December 2, 1996
August 22, 1996, marked a dramatic new day for America’s welfare programs. On that day President Clinton signed the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 into law, bringing to an end some 30 years of federal government policies that have, despite billions of dollars in effort, done little to alleviate the needs and distress of the poor.
The current welfare system consists of an array of programs that are designed to provide society’s neediest members with cash assistance, food stamps and medical assistance. Though well intentioned, it has evolved into a bureaucratic behemoth that is largely ineffective. In fact, many critics fault the current system for contributing to, rather than solving, the problem of intractable poverty. From now on, the welfare system’s focus will be on expanding opportunities for America’s poor while instilling in them the values of family, work and personal responsibility.
Georgians are a caring and compassionate people who are willing to assist welfare recipients build and maintain strong families and communities. But they also expect welfare recipients to work in exchange for benefits, be held accountable for their own actions and those of their children, and strive their utmost to help themselves. These are values that will serve welfare recipients well as they assume more productive, self-sufficient lives, and will especially benefit their children.
One of the most remarkable features of the new federal law is that it virtually abandons the age-old welfare entitlement system and empowers states to forge their own welfare initiatives. And while it may seem to some as though Congress and the president have dumped the nation’s welfare problems squarely in the laps of states, those who have long argued for less interference by the federal government and fewer federal mandates will find the new system to be a golden opportunity.
While this new day brings with it tremendous opportunities for states, it is accompanied by a sense of urgency, not only for the tens of millions of welfare recipients nationwide who will soon find that the rules have dramatically changed, but also for the state and local leaders and policy makers who must implement the new law.
The purpose of this report is to provide information on the new federal law, an overview of what innovative states, including Georgia, have done under the current system, a description of several states’ plans for managing programs under the block grant system and, finally, Georgia’s plan that was filed with the U.S. Department of Health and Human Services on November 15, 1996.
Prior to the beginning of the 1997 session of the Georgia General Assembly, the Georgia Public Policy Foundation will publish Part II of this analysis, which will contain specific legislative recommendations, including budget implications.
TABLE OF CONTENTS
IV . THE NEW FEDERAL WELFARE ACT
A. The Personal Responsibility and Work Opportunity
Reconciliation Act of 1996
B. Temporary Assistance for Needy Families (TANF)
1. Mandatory Provisions for States
2. Permissive Provisions for States
3. Mandatory Provisions for Recipients / Penalties
C. Child Support
D. Aid to Immigrants
F. Food Stamps
G. Continuation of Reforms Pursuant to Waivers
Appearing in nearly every newspaper and television news broadcast these days, welfare reform has become a hot political topic. In the months leading up to the 1996 elections, both the Republican and Democratic nominees for president claimed responsibility for the recent efforts to overhaul the welfare system, and many congressional candidates vowed to do more if elected.
What is it about our current system for aiding America’s poor that has made it such a controversial subject? And why, after decades of unfulfilled promises by members of Congress to rewrite the rules, do we now have a consensus that the current system is a disaster? These questions are relatively simple to answer, unlike the more perplexing question of what can be done to repair the flawed and failing welfare system.
A. History of Welfare
To get a true picture of what is wrong with the current welfare system, it is helpful to have an understanding of its history. Until the beginning of the Great Depression, welfare spending accounted for a very small portion of the annual federal budget. In response to the huge increase in unemployment during the Depression, the federal government instituted a series of programs aimed at lifting the jobless out of poverty. Although the welfare rolls grew dramatically and welfare spending shot up to a high of $46.6 billion (in constant 1993 dollars), the economy gradually improved and the programs were terminated within a decade. Welfare spending declined and remained at relatively low levels over the next two decades.
In 1964, however, President Lyndon Johnson declared a “War on Poverty” and welfare spending skyrocketed. The most astonishing growth came in the ten-year period from 1965 to 1975, when welfare spending soared from $38.3 billion to $119.4 billion (also in constant 1993 dollars). During the same period, the percentage of the Gross Domestic Product (GDP) allocated to welfare spending went from 1.3 percent to 3.8 percent, an extraordinary increase. Although growth in welfare spending has slowed in recent years, it has risen in every year but two from 1965 to the present.
B. Welfare as an Entitlement
One of the most common criticisms of our welfare system is that it, like many government programs, has grown out of control. But why has welfare spending grown so dramatically? From its inception, welfare has been an entitlement. States were bound by federal law to pay benefits to any person who met federal eligibility requirements. In fiscal year 1995, entitlements or mandatory spending programs totaled $835 billion, nearly 55% of all federal spending, and social welfare programs accounted for 18 of the 19 largest entitlements. While the term “entitlement” may seem benign to casual observers, it places annual expenditures beyond the scope of the congressional appropriations process. Unlike discretionary spending, which is reviewed annually by Congress, these expenditures go virtually unchecked, the budgetary equivalent of “auto-pilot.” Predictably, this lack of annual accountability and control has led to bloated, expensive and often ineffective programs.
Welfare is a good example of entitlement spending gone awry. Work-related social welfare programs, those for which eligibility is based on past work experience, make up 71 percent of all entitlement spending. Most of the criticisms, however, concern means-tested programs–those for which eligibility is based, in large part, on the applicant’s income level. There are 77 different means-tested welfare programs at the federal level alone. Along with those run independently by the states, these programs provide a wide array of services for America’s poor, from cash benefits, food stamps and job training to medical services and housing.
While welfare is actually a conglomeration of federal, state and local programs, Aid to Families with Dependent Children (AFDC) is the largest and most publicized welfare program. Established by the 1935 Social Security Act, the Aid to Dependent Children program provided assistance only for children. The name was changed to AFDC in 1950 when Congress began authorizing aid for needy mothers and caretakers, as well as children. In 1962, the scope was again expanded, permitting states to aid entire families. AFDC has been at the core of public welfare ever since, expanding to cover 14 million recipients (5 million families) by 1993.
C. The Welfare Trap
But the problem is not just excessive spending. At a time when even two-income families often struggle to make ends meet, staggering rates of teen pregnancy and illegitimacy make it nearly impossible for the many single-parent households to do the same. For example, in 1991, 45 percent of fatherless families received some sort of publicly provided cash assistance, while only 7 percent of two-parent families depended on such benefits. Illiteracy and inadequate education are also big contributors to the welfare crisis, given that welfare recipients often do not possess the skills necessary to get and keep many jobs.
And what about the welfare trap–the cycle of dependency that one hears so much about? For years the system did little, if anything, to encourage recipients to transition from welfare to the work force. In fact, many argue that it did just the opposite. By setting rigid eligibility standards, the system ironically made it nearly impossible for a single mother or other recipient to break out of the welfare cycle. As soon as she found a job, often at minimum wage, welfare assistance was frequently terminated, leaving her to pay for housing, food, medical expenses and child care with meager earnings and virtually no savings to cover unanticipated expenses. As a result, recipients were often back on welfare within months of leaving it.
Moreover, by denying benefits to most two-parent families, the system encouraged mothers to raise their children by themselves in welfare-supported households, a situation known to engender long-term intergenerational dependence. Children raised in families that receive welfare assistance are three times more likely than other children to become welfare recipients themselves as adults.
Between 1985 and 1990, an estimated $120 billion was spent on cash assistance, food stamps and Medicaid for teenage mothers. Yet most of them were not even required to finish high school or develop basic skills that would help them obtain gainful employment. Worse yet, many states, although with good intentions, compounded the problem by giving welfare mothers more money for each additional child they had. Making the transition from dependence to self-sufficiency is difficult enough for a single mother with one child, and nearly impossible for a single mother of two or more.
Even with these staggering statistics, the overriding theme resonating from most critics of the current welfare system is one of fairness, not funding. While taxpayers are willing to provide assistance to those in need, they expect responsibility and accountability in return. Requiring less, as the system has done for decades, offends the many middle- and low-income families and mothers who do not receive government assistance, work full time, return to work soon after their children are born, and cannot count on a pay raise if they have additional children.
