Human Needs Report Article

The Human Needs Report is the Coalition on Human Needs' newsletter on national policy issues affecting low-income and vulnerable populations. It is published every other week while Congress is in session.

Bipartisan TANF Bill Passes Senate Finance Committee (3/11/05)

All but one of the Senate Finance Committee members present* voted to approve the PRIDE bill (Personal Responsibility and Individual Development for Everyone) at the Committee's March 9 mark-up meeting. The bill would reauthorize Temporary Assistance for Needy Families (TANF) and the Child Care and Development Block Grant through fiscal year 2010. It is most likely to reach the Senate floor sometime after the beginning of April. In the interim, Congress will have to pass another TANF extension, since the law is due to expire again at the end of March.

The brief debate at the mark-up was notable for the generally cooperative spirit among senators, and for a passionate defense of new child care funding included in the bill. The bill adds $6 billion in new child care funds compared with current law. Although he voted for the PRIDE bill, Senator Santorum (R-PA) was unenthusiastic about the additional child care funding, saying that child care is a “Washington-based issue,” that it was “not out in the states and communities.” That dismissal prompted strong defenses of the need for child care by Senators Hatch, Lincoln, Grassley and Snowe. Senator Hatch (R-UT) recognized the large number of single mothers raising children and said that it is not possible to increase work requirements without more child care. He said adding child care funding is “the right thing to do, the conservative thing to do.” Senator Lincoln (D-AR) identified with other parents whose work demands made child care a necessity. Chairman Grassley (R-IA) noted increased funding for child care is needed to compensate for increased costs of care due to inflation and for the increase in work requirements.

The discussion of child care funding was also marked by concern about one of the offsets found from the Earned Income Tax Credit, which would appear to deny the EITC to certain immigrant families (see below). Chairman Grassley (R-IA) pledged to see if redrafting could avoid loss of the EITC by those immigrants who are currently receiving it. Senator Bingaman (D-NM) announced that he would offer an amendment on the floor to replace that offset with revenues from reducing tax avoidance by corporations and individuals with overseas income.

Among the key provisions in PRIDE:

•  An increase in the required work hours , to 34 per week for parents with children older than 6, and to 24 per week for parents with children younger than 6. States receive partial credit for adults working fewer hours and extra credit for more than 34 hours of work per week. (Under current law, states either receive full credit or nothing.)

•  More activities counting towards the work requirement: for the first 24 hours of work per week, an important improvement in work activities is included. In addition to paid or unpaid employment, job search, and limited amounts of vocational training, PRIDE allows up to 6 months out of 24 for literacy training and rehabilitation services for substance abuse or disabilities, with the possibility of extending rehab services beyond six months to overcome work barriers. Postsecondary education may count for 3 months out of 24 for the first 24 hours of work per week. In addition, PRIDE includes the Parents as Scholars program, for up to 10 percent of the TANF caseload to engage in postsecondary education for longer periods.

•  More child care funding: the bill includes $6 billion more than current law in mandatory child care funds over 5 years. The Committee paid for some of the child care increase with modifications to the Earned Income Tax Credit and Child Tax Credit. Although some of the changes closed loopholes allowing people with higher incomes to claim these credits, one controversial change would bar certain low-income families with one or more family members who are immigrants from claiming the EITC.

•  Increase for SSBG: The Social Services Block Grant is increased by $1 billion over 5 years, paid for SSI pre-effectuation reviews.

•  Increased funds for marriage promotion: $1 billion in federal funds over 5 years, of which $500 million is for matching grants to states and $500 million is for research and demonstration projects related to marriage. Certain domestic violence and privacy protections have been included.

•  Responsible Fatherhood funding: $100 million over 5 years is provided in mandatory funding for state demonstration projects plus $150 million over 5 years in national demonstrations.

•  The work participation rate required of states rises gradually to 70 percent (from the current 50 percent). This rate can be reduced by a new employment credit; that is, states get credit when adults in families leaving TANF find work; the state gets extra credit when jobs pay above a certain minimum. Current law gives states credit for caseload reduction, whether or not employment is achieved. States that fail to meet the work participation rates will not incur financial penalties if they show a 5 percentage point improvement in work rates.

•  Additional grants to states: The PRIDE bill includes $200 million over 5 years for capitalizing and developing social services programs that serve TANF recipients; $125 million for grants for low-income car ownership; $1 billion for transitional jobs and business links programs for job development; and $5 million over 5 years for a national teen pregnancy prevention resource center.

•  Child support improvements: These provisions allow more child support dollars to go to families rather than being retained by government and provide additional enforcement tools.

•  Transitional Medical Assistance: Families leaving TANF will be eligible for continuing Medicaid for 12 months with a state option to continue coverage for an additional year.

•  Tribal TANF: PRIDE increases financial support to tribes operating their own TANF programs.

A number of amendments are expected to be offered on the floor as PRIDE moves forward. Senator Bingaman, in addition to his amendment to change the offset for child care, will offer amendments to allow states to continue operating their TANF programs under waiver authority (co-sponsored with Senator Wyden (D-OR)), and to clarify that state and local governments are allowed to use their own funds to provide health services to immigrants. Senator Smith (R-OR) is expected to offer an amendment giving states the option to count individuals receiving rehabilitative services towards the work participation rate, if needed, beyond six months. Senator Baucus (D-MT) said that he would offer an amendment related to abstinence only programs. Senator Baucus and many other co-sponsors filed an amendment to include the Immigrant Children's Health Improvement Act (ICHIA) in PRIDE, giving states the option to cover eligible legal immigrant pregnant women and children under Medicaid and SCHIP. It was not included.