Copyright 2002 eMediaMillWorks, Inc.
(f/k/a Federal
Document Clearing House, Inc.)
Federal Document Clearing House
Congressional Testimony
April 11, 2002 Thursday
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 7545 words
COMMITTEE:
HOUSE WAYS AND MEANS
SUBCOMMITTEE:
HUMAN RESOURCE
HEADLINE: WELFARE OVERHAUL PROPOSALS
BILL-NO:
H.R.
4090 Retrieve
Bill Tracking Report
Retrieve
Full Text of Bill TESTIMONY-BY: WENDELL
PRIMUS,, DIRECTOR OF INCOME SECURITY,
AFFILIATION:
CENTER ON BUDGET AND POLICY PRIORITIES
BODY:
Statement of
Wendell Primus, Director of Income Security, Center on
Budget and Policy Priorities
Testimony Before the Subcommittee on Human
Resources of the House
Committee on Ways and Means
Hearing on
Welfare Reform Reauthorization Proposals
April 11, 2002
Thank
you, Mr. Chairman, and members of the Committee, for the opportunity to testify
before you today. I am Wendell Primus, Director of Income Security for the
Center on Budget and Policy Priorities. The Center is a non-profit institute
that conducts research and analysis on policy issues affecting low- and
moderate-income families at both the state and federal levels. We receive no
government funding.
My testimony will briefly review the experience of
welfare reform over the last six years, then analyze the Chairman's
TANF reauthorization bill in light of what research and state
experience have shown to be effective in moving families from welfare to work.
Finally, I will outline a work-focused alternative plan that would allow states
to address some of the remaining challenges of welfare reform by building on
current successful state-based approaches. The Experience of the First Six Years
of Welfare Reform
Nearly six years ago, Congress passed legislation that
dramatically altered the basic safety net for low-income families with children.
The Aid to Families with Dependent Children (AFDC) program, which had existed
for 60 years, was dismantled, and a new block grant -- Temporary Assistance for
Needy Families (
TANF) -- was put in its place.
States
used their block funds to design programs that capitalized on the strong economy
and moved welfare recipients into private- sector jobs. As cash assistance
caseloads tumbled and the economy surged, employment rates among single mothers
rose significantly, continuing a upward trend that began in 1993. While clearly
playing a role, the law's work requirements were not the only factor in this
increase. States were able to use
TANF funds to create an
expanded system of supports for low-income working families. In addition to
helping families leave welfare, these supports, including child care,
transportation assistance, and state earned income tax credits, have helped
low-wage workers avoid going on to welfare in the first place. Besides
TANF, other federal programs, including Medicaid, the Earned
Income Tax Credit, and the Child Care and Development Block Grant (CCDBG) -- all
expanded in the 1990s -- are part of this work support system.
The
extent to which
TANF has been transformed into a work support
system is reflected in state spending patterns and the number of families served
in
TANF that do not receive welfare. Fewer than 4 out of every
10
TANF dollars are now spent on cash assistance. (1) The
largest share of the remaining dollars is spent on child care and other work
supports. It is important to note that the work support system funded by
TANF extends beyond welfare recipients to low-income families
who have left welfare and those who have never received welfare. Unfortunately,
there is no official count of the number of families who receive
TANF-funded work supports outside of the welfare system.
However, recent GAO data suggest that at least 1 million non-welfare families --
and quite likely many more -- receive work supports funded in part with
TANF. (2) Thus, the number of non-welfare families receiving
TANF-funded work supports is likely as large, if not
substantially larger, than the number of families receiving cash assistance who
are subject to
TANF work requirements. (3)
While states
have made substantial progress on the employment front in the last few years,
the reduction in poverty has been much more modest than the reduction in
TANF caseloads or the increase in families with earnings.
Trends in the "child poverty gap" provide strong evidence that this is due in
part to the large reductions in the amount of cash assistance and food stamp
received by eligible families. (The child poverty gap, which many analysts
consider the single best measure of child poverty, is the total amount by which
the incomes of all poor children fall below the poverty line.)
Before
counting means-tested programs, the child poverty gap declined substantially
between 1995 and 2000, just as it had between 1993 and 1995. The drop in the
child poverty gap, as measured before means-tested benefits are counted,
primarily reflects the effect of the economy in reducing child poverty through
increases in employment and earnings among parents. But when the benefits of
means-tested programs (and federal tax policy) are taken into account, the
picture changes.