II. STATE-LEVEL REFORMS THROUGH FEDERAL WAIVERS
Although the problems with the current welfare system are well documented, members of Congress have found it nearly impossible to reach a consensus on how to remedy the situation. In recent years, however, the federal government has granted certain states the authority to devise and implement their own programs aimed at improving their welfare systems.
A. Federal Waivers
After receiving waivers from the federal government, many states pioneered policies and programs that will help shape welfare reform in the years to come. These programs have ranged from rewarding teens for staying in school to creating binding contracts between the state and welfare recipients that require able-bodied adults to work in return for benefits. Wisconsin, Ohio and Michigan have been among the most innovative states, yet many more states, including Georgia, have also done their share of experimenting through waivers.
B. Teen Pregnancy
Among the more notable initiatives, many states have begun to focus on reducing teen pregnancy by requiring teen mothers to live with a parent and attend school. The reasons for this focus are fairly obvious. Teen mothers are much more likely to become dependent on welfare than those who give birth later, and their children are more likely to drop out of school and become welfare dependent themselves.
Some analysts have suggested that Georgia and other states have taken the wrong approach. Surveys have shown that young girls are often not motivated by a desire for independence or money. Instead, teen pregnancy often results from young girls’ desire to have somebody to love–someone who will return their affections. They also fear that they will lose their boyfriends if they do not engage in sex. A clear inference may be drawn that many young girls have babies to satisfy a desire for love and affection that is not being met at home, not to get additional monies. If true, then no state program premised on financial penalties alone will completely address the problem.
C. Use of Charitable Organizations
In some of the more notable initiatives, states have opted to harken back to the days before government-funded welfare programs, when churches, families and charities helped care for society’s neediest members. Michigan, for instance, has contracted with the Salvation Army to operate 120 shelters throughout the state. The Salvation Army provides the needy with two meals, counseling aimed at reducing “behavioral poverty,” and a bed (if necessary), at a cost to the state of $10 per person per day. Mississippi’s “Faith and Families” program pairs welfare recipients with a church of their choice that offers personal and spiritual guidance. Still in its infancy, this program has only placed about 100 AFDC families thus far.
While none of these programs have solved the welfare crisis, it is clear that the reform movement has only just begun. States and the federal government appear much more likely to be innovative in finding real, long-term solutions to helping welfare recipients become self-reliant participants in the economic mainstream. Listed below are some of the more innovative state programs implemented in recent years through the waiver process. These initiatives provide a great deal of information and may be useful guideposts for state programs under the new federal law. (See the additional discussion concerning federal waiver programs under the new law on page 22.) State-Level Reforms Through Federal Waivers
Program / Policy
|Family Investment Program – In 1993, Iowa received a federal waiver to replace AFDC with the Family Investment Program, a binding contract requiring welfare recipients to participate in Iowa’s employment program (Promise Jobs) in exchange for assistance from the state. Those who refuse to sign the contract are put on a Limited Benefit Plan paying reduced benefits for three months followed by a termination of all benefits.||In the past two years, the number of welfare recipients put to work has nearly doubled. Thirty-four percent of Iowa’s welfare recipients now work, more than 10 percent of them full-time.|
|A 1988 law allows welfare recipients to temporarily continue receiving public assistance after they begin earning income, helping them make the transition from welfare to work.Kentucky officials recently announced a Relocation Assistance Program through which they plan to move welfare recipients who cannot find work to areas with better job opportunities.||From 1992 to 1996, the number of welfare recipients in the state dropped from 230,000 to 176,000.|
|The Full Employment Program, begun in 1995, encourages employment by allowing welfare recipients to forego cash benefits and food stamps in exchange for subsidized wages in the private sector. Participants continue to receive transitional Medicaid and day care assistance.||The number of working welfare recipients jumped from 8 percent in November 1995 to 14 percent on August 1, 1996. In addition, the state has closed 13,473 welfare cases as a result of recipients reporting higher earnings. August 1996 marked the 36th consecutive month in which the number of welfare recipients declined.|
|Social Contract – Michigan’s AFDC recipients are expected to either seek work, go to school or perform community service in exchange for cash assistance. Participation is required of all able-bodied recipients and, as of October 1996, those who do not seek work will lose their benefits after four months.
Project Zero – A six-site pilot program aimed at finding jobs for AFDC recipients within one year. Participants are required to attend an orientation program and take classes in reading, writing and math. Welfare recipients are required to report to job agencies every day until they find a job.
In yet another pilot program, Michigan residents are able to obtain Medicaid for one year after leaving welfare. The cost is split between the state and the beneficiaries, with beneficiaries paying $100.81 a month for one parent and any number of children.
|Michigan’s reform efforts began in October 1991 and since that time the work participation rate among Michigan’s AFDC recipients has climbed to more than 30 percent, well above the national average of 12 percent. Welfare rolls are now at their lowest level in two decades.
Michigan’s welfare officials report that 94 percent of those who completed the month-long program found jobs paying at least $5.25 an hour. Their main obstacle, however, has been getting participants to attend classes and keep appointments. Since the program began in August 1996, fewer than half of those referred to job agencies showed up for their first appointment.
There are no results on the effectiveness of this program as Michigan was only recently granted a federal waiver to implement it.
|Participants in Ohio’s workfare program are enrolled in a two-week Job Club and taught to write a resume, interview successfully, dress appropriately and conduct a focused job search.||Though not in effect statewide, one county reports that 50 percent of participants had a job by the end of the two-week course. Those who do not find work immediately are given 90 additional days of job search assistance, with a follow-up evaluation taking place after 60 days.|
|Under a new law, able-bodied recipients may not receive benefits for more than 36 months. Recipients are not eligible for additional cash benefits for children born while the mother is receiving AFDC–cash benefits are replaced with vouchers for baby food and clothing. And those moving into Oklahoma from a state whose benefit levels were lower will continue to receive the amount of assistance they received in the previous state.||No results are available for these programs as they have only recently been implemented.|
|Work, Not Welfare – Begun in July 1993, this program caps benefits to individuals at two years, provides recipients with job training and requires work in exchange for benefits._______________________________________W-2 (Wisconsin Works) – W-2 is a new initiative requiring work from virtually all adult recipients with the exception of mothers with newborn children and the infirm. After their skills have been evaluated, participants are placed into one of four work options, each requiring a total of 40 hours of “work” per week. Program 1 mandates that recipients spend 28 hours per week in “W-2 Transition” and devote an additional 12 hours to education and training programs; Program 2 requires 30 hours of work or community service, plus 10 hours of education and training each week; Program 3 is a 40-hour-per-week trial job; and Program 4 is unsubsidized employment. Child-care and health benefits are provided according to income level. No individual is eligible for benefits after two consecutive years, or a lifetime total of five years.||In the seven-month period ending July 1995, this program resulted in a nearly 39 percent decrease in AFDC rolls in two targeted counties. _____________________________________This program has been run as a pilot program in one Wisconsin county since 1995. Welfare rolls there have been cut in half and welfare payments have dropped from $348,000 to $118,000. Administrative costs, however, have risen statewide from $3.9 million in 1994 to $5.2 million in 1995. Even with this increase, Wisconsin’s welfare budget has been reduced by $68 million a year.
Wisconsin is now in the process of implementing W-2 statewide. This transition is expected to be completed by late 1997.
In recent years, the Georgia Department of Family and Children Services (DFACS) has worked with the Governor and General Assembly in seeking federal waivers to institute changes in its welfare system. Georgia’s focus has been primarily in the area of AFDC, producing several new programs, with mixed results.
