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Thursday, June 26, 1997

Gramm effort to secure approval for Texas welfare plan challenged

By MICHELLE MITTELSTADT / Associated Press Writer

WASHINGTON (AP) - Efforts to secure approval for a far-reaching Texas welfare privatization plan hobbled by the White House failed Wednesday in the Senate.

Sen. Phil Gramm, R-Texas, had inserted into the bipartisan budget agreement language that would override the Clinton administration's objections and grant approval for the Texas welfare plan. But as the Senate debated the measure Wednesday, Sen. Kent Conrad, D-N.D., raised a point of order challenging Gramm's provision.

Faced with that parliamentary maneuver, Gramm would have had to round up 60 votes to surmount Conrad's objection.

Despite losing that skirmish, Gramm remains optimistic that Congress will approve the plan rejected last month by the White House amid heavy labor union opposition, a spokesman said.

"It's not over yet," said Gramm press secretary Larry Neal. "We just pulled back to fight again another day."

That day will occur when House and Senate negotiators meet later this year to iron out differences in their respective bills to implement a balanced budget by 2002.

The House bill contains provisions that would allow Texas and other states to use private-sector workers to determine welfare applicants' eligibility for food stamps and Medicaid.

The key will be to ensure that those House provisions remain in the final budget package, Neal said.

Texas Republicans turned to Congress for relief after the administration refused last month to sign off on the Texas plan - largely over the question of whether eligibility determination must remain the sole function of government workers.

White House officials contend existing law mandates that only government employees make such determinations. And labor unions fear that a lifting of the provision would cost tens of thousands of good-paying government jobs nationwide.

In seeking federal approval for their plan last year, Texas officials said turning over welfare operations to for-profit companies could save $120 million of the $550 million the state spends annually delivering welfare benefits.

Now that the original plan has been rejected and the Texas Legislature has adopted new welfare legislation, state officials are going back to the drawing board.

They don't have a deadline for coming up with a new plan.

For now, they are concentrating on financing a $150 million to $200 million proposal to upgrade computers and automation in the welfare system.

Under the original proposal, the cost of automation improvements would have been borne by the private contractors who would have won a competition for a contract estimated at $2 billion over five years. Now, the Legislature has given permission to float bonds for the money needed to improve automation. Send a Letter to the Editor about This Story | Start or Join A Discussion about This Story
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