This response to the Administration’s welfare reauthorization proposal is informed primarily by the Faces of Change study, research the Alliance has undertaken since 1999 on the impact of welfare reform. In addition to responding to specific proposals, we offer a set of additional recommendations, where needed, that are relevant to topics raised in the proposal.

The three provisions listed below in the current proposal, we believe, promote greater flexibility and aid states’ ability to provide needed supports to transitioning and low-income families and we, therefore, support them.

• "Rainy day funds" designation will help states plan for economic downturns
  
• Increasing flexibility of carried-over funds allows states to use these funds for a variety of worker supports rather than only for cash assistance

There are other provisions in the current proposal which we believe will have a deleterious impact on the ability of states to respond to the needs of families served under TANF

• Maintaining current levels of the TANF block grant.

While this proposal is certainly better than reducing the block grant as some in Congress have proposed, maintaining the block grant at the current level over the next five years would in essence amount to a reduction in the federal contribution over time and limit the ability of states to promote the range of transitional services needed by TANF recipients. Given the current economic downturn, and the potential for regional and sectoral contractions of the economy in the future, it is important for effective funding levels to remain steady. Thus we support indexing the TANF block grant for inflation to ensure states will not see funding levels drop over time.

• The Maintenance of Effort (MOE) requirement falls to 75% for states that achieve mandated work participation rates.

We believe MOE levels should be maintained at 80% and only lowered if a state is able to show a set of positive outcomes associated with their TANF program. Rather than rely solely on meeting work participation levels as the current proposal advocates, a broader measure of welfare reform success should be used which would include showing a reduction in poverty among families who have left the rolls, a close matching between eligibility and use of worker supports in TANF and related programs, and other family health outcomes such as child well-being. States that meet and exceed these measures would be allowed to reduce MOE funding to 75%; states that do not meet these outcomes should have to increase their MOE levels to 85% or higher until state outcomes improve.

There are a number of issues that should be addressed in reformulating the federal-state partnership that the current proposal does not address. Given the emphasis on increased participation and work requirements, it is surprising there is so little devoted to child care and transitional supports in the proposal. We propose several specific improvements below.

• Increase childcare funding beyond proposed levels.

The current proposal does not increase funding levels. Currently, according to the Children’s Defense Fund (2001), only 12% of eligible children are receiving childcare assistance. Funding levels need to be increased to meet the current demand. Beyond this, funding levels will need to grow to meet the increased demand as many current TANF recipients reach time limits on cash assistance, and as a result of the potentially higher work participation levels outlined in the current proposal.

• Create a seamless system of child care for low-income families.

Specific steps should be taken within the administration of subsidized child care to reduce gaps in access, including:

• coordinating and streamlining the administration of TANF child care and subsidized care for the working poor (i.e., CCDF)
• restoring the federal guarantee to transitional child care for parents leaving welfare for work
• mandating or creating incentives to encourage states to raise income-eligibility levels to 85 percent of the state median income and limit co-payments to 10 percent of a family’s income

In order to expand the supply of subsidized child care, capital investments must be made. Resources targeted at facility construction and improvement would create more centers in close proximity to low-income communities and increase the number of subsidized slots available. Establishing quality day care also requires a dedicated staff, trained in early childhood education. The average food preparation worker earns more than the average child care provider. Offering grants and salary incentives for center and family day care providers who seek training and remain on the job encourages individuals to enter and remain in the child care profession.

• Diversion practices operating in most states should be examined to ensure that needy individuals are not turned away from TANF and other benefits. Sanction policies should be reviewed to ensure that they are applied fairly and are not punishing those who have barriers that limit their participation.

• Non profit and charitable organizations should be included as partners in improving the welfare system and providing services to this population.
  

This section of the proposal spells out what are the most dramatic changes to the current law.

• We support the proposal to count participation in a substance abuse program for up to three months as fulfilling the work requirement.

• Several proposed changes in this section, such as the 60 day universal engagement requirement which eliminates the 24 month engagement requirement; the 40 hour/week participation requirement, up from 30 for single parents; the 24 hour/week employment requirement; and the state participation rate increase to 70% by 2007, should not be implemented.

These changes will create a number of negative consequences. First, while this TANF proposal purports to provide states "full discretion to define and design appropriate activities," these newly proposed participation requirements would severely limit the ability of states to promote training and educational activities for TANF participants. The 24-month engagement requirement was one way states could allow recipients to participate in associate degree programs without being penalized.

Similarly, the increased percentage of caseloads that must meet these new requirements (70% by 2007) will create an undue burden on states, particularly given the high level of services needed by remaining caseloads. We feel increasing state participation rates beyond 50% is unrealistic and provides the wrong kind of incentive to states. Based on the Faces of Change study, nearly half the study’s participants were not employed because they suffered multiple barriers such as severe health problems, educational deficits, or were not ready for work. Rather than provide states with the resources and incentives to address the needs of families with multiple barriers and who will need a much longer period of support to make the transition to full-time employment, these new rates create an incentive for states to push TANF recipients into the job market without completing education and needed training to avoid losing part of their federal TANF monies. This change may also lead to screening out potential TANF participants to ensure participation rates are met.

