CHN: Senate Finance Committee Approves TANF Reauthorization

On September 10 the Senate Finance Committee approved a TANF reauthorization bill, called PRIDE (Personal Responsibility and Individual Development for Everyone). Its key differences from current law are increased work requirements, funding for marriage promotion and fatherhood programs, and improvements in distributing child support to families. The proposal provides just $1 billion additional child care funding over the next five years, although it is expected that Senator Snowe will offer an amendment when the bill goes to the floor to increase that amount. In addition the bill includes a “superwaiver” provision that would give up to ten states authority to waive federal laws to coordinate TANF, the Social Services Block Grant and child care programs.

The added work hours and high participation requirements of PRIDE restrict state flexibility while ignoring the problems of rising unemployment and state budget crises. Although the Senate measure is an improvement over the House bill, the bill largely misses the opportunity to promote successful approaches that support work and help lift families out of poverty. The $1 billion of additional child care is much less than the $5.5 billion proposed by the Senate Finance Committee last year and falls far short of the need that has grown since last year because of state child care cutbacks. However, there are some important positive elements in the bill, such as improvements to distribute more child support collections to families and provisions allowing the care of dependents with disabilities to satisfy the work requirement.

Next steps:
It is unlikely the bill will go to the Senate floor for debate before October. In the weeks before the bill reaches the floor, Senators will be developing amendments and negotiating for further changes. Advocates should use this critical time to continue to press for improvements that will help families with children to find and keep jobs that will lift them above poverty, and to protect those families when work is not possible. During the mark-up, Senator Grassley promised to work with a number of members to include some of their suggestions in the bill that goes to the floor, and advocates should make sure the best possible version is included. Among the changes Senator Grassley promised to adopt is a provision to allow states to provide health coverage to legal immigrant pregnant women and children (ICHIA); funding for a business links / transitional jobs programs to help parents find and keep jobs; and improvements to the employment credit.

Senate Finance Committee Bill Changes from Current Law:

Work Requirements:
The bill approved by the Senate Finance Committee increases the amount of work required of parents in order for states to get full credit for their participation, but provides no additional funding for extra hours of activities. States trying to implement these proposals are likely to increase the hours parents must work at a time of rising unemployment. Families may be expected to find more hours of paid or unpaid work with little help from the state; if they cannot fill the required hours, they will lose assistance.

* Hours required to meet core work requirement: The core work requirement (hours of work most narrowly defined) is increased to 24 hours per week – the same as the House bill. Current law sets the core requirement at 20 hours.

* Total hours required: States receive full credit when a single parent engages in work activities 34 or more hours per week. The House bill gives full credit for participation at 37 hours per week. Current law gives credit for 30 hours. The Senate bill requires two-parent families to work 39 hours to receive full credit or 55 hours per week if they receive subsidized child care.

* Partial credit and extra credit: The Senate Finance outline gives states partial credit when individuals work at least 20 hours a week and extra credit when they work more than 34 hours per week. The House bill gives states less generous partial credit starting at 24 hours, and less generous extra credit starting at 38 hours. Current law provides all or nothing credit – states get no credit if people work fewer than 30 hours, and no extra credit if they work more. The formula providing partial credit can help states to meet participation rates, but states may still feel pressure to increase the hours of work required of families in order to be sure of making the work participation rates.

* Parents with children under 6: Half of all TANF recipients have children under the age of six. The Senate Finance bill gives these parents full credit if they work 24 or more hours per week. Parents with preschool age children working 20 to 23 hours per week can receive partial credit. The current law allows parents with preschool children to satisfy the work requirement by working 20 hours per week; the House bill requires parents with preschool children to work 34 hours or more per week.

* Work participation rate: Both the House and the Senate Finance Committee bills require that states must have 55 percent of their caseload in work activities in 2004; then rising 5 percentage points each year to a maximum of 70 percent in 2008. Current law requires 50 percent of the caseload to participate in work activities. These participation rates may be offset by credits – see below. The higher work participation rate required of two-parent families in current law is eliminated in this draft.

