TANF Reauthorization

TANF Reauthorization Ideas

Office of Family Assistance

5^th Floor East, Aerospace Building,

370 L’Enfant Promenade, SW, Washington, DC 20447.

Re: Comments on TANF Reauthorization

Dear Office of Family Assistance:

We are writing on behalf of our clients, ROWEL and Southside Welfare Rights Organization, to provide comments on the reauthorization of TANF. Our recommendations are described in detail below.

I. Background

Reauthorization provides an excellent opportunity to re-examine state and federal welfare reform efforts and to assess the strengths and weaknesses of the federal welfare law. TANF reauthorization discussions should take into account at least the following basic facts regarding what has occurred since the federal welfare law was enacted:

· Welfare caseloads have declined substantially across the country and in Missouri;

· A majority of individuals leaving welfare are working;

· Most individuals are working for wages that still leave them in poverty, and in jobs that do not provide health coverage, paid sick leave, or vacation leave;

· The welfare caseload is increasingly comprised of persons with significant barriers to employment;

· Low-income families are losing access to critical supportive services, such as food stamps, childcare and Medicaid.

These themes are addressed in more detail below.

A. Caseload Decline and Impact on TANF Leavers

1. General trends

One of the most salient features of welfare reform is the substantial caseload decline -- in Missouri and across the country. For example, Missouri's welfare caseload declined by 53% from January 1993 to June 2000.[1]

Missouri, like many other states, has engaged in what are commonly referred to as "leavers" studies in which the states assess what has happened to families leaving welfare. These studies generally show that a majority of individuals leaving welfare are working; however, most welfare recipients who find jobs typically work a substantial number of hours per week but still have earnings that are well below the poverty line.[2]

In addition to earning low wages, most recipients who find jobs do not receive paid vacation, sick leave, or health insurance from their employer. Many also have lost access to critical support services such as Medicaid and food stamps.[3]

2. Key Findings from Recent Missouri Leavers Study

The Department of Social Services contracted with the Midwest Research Institute (MRI) to undertake a study of former AFDC recipients and determine their economic, social, and family status two years after leaving welfare. The study confirms that many former recipients are struggling -- many have actually had to return to welfare after they were unable to sustain employment or meet their families’ basic needs with the earnings they had. Here are some of the study’s key findings:

· Income is Insufficient

Two years after leaving welfare, 58% of those surveyed were living in households below the federal poverty level (while 90% had incomes defined as near-poor, or 185% of the federal poverty level). Thus, 6 of 10 former welfare recipients remained impoverished in Missouri.

The actual average wage of these TANF leavers was reported to be about $6 per hour. These earnings fall well below what the Missouri Department of Economic Development has determined to be the “self-sufficiency standard,” or the amount necessary to meet a family’s basic needs without relying on any public assistance.[4]

· Work Effort is Strong

The MRI study found that the poverty status of workers was not due to a lack of work effort. Over 80% of the respondents reported having income from earnings. The earnings, while above minimum wage, were not enough to make families self-sufficient. 44% of respondents reported needing to rely on a combination of income sources including TANF and other public assistance benefits (e.g., Supplemental Security Income, and Survivor’s Benefits) at some point since first leaving welfare.[5]

· Families Lose Access to Other Supportive Services When They Leave Cash Assistance

Food Stamps, Medicaid, and childcare assistance are vital supports for families working at wages below the poverty level. However, the MRI study shows that a disturbing number of eligible families lose access to these critical supports when they leave TANF.

For instance, only 60% of those who were eligible for the Food Stamp Program were receiving food stamps at the time of the survey. And, of the 40% who did not receive food stamps, more than one-third (37%) responded that there had been a time in the last month when they were unable to buy enough food for their needs. 6% of these families reported that their child/children were forced to skip at least one meal in the last month. Additionally, 11% of families reported children without any health coverage, even though they were probably eligible for Medicaid; 41% of households included adults without any health coverage. Furthermore, less than 15% of survey respondents were accessing childcare subsidies, although a large majority were eligible for assistance. One-third of these individuals indicated that lack of access to childcare remained a barrier to employment.

B. The Remaining Welfare Caseload

The fact that many families have left welfare for work has changed the shape of the remaining welfare caseload. Families still receiving TANF assistance are more likely to have serious barriers to employment than those families that have left.[6] These families are less likely to have recent work history and less likely to have completed high school. Nearly half of the families still receiving assistance in 1997 indicated that their general health or mental health was poor.[7] These recipients are typically referred to as "hard to serve" or "hard to employ" since their needs typically go beyond the scope of assistance available at traditional employment agencies and welfare offices.[8]

Different strategies for moving families from welfare to work will be appropriate for different sectors of the caseload.[9] For some recipients -- those without significant barriers -- the emphasis on "work first" and job search assistance may very well meet their needs (especially when the economy was more robust).[10] For other recipients -- those with significant or multiple barriers to employment – a “Work First” approach (even coupled with incentives such as enhanced supportive services such as child care, Medicaid and the earned income tax credit) may not be as effective.[11] These problems were acknowledged by Secretary Thompson at his confirmation hearing. Secretary Thompson stated:

But now it’s time to consider the next steps in this process. We must face head on the huge challenges faced by those still receiving direct benefits. As you know, these are often the people with significant health problems or with individuals struggling with substance abuse, lack of education, and lack of work skills.[12]

Like other states, Missouri will be increasingly challenged in moving families from welfare to work because it will face significantly more disadvantaged caseloads. These challenges must be kept in mind in addressing time limits and a host of other issues that are considered when TANF is reauthorized.

