Bob Graham

Mr. GRAHAM

Mr. GRAHAM. Am I correct--this is a question of the Senator from Rhode Island--this 80 percent is based on what was received in 1994? The Senator from Louisiana explained that in his amendment the 90 percent was 90 percent of the Federal funds in the year of receipt. So if in 1998 a State received $100 million, it would have a required maintenance of effort of $90 million. [[Page S 13497]] I understand under the amendment of the Senator from Rhode Island--or am I correct that the 80 percent is 80 percent of what the State's required effort was in 1994? Is that correct?

Mr. GRAHAM. Mr. President, I yield 2 minutes to the Senator from Arkansas.

Mr. GRAHAM. Mr. President, how much time remains?

Mr. GRAHAM. We will reserve our 6 minutes to close.

Mr. GRAHAM. Mr. President, to close on this amendment, we have [[Page S 13486]] heard a lot about the phrase that ``we want to change welfare as we have known it'' and that it is a failed system. There are many citations as so what those failures are. If one of the objectives of the welfare system was, as the senior Senator from New York has stated, to move resources from the Northeast to the South and West, we will add that as an additional failure of the welfare system. How can you say that a system has accomplished that objective of assisting the poorest States in America when Texas receives one-fifth the amount of funds for its poor children as does New York and when Arkansas receives one-eleventh of the funds per poor child as does the District of Columbia? Another example of the failed system. Assume that we were to start this process with a blank piece of paper. Assume we had never distributed Federal money for the purposes of assisting poor children and assisting the guardians--particularly the single, female heads of households--of those poor children to get off welfare and on to work and thus independence. How would we go about allocating the money? First, I think we want to allocate it in a manner that would, in fact, make the system work, that would provide a sufficient amount of resources into each of the communities of America to allow the kinds of training programs and child care to be functional, to accomplish the objective of moving from dependence to independence through work. Second, we want to have elemental fairness in how those funds are distributed. That is the essence of the amendment that is before us today, Mr. President. This amendment follows the simple principle, take the total number of poor children in America--they are America's poor children. They are not Florida's poor children or California's poor children, they are America's poor children. The funds will come from all Americans through the Federal Treasury. Take the number of poor children in the country, divide that into the funds we have available, approximately $17 billion a year, and distribute the money wherever the poor children are. That seems to me to be an imminently reasonable approach and a fair approach in terms of achieving the objective. The amendment that has been offered by Senator Dole would distribute 99 percent of the Federal dollars to the status quo. However, the money which was distributed in 1994 will be distributed in the year 2000, without regard to any changes. There can be a depression in Colorado, you can have enormous growth in Arizona, you can have a depopulated Michigan, and yet you will get the same money in the year 2000 that you got in the year 1994. That does not sound like a fair, reasonable plan, or a plan which will accomplish the objective of this legislation. Much has been made by the Senator from Pennsylvania about maintenance of effort. Frankly, maintenance of effort has been a moving target throughout this debate. We had no maintenance of effort when we started this debate. We defeated an amendment yesterday to require a continuation of maintenance of effort. Whatever final position we take on this formula, obviously, we will have to readdress the issue of maintenance of effort. Mr. President, I believe there are a number of considerations that Members of this Senate ought to take into account as they decide whether to vote on this amendment. First, the Dole amendment does not respond to economic or demographic changes. Second, the Dole amendment rewards inefficiency. New York State spends over $100 per welfare case for administration. West Virginia spends $13. Yet, those inefficiencies are going to be rewarded in that New York State will get a higher proportion of the money, in part because it has been more inefficient in utilizing the funds available. The mandates that we are imposing, heavy mandates in training and in child care, will be much more difficult to meet in a State like Texas, where 84 percent of the money Texas gets from the Federal Government will have to be spent to meet the mandates of training and child care. In Mississippi, 88 percent of the money will have to be used, whereas in more affluent States, less than 40 percent of their Federal funds will be required in order to meet these mandates. Much has been said about the fact, Mr. President, that we are going to be moving toward parity under the Dole amendment, that eventually we will get to the goal that all children will be fairly and equally treated. How long will that trail take? Let me give some examples. How long will it take from today, using the Dole formula, for the State of Alabama's poor children to have the same worth in terms of the distribution of Federal funds as do the poor children of the rest of America? Mr. President, 74 years is how long it will take Alabama; Delaware, 39 years; Louisiana, 79 years; Idaho, 42 years; Mississippi, 100 years before the poor children of Mississippi reach the average of the Nation; Florida, 29; Nevada, 29; Illinois, 13; South Carolina, 78 years before South Carolina's poor children reach the average of the Nation in terms of the distribution of the Nation's resources for poor children; South Dakota, 27 years; Texas, 75 years. How, in 1995, do we support a formula which has that degree of inequity and unfairness, and the fundamental undermining of the ability of this legislation to achieve its intended result, to change welfare as we have known it by giving people a chance, a chance to move from dependency to independence through work. I urge the adoption of this amendment.

