Senate New Dem Welfare Proposal Strikes Balance Between Resources and Results
By Anne Kim
As the Senate prepares to take up welfare reform, the key question confronting members will be how best to build on the successes of the landmark 1996 welfare reform law signed by President Clinton.
Thanks to the stunning progress of work-first welfare reform over the last six years -- as measured by historic declines in child and overall poverty rates, increased earnings by single mothers, and unprecedented drops in the welfare caseload -- few are calling to turn back the clock. Although many of the original critics of welfare reform continue their efforts to weaken work requirements and time limits, the debate is far less polarized than it was in 1996. Reauthorization is about refinements, rather than restructuring.
Although this year's debates may lack the drama of the titanic battles that accompanied passage of the original law, the outcome of this year's reauthorization is no less critical to the continued success of welfare reform.
As the Progressive Policy Institute (PPI) has proposed, Congress should maintain an unrelenting focus on work-first welfare reform by raising work requirements and asking states to get more recipients employed. At the same time, Congress should provide states with enough resources and flexibility to get the job done right by increasing funding for child care, transportation, and other supports to ensure that recipients stay on the job and become self-sufficient.
The Work and Family Act, introduced by nine New Democratic Senators, including DLC Chairman Evan Bayh (D-Ind.), Tom Carper (D-Del.) and Bob Graham (D-Fla.),1is the best and most viable legislation introduced so far to strike this balance between demanding results and providing resources.2
The Bush administration's proposal, embodied in the bill passed by House Republicans this week, fails to back up tough work requirements with adequate additional resources and is too prescriptive in its demands on the states. Proposals from the left, on the other hand, call for substantial additional funding without additional accountability.
Editor's Note:A side-by-side comparison of the Welfare Reform proposals mentioned above is available in PDF format only. (Requires Adobe Acrobat Reader.)
The Bayh-Carper-Graham bill, however, contains numerous provisions that make it the best blueprint for reauthorization of welfare reform legislation this year:
1. A strong focus on "work-first." Bayh-Carper-Graham strengthens the backbone of welfare reform by raising work participation rate requirements to 70 percent over the next five years. It also eliminates a major loophole in the current law, the caseload reduction credit, which enables states to lower their work participation requirements by lowering their caseloads -- but without regard to whether recipients leaving welfare were doing so for jobs. In 2000, the caseload reduction credit succeeded in reducing the work rate requirements in 31 states to zero.
The bill instead replaces the caseload reduction credit with an "employment credit" that allows states to count working welfare "leavers" toward work participation rates for up to 12 months.3 The bill also rewards states with credit toward work participation rates for other efforts to support leavers and working recipients. For example, the bill allows partial credit for part-time workers and recipients enrolled in higher education. To prevent exceptions from swallowing the rule, however, the bill prevents these credits from lowering a state's effective work rate requirement by more than 15 percent.
Like the president's proposal, the bill demands from recipients a full-time workweek. Unlike the president's plan, however, the 40-hour weekly work requirement in the Bayh-Carper-Graham legislation provides both states and recipients with ample flexibility:
- The weekly work requirement is tied to increases in child care funding provided for in the bill; the new standards will not be triggered without these additional funds.
- Recipients considered to be working "full time" by their employers will automatically satisfy the workweek requirement.
- The full-time workweek requirement will not apply to single parents with children under six; these recipients will instead need to meet current law requirements for a 20-hour week.
- States will receive pro rata credit for recipients working at least 24 hours a week in "core" work activities (but less than 40 hours a week overall) and bonus credit for recipients working at least 24 hours a week in core activities (and at least 40 hours a week overall).
These features ensure that states are not forced to adhere to a one-size-fits-all-recipients program, such as the president's relatively rigid "24/16" scheme. It instead imposes a flexible and realistic framework that takes into account the variety of welfare-to-work programs now run by the states and the disparate needs and capabilities of recipients.
2. Provides resources and flexibility for both career advancement initiatives and placement of the "hard-to-serve." "Work-first" is unquestionably the best approach for moving recipients from dependency into self-sufficiency. Many recipients, however, are not job-ready, and the Bayh-Carper-Graham proposal tempers tough demands for work with new funding and flexibility for so-called hard-to-serve recipients.
Unlike the president's plan, which provides no new money for programs targeted toward recipients with multiple barriers to employment, the Bayh-Carper-Graham bill provides $25 million a year in competitive grants for "transitional jobs" programs. Transitional jobs, which combine on-the-job training and education, work supports, and other services aimed at reducing obstacles to employment, have proven very effective in a number of states. The grants proposed in the bill will help broaden their use nationwide.
Moreover, the bill provides states with the flexibility to assist recipients who face severe obstacles, such as drug addiction or depression, and who need to be engaged in counseling, rehabilitation, or other barrier reduction activities full-time. Rather than defining these activities as "work," the bill grants these recipients a three-month grace period from being subject to work requirements.
The Bayh-Carper-Graham proposal also provides services for recipients at the other end of the welfare-to-work continuum -- namely, recipients and leavers who have made a successful transition into work and are seeking career advancement. By itself, low-wage work is not enough to lift working recipients and leavers out of poverty; self-sufficiency requires not only work experience but job skills acquired through supplementary training and education.
