In New York, more than $500 million in federal funds that was earmarked to be spent on programs aimed at helping working people leaving welfare, remains in the state government's treasury. This is more than half the total amount set aside by the state for transportation aid, job training, and other programs that were to have been put into operation over the past several years.

In New York City, the Giuliani administration announced plans to deny automatic enrollment to 38,000 working people in the Safety Net program, established to provide some benefits to those who at the end of this year will reach the five-year limit for receiving welfare. Under this program, created in 1997, state and local governments are required to provide a similar level of benefits to people pushed off welfare.

Jason Turner, director of the city's Human Resources Administration (HRA), told a city council hearing that welfare recipients should instead "redouble their efforts to work with HRA and find employment and close their case, and only if all of those efforts fail, reapply for the extended" benefits. City council members disputed Turner's statement and accused the Giuliani administration of backing proposals that would punish families who have been on welfare rolls over the past five years.

According to statistics from 1998, the most recent available, 24 percent of all children in the state live below the poverty line. The New York Times reported that "advocates for the poor contend that while many local welfare agencies have been eager to trim their rolls, sometimes removing people for failing to meet technicalities in program requirements, they have not been as eager to start programs to lift former welfare families out of poverty."

The 1996 Personal Responsibility and Work Opportunity Reconciliation Act eliminated the federally funded entitlement Aid to Families with Dependent Children and set a five-year lifetime limit on an individual's ability to receive welfare payments.

Some states implemented a shorter cutoff. Indiana, for example, allows only two years and has struck 14,300 families from the welfare rolls since 1997. Only 129 received extensions from the state.

There are some worries among wings of the ruling class over the consequence of the 1996 law, especially in a period of economic slowdown. A recent report of the bipartisan Congressional Research Service pointed out that the new welfare law was adopted "during a period of extraordinary economic growth" and its results have "yet to be tested by a recession."

Harry Holzer, a former chief economist of the Labor Department, estimated "welfare rolls will rise by 5 to 7 percent for each percentage-point increase in the national unemployment rate." The new law gave states the power to use federal block grants for cash assistance, job-training programs, child care, and transportation. However, there is no allowance for extra funds when welfare rolls start to rise.

Another result of the 1996 "welfare reform" law is that nearly a million low-income families have lost Medicaid coverage, according to a study from Families USA. "Most parents moving from welfare to work are in jobs that provide no health coverage, but they are losing their Medicaid lifeline," said Ronald Pollack, the executive director of the organization.

Meanwhile, President George Bush is continuing the attack on Social Security begun under the Clinton administration. In early May the president named a bipartisan commission to draft a Social Security "overhaul" plan co-chaired by former New York Democratic senator Daniel Patrick Moynihan and AOL Time Warner executive Richard Parsons.

Bush--casting Social Security as a individual retirement plan rather than a social wage covering disability payments, support for minors who have lost a parent, and old-age pensions among other benefits--has been pushing a plan to allow people to put up to 2 percent of their Social Security payroll tax into private investment accounts. Moynihan and others on the commission have favored partial privatization of the Social Security entitlement for some time.

U.S. treasury secretary Paul O'Neill told the Financial Times May 18 that he questioned whether or not the government should guarantee health care and pension benefits to retirees. "Able-bodied adults who have the ability to earn income have an obligation not to pass part of their own responsibility on to a broader population," he said.  
 
 
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