska, of course, which only has one house, every State capital has one man, one vote. People have access to the ballot box like never before. As a matter of fact, the civil rights laws of the third quarter of this century moved to guarantee access and moved to remove legal barriers from voting and political participation. But just this decade, the Congress of the United States moved to remove virtually any kind of barrier. As a matter of fact, there is a special privilege for people on welfare. They are automatically asked to register when they go on welfare. There can be no argument that people in need are people who are disenfranchised in the United States. The idea that you have come to the Federal Government to be heard or to have an impact as a citizen is a bankrupt argument. It may have had currency at one time, but that currency has been substantially devalued by a change in the law, both the judicial law and the legislative law. The people of this country are represented and can be heard in their State capitals. I submit that they will be heard there better than in Washington, DC. As a former Governor, I witnessed far more people visiting me in the State capital than visiting me here in Washington, because the only disenfranchisement that comes now is a disenfranchisement of distance. Frankly, I cannot name a single State for which Washington, DC, is a closer destination than their State capital. It is simply not the case. If we give States discretion about how to spend this money so we can have real reform, needy people can go to the State capital. Needy people know that if the State makes a mistake, it is easier to correct and more quickly corrected than it is if the country makes a mistake. Needy people know that if there is a mistake in 1 program out of 50, it is not nearly as bad as if it is a national mistake. Needy people know that to get legislation changed in Washington, DC, you have to fight your way through special interests and all kinds of power groups, politically. They know that at the State level individual voices are heard, and the voices of neighborhoods and communities are heard. So I rise to oppose this amendment because I think it will hurt the people who are in need in this country. I rise to oppose this amendment because I think it is an amendment which is designed to institutionalize and guarantee the maintenance of the current system. It is incomprehensible to me, after the people spoke in 1994 as loudly as people spoke to me just last month when I was home, just incomprehensible to me that we would not want to really reform this system, that we would want to guarantee that the system is 90 percent the same as it is now. If a State can save enough money to go below that 90 percent, or devote that resource to additional education or additional ways of helping people pick themselves up and carry themselves out of poverty, we say: No dice, no; you have to be at least 90 percent as inefficient as the Federal Government, 90 percent as punitive as the Federal Government; you have to be at least 90 percent as unsuccessful as the Federal Government. I think we need to turn these States loose. There is very little doubt in my mind that there are just ways that people will solve these problems. Ninety percent, I think, would lock in a spending level. Ninety percent would likely lock in, in some cases, an increase in the number of people on welfare. I cannot think of anything more tragic than the State to sweeten its system, to redesign its program, and as a result of [[Page S 13323]] the redesign of the program, end up sucking more people into a system which has already impoverished many and stolen the future of generations. In some communities, like Detroit, 79 percent of all the children are born without fathers. We have an epidemic that is aided and abetted by this system, which is counterproductive. We should not institutionalize the status quo, and we must reject the Breaux amendment. Mr. SANTORUM addressed the Chair.

