Wisconsin Leads Welfare Reform Regulations Cleared in Record Time Increase Work Incentives and Reduce Child Payments

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THE first state in a new wave of welfare-system reforms has cleared regulatory hurdles in record speed as the Bush administration approved innovations in Wisconsin.

The changes in Wisconsin are intended to make it easier to move off welfare and into work by allowing recipients to keep more of their wages while still getting state aid. The reforms also remove benefits to recipients for having additional children while on welfare.

This move, and other plans in states from New Jersey to California, is in response to a growing consensus that welfare systems are not working.

Both Democrats and Republicans, liberals and conservatives, are increasingly in accord that many state welfare systems contain perverse incentives that discourage moving into the work force and marrying.

President Bush strongly encouraged states to embark on such reforms in his State of the Union speech in January, saying that "welfare was never meant to be a lifestyle."

On Friday, Wisconsin was granted the federal waiver it needed to change its system in less than a month, drawing heavy praise from the president.

More than philosophy is behind these moves, however. Most states revamping their welfare systems are under severe pressure to cut their budgets. Most of Gov. Pete Wilson's proposals in California, for example, reduce benefit levels.

The Wisconsin changes will raise the amount of wages that welfare recipients can keep from $30 and one-sixth of earnings to $200 and one-half of earnings. The purpose is to make it more economically attractive and practical to take a job.

An irony is that it took an innovative Republican governor, Tommy Thompson, to raise these work-incentive levels. They were cut down nationally under the Reagan administration.

Unless states invest in job training and creating some workfare jobs, notes Prof. Sheldon Danziger of the University of Michigan, these incentives can only get people to search for jobs. They cannot make them employable.

"It can be a move in the right direction," he says. But he notes that, nationally, states are leaving some of their federal matching funds for job training untapped.

States have only committed enough money for training and education to cover about one in nine welfare families, according to the Center for Law and Social Policy.

Wisconsin is also attempting to remove any incentive in the system for bearing additional children while on welfare. …