NEW YORK—This August will mark three years since President Clinton made good on his promise to "end welfare as we know it." The poor quickly learned the promise was painful, but some states are letting money allocated to help go unused.

The strongest economy in over 20 years, strict eligibility time limits, and work requirements have meant historic drops in welfare caseloads; and billions of dollars earmarked for welfare recipients are sitting in the United States Treasury, untouched by state officials. Some states are saving the money in case of a recession, while others want to transfer the unspent funds to education and other services.

According to the U.S. Department of Health and Human Services (HHS) out of the $17 billion in Temporary Assistance for Needy Families (TANF) grants states received last year, nearly $3 billion remained unspent on Sept. 30, the end of the fiscal year.

New York, Florida and Pennsylvania accounted for over $1 billion of those unused funds.

In August 1996, President Clinton signed the welfare reform law which gave TANF block grants to states. The new time-sensitive law replaced the previous Aid to Families with Dependent Children (AFDC) program.

The annual grants are based upon the amount of federal welfare funds each state received during the mid-1990s when welfare cases were at their peak. In addition, the law allowed states broad discretion as to how best to use the money.

The reform law also gave states the responsibility to create programs to move families off welfare to work, however, many states have not adequately assisted families in making the transition, critics say.

Since 1994, the number of families on welfare has dropped from just over 5 million to nearly 2.7 million.

According to HHS, the decline is evidence the system is working. Yet, the rolls have declined so far and so fast that some states charge they are left unprepared.

Several states have conducted studies showing that while many of those leaving welfare may have jobs, they don’t earn nearly enough money to get out of poverty. Most earn just slightly more than the minimum wage. A Final Call review of welfare statistics and studies shows this lack of living-wages should cause politicians to rethink their policies.

In New York City, Mayor Rudolph Giuliani has come under heavy criticism for his social reform policies which advocate reliance on other resources for financial help—friends, relatives and soup kitchens. Those applying for welfare in New York City are now required to spend at least 40 hours a week seeking employment while their applications are processed. Those unable to find employment will work for the city in exchange for their check.

"I hear the mayor always say that the amount of people on welfare is going down," said Ricky Hernandez, who has been on and off of welfare for the past 10 years. "Where do you think they are going? They all don’t have jobs—a lot of them are homeless. That’s what is going to happen when peoples limit is up, they will become homeless."

The over $600 million New York stockpiled last year provides the state with an important opportunity to create new programs and expand and reform existing ones, say advocates for the poor.

"This money could be invaluable to helping many recipients find and retain jobs," said Karen Schimke, executive director of the State Communities Aid Society. It could also help expand support programs for the large number of welfare recipients that lack proper education and have problems that make it hard to find jobs, she added, at a press conference earlier this year.

At the end of fiscal year 1998, which ended on Sept. 30, most states had huge reserves of unspent federal welfare money. One of the poorest states in the country, Louisiana, spent just $44 million out of $168 million on welfare, leaving an excess of $123 million. Idaho used only $5 million of its $33 million in federal welfare funds. Colorado spent only $58 million of its $139 federal block grant on welfare. Other states with large surpluses included New Jersey with $170 million, Minnesota with $136 million and Maryland had $80 million in unused funds.

While state and government officials debate how to utilize surpluses, life continues to be a struggle for those on welfare.

Many advocates are worried and predict conditions will only worsen as the five-year lifetime limit on welfare funds expires.

"There are families out there in terrible shape and we don’t know how they are surviving," said Martha Walker, chairman of the Senate’s Committee for Health and Human Services.

At West Virginia Health Right, a free health clinic for low-income residents in Charleston, administrator Patricia White shed further insight. "In three to five years we will be having more women being arrested. The reason is, they are not going to let their kids go hungry. So they’ll steal, and we’ll build more prisons to house them," she predicted, in a New York Times article.

D.G., a 35-year-old mother of three from California, finds it difficult to understand why states would withhold money poor people need. The money could be used for temporary placement jobs and training, said D.G., who is less than a year away from earning her bachelor’s degree.

"Personally, welfare has been somewhat a blessing and a curse. A blessing for helping me raise three children and go to school, but a curse whereas you get stuck in the cycle and you become fearful, like, ‘Oh, God, if I get off of this, I will lose this help,’ " she added.

"People think that welfare is over and that’s it, go on your merry way. What about those who have not had to worry about these (life) issues. Who will train them?" asked Gwen Taylor, who cofounded A Better Life Experience (A.B.L.E.) with Elizabeth Sampson, in Pomona, Calif.

A.B.L.E.’s immediate goal is to reach out to women on welfare and help get them back into the workforce. Critics of welfare changes say instead of sitting on money, it should go to fund programs like A.B.L.E., that are working to help people like D.G. make the transition from welfare to work.

The "welfare surplus" exists even as problems like loss of health insurance once covered under the old welfare program remain. "In this case, working people are being rewarded for getting jobs by losing their health care," said Rep. Paul Luebke (D-N.C.) in a published report. He is cosponsoring a bill with Rep. Verla Insko (D-N.C.) to extend coverage to two years. North Carolina officials have said to extend health coverage another 12 months would cost the state an estimated $5-10 million dollars. Last year North Carolina had over $93 million in unused funds. A recent report estimates welfare reform has left over 600,000 people without health care insurance, 62 percent of whom are children.

But others like Rep. Bill Archer, a top House Republican who pushed welfare reform says falling numbers of people on welfare prove the program is working well.

"The fact is, former welfare recipients’ lives are getting better, poverty is going down and more Americans are enjoying the freedom of independence from the chains of welfare," he said, during the May 27 release of a Government Accounting Office (GAO) report that logged falling numbers of people on welfare and rising work rates.

Rep. Archer, joined by other proud Republicans, said any problems with welfare are minor.

But even the GAO, which looked at some state studies of people who have left welfare and found most were working, said studies suggest former welfare recipients have not escaped poverty and are struggling to get by.

Rep. Archer and other Republicans rejected predictions that things will worsen when the economy sours, and as recipients use up their five-year eligibility for benefits.

Meanwhile, what critics call a war on the poor (not a war on poverty) rages on:

• It took a May 17 Supreme Court decision to stop California from trying to cut welfare benefits for new state residents to match the lower rate of the state they came from.

• A new state law, effective June 13 and coming on the heels of a class action lawsuit, forced West Virginia to stop counting Supplemental Security Income (SSI) toward welfare benefits. As a result, nearly 7,000 of West Virginia’s 37,000 total cases have been dropped since 1997. Former SSI recipients who lost their benefits because of the law will be able to reapply.

• Michigan legislators have proposed fingerprinting all welfare recipients to cut down on fraud. The state already requires welfare recipients take drug tests.

Advocates for the poor and anti-hunger groups are also concerned about the drop in food stamp rolls, which are separate from welfare benefits and have no time limits. Since 1996 food stamps caseloads have declined nearly 30 percent across the nation. There is a concern that welfare caseworkers may be discouraging applications for food stamps by families in the TANF program, according to the Center for Budget and Public Policy Priorities.