Mr. ASHCROFT. The Federal Government is locked into spending 100 percent by an amount determined by its expenditures last year, and then any savings that come out of that should inure to the States. The difference is under the block grant proposal. There would be a massive incentive for the States to save money and to reduce welfare rolls. Under the Breaux amendment, which would require a 90-percent expenditure, instead of saving the money and devoting it to things that might be more needy, they would be required to spend it in the same way they had previously, which could result in the anomaly of increasing welfare substantially. Let me just move away from the area of Medicaid, for instance. Food stamps are the second largest of all the welfare programs. The testimony from the Office of Inspector General and from the Food and Nutrition Service and the Department of Agriculture is there is about a 12-percent administrative cost in food stamps. There is about a 12- percent slippage when you consider trafficking in food stamps and fraud and mistakes and those kinds of things, or about 24 percent of the program--24 percent of the program--does not really get to needy folks. If you are to take that kind of a welfare program and send it back to the States with a 90-percent requirement that they keep spending the money for the same program, it is another case where they might have to increase the number of people on welfare. Mr. President, I think what we have here is a classic situation: Are we here to reform the welfare system? Are we here to reduce welfare or are we here to increase welfare? In my State, the people of Missouri spell ``reform'' r-e-d-u-c-e. They believe they sent us here in the year 1994, last year, to do something about an epidemic of welfare [[Page S 13322]] which is pulling more and more people into the category of dependence and despair and fewer and fewer people into the category of independence and industry. I think we have to ask ourselves the question: What is our purpose in reform? I think our purpose in reform ought to be giving States the incentive to move people off welfare and, yes, if there are surplus funds and they have been successful in doing that, let the States devote those funds to the benefit of the entire population. Let me just raise another issue. The other issue is this: If States do get the number of people down on welfare--and, after all, we should be trying to get fewer people on welfare, not more. The index of a compassionate society, J.C. Watts said, and he is profoundly correct on this, and the Chair, being from Oklahoma, knows Congressman Watts well, the compassion of a society should not be how many people you can get on welfare, but a really compassionate society should have few people on welfare. If you are required to keep spending lots and lots more money on welfare per capita than you have, if you have any inefficiencies now that are expressed in the program, if you have to spend more money per case, what does that do? If you have the case level down to 75 and you still have to spend at 90, you have to make that case much richer, you have to provide more benefit. As you increase the benefit, what do you do? You attract people back into the system. The pernicious impact of the Breaux amendment would be to attract more people into welfare to the extent the States were able to reduce the welfare caseload and the administrative cost to a level below 90 percent. We do not want to build a welfare system here; we want to make a welfare system that helps people out of welfare into work. We do not want to make the benefits richer so it makes it harder for people to move from welfare to work; we want this system to be designed to meet the needs of truly needy individuals but without a Federal mandate that might require the State of Missouri, for instance, if it were to be applied to Medicaid, to move from 600,000 people on welfare to 810,000 people on welfare, or, in the area of food stamps, if you could somehow get a good bit of that 24-percent slippage out of the system, that would require an increase in the benefits so that more people would be enticed into the system rather than fewer. This is a fundamental point that if you are going to reduce the number of people on welfare and you require the amount of money to be maintained at a very high level, you have to make the benefit richer and richer and richer. And if you enrich the benefit while you are decreasing the population, then all of a sudden people will start seeing the benefit being richer again, and you will attract more people into the system. We do not want to build into welfare reform. We do not want to sow the seeds of its own destruction. We do not want to build a structure and mechanism which will result in welfare being increased and grown. I said the people of Missouri spell ``welfare reform" r-e-d-u-c-e, and they do not want to grow welfare, they want to slow welfare, not because it is so much a question of how much money we are spending, it is a question of how many lives we are losing. We are losing generations of children. Another point: There seems to be some question--and I am glad the Senator from Pennsylvania raised this with me--as to whether people at State capitals can be sensitive to the needs of the needy. It is as if somehow people can only be heard if they have needs in Washington, DC. I suppose it might be as a result of the history of this whole enterprise of welfare, if we could mislabel welfare as an enterprise. It might be that if we were to discuss the history, we could see why that question comes up, because there was a time in America's history when individuals who were needy were not well represented in politics. Back in the fifties and sixties, there were laws that related to access to voting which kept a lot of people from voting. The civil rights movement was a response to that. And then the Supreme Court of the United States in the 1960's said, ``We can't have rural communities have an improper impact on legislation because they do not have the population anymore.'' So there was a Supreme Court case called Baker versus Carr that provided for one man, one vote. And there is only one legislative body in the United States of America that does not represent one man, one vote. It is the U.S. Senate.

Mr. ASHCROFT. We would do so by ending the entitlement, and that provides an incentive to the States to reduce welfare, as opposed to the Breaux amendment which would provide a mandate, in many instances, to increase welfare.

Mr. ASHCROFT. Yes.

