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U.S. to Reward States Moving Welfare Recipients into Jobs

By Barbara Vobejda
The Washington Post

The Clinton administration has decided to distribute $1 billion in federal bonuses to states that are most successful in moving welfare recipients into jobs and keeping them there.

Guidelines to be sent to states this week spell out for the first time precisely what they must do to compete for the coveted "performance bonuses" created by the 1996 welfare legislation. In issuing the guidelines, the administration answered the long-standing question of whether success in welfare reform would be measured on the basis of declining caseloads, a figure many governors are fond of quoting because of shrinking welfare rolls in their states.

Advocates for the poor had feared that distributing bonuses based on caseload decline would encourage states to push recipients off the rolls whether or not they had become self-sufficient. But the new guidelines make it clear that the administration has chosen to reward states primarily for helping recipients find stable employment.

"These bonuses are an important part of our strategy to ensure that the centerpiece of welfare reform is moving families from welfare to work," said Health and Human Services Secretary Donna E. Shalala, whose department is in charge of overseeing welfare reform.

An administration spokesman said President Clinton would focus on the bonuses in his remarks next week to the National Governors Association, reiterating his hope that states will change the culture of welfare offices to emphasize work.

According to the guidelines, $200 million will be distributed each year, beginning in the current fiscal year, based on four broad measures: "job entry rates," "success in the work force," improvement in "job entry rates" and improvement in work-force success.

The 10 states that rank highest on each of those measures will receive a portion of the bonus. Success in the work force will be based on job retention and improvement in earnings for recipients.

The final two categories will reward states that show the most improvement from one year to the next on their job entry and work-force success rates.

The guidelines are similar to a proposal floated last summer by the administration, with the exception of one category, teenage births, that was ultimately dropped. The guidelines will eventually be incorporated into final regulations.