Issue

The Temporary Assistance to Needy Families Act [TANF], which was enacted in 1996, is scheduled to be reauthorized during the first session of the 107th Congress in 2001. Hearings by the oversight committees [Ways and Means and Education and the Workforce Committees in the House; Finance and Health, Education, Labor and Pension Committees in the Senate] may begin later this year.

While there are some significant gaps in what we know about the impact of the implementation of TANF, we are aware of impacts which cause concern and which may form the basis for developing priorities for our work on the reauthorization. We know that in New Jersey more children were aborted and more than 28,000 children live in deeper poverty because of the Family Cap. We know that, in a booming economy, enrollment in welfare has dropped significantly. At the same time we have seen unexpected drops in Medicaid and food stamp enrollment. Many families have moved off welfare and into jobs. What we don't know is the quality and longevity of those jobs. We know that some families appear to be unable to make the move from welfare to work either because the parent is incapable of work or the needs of the children make work impossible. We don't know how these families will survive under the current time limits.

Family Cap: Despite the opposition of the Catholic Conference, Catholic Charities and many members of Congress, the family cap was included as an option for states in the 1996 welfare reform law. It is aimed at stopping poor women from having children by denying benefits to any child born while their family receives welfare. This option has been implemented in 23 states. It was implemented first by New Jersey, before the 1996 law was passed, as part of their welfare waiver and then continued under the new welfare law. The waiver required that New Jersey collect and analyze data to assess the impact of the family cap. New Jersey commissioned Rutgers University to do the study and the results are now in. According to the Rutgers study, the family cap policy has increased abortion rates by 14% among welfare recipients in the state and resulted in more impoverishment for the 28,000 children born under the family cap and denied benefits. Both Senator Moynihan [D-NY] and Rep. Chris Smith [R-NJ] have introduced bills either to remove this option or require states to monitor its impact.

Enrollment: The most striking finding since the passage of the welfare reform law is the unprecedented decline in enrollment. Enrollment began to decline in 1994. In 29 states, the decline in the first 9 months of FY1998 exceeded 35%, large enough, if sustained for the full year to eliminate the FY1999 all-family [including both single and two-parent families] work participation requirements in more than a third of those states. There are currently 8 million TANF recipients, a 44% decline since 1994. Food stamp enrollment has also declined sharply. In August, 1999 more than 18 million people were enrolled, one-third fewer than the peak number of March 1994 [28 million].

Medicaid and Food Stamps: As TANF caseloads continue to drop, Medicaid enrollment is also declining. Medicaid was "delinked" from TANF by the 1996 law, removing the automatic eligibility for Medicaid for those eligible for cash assistance. This Medicaid caseload decline appears to be an unintended consequence of some state welfare reform policies and practices. In particular, diversion or "welfare avoidance" policies [programs which offer assistance other than cash for temporary short-term needs partly in an effort to avoid the TANF time limits] may be at fault for some of the decline in enrollment of eligible families for Medicaid.

Food stamp caseloads have been declining almost as rapidly as the widely publicized declines in cash assistance. Some of this decreased use of food stamps is due to the strong economy and federal reforms explicitly designed to cut back the Food Stamp Program. But these factors do not fully explain the drop in food stamp use. About two-thirds of families that left the Food Stamp Program were still eligible for foods stamps, according tho the 1997 National Survey of America's Families. Former welfare recipient families left the program at a much higher rate than their nonwelfare counterparts at all levels of income

Jobs: While states report large numbers of former recipients are finding jobs, advocates continue to debate whether they are finding work which pays enough to get them out of poverty. The National Governors' Association reports that 50-60% of former recipients found jobs. Most of these jobs paid between $5.50 and $7.00 per hour, higher than the minimum wage but not enough to raise a family out of poverty. About 20% of families that leave welfare come back within several months, often reporting they did not have enough money for food, rent, utilities or personal needs. Additionally, states are now focused on the hard to place individuals who lack the skills and/or the resources to take advantage of welfare to work programs.

Time Limits: Time limits may be the most important features of the new welfare law. The strong economy and the emphasis on work have reduced the immediate impact of the time limits. States have taken different approaches to the time limits issue. California and New York, which account for a third of the nation's recipients, have said that after five years they will reduce, but not eliminate, a family's cash assistance. Massachusetts and Louisiana, however, are already enforcing their time limits, dropping 3,500 and 4,200 families respectively this year.

New Regulations: One way in which TANF is already being reworked is through the federal regulations which guide the states in its implementation. In April 1999, the Administration for Children and Families [ACF] published a final rule that governs key provisions of the TANF program. The rules took effect on October 1, 1999.

Prompted in part by the surplus of TANF funds [between $2 and 5 billion in 1998], as well as the dramatic decline in caseloads and the growing concern about what happens to families who leave welfare, the new regulations provide more flexibility to the states. The states can now be more creative in the use of funds and are freer to spend more TANF and Maintenance of Effort [MOE] funds to assist the poor. The new rules deal with several areas of importance to advocates by outlining new possibilities for assisting needy families without subjecting them to the consequences of receiving TANF funds.

Definition of assistance: These new regulations distinguish between ongoing assistance which triggers time limits and work requirements and assistance that provides short-term, non-recurrent benefits designed to deal with individual crisis situations.

State Maintenance of Effort: The new rules require that states provide a refundable Earned Income Tax Credit [EITC] in order to count that tax expenditure as part of the state MOE. These refunds do not count as ongoing assistance that would trigger time limits and work requirements. In addition, the new rules remove an impediment enabling states to spend their MOE funds within a "separate state program" which is not subject to many of the TANF requirements

While the new regulations can lead to some positive results, they also open the possibility for this money to get "lost" either entirely or in other programs that do not address the needs of the poor. There also remains the obstacle that some of the earlier provisions which limited state options were written into state law whichwill have to be changed to exercise the flexibility allowed under the new rules.


Our Position:

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

• Protection of 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

During this year, we have an opportunity to establish priorities for the reauthorization of TANF which will strengthen the program in those areas where poor children and families remain vulnerable; eliminate those provisions which do harm to children and families; and to offer new provisions to address unrecognized and unmet needs. In order to do that, USCC, along with CCUSA and CCHD will be gathering information from people working in the states on welfare implementation about the impact the law has had on poor children and families. These individuals can offer the perspective of those working with implementation in the states on the law's strengths and weaknesses and on the particular political climate in their states.

Information will be gathered via e-mail, gatherings in your state in conjunction with other meetings, or through hearings held specifically for this purpose. You will be hearing more about the specifics from USCC Outreach and DSD Office, CCUSA, and CCHD.

Some questions which may be helpful in developing priorities for TANF reauthorization include:

• Is the New Jersey experience with the Family Cap sufficient to establish that the state option should be repealed?
  
• With the TANF emphasis on work, how have recipients who cannot work fared? Should there be provisions, outside the time limits, which address the needs of these families?
  
• Is there too much flexibility in how states use TANF funds? Should there be more limits set on the use of TANF funds by the states?
  
• How have families who have left welfare for work really fared?
  
• Does the current law permit us to know what happens to families when they leave the welfare rolls for work or otherwise?
  
• How well are we preserving the access to Medicaid and Food Stamps for people not receiving cash welfare assistance?

Email us at sdwpmail@usccb.org
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