Mr. GRAHAM. I wish I could be as sanguine as the Senator from Rhode Island. Having seen how many Senators voted to punish the poor children on an earlier vote, I cannot be so sanguine.

Mr. GRAHAM. Mr. President, I asked for a copy of the amendment, and it was not available, so would the Senator from Rhode Island yield for two questions relative to the amendment?

Mr. GRAHAM. I am familiar with the amendment we voted on yesterday offered by the Senator from Louisiana as it relates to what categories a State can allocate funds which will count towards the 80-percent maintenance-of-effort requirement. Could the Senator indicate if there are any variations from the amendment of the Senator from Louisiana? And, if so, what are those variations?

Mr. GRAHAM. If for any reason--sanction or for other reason-- sufficient that we do not appropriate the full $17 billion in the year 2000 and States get less than is currently projected, if for that or any other reason--sanction, political, economic, or otherwise--Federal funds should fall below the 1994 level, does your amendment provide for any adjustment to the maintenance-of-effort provision?

Mr. GRAHAM. Are there any instances in which, if the Federal funds are reduced below what they were in the base year 1994, that there would be adjustment to the maintenance of effort?

Mr. GRAHAM. There had been concern about the definition under the original 75-percent maintenance of effort that it would have allowed, for instance, a State's contribution to Medicaid and Head Start programs to count toward maintenance of effort.

Mr. GRAHAM. The second question: We had earlier debate about what happens if a State's allocation of Federal funds declines, what occurs to that State's continuing maintenance of effort? For instance, there is a very high probability that many States are going to end up being sanctioned under this bill because they will have such a limited amount of Federal funds that they would be unable to meet the work requirements and therefore would become subject to the 5- percent sanction, reduction. If that were to occur, what, if any, effect under your amendment will that reduction in Federal funds, for whatever reason, have on their maintenance-of-effort obligation?

Mr. GRAHAM. Mr. President, I yield 2 minutes to the Senator from Nebraska, Senator Kerrey.

Mr. GRAHAM. And that would be constant over the 5-year period, without regard to changes in the levels of Federal support?