A. Work First
Work First reflects the philosophy behind Georgia’s recent efforts to improve its AFDC program. Begun in August 1995, Work First makes getting a job, rather than qualifying for benefits, the first priority for new welfare applicants. Before receiving a benefit check, recipients receive counseling on how to begin a job search and how to tackle problems such as finding adequate child care and transportation, two things that often stand between welfare recipients and the working world.
While it is too early to judge its effectiveness, Work First has had some positive results. For example, in a little more than two months, the Cobb County DFACS office sent 54 AFDC applicants to job interviews. Thirty-six were immediately hired and never entered the welfare rolls. Those who didn’t find work were asked to volunteer with the United Way, Red Cross or the Cobb County DFACS office.
B. The PEACH Program
One of Georgia’s first efforts at getting welfare recipients into the work place began nearly a decade ago. Created by the General Assembly, the Positive Employment and Community Help Program (PEACH) has evolved from what was, in essence, a job training program into a job placement program. It provides education and skills training, on-the-job training and work experience, for which participants may or may not be compensated. The program has grown steadily since its inception in 1987, and is now available to AFDC recipients statewide. In 1995, 37,000 Georgians participated in the PEACH program, of whom 56 percent were placed in jobs. PEACH has resulted in the employment of nearly 34,000 welfare recipients over the past ten years.
PEACH, however, is not without its problems. While participation is supposedly mandatory for all eligible AFDC recipients, there are backlogs of willing participants due to limited staff and resources. Cobb County DFACS alone reports that 225 individuals are currently on their PEACH Program waiting list, with an average wait of approximately 90 days. This problem has not gone unnoticed by the state, which directed $45.1 million in 1995 to provide PEACH participants with additional child care, transportation and program services. Still, DFACS officials have no plans to hire additional personnel but may “redirect” some staff to this effort. PEACH Program Statistics: 1995
|Number of PEACH Participants: 37,000|
|Individuals Employed Through PEACH: 10,276|
|Average Hourly Wage Earned: $5.21|
|Statewide Spending for Peach Services: $45.1 million|
While PEACH is Georgia’s only tested welfare-to-work program, there are several other programs designed to promote responsibility, reduce illegitimacy and break the behavioral cycle of welfare dependency. The “family cap,” for instance, aims to discourage single welfare mothers from having additional children while receiving public assistance–a policy supported by 84 percent of those questioned in a recent survey. Under the “family cap,” any person who has received cash benefits for a period of 24 months (starting January 1, 1994), is no longer eligible for the incremental benefit otherwise available upon the birth of a child–an average of $45 per month. Georgia’s DFACS has already denied additional benefits for 1,454 children born during the first eight months of 1996, and the agency estimates that the policy will result in 10 percent fewer births each year to welfare mothers, for an annual savings of about $12.5 million.
Even with its success to date, the 24-month grace period before the family cap is triggered has come under fire. During that time, a young woman could give birth to one or even two more children. The State of New Jersey, in contrast to Georgia, decreed that parents on welfare would receive no additional payments for children born after the parent joins the welfare rolls. In the first 13 months thereafter, birth rates among women on welfare in New Jersey dropped 11.4 percent.
D. Requiring Teen Parents To Live at Home
More than 4,000 Georgia AFDC recipients are mothers under the age of 18. Since January 1, 1994, teens who have never been married and are either pregnant or have a dependent child have been required to live with a parent, legal guardian or other adult relative. Intended to foster responsibility in teens and their parents, this program has resulted in 381 individuals being sanctioned for noncompliance; another 391 have been granted exceptions to this “live-at-home rule” due to abusive home environments or other unacceptable living conditions.
E. Child Support Enforcement
One area in which Georgia leads most of the nation is that of child support collection. A Georgia mother applying for AFDC benefits must provide the full name and last known address of the child’s biological father. If the mother fails to disclose the information, she may be denied assistance, though the child’s benefits are not affected. Once parental disclosure is obtained, DFACS turns the matter over to the Child Support Enforcement Division to obtain a court order for child support and to collect monies owed by the absent parent.
Child Support Enforcement Division Statistics: 1995
|Parents Ordered To Pay Child Support: 231,640|
|Parents Who Paid Child Support: 41 percent|
|Support Obligations Established: 75,000|
|Child Support Collected: $255.8 million|
In addition to the collection efforts of the Child Support Enforcement Division, a new Georgia law authorizes state licensing entities to deny, suspend or revoke professional, commercial and drivers’ licenses of any individual found not in compliance with a child support order. It is too early, however, to fairly judge the effectiveness of this new law.
F.Georgia’s Problem Areas
While many of Georgia’s programs have produced positive results, a few of its federal waivers have been largely ineffective. A “mandatory work” requirement, for instance, purports to deny benefits to any able-bodied adult (ages 18-60) who either refuses or quits full-time employment. Penalties include a loss of cash assistance for 90 days for the first violation, followed by a six-month suspension for subsequent refusals. But the requirement is undermined by the fact that it only applies to about 5 percent of all AFDC beneficiaries–those who do not have a child under the age of 14. Furthermore, enforcement is virtually nonexistent since recipients must report their own violations. In 1995, only 38 of Georgia’s 139,000 families receiving AFDC benefits were sanctioned for failure to comply with this mandatory work requirement.
Inadequate tracking of welfare recipients and minimal reporting of program results are problems that have plagued Georgia DFACS for many years. Without solid data on existing programs, states cannot accurately gauge which efforts are effective and which are not. Many reasons have been cited for the current situation–the high cost of tracking recipients, the challenge of training thousands of workers to use new high-tech monitoring systems, and the fear that information will fall into the wrong hands. But there can be no justification for allowing tens of millions of dollars to be spent each year on programs for which there is no true measure of effectiveness.
When the president signed the new welfare reform bill into law on August 22, 1996, many state leaders were left scrambling to predict its impact on them. Although many governors had been requesting reform for years, they had apparently resigned themselves to the prospect that such fundamental reform would never materialize. Yet after much political posturing from both sides of the aisle, and two presidential vetoes, the nation finally has real welfare reform–or does it?
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 is a broad, sweeping, eight-part law covering several hundred pages. It addresses everything from child support to food stamps, but its most significant and heralded provisions are directed at the AFDC program, which it replaces with Temporary Assistance for Needy Families (TANF).
The new federal law converts AFDC from an entitlement program to a block grant program, a major change. States will now receive large sums or “blocks” of money to use on state-administered and state-tailored welfare initiatives. The National Governors’ Association and countless policy analysts have long extolled the virtues of block grants because they return responsibility and accountability to the states, empowering them to make their own decisions about how local poverty problems can best be solved. But states will now have to be much more results-oriented in administering their programs; they will no longer have access to unlimited federal funds.
Under the new act, states will receive funding based upon their level of federal welfare allocations in previous years. In addition to this base amount, Georgia and nineteen other states, because of high population growth or their low level of welfare spending, are eligible for $800 million in supplemental grants between 1998 and 2001. The new law also establishes an annual bonus for “high-performing states” and an Illegitimacy Reduction Bonus Fund of $20 million annually for each of five states that achieve the greatest success in reducing out-of-wedlock births, without increasing abortions. Georgia consistently ranks among the nation’s worst in illegitimacy.
B. Temporary Assistance for Needy Families (TANF)
For the first time in 60 years, states will have the authority to decide which of their needy will receive cash assistance. No longer obligated to provide assistance to every resident meeting federal eligibility requirements, states will be permitted to establish their own criteria for determining who will be granted assistance and to what extent. And although Georgia and other states will have much greater freedom in designing welfare programs, the block grant funds will not come completely free of strings. Scattered throughout the act are various provisions, some mandatory and some permissive, that restrict the use of block grant funds, set specific goals for states and establish penalties for states and individuals that fail to comply with its requirements.
