State Plans Banking On Congress Enacting Welfare-Reform Bill

By Jessica Portner

Although it is far from certain that a federal welfare-reform law will be enacted this year, some states are already banking on the short-term financial windfall they would get under the leading plans to give states control over welfare.

Some of the reforms state officials want to implement have gone forward under a waiver process. But several states have incorporated projected dividends from a federal welfare-reform overhaul into their current budget proposals, which could complicate state finances should the federal reforms fail to become law.

"What is tricky and problematic is that those states have assumed block grants and budgeted for those savings," said Jodie Levin-Epstein, a policy analyst at the Center for Law and Social Policy, a Washington-based research group with a liberal orientation. "States have to operate under a balanced budget, so ultimately something could...