Mr. GRAHAM. Thank you, Mr. President.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, the junior Senator from New York, Senator D'Amato, said he opposed this amendment because it had no relationship to need, that it was arbitrary and capricious. That is exactly the point. What is more related to need than to allocate funds for poor children based on where poor children are in the year you are going to distribute the money? What this amendment states is that the fundamental basis for allocating funds will be where poor children are in the year of distribution. If the State of Missouri represents 3 percent of the poor children in America in 1996, it will get 3 percent of the money. If it represents 2.9 percent of the poor children in 1997, it will get 2.9 percent of the money. That, to me, is a principle which is fundamentally as fair and straightforward as the reputation is of Missouri for a State that wants you to ``show me'' why you are proposing to do what you are proposing to do. There has been a theme through some of the comments that have been made that we are holding the world constant, and therefore we can continue to hold constant the way in which we have distributed money in the past for the support of poor children. The fact is, we are engaged in reform--some people would say in revolution--of the welfare system. Could it be more paradoxical that we are fundamentally changing the objectives of the system, the structure and administration of the system, the relationship of the States, the Federal Government, and the individuals affected, yet we are going to continue to distribute the Federal money, 99 percent of it, based on the old allocation formula? I think that belies our real commitment to reform. What are some of the changes in this revolution in welfare? Those changes include massive new mandates to the States to undertake job training and preparation, including placement services where necessary, transportation services, and child care services for those persons who are trying to collect up the necessary personal capabilities to become independent, employed persons in our society. Those mandates have very serious implications to the States. The State of Texas is going to have to spend 84 percent of the Federal money that it will receive under this program in [[Page S 13364]] order to meet those mandates. Yet we are going to continue to distribute money to the State of Texas as if those mandates did not exist because, in fact, those mandates did not exist when this basis of allocation of funds was developed. We are going to distribute, over the next 5 years, $85 billion of Federal money--this is not State money, this is not money to which any locality has a particular claim, this is money that belonged to all the people of the United States and is paid by all the people of the United States--we are going to distribute $85 billion to a status quo program, how things were in 1994. We are going to distribute a shade less than $900 million based on a formula which will commence 3 years from now, that will provide an increase to a handful of States based on growth and extreme poverty in terms of how far they fall below the national average in their support for poor children. It has been suggested that there is an unfairness in this adjustment, that we are overly imposing on some States. Let me just look at this chart. The garnet bar represents what is in the amendment that is the basis of this legislation, the Dole proposal. The gold bar represents the modification in funding if the Graham-Bumpers amendment were adopted. Let us just look at New York and Arkansas. Under the Dole bill, New York will receive over $2,000 per poor child in 1996--over $2,000. Arkansas will receive less than $400 per poor child. If this amendment, that has been described as overreaching and unfair, is adopted, what will happen? What will happen is that in 1996, New York will have approximately $1,400 for every poor child, and Arkansas, that egregious, greedy State of Arkansas, will jump up to approximately $550 per poor child. That is what happens when greed takes over the system and Arkansas begins to move somewhat toward parity. It will take another 3 years before Arkansas finally reaches New York in parity. Under the proposal that is in the current bill, it will take Arkansas 177 years--177 years before Arkansas would be in parity with New York, under the bill as proposed by the majority leader. Yet we are being accused of being overreaching. It has been suggested that our amendment is inappropriate because of the maintenance of effort provision that was in this bill. When we wrote this amendment there was zero maintenance of effort in this bill. The maintenance of effort--that is what will be required of States in order to be eligible to participate--has been a work-in-progress over the last several weeks. We submit this, what we think is the fundamentally appropriate manner in which to allocate $85 billion of Federal funds over the next 5 years for poor children, which is the radical idea. Let us put the money where the poor children are. When the Senate in its wisdom adopts this amendment, then we will come back and look at the issue of what that says in terms of appropriate modifications to a maintenance-of-effort provision. It has been suggested that there is some Machiavellian plot here, that we are trying to defeat welfare reform. I want to state in the strongest possible terms that I am a strong supporter of welfare reform. My State has two of the most successful welfare work projects in the country. I spent a day recently working at the project in Pensacola which has put almost 600 people into productive work, which will have half of the welfare population of Pensacola involved in a transition program in the next few months, which already has approximately 25 to 30 percent involved, is serious about the business, and has learned what it is going to take in order to be successful. So I take second place to no one in my commitment to seeing that there is real welfare reform. But I would suggest that, first, in terms of what is in the interest of the vast number of States in America as seen on this map where all of the States in yellow will be better equipped to meet their responsibilities when the money is distributed based on where poor children are, that we have a better chance of achieving real welfare reform under that allocation of funds than under one which continues to impoverish a large number of States in America. I believe that on this Senate floor it is going to be difficult--it must be difficult for many Senators who are here tonight; they can read the charts; they know what the implications of this are to their State--to vote for a bill, even one which has many provisions that they support which contains at its heart, at its core, such a cancerous unfairness in terms of how the Federal money will be distributed in terms of where the poor children, the poor children in their State, the poor children in America, live. Finally, in terms of, is this a plot to sink welfare reform? In my judgment, this is not the plot. The plot is there, Mr. President. It is there in the bill as authored by the majority leader. And it is there because there are not the resources available in that formula, in that bill, in order to meet the objective of having 25 percent of the welfare beneficiaries in meaningful employment in 1996 and 50 percent in meaningful employment in the year 2000. That is not Senator Graham's assessment. That is, among others, the assessment of the Congressional Budget Office, which has estimated that upwards of 40-plus States will not be able to meet the work requirements in the legislation offered by the majority leader, in large part because they do not have the resources to pay for those things that will be necessary to prepare people for work, including the appropriate child care for their dependent children while they are preparing themselves to work and during those initial weeks of employment. So there may be a plot here to sink welfare reform and to show that, in fact, it is unattainable, but that plot is contained in the legislation which is the underlying proposal of the majority leader, not in this proposal, which in fact would give all States an equal opportunity to use their creativity, imagination, and unleash what the presiding officer as a former Governor and I as a former Governor know to be the energy of States to meet a very serious national problem at the local level. So, Mr. President, I urge the close attention of all of my colleagues to the implication of this amendment and urge tomorrow, when this is before us for a vote, their favorable consideration. Thank you, Mr. President. [S12SE5-358]{S13364