Many children of welfare recipients believe that paychecks come from the mailbox rather than the work place. In order to address this unfortunate situation, as well as to help recipients get back on their feet, some states have recently begun requiring public welfare recipients to work for their benefits.
Under the new federal law, what began as a trial program will now be mandated nationwide. Beginning in 1997, states may immediately direct adult welfare recipients to participate in state-defined work activities. Moreover, regardless of state law, work will be mandatory for all able-bodied persons who have received TANF assistance for at least 24 months.
In addition to the work requirement, states will now be required to attain certain minimum levels of work participation among families receiving cash assistance. The federal act lists twelve “work activities” that will allow an individual to be included in a state’s work participation rate calculation, and each state can further refine its definition of eligible “work activities.” In 1997, the minimum participation rate for single-parent households will be 25 percent; the rate will increase by 5 percent each year thereafter, topping out at 50 percent in 2002. States failing to attain the minimum work participation rate will be penalized through a 5 percent grant reduction during the next fiscal year.
Although the act does not distinguish between one- and two-parent households with regard to TANF eligibility, it does provide separate work participation requirements for the two groups. In order to count toward the state’s work participation rate, a person in a single-parent family must “work” an average of 20 hours per week during 1997 and 1998, 25 hours in 1999, and 30 hours in 2000 and each year thereafter. Beginning in 1997, 75 percent of two-parent families must have at least one parent working a minimum of 35 hours per week.
As with most statutory requirements, there are many exemptions from this rule. A single parent with a child under age 6, for example, will be deemed to have met the work participation requirement if engaged in work for an average of 20 hours per week, and a teen head of household can satisfy the work requirement by maintaining satisfactory attendance at a secondary school or its equivalent, or participating in education directly related to employment, for the minimum number of hours per week.
The act also remedies a problem that has plagued Georgia and other states for decades–inadequate monitoring and reporting. States will now be required to submit quarterly reports containing detailed information about each TANF recipient, state expenditures, the number of months each family has received assistance, the work activities performed by each recipient, the number of non-custodial parents participating in work activities, the amount and reason for any sanction or reduction of assistance and, in cases that have been closed, the reason the family left the program. States that fail to submit quarterly reports will suffer a 4 percent reduction in their grant during the next fiscal year.
Described below are some of the more important mandatory provisions of the new federal welfare reform act:
Requirement / Prohibition
Georgia’s Current Regulations
|Sixty-Month Cap||A state may not use any of its grant to provide assistance to a family that includes an adult who has received TANF benefits for 60 months (whether consecutive or not). The clock begins running for this lifetime limit on the date the state program under this act commences.||Georgia imposes no time limit on AFDC assistance.|
|Work Requirement||States may require a parent or caretaker receiving TANF benefits to engage in work (as defined by the state) once that individual is deemed ready to do so. However, individuals must be required to work after having received assistance for 24 months (whether or not consecutive).||Work for Welfare, a 10-county pilot program begun in October 1996, requires able-bodied AFDC recipients who have received cash assistance for 24 of the last 36 months to work 20 hours per month. Non-custodial parents of AFDC children who are at least two months behind in child support payments may also be required to work.The PEACH Program teaches participants job skills and helps them find jobs. Although recently expanded, only 37,000 of 114,000 adult AFDC recipients participated in 1995.|
|Individual Responsibility Plans||States must make an initial assessment of the skills, prior work experience and employability of each adult TANF recipient.||N/A|
|No Assistance for Fugitive Felons||A state may not use any of its grant to assist an individual who is either a fugitive felon or in violation of probation or parole.||N/A|
|No Assistance for Teen Parents Not Living at Home||A state may not use any of its grant to provide cash assistance to an unmarried individual under the age of 18 who has a minor child in his or her care, unless such individual resides in a place maintained by a parent, legal guardian or other adult relative.||Georgia has had a similar provision since January 1994. From its inception, this provision has resulted in lost benefits for only 343 individuals; another 348 teen parents have been granted permission to live in an unsupervised setting.|
|Statutory Rape Education||Each state must administer a program to educate and train both law enforcement officials and educators on statutory rape.||Georgia does not currently operate a statutory rape education program; however, a recently enacted law mandates a 10-year sentence for certain individuals convicted of statutory rape.|
|Mandatory School Attendance||A state may not use any of its grant to provide assistance to an unmarried person under the age of 18 if such person does not participate in educational activities directed toward attaining a high school diploma or its equivalent. Exceptions are made for individuals who have a child under 12 weeks of age and those who have successfully completed high school.||N/A|
|Child Support Enforcement||Each state must certify that it will operate a child support enforcement program in order to be eligible for its grant. States failing to do so may suffer up to a 5 percent reduction in their grant for the next fiscal year.||Georgia’s Office of Child Support Enforcement helps AFDC and non-AFDC custodial parents collect support from absent parents. In 1995, this program established 75,000 support obligations and collected $83 million for AFDC families.|
|Assignment of Support Rights||States must require that persons receiving cash assistance assign to the state any rights to child support. Failure to do so will result in a denial of cash assistance.||N/A|
Although the act has a significant number of mandatory provisions, it provides states a great deal of latitude and flexibility. By establishing a wide array of options, the act encourages states to be creative. In fact, some state leaders have even expressed frustration at the lack of feedback and direction they are getting from federal officials…quite a change from the past.
In one of its more inventive provisions, the act gives states the authority to contract with charitable, religious or private organizations for the administration and provision of program services, and even allows states to provide recipients with vouchers or certificates that are redeemable with such organizations. This appears to be an acknowledgment of the long history and success of many charitable and religious organizations in providing society’s most destitute members with needed services.
The act further allows organizations that are faith-based or religious in nature to accept federally funded vouchers or certificates without “impairing the religious character of such organizations, and without diminishing the religious freedom of beneficiaries of assistance.” Under the old law, programs administered by these groups were required to be non-religious. Now, the only prohibition is that no federal funds may be expended for “sectarian worship, instruction, or proselytization.”
For several years now, some states have been utilizing private organizations to help the needy. One such organization, America Works, has been operating in New York, Connecticut, Ohio and Indiana for more than a decade. A private employment agency, America Works helps welfare recipients find full-time jobs by putting them through a five-day job-search seminar and then scheduling interviews for appropriate positions. But the relationship doesn’t stop there. The biggest challenge America Works faces is ensuring that those they place stay on the job. This often requires numerous visits to the work place to counsel participants, monitor progress and obtain feedback from employers.
America Works earns $5,000 to $5,500 for each welfare recipient it successfully places. But states are not required to pay for this service until the welfare recipient has been on the job for four to six months. If the employment is terminated prior to that time, America Works does not get paid. While critics have argued that $5,000 is too much to spend for an employment agency, the results have been promising. A 1993 study by Ernst & Young found that 85 percent of those placed by America Works have kept their jobs for at least a year. Proponents point out that the initial investment with America Works saves the state much more in the long run by successfully transitioning these welfare recipients into gainful employment and teaching them job skills and social skills that will remain with them for life.