Rather than succumbing to pressure from advocates who want to weaken work requirements in favor of education and training, the Bayh-Carper-Graham bill puts training and education in its proper context -- as a complement to work and not as its substitute. The proposal maintains the limits under current law on the amount of training and education that can count as work (although states may permit a limited percentage of recipients to enroll in education for up to 24 months, provided they are working toward a degree). It also creates a competitive grant program to fund new programs aimed at providing training and education to working recipients and leavers. This initiative envisions partnerships among public and private employers, community colleges, and other private or nonprofit groups to offer "earn and learn" opportunities, such as community college vouchers for working leavers or employer-matched education savings accounts.
3. Expanded funding for critical work supports. To make a successful and long-lasting transition into work, recipients and leavers must have adequate access to basic work supports such as child care, transportation assistance, stable housing, and health insurance. Most important of these supports is child care; lack of access to consistent, quality child care is in fact the single biggest barrier to steady employment for many welfare recipients.
A strong commitment to work-first welfare reform will not succeed without an equally strong commitment to build a comprehensive system of work supports for recipients leaving welfare. Nevertheless -- and despite much pressure to do more--the Republican welfare bill passed by the House includes a bare $2 billion in new money for child care over the next five years.
The Bayh-Carper-Graham bill, however, provides $8 billion in new funding for child care. And unlike the Republican bill, it provides a one-year extension of Transitional Medical Assistance for working leavers who lack health insurance and who otherwise do not qualify for Medicaid because of their earnings.
4. A focus on low-income fathers of children on TANF. While the first round of welfare reform focused principally on bringing single mothers into the workforce, the next stage of reform should cast a wider net to include the fathers of children on TANF as well. Child support can be a critical source of income for poor families, but too many low-income fathers are either unemployed or underemployed and unable to support their children.
Unique among other proposals for TANF reauthorization, the Bayh-Carper-Graham bill includes a variety of provisions aimed at ensuring that fathers of children on welfare can and do pay child support. The bill contains provisions that would streamline child support enforcement and encourage states to "pass through" a bigger portion of their child support collections to families rather than retaining them as reimbursement for the cost of supporting a family on welfare. The proposal also provides new money to support effective programs promoting "responsible fatherhood" and sets aside funding for pilot programs that would require unemployed non-custodial parents to enroll in court-supervised employment programs or face time in jail.
To encourage states to turn some of their attention to men, the bill also permits states to count low-income fathers enrolled in TANF-funded employment programs (and who are paying child support) toward work participation rates. In addition, it eliminates the current law's separate, higher work participation rate for two-parent families, which has discouraged states from providing help to these families.
5. Support for teen pregnancy prevention. While marriage promotion has been high on the TANF reauthorization agenda for both the president and Congressional Republicans, Democrats have been focusing on a more realistic goal: preventing teen pregnancies and out-of-wedlock births. Despite overwhelming evidence that children fare best in healthy, two-parent families, it is far from certain that government can really succeed at leading low-income couples to the altar. Moreover, research shows that marrying out of poverty is not a viable option for many poor single mothers; single mothers are less likely to marry than other women, and their marriages are less likely to last.
Teen pregnancy prevention, on the other hand, strikes at a root cause of dependency; teen moms are overwhelmingly at risk of going on welfare, and in fact four out of five of them do. Prevention programs can stop the cycle before it starts. And while no evidence supports the effectiveness of marriage promotion programs, a growing body of research is finding that teen pregnancy prevention programs really work.
The Bayh-Carper-Graham bill demonstrates a strong commitment to teen pregnancy prevention: It sets a national goal of reducing teen pregnancy by 25 percent over the next decade, provides new funding for effective programs, and establishes a national clearinghouse to provide states with information on best practices.
6. Restoration of benefits to legal immigrants. The Bayh-Carper-Graham legislation makes great strides toward correcting the last remaining flaw of the 1996 law, which is the denial of federal benefits to legal immigrants. These provisions, included as a concession to right-wing Republicans during the 1996 debate, have unfortunately survived in the Republican bill passed by the House last week and threaten to become a point of contention for both parties.
Congress should accept the compromise forged in the Bayh-Carper-Graham legislation, which provides states with the options of offering TANF-funded assistance and services to legal immigrant families and Medicaid coverage to legal immigrant children and pregnant women. This proposal has bipartisan appeal: It maximizes the flexibility of state response toward legal immigrants while at the same time averting the need for massive infusions of additional funding.
Conclusion
The Bayh-Carper-Graham legislation provides the best blueprint for a bipartisan deal on welfare reform. It balances tough new demands on work with more resources for work supports and plenty of state flexibility. It also offers a sensible compromise on the extension of benefits to legal immigrants and puts strong emphasis on promoting the formation of two-parent families. More than any other proposal currently on the table, the Bayh-Carper-Graham bill will give states, recipients, and leavers the best chance of continuing the progress of welfare reform.
Endnotes
1. Other original cosponsors of this legislation are Sens. Hillary Rodham Clinton (D-NY), Zell Miller (D-Ga.), Jean Carnahan (D-Mo)., Ben Nelson (D-Neb.) and Bill Nelson (D-Fla.).
2. The so-called "tri-partisan" proposal authored by Senate Finance Committee members Sens. John Breaux (D-La.), Olympia Snowe (R-Me), and others also follows this broad framework in many respects. As of this writing, however, specific legislation had not yet been introduced. The Democratic substitute to the bill put forward by House Republicans also included several provisions inserted by House New Democrats, such as tougher work participation rates and additional resources for states.
3. Although the president's original plan proposed a similar credit -- albeit limited to only three months -- the bill passed by the House continues to contain the flawed caseload reduction credit.
Anne Kim is the director of PPI's Work, Family & Community Project