II. Recommendations

A. Modify Time Limits to Reflect the Needs of the Remaining Caseload

1. Allow States Greater Flexibility to Grant Extensions.

Time limits should be adjusted to make sure that all families that are still in need are served. As mentioned above, the caseload is increasingly comprised of individuals who are harder to serve because they have severe or multiple barriers to employment. Some of these individuals could lose assistance without modification of federal time limits. States should be able to exceed the 20% hardship exemption in order to serve individuals with severe barriers who are cooperating to the best of their ability. Or, the exemption should be expanded to ensure that every needy family which is cooperating to the best of its ability is served.

Missouri has a caseload of about 48,000 families. The Department of Social Services has estimated that some 2000 families with over 8000 children will reach the state’s time limit in July 2002, and that an additional 400 families per month will hit the time limit each month thereafter. In addition, some 17,000 families have been cycling on and off during the last four years, and many of these could also become subject to the time limit.[13]

In testimony before the General Assembly, the Department of Social Services has testified that there are insufficient state funds to cover all of the groups that might need an exemption due to some type of hardship. Moreover, there is some reluctance to spend state maintenance of effort funds differently than federal funds given the overall message of welfare reform -- even though the law allows different rules for the TANF and MOE funding streams. National policymakers cannot assume that states will respond to increased need with their own state funds. Therefore, time limits should be modified to ensure that people who are still in need continue to receive assistance.

2. Working Families Should Not Have a Time Limit

In addition, states should have the option of serving working families (including both employed families and families who are otherwise participating in work activities) with federal funds without a time limit.

The law’s time limit provisions contradict the “make work pay” approaches of many states — under which a certain amount of a family’s earnings is disregarded in determining eligibility and benefit levels for TANF cash assistance. (Missouri has chosen to disregard two-thirds of earned income for one year for TANF families who go to work.) As indicated later in these comments, this approach has proven to be successful in helping families obtain work and escape poverty while alleviating a number of other social problems in the process.[14]

However, running a time clock on families who are working but still poor enough to qualify for a small amount of cash assistance diminishes the work incentive effect of these types of policies. (The work incentive is lessened because families would use up valuable months on their time clocks if they take a job while qualifying for a small cash grant). Further, individuals working a significant number of hours -- consistent with the goals of welfare reform – should not be subject to a time limit, which is designed to prod them into the workforce.

For these reasons, several states now provide assistance to working families with "segregated state funds" to ensure that periods in which they are working substantial hours but are still poor do not count against the five-year time limit.[15] By providing “off the clock” assistance to families who are working but remain poor, these states enable some of their working poor families to “save their time” for a future crisis or period of unemployment.

Most states, however, have not been willing or able to use their limited state funds in this manner, even if they believe that providing “off the clock” assistance would be a good policy. Because this approach is beneficial to both families and states, states should have the flexibility to provide TANF-funded cash assistance to working families without running a time clock.[16]

B. Preserve the TANF Block Grant and Index it to Inflation; Revise the Formula for Allocating Supplemental Block Grant Funds

1. Preserve the Value of the Block Grant

Because of the large caseload decline, some have suggested reducing states’ TANF funding. Reduced funding would be extremely harmful to Missouri. The state is already spending all of its federal TANF funds and is still not able to serve all of its low-income families effectively. Even though Missouri has dramatically increased its child care spending and transferred substantial amounts of TANF funds to the Child Care and Development block grant, the state still provides childcare assistance only to those families under 121% of the federal poverty level—the most restrictive eligibility criteria in the nation.[17] Furthermore, due to severe budgetary problems, the state is not meeting the needs of those trying to make the transition from welfare to work. In fact, the state has recently cut crucial transportation assistance to working poor families.[18] Thus, the value of the TANF block grant must be preserved if Missouri is to live up to federal expectations.

Missouri is in an especially difficult situation because the state continues to receive funding based on its historically low rate of spending in the old AFDC program. In fact, thirty-four states plus the District of Columbia receive more TANF block grant funding per poor child than the state of Missouri.[19] However, the costs of childcare and other work supports in Missouri are comparable to those costs in states that receive higher levels of block grant funding. The block grant must be preserved and enhanced so that states like Missouri can receive funding consistent with their changing needs in moving families from welfare to work.

Moreover, with a recession looming, states will need more—not less—money. In fact, there is no longer a contingency fund available to make up for any cuts in the TANF block grant—it expired on September 30, 2001. Missouri and other states would have been hardpressed to access contingency funds as they were originally designed.[20]

For all of these reasons, current block grant funding must be preserved and indexed to inflation to help meet ongoing needs.