Mr. ASHCROFT. Thank you, Mr. President. I rise to question the public policy value of trying to lock States into spending 90 percent as much as the Federal Government has on a series of programs, many of which not only have failed, but have locked people into dependency and have locked people into poverty. I think there are very substantial and significant public policy reasons to say that we should allow the States the flexibility to correct the errors of the Federal Government rather than to pass legislation which would require State and local governments to persist in the errors of the Federal Government. The Breaux amendment would require that there be a 90-percent maintenance of effort. And in my understanding of it, that means that we would require that States spend 90 percent of any block grant just as the Federal Government did, in other words, lock in an amount of spending. This could be a serious problem for States because, in some instances, it could actually require that States build the program to be a much bigger program than it now is. It might require States to go out and get far more people into the program than they now have. Let me just give you one example that flows out of my experience as Governor, but really persists and has come as a part of the testimony that has been in the debate about welfare from my successor and from the people in his administration. As you know, I did not have the privilege of being succeeded by a Republican. So a Democrat is now Governor of our State. And so, I want you to know that these figures are not Republican figures or Democrat figures. They happen to be Democrat figures, but they came from an administration that followed mine. Take one of the biggest welfare Programs of all. The most costly welfare program of all is the Medicaid Program. In the Medicaid program in my home State, the Medicaid director has said that if he could just have the money and not have all the Federal red tape, instead of serving 600,000 people with the money, he would be able to serve 900,000 people with that same amount of money, meaning that there are tremendous inefficiencies in the Federal program; that these inefficiencies, as a matter of fact, if they could be wiped out, would be more than a 10-percent benefit to the program. They could provide for a 50-percent increase in the population being served. If we were to apply the Breaux amendment to that kind of a situation, what would happen? The Breaux amendment would require spending 90 percent of the money, which would mean that you would get 90 percent of the increased number of people that could be served absent the Federal regulations. That would, in a program like the Medicaid program in Missouri, automatically boost the program from a 600,000 population program to an 810,000 population program, because we would mandate that they spent 90 percent as much as they would now be spending, but do it in a context without the Federal regulations, which would allow for greater efficiencies.

Mr. ASHCROFT

Mr. ASHCROFT. I wish to thank the Senator from Connecticut for his courtesy.

