Current Federal Policies | Analysis of Policy Proposals | Workforce Research Bush Administration Welfare Plan President Bush Announces Administration's Welfare Reauthorization Plan President Bush released the Administration's plans for reauthorization of the Temporary Assistance for Needy Families (TANF) Program on February 26th. Consistent with earlier signs from the Administration about its general intentions for TANF reauthorization, the Bush plan seeks to maintain the program's current level of funding over the next five years (with no adjustment for inflation), and retain the five-year limitation on benefits. However, the bulk of the plan signals an alarming move by the Administration to reduce the already meager options for skills development and work-related advancement for TANF recipients — in contrast to the Administration's characterization of its plan as allowing for "creative combinations of job training, education and work" (see link to February 26th New York Times article below). The Bush plan will actually give states less flexibility than under current law to develop local innovations for work-related advancement, due to the following new mandates proposed by the Administration: The Administration will require families to participate in work activities for 40 hours per week (up from the current 20-30 hours for single parents and 35 hours for two-parent families). The proposal indicates that 24 of those hours must be in activities defined as work, including: unsubsidized employment, subsidized private or public sector employment, on-the-job training, supervised work experience, or supervised community service. Activities that would not be defined as work for these 24 hours, and which are permissible under current law, include vocational education and education and job skills training directly related to employment. The plan leaves the remaining 16 hours to the states, which "will have discretion to define approved activities, which must help achieve a TANF purpose." The plan will allow certain activities to count towards meeting the 24-hour work requirement for no more than three consecutive months within any 24-month period. According to the plan, "work-related training enabling the recipient to work," as well as substance abuse treatment and rehabilitative services will be countable activities. The plan proposes to increase the minimum work participation rate requirement for states. Currently, 50 percent of a state's TANF caseload must be engaged in a combination of work and work activities. The President proposes to increase that rate by five percent per year to 70 percent in 2007. According to the plan, states will only be able to count families that meet both the 24-hour work participation requirement and the 40-hour full participation requirement toward their participation rate, but will get some credit for those engaged in activities less than full time if they meet the 24-hour direct work requirement, and will be able to count families that have left TANF due to employment for up to three months. The plan will also phase out the current caseload reduction credit by 2005, stating that the credit has essentially reduced states' minimum participation requirements. This means that some states, on average, would have to at least double the percentage of TANF clients currently in "work activities" by 2007 to meet the planned increase in the work participation rate (in 2000, the average participation rate stood at 34 percent), even though the Administration proposes no correlative increase in federal TANF resources to support such a dramatic new mandate. This could mean that states will be forced to put their TANF clients into the least expensive service options available. The plan will also discontinue existing state welfare program waivers—another dramatic reduction in state flexibility. In the recent "National Evaluation of Welfare-to-Work Strategies" study commissioned by the U.S. Department of Health and Human Services, the best performing of the analyzed sites (Portland, Oregon) achieved such success because it was able to combine education and training with other work-related services under a waiver that allowed Oregon to develop its strategy without federal mandates. Such waivers will be eliminated under the Administration's proposal. The Bush plan will require states to describe in their state plans specific strategies for addressing employment retention and advancement. The proposal further replaces the current High Performance Bonus with a $100 million per year "Bonus to Reward Employment Achievement." The formula for measuring state performance is not defined in the proposal, which says that it will be developed in consultation with states, that the emphasis will be placed on outcomes, and that all states will be ranked "in the order of their performance on indicators measuring employment, retention, and wage increase." While the plan eliminates existing state waivers, it does propose a new waiver to allow states to integrate funding and program rules across public assistance and workforce development programs. Among the programs cited by the plan as potential areas for state integration are the Workforce Investment Act (WIA), the Wagner-Peyser Act, and "GED and post-secondary education programs." Again, while it is encouraging that the Administration acknowledges that education and training are an important part of what leads people towards self-sufficiency and seeks on some level to measure states' performance in reaching improved employment outcomes, the Administration's plan does not explicitly improve access to education and training for TANF recipients. Further, adding the burden of new work requirements on states and working families in the face of rising caseloads and limited funds to meet the needs of those receiving assistance does little to advance TANF recipients in the labor market or move them toward financial independence. Nor does it increase significantly the flexibility of states to determine strategies to prepare TANF recipients for long-term success in the workforce. Increased access to education and training are crucial in helping those remaining on or returning to public assistance gain the skills necessary to attain better jobs and achieve financial independence. The Workforce Alliance's proposals to increase education and training options for TANF recipients include: raising the 12-month limit on vocational education as a countable work activity to allow individuals the time necessary to complete training and education programs; allowing a range of education and training activities—including post-secondary education—to count as work activities to provide increased options to gain necessary skills; eliminating the 30 percent cap on the number of recipients engaged in education and training activities so that recipients who need training are not restricted from receiving it; and providing additional funds to states for strategies aimed at improving the skills of and enhancing employment prospects for low-wage and entry-level workers. The Alliance proposal also includes using current High-Performance Bonus criteria (job entry rates, job retention rates, and earnings gains) as a portion of the baseline performance criteria for all states, and encouraging states to develop systems that coordinate these with similar performance measures under WIA; and rewarding states for investing in training and education to encourage states to provide the necessary training and education TANF recipients need to become independent and to strengthen the nation's workforce.