2. Preserve Supplemental Block Grants but Revisit the Formula

As part of the Personal Responsibility Act, Congress provided supplemental funding to a number of states, in part, to make block grant distribution more equitable but also as a political compromise to ensure the bill’s passage. Missouri does not receive any of this supplemental funding.

As indicated above, Missouri is in an especially difficult situation because the state continues to receive funding based on its historically low rate of spending in the old AFDC program – even though the costs of childcare and other work supports in Missouri are comparable to those costs in states that receive higher levels of block grant funding.[21]

The formula for distributing these supplemental grants should be modified so that states like Missouri can receive funding consistent with states’ changing needs in moving families from welfare to work. Otherwise, Missouri will continue to be at a disadvantage in meeting the goals and objectives of federal welfare legislation.

3. Build in Anti-Recessionary Provisions

The reauthorization of TANF also should include building in some type of economic stabilizer under which the TANF program can respond to increased need during times of recession. The current structure of the block grant includes no meaningful protections for states and families to combat the high unemployment that occurs in times of recession. As indicated earlier, the contingency fund has expired and was woefully inadequate to address economic downturn. Therefore, modifications are needed to ensure that sufficient additional funds are available for states and low-income families in times of recession.

C. Revise the Purposes of TANF to Include “Poverty Reduction”

As indicated earlier, one commonly acknowledged fact about welfare reform is that although caseloads are down, poverty persists for many families leaving welfare. While the federal law focused on moving families off of welfare and into the workforce, many of the working poor are no better off, financially, than when they received TANF cash assistance. Reducing poverty is not one of the stated purposes of TANF. Because the law’s stated purposes send important signals to the states about what they must try to achieve, reducing poverty should be made a purpose of TANF and states should be rewarded for efforts in this area. In fact, a poverty reduction bonus should be awarded to states that do an effective job in reducing poverty.

The merits of this approach are seen in state efforts to “make work pay” by disregarding a percentage of earnings from countable income in determining cash assistance eligibility and benefit levels. Such strategies have proven to make a significant difference in helping families leave welfare and escape poverty.

A recent Manpower Demonstration Research Corporation (MDRC) study found that Minnesota’s Family Investment Program (MFIP) which provided a positive financial incentive by increasing the disregard of welfare recipients’ earnings, produced dramatic results:

· The program produced substantial increases in employment and earnings, compared to the outcomes of regular cash assistance recipients (who did receive the additional financial incentive to work);

· The combination of higher earnings and cash assistance payments for working families led to increased income and reduced poverty, compared to the levels of income for the regular cash assistance group;

· The program’s effects on families’ economic circumstances led to a series of important changes in family life and improvements in child well-being – a dramatic decline in domestic abuse, a modest increase in marriage rates, and for children, better performance in school and fewer behavior problems;

· For two-parent recipient families, the program reduced the financial pressure for both parents to work and increased marital stability. The program produced a dramatic increase in the proportion of two-parent families who stayed married, compared with their counterparts in the regular cash assistance group.[22]

These results have important ramifications for states’ welfare-to-work policies and for TANF reauthorization. They suggest that strategies designed to improve incomes can make a significant difference in helping families move from welfare to work and reduce a number of social ills in the process. Thus, in addition to including “poverty reduction” as a goal of TANF, states should be increasingly rewarded for efforts to help families escape poverty rather than for simply moving people off of welfare.[23]

D. Increase State Flexibility to Define Work Activities

States clearly need more flexibility to allow the full range of work activities for their low-incomes families. The law’s current framework does not give states enough flexibility to provide work activities appropriate to each state’s own circumstances. Education, including elementary and secondary education, literacy, English as a Second Language, GED, work-study, and higher education should all be allowable work activities.

1. Improve Access to Post-Secondary Education

As indicated earlier, most families leaving welfare are working but still poor. A way to remedy this problem is to allow greater access to post-secondary education for low-income families receiving TANF.

However, states are limited in their ability to count post-secondary education as a work activity—even though post-secondary education is the clearest route out of poverty for low-income families mired in the welfare system. Approximately 50% of Missouri welfare recipients have at least twelve years of school, and thus, are potentially ready to move on to a college education.[24] Studies show that women with an associates degree increase their earnings by 19-23% over their non-degreed counterparts and those with a bachelor’s degree earned 28-33% more than their peers.[25]

Recent U.S. Census data show that annual average earnings in 1999, for those ages 18 and over who had completed high school only, was $24,572; for those with bachelor’s degree, it was $45,678.[26] Moreover, rigorous research on welfare-to-work programs shows that programs which incorporate a PSE component help recipients find better jobs, i.e., jobs that are higher paying and/or with benefits.[27] Studies also show that a college education reduces welfare recidivism in that women on welfare who graduate from college leave and stay off of welfare.[28] This is critically important, given that there has been quite a bit of recidivism among TANF leavers in Missouri.[29]

Despite these findings, the one-year limit on counting vocational training and the limit on the number of individuals (30% of the caseload) that can be counted toward federal work participation rates has been a significant obstacle to post-secondary education for TANF participants. To address this ongoing problem, the Missouri legislature recently acted on a bi-partisan basis to allow post-secondary education to be fully countable for the entire time a family receives cash assistance.[30] The same approach should be employed on a national basis to ensure that states have the full range of options in helping their families move toward self-sufficiency.