While the gap still shrunk -- by $
3.6
billion between 1995 and 2000 -- this was much more modest than the
$
7.4 billion drop that occurred between 1993 and 1995, even
though pre-transfer poverty fell nearly twice as much during the later time
period. (4) These data strongly support the conclusion that poverty could have
fallen at a faster rate between 1995 and 2000 if declines in the numbers of
children receiving means-tested benefits had not been as sharp.
There
appears to be broad bipartisan consensus in Washington and among states that an
important goal of the next five years of welfare reform is to enhance child
well-being, which includes reducing the extent and depth of poverty among
families with children. Meeting this goal will require moving beyond welfare
reform's initial focus on caseload decline -- a move that many states are
already in the process of making. In addition, most agree that further progress
on this goal will require addressing the following challenges:
Helping
TANF Recipients Who Have Severe "Barriers" to Employment that
Impede Their Progress in Moving toward Self-sufficiency: While there are
significantly fewer families on welfare, a recent General Accounting Office
study found that 38 percent of them have a severe physical or mental health
impairment. Studies have found that these and other barriers -- including
domestic violence, lack of stable housing, and having a disabled child --
significantly reduce the likelihood of working. In order to make these families
part of welfare reform's success, we need to be realistic about what it is going
to take to get them from where they are today to where they need to be, and
ensure that states have the resources and flexibility to work with them
intensively towards that goal.
Doing More to Help Recipients Find
Better-paying and More Secure Jobs that Can Support a Family:
TANF recipients typically end up in low-paying jobs -- most
earn less than $
8.00 an hour and many earn significantly less
than that. Data from studies of parents who left welfare for work show that
median quarterly earnings for families that left
TANF and were
working were typically between $
2,000 and
$
2,500, roughly 33 percent below the poverty level for a family
of three. (5) Earnings do grow after leaving welfare, but they still remain
quite low even years later. A Wisconsin study that tracked welfare leavers in
that state found that nearly 60 percent had below-poverty-level incomes even
three years after leaving welfare. (6)
Strengthening Families: Several
"family formation" trends have taken a positive turn in recent years. The teen
birth rate has fallen significantly since the early 1990s. The share of
children, particularly low-income children, living in two-parent families
increased while the share living in single-parent families fell. The number of
paternities established soared in the 1990s and amount of child support
collected in the federal- state child support system increased dramatically.
While these statistics are heartening, there is further progress to be made on
all of these fronts.
States have begun to fine-tune their
TANF programs to address these issues, but much more could be
done to improve outcomes for families in these areas.
TANF
reauthorization should address these challenges by building on current effective
state strategies where they exist, and supporting research and demonstrations to
develop a knowledge base on which to build future successful programs.
The Work Provisions in H.R. 4090
H.R. 4090 includes a
far-reaching set of changes to the work provisions in the
TANF
law. The most significant changes are to
TANF's participation
rate structure under which states must place a certain percentage of families in
federally-authorized work activities or face fiscal penalties. The proposed
legislation makes the following changes to the participation rate structure.
States would have to place 70 percent of
TANF families
in specified work activities by fiscal year 2007, up from 50 percent in the
current fiscal year.
The current caseload reduction credit -- which
reduces state participation rates by 1 percentage point for each 1 percentage
point reduction in caseloads since 1995 -- would be replaced with a "rolling"
credit. Instead of being based on the reduction in caseloads since 1995, a
state's participation rate would be determined each fiscal year based on the
percentage reduction in the state's caseload in the three preceding fiscal
years.
To count fully toward the rate, families with children age 1 or
older would have to participate in work activities for 40 hours a week. This
change would double the number of hours required for parents with children under
age 6 and increase by 10 hours a week the number of hours required for other
families.
The work activities that count toward the first 24 hours of
the work requirement would be narrowed to paid work (unsubsidized and subsidized
employment, and on-the-job
training) and unpaid work (work
experience programs and supervised community service). States would be able to
count families placed in substance abuse, rehabilitative activities,
work-related
training, and job search or job readiness
assistance, but for no more than three consecutive months in any 24-month
period.
