2003 Congressional Welfare Reform Reauthorization

Prepared by Walsh & Weathers Research and Policy Studies for

Asset Empowerment Training - *Legislative Process*

January 10, 2003

In 1996, Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), also known as the 1996 Welfare Reform Law. It changed public financial assistance, child care, child support, Supplemental Security Income (SSI), food stamps, child protection, and transitional medical assistance. Now parts of the law need to be reauthorized, providing an opportunity to make positive changes.

Background - PRWORA changes financial assistance for poor families

Some of the most drastic changes were made in the way financial assistance operates for families with dependent children. PRWORA ended the Aid to Families with Dependent Children (AFDC) program, which provided a monthly amount to mostly single parent families with children if they were poor under certain definitions. The Temporary Assistance for Needy Families (TANF) program was established in AFDC's place. Here are some of the main provisions of TANF:

• Assistance is limited to five years (Utah-at three years-and some other states have shorter time limits by state law) for all but a small number of families with specific hardship circumstances.
• Parents must participate in work-related activities (as defined by their states) to remain eligible.
• States must ensure that certain percentages of all families must participate in very specific, "countable" federally-defined work activities or they are penalized financially
• Education and training activities are restricted.
• The entire family can lose assistance if the parent does not participate.
• Teen parents must, in most cases, live with their parents to be eligible.
• Funding for TANF is block-granted so that, if need increases, states do not necessarily receive more federal funds to respond.
• Indian Tribes can apply to set up their own TANF programs and receive a portion of the funding that comes to their state.

Congress also provided in the law that it would need to be "reauthorized" in 2002, meaning it would be opened up for making changes through the legislative process.

What have we learned about how welfare reform has worked in the first five years?

Much study has been done during the first five years of welfare reform. In some cases, political philosophy causes different interpretations about what should be done about what has been learned.

Financial assistance caseloads have declined

Financial assistance caseloads across the nation have been declining steadily since 1993 for combination of reasons, three years before passage of PRWORA. There is general agreement that both the economy and welfare policy have played a role, both nationally and in the individual states, although some place more emphasis on one or the other. Utah's caseload, first AFDC and then the Family Employment Program (FEP)-Utah's TANF program, dropped by 59 percent between early 1993 and June 2002, from over 18,606 families to 7,585. Caseloads dropped by 35 percent from the implementation of FEP in 1997 to mid-2002, when the caseload was 11,647. Recently, economic decline appears to be the primary cause for a reversal in the trend in many states, although so far, Utah's caseload is an exception.⁽¹⁾

Child and family poverty have declined over the decade

There is wide agreement that the 1990s saw the earnings of single mothers increase dramatically, and family and child poverty decline. For example, in the nation as a whole, between 1993 and 1999, the child poverty rate fell from 22.7 to 16.9 percent. The "deep poverty rate" (those with incomes at or below 50 percent of the Federal Poverty Level) fell from 10.1 to 6. ⁽²⁾ More jobs, expanded Earned Income Tax Credit (EITC), and welfare policies have all played roles. Few dispute the existence of a group of families who are worse off than before welfare reform.⁽³⁾ Here, too, there is controversy over what this should mean for future welfare policy.

Outcomes in rural areas with high unemployment and fewer resources are less positive

In areas of higher unemployment and limited resources of all types, from intervention services to transportation, caseload reduction has been less dramatic. For example, in Utah's largely rural Eastern Region, including counties generally ranking in top five for high unemployment and poverty, caseloads have fallen since 1993 by only 21 percent, in contrast to 54 percent in the state as a whole.⁽⁴⁾ A study of the impact of welfare reform on Indians in Utah's Uintah Basin showed that, between January 1998 to February 2001, Indian families were substantially more likely to leave welfare due to sanction than employment; the opposite trend was true of non-Indian families.⁽⁵⁾

Many families are working.

Although the economic slowdown currently appears to be having an effect on TANF family employment success, an average of from 20.5 to 26.5 percent of Utah's FEP caseload have had earnings since August 1997 when FEP was fully implemented. During that same period from 22.7 to 38 percent of cases that closed did so because of employment.⁽⁶⁾

Working former TANF clients are generally earning low wages and lack health care benefits.