2. Activities for Families with Severe Barriers

Also, participation in counseling and other activities designed to address domestic violence, mental illness, substance abuse, and disability should be countable work activities. States should be able to allow the full range of work activities that are necessary to achieve their welfare reform goals.

In fact, Missouri provides for “state-defined work activities” for some of the families who are unable to perform activities that meet the more restrictive federal definitions (e.g., those caring for a disabled family member, those facing domestic violence, those who are temporarily disabled). However, Missouri cannot count such activities toward federal work participation rates, even though they serve the state’s welfare policy goals. There is simply no reason not to allow “barrier-reduction” activities to be countable in determining states’ work participation rates. In fact, barrier reduction and removal must occur before many individuals can participate in the activities that are countable under the current federal law.

E. Eliminate All Restrictions on Two-Parent Families

The welfare law inappropriately continued the AFDC program’s bias against two-parent families by including more stringent work requirements for these families. While a majority of states (including Missouri) have removed the “deprivation of parental support” requirements from their TANF programs, many have not. Since one of the stated purposes of the federal law is to promote family formation, it makes little sense to allow states to continue to discriminate against two-parent families in providing cash assistance to poor people. Furthermore, it makes no sense to impose very restrictive work participation requirements on two-parent families, which have the effect of discouraging participation by these families. Thus, modifications are needed to ensure that two-parent families are no longer subject to any discrimination in the receipt of benefits and services. This approach is an effective way to “promote marriage” under welfare reform—rather than requiring states to dedicate scarce TANF resources on “marriage promotion” activities or other forms of social engineering.

F. Protect Families Against Improper Sanctions

The federal welfare law rewards states for reducing caseloads but includes almost no protection against improper terminations of assistance for needy families. We are concerned about sanctions and improper termination of benefits because there is much evidence that sanctioned families are often those with the most severe barriers to work.[31]

Some states, like Missouri, have included some beneficial protections against improper terminations and sanctions in their written policies, but these policies are often not implemented in practice. Some states do not even include mandatory “conciliation,” prior to a sanction, in their TANF programs. Thus, families who are still in need may unnecessarily lose all cash assistance.

Modifications made during reauthorization should include basic protections against improper and unnecessary sanctions, and monitoring of states’ performance in providing such protections. Also, such protections should be invoked before a time limit is imposed on a family. Other helpful modifications would include minimum good cause criteria for determining noncompliance with TANF work requirements, and prohibitions against full-family sanctions, which cause severe harm to children in sanctioned families, and do little to improve work program participation. In fact, the nation would do well to follow Missouri’s lead and reject full-family sanctions as a welfare reform strategy.

G. Ensure that More Low-Income Parents Receive Child Support Collected on Their Behalf

Child support is a critical income support for working poor families. Ensuring that working poor families receive a greater share of child support collected can help these families attain self-sufficiency while providing an incentive for non-custodial parents to make child support payments. The federal welfare law eliminated the requirement that states pass through to the family the first fifty dollars of child support collected and disregard that income in determining the family’s cash assistance grant amount.

While some states have retained or enhanced this fifty-dollar disregard, Missouri eliminated this child support disregard when it implemented the federal welfare law. The states that have retained or enhanced the disregard have recognized that allowing a family to receive a portion of the current child support paid on their behalf: (1) provides critical income support to families trying to make the transition from welfare to work; and (2) provides an incentive for the non-custodial parent to make child support payments to the family, because he knows that the children are more likely to benefit if the payment is made (instead of having the government retain all of the child support that is collected). [32]

In addition, there is evidence that programs designed to allow families to receive greater shares of child support income can be very effective in supplementing earnings and helping them escape poverty.

For example, a "child support assurance" program would guarantee low-income working families with child support orders their child support payments, regardless of whether the payments were actually made. One advantage of this approach is that it provides necessary income support to working families outside of the state's welfare system. Instead of receiving a TANF check, an eligible family receives its monthly child support payment or the equivalent, guaranteed by the state, which can collect the payment from the non-custodial parent.[33] New York State's Child Assistance Program (CAP) has employed this approach with considerable success.[34] In 1997, Missouri's Senate passed legislation that would have adopted this strategy.[35] Budgetary obstacles are a major reason this approach has not been employed in Missouri.

The current federal child support requirements are an impediment to funding child support assurance programs. One of the requirements of the TANF block grant is that the applicant must assign her child support to the state, which in turn must send a share of support collected to the federal government. This requirement is a major obstacle to the implementation of such innovative programs to help families receive more child support.

Under current law, such a program must be set up separately from the state's TANF system – and funded solely with state funds -- to enable the state to provide child support directly to the parent, without sending a share of support back to the federal government. Many states do not have sufficient MOE money to fund such a program.