Instead of addressing the remaining challenges by building on
current state strategies to help families overcome barriers to employment and
find better jobs, the proposed legislation would curtail state flexibility and
effectively require all states to adopt a federally proscribed welfare-to-work
program structure. States would be forced to restructure their current programs
and abandon many of the successful strategies they currently use to help parents
prepare for, find, and retain employment in favor of more costly programs. Such
a change might be warranted if states had clearly failed to implement effective
welfare-to-work programs over the past few years, or if there were research
evidence showing that the proposed approach was more effective at addressing
current welfare reform challenges than existing state approaches. There is,
however, no evidence to support either of these conclusions; indeed, there is
evidence to suggest that the proposed approach could be less effective than
other state-based approaches.
The reformulated caseload reduction credit
is likely to give states little help toward meeting the work participation
requirements. Under H.R. 4090, states would only get credit toward their work
participation rates if the overall caseload fell over the previous three-year
period. While no one can predict caseload levels with certainty, the rapid
caseload decline that occurred in the mid 1990s appeared to be leveling off even
before the recession and in 2001, 34 states saw their caseloads increase. It
should be noted that when a state's cash assistance caseload remains steady,
this does not mean that families are not moving from welfare to work. It simply
means that the number of families who have fallen on hard times and need help,
at least temporarily, is about the same as the number of recipients who were
able to leave welfare, often because they found jobs.
The Proposed
Participation Rate Structure Would Limit State Flexibility
Under H.R.
4090, states would be required to place a substantially increased proportion of
their caseloads in a very narrow set of work activities or be subject to fiscal
penalties. Two activities, job search and vocational education, that currently
count toward the rate would not count at all toward the 24-hour requirement. For
recipients who do not already have an unsubsidized job, they could only be
counted toward a state's work participation rate if they worked in a subsidized
job or participated in work experience, supervised community service, or
on-the-job
training programs for 24 hours each week. Families
would have to be placed in one of these activities even if the state does not
believe this would be the best approach to helping them succeed in the labor
market.
Some may argue that because participation rates remain below 100
percent, states will continue to have the flexibility to structure different
activities for a significant share of its
TANF recipients. This
is incorrect. While the participation rate that states will be required to meet
is less than 100 percent, to achieve a participation rate in the 60 to 70
percent range, they will need to impose the federally-mandated work requirements
on nearly 100 percent of families. This is the case for two reasons. First, some
parents will not be able to meet the hourly requirements for a particular week
because of personal family circumstances, including illness or having to care
for an ill child. (7) Second, even in well-run programs, a significant number of
recipients are not in activities at any given time because they are waiting for
a program to begin a new session, are between work activities or assignments, or
they cannot begin a work activity until child care is in place. Researchers have
recognized that in order to attain any given participation rate, a state must
actively seek to attain participation for a considerably larger group of
families. (8)
The proposed legislation would allow states to count
families placed in substance abuse, rehabilitative activities, work- related
education or
training, and job search and job readiness
activities for three consecutive months in any 24 month period. It also would
allow states to define what counts toward work for the final 16 hours of the 40
hour work requirement. As a practical matter, however, these provisions provide
almost no new flexibility for states.
Under current law, states actually
have considerable flexibility to place participants in the types of activities
that the proposed legislation would now limit to three months. While some of
these activities do not currently count toward the work participation rates
(except in several states with waivers that the proposed legislation would
rescind), states have generally achieved actual participation rates that are
substantially higher than the required federal standard. This is due in large
part to the current law's caseload reduction credit that lower the rates states
must meet based on the decline in caseloads since 1995. As a result, states have
been able to place recipients in activities that do not count toward the federal
rate without having to be concerned that they would fail to meet the required
standard. Many states have used this flexibility to place participants in
barrier-removal activities that have not necessarily been limited to three
months, while maintaining their otherwise vigorous and intensive efforts to move
recipients to work.
By increasing the overall rates and modifying the
caseload reduction credit in a manner that would likely limit the extent to
which it reduces states' effective rates over time, the proposed legislation
would eliminate this flexibility that currently exists.
Similarly,
allowing states to define work activities that count toward the final 16 hours
of a 40-hour requirement is not an enhancement to the flexibility states have
under the current work participation requirements. For families with children
age 1 to 6, the federally-mandated work requirement is 20 hours but states are
free (and many do) require participation in state-approved activities --
activities which may differ from the work activities under current federal law
-- for additional hours each week. Since the proposed legislation would require
an additional 20 hours of work for these families, it can only be characterized
as limiting state flexibility for them, regardless of whether states are able to
define allowable work activities for 16 of the new hours.