According to the Congressional Research Service, jobs held by TANF recipients when they exit the program generally pay around $6.00 to $7.50 per hour. ⁽⁷⁾ The Urban Institute, in its National Survey of America's Families, found 1999 median wages for recent welfare leavers were $7.15. ⁽⁸⁾ In a study of welfare leavers in Wisconsin, the Madison-based Institute for Research on Poverty found that, although earnings of tracked families grew from one year to the next, over three years, they never approached above-poverty levels for a family of three. The Center for Law and Social Policy surveyed state studies on welfare leavers and found both low wages and three out of four lacking employer-provided health insurance.⁽⁹⁾ Comparable wage data for former TANF families in Utah are not available; however, a study utilizing administrative data to follow a sample of Utah welfare leavers in 1994 through 1999 found that, for the average sized FEP family (three), 59 percent would have had incomes below 50 percent of the Federal Poverty Level (FPL) and only two percent would have surpassed 150 percent of FPL.⁽¹⁰⁾

Welfare caseloads include families with serious and multiple barriers to employment

During its 1997 General Session, the Utah Legislature mandated a study to examine the circumstances of families who would be likely to confront Utah's 36-month time limit. DWS contracted with the Social Research Institute at the University of Utah to conduct research targeting recipients who had received assistance for 24 months or more. They found that 80 percent of respondents had a physical or mental health barrier; 30 percent had a work barrier (poor work history); 32 percent lacked a high school diploma or equivalency; 42 percent had a child with a physical health problem; 23 percent had a child with a serious behavior problem; 74 percent had experienced severe domestic violence as adults; over 50 percent had been physically or sexually abused as children; and 46 percent had been involved with Child Protective Services. In all of these characteristics, researchers found that longer-term recipients have a higher incidence than the welfare population as a whole. ⁽¹¹⁾

Sanctions have played a more significant role in case closures than time limits

The first group of FEP families to reach Utah's 36-month lifetime limit did so in December 1999. That group included 436 families; the cases of 143 families were actually closed due to time limits. Forty-four percent qualified for extensions.⁽¹²⁾ Since then, an average of 7.0 percent of all case closures per month are due to time limits for a total of 1,268 families as of January 2002. ⁽¹³⁾

Sanction closures occur when families have been determined to fail to participate in activities required in their employment plan. ⁽¹⁴⁾ Since the FEP program began in August 1997, an average of 8.5 percent of monthly case closures have been due to sanctions, with sanctions becoming twice as common in recent months as in the early months of the program. The total number of such closures is 4,476 to January 2002. An unknown number of those have reopened when the parent began to comply with participation requirements. The outcomes and circumstances of only a small fraction of these families and those off assistance due to time limits are known (see just below).

Many families who have left welfare due to time limits or sanctions are not faring well.

Subsequent to the above-mentioned investigation of long-term family circumstances, DWS commissioned SRI to study members of that same cohort who had since left the FEP program. Researchers interviewed 407 people and compared circumstances and characteristics of three groups-those who had left FEP for work, time-limits, and sanctions. They found that, as a group, the latter two groups differ significantly from the former group and are at substantial risk of deteriorating well-being. When compared with those who left for work, families closed for time limits or sanctions tended to . . .

• have come from more disadvantaged backgrounds;
• have had greater contact with the Child Protective Services system as children, including having spent time in foster care;
• have lower educational attainment;
• have had criminal convictions;
• have limited social support systems;
• have mental health problems, including higher rates of both depressive symptoms and Post-traumatic Stress Disorder;
• have suffered greater exposure to trauma, including domestic violence in the recent past;
• belong to a non-white racial or ethnic group;
• be unemployed;
• report declining well-being since they had left the system, including problems related to the loss of cash assistance such as "housing problems, trouble paying rent, eviction, phone disconnection, loss of a utility, inability to obtain medical and dental care for themselves and their children, inadequate clothing, lack of food, and a child leaving home."⁽¹⁵⁾

A higher percentage of children receiving welfare assistance are living with relatives other than their parent(s) than before 1996.