Therefore, poor families should be allowed to receive a greater share of child support collected from non-custodial parents, rather than have those payments retained by the state, and shared with the federal government. States also should be offered incentives for passing through greater amounts of child support to working poor families and disregarding a substantial portion of those payments in determining eligibility for cash assistance.

H. Restore Benefits to Immigrants

As you know, the welfare reform law eliminated various types of assistance for legal immigrants who used to qualify for benefits. In fact, much of the cost-savings in the original legislation was achieved by restricting legal immigrants’ eligibility for a number of programs. These types of cuts impose severe hardships on needy immigrant children and their parents. Additionally, this needy group was dropped only because of its immigrant status, rather than because of any “welfare to work” policy objective. Moreover, many legal immigrants have jobs and are paying taxes. We favor immigrant restorations in the Food Stamp Program as part of that program’s reauthorization and support restoration for legal immigrants in the TANF context as well.

Such a restoration supports working immigrant families who pay taxes and ought to benefit from TANF cash assistance if they meet the program’s financial eligibility requirements. Immigrant restorations in TANF will not cost any new federal dollars since the federal government could authorize the use of TANF funds for legal immigrants, without increasing the size of the block grant. Missouri has provided TANF benefits to legal immigrants with state funds but should not be expected to shoulder this burden when such state funds are also needed for other vulnerable groups. Missouri and its needy immigrant families would benefit substantially if federal TANF funds could be used to serve legal immigrants.

I. Ensure That States Serve Families with the Most Severe Barriers to Employment

1. Programs for Persons with Severe Barriers.

As discussed in detail above above, families remaining on the caseload have the most severe barriers to employment and may not benefit from a “Work First” approach. The so-called “hard to serve” individuals may not be ready for unsubsidized private sector employment. It is not sufficient for states merely to exempt these individuals but states must provide needed services to remove employment barriers. Therefore, states should be encouraged to provide appropriate services for these families. Such services should be made part of a meaningful individual responsibility plan (or “self-sufficiency pact”) that is negotiated after an individualized assessment of the recipients’ barriers and needs. For example, if the assessment reveals a domestic violence problem, the parent might receive counseling; or if an alcohol/substance abuse problem exists, the parent could be required to receive appropriate treatment to remove that barrier. As discussed earlier, Missouri is employing this strategy to a limited extent by having families who have certain barriers referred to a different level of services.[36] Yet, the state still runs a time clock on these families who are incapable of participating in federally-defined work activities.

Among the possibilities for reauthorization are for the TANF program to authorize additional funds -- beyond the basic block grant -- for states that want to establish special programs for individuals with barriers. Furthermore, states must be able to provide such assistance “off the clock” for families that are not capable of private sector employment or federally defined work activities. While the current federal law allows states to serve families with state funds off the clock, Missouri and other states have limited budgets to serve all of their most vulnerable families off the clock. Therefore, states should have the flexibility to provide assistance off the clock to these families with federal TANF funds at the time the barrier is identified, rather than wait to provide an extension after five years have expired.

2. Transitional Jobs

Another very promising approach that has proven successful in some states and localities is the provision of transitional jobs for persons with severe employment barriers. Such programs provide participants with a combination of intensive case management and a job opportunity that pays an actual wage rather than a welfare check. These programs provide subsidized jobs in various nonprofit or government agencies in local communities across the state. They can target recipients who have been unable to secure unsubsidized employment and who are determined to be likely to reach their time-limit without securing unsubsidized employment. This could include many of the "hard to serve" welfare recipients, including those who are experiencing multiple barriers to employment or those with extremely low skills.[37]

The ultimate goal of such programs is to help families move from welfare dependence to economic independence through meaningful employment. These programs accomplish this goal by providing valuable work experience -- in the form of a wage-paying job -- and case management to persons who have been unable to attain unsubsidized employment.[38] Additional funding for transitional jobs would be beneficial to states’ efforts to assist the “hard to serve” families that remain on assistance.

As discussed above, provisions on work activities and time limits also should be modified to reflect the needs of the increasing percentage of the caseload that has multiple or severe barriers to employment. Furthermore, in light of the severity of the nation’s domestic violence problem, the family violence “option” should be made a requirement. In this critical area, states should not be left to decide whether they want to address the safety of their low-income children and parents.

J. Include Strong Protections Against Supplantation in the Welfare Law

In these tight budgetary times, states must not use limited federal TANF dollars to replace state general revenue or on items that do not directly help poor families in need of cash assistance or critical work supports. Reauthorization is an opportunity to address the need for protections against such abuses.

K. Include Greater Accountability Measures in the TANF Program

With the emphasis on caseload reduction, discussed throughout these comments, has come a lesser emphasis on accountability in state welfare programs. Missouri advocates and social services providers have expressed serious concerns about the implementation of the state’s welfare program.