Mr. GRAHAM. Mr. President, if no one seeks recognition to speak on the amendment, I would like to make a few comments in closing, recognizing that there is some time reserved tomorrow morning for final comments on this matter. My comments this evening will be, first, to express my appreciation to all of the Senators who have participated in the debate on this amendment on both sides of the aisle and on both sides of this issue. I recognize that, whenever you are attempting to allocate not only a zero sum, a fixed amount of money, but what actually is a declining amount of money because of the decision to freeze 1994 allocations in place until the year 2000 with no adjustment for inflation, no adjustment for demographic changes, no adjustment for economic changes, you are dealing with, effectively, a declining amount of dollars to attempt to allocate. That makes the issues of fairness even more difficult, but I suggest even more urgent. I would like to respond to some of the comments that were made. Before doing so, Mr. President, I send to the desk a series of tables and other materials which were referenced in my comments, or comments of Senator Bumpers or Senator Bryan, in behalf of this amendment. I ask unanimous consent they be printed in the Record at the conclusion of my remarks.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, what is the current parliamentary status of the Senate?

Mr. GRAHAM. Thank you, Mr. President. Amendment No. 2565

Mr. GRAHAM. Thank you, Mr. President. Mr. President, I ask unanimous consent that the two pending amendments be set aside for the purposes of considering amendment No. 2565.

Mr. GRAHAM. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GRAHAM. Mr. President, is there unanimous consent for time for disposition of subsequent amendments?

