President Bush's Welfare Reform Plan
Leaves Millions of Children Behind

President Bush claims that his welfare reform plan will get more parents into work but his plan does not invest in any of the supports that low-income families need to get—and hold onto—a job. The Administration's plan places big new burdens on the states and families but fails to provide the resources necessary to help families succeed in the move from welfare to work. On average, states will have to more than double the number of families engaged in work or face stiff financial penalties, but will have no additional resources.

Work Requirements. The Bush plan would require that more families work more hours. Under the proposal families would be required to be engaged in a work activity for 40 hours per week - a one-third increase from the current 30 hour requirement (20 hours for single parents with young children). In addition, the Bush Administration would require that states put 70 percent of their caseload in work, or suffer financial consequences. Currently, states have about one-third of their caseload in work.

State Flexibility. Although the Administration claims that state flexibility lies at the heart of welfare reform, the Bush plan limits state flexibility and tells states how to run their welfare programs. The plan would mandate that states require parents to spend at least 24 hours a week in a very limited set of work activities (unsubsidized employment, work experience, community service or on-the-job training), while allowing them to use other activities (such as job search, GED classes, or vocational education) for the remaining 16 hours of required work. Families in substance abuse treatment or job training services may have these activities count towards the 24 hour requirement for one three-month period.

Child Care Funding. The Bush budget proposal would provide no new child care funds for the next five years, despite increased work requirements. The Administration plan would allow 114,000 fewer children to receive child care assistance over the next five years. Child care is key to helping families stay employed, but demand for child care assistance far outstrips supply. Only one in seven children who are federally eligible for child care assistance receives it. Florida and Texas each have 37,000 families waiting for child care assistance; in Massachusetts the list is 18,000.

TANF Funding. The Administration's plan adds no additional dollars to the Temporary Assistance for Needy Families (TANF) block grant. Without an adjustment for inflation over the next five years, the block grant will lose 29 percent of its current value. In FY 2000, States spent about $2 billion more than their annual block grant, by dipping into prior years' funds. States will quickly spend any remaining prior year funds as they try to meet increased work requirements and attempt to fill state budget deficits. In addition, many states have seen their caseloads increase slightly in recent months.

Employment and Training. The Administration says that welfare reform should move families into permanent employment, yet the plan will push states to abandon strategies that help families find higher paying jobs. Under the proposal, job search, vocational education or job skills training directly related to employment do not count towards the first 24 hours of required work in a family's 40-hour work week. The current law allows vocational education (for 12 months maximum), job skills training, and education related to employment to count as a work activity.

Work Supports. The Administration's proposal makes no efforts to ensure that families moving from welfare to work get the benefits - such as food stamps, health care, child care and transportation help - for which they are eligible. Research reveals that many families trading welfare for work do not receive work supports that can help them stay on the job. Those families that have made a successful transition from welfare to work and do receive work supports may be in danger of losing them. The burden of meeting work participation requirements among current recipients may pressure states to shift money away from work supports for the working poor.

Legal Immigrants. The 1996 welfare law banned most legal immigrants from receiving federal welfare assistance until they have been working in the United States for at least five years. About three million legal immigrants (about one-third of all legal permanent residents in the country) have been in the country for five years or less. The Administration's plan continues this ban.

Children's Defense Fund Recommendations - Congress must take action to help families work, improve child well being and reduce family poverty by:

• Providing an additional $20 billion for new child care assistance in the Child Care Development Block Grant to make improvements in quality while serving an additional two million children.
• Increasing funding for the TANF block grant to provide states with the financial resources necessary to move families into steady employment with a career ladder.
• Ensuring families get the benefits for which they are eligible by giving grants to state and local governments and community based organizations to create new gateways to services such as food stamps, Medicaid and child care. The grants will enable states to streamline and make application and renewal procedures more convenient.
• Helping families overcome barriers to employment by allowing more education and training to count towards the work participation requirement, allowing ongoing supplements to low wages, and requiring individualized service plans with appropriate services.
• Fully restoring benefits for legal immigrants.