Cooking the books?

With Nathan Russell, who teaches economics at Patrick Henry College.

President Barack Obama and the Department of Health and Human Services announced in a memo to the states July 12 that they will be considering and granting waivers that allow states to provide welfare benefits to healthy people who are not looking for a job.

The administration said it is interested in approving state experiments that will help "find more effective mechanisms for helping families succeed in employment."

Maybe this administration really believes that expecting people to find jobs is mean, unfair, and insensitive. Maybe it really does want to "help families succeed."

But we doubt it.

Here's what happened. According to the Obama administration's memo, states must still abide by the work requirements of the landmark 1996 federal welfare reform law, but they may get federal approval to try to accomplish the same goals by using different methods than those spelled out in the legislation.

Republicans immediately denounced the idea. "They have arrogated to themselves complete control over this program, and they did it through what's essentially foul play," The Heritage Foundation's Robert Rector told the Associated Press the day after the memo was issued. Rector, who said the administration was essentially making an end-run around the law's work requirement, helped draft the original legislation that former President Bill Clinton signed into law.

Sen. Orrin Hatch, R-Utah, who serves on the committee overseeing welfare, called the move a "power grab," and on Wednesday introduced a bill designed to put a stop to the changes.

Some may think the move was designed to appeal to liberals and encourage those on welfare to vote Democratic this fall. But it could be more about pushing down unemployment numbers between now and November.

The 1996 Welfare Reform Act, among other things, says that people on welfare do not have to find a job, but they have to look for one, be trained for one, or attend substance abuse counseling. The Obama administration's decision does not require states to provide welfare benefits to the nonworking able-bodied, but states could apply for waivers to do just that.

That matters because the unemployment rate is calculated in part by looking at how many people state agencies help to find jobs. That is, to be counted in the unemployment statistics you must be looking for a job.

But if welfare recipients no longer have to seek work to qualify for welfare, then some (or many) will stop looking. In those states, they will no longer be counted as unemployed and the unemployment rate will fall-without a single new job being added.

Obama desperately needs people to think this country is headed somewhere positive. He has three monthly unemployment reports between now and the election, and he needs for them to show positive change. Is this change in the welfare requirements one way to cook the books?

Incumbent governors in most states have a lot of incentive to be the recipient of one of these waivers-what percentage of Democratic compared to Republican governors who ask for them will receive them?

This could also be a way for the Obama administration to blunt the report that came out a few weeks ago noting that all the states with newly elected Republican governors have seen budget turnarounds and reductions in unemployment, while states with Democratic governors have seen no such success.

Crafty. Very crafty.