Mr. ASHCROFT. I thank the Senator from Connecticut. I am delighted to have this opportunity to make a few remarks and to offer two amendments to the Dole modified amendment for the welfare reform proposal. Mr. President, the Dole modified amendment which is offered today is a substantial improvement, a very substantial and significant step toward the right kind of operation in terms of reforming welfare. I am pleased to see that the mechanism for delivering block grants--which was first recommended in the proposal I made on welfare reform called CIVIC, Senate bills 842, 843, 844 and 845, the proposal for delivering block grants directly from the Department of the Treasury to the States--is included and that will vastly reduce the Federal welfare bureaucracy, which I considered to be a bureaucratic tax upon the poor, and make resources available to the truly needy. It should limit Washington's interference in the States' welfare reform efforts. As I have spoken many times on the floor, ending the micromanagement and intermeddling involvement of HHS to the extent possible, and giving States the opportunity to craft and shape welfare reform so that it meets the needs of the people in the States, is very important. We do need to replace the failed system of welfare which has been a Washington-run system, and the modified amendment proposed by Senator Dole would help achieve this, in part, by adopting the proposal which is for direct block grants to the States that bypass much of the redtape of Washington. Also, it is important that the Dole amendment includes an independent audit provision which will eliminate much of the Washington micromanagement and prevent funds from being consumed needlessly on bureaucratic oversight. Under this provision, States would supply to the Department of the Treasury audits conducted by independent auditors demonstrating their compliance and that block grant funds have been used properly in serving the needy populations. I want to also say how pleased I am to see that the modified amendment includes a provision adapted from my welfare reform bill, which recognizes that Government programs alone will never solve all of our welfare needs. We have to allow States to involve a number of nongovernmental charitable organizations, including faith-based organizations, in serving the poor. Organizations like the Salvation Army and Boys and Girls Clubs are often more successful in serving people in need than are governmental institutions. We need to be able to tap these resources effectively. There is a character in the programs like the Boys and Girls Clubs and the Salvation Army that is important in meeting needs. It is a character associated with charity, which provides for a kind of compassion and caring that instills hope and aspiration in the lives of people. The modified amendment includes very important provisions in this respect, which will ensure that such organizations that are selected to participate in meeting the needs of the poor are not forced to compromise their character. Furthermore, any person eligible for assistance who would be offended by going to one of these organizations to receive assistance would have an opportunity to receive alternative services from the state. There have been clear guidelines set to protect individual rights and to protect the rights of the organization. While these are important provisions included in the modified Dole amendment, Mr. President, the modified amendment still I think needs adjustment and falls shorts of being a comprehensive welfare reform bill. That is why I intend to send a pair of amendments to the desk which would broaden the bill to include block grants for two major welfare programs: Food stamps and supplemental security income, or the SSI program. Block grants are essential for these programs because if you leave welfare partially open ended as entitlement programs, and partially block granted, there is a tendency on the part of jurisdictions to shift the welfare caseload from the areas which are block granted to the areas that are open ended and entitlements. As a result, rather than controlling and managing welfare effectively, you just push from one area of the welfare population to another, move people from AFDC over to SSI. In some cases, that move would be far more expensive. A single child on SSI gets $448 a month. There are AFDC programs which provide $200 or $300 a month, and a shift in that population would not be a reform at all in terms of cost containment, but a way of just dramatically increasing our welfare costs. As a matter of fact, it would make it very difficult for us to control costs. In addition, when you have a program which has no limit on it, totally entitlement and totally federally funded, the incentives on the part of State and local instrumentalities to combat fraud and abuse are low. If we give the items in block grants to the States, the incentive to contain fraud and abuse, to detect it, to root it out of the system, is elevated. Mr. President, fraud and abuse are rampant in the Food Stamp Program and SSI today because as the rolls grow, the money flows. There is no incentive to the welfare industry to reduce the problem. The only way we will be able to combat fraud and abuse is to give States the ability to design and enforce these programs and the incentive for them to limit the expenditures in these programs. I intend to send two amendments to the desk regarding SSI and food stamps. Finally, Mr. President, I join today Senator Coats in introducing an [[Page S 12925]] amendment which also recognizes we must look beyond Government to solve the welfare problems. Specifically, we need to encourage people to get involved personally in helping the needy. Our amendment combines proposals which we have offered in the past to accomplish this goal. It would provide a nonrefundable tax credit to individuals who volunteer time as well as money to give to charitable organizations so that individuals who contributed at least 50 hours per year at nonprofit private or religious charitable organizations which serve the needy would be eligible for not just the tax deduction regarding a $500 contribution, but if they also have a $500 contribution, they would be eligible for a tax credit of up to $500. Mr. President, let me emphasize that simply rearranging the deck chairs on the ``Welfare Titanic'' would be turning our backs on the most pressing issues facing our future. We must fundamentally reform the entirety of our welfare system. We simply cannot tinker around the margins. We cannot afford to repeat the mistakes we made in the past. We must all admit that Government alone has failed miserably and will continue to fail. We must, I believe, have these expanded block grants so we do not have a partial system of block grants which invites cost-shifting and does not provide incentives for fraud and abuse containment. I believe we must invite a far broader band of our society to participate in meeting the needs of the needy, and for that reason we need to encourage involvement by a far broader group of individuals in society. Amendments Nos. 2561 and 2562 to Amendment No. 2280

Mr. ASHCROFT. Perhaps the Senator needs to apologize to the Senator from Ohio if he is offended. I yield to my colleague from Florida. Amendments Nos. 2563 and 2564 to Amendment No. 2280