For families
with school-age children who are currently subject to a 30-hour requirement, the
proposed legislation would allow states to count a broader range of activities
toward hours 25 through 30 of the work requirement than is currently allowed.
This is a very limited enhancement of flexibility, however, given that the plan
would also narrow substantially what counts toward the first 24 hours of the
work requirement. In addition to prohibiting vocational education, job
readiness, and job search from counting toward the first 24 hours, the plan
would not allow other educational activities and job skills
training -- which currently can count for 10 of the required 30
hours -- to count until the 24 hour requirement in direct work activities is
satisfied.
Moreover, regardless of the child's age, in order to meet the
24- hour requirement, states will likely have to place families in the narrower
set of paid and unpaid work activities for more than 24 hours. This is because a
state gets no credit for an individual participating in the work activities
prescribed by the proposed legislation for 23 hours or less, even if they are in
other activities for 16 hours. To avoid the potential risk of not getting any
credit for a family, states are likely to schedule participants in the narrower
set of activities for significantly more than 24 hours each week.
Finally, many states -- particularly those with low cash benefit levels
-- will have difficulty meeting the work requirements while complying with the
federal legal requirement that recipients not be required to work at an
effective wage below the minimum wage. Many
TANF recipients
receive only partial benefits because they have other forms of income (including
Social Security benefits) while many families in low-benefit states receive cash
assistance benefits that are below $
200 per month. The Herger
bill makes no exception to the requirement that families participate in paid or
unpaid work for 24 hours each month for families in which such a requirement
would mean that they were working at below the minimum wage. (9)
States
would be Forced to Abandon their Own Successful Approaches
Under the
proposal, all states would face sharply increased work participation rate
requirements that would require them to focus on meeting these requirements to
avoid fiscal penalties. Families that are not able to find unsubsidized
employment, would have to be placed in subsidized work, work experience,
supervised community service, and on-the-job
training. Only a
few states and localities have welfare-to-work programs that place a substantial
number of parents in these activities and only about 7 percent of
TANF recipients nationally who are not working participate in
one of these narrow activities. (10) As a consequence, most states would have to
reconstruct their work programs, jettisoning current employment initiatives in
favor of the narrow set of activities that would meet the new prescriptive
federal requirements. (11)
Instead of large-scale subsidized work or
work experience programs, most states operate welfare-to-work programs that are
focused on placing participants in unsubsidized private-sector employment. These
programs generally require participants to conduct an intensive job search often
in conjunction with "soft- skills"
training and other job
readiness activities. In keeping with recent research findings discussed below
on the effectiveness of what is commonly referred to as a "mixed strategy"
approach, a growing number of states are modifying their programs to combine an
overall work emphasis with opportunities for pre-employment
training and targeted vocational education. While work
experience is often a component in these types of programs, it is typically used
on a case-by-case basis, rather than as a one-size-fits-all activity for every
participant who does not immediately find unsubsidized employment.
While
evaluation studies that cover all 50 states and compare the effectiveness of all
of the varying work program approaches are not available, the data that is
available generally finds that states using strategies quite different from the
particular program model the proposed legislation would mandate have been
successful in helping large numbers of parents move from welfare to work. In
fact, many states utilizing very different approaches have achieved rates of
caseload reduction and employment that equal or exceed national averages.
There is some evidence to suggest that the model mandated by the
proposed legislation could be less effective than other state approaches.
Washington State's recent decision to discontinue its work experience program is
instructive on this point. The state's decision was based in part on results
from a recent evaluation of the state's
TANF program which
found that work experience had no positive impact on participant earnings, while
other activities - - including jobs skills
training, a paid
transitional jobs program, and pre-employment
training -- all
had positive impacts on earnings. (12) The pre-employment
training program had the strongest earnings impacts, increasing
quarterly earnings by $
864. The work experience program did
appear to increase employment rates somewhat, but other activities, including
job skills
training increased employment by a greater amount.
Of the programs evaluated in Washington State, only the work experience
program and the paid transitional jobs program would appear to count toward the
first 24 hours the proposed work rates. (13) Since the paid transitional jobs
program is too expensive to operate on the large scale that would be required to
meet the proposed rates, Washington State would have little choice but to
resurrect a work experience program that it had previously discontinued because
of poor results.