Breakdowns in communication within the Department of Social Services inhibit the Agency’s ability to implement policies that are designed to move people toward economic self-sufficiency. Clients receive varying responses to similar circumstances and many caseworkers are not informed of policy changes in a timely manner. Further, the “Work First” approach has caused workers to focus on reducing the caseload rather than providing necessary services or removing barriers. Consumer safeguards are often ignored in the process. Moreover, caseworkers are overburdened with an increasing array of responsibilities that are difficult to meet. The current welfare office environment is not conducive to providing the intensive case management that is necessary to move people toward financial independence.

In Missouri, special case reviews revealed that caseworkers have misapplied the rules that require them to provide Medicaid coverage to individuals leaving cash assistance for employment.[39] However, these are not the only examples in which implementation has broken down. Other areas of concern include but are not limited to:

· The failure to inform clients of their rights and responsibilities, including the option to receive Medicaid without a welfare check;

· The failure to inform recipients of their choices regarding work activities, including the option to participate in post-secondary education as a work activity;

· The failure to provide transportation-related expenses and/or work-related expenses to eligible families;

· The failure to honor the state law requirement that self-sufficiency pacts be negotiated by mutual agreement between the client and the state agency;

· The failure to provide benefits in a timely manner to eligible families;

· The failure to engage in conciliation prior to implementing a TANF “work” sanction;

· The failure to provide exclusions for participants with a disability or caring for a disabled family member;

· Misapplication of TANF work requirements for families with young children, including a failure to comply with hourly requirements for families with children under age six;

· The failure to provide subsidized childcare in a timely manner to eligible families;

· Inaccessibility of caseworkers, and caseworkers failure to assist clients in obtaining verification and accessing services in accordance with their responsibilities;

· Failure to provide appropriate service for non-English speaking clients. [40]

In light of these problems, states should be subject to greater accountability requirements to ensure that they actually serve the clients they are intended to serve. Some of the federal food stamp legislation takes steps in this direction by including bonuses for states that do a good job in certain specific areas of client service (e.g., providing benefits to eligible households and providing timely service). Similar measures could be incorporated into the TANF system of rewards and sanctions. States could be rewarded to a greater extent for providing food stamps, child care and Medicaid to eligible families, particularly those who leave TANF cash assistance. States should be rewarded and penalized based on whether they conduct the individualized assessment that the federal law requires, and whether they properly negotiate self-sufficiency plans (which Missouri law requires) and provide other critical services to TANF families.

States should not only be required to measure their performance in providing work supports, but to take corrective action if they fail to provide these services to eligible families.

III. Conclusion

We are happy to present these suggestions for improving the TANF program. We hope that these recommendations will be helpful to HHS in formulating its own proposals for TANF reauthorization.

Sincerely,

Joel D. Ferber

Attorney at Law

Laura V. Brink

Attorney at Law

[1]Change in TANF Caseloads, available at http://www.acf.dhhs.gov/news/stats/caseload.htm (measuring decline in TANF recipients by state).

[2] See Sharon Parrott, Center on Budget and Policy Priorities, Welfare Recipients Who Find Jobs: What Do We Know About Their Employment and Earnings?; Evaluation of Outcomes in the AFDC/TANF and FUTURES Populations: 1993-1998, Part III. Status of Welfare Leavers Since Leaving the System: Employment, Recidivism, Use of Other Public Assistance, Presented to the Missouri Department of Social Services by the University of Missouri Department of Economics, December 1, 1998; Midwest Research Institute, MRI Project no. 1033-01, Chapter 1 -- Employment and Earnings of Former AFDC Recipients in Missouri, June 7, 2000 (“MRI study”), for the Missouri Department of Social Services through the Local Investment Commission.

[3] See Mark Greenberg et al., Welfare Reauthorization: An Early Guide to the Issues, July 2000 ("Welfare Reauthorization"), at 6, 20-21, 23-24 (and citations therein); Joel Ferber and Theresa Steed, The Impact of Welfare Reform on Access to Medicaid, St. Louis University Law Journal, Winter 2001 (regarding loss of Medicaid for persons leaving welfare in Missouri); and Missouri Association for Social Welfare, Food Stamps: Declining Access for Missouri's Food-Insecure & Eligible Families, May 2000 (regarding food stamp decline in Missouri).

[4] MRI study, Chapter 2, at 18.

[5] Missouri Department of Economic Development: Research and Planning (September 2000). The Missouri Self-Sufficiency Standard: Necessary Wages for Essential Needs. Report commissioned by the Missouri Women’s Council: A Division of Workforce Development. The Missouri self-sufficiency standard is calculated based on several factors, including the costs for housing, food, child care, transportation, clothing, and work-related expenses in the area. Id. at 1. There is a large variance in the wage levels necessary for self-sufficiency among counties in Missouri. Not surprisingly, the urban areas require higher wages than outlying areas. For example, the necessary wage for an adult and an infant in Chariton County is $9.55 per hour, while in Jackson County it is $ 12.84 per hour. Id. at 2.

[6] Welfare Reauthorization, supra, at 6.

[7] Id. (citing Loprest and Zedlweski, Current and Former Welfare Recipients: How Do they Differ?, Urban Institute, 1999, http://new federalism .urban.org/pdf/discussion99-17.pdf).