* Employment credit: The Senate Finance Committee bill lets states reduce their required work participation by as much as 40 percentage points in the first year, phasing down to no more than 20 percentage points off the full 70 percent requirement in 2008. The employment credit takes into account people placed into jobs and expenditures on child care and transportation for non-TANF recipients and states could earn extra credit for families with high earnings. The House bill lets states reduce their work participation based on how much the caseload drops from year to year. Current law includes a caseload reduction credit based on caseload declines since 1995.

* What counts as work: The Senate Finance Committee keeps the current law definition of what counts as “core” work activities for the first 24 hours per week. That makes it broader than the House bill, which no longer counts vocational education or job search in the 24 “core” hours. (Current law requires work activities for 20 hours per week.) To fill the remaining 10 or more hours, a much broader range of activities is allowed in both House and Senate versions.

Both the House bill and the Senate bill allow a 3-month period out of 24 months in which a broader array of activities, including substance abuse treatment and literacy activities may satisfy the core requirement. In the Senate Finance Committee bill, states may allow an additional 3 months of rehabilitative services on top of the first three months, when combined with work or job readiness. Six months is an arbitrary and restrictive period, inadequate for many treatment and training programs. More flexibility for states would be appropriate, allowing states to increase the duration of activities that overcome barriers to employment based on an individualized assessment of the family’s needs. The Finance Committee adopted an amendment by Senator Snowe that allows states to count post-secondary education or vocational education as a core work activity for longer than 12 months for up to 10 percent of its caseload.

* Counting care for dependents with disabilities as work: The Senate Finance Committee bill improves current law by allowing a parent caring for a child or adult dependent with a physical or mental impairment to count that care towards the work participation requirement. Impairments must be verified by a medically acceptable clinical or diagnostic technique.

* Sanctions: The Senate Finance Committee bill requires states to conduct a pre-sanction review before reducing a family’s cash assistance grant for failing to meet work or other requirements. The bill leaves out the punitive House proposal to change current law by requiring states to terminate rather than reduce benefits as the penalty for not complying with program rules.

Marriage Promotion:
Both the House and Senate Finance Committee bills include $100 million a year in matching grants to states for marriage promotion. In the Senate bill, states may use TANF funds to meet 50% of the state match; in the House bill states may use TANF to meet 100% of the match. Both bills also include $100 million a year for research and demonstration project and technical assistance, most of which must be spent on marriage promotion.

The Senate Finance Committee bill Includes provisions from the Responsible Fatherhood Act of 2003, which provides $21.5 million a year in grants to up to 10 states for demonstration projects that promote marriage, parenting help, and job preparation. The bill also funds a $5 million per year media campaign to promote responsible fatherhood.

Child Support Improvements:
The Senate Finance Committee bill makes important improvements in child support collection and distribution. The improvements will allow states to distribute more of the child support collected to families (instead of the funds being kept by state and federal governments). The House bill includes less generous improvements.

Transitional Medicaid:
The bill extends Transitional Medicaid (TMA) for five years and the bill that goes to the floor will include simplifications to improve the program. The House bill extends TMA for just one year.

Transportation Assistance:
The bill provides $25 million per year to improve access to dependable cars to improve access to training and jobs and increase family self-sufficiency.

Grants to Capitalize and Develop Sustainable Social Services:
The bill provides $40 million per year for grants to capitalize and develop the role of self-sustainable social services that will move TANF recipients to work.

Contingency fund:
Both the House and Senate Finance Committee bills make improvements to the contingency fund to make it more accessible for states that need it.

In the Senate bill, up to ten states may obtain waivers of federal laws in order to run demo programs that coordinate and integrate TANF, Social Services Block Grant and child care programs. The provision gives states unprecedented power to eliminate standards and protections in programs serving low-income families. The more expansive House superwaiver provision includes Workforce Investment Act, food stamps, housing, and adult basic education programs.

Provisions Left Unchanged from Current Law:
Much is left unchanged, including time limits, restriction on using federal TANF funds for legal immigrants, basic block grant funding and supplemental funding.

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