Reps. Wally Herger (R-Calif.), chairman of the Human Resources Subcommittee of the Ways and Means Committee, and Buck McKeon (R-Calif.), chairman of the Twenty-first Century Competitiveness Subcommittee of the Education and Workforce Committee, introduced their version of welfare reform legislation April 9 (H.R 4090 and 4092). Their legislation is very similar to President George W. Bush’s proposal unveiled in late February. NACo policy agrees with some aspects of the president’s proposal, but differs in the approach to work requirements and program funding.
The House is moving very quickly. House subcommittees were planning to mark up the legislation the week of April 15, with full committee action expected the following week. The leadership’s goal is to get a bill on the floor of the House in May. The Senate is not moving as quickly, but senators want to get a bill out before the summer recess.
The main difference in the Herger bill and the president’s proposal centers on the Caseload Reduction Credit. Under current law, the percentage of the state caseload that must be working is reduced by one percentage point for every percentage point in caseload reduction since 1995. The president’s proposal would phase out the Caseload Reduction Credit and eventually eliminate it by 2005. The Herger bill would keep the credit but calculate each year’s credit on the caseload reduction for the three preceding years.
The Herger bill would also increase the amount that can be transferred from the Temporary Assistance for Needy families (TANF) block grant to the Child Care Development Fund from the current 30 percent to 50 percent.
This is a change from the president’s proposal, designed to allay some of the criticism that the president’s proposal does not provide enough funding for child care. Under current law, however, TANF can be used for child care, and many counties are already using a significant proportion for child care.
The major criticisms about the president’s proposal center on the increase in participation rates, the increase in the required hours of work, additional resources, and the reduction in the definition of activities that can be counted toward work.
Under the president’s proposal and the House bills, the work requirement increases from 30 to 40 hours a week. Additionally, 70 percent of single and two-parent families would have to participate in work. The participation rate would increase over time until it reaches the 70 percent level. Under current law, 90 percent of two-parent families and 50 percent of one-parent families have to participate in work. Twenty-four of those hours would have to be devoted to very specific work activities, which are more narrowly defined than current law. The proposals do not, however, increase the funding for the child care programs to accommodate the larger number of individuals who would have to participate as well as the longer hours of work.
States would have wide flexibility in designating the activities that would qualify for the remaining 16 hours. This could include substance abuse treatment, which is not currently covered, and which NACo supports. It is important to note, however, that in order to gain credit for the 16 hours, participants would have to do the 24 hours of work.
According to the American Public Human Services Association (APHSA), TANF clients in 27 states do not qualify for cash assistance when they work 40 hours at the minimum wage. In 16 states they lose benefits after 24 hours of work at $7 an hour.
The National Governors’ Association and APHSA recently released the results of a survey on the president’s proposal. When asked about the costs of child care, 30 of the 32 states that responded said costs would increase. According to the survey, the total increase for the 30 states would be $770 million a year.
One area where the president’s proposal and the House bills have made a significant improvement is in the definition of cash assistance. Under their proposals, the child care provided under TANF would not be counted as cash assistance and therefore would not be subjected to the five-year time limit.
The House bill would also treat transportation assistance in the same manner. It would, however, continue to count housing assistance provided under TANF as cash. NACo policy supports excluding housing assistance from the definition of assistance because the high cost of housing is a significant burden in many regions of the country.
The president’s proposal and the Herger bill would restore the 10 percent transfer authority from TANF to the Social Services Block Grant (SSBG), but would not do so immediately. Additionally, both proposals leave SSBG funding at $1.7 billion instead of restoring it to $2.8 billion as authorized in the 1996 welfare reform law. NACo supports immediate restoration of the 10 percent transfer and full funding. SSBG is used to provide many essentials such as child care and in-home services to the elderly.
The McKeon bill adds several quality and early childhood development provisions to the Child Care and Development Block Grant. States would have to provide information on how they coordinate services with Head Start and other early childhood programs. The bill also sets aside 4 percent for quality improvement.
