On March 15, the House Education and the Workforce Subcommittee on 21st Century Competitiveness held a hearing on a bill (H.R. 240) to reauthorize the 1996 welfare reform law (P.L. 104-193). The House Ways and Means Subcommittee on Human Resources approved the measure later the same day, while the Senate Finance Committee approved its version of the bill (S. 667) on March 9 (see The Source, 3/11/05).
Calling the 1996 welfare reform law “an unqualified success,” Chair Buck McKeon (R-CA) stated, “Welfare caseloads have dropped over 60 percent from their all-time high of 5.1 million families in March 1994 to approximately 2 million today their lowest levels since 1970, according to the Department of Health and Human Services. Census figures also show that employment by mothers most likely to go on welfare rose by 28 percent between 1996 and 2003.” He added, “The challenge for Congress this year is to build on that success by putting more Americans on the path to self-reliance when the law is reauthorized this year. While it is true that the ’96 reforms significantly reduced welfare caseloads, we still have work to do: a majority of TANF [Temporary Assistance for Needy Families] recipients today are still not working for their benefits.”
Ranking Member Dale Kildee (D-MI) expressed his concern that while welfare caseloads have decreased significantly, many families still remain poor. These families “aren’t looking for a handout, they’re looking for a hand up,” he stated, adding, “Leaving welfare rolls should be about leaving poverty behind.”
Assistant Secretary for Children and Families at the Department of Health and Human Services Wade Horn said that the Bush administration’s reauthorization proposal “is guided by four critical goals that will transform the lives of low-income families: strengthen work, promote healthy families, give States greater flexibility, and demonstrate compassion to those in need.” He explained that the proposal would maintain the current level of $16.5 billion for TANF block grants, replace the current caseload reduction credit with an employment credit, establish demonstration projects to integrate welfare and workforce assistance programs, and reform child support enforcement programs so that more money is collected and directed to needy families. With regard to child care assistance, Secretary Horn stated, “Our proposal supports maintaining the historically high level of funding for child care, including $2.1 billion for the Child Care and Development Block Grant and $2.7 billion for Child Care Entitlement a total of $4.8 billion for what is referred to as the Child Care and Development Fund or CCDF. In addition, States continue to have the flexibility to use TANF funds for child care both by transferring up to 30 percent of TANF funds to CCDF, and by spending additional TANF money directly for child care.”
Secretary Horn detailed the administration’s proposal to support healthy marriages, explaining that funding would be redirected from the discontinued Out-of-Wedlock Birth Reduction and High Performance Bonuses. He also noted that $40 million would be provided “for the promotion and support of responsible fatherhood and healthy marriage programs to reverse the rise in father absence and its subsequent impact on our nation’s children.” Finally, Secretary Horn explained that the proposal would reauthorize the State Abstinence Education Program, which “helps people develop inner strength, take charge of their lives, and direct their energies to healthy and productive choices. The goal of abstinence education is to encourage our Nation’s youth to make the healthiest decisions for themselves, and our approach links these programs to positive youth development programs operated by community-based and faith-based groups.”
During the question and answer session, Rep. Kildee asked how states would be able to use their TANF funds for child care when most state reserves have been depleted. Secretary Horn responded that many states currently have carryover funds, which under current law can only be used for cash assistance. He explained that H.R. 240 would allow states the flexibility to use these funds for other purposes, so if the bill becomes law, an additional $2 billion would be available for child care assistance.
Mark Greenberg, director of policy at the Center for Law and Social Policy, focused his comments on negative welfare trends seen in the past three years, noting, “Employment among single mothers fell from 73 percent in 2001 to 69.7 percent in 2004. Employment among married mothers showed a similar decline, from 68 percent to 65.3 percent, during the same period…Since the recession, the industries most likely to employ welfare recipients and large proportions of single mothers have either lost jobs or are experiencing slower job growth.” He added, “Many families still receiving assistance have serious employment barriers, and a group of families with serious barriers is now not in work and not receiving welfare. A well-functioning TANF program would assist needy families while connecting those who are able to work with sustainable employment; however, there are clear indications that the current program makes it difficult for needy families to receive assistance and serves a steadily declining share of poor children.”
Mr. Greenberg said that the additional work requirements in H.R. 240 run “the risk of resulting in less effective programs, for three reasons. First, it creates the danger that program administrators will need to shift their focus from efforts to promote employment to efforts to ‘manage’ 40 hours of participation. Second, the need to generate activities, even low-cost ones, and pay attendant child care costs, will force a misallocation of scarce resources at a time when states are struggling to sustain current services. Third, many observers have recognized the need to do more to engage families with the most serious employment barriers…If any individual who has difficulty consistently participating at the 40-hour level will become a ‘drag’ on the state’s ability to meet participation rates, there will be an increased risk that such families are sanctioned and terminated from assistance rather than provided needed assistance to more toward employment.” With regard to the additional $2 billion in TANF reserves, Mr. Greenberg stated, “We support the proposal to broaden allowable use of reserve funds, but enacting this proposal will not free up significant resources for child care.” He explained that the vast majority of states are currently able to use their unobligated funds for child care and noted that in the past three years, most states have spent more for TANF benefits and services than they received in their annual block grants. “This strategy cannot be sustained indefinitely; reserves for most states are likely to be depleted within a few years unless states make significant cuts in current levels of services. Thus, most states cannot simply use reserve funds to expand child care services without creating deeper deficits for future years.”
The subcommittee also heard testimony from Dr. Lawrence Mead, a professor of politics at New York University. “The ideal in welfare reform is to link benefits as tightly as possible to work,” he stated. “That requires a clear work test that employable recipients must meet as soon as they apply for aid, not sometime later. Equally important, there must be ample benefits to support working [families], particularly child and health care.” Calling the work requirement in H.R. 240 “too ambitious,” Dr. Mead said that 70 percent “is more than double the national participation rate actually achieved in 2002, only 33 percent. A real activity rate of half the caseload is probably as much as most states can achieve, given the practical difficulties of getting welfare mothers out of their homes and into programs or jobs…I would rather keep the 50 percent, phase it in over several years, and omit the credits and exemptions. That would be more honest and also more effective, because it would make clearer what was expected.” Dr. Mead supported provisions in the bill that would limit what activities could count towards work participation: “Evaluations demonstrated that ‘work first’ was a better strategy. The fact that many recipients today are more disadvantaged than those who left the rolls earlier does not change this verdict; they, too, are likely to profit most from actual work. To allow recipients to turn welfare into a college scholarship also offends equality, since many of the taxpayers who pay for welfare lack the same opportunity.” Finally, Dr. Mead argued that the $1 billion increase for child care funding over five years “is probably enough to cover the child care needs of single mothers leaving welfare,” adding, “One can argue for more money only if one posits other goals, such as providing more subsidized care to families already off welfare or improving child care quality. Those aims might be valuable, but they go well beyond the needs of welfare reform. Reauthorization should not be held hostage to them.”
