Cost neutrality and welfare reform

Many states have chosen to reform welfare through the Social Security Act's Section 1115 waivers. When states choose this method, the Departments of Health and Human Services and Agriculture require the states to determine whether these initiatives are cost neutral to the federal government. States using this cost neutrality information as an ongoing piece of evaluation information must be careful in interpreting cost neutrality data. This article discusses two reasons for state and federal policy-makers to be cautious in using cost neutrality data as an indicator of welfare reform success.