The model that would be dictated by the proposed
legislation also runs counter to the growing state interest in tailoring work
activities more closely to the needs of individual parents rather than being
limited to a narrow set of work activities countable toward the work
participation requirements. States want to move their work programs in this
direction in part because of the substantial evidence that now exists about the
extent of barriers to employment among the remaining
TANF
caseload. By narrowing what counts toward meeting work requirements and
diverting funding to that very limited set of activities, the proposed
legislation will make it more difficult for states to invest in benefits and
services that address the significant challenges that remain -- helping the
harder-to-employ move from welfare to work and helping recipients with
persistently low wages qualify for higher-paying jobs. In fact, in February the
National Governors' Association passed on a bipartisan basis a welfare reform
policy that called on Congress to allow states to count a broader range of
activities toward the work participation requirements. (14)
The Proposed
Legislation Would Mandate an Approach that Runs Counter to Two Decades of
Welfare Reform Research
The legislation would mandate an approach that
falls outside of the mainstream of current state welfare-to-work approaches
despite a lack of research evidence indicating that it would be more effective
than other work programs that are evaluated over the last two decades. The
clearest finding from this extensive body of research is that providing a range
of employment and
training services is the most effective
welfare-to-work strategy, rather than the one-size-fits-all model that the H.R.
4090 would impose on states. The single most effective program in the recently
completed 11-program National Evaluation of Welfare-to- Work Strategies (NEWWS)
-- a program that operated in Portland, Oregon in the mid-1990s -- did not have
a large-scale work experience component. Instead, the Portland program
emphasized moving participants quickly into private sector jobs, while allowing
for varied initial activities and establishing performance standards that
encouraged case managers to help participants find jobs that paid well above the
minimum wage and offered better long-term career opportunities. (15)
Participants were more likely to find better-paying jobs that were full-time and
provided employer-based health insurance than welfare participants in a control
group.
Similarly, none of the programs that have been shown to
measurably increase child well-being included work experience as a significant
program component. Perhaps the most notable example is the Minnesota Family
Investment Program (MFIP) demonstration, which increased child well-being (as
measured by school performance and behavior), in addition to having strong
positive impacts on employment, poverty, and marriage rates. MFIP achieved these
outcomes despite placing fewer participants in work experience than in any other
program component. (16) Minnesota has since adopted a statewide
TANF program modeled on this demonstration program. Program
administrators have said that the change proposed by the Administration would
force them to shift away from this program model in spite of its unprecedented
success.
Sweeping New Waiver Authority Is the Wrong Mechanism for
Assuring Adequate State Flexibility
The Herger bill would allow the
Secretaries of HHS and the Department of Labor to waive any program rule in any
program operated through their agencies, with the exception of Medicaid (though
it appears that states could seek waivers of SCHIP rules). A companion
TANF reauthorization bill introduced by Rep. McKeon (R-CA),
chairman of the subcommittee on 21st Century Competitives of the House Education
and Workforce Committee (which has joint jurisdiction over some parts of the
TANF program) also would include programs under the Secretary
of Education in this "super waiver" proposal. Programs that could be affected
include unemployment insurance, student loans and aid programs, federal support
for K-12 education, job corps, head start, the public health service, and family
planning programs. Some have cited this so-called super-waiver proposal as the
answer to questions raised about the significant restraint on state flexibility
included in the work-related sections of the proposal. (While the current
proposal is limited to programs in these agencies, the Administration's original
proposal was broader and House leaders have indicated that programs in other
agencies will be added to the super-waiver proposal by other House committees.)
The super-waiver proposal does not limit the number of states that can
be granted particular types of waivers nor does it impose any significant
limitations on the types of rules states can apply to have waived, except that a
waiver must not result in higher federal costs than would be incurred under
standard federal law. This is in contrast to most current waiver provisions. For
example, the Workforce Investment Act allows states to apply for waivers but
prohibits waivers of federal worker protection and minimum wage laws. Moreover,
unlike past waiver policies which allowed states to operate demonstration
projects to test the efficacy of new initiatives or alternative approaches,
there would be no requirement that these waivers have a research objective or
even be subject to an independent evaluation. Rather than being designed to
encourage states to test new approaches, this waiver policy simply would allow
waivers of any program rule a state did not like.