Increasing participation rates to 40 hours per week will create undue hardship for transitioning families and will ultimately be counterproductive. As our research on transitioning workers reveals, most families lack a number of the needed supports to manage family and work, such as owning a car, or having a partner to meet the various demands of parenting. Added to this set of challenges, is the frequent number of reviews, conferences, and other requirements of TANF and related supports that participants must meet and that take up considerable time during the week. Even with the current participation levels of 30 hours per week, many TANF participants are unable to manage the competing demands of work, family, and TANF. As a result, some participants have been sanctioned, lost benefits all together, or simply become so discouraged they don’t even attempt to comply or seek assistance. Increasing the required level of participation time will only exacerbate these problems for transitioning families, and will lead to fewer, rather than more, participants moving toward self-sufficiency.

Increasing the weekly participation requirement in work from 20 to 24 hours/week and eliminating several currently allowable activities under the hourly requirement also moves PRWORA in the wrong direction. We are most concerned by removal of vocational training and job readiness assistance as qualifying activities under the 24 hour work requirement. Without making allowances for meeting educational deficits and needed job training, TANF recipients will find the employment options available to them severely limiting.

Maintain time limits and 20% exemption. Given the evidence from the 40% of remaining caseloads nationally, and the likely incidence of welfare leavers returning to assistance, it is critical that TANF assistance be available as a safety net for these needy families. In order to ensure this, the percentage of caseloads exempted should be raised beyond 20%.


Promote Child Well-Being and Healthy Marriages

We strongly support the addition of improving the well-being of children as a core goal and strategy of PRWORA. However, the proposal is quite vague on how child well-being will be defined and promoted. We can suggest several important measures and incentives to promote child well-being which were not addressed.

We are concerned by several proposals related to the promotion of healthy marriages. On the one hand is the appearance that marriage promotion represents the chief element of the Bush proposal to shore up the income of former TANF recipients and low wage workers in general. We feel this shifts the focus away from policy proposals that would have a direct and immediate impact on the income of families, headed by a solo or dual parent/earners such as proposals to increase and expand EITC, minimum wage legislation, and expanded child tax credit. The administration has not indicated their support for such measures thus far. The second concern relates to the issue of efficacy of the $300 million to be spent on marriage promotion, and whether these monies would be better spent on other programs.

• $100 million in matching program funds. These programs, in addition to the concern over program efficacy, will potentially redirect state TANF monies away from other programs that are currently in need of greater efficiency and funding levels to meet demand.

• Requiring states to design efforts to promote marriage. Given the overall level of complexity of current TANF and other support programs, imposing additional program requirements on TANF participants is likely to create further burdens on parents trying to transition off assistance. As the Faces of Change study showed, many TANF participants found it difficult, if not impossible to meet all of the frequent reviews, conferences, recertifications, workshops, etc. In many cases TANF participants were unaware of a required meeting or found the numerous appointments conflicted with meeting family or work obligations. Adding "marriage promotion classes" to the mix of requirements is likely to add another layer of complexity to these families’ lives without any necessary benefit to the participant. These workshops and classes are also likely to be deeply resented by participants as unwarranted intrusions into the lives of poor people. While TANF participants should have access to counseling and other support services, these should be voluntary programs.

• We are also concerned that the requirement of states to provide numerical performance goals and annual reporting of state achievements on marriage promotion may potentially punish states for outcomes that are independent of their efforts. Divorce and unwed parenthood are connected to a complex set of determinants and are worldwide trends of modern society. Holding states accountable for numerical goals in marriage promotion before it is clear which program or policy, if any, might promote such an outcome, is simply bad policy, and threatens to hurt both families and states.
  

Encourage Abstinence and Prevent Teen Pregnancy

$50 million reauthorization of abstinence education funding per year and the $73 million appropriation for community based abstinence education.

We are concerned by the use of TANF funds for these two programs. We argue that further funding should await the results of the multi-state evaluation of post-96 abstinence efforts due out in 2003. We also believe that abstinence-only programs do not reflect the cross-national research on how best to address unplanned pregnancies and the prevention of STDs. Instead, they reflect a rather narrow ideological consideration which we believe should not be used to influence the design of programs that address such an important public health issue.

Focus on employment achievements.

While we strongly support the need for accountability, we believe the current emphasis on employment achievements is insufficient. States need to have the flexibility to delay employment for participants who have educational deficits or need additional job training. Moreover, employment, by itself, for the vast majority of welfare leavers, has not brought their families out of poverty. In the Faces of Change study, 80% of working adults had incomes just at or below the poverty level. As a result, poverty reduction, not simply employment, should be the TANF program outcome emphasis.

We offer a set of recommendations that make poverty reduction a major goal of PRWORA.

• Federal policy should define a minimum level of assistance states must provide to TANF recipients that allows a family to meet their economic needs. Currently, most state benefit levels hover near or below half of the federal poverty level.

