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As reports mount confirming that New York is rapidly entering a recession, welfare recipients and advocates for the poor are nervously eyeing a White House and Congressional relief package that will let the state and city spend $110 million less on poverty fighting measures this year.

Governor George Pataki and Mayor Rudy Giuliani last month asked the feds to waive their 2002 “maintenance of expenditures” requirement, a.k.a. MOE, which, under the Clinton welfare reform bill, mandates that state and local governments spend 75 percent of what they spent in 1995 for poverty relief. The Bush administration approved the request, and included a $110 million MOE waiver, slated for approval by Congress in the coming weeks, as part of its $2.8 billion bipartisan disaster relief package.

How the state and city will spend, or save, the $110 million remains to be seen. (Spokespeople for the state Office of Temporary and Disability Assistance said they hadn’t decided yet; the city Human Resources Administration was not available for comment.) Given that Pataki and Giuliani actively sought a way out of the spending requirement, though, some analysts say it is likely that anti-poverty programs will lose much of those funds. Up to now, that pot of money has supported child care block grants, expansion of the city’s health insurance coverage and job training programs.

As Doug Turetsky of the New York City Independent Budget Office noted, “The only way you get a savings is by cutting the expenditures you had intended to make with MOE funds.” Those cuts may be particularly appealing to City Hall and Albany considering that next year’s welfare budgets are expected to be the tightest since welfare reform began in 1996. As unemployment rises, so too will the rolls, and the state and city will have to absorb tens of thousands of welfare cases when the five-year federal time limit expires at the end of the year.

Some economists hope, however, that New York will use surplus federal Temporary Assistance for Needy Families dollars to make up for any cuts made in city and local spending. “It is a terrible precedent to set when you have a crisis in your state, you spend less on poor people,” said economist Trudie Renwick of the Albany-based Fiscal Policy Institute. “But if we don’t have to spend MOE, then I think they’ll just take more from the TANF grants.”

At the very least, said Don Friedman, a senior policy analyst at the Community Food Resource Center, the state constitution requires that the state be on the side of the poor. According to Article 17, the state must “provide aid, care and support for the needy.”

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