Mr. GRAHAM. Mr. President, amendment No. 2565 has been sent to the desk pursuant to the filing requirement of last week. Mr. President, this evening with my colleague Senator Bumpers, we rise to offer an amendment to the pending amendment of Senator Dole which would dramatically affect the fairness of the funding allocations to the States under this legislation. We describe our amendment as the children's fair share amendment. Our approach is simple. We believe that the funding to the individual States, and therefore to their children, should be needs based. As a result of our formula, States would receive funding based on the number of poor children within that State in the particular year in which they received funding. There are two modifications to that basic principle: that funds should be allocated where poor children are in the year of distribution. Recognizing the fact that this legislation imposes some very serious mandates on States, particularly in areas of preparing persons for work, and to be able to meet specific numerical goals for the percentage of welfare beneficiaries who are employed, we believe that there is a minimum amount of funds required for any State in order to meet those obligations. Therefore, we provide that no State will receive less than either 0.6 percent of the national allocation, or twice the actual amount of that State's 1994 expenditure level, whichever is less. That will assure that all States will have a basic amount of funds in order to discharge their responsibility. The second principal modification from the pure principle of allocating funds where poor children are located is that all States, except those covered by the small State allocation, will be subject to a transitional period by which their increases in funding in any year would be limited to no more than 50-percent of what they had received in fiscal year 1994 for fiscal year 1996, or no more than a 50-percent increase in fiscal year 1997 over what they received in 1996 and so forth. The purpose of this is to provide for a 4-year transition period in order to get to the goal of parity for all poor children in America. The savings from this allocation of increased ceiling would exceed that for the small State minimum allocation. The net effect of these adjustments would be reallocated among the States which receive less than their 1994 actual expenditure. Any formula allocation should be guided by some underlying principles and policy justifications. One fundamental principle of the Federal Government allocating money to its citizens through the States should be fairness--fairness to America's children, fairness to the States, and fairness to the Nation. There is another principle which should be applicable in this legislation; that is, will the distribution of funds allow the fundamental objective of the legislation to be attained? The objective of this legislation is to facilitate [[Page S 13352]] the movement of welfare beneficiaries from dependency to independence through work. Will the funds as allocated to the 50 States, and available to them in order to meet that objective, be equitable? If we are going to a block grant, welfare we must be very careful that these principles, particularly the principle of fairness, fairness to children, is met. The General Accounting Office noted in its report of February 1995 entitled ``Block Grants: Characteristics, Experience, and Lessons Learned,'' that ``because initial funding allocations used in current block grants were based on prior categorical grants, they were not necessarily equitable.'' Senator Bumpers and I propose a funding formula that would clearly meet the following principles: block grant funding should reflect need or the number of persons in the individual States who require assistance. The principle No. 1 of a block grant program should be to reflect need or the number of persons in the individual States requiring assistance. A second principle of block grants should be that a State's access to Federal funding should increase if the number of persons in need of assistance increases and decrease if the number of persons requiring assistance declines. Third, States should not be permanently disadvantaged based upon policy choices and circumstances which were prevalent in years prior to the block grant. And fourth, if requirements and penalties and public ridicule are to be imposed upon States, as I envisage will be the case with the bill of Senator Dole, then fairness dictates that all States have an equitable and reasonable chance of reaching those goals. If I might comment about public ridicule, one of the provisions in the original version of this legislation--and I believe that it is retained in the modified version--is that there will be periodic evaluations of how the 50 States are conducting their business under a reformed welfare. States will be ranked assumedly from 1 to 50 as to how well they are doing in terms of achieving the objectives of moving people from dependence to independence. Yet, we are going to be saying to some States you start this process, as with Mississippi, with $331 per year per poor child in your State, another State will start this process with $3,248 per poor child per year. And yet we are going to publish a report analogous to an Associated Press rating of football teams how well each State did in meeting the directives, the mandates, the goals of this legislation. It would be as if one State was able to field a fully professional team and another State had to find a group of junior high school beginners to play this game. Yet, they are both going to be subject to the same evaluation. That is the public ridicule I suggest is going to be a consequence of this inequitable funding formula. The test by which States should be evaluated would seem reasonable. In sharp contrast, the amendment as offered by Senator Dole fails to meet any and every test of fairness of a block grant. In fact, the formula used in the Dole amendment would perpetuate the inequities of the status quo. What are some of the problems with the amendment that is before us as offered by Senator Dole? The authors of the leadership proposal have failed to learn the lessons cited by the General Accounting Office and other experts who have examined block grants. They have chosen to distribute welfare funds to States well into the future based on fiscal year 1994 allocations. Ironically, in the name of change and in the name of reform, we are locking in past inequities in distribution of Federal funds. We are repackaging them as block grants. We are punting welfare to the States and failing to take into account future population or economic changes among the States and failing to give the States an opportunity within a reasonable period of time to achieve parity and equity in the treatment of the poor children within those States. By allocating future spending on the basis of 1994 allocation, the Dole bill fails to distribute money based on any measure of current or future need. It fails to account for population growth and economic changes. It would permanently disadvantage States well into the future based on choices and circumstances made in the past. And it would unfairly impose penalties on States. The Dole allocation is essentially based on the status quo. How was the status quo arrived at? How did we end up with a system in which one State gets $3,248 per year per poor child and another State gets $331? The answer is that we had a system which had as one of its principal objectives to encourage those States that were able, capable and willing to invest substantial amounts of funds in their cash assistance to welfare beneficiary programs. Since we are in a nation which, unfortunately, has huge disparities in capability as well as in political will from State to State, we have ended up with huge disparities in terms of Federal funds for poor children. The basic formula has been that for every dollar a State would put up, there would be a Federal match. For the most affluent States, the matching rate is 50-50--a dollar from the State draws down a dollar from the Federal Government. For States that are less affluent, they have a somewhat richer matching rate, going all the way up to the poorest State being able to get 83 Federal dollars for every 17 State dollars. And based on that formula we have ended up with a situation as it was in 1994 and as it is almost proposed to be continued into the indefinite future. One other modification has been made to that, however, Mr. President, and that is that a group of some 19 States which had the characteristics of either growing at a rate faster than the Nation as a whole--and there are some 17 States that met that standard--or States which were more than 35 percent below the average of the Nation in terms of funds per poor individual received a bonus and that bonus is 2.5 percent growth beginning in the third year of this 5-year plan. So beginning in the third year, if you have been receiving $100 million, you got $102.5 million, and a similar 2.5-percent adjustment in the fourth and the fifth year. That adjustment distributes approximately $800 