USCCB - (SDWP) - Welfare Reform

Welfare Reform

February 2001

Background

In 1996, our nation's welfare system was overhauled with the passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA). A new program based on state block grants, the Temporary Assistance to Needy Families (TANF) program, replaced the benefits entitlement approach of the Aid to Families with Dependent Children (AFDC) with a "welfare to work" approach with time limits and sanctions. PRWORA also made major changes affecting other programs such as child care, food stamps, and the eligibility of immigrants for federal, state and local benefits. These programs and the issues they address – national poverty policy and family policy – will take a major place on the national agenda again in 2001 and 2002, because Congress must reauthorize the TANF, Child Care and Development Block Grant (CCDBG) and food stamps programs by October 1, 2002.

Congress will probably begin serious work on the key pieces of reauthorizing legislation in 2002. The debate that will shape that legislation will begin this year, with hearings in as many as eight Congressional committees bringing together panels of governors, advocates, experts, academics and service providers to assess the positive and negative effects of welfare reform and where to go next. Among the key issues will be:

Family Cap: Twenty-three states have exercised the option given them by the 1996 welfare reform law to deny benefits to children born while their family is receiving assistance, a move aimed at stopping poor women from having children. The family cap was opposed by USCC, Catholic Charities USA and many members of Congress. A Rutgers University study of the New Jersey family cap found that the policy increased abortion rates among welfare recipients by 14% and forced into deeper poverty 28,000 children denied benefits because of the family cap. We hope to see efforts to end the family cap, either in TANF reauthorization or in separate legislation. But others may argue that the family cap should instead be extended or even mandated.

Medicaid and Food Stamps Enrollment: A significant number of families who are eligible for Medicaid and food stamps are not receiving these benefits. Enrollment in these programs ceased to be automatic for welfare participants in 1996.

Since then, Medicaid enrollment has dropped, even though "delinking" did not reduce the number of people eligible for Medicaid. One reason for the drop is that a significant number of families stop getting Medicaid when they come off cash assistance, even though they are still eligible. While rates vary by state, one study indicates that, on average, 20% of children and most adults leaving welfare are not on Medicaid.
A Department of Agriculture analysis indicates that two-thirds of the 29% decline in households receiving food stamps between 1994 and 1998 is attributable to food stamp eligible families no longer receiving TANF. According to another study, 65% of former welfare families who left the food stamp program were still eligible for the benefit.

State determination errors, state sanction policies, and unnecessarily burdensome and confusing application processes all contribute to eligible TANF and former TANF families going without health care coverage and food stamp assistance.

Time limits and sanctions: A five-year time limit on TANF assistance to adults and mandatory financial sanctions for non-compliance with program requirements, such as the work activity requirement, were key, and controversial, aspects of the 1996 law. Participants are starting to hit their five-year time limits, forcing states to decide whether and how to continue helping these families with state funds. Sanctions can be severe – 35 states have "full family" sanctions punishing whole families for infractions – and there are indications that they are not equitably enforced. Some sanctioned participants don't understand what they did – or didn't do – to cause the sanction. Congress will almost certainly revisit these issues in the upcoming debate. For example, should states be allowed to "stop the clock" on time limits when participants are fulfilling their work requirement, or are in necessary pre-work programs, such as substance abuse treatment?

Caseloads are declining, but are people finding jobs? The most striking impact of welfare reform has been the unprecedented decline in the number of people receiving cash assistance. In June 2000, 5.8 million people were enrolled in TANF, a 60% decrease in welfare caseloads since the peak enrollment year, 1994. But a serious question for state and federal policy makers is, what happened to the people who came off the welfare rolls? It is estimated that approximately 60% of those who leave welfare have found jobs. What happened to the others? According to some studies, 20% of mothers leaving welfare go through long periods without work, and more are without jobs from time to time. And the jobs that welfare-leavers find generally offer wages below the poverty line, and no health benefits or paid leave time. Many families face serious barriers to employment: mental health and substance abuse problems, lack of skills or education, illiteracy, domestic violence, seriously ill or disabled family members. Congress must grapple with whether and how to help families that simply aren't able to meet the work requirements.

Supports for Working Families: Like other low-income working families, families leaving welfare for work need assistance to help keep them in jobs and off welfare. EITC, child care, food stamps, Medicaid/SCHIP, good child support laws, and housing and transportation assistance are crucial to the success and well-being of low-wage workers and their children. Any debate on welfare and poverty will reexamine such programs.

How TANF is funded: The amount and structure of TANF funding will be a key issue: the total amount of money set aside for block grants; the formula used to allocate that money among the states; the amount of flexibility states will have in spending that money and designing their TANF programs.

USCC Position:

In 1995, in anticipation of the national debate about welfare reform, the Administrative Board of the USCC issued a statement, Moral Principles and Policy Priorities for Welfare Reform, outlining six criteria for reform:

Protects human life and dignity
Strengthens family life
Encourages and rewards work
Preserves a safety net for the vulnerable
Builds Public/Private Partnerships to overcome poverty
Invests in human dignity

Since the passage of the 1996 welfare reform law, these criteria have been used to monitor the effects of its implementation. They continue to be useful as a framework for developing priorities for the upcoming reauthorization debate and development of legislation in 2001-2002.

Action Requested

While it is Congress' responsibility to pass the reauthorization legislation, both federal and state governments play key roles in welfare implementation and both will be important players in the upcoming debate. Let them know you care about the following issues:

Ending the family cap
Making sure TANF leavers have the work supports they need to succeed at work and take care of their families
Time limits and sanctions are tools that, if continued, must be applied fairly and with compassion, especially for the children of parents who are unable to meet TANF work requirements
More must be done at the state level to make sure people who are eligible for Medicaid/SCHIP and food stamps receive those benefits, including outreach efforts and simplification and coordination of application procedures

Resources

Putting Children and Families First
Moral Principles and Policy Priorities for Welfare Reform

Websites:

USCC: usccb.org
CCUSA: catholiccharitiesusa.org

For further information: Kathy Curran (ph) 202.541.3188, kcurran@usccb.org; Mark Gallagher (ph) 202.541.3142, mgallagher@usccb.org