Dan Coats: “many of the congressional efforts at reforming the welfare system have focused on the elimination of the Federal…”

“many of the congressional efforts at reforming the welfare system have focused on the elimination of the Federal bureaucracy, the devolution of Federal authority, and the transfer of funds to the State bureaucracy. In some respects, these reforms may be effective and efficient. In other areas, the devolution will prove too limited in that authority and funds remain remote from the people and communities who would most benefit from change and who are most capable of effecting that change. Devolution to the States almost certainly will not change one critical flaw in traditional welfare programs--a focus on income maintenance and spending instead of a focus on asset-building and saving. The current welfare system in fact punishes the accumulation of assets by terminating eligibility for assistance when minimal asset levels are achieved. There is then a need to help low-income individuals and families, whether working or on welfare, to develop and reaffirm strong habits for saving money and to invest that money in assets rather than spending it on consumer goods or other items that may not help lift the individual or family from poverty. There is particularly a need to focus on the building of assets whose high return on investment propels them into economic independence and personal and familial stability.”