In FY 1999, 29 percent of families receiving cash assistance through TANF programs nationwide were "Child-only" cases, meaning that children were living with a "specified relative" rather than with a parent. Under TANF law, the head-of-household is exempt from time-limits and is excluded from work participation rate calculations. This phenomenon is emerging more slowly in Utah than in national statistics, but the percentage of FEP cases designated as "Specified Relative" is growing,

nonetheless. When FEP began in August 1997, 11 percent of the total caseload was so designated; by August 2001, the percentage had nearly doubled to 21 percent.⁽¹⁶⁾

Little is known about child well-being

Despite the facts that the 1996 Welfare Reform Law is one of the most heavily studied public policies and that the majority of TANF recipients are children, little is known about how children have fared under welfare changes. Of the few studies that exist, the Manpower Development Research Corporation (MDRC) found that, of pre-TANF welfare-work programs they considered, younger children appeared to experience some gains in progress at school and improved behavior when their usually single mother was able to increase disposable income. Programs that involved work, but which did not result in increased family income had no measurable positive impact on children. ⁽¹⁷⁾ In a recent review of welfare-to-work program evaluations, Child Trends found evidence of "increased behavior problems and lower academic achievement" among adolescents with parents enrolled in those programs. In the case of these older children, the negative impact was not mitigated by increased income. ⁽¹⁸⁾

2002 Welfare Reform reauthorization activities

The need for reauthorization led to a great deal of discussion and some legislative activity last year.The Administration and Congresspersons have heard thousands of recommendations for change made by hundreds of entities and individuals. In Utah, the Utah Reauthorization Project (UREAP) has been part of this process. The National Congress of American Indians (NCAI) is one of a number of national organizations that has been heavily involved. President Bush issued a proposal containing his views. Some provisions were positive, but family advocates and others voiced serious concerns about provisions restricting rehabilitative and work preparation activities, increasing required hours of work, and failing to fund the child care that would be needed to cover these changes. The U.S. House of Representatives passed House Resolution (HR) 4737 very quickly thereafter, closely following the President's proposal. As is its tradition, the Senate worked more slowly and carefully. Utah's Senator Orrin Hatch, a long-standing member of the Senate Finance Committee, joined a Tri-partisan working group made up of Republicans, Democrats, and one Independent Senator. The Tri-partisan group spent months studying available information and negotiating over various possible changes, producing by June 2002 the Work Opportunity and Responsibility for Kids (WORK) Act. The Senate Finance Committee as a whole debated the bill and passed it. Here are some of the primary provisions of the WORK Act that will affect all families, including the majority of Utah Indian families who do or will receive assistance under the State's FEP (in Utah, only the Navajo Nation is operating a tribal TANF program):

• Freeze TANF block grant funding at $16.5 billion a year [maintains current funding];
• Reauthorize state TANF supplemental grants and increase funding from $319 million a year to $441 million a year [Utah relies on supplemental grants];
• Increase mandatory funding for child care by $5.5 billion over five years [more is needed, but this exceeds the amount in HR 4737 by $4.5 billion];
• Give states the option to use federal TANF funds to serve recent legal immigrants [currently, Utah serves these families with all state dollars];
• Require states to screen and assess TANF recipients for barriers to employment, [this will increase the chances that family needs, including barriers related to child behavior and well-being, are discovered and addressed before their time limits run out];
• Beginning in 2004, require all new parents and caretakers receiving cash assistance to have an Individual Responsibility Plan (IRP) within 60 days of enrollment in TANF [Senator Hatch calls this "Universal Engagement" and the advantage of this is the same as described just above. Additionally, the WORK Act requires that IRPs be reviewed before families can be sanctioned, a step that may help reduce inappropriate sanctions.];
• Increase state TANF work participation rates by 5 percentage points a year (from 55 percent in 2004 to 70 percent in 2007) [this is supported in both the House and Senate and makes it essential that states have the greatest amount of flexibility possible to allow families to participate in activities that match their needs, rather than forcing them into work when they are not ready to succeed];
• Replace the caseload reduction credit with an employment credit [this will reward states financially for helping people find work and increased income, rather than just for getting people off the rolls];
• Cap the employment credit at 20 percent in 2007 (states that meet two Contingency Fund triggers would not be subject to the cap) [work is being done to change this part of the employment credit, since this provision is contrary to the purpose for the employment credit];
• Maintain current work hour requirements, except that 24 hours (instead of the current 20) would be required in current "priority" activities [the House bill increases the hours-per-week requirement to 40];
• Count "rehabilitative" activities, including substance abuse treatment, mental health counseling, basic education, and English as a Second Language (ESL), as work for up to three months, and count these activities as work for up to an additional three months when they are combined with work [this will provides states with more flexibility to help families address their barriers];
• Allow vocational education training activities for up to 24 months [this is also an important change to help families get better jobs with higher wages and more stability];
• Provide $200 million a year for "healthy marriage promotion" grants, teen pregnancy reduction, and broad-based income support programs regardless of family structure (domestic violence programs would be allowable activities)[the WORK Act provision allows projects that attempt to reduce stress on families caused by poverty]; and
• Reauthorize Transitional Medical Assistance for five years with new state options to simplify and expand coverage [the House bill only reauthorizes TMA for one year and lacks the options to simplify the way families can maintain eligibility].⁽¹⁹⁾

