Abstract:
The 1962 Public Welfare Amendments Act authorized HEW to grant funds to states for social services delivered to both actual and potential welfare recipients. The ambiguity of the law and the Great Society zeal of several bureaucrats who recognized its possibilities resulted in massive state claims on federal monies. This case chronicles HEW attempts through the Nixon and Ford administrations to cap these expenditures. These efforts met with resistance both in Congress and from states, which brought suit against HEW. Finally, Hale Champion, HEW undersecretary in the newly installed Carter administration, opted to seek an out-of-court settlement of the suit.
Learning Objective:
The case details the ensuing negotiations and final settlement of the suit, which involved reaching agreement on a total dollar figure for claims and on a formula for distributing the money among the 28 participating states. The case illustrates the intricacies of intergovernmental negotiations, and suggests a viable strategy for such dealings. It underscores the importance of considering, in sequence, the parties, the issues, the alternatives to agreement for each side, and the special role of time.
