Kay Bailey Hutchison: “I want to talk about the underlying formula, the Dole-Hutchison formula that is in this bill. The key to our formula is…”

“I want to talk about the underlying formula, the Dole-Hutchison formula that is in this bill. The key to our formula is balance. When we looked at the monumental problem of welfare reform, the main goal we had was to keep the reform in the bill but not penalize any State too much. So what we did was take the high-payment States, the high-welfare States, and we froze them. That is a big gain in the beginning for those States because we felt that we could not go to a State like New York or California and say next year you are getting a cut. So we freeze them for 5 years. When you are talking about a 5-year block grant, you have to be very careful. You have to be careful about year 1, but years 3, 4 and 5 are just as important, especially if you are a growth State. And, if you are a low-benefit growth State, you do not have the margin of error that would allow you to absorb growth with a very low benefit in the outyears. So we took this problem, and we said how can we do a 5-year block grant so we can plan for the budget, so that we can balance our budget responsibly without hurting any State too much? That is what the Dole-Hutchison formula does. It leaves the high benefit States whole. They never lose anything that they had in 1994 and beyond. No State loses anything they had from 1994 on.”