PRWORA was written and passed with little input from Indian Country and therefore included a number of inequities and deficiencies. Indian organizations including the National Congress of American Indians pushed successfully for a bill that would correct those problems. In response, Senator Max Baucus, then Chair of the Senate Finance Committee, sponsored S. 2484, "American Indian Welfare Reform Act." Many of the provisions of S. 2484 were folded into the WORK Act as the Committee passed the bill on June 24, 2002, including these that would apply to Utah:

• For FY 2003-06, create a "Tribal TANF improvement fund" funded at $75 million to: support tribal capacity grants for the development of tribal human services infrastructure ($35 million), for tribal development grants to provide technical assistance, including peer learning initiatives and tribal TANF feasibility studies ($5 million);
• Provide $37 million a year for new Tribal Employment services program (to replace NEW and Welfare-to-Work grants);
• Set aside $25 million of the TANF Contingency Fund for tribes;
• Require the disregard of months of assistance received by an adult while living in an area in which 20 percent of adult TANF recipients are jobless, but require recipients to comply with program rules [this provision only applies to the Navajo Nation and would need further modification to apply to other Utah Tribes];
• Allow states authority comparable to the authority of Tribal TANF programs in defining work activities for recipients in state TANF programs who live in Indian country areas of high joblessness;
• Require HHS to convene an advisory committee on the status of non-reservation Indians and require the HHS Office of Faith-Based and Community Initiatives to convene an advisory committee of Indians expert in social services and the spiritual aspects of traditional Indian cultures;
• Require a GAO study on the demographics of Indians not residing on reservations, with information about their economic and health status and their access to public benefits; and
• Beginning in FY 2004, provide direct tribal access to Title IV-E foster care funding under the same provisions applying to state IV-E programs. ⁽²⁰⁾

Where are we in 2003?

A number of political considerations, largely relating to the November 2002 Congressional elections, prevented the bill from coming to the Floor of the Senate. That meant that the 1996 law was simply "continued" until this year. Although the bill was not perfect, the WORK Act is a reasonable bill. Some of the provisions may be vulnerable in 2003, due to the change in the make-up of Congress. Provisions that would have required new funding are among those-with a declining economy and tax cuts and war on the horizon, less money may be on the table this year.

Most people expect that, within the next three months, the new 108 ^th Congress will begin the welfare reform reauthorization legislative process again. Once again, the President is expected to release a proposal which, once again, the House will likely embrace in legislation and pass quite quickly. The Senate Finance Committee is thought most likely to rework the WORK Act, seeking to make some modifications on the more controversial points. Since the Republicans now hold a slim majority in the Senate, it is expected that the new version of the WORK Act will be somewhat more conservative, but that many of the original provisions will be retained. Once the bill passes the Senate, a Joint Conference Committee (made up of key Senators and Representatives) will negotiate over points of difference between the Senate and House bills to produce the legislation that goes to the President for his signature.

There is still an opportunity to make the welfare system work better for families in a number of ways. There is an opportunity to make changes that will help all families, including Indian families served by state TANF programs like most in Utah. There is an opportunity to improve provisions for Indian Tribes that are operating their own versions of the new federal welfare program or those that may wish to. These opportunities require action by those who wish to make these changes through the legislative process-by working with others who seek the same changes and by making views and information known to members of Congress.

