With the March 31 deadline for reauthorizing Temporary Assistance for Needy Families (TANF) looming, Chairman Wally Herger (R-CA) of the House Ways and Means Subcommittee on Human Resources introduced a bill last week to extend the program through June 30. TANF has been operating on temporary extensions since 2002. Until now, each extension was a straightforward continuation of current law and funding. This time, the extension proposed by Chairman Herger (in H.R. 3848) would drastically increase the work participation rates states must meet to avoid federal penalties. The legislation would phase out a credit used by states to satisfy federal work participation rates. Under current law, states get credit for reducing their TANF caseloads below the levels they were just before TANF’s 1996 enactment. If a state’s caseload dropped 30 percent, the state could knock 30 percentage points off the proportion of the caseload that had to be engaged in work. H.R. 3848 would require states to meet a much more difficult standard – they would have to reduce their caseloads below a much more recent year in order to qualify for the caseload reduction credit. Since the recession began in March 2001 through September 2003 (the most recent data available), caseloads rose in 28 states; only a few states had substantial reductions during that period. In FY 2006, the base year for caseload comparisons would be FY 2001.
According to an analysis released by ranking Democratic House Ways and Means Member Charles Rangel (D-NY), 41 states would be forced to increase their participation rates by FY 2006. Thirteen states plus the District of Columbia would have to more than double their participation rates to avoid penalties. Some states would have to make hasty increases in their work participation this year, even though the fiscal year is nearly half over. The listing of states is shown below.

Chairman Herger’s statement accompanying the bill noted “For all the success of the 1996 welfare reform law, the majority of welfare recipients are still not engaged in work or training – essential experience to achieve independence.” The National Governors’ Association and the General Accounting Office conducted separate surveys of work participation in 2001 and each found that more than half of the caseload was participating in work activities – although not all would meet the narrow federal requirements. In addition, a million working families receive non-cash help from TANF – they are not counted in the participation rates.

No funding increases for child care or welfare-to-work preparation would accompany these dramatically tougher participation rates.

The legislation appears intended to put pressure on the Senate to complete its work on TANF reauthorization, and puts families and states in the middle of differences between the two bodies. Organizations of state officials, several of whom have in the past called for a simple long-term extension of current law, are likely to protest the threat of harsher work participation rates as a way to force changes in the legislation. Many low-income advocacy groups have taken a similar position.

It is possible the bill will move quickly to the floor, although it would have to be taken up by the Rules Committee first and such action has not yet been scheduled.

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