to $900 million over the 5-year period, concentrated in the third, fourth and fifth year of the 5-year period. The status quo plan, the plan that is based on funds as they were distributed in 1994, will distribute approximately $85 billion over that same 5-year period. So the amount of funds that are intended to represent poverty and growth are a pittance compared to the enormous amount of money that is going to be invested in continuing the status quo as it was in 1994. The consequence of this allocation is this map that is called ``Children's Fair Share Allocations.'' The States in red on this map benefit by using a formula based on status quo and the modest adjustment which I have indicated. The States in yellow are the loser States in that allocation and, conversely, would benefit if the funds were distributed on the basis of where poor children in America live. Mr. President, the current proposal before us, the formula of Senator Dole, would result in extreme disparity between States in Federal funding for poor children. For example, Mississippi would receive $331 per child in 1996 compared to an affluent northeastern State's $2,036 per poor child. Let me repeat that. Mississippi, $331; an affluent Northeast State, $2,036; an affluent far Northwestern State, $3,248. In effect, those affluent States would receive six times or more funding per poor child than the poor State of Mississippi. Even under the formula of Senator Dole, Massachusetts--another affluent Northeastern State--would receive $2,177 per poor child. If you combine the per child total from five other States--you combine the amount that a poor child in Alabama, in Arkansas, in Louisiana, in South Carolina, and in Texas, if you combine what those children would receive in a year--that total would not equal what a poor child, a single poor child in Massachusetts would get in a single year. To state it another way, the Federal Government effectively values poor children of that affluent State five times more than it does the children of Alabama, Arkansas, Louisiana, South Carolina, and Texas. There is no justification for poor children to be treated with less or more value by the Federal Government depending on the State in which they happen to live. [[Page S 13353]] The proponents of the Dole formula will argue that some States will qualify for the 2.5 percent adjustment in the bill to address these disparities. However, a sizable number of States that are not treated fairly under the current system would receive zero remedy from the limited, inadequate 2.5 percent adjustment feature. Those States which would get zero remedy from the 2.5 percent adjustment include Kentucky, Oklahoma, Indiana, Illinois, Missouri, Nebraska, West Virginia, Kansas, and North Dakota. All of those States are well below average Federal funding per poor child, yet would get no benefit from the proposed remedy. Moreover, even for those who do qualify, the adjustment is marginal and may fail to treat all poor children equally. Let me use as an example again Mississippi. How long will it take under the 2.5 percent formula for Mississippi to come up to the average of the country in terms of funds available per poor child? Will it take 10 years, will it take 20 years, 30 years, 40 years, 50 years, 60 years, 70, 80, 90? No. It will take 100 years for Mississippi to go from its current $331 per poor child to reach the average of the Nation at 2.5 percent a year. How long will it take for Mississippi to reach the level of an affluent Northeastern State? It happens to come out historically and somewhat ironically that it will take 206 years for Mississippi to reach the same level as the affluent Northeastern State. That happens, Mr. President, to be the same number of years looking backward to the signing of the U.S. Constitution. So Mississippi could look forward to all of the generations and all of the historical changes that have occurred since this great Nation was established. All of that would have to elapse again before Mississippi, under this formula, would reach the parity of an affluent Northeastern State. In contrast, the amendment as offered by Senator Bumpers and myself would eliminate these disparities in less than 4 years. Mr. President, if we are going to have a serious debate, let us have a debate over how many years should we allow ourselves to eliminate this unfairness. Is 4 years too hurried a time for equality? Is 100 years adequate time to achieve the equality? I believe that we ought to have as a principle that all poor children in America have equal value and that we should move as expeditiously as possible to put that principle into our law. These disparities in State-to-State funding have real consequences on the lives of children. These are not just accounting or statistical issues. These 5 and 6 and more to 1 disparities have in the past and will continue to have real human consequences. The State of Washington, for example, received $2,340 per poor child in 1994, $2,340 compared to $393 per poor child in South Carolina, almost a 600 percent difference. Should we be surprised that there are tremendous outcome differences? The State of Washington's children rank seventh and sixth in rankings of infant mortality and percentage of children in poverty. The State of Washington's children ranked 12th overall in the children's well-being index as established by the Casey Foundation. Meanwhile, South Carolina with one-sixth the funding per poor child ranks 48th among the States in infant mortality, 45th in the percentage of children in poverty, and ranks 46th in the children's well-being index. It will be the height of irony, if not hypocrisy, to change our welfare system and not address this cruel disparity. When people ask, is the welfare system broken? the answer is almost universally, yes. And what is one of the key elements of a broken system? It is the fact that we have tolerated for too long a system that has resulted in these extreme disparities in the treatment of children and the consequence on the children in their ability to grow up healthy, strong, educable, and productive citizens. But these are not the end of the list of adverse consequences of the amendment as offered by Senator Dole in terms of how to allocate funds. Locking in historical spending will also lock into place inefficiencies of the status quo, the very status quo that we are supposedly reforming in this legislation. In 1994, the national average monthly administrative expense per welfare case was $53.42--$53.42. New York and New Jersey, however, had administrative costs exceeding $100 per welfare case, almost twice the national average, eight times the average of West Virginia, which administered its program for $13.24 per welfare case. Those States with higher administrative costs in fiscal year 1994 would receive block grant amounts reflecting their higher fiscal year 1994 costs for the next 5 years, whether or not those costs are justified. This formula fails to take into account demographic and economic accounts. Initial disparities locked in by the Dole approach would actually intensify as a result of the different rates of anticipated population growth through the end of the decade. Between 1995 and the year 2000, 10 States are projected by the U.S. Census Bureau to grow by at least 8 percent. Eight States are projected to grow less than 1 percent or experience a population decline. Among the fastest growing 25 States, the top half, 17 of those growth States would receive initial welfare allocations below the national per poor child average. Seventeen of the twenty-five fastest growing States start this process at below the national average. Thirty Senators, including the Senators from Texas and both Senators from my State, raised this issue in a May 23 letter to the Finance Committee chairman, in which we stated: ``Block grant funding would be locked in, in spite of rapidly changing patterns of need. This disconnect between need and funding would produce devastating results over a 5-year period.'' Proponents of the Dole formula would argue that some States will qualify for the 2.5 percent annual adjustments beginning in the third year to address population growth. However, six growing States-- Washington, Alaska, Hawaii, Oregon, California, and Delaware--all fail to qualify for the adjustment despite projected above-average population growth. Moreover, even with the 2.5 percent adjustment, Texas would only receive $445 per poor child in the year 2000, and 27 percent of the $1,600 per poor child in Connecticut, which that State would receive despite the fact that its population is projected to decline between 1995 and the year 2000. So a State whose population is going up, a State which entered this process as one of the lowest in terms of funds for poor children, would be even further disadvantaged, while a State which entered the process at a relatively high level with a declining population of poor children would be further advantaged. Another difficulty with the legislation before us, Mr. President, is that under the proposal, States that receive less than their fair share of funding per poor child are