In 1996, the Personal Responsibility Work Reconciliation Act (P.L. 104-193) was enacted. The new welfare law made major changes to existing programs designed to assist the needy in America. The law eliminated Aid to Families with Dependent Children (AFDC), which had been the primary program providing cash assistance to families, and replaced it with the Temporary Assistance to Needy Families (TANF) program which provides block grants to states to design work-focused and time-limited welfare initiatives.
In exchange for broad flexibility and fixed funding to the states, the law imposed certain key requirements, particularly work requirements and time limits on federal funding. TANF establishes a 60-month time limit for families receiving aid; however, individual states can opt for shorter time limits for families.
With Congress poised to reauthorize the TANF program this year, the House Ways and Means Subcommittee on Human Resources held a March 7 hearing to examine how the states are implementing the work requirements and time limits of the 1996 welfare law.
“I know that many people will be surprised to learn that we don’t require every welfare recipient to work,” noted Subcommittee Chair Wally Herger (R-CA). “According to the Department of Health and Human Service’s most recent annual report, an astonishing 57.6 percent of families on welfare are doing nothing to prepare for work while receiving benefits,” he said, and added, “That’s just not good enough.”
In his opening remarks, Rep. Benjamin Cardin (D-MD), Ranking Member of the subcommittee, acknowledged the progress that has been made since the inception of the 1996 law. “As a result of TANF and the economy, there has been an increase in the number of never-married moms who have left welfare for work,” he said. However, he criticized the President’s budget saying that it “does not provide sufficient funds for child care, which affects the flexibility the states say that they need.”
Cynthia Fagnoni of the Government Accounting Office discussed “the extent to which families receiving cash assistance are excluded from work requirements and time limits.” She told the subcommittee that, “TANF programs give states considerable flexibility in implementing work requirements.” Noting the strong economic growth that has occurred since the implementation of welfare reform and the decline in welfare caseloads, she said, “The work participation target rate for every state in FY2002 is 50 percent for all families. However, once the caseload reduction credit is taken into account, the target rates can be greatly reduced.”
Ms. Fagnoni said that approximately 90 percent of families on welfare are subject to work requirements through the states; however, officials in 26 states use supplemental funds to pay for specially-designed work programs that can include substance abuse programs or vocational training. “The five-year limit on welfare benefits does not apply to benefits that go to workers participating in these programs.”
She also told the committee that “one-third of families receiving cash assistance are child-only cases that are not subject to federal work requirements or time limits.” She described the “most common types of child-only cases as families in which the caregiver is a nonparent, the parent is receiving Social Security or Supplemental Security Income and not eligible for TANF (25 percent), or the parent is a noncitizen.”
Douglas Besharov of the American Enterprise Institute said that if you “ask people on the street what ‘welfare reform’ means, most probably would answer ‘work in return for welfare.’” He told the subcommittee that, according to research by the Brookings Institution, “The clear public favorite among welfare reforms is work requirements…,” adding that “most opinion polls show that while voters want the government to support needy families, they also want adult welfare recipients to work, like the taxpayers who support them.”
Addressing concerns about circumventing work requirements, Mr. Besharov acknowledged that under current law, “states can minimize TANF’s participation requirement, by creating separate state programs or child-only cases, by adopting loose definitions of work, and by increasing the number of those combining work and welfare.” He recommended “reinforcing work first efforts and making time limits enforceable.”
Jennifer Reinert of the Wisconsin Department of Workforce Development described the welfare reform efforts in her state. “The success of the TANF program, called Wisconsin Works or W-2, stems from its work-focused philosophy, its wide range of work-training opportunities and work support, and its flexibility, all targeted at empowering parents to achieve personal responsibility for the welfare of their families,” she said.
Rep. Cardin noted that state officials “want more flexibility in dealing with federal requirements.” He also expressed concern that welfare recipients are getting subsidized jobs in the public sector without opportunities for advancement. He said that more attention should be focused on ensuring that families on welfare receive higher-paying jobs.
Rep. Nancy Johnson (R-CT) expressed concern that states are using their own money on state work programs that impose less strict requirements on welfare recipients than those imposed by the federal government.