[8] See Sheila R. Zedlewski, Work-Related Activities and Limitations of Current Welfare Recipients, July 1999. This group of recipients may face such barriers as substance abuse, mental health problems, undiagnosed learning disabilities, illiteracy, domestic violence, or homelessness. See M. Robin Dion, et. al, Reaching all Job-Seekers: Employment Programs for Hard to Employ Populations, Mathematica Policy Research, Inc., October 1999. Therefore, these individuals may need to be temporarily exempt from traditional work activities and may require more specialized services and/or workplace environments to make successful transitions from welfare to work. In order to overcome these barriers, they may need counseling, mental health services, literacy or skills training, substance abuse treatment, or other needed interventions. See Sandra Danziger, et al., Barriers to the Employment of Welfare Recipients, University of Michigan, Poverty Research and Training Center, October 1998, at 19.

[9]Sandra Danziger, et al., note 8 supra.

[10] Id. As the most "job ready" clients find employment, the caseload is increasingly comprised of individuals with the most severe barriers to employment who have a harder time moving from welfare to work.

[11] Indeed, many early welfare-to-work strategies have focused on moving the most job-ready clients into employment and many of those who are "hard to serve" have typically been exempt from work participation. U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluations, State Welfare to Work Policies for People with Disabilities, Changes since Welfare Reform (“HHS Report”), October 1988.

[12] See Secretary Thompson’s comments at his cabinet confirmation hearing (available at kaisernetwork.org/healthcast/thompsonjan2001, Day One Transcript, lines 1424-1430) (emphasis added).

[13] These figures were provided by Division of Family Services Director Denise Cross at a meeting on October 17, 2001.

[14] See infra at 9.

[15] Those states include Illinois, Delaware, and Rhode Island.

[16] The recent evaluation of Minnesota’s welfare reform demonstration project recently released by MDRC noted the tension between “make work pay” policies (which keep working families on aid longer) and time limits (which encourage or require needy families to stop receiving aid). See Knox et al., infra, note 22.

[17] Missouri reports that it has quadrupled its childcare spending between FY 1994 and FY 2000. See Missouri Department of Social Services Fiscal Year 2002 Budget Highlights (attachment). The state also reports transferring 22.3 million from the TANF block grant to the Child Care and Development Block Grant in FY 2002. Id.

[18] The new policy on Transportation-Related Expenses (TRE) and Work-Related Expenses (WRE) IM-120 was issued on June 27, 2001 and effective July 1, 2001. The policy drastically limits working poor families’ ability to receive necessary transportation assistance by allowing such assistance for only 90 days- there was no such limit in prior policy.

[19] See Center on Budget and Policy Priorities, TANF Grant Per Poor Child by State.

[20] See Harry Holzer, TANF Contingency and Supplemental Funds, Urban Institute April 26, 2001, describing how the criteria for accessing the contingency funds are difficult to meet and no longer appropriate for most states. See TANF Contingency and Supplemental Funds, April 26, 2001.

[21] Childcare costs are one of the most significant barriers to sustaining employment. As Missouri families begin to reach an income that would allow them to escape from poverty, they are abruptly burdened with the high cost of childcare (infant care in the St. Louis area ranges from $190 to $330 a week). Child Day Care Association (CDCA), Child Care Fees and Market Rates.

[22] See Knox et al., Reforming Welfare and Rewarding Work: A summary of the Final Report on the Minnesota Family Investment Program, September 2000 (Manpower Demonstration Research Council). See also Hamilton et al., discussed in note 34 infra (regarding success of a program that provided recipients with a more favorable earnings disregard along with a child support incentive).

[23] Under the current system, states are rewarded for reducing caseloads by having their federally-mandated work participation rates lowered based on the reduction in their welfare caseloads. This has led states to move individuals off of the caseload through “work first” strategies, under which individuals are pushed into low-wage employment. This single-minded focus also has led to procedural terminations and sanctions, under which individuals’ benefits are terminated for failing to meet program requirements such as attending an office interview. Furthermore, as discussed above, studies generally show that individuals who obtain employment when they leave assistance remain poor. States must be rewarded not only for moving people off of cash assistance but for helping them obtain and retain employment, and for moving them out of poverty. States’ financial incentives should be revised to reflect these important priorities.

[24] See Missouri DFS Annual Report, FY 2000, at 5.

[25] Mark Greenberg et al., State Opportunities to Provide Access to Postsecondary Education Under TANF, Center for Law and Social Policy, September 1999, at 5 (citing Labor-Market Returns to Two- and Four-Year College, American Economic Review, June 1995).

[26] U.S. Census Bureau, U. S. Department of Commerce, Educational Attainment in the United States (Update), March 2000 (issued December 2000).

[27] Greenberg et al, note 25, supra, at ii; 4-5 (and citations therein).