most likely to be penalized with a 5- percent reduction in their funding for failure to meet the bill's work requirement. To meet the work standards in the bill, States would be mandated to spend large chunks of their Federal funds for job training and for child care. According to estimates by the Department of Health and Human Services, the additional cost of the work program and the associated child care needs would absorb more than $8 out of $10 of Federal allocations to Mississippi, Louisiana, Tennessee, and Texas; that over 80 percent of the Federal funds from those States would go to meet the new Federal mandates in work requirements and child care. But, again, we see wide disparities. In California, New York, Oregon, and Wisconsin, less than 4 out of 10 Federal welfare dollars would be subject to the Federal mandates under this bill; that is, those States would be able to meet the same mandates by using less than 40 percent of their Federal money, while the poor States would have to use over 80 percent of their Federal funds in order to come into compliance. Washington would tell the States that they have to spend block grants on job training and child care or face 5-percent penalties for failure to meet the work requirements. For States facing sanctions, the States would receive vastly different amounts of support to reach a common goal. That, Mr. President, is patently unfair. I might add that some of the States that are treated the most unfairly under this bill are represented by Senators on both sides of the aisle who [[Page S 13354]] joined in that letter to the chairman of the Finance Committee. If I could just put this in the context of my State and in the context of what it is going to mean in the lives of real children, in my State, a family on aid to families with dependent children, which is typically composed of a single female and two children, receives $303 per month; $303 is their current allocation. Fifty-five percent of that comes from the Federal Government; 45 percent, State funds. That means that Federal funds represent approximately $168 or $169 of the $303 that is being required. Under the proposal, 63 percent of the Federal money in my State of Florida would be required to meet the mandates of job training and child care; 63 percent would be required, which means, Mr. President, that less than 40 percent of that $168 is going to continue to be available to meet the economic needs of children. It is that 40 percent, plus the $135 that comes from the State, that buys the clothing, that pays the light bill, that pays the rent, that provides whatever transportation costs, that meets their health care needs that are not covered by Medicaid. Think in your own life experiences of meeting all of those needs on $303 a month. You would also qualify for $304 a month in food stamps to cover your food budget. But think of what it would mean to live at that level and then to see your $303 monthly stipend reduced to $198, which is what is going to happen with the mandates on child care and on work training, and that assumes that the State will continue to maintain its current level of effort. Just a few hours ago, we defeated an amendment that would have required a maintenance-of-State effort. So that is speculative as to whether, in the case of my State or any other State, there will be a continued maintenance of effort, which would keep the level of monthly support at the $198 level, not the $303 level which is currently available. Another factor, Mr. President, is that a wrong decision made today is not a decision likely to be reversed. The history is that once a funding formula is adopted, there will be great difficulty, if not impossibility, of future change. Example after example can be cited of block grants which are being allocated today because of funding decisions in the past, often decisions which are historic and irrelevant to needs today. The General Accounting Office notes that, for instance, under the maternal child health block grant, funds continue to be distributed primarily on the basis of funds received in the fiscal year 1981 under the previous categorical program. A program in 1995 is distributing funds based on a preexistent categorical program of 1981. I am concerned that our successors would be looking back from the perspective of the year 2015 wondering why we are distributing a significant amount of Federal funds for block grants to States to meet the needs of poor children based on a categorical program of 1981. The General Accounting Office proceeds by saying: Only when the funding exceeds the amounts appropriated in fiscal year 1983 are additional funds allocated in proportion to the number of persons under the age 18 that are in poverty. We found that economic and demographic changes are not adequately reflected in the current allocation resulting in problems of equity. As Ronald Reagan might have said: Deja vu, there we go again. Mr. President, I want to conclude with two final comments. One looks forward and one looks back. The debate that we are having today foreshadows a much larger debate that we are likely to have on Medicaid. More than $4 of every $10 that Washington sends State governments are Medicaid dollars. This is the program that provides medical assistance to the poor, elderly, disabled, and poor children and their families. Medicaid is nearly five times larger in terms of its Federal role than welfare; $81 billion were distributed last year as opposed to $17 billion distributed in welfare reform. We are already hearing that if the policy is adopted of using essentially the status quo as the basis of distributing welfare funds, that that will establish the precedent for how we should distribute Medicaid funds; that by locking in past spending patterns and inequities in this program, we are setting the precedent for the much larger Medicaid Program. Again, remember my previous point: Block grants, once established, have proven to be highly resistant to subsequent change. Finally, Mr. President, to look back. I say this with sadness but also with candor. This Congress has been faced over the past several years with a number of major challenges. Examples: In the early eighties, we were faced with the challenge of reforming our financial institutions. A number of pieces of legislation were adopted with that as their intention. Unfortunately, less than a decade later, we were back passing further legislation to deal with it with the calamity of our financial institutions which have largely been occasioned by our earlier actions. In 1986, we passed what was supposed to be major tax reform, intended to simplify the Internal Revenue Code. Today, there is so much public dismay at the complexity of the Internal Revenue Code that we are talking about a complete repeal of the income tax and the substitution of a consumption tax, or a flat tax, or some other basic new approach to domestic revenue procurement. In the mid-1980's, we passed a catastrophic health care bill that was intended to deal with some of the inadequacies in Medicare. Within less than 2 years, we repealed the bill that we passed, and now we are back looking at Medicare reform again, but no longer looking at legislation to fill the gaps of the program, but rather to add new gaping holes to Medicare and new expense to the beneficiaries. Mr. President, I suggest that all of those past precedents have something in common; that is, we allowed the theory of how things were going to work to get ahead of common sense and practicality as to how things would work. We, I fear, are about to make the same mistake again. I will state, with no doubt of the correctness of history in this statement, that a plan which is as fundamentally unfair in the distribution of funds as this which is before us today--a plan which so fundamentally mistreats two-thirds of the States of this Nation, in terms of their ability to achieve the goal of facilitating the movement of welfare-dependent individuals to the independence of work, that a plan that has those kinds of imperfections embedded in its basic allocation of funds to achieve its purpose, will fail. And we will be subjected to more public animosity toward this institution for failure to have carried out our task in a craftsmanlike manner. The public will continue to be outraged at what it sees as the abuse of people who are living on a public system without contributing to the betterment of the public. We will continue to see poor children start their lives with the extreme disparities that exist today. We will see this institution held in even more public disrespect because of our inability to deal intelligently, thoughtfully, rationally, with an important national chapter. We are dealing here with fundamental fairness. The proposal before us fails to meet that standard. Senator Bumpers and I, joined by our other colleague, the Senator from Nevada, have provided to the Senate an alternative which will meet the goal of treating poor children in America as they should be treated--each with equal worth and dignity. I urge the adoption of the children's fair share amendment. Thank you, Mr. President.