Permissive Provisions – State Options
Option Available to the State
|Work Requirement||States may require parents and caretakers receiving TANF to engage in work any time after that person is deemed able, but are required to mandate work of all able-bodied recipients who have received benefits in excess of 24 months. States are also given the discretion to define work as narrowly as they see fit.|
|Community Service||By September 1997, states must require parents and caretakers who have received cash assistance for two months to participate in community service. States must determine the minimum hours per week required and the tasks that will satisfy this requirement. The governor may elect, however, to opt out of this provision entirely.|
|Exemptions from Work Participation||States may excuse from work any single custodial parent caring for a child under one year of age. Such persons may also be disregarded in determining the states’ work participation rate.|
|Differential Treatment||A state may provide newcomers, during their first 12 months in the state, the benefits they would have received in their former state.|
|Employment Placement Programs||A state may use a portion of its grant to make payments to state-approved public and private job placement agencies that provide employment placement services to individuals who receive cash assistance.|
|Domestic Violence Screening||States may establish and enforce standards and procedures to screen for individuals with a history of domestic violence, refer such persons to counseling, and waive program requirements such as time limits, residency requirements, child support cooperation requirements and family cap provisions in cases where compliance would make it more difficult for individuals to escape domestic violence or unfairly penalize such persons.|
|Denial of Assistancefor Drug-Related Convictions||Any person convicted of a felony involving possession, use or distribution of a controlled substance is no longer eligible for cash assistance or food stamps. The family of such person may also be denied the benefits that individual would have otherwise been entitled to receive. The state may, however, by specific reference in law, opt out of this requirement or limit the period for which the individual and his or her family is denied assistance.States that do not opt out of this provision must require individuals applying for cash assistance or food stamps to state, in writing, whether any member of the household has been convicted of a felony involving the possession, use or distribution of a controlled substance.|
|Electronic Benefit Transfer System||States are encouraged, but not required, to implement an electronic benefit transfer system for providing assistance under the TANF program, and are permitted to use a portion of their grant for that purpose.|
|Individual Development Accounts||States may establish Individual Development Accounts on behalf of persons eligible for TANF benefits for the purpose of enabling welfare recipients to begin saving. Use of such an account must be limited to post-secondary educational expenses, the purchase of a first home, and capitalization of a business.|
Recognizing that previous welfare laws made it virtually impossible for low-income mothers to get assistance unless they were unmarried, Congress has now sought to craft a “family friendly” act. TANF explicitly aims to end dependence on government assistance by promoting both work and marriage, while reducing illegitimacy. In order to attain these goals, TANF includes a wide array of sanctions that may be imposed on individuals who fail to comply with certain requirements. Some penalties are mandatory minimums, with states having permission to levy even harsher sanctions; in other instances, states are given complete discretion in punishing violators. Mandatory Provisions for Welfare Recipients / Penalties
Offense / Violation
|Ensure Children Attend School||States may penalize a custodial adult receiving cash assistance or food stamps for failure to ensure that a minor child in his or her care attends school.||None.||States have complete discretion to impose penalties against such individuals.|
|Failure To Work||Any able-bodied adult TANF recipient who refuses to engage in work will be penalized. Exceptions are made for single custodial parents caring for a child under six years of age, so long as that individual can demonstrate an inability to obtain needed child care.||The amount of assistance otherwise payable to the family will be reduced pro rata for any period in which the individual refuses to work.||States may impose an additional reduction in cash assistance or a complete termination of such assistance, subject to a showing of good cause.|
|Assignment of Rights||States must require that any person applying for assistance assign to the state any rights that any family member may have to child support.||Failure to assign such rights will result in a total denial of TANF benefits.||No options.|
|Establishing Paternity||Any individual who, without good cause, fails to cooperate in establishing paternity or in establishing, modifying or enforcing a child support order must be penalized.||State must deduct at least 25 percent of the assistance that would otherwise be provided to the family.||States may choose to deduct more than 25 percent or to completely deny cash assistance under their programs.|
|Individual Responsibility Plans||States may reduce the assistance otherwise payable to a family if that family includes an individual who fails, without good cause, to comply with an Individual Responsibility Plan.||None||States have complete discretion to withhold any amount of discretion that they deem appropriate.|
|Fraudulent Misrepresentation||Any individual found to have made a fraudulent statement or representation with respect to place of residence in order to receive assistance simultaneously from two or more states shall be denied assistance.||Mandatory denial of cash assistance for 10 years beginning on the date the individual is convicted.||No options.|
|Achieve High School Diploma||States may penalize adult TANF or food stamp recipients over the age of 20 if such recipients do not have or are not working toward a secondary school diploma or its equivalent.||None.||States have complete discretion to impose penalties against such individuals.|
Recognizing that two major causes of single mothers’ dependence on welfare are the absence of a second parent and the additional income such parent normally provides, the new welfare reform law puts a great deal of emphasis on establishing and enforcing child support orders. States are required to implement programs to aid in the collection of past-due support for custodial parents of TANF children. They must also pay the federal government its share of any child support monies collected on behalf of such children. The state may then retain, or distribute to the family, the states’ share of child support proceeds.
Consistent with the premise that parents who fail to support their children should not be allowed to enjoy certain privileges, states are now required to withhold, suspend or restrict drivers’, professional, occupational and recreational licenses of persons who owe past-due child support, as well as those who fail to comply with warrants or subpoenas in paternity or child support proceedings. Many states, including Georgia, have recently implemented variations of this requirement, but now its imposition will be mandatory.
In order to aid in the enforcement of child support orders, the act also takes significant steps to improve and standardize the record keeping systems of states. All states will be required to record Social Security numbers on drivers’, professional, occupational and marriage applications, as well as divorce decrees and death certificates. In addition, the act establishes a National Directory of New Hires and requires each state to establish a state directory to assist in the enforcement, through employee withholdings, of child support orders. All employers will be required to report new hires within 20 days, and the state must then enter the names into its directory and transmit the data to the National Directory. As part of the Federal Parent Locator Service, the act also creates a national case registry of child support orders and requires all states to send abstracts to, and match data with, this registry.
States will have the option of implementing what is known as Grandparent Liability. By enforcing child support orders against the parents (paternal or maternal) of minor, non-custodial parents of TANF children, the state may force grandparents to be financially responsible for their grandchildren, offspring their teenage children create and then neglect.
D. Aid to Immigrants
In recent years, the number of aliens applying for and receiving public assistance has steadily increased. This increase, along with the widespread belief that public benefits should not be an incentive for immigration to the United States, served as a catalyst for the dramatic changes in the policies relating to immigrants’ eligibility for welfare. While illegal immigrants are already denied most federal benefits, one of the most heavily publicized and criticized portions of the act concerns welfare assistance for legal immigrants. The act provides for the mandatory denial of food stamps and Supplemental Security Income (SSI) to future legal immigrants for five years (or at least until they become citizens), and the act gives states the discretion to decide which of its current legal immigrants will remain eligible for cash assistance and non-emergency Medicaid, as well as for other state and local means-tested programs. Exceptions are made for refugees, asylees, and those granted a withholding of deportation during their first five years in the United States. Veterans, active duty military personnel, and the spouses and dependents of both veterans and active duty military personnel are also excepted.
DFACS officials in Georgia have not released information on the number of Georgia recipients who will be affected by these new restrictions, but some have suggested that only about one percent of all AFDC recipients in Georgia are foreign-born. An Atlanta Journal article dated November 1, 1995, estimated that 5,000 legal immigrants could lose Medicaid benefits, disability payments and cash assistance; many more will lose access to legal aid, a service often used to help immigrants apply for citizenship. Significantly smaller numbers will lose their federally funded student grants and loans.
While the new federal law references Medicaid, it does not call for its comprehensive reform. States are still required to provide Medicaid coverage for all non-TANF children in families whose income falls below the federal poverty guidelines, as well as to pregnant women and children under six whose family income is below 133 percent of the poverty level.
What has changed is that parents and children who were eligible for AFDC are no longer automatically entitled to Medicaid coverage. That tie has been severed. Eligibility for one program no longer guarantees eligibility for the other.
In determining AFDC eligibility, states must, however, continue to provide Medicaid coverage to those who satisfy the criteria that was in effect on July 16, 1996. Therefore, while AFDC no longer exists, those satisfying the old AFDC criteria will remain eligible for Medicaid. States may terminate Medicaid coverage to those able-bodied TANF recipients who refuse to work, but must continue to provide coverage to pregnant women and minor children under all circumstances.
Transitional Medicaid, temporary medical assistance for those moving off public assistance and into the work force, remains virtually unchanged. Individuals who are no longer eligible for cash assistance due to an increase in child support payments they receive will continue to receive Medicaid for an additional four months, while those who lose cash benefits due to an increase in earnings will continue to be covered for another year.
