Welfare Reform Reauthorization in 2003: A Utah Business Concern

Current, key discussion issues in the Senate Finance Committee

The U.S. House of Representatives has passed HR 4 "The Personal Responsibility, Work, and Family Promotion Act of 2003" to reauthorize the 1996 welfare reform law and the Senate Finance Committee is working on its version. Committee Chairman Charles Grassley has released a Proposal that has resulted in some controversy. Sticking points are still being negotiated in hopes that a Committee bill can pass. The following are issues of particular concern to employers.

1) The Grassley Proposal includes no increase in funding for child care, despite the fact that required hours of participation per week are to be increased from 30 in the current law to 40, and the percentage of welfare parents who work is to be increased from 50 percent of the caseload to 70 percent (in increments of 5 percentage points per year).

• To be productive on the job, working parents need to know that their children are safe and receiving good care.

• Already, there is not enough funding to cover the needs of all welfare recipients who are working, let alone the children of working parents who have left welfare. An increase in both hours and the participation rate will exaggerate this funding shortfall.

• The Senate Finance Committee determined last year that $5.5 billion would be needed-just to increase participation rates without any increase in required weekly hours of participation.

• Over the years, Utah's Senator Hatch has been a leader in the U.S. Congress on the low-income child care funding issue. Last year he supported the $5.5 billion increase in the Committee bill.

Senator Hatch's leadership is needed at this time to ensure that at least $5.5 billion is in any bill that comes out of the Senate Finance Committee.

2) If employers are to hire welfare recipients, those individuals must meet their increasing need for skilled workers, yet the House Bill eliminates vocational education and training as a core activity and the Grassley Proposal reduces allowable months from 12 to three.

• Utah was one of the first states to recognize the value of providing longer-term education and training for jobs in demand to welfare recipients with the ability to benefit.

• The flexibility in the 1996 welfare law has allowed qualified Utah welfare recipients to receive up to 24 months of education and training, thereby creating a better prepared labor pool and making it possible for TANF recipients to compete for better jobs.

• HR 4 and the Grassley Proposal are entirely counterproductive in their reduction of months from the current law and will force Utah to end a policy that has worked.

Senator Hatch's past efforts to increase the allowable months of education and training to 24 months need the support of the business community so that he can accomplish the same enhancement this year. It is essential that he oppose efforts, as in HR 4, to further limit vocational education.

3) The House Bill and Grassley Proposal increase the work week for welfare recipients beyond the current 30 hours. This will disadvantage them in ways that we anticipate will reduce their effectiveness on the job.

• Increasingly, a broad range of employers elect to hire people for fewer than 40 hours per week.

• If employees who are enrolled in TANF are required to perform additional hours of some other allowable activity after finishing their workday, they must juggle child care arrangements, transportation, and those additional requirements, challenges that are likely to reduce their ability to focus on their work and make them less attractive hires.

• Requiring current and recent welfare recipients, often already facing special challenges, to engage in activities for more hours per week than the majority of non-TANF employees jeopardizes, rather than supports, their chances to succeed.

Senate legislation should maintain the weekly hours of participation requirements in the current law (30 hours for parents with children over six; 20 hours with children under six) in order to enhance the chances that those making a sincere effort can succeed and move forward towards self-sufficiency.

4) In a real way, barrier removal supports and assistance are as helpful to employers as they are to welfare recipient employees. Yet the Grassley Proposal limits interventive activities to three months.

• Many welfare parents suffer from treatable mental health and substance abuse problems, have gaps in their educational and work skills, have physical disabilities, and may be dealing with behavioral problems or disabilities of their children.

• Unsupported, employee barriers can disrupt primary business objectives and workers become liabilities.

• If employers are to continue to play a role in providing employment to welfare recipients, they need to know that policies allow them to get full access to the amount and type of interventions they need to progress and cope in their jobs.

It is important that the Finance Committee bill to reauthorize welfare reform reauthorization increases the role that barrier-removal activities can play in the lives of welfare recipients and addresses the situations faced by families dealing with disabilities both before and after they seek employment.

Conclusion. Public assistance programs like TANF, Medicaid, nutrition programs, and housing assistance play key roles in our state's economy. While they assist families with basic needs and help them become employed, the funds are immediately injected into local economies and thereby support jobs, employers, and employees. The reauthorization of these programs offers an opportunity to respond to our growing understanding of the population that is directly served, as well as their potential role in developing our economy, labor force, and healthier communities. With TANF reauthorization, we have a chance to enhance the role that government can play in encouraging work and self-reliance in a real-world way that does not have the unintended consequence of discouraging employers from hiring welfare recipients.