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Senate and House Committees Examine President’s Welfare Plan

On March 12, the Senate Finance Committee and the House Ways and Means Committee held hearings to examine the President’s welfare reform proposal. At each of the committee hearings, Secretary of Health and Human Services (HHS) Tommy Thompson presented the President’s welfare reform plan.

The 1996 welfare law (P.L. 104-193), which includes the Temporary Assistance for Needy Families Program (TANF), the Child Care and Development Block Grant (CCDBG) and the food stamp program, will expire this year and must be renewed by Congress.

Senate Hearing
Finance Committee Chair Max Baucus (D-MT) noted that since passage of the 1996 welfare law, “millions of Americans left welfare for work,” and “child poverty is down, despite the fears of critics.” He called for “increased funding for child care,” and “extending and improving transitional Medicaid coverage for those who leave welfare for work,” as Congress moves to reauthorize the TANF program.

Ranking Member Chuck Grassley (R-IA) also highlighted the success of the 1996 law. “It would be naive to say that there isn’t room for improvement,” he commented. “Single mothers in particular have proven that they can excel in the workforce, but many working women have yet to realize their full earning potential,” he added.

Secretary Thompson outlined the President’s proposal. He said the plan would continue the focus on “maximizing self-sufficiency through work” and would increase the work week for welfare recipients from 30 to 40 required hours. Recipients must spend 24 hours per week “in direct work,” and states would have the flexibility to decide which activities, such as education or substance abuse treatment, should be included in the remaining 16 hours. The plan also would raise the required percentage of welfare clients who must hold a job from 50 percent to 70 percent by the year 2007.

Although the centerpiece of the proposal is work, according to Secretary Thompson, the “overriding goal of the TANF reauthorization is child well-being.” The President would appropriate $4.8 billion for the Child Care and Development Fund (CCDF). Of that total, the plan would provide level funding of $2.1 billion for the CCDBG and $2.7 billion in mandatory funding for the Child Care Entitlement. As under current law, states would have the flexibility to use funds under the TANF program on child care.

The President’s plan would provide $300 million to encourage states to develop innovative programs to promote healthy marriages and reduce out-of-wedlock births. Additionally, single mothers transitioning from welfare to work would be eligible for income supplements of up to $4,000 through the Earned Income Tax Credit, and the child support enforcement program would be expanded so that more payments by non-custodial parents would go directly to the custodial parents and the children.

Under the 1996 welfare law, a five-year ban on most welfare benefits was imposed on legal immigrants, along with a permanent ban on food stamps and Supplemental Security Income. The President’s proposal would allow legal immigrants to receive food stamps five years after entry into the United States, but would continue the five-year ban on non-citizens entering the United States after 1996.

During the question and answer period, several Senators expressed concerns that the President’s proposal would provide only level funding for child care.

“It seems to me that we could be performing a great service to our country by putting more emphasis on child care,” said Sen. Baucus. “No parent should have to spend their day worrying that their child may not be in good hands,” he commented. “How, with the ambitious goals” of increasing the weekly working requirements “can we achieve them without any new child care funding?” he asked.

Sens. Blanche Lincoln (D-AK) and Olympia Snowe (R-ME) echoed the concerns expressed about child care funding. “What is being expected of working moms is really incredible,” said Sen. Lincoln. “For working mothers, child care is essential,” she said, commenting that in many states there are waiting lists for quality, affordable child care services.

Sen. Snowe said, “Child care is pivotal to establishing self-sufficiency.” She asked, “How do you see that level funding for child care” will address the needs of adolescents and after-school programs? “Thousands are on waiting lists,” she continued. According to a survey in Maine, “42 percent of those on TANF are now unemployed” due to a lack of child care, she said.

“You’ll get no argument from me,” responded Secretary Thompson. “There are no waiting lists in Wisconsin. This is something I passionately believe in,” he said. “But when you have a situation with homeland security,” he added, “this is all we’ve got.”