Unlike TANF, the food stamp program remains an uncapped entitlement. There are no block grants, and states are expressly prohibited from altering the program in any manner. What the welfare reform act does do, however, is substantially limit the availability of food stamp benefits. Able-bodied recipients between the ages of 18 and 50 with no dependent children are permitted to receive benefits for only three out of every 36 months, unless they work or participate in a qualified work program for at least 20 hours per week. Unlike the TANF work requirement, job search and job-search training programs do not satisfy this requirement. However, at a state’s option, up to 10 percent of those required to work may be excused for reason of a hardship.
Georgia’s Food Stamp Recipients: 1995
|Average Yearly Food Stamp Recipients: 820,000|
|Food Stamp Benefits Conferred in 1995: $692.6 million|
|Number Required To Work Under New Federal Law: 62,000|
|Number for Which State Can Claim a Hardship Exemption: 6,200|
The act also allows qualifying states to provide wage subsidies in lieu of food stamps to TANF recipients who have worked in unsubsidized employment for a minimum of 90 days and have earned at least $350 per month. The state, however, must increase these benefits to compensate recipients for any state or local sales taxes on food. Moreover, all states are required to implement an Electronic Benefits Transfer System, a debit-card type program to distribute food stamps quickly and efficiently while reducing fraud. Such a system must be in place by October 1, 2002, and should include retailer scanning devices by October 1, 2004, that differentiate between allowable and non-allowable food stamp items.
Food Stamp Program Reforms
|Limits benefits to just three of every 36 months for able-bodied recipients between the ages of 18 and 50 with no dependents, unless such recipients satisfy a work requirement.||Hardship exemption for up to 10 percent of those who would otherwise be required to work.|
|Implementation of an Electronic Benefits Transfer System by October 1, 2002.||“Cashing Out” food stamp benefits to supplement salaries of certain working TANF recipients.|
Many states are currently operating reform initiatives under a number of federal waivers. The welfare reform act gives states the option of either terminating their waivers or continuing them through their stated expiration. In the latter case, states would receive their full block grant funding in future years, after the expiration of the waivers. States that elect to continue their waivers will be exempt from provisions of the act that are inconsistent with the waiver(s).
Seventy-seven waivers have been granted to nearly three dozen states in just the past four years. This widespread issuance of waivers has been one of the more positive developments in the area of welfare reform, giving states the opportunity to try different approaches to transition welfare recipients into gainful employment.
While the waiver policy has yielded some encouraging results, it was, at least in part, the impetus behind the block grant system. Federal waivers were subject to revocation by the federal government and their limited duration meant that states would eventually have to go back to the problem-riddled programs of before. Opponents of federal waivers argued that while appearing to empower states to create local solutions, waivers actually perpetuate the problem of Washington’s bureaucratic stronghold.
Though most waivers were narrowly tailored or limited to specific geographic areas, they were typically issued for five years. States that received waivers in 1995, for example, could manage to sidestep the full impact of the federal act, or at least parts of it, until the year 2000. While these state waivers involve many innovative attempts at real reform, they often differ significantly with the requirements of the new federal law.
Georgia’s existing reforms made pursuant to waivers are as follows:
Georgia’s Welfare Reform Waiver Programs
|Preschool Immunization||Adult recipients of AFDC are required to keep their preschool age children immunized, or face a denial of cash assistance.||In effect since January 1993, this provision aims to protect the 103,000 preschool children receiving AFDC benefits each year. Since April 1994, nearly 6,000 AFDC children were found to be inadequately immunized, and in 1995, 2,500 recipients were temporarily denied benefits for failure to comply.||1998|
|Work Requirement||Adult AFDC recipients without a dependent child under 14 lose cash assistance for either failing to accept an offer of full-time employment or for quitting a job.||By exempting everyone with dependent children under 14, this work requirement only applies to approximately 5 percent (7,400) of Georgia’s AFDC families. In addition, enforcement depends on individuals reporting their own violations. During 1995, only 38 families were sanctioned under this waiver provision.||1999|
|Family Cap||Any individual who has been the recipient of cash benefits for a period of at least 24 months (after 1/1/94) is no longer eligible for the incremental benefit to which he or she would otherwise be eligible following the birth of another child.||Enacted in 1994, this provision only really took effect in January 1996 because of the 24-month grace period. Georgia’s DFACS estimates that 14,800 women on AFDC for more than 24 months give birth each year. The result is expected to be a 10 percent drop in such births and an annual savings of $12.5 million.||1999|
|Work For Welfare||A ten-county pilot program begun in October 1996, this program requires able-bodied AFDC recipients and non-custodial, non-supporting parents of AFDC children to work up to 20 hours per month, if they have received benefits for 24 of the last 36 months.||This program has not been in place long enough to gauge its effectiveness.||1999|
|Fraud Deterrence||Under a recently proposed waiver program, anyone convicted of fraudulently receiving AFDC assistance or food stamps will be denied those benefits for a period of one year. After a second conviction, individuals become permanently ineligible.||Georgia officials are still awaiting a federal waiver so that this provision may be implemented. Under the new law, waiver applications that were pending on the date of enactment may still be considered.||N/A|
|Jobs First||Jobs First is a proposed ten-county pilot program that would grant tax credits and wage supplements to employers hiring AFDC recipients. Participation would be mandatory for able-bodied AFDC recipients. Once employed, participants would continue to receive AFDC cash assistance (in addition to earned wages) for four weeks, and child care and transitional Medicaid for up to 24 months.||Georgia officials are still awaiting a federal waiver so that this trial program may be implemented.||N/A|
Although the new welfare reform law is extensive in scope, it may not be as hard-hitting as many critics have suggested. Its greatest strength is that it clearly makes cash assistance temporary, providing recipients an incentive to do whatever is necessary to reenter the work force. Some of its weaknesses emanate from the fact that it allows too many individuals to be excused from the work requirement, it leaves the definition of “work” up to the states, and it permits a large number of states to continue operating under existing waivers.
The act also allows states to count individuals removed from their welfare rolls in 1995 toward meeting next year’s work participation requirement. Due to a booming economy and reform efforts, Georgia’s welfare caseload has dropped nearly 10 percent since July 1995. That 10 percent, plus the roughly 10 percent of Georgia’s welfare recipients who are already working, could be counted against the 25 percent work participation requirement for 1997. Yet another provision allows states to excuse up to 20 percent of the average monthly number of familiesreceiving assistance from the lifetime 60-month limitif the family includes an individual who has been battered or subjected to extreme cruelty, or for reasons of hardship.
While there will always be some welfare recipients who cannot work due to age, disability or insufficient skills, this provision, if misapplied, would allow Georgia to “excuse” approximately 28,000 of the nearly 140,000 AFDC families from the five-year cap. Moreover, the act provides no means of tracking welfare recipients as they move from state to state, thus making it virtually impossible to know whether an applicant has already used up his five-year lifetime eligibility while living in another state. And although the act requires most adults to participate in work activities after 24 months, states can exempt single custodial parents with a child under one year of age from the work requirement, and may further choose to disregard such individuals when calculating the state’s work participation rate.
Even after a state decides which of its TANF recipients to excuse from work, those who are required to work must do so for only 20 hours per week during the first two years, and never more than 30 hours per week. This requirement is quite lenient when compared to the needs of most employers and the hours most persons must work.
And what qualifies as work? Unfortunately, the work provisions in the act are very broad and somewhat obscure. In fact, the definition of “work” is left entirely to the individual states to determine. Georgia’s recently instituted Work for Welfare pilot program sets minimum work requirements at just 20 hours per month, well below the threshold of what most people consider “work.”