• In the first section of the proposal, the administration reports that a minimum wage job working full-time, year-round, with EITC and other supports is converted to an $8 per hour wage with benefits, amounting to $16,000 annually (p.10). While these supports are clearly critical, they make an unrealistic assumption about past and future employment experiences of working parents in low-wage jobs. Our research in the Faces of Change study found that few welfare leavers were able to work consistently for several reasons: 1) jobs did not offer full time work; 2) chronic health issues of parent and/or child reduced total hours, or led to losing one’s job; 3) other disruptions in daycare arrangements, TANF requirements, regular illnesses, and transportation problems limited total employable hours, and often threatened job sustainability. Thus, while theoretically, a minimum wage job might bring in a higher rate of pay working full-time, year-round with those added government-provided benefits, based on actual family experiences, this rarely occurs at the levels suggested in their proposal.
  
• Encourage States to adopt welfare wage supplements or improve those already in place. A number of states have modified TANF eligibility rules to enable those who work, but do not earn enough to make ends meet to receive supplemental assistance. These benefit calculations, know as Earned Income Disregards (EIDs) provide a strong incentive to work by allowing TANF recipients to keep a portion of earnings before TANF benefits are reduced, and continue benefits until an earnings threshold is reached. The various formulas used by different states should be evaluated and the most effective models should be adopted by all states

In addition to poverty reduction, issues that promote quality and accountability should be developed around child care and TANF cash assistance administration.

• Ensure that formal child care providers are offering safe, high quality care.

To do so requires federal financial support, in addition to state funding. Initiatives to achieve this goal could include:

• providing financial incentives to states with a specific proportion of providers that adhere to standards suggested by professional organizations, such as the National Association for the Education of Young Children. Such awards could be allocated to states through CCDF discretionary funds or TANF performance bonuses.
• establishing federal content requirements and performance monitoring similar to those of the Head Start program.
• providing federal resources for states to establish training and retention initiatives for child care providers.

Quality child care is not only important to children’s health and development, but is necessary to parents’ employment efforts. Parents cannot sustain work if they must take time off to search for better child care or are constantly distracted from work because they are worried about the well-being of their children. Without federal encouragement or mandates to adhere to quality and safety standards, states may compromise on the importance of a safe and stimulating environment for children. This is especially likely in the wake of child care shortages or competing budgetary priorities. For example, Florida has recently decided to repeal the state "Gold Seal" system, a three-tier quality rating system for subsidized child care providers, instead leaving continuation of the program to the discretion of the counties.

• Federal policy should maintain greater oversight in the area of access, quality, and measuring outcomes in the following ways:

• Federal policy should ensure greater access to government benefits. Benefits that support work and supplement income should be as easy to access. Families leaving TANF should be linked with benefits such as health coverage, child care subsidies, food stamps, and transportation for which they are eligible. Families not receiving TANF should be provided with easy access to these benefits. Federal standards should require states to meet basic administrative improvements that have been found to increase access including co-location of offices, shared applications and linked computer systems. Applications should be taken by mail, fax or e-mail to limit frequency of office visits. (Income eligibility can be verified later by the agency through computer checks.) Recertification periods of up to a year should apply, rather than 3 to 6 months, as is the current practice with many benefits. Benefit offices must be open during hours convenient to working recipients. States should be monitored to ensure such guidelines are being met.

• Federal guidelines should ensure a higher level of quality in the local administration of TANF and enhance the role of the TANF caseworker. Federal guidelines are needed to monitor and reward states that improve the quality of state TANF workforces and increase access and efficiency of benefit provision. Borrowing from the Social Security Administration, which can serve as a model of improving access and professional handling of beneficiary needs, federal funds should be used for training workers and to test new approaches.
  

We strongly support the three provisions listed below in the proposal to simplify program rules, increase access, exempt a vehicle, and adjust food stamp provisions to family size.

• Simplify program administration.
• Enable working families to have access to reliable transportation.
• Phase-in a higher standard deduction for larger households.

While these proposals will help to overcome some of the current barriers of the program, the proposals do not go far enough to address the fact that only half of eligible families leaving TANF are receiving food stamps, a finding the Bush administration acknowledges exists in their proposal (p.30). Incentives should be offered to states to try and close the gap between eligibility and food stamp use with yearly performance outcomes established.

We believe that the proposal to end the ban on offering food stamps to immigrants does not go far enough. Their proposal to remove the food stamp ban to immigrants after five years in order to "ensure adequate nutrition among children and other vulnerable immigrant groups" rings hollow (p.3). In order to fully ensure the health of immigrant children and families, the first five years ban on food stamps should be abandoned as well as the first five years ban on TANF, particularly given the fact that noncitizen children have seen an increased inability to meet dietary requirements, a finding acknowledged in the proposal (p.33).

Facilitate Program Integration

We support the efforts to reduce the complexity of TANF and related support programs, and increase access to benefits. We believe in many areas there needs to be greater standardization in terms of minimum standards in assistance levels, quality, access, etc. Thus waivers must not granted that would reduce or limit enforcement of these standards.