Mr. GRAHAM

Mr. GRAHAM. This would be 90 seconds in addition.

Mr. GRAHAM. Mr. President, I rise just to put the Senate on notice that this is not the only alternative to the formula that we will have an opportunity to consider during the debate on the welfare reform bill. There will be other amendments that will be offered by Senator Bumpers, others, and myself tomorrow which go to the more fundamental issue. That fundamental issue is that not only as the Presiding Officer has correctly pointed out have we changed the status quo by no longer requiring a local effort, and therefore continuing a formula whose numbers were predicated on that effort, is irrational. We go beyond that. We impose new obligations on the States, particularly in the areas of child care and preparation for work. We are going to be requiring essentially the same obligation from each of the 50 States with enormously different amounts of Federal resources in order to reach those obligations. There are some States that will have to spend over 80 percent of their Federal money in order to meet the new Federal mandates. Other States can reach those Federal mandates with 40 percent or less of the Federal money. So I suggest this is not just an issue of allocating money between Texas, California, New Mexico, Rhode Island, Florida, or the other States. It goes to the fundamental issue of: Can we achieve the result that this bill is intended to achieve, which is to assist people through appropriate State action to move from welfare dependency to the independence of work? My suggestion is that we will not be able to achieve that objective, and therefore I urge the amendment as offered by my good friend, the Senator from California, be defeated and, frankly, that tomorrow we be prepared to engage in a very fundamental debate about how we are going to allocate resources that, in my opinion, is critical to whether this goal of welfare to work is attainable.