The federal act does include a list of activities that are considered “allowable activities” for purposes of calculating a state’s work participation rate. Among the permitted work activities are subsidized and unsubsidized employment, on-the-job training, job search and job readiness assistance, community service programs and vocational education training. In addition, teen parents are considered to be engaged in work if they maintain satisfactory attendance at a secondary school or participate in education that is directly related to employment, something many states already require.
While its effectiveness nationally will likely be diluted by the exclusion of millions of individuals from the work requirements, along with the prospect of dozens of state-created waivers, the act does afford an unprecedented opportunity for states truly interested in reform. By turning to block grant funding, the federal government has empowered states to chart their own course.
Arguing on behalf of block grants, the National Governors’ Association has long maintained that local problems are best solved by those at the local level, not by Washington bureaucrats. The same holds true here; though the new legislation is undeniably a step in the right direction, Georgia and the other states will never have true welfare reform until they decide to demand it of themselves.
V. THE NEW ERA: STATE PLANS UNDER THE BLOCK GRANT SYSTEM
States have until July 1, 1997, to submit their plans to the Secretary of the Department of Health and Human Services. Many, however, submitted theirs at the beginning of the fiscal year (October 1, 1996) in order to ensure that they received their full grant amount. With states now having greater latitude to design their welfare programs, a number of them have already announced intentions to experiment and innovate. Some of the plans released to date adhere closely to the provisions of the federal act, indicating a reluctance on the part of some states to take full advantage of the freedom given them. Described below are several new programs states plan to implement:
Michigan was among the first states to submit a plan under the new law to the U.S. Department of Health and Human Resources. Early news reports indicate that they have taken a very aggressive approach, going above and beyond the requirements of the federal act. Michigan will:
1. Require all new applicants to attend a job orientation session. Those who fail to attend will not be eligible for benefits;
2. Reduce from 12 months to four months the time recipients will be permitted to remain on the welfare rolls if they fail to prove that they are seeking work;
3. Reduce from 12 months to 12 weeks the period during which a new mother will be excused from the work requirement;
4. Require those not working to engage in community service within two months of receiving benefits; and
5. Terminate benefits for those convicted of a drug-related felony or found to be in violation of probation or parole.
Kentucky’s welfare plan, called the Kentucky Transitional Assistance Program, takes a different approach by creating four categories of needy families. For persons in the first category, families who are not currently on welfare, the state plans to assist them in times of need, hopefully preventing them from ever entering the welfare rolls. Persons in the second tier, made up of those who are deemed “not ready for work,” will be provided training and education, but must work at least 20 hours a week after six months. Those with a high school diploma or a successful work history, comprising the third category, will be expected to find work within six months. The fourth category was established to provide special service to teen parents. By utilizing this new system of services tailored to meet individual needs, Kentucky’s welfare officials are optimistic that they will meet or exceed the work requirements established by the new law.
In a recently submitted plan, Governor George W. Bush announced plans to continue the one- to four-year cash assistance limits that are already in place in Texas. But in a more controversial move, the governor announced further plans to privatize the state’s entire welfare system. If approved, the first-of-its-kind plan would allow the state to select a private technology company to create and run the multibillion-dollar system for determining eligibility of applicants, distributing benefits, providing social service programs and working closely with local welfare-to-work programs. By the end of October 1996, three major bidders had expressed interest in taking on the task. They included Andersen Consulting; an alliance between EDS, the Texas Department of Human Services and Unisys Corp.; and a second alliance between Lockheed Martin, IBM and the Texas Workforce Commission.
While some states have shown a true desire to utilize the authority given them under the new law by making drastic changes, California’s 15-page plan has been described as only “a baby step toward real change, the minimum effort required now to get the maximum in federal aid later.” The plan does virtually nothing but change the name of the old AFDC program to Temporary Assistance for Needy Families. State officials stress that they are still working out the details of their redesigned welfare system and will eventually present a more formal plan. They have, however, announced plans to cut all TANF grants by 4.9 percent beginning on January 1, 1997, and will also lower aid by another 4.9 percent in counties that have a lower cost of living.
VI. GEORGIA’S PLAN UNDER THE BLOCK GRANT SYSTEM
While the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 makes some structural changes to the existing welfare system, it alone will not produce real reform. Each state bears the responsibility of utilizing the tools given to it by the federal government to move persons from a state of dependence on government to self-sufficiency.
The actions taken by Georgia’s General Assembly, DFACS and the governor during the past several years have paved the way for Georgia’s compliance with the new federal law. The number of AFDC recipients in the state has steadily declined, and early welfare-to-work initiatives–some utilizing community service for those unable to find work–have proved successful. The Child Support Enforcement Division of DFACS has recovered millions of dollars for AFDC recipients, and unmarried teen mothers know that they will be required to live at home if they are going to get public assistance. Mere compliance with the act, however, will not produce the degree of reform that the vast majority of Georgians want and deserve.
In the months since the President signed the welfare reform bill into law, county officials, charitable organizations and many other interested persons have been anxiously awaiting the release of Georgia’s welfare plan. They have been waiting to see whether Georgia’s leaders would embrace their new-found authority to set rigid work requirements and establish high goals. On November 15, 1996, Governor Miller submitted Georgia’s plan to the Secretary of the U.S. Department of Health and Human Services. There will be a 45-day comment period during which proponents and opponents will have an opportunity to voice their opinions. (The complete text of Georgia’s plan appears in the printed version of this report)
Although all of the budget and programmatic implications of the new state plan are not yet clear, it does appear that Georgia will seize the opportunity and send the clear message to everyone that welfare recipients must do everything in their power to get and keep a job, that a job is good for individuals, their families and the community, and that Georgians want all of their state’s children to be raised in solid, stable and nurturing homes.
Welfare expenditures totaled only $90 million ($813 million in constant 1993 dollars) in 1929, as compared to $324.3 billion in FY 1993. Robert Rector, Welfare Reform, Issues 1996, at page 200 (The Heritage Foundation, 1996).
Id. at 201.
Social Security, Medicare and unemployment compensation, for example, are all entitlements based on individuals’ past work experience. Dawn Nuschler and Richard Rimkunas, Congressional Research Service, Entitlement Spending, 96-70 EPW (1996).
Entitlements: Brief descriptions of the largest programs, CRS Report for Congress, 96-70 EPW (1996).
Paul Greenberg, Catching on to the welfare trap, Washington Times, October 21, 1994.
In 1995, Georgia’s DFACS reported that just over 500 two-parent families received AFDC benefits totaling $2.2 million under the AFDC- Unemployed Parents program.
M. Anne Hill and June O’Neill, Underclass Behaviors in the United States: Measurement and Analysis of Determinant, City University of New York, Baruch College (1990). Noted in Robert Rector, Welfare Reform, Issues 1996, at 208 (The Heritage Foundation 1996).
Martha Ezzard, Teen pregnancy a grown-up problem, Atlanta Journal & Constitution, September 14, 1996, at A12.
Lawrence W. Reed, Michigan: Have we gone far enough?, Alternatives in Philanthropy, Capital Research Center (April 1996).
Jim Yardley, Focus on Overhauling Welfare, Atlanta Journal & Constitution, April 30, 1996, at A6.
Amy Frantz, Iowa: Investing in Families, Alternatives in Philanthropy, Capital Research Center (May 1996).
Gil Lawson, Credit will help meet welfare work goals, Cincinnati Enquirer, September 27, 1996, at B1.
Lisa Eckelbecker, Worcester a Welfare-To-Job star, Telegram & Gazette (Worcester, Mass.), September 22, 1996, at A1.
Lawrence W. Reed, Michigan: Have We Gone Far Enough?, Alternatives in Philanthropy, Capital Research Center (April 1996).
Mark Hornbeck and Shawn D. Lewis, Welfare recipients bracing for impact of ‘no work, no aid,’ Detroit News, September 29, 1996, at A1.