[28] A study of welfare recipients who graduated from Eastern Washington University in 1995 and 1996 showed that 85% earned $8.00 per hour or more, 50% earned $11.00 per hour or more, 12% earned $18.00 per hour or more. As of November 1997, 94% of the 1995 graduates and 85% of the 1996 graduates were not receiving welfare. Karier (1998), as reported in the Institute for Women’s Policy Research (IWPR) Welfare Reform Network News (April 1998). Furthermore, a nine-year study of 158 women who were receiving public assistance when they enrolled in New York colleges in 1980, and who had received either a two or four year degree, found that 87% left welfare upon graduation, 89% had been employed since graduation, and about half were earning over $20,000 per year in 1989. They reported improved lifestyles, better standards of living, greater self-esteem, and an intent to encourage their children to attend college. Gittel, et al. (1990), as reported in the IWPR Welfare Reform Network News (April 1998).

[29] The MRI study’s review of administrative and survey records shows that 50% of Missouri TANF leavers returned to TANF. MRI study, Chapter 3, at 7-8.

[30] See Missouri Senate Bill 236 (enacted in the 2001 Legislative session).

[31] See., e.g., LaDonna Pavetti et al., Welfare–to-Work Options for Families Facing Personal and Family Challenges: Rationale and Program Strategies, the Urban Institute (August 1997); Laura Colville et al., A Study of AFDC Case Closures Due to JOBS Sanctions, April 1996 Case Closures, Michigan Family Independence Agency, Administration for Legislation, Budget & Analysis, May 1997, at 1; State of Minnesota Department of Human Services, Interoffice Memorandum, March 4, 1996 (describing the results of a study of the state’s MFIP program), at 3.

[32] See Mark Greenberg, Beyond Welfare: New Opportunities to Use TANF to Help Low-Income Working Families, July 1999. Greenberg discusses how, in recent years, there has been increasing criticism of a system in which the children do not see the benefit of the support paid by their non-custodial parent, and the parents cannot see the benefit of support paid to their children.

[33] See Paula Roberts, Beyond Welfare: The Case For Child Support Assurance (October 1999), at 2 (http://www.clasp.org/pubs/childassurance/CSAPaper.html).

[34] The CAP program was created as a voluntary alternative to AFDC, available to single-parent AFDC families including a custodial parent and at least one child covered by a valid court order for child support from the non-custodial parent. See William L. Hamilton, et al., Selected Analyses of Families' Experiences with CAP: The New York State Child Assistance Program, December 1996, prepared for New York State Department of Social Services for an elaborate analysis of the CAP program. By providing a favorable earned income disregard, and a child support incentive, the CAP program encouraged recipients to move towards self-sufficiency through work as well as to seek child support orders. Evaluations of the program over a five-year period found that participants earned 20 percent more than non-participants in a control group (to which standard AFDC rules applied).

[35] Missouri Senate Bill 202, 1997 Legislative Session.

[36] Several other states have established separate state programs for persons with barriers:

• Maryland has a separate state program for families subject to domestic violence and disabled adults and children;

• Ohio has a program for families in which drug or alcohol abuse threatens employment or the ability to care for children in their homes;

• Washington D.C. has a program on Work, Employment and Responsibility (POWER) for parents facing incapacities (physical or mental) which interfere with their ability to participate in conventional work activities and require rehabilitation and specialized job training in order to prepare the individual for joining the work force.

[37] For additional information about such transitional employment programs, see National Governors Association, Working Out of Poverty, Employment Retention and Career Advancement for Welfare Recipients, at ix, 34; Clifford Johnson, Publicly-Funded Jobs for Hard-to-Employ Welfare Recipients, Center on Budget and Policy Priorities, July 14, 1998; Clifford Johnson, et al., Creating Jobs: Public and Private Strategies for the Hard-to-Employ, Corporation for Enterprise Development and Center on Budget and Policy Priorities, 1999.

[38] These programs both fulfill important community needs(in that local communities would decide on the appropriate projects) and simultaneously provide an opportunity for "hard to serve" families to obtain work experience and necessary supportive services that will enable them to make the transition to long-term unsubsidized employment. For example, in Vermont's subsidized employment program, the most common jobs are clerical, maintenance, recreation and highway crew workers for local governments, public schools and human service organizations (e.g., hospitals, food banks, community action agencies, and senior centers), housing authorities, National Guard centers, colleges and universities, public landfills, and district offices of various state agencies. These results are achieved because participants would receive appropriate support services, such as childcare, transportation, job development, or job skills training, which would be focused on eliminating barriers to employment.

[39] See Ferber and Steed, note 3, supra, at 172-177 (citing special quality assurance reviews of Missouri’s implementation of Medicaid/TANF delinking requirements).

[40] The barriers Missouri TANF recipients are encountering are consistent with national trends. See, e.g., L. Bell and C. Strege-Flora, Access Denied: Federal Neglect Gives Rise to State Lawlessness; Families Denied Access to Medicaid, Food Stamps and Child Care, Published jointly by the National Campaign for Jobs and Income support and the National Federation of Community Organizations (NWFCO), for a list of fundamental barriers to accessing necessary services (specifically, Food Stamps, Medicaid, and Child Care) for TANF leavers as they transition to self-sufficiency.