The following are just
some examples of the kinds of waivers which the Secretaries of these agencies
would have authority to approve:
The Secretary of the Department of
Education could waive any rules related to federal education funding, including
formulas that direct resources to low-income children.
The Secretary of
HHS could approve a state waiver in which key federal
TANF
program rules are eliminated -- including the maintenance-of-effort requirement,
data reporting standards, or the requirement that states not sanction a parent
that could not meet work requirements due to a lack of child care.
HHS
also could approve a waiver in which a state would be permitted to divert all of
the resources it now devotes to activities to ensure that child care providers
offer safe, high- quality care to other purposes. As child care budgets tighten
due to heightened work requirements and frozen funding, states may be tempted to
ignore the importance of the quality of child care services and wish to focus
solely on placing as many children as possible in child care programs. Basic
health and safety protections now required under federal law also could be
waived.
Waivers that transfer substantial resources from activities
permissible under one program to entirely different programs also would be
permissible. For example, the Secretaries of these agencies could approve
waivers in which federal
TANF funds are shifted to provide
student aid to middle-income college students, to augment federal funding for
public education, or employment and
training programs for
higher-income laid-off workers.
The Herger bill also would appear to
allow the Secretaries to waive other independent statutory and regulatory
requirements applicable to programs within their jurisdiction, including minimum
wage requirements, OSHA standards, and civil rights regulations. At a minimum,
there is no language in the bill that would clearly prohibit waivers of these
requirements. There also is little question that the Secretaries would be able
to waive certain program-specific civil rights protections that provide greater
protections than general civil rights law or that clarify the applicability of
civil rights rules to specific programs. This would include section 188 of WIA
which contains equal opportunity and nondiscrimination protections specific to
WIA and 408(c) of
TANF which provides that the Americans with
Disabilities Act and Title VI of the Civil Rights Act of 1964 apply to
TANF. If programs under the jurisdiction of other
agencies, the problems only compound. If programs under the Departments of
Agriculture and Housing are included, for example, a state could apply for
waivers that could dramatically reorder federal funding priorities involving
billions of dollars and cutting across multiple programs.
The only
statutory limitation, other than cost-neutrality, on these Secretaries'
authority to approve waivers is that the state applying must show that the
waiver would further the purposes of all of the programs involved. This language
is so vague that a Secretary could determine that any state proposal met this
test.
In short, this broad new waiver authority would mean that if a
state and the administration agree that they do not approve of a statutory
provision in
TANF, public health programs, child care programs,
education and
training programs, or any other program within
the jurisdictions of HHS and DoL, they can effectively exercise line-item veto
power and have that rule waived. This would eliminate any assurance that
Congress could establish any national standard or requirement in programs within
HHS or DoL. If enacted, this waiver authority would represent an unprecedented
abrogation of Congressional authority to establish funding priorities, set
funding levels, and legislate program parameters. In transferring such authority
to the Executive branch, this provision would allow any Administration to make,
in conjunction with a state, unilateral policy decisions that Congress never
would have agreed to within the legislative process.
Such broad waiver
authority is not needed and could be very damaging. If there are particular
areas within a program in which there is consensus that states should have more
flexibility in establishing rules, those areas should be addressed in a targeted
manor. For example, if there is consensus that states should have more latitude
in the way they design their welfare-to-work programs, then the
TANF statute should provide that flexibility. Similarly, if
there are particular areas in which states should have more flexibility to align
WIA and
TANF rules, those areas should be identified and the
statutes altered to provide that flexibility.
It also should be noted
that the Herger bill would terminate welfare-related waiver programs currently
operating in some 10 states. These waivers were granted prior to the enactment
of
TANF and states with such waivers were allowed to continue
those programs, even if they conflicted with federal
TANF
rules, under the 1996 welfare law. It seems odd that while seeking to provide
the Administration and states with new ways to seek very broad waivers, that the
bill would terminate those waivers already in place.
The Herger bill
also would appear to allow the Secretaries to waive other independent statutory
and regulatory requirements applicable to programs within their jurisdiction,
including minimum wage requirements, OSHA standards, and civil rights
regulations. At a minimum, there is no language in the bill that would clearly
prohibit waivers of these requirements. There also is little question that the
Secretaries would be able to waive certain program-specific civil rights
protections that provide greater protections than general civil rights law or
that clarify the applicability of civil rights rules to specific programs. This
would include section 188 of WIA which contains equal opportunity and
nondiscrimination protections specific to WIA and 408(c) of
TANF which provides that the Americans with Disabilities Act
and Title VI of the Civil Rights Act of 1964 apply to
TANF.