Here in Utah, we have a good chance of making a difference in these matters. Utah's Senator Orrin Hatch is a key player in welfare reform reauthorization. For nearly two years, the Utah Reauthorization Project (UREAP) has been working with Senator Hatch and has found him willing to support some very positive changes. Senator Bob Bennett, quite receptive to information in recent months and in close contact with Senator Hatch, is now in a leadership position as the Assistant Majority Whip. Other organizations are working, as well. Time is short, though. We must work fast.

Downloadable copies of the Utah studies mentioned in this paper can be found at www.cppa.utah.edu/wri/ and www.socwk.utah.edu/sri/index.html.

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1. Jodie Levin-Epstein, ed., CLASP Update, Washington, D.C.: Center for Social Policy and Law, January 2002. Caseload figures for Utah are from monthly data sheets issued by the Social Research Institute, Graduate School of Social Work, University of Utah, "Characteristics of Participants Receiving Financial Assistance," 1993-2002.

2. Greg J. Duncan and P. Lindsay Chase-Lansdale, "Welfare Reform and Children's Well-Being," in The New World of Welfare.

3. Ron Haskins, "Effects of Welfare Reform on Family Income and Poverty," Ibid.

4. Utah-specific research suggests that factors such as race and ethnic background affect employment outcomes, as do the shortage of intervention services in rural areas. Mary Jane Taylor, "Race and Regional Unemployment as Predictors of Exit from AFDC," Journal of Social Service Research, 2000; Shirley A. Weathers and William P. Walsh, Jr., Welfare Reform: The Impact on Native Americans in Utah's Uintah Basin, Center for Public Policy and Administration, University of Utah, February 2001.

5. Shirley A. Weathers and William P. Walsh, Jr., Welfare Reform: The Impact on Native Americans in Utah's Uintah Basin, Phase II , Salt Lake City, Center for Public Policy and Administration, University of Utah, May 2002.

6. Social Research Institute, 1997-2002.

7. Vee Burke, "Welfare Reform: An Issue Overview," Congressional Research Service, The Library of Congress, January 10, 2002.

8. Pamela Loprest, How Are Families That Left Welfare Doing? A Comparison of Early and Recent Welfare Leavers, Washington, D.C., The Urban Institute, April 2001.

9. Center for Law and Social Policy, "Comments to the U.S. Department of Health and Human Services Regarding the Reauthorization of the Temporary Assistance Program for Needy Families (TANF) Block Grant," November 30, 2001.

10. Andrea Coon, Mcleans Geo-Jaja, and Garth Mangum, From Welfare Poor to Working Poor: Post AFDC/TANF Income in the State of Utah, Salt Lake City: Center for Public Policy and Administration, University of Utah, November 2000.

11. Amanda Smith Barusch and Mary Jane Taylor, Understanding Families with Multiple Barriers to Self-sufficiency, Social Research Institute, Graduate School of Social Work, University of Utah, February 1999. Findings in this study are consistent with a research summary, Eileen P. Sweeney, "Recent Studies Indicate that Many Parents Who Are Current of Former Welfare Recipients Have Disabilities or Other Medical Conditions," Center on Budget and Policy Priorities, Washington, D.C. February 29, 2000.

12. Around 30 percent received extensions for medical reasons, three percent because of a medical problem of a dependent, 1 percent because of domestic violence, and 10 percent for other reasons of hardship (extension definitions have been revised since then to be more specific). Information from DWS, January 2000 and the DWS Annual Report, 2001.

13. Social Research Institute, 2000-2002.

14. Ibid.

15. Mary Jane Taylor, Amanda Smith Barusch, and Mary Beth Vogel, Multiple Impacts of Welfare Reform in Utah: Experiences of Former Long-term Welfare Recipients, Social Research Institute, Graduate School of Social Work, University of Utah, June 30, 2000.

16. Social Research Institute, 1997-2001.

17. Ron Haskins and Wendell Primus, "Welfare Reform and Poverty," Welfare Reform and Beyond Policy Brief, Brookings Institution, July 2001.

18. Jennifer L. Brooks, Elizabeth C. Hair, and Martha J. Zaslow, Welfare Reform's Impact on Adolescents: Early Warning Signs, Child Trends, July 2001.

19. Congress of American Indians, "NCAI News," June 25, 2002 (Broadcast #02-047)

20. Ibid.