Secretary Thompson told the committee that states would have a great deal of flexibility and discretion over the funds at their disposal. He explained that states could transfer 30 percent of TANF funds for child care services, and that money from the $6.5 billion for Head Start, the early childhood education program, could be used for child care. Counting the $4.8 billion authorized by the President’s proposal, plus the flexibility provided states to transfer funds from other programs, “about $17 billion could be available for child care,” he said.

The committee also heard testimony from a second panel of witnesses including representatives from the business and research communities.

Robin Arnold Williams from the Utah Department of Human Services described how the states are succeeding in implementing the 1996 welfare reform law. “For example, employment rates for never-married mothers increased by 40 percent over the past five years, reaching an all-time high in 2000,” she said. “Sixty-six percent of TANF mothers are working for 30 hours a week in private-sector employment and an additional 12 percent of them are actively looking for work,” she highlighted, and added, “between 1996 and 1999, there was an 80 percent increase in the number of children receiving a monthly child care subsidy.”

Ms. Williams commented on the President’s proposal and presented recommendations for TANF reauthorization legislation. She urged the committee to “maintain and enhance the flexibility of the TANF block grant” and “afford states with the flexibility to devise their own strategies” to meet the goals of the program.

“With respect to child care,” she said, “additional federal funding is needed.” She also cautioned the committee about increasing the required work week to 40 hours saying, “The new requirement would have unintended effects and increased costs.” She added, “Increasing the number of required hours and work rates will increase the costs of child care and may require one or more additional child care arrangement.”

Gordon Berlin of Manpower Demonstration Research Corporation also commented on the President’s proposal and had some cautionary words for the committee on the reauthorization of TANF. He acknowledged that as welfare caseloads in the states have declined and employment has increased, “The needs of the working poor and the hard to employ have come into greater focus.” He said that research supports the conclusion that the emphasis on work “has driven much of TANF’s success.”

He commended the President’s plan for adding “the improvement of child well-being as a purpose of TANF,” and for allowing “a greater use of education and training and other services.” However, he warned, “If it’s not broken, don’t fix it,” and added, “The challenge is to adapt TANF to the changing environment while building on its success.”

House Hearing
Ways and Means Committee Chair Bill Thomas (R-CA) opened the hearing by noting the success of the 1996 welfare law despite dire predictions from critics. Ranking Member Charles Rangel (D-NY) said that he hoped the administration would work directly with the Democrats on a bipartisan proposal.

Rep. Pete Stark (D-CA) also expressed support for a bipartisan bill. He described legislation (H.R. 2166) that he introduced that would make reduction of child poverty a TANF goal and would appropriate $150 million per year for bonuses to states for their poverty reduction rates. “You give $200 million in your proposal to promote marriages,” he said. “Could we give $200 million to prevent poverty?” he asked.

Secretary Thompson responded that Sens. Thomas Carper (D-DE) and Evan Bayh (D-IN) are working on legislation that would provide an employment credit to states. He said that the goals of TANF should “be broader than poverty” and should include “education and daycare.”

Rep. Jim McDermott (D-WA) said, “We haven’t got enough money now to cover the kids. How can you justify expanding the work requirement another 10 hours?”

Secretary Thompson pointed to the flexibility in the proposal that would allow the states to draw money from child care from the TANF and Head Start programs. He said there was enough money in the proposal to meet child care needs.

Rep. Jennifer Dunn (R-WA) pointed out that children who grow up in two-parent families are more likely to do well in school and in life. She asked the Secretary to describe the promoting healthy marriages program.

The proposal would provide “$100 million from the discontinued Illegitimacy Reduction bonus to allow states to set up programs at the local levels that would provide counseling” and other technical assistance focused “on promoting healthy marriages.” Additionally, he said that “$100 million from the High Performance Bonus” would be used for a competitive matching grant program for the states to initiate programs that promote marriage.

“Washington is number two in unemployment in the country,” said Rep. Dunn. “Does the state of the economy reflect the number of people on welfare?” she asked.

“Welfare reform has worked even in a down economy,” responded Secretary Thompson.

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