The Child Support and Family Formation Provisions of the
Administration's Plan
The proposed legislation makes several changes in
the areas of child support and family formation.
For current and former
welfare recipients, states would be given a new option and new incentives to
direct child support payments currently retained by states and the federal
government to families. (Collections on behalf of current and former welfare
recipients are often retained by the federal government and states as
reimbursement for welfare costs.)
The "illegitimacy reduction bonus"
would be replaced with a "Healthy Marriage Promotion" competitive matching grant
program. States would be able to use federal
TANF funds to meet
the state match requirement.
An additional $
100 million
is diverted from the high performance bonus for use by the Secretary to fund
further marriage promotion research, demonstrations, and technical assistance.
The fourth purpose of
TANF would be changed from
"encourag[ing] the formation and maintenance of two-parent families" to
"encourag[ing] the formation and maintenance of healthy, 2-parent married
families, and encourag[ing] responsible fatherhood." States would be required to
establish annual, specific plans and numerical performance goals to improve
outcomes with respect to this purpose and the other three purposes of
TANF. Child Support Provisions are More Modest than
Earlier House- Passed Legislation
There is strong evidence that
noncustodial parents are more likely to pay child support if they know that the
support goes to their children. Research has shown that when child support is
passed through to families receiving welfare, the child support paid by
noncustodial parents increases, welfare receipt declines, and children's
financial well-being improves. (17)
The Herger bill includes two
provisions that would help states to implement policies that increase the extent
to which child support goes directly to children. The first provision would
provide states with an option to direct delinquent child support payments
collected by intercepting noncustodial parents' federal tax refund checks to the
children of former welfare recipients. The second provision would help states to
implement or enhance policies that direct a portion of child support payments
collected from noncustodial parents of children currently receiving
TANF to their children. Under current law, states and the
federal government generally retain child payments made by noncustodial parents
of children receiving
TANF. While states already have the
flexibility to pass through child support, if they exercise this option, they
must still send the federal government its portion of any child support
collected, making it an expensive option to take. The Herger bill would help
states pay for the costs of providing up to the greater of $
100
per month or $
50 more than the current state "pass through" to
families that receive
TANF. These provisions, while
positive, are far more modest, than child support legislation sponsored by
Representatives Nancy Johnson and Ben Cardin that passed the House of
Representatives in 2000 with overwhelming bipartisan support.
Within
five years of enactment, the Johnson-Cardin bill would have required all states
to direct intercepted federal tax refunds to former welfare recipients who are
owed past-due child support. A uniform national rule is preferable to a state
option in this area for two reasons. It is more equitable than a state option --
whether a child receives support should not depend on her or his state of
residence. It also makes more sense given the additional complexities that would
result in the interstate distribution of child support if states had varying
rules in this area.
The Johnson-Cardin legislation would have limited
the requirement that families applying for welfare sign over to the state their
right to collect unpaid child support that was owed to them before they applied
for welfare. (The requirement that families turn over the support owed to them
while receiving welfare is retained in both bills). The Herger bill leaves this
requirement in place. The Johnson-Cardin approach recognizes that families who
hold off from applying for welfare should not be penalizing by having to turn
over child support that was owed to them before applying for welfare.
The Johnson-Cardin bill placed a substantially higher limit on the
amount of child support that states could pass through to current
TANF families with financial support. Under the Johnson- Cardin
bill, the federal government would help pay for the costs of providing up to
$
400 in child support to a family with one child receiving
TANF. Johnson-Cardin also is more advantageous than the
Administration's plan for states that had previously implemented a child support
pass-through policy. (18)
Family Formation
There is substantial
interest in developing programs that further reduce nonmarital births, foster
and strengthen healthy two- parent families, and increase the proportion of
children cared for by both parents. However, very little is known about what
kinds of policies and programs could produce desirable results in these areas.
(One exception is teenage pregnancy reduction, where a growing body of research
points to successful strategies.) (19)
Unfortunately, both the Healthy
Marriage Promotion competitive matching grant program and the additional
research and demonstration funding proposed in H.R. 4090 are so narrowly focused
that little would be learned about effective strategies for strengthening and
improving child well-being under this proposal. In both cases, the Department of
Health and Human Services (HHS) would be required to fund a narrow set projects
including marriage promotion activities such as pro-marriage advertising
campaigns, pre-marital education classes, marital counseling, and relationship
strengthening.
Efforts to reduce teen pregnancy are notably absent from
the list of projects that can be funded with these resources, despite research
indicating that reducing teen pregnancy can be an effective means to reducing
the number of children living in single-parent families. Also absent from the
list of allowable uses of these funds are efforts to foster the involvement of
noncustodial parents in the lives of their children, or to enhance the ability
of noncustodial parents to pay child support could not be supported with these
resources. (20) Because we know so little about what works in these areas,
states should be allowed to use these funds to conduct a wide range of research
and demonstrations that could reasonably be expected to have positive impacts on
family formation.
Finally, there are two troubling aspects of the
funding mechanism for these efforts. While we support eliminating the
"illegitimacy bonus" which appears to have rewarded states that experienced
falling nonmarital births unrelated to state efforts in this area, the high
performance bonus should not be cut by 50 percent to fund these efforts. The
TANF program includes many fiscal penalty provisions, but the
high performance bonus is the only
TANF provision that rewards
states for achieving better employment outcomes and increasing access to work
supports. In addition, states should not be permitted to use federal
TANF funds as the state match for the Healthy Marriage
Promotion competitive matching grant program. If the Congress decides that
additional resources should be allocated to such marriage-related proposals,
states should be required to contribute new resources, rather than taking funds
from existing
TANF efforts, to participate in a competitive
matching program for which they are receiving additional federal funds.
The Fiscal Implications of H.R. 4090
Despite increasing the
participation rates that states must meet and hourly requirements that families
must meet, while also requiring states to place substantially more parents in
more expensive subsidized jobs or work experience programs, H.R. 4090 would
freeze both
TANF and child care funding for five years at the
FY 2002 level. Even without the far more costly work participation requirements
on states in H.R. 4090, freezing
TANF and child care funding
for five years would itself mean that most states would be unable to maintain
their current welfare reform efforts.
The 1996 law based each state's
TANF block grant level on its historical AFDC spending. Funding
was not indexed for inflation. Data from the Treasury Department show that in FY
2001, states spent $
18.5 billion a year on
TANF -- $
2 billion more than the annual block
grant level. States have been able to do this because they can tap unspent funds
from the early years of the
TANF program. Those funds, however,
are dwindling quickly. Many states either have few remaining reserves of unspent
funds from prior years or will be without any significant reserves at some point
in the next couple of years. If funding remains frozen, many states will have to
cut
TANF services significantly, including supports for working
poor families with children. Adding to this problem, the $
16.5
billion will purchase less in services and benefits with each passing year, due
to inflation. Since 1997, the block grant has lost 11.5 percent of its value --
five more years of funding at the current level would mean that it would fall 22
percent below its value in 1997.
If the child care block grant is
frozen, it would lose nearly 12 percent of its value by FY 2007 due to
inflation. The cost of child care is comprised primarily of the salaries of
child care workers. States will not be able to freeze the salaries of these
workers for the next five years and, thus, as the cost of child care rises,
states will be unable to maintain their current service levels without devoting
increased state resources to child care or using larger amounts of
TANF funds for child care, leaving even less in
TANF for other purposes. It is likely that most states would be
forced either to reduce the number of children served or increase the costs
borne by low-income families by reducing the value of the subsidy. Thus, while
most analysts agree that there remains large numbers of low-income families who
need child care assistance in order to afford quality, stable child care,
funding would be falling and states would not be able to maintain even their
current child care programs.
The Herger bill includes a provision which
would allow states to transfer up to 50 percent of its
TANF
funds to the child care block grant. Under current law, states can transfer up
to 30 percent of
TANF funds to the child care block grant but
can spend an unlimited amount of
TANF funds directly on child
care. In fact, under current law, a state could choose to spend its entire
TANF block grant on child care assistance. Thus, increasing the
amount that can be transferred to the child care block grant provides no
additional resources for child care.
New Work Requirements Would Be
Costly
LOAD-DATE: May 1, 2002