“Families will qualify if they’ve left welfare and used up a year of ‘transitional’ Medicaid; don’t have other health insurance; and are at 185 percent of the poverty level.” Judy Putnam, Health insurance deal helps ease way off welfare, Grand Rapids Press, October 2, 1996, at A1.
The Michigan Miracle: A Model For The 21st Century, 25 Imprimis n 8 (August 1996).
Project Zero has trouble getting welfare clients to attend classes, Grand Rapids Press, October 9, 1996, at B4.
Joanne Huist Smith, Welfare program successes noted, Dayton Daily News, September 25, 1996, at Z45.
Governor Keating Signs Welfare Reform Bill, State of Oklahoma, at http://www.state.ok.us/osfdocs/
W-2 Transition is designed for those who are unable to perform independent, self-sustaining work, even in a community service job. Participants are required to engage in work activities deemed to be consistent with their capabilities and must participate in other activities necessary to facilitate their movement into less structured employment. Department of Workforce Development, State of Wisconsin, W-2 Works, page 6 (1996).
Jeff Dickerson, A Real Revolution. Wisconsin Welfare Reform Kicks Into High Gear, Atlanta Journal & Constitution, October 8, 1996, at A12.
Michael E. Hartmann, Wisconsin: Work Requirements For All Welfare Recipients, Alternatives in Philanthropy, Capital Research Center (April 1996).
Mike Flaherty and Kimberly Garcia, W-2: How much will it cost? Trial runs yield mixed results, Wisconsin State Journal, June 4, 1996, at 1A.
Wisconsin’s Reforms, Executive Alert, page 8, National Center For Policy Analysis, September/October (1996).
In 1995, Georgia provided an average of 383,000 individuals with assistance each month. Division of Family & Children Services, State of Georgia, 1995 Descriptive Data, page 6 (1996).
Laura Williamson, State gets jump on proposed welfare reforms, Atlanta Constitution, October 8, 1995, at F4.
Laura Williamson, Focus on Overhauling Welfare, Atlanta Journal & Constitution, March 30, 1996, at A8.
O.C.G.A. 49-4-108 (1996).
In FY 1991, PEACH programs were available in only 16 of Georgia’s 159 counties.
The state provides child care and transportation subsidies for program participants. Those unable to obtain transportation or child care are excused from participation. O.C.G.A. 49-4-108C(2) and (3).
1995 Descriptive Data, supra note 26, at 28.
Department of Human Resources, State of Georgia, PEACH 1995 Annual Report (1996).
O.C.G.A. 49-4-115 (1993).
Of 1,000 Americans surveyed by the Family Research Council, 66 percent said they “strongly” opposed increasing a mother’s monthly welfare check if she has another child out of wedlock, another 18 percent said they “somewhat” opposed such increases. See Gary L. Bauer, New Welfare Poll Shows Strong Support For Combating Illegitimacy, Family Research Council, November 1, 1995, at http://www.frc.org/.
Lucy Soto, Welfare changes and Georgia, Atlanta Journal & Constitution, August 29, 1996, at B2.
This projection includes AFDC, Medicaid and food stamp savings from both births prevented and sanctions imposed. Department of Human Resources, State of Georgia, Welfare Reform In Georgia, Fact Sheet (1995).
Results Mixed After Caps Placed on Money For Children, New York Times, September 21, 1995, at A10.
O.C.G.A. 49-4-112 (1993).
O.C.G.A. 49-4-102 (1988).
1996 Georgia General Assembly: Pay Child Support, Or Walk, Atlanta Journal & Constitution, February 16, 1996, at A10.
Department of Human Resources, State of Georgia, 1995 Annual Report, page 10 (1996).
O.C.G.A. 49-4-113 (1993).
Under O.C.G.A. 49-4-113 (1993), exceptions are made for any individual who is: the mother of or other relative caring for a child under the age of 14; without means of public or private transportation to the job; physically or mentally incapable of performing the requirements of the job; or enrolled in school on a full-time basis.
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Pub. L. 104-193, 110 Stat. 2105 (1996).
Id. 110 Stat. 2105, 2116, § 103 (amending 42 U.S.C. 601 et seq. by adding § 403(a)(1)). Because states’ grants are based on their federal allocations in previous years, Georgia and other states that have experienced a recent decline in AFDC recipients will actually receive more federal funding per beneficiary than they had in previous years. With this in mind, the Act establishes a Maintenance of Effort requirement under which states must commit to current welfare programs a dollar amount equal to or greater than 80 percent of the state’s combination of AFDC, Jobs Opportunities and Basic Skills Training Program (JOBS) and Emergency Assistance (EA) spending for fiscal year 1994. Failure to satisfy this requirement will result in a dollar-for-dollar reduction in the block grant. In addition, states will not be eligible to apply for additional federal money during recessions if they spend less than they did in 1994.
For fiscal year 1998, qualifying states will receive a grant in an amount equal to 2.5 percent of the total amount required to be paid to the state under former section 403 (as in effect during fiscal year 1994) for fiscal year 1994. Id. 110 Stat. 2105, 2119, § 103 (amending 42 U.S.C. 601 et seq. by adding § 403(a)(3)(A)).
Id. 110 Stat. 2105, 2119, § 103 (amending 42 U.S.C. 601 et seq. by adding § 403(a)(3)(C)). A state qualifies for supplemental funding if the population growth rate of the state for the most recent fiscal year for which information is available exceeds the average population growth rate for all states, and the level of welfare spending per poor person by the state for the immediately preceding fiscal year is less than the national average level of state welfare spending per poor person. Twenty states, including Georgia, were deemed qualifying states under Section 403(a)(3)(C)(iii) because the level of welfare spending per poor person by the state for fiscal year 1994 was less than 35 percent of the national average level of state welfare spending per poor person for fiscal year 1994; or the population of the state increased by more than 10 percent from April 1, 1990, to July 1, 1994, according to the population estimates in publication CB94-204 of the Bureau of the Census.
The Secretary of the Department of Health and Human Services, in consultation with the National Governors’ Association and the American Public Welfare Association, will develop a formula for measuring state performance so as to achieve the goals set forth in the Act. The Secretary will then determine the amount of the grant payable under this reward to a high-performing state for a bonus year. See id. 110 Stat. 2105, 2121, § 103 (amending 42 U.S.C. 601 et seq. by adding § (403)(a)(4)(B)).
Based on studies conducted by the Centers for Disease Control and Prevention.
Act of August 22, 1996, § 103, 110 Stat. 2105, 2113 (amending 42 U.S.C. 601 et seq. by adding § 401(b)). Section 401(b) states that “this part shall not be interpreted to entitle any individual or family to assistance under any State program funded under this part.” Section 116(c) of the same act terminates the AFDC entitlement providing that “effective October 1, 1996, no individual or family shall be entitled to any benefits or services under any State plan approved under part A or F of title IV of the Social Security Act.”
Act of August 22, 1996, 110 Stat. 2105, 2133, § 103 (amending 42 U.S.C. 601 et seq. by adding § 407(d)). Permissible “work activities” include the following: 1) unsubsidized employment; 2) subsidized private sector employment; 3) subsidized public sector employment; 4) work experience (including work associated with the refurbishing of publicly assisted housing) if sufficient private sector employment is not available; 5) on-the job training; 6) job search and job readiness assistance; 7) community service programs; 8) vocational educational training (not to exceed 12 months with respect to any individual); 9) job skills training directly related to employment; 10) education directly related to employment, in the case of a recipient who has not received a high school diploma or a certificate of high school equivalency; 11) satisfactory attendance at a secondary school or in a course of study leading to a certificate of general equivalence, in the case of a recipient who has not completed secondary school or received such a certificate; and 12) the provision of child care services to an individual who is participating in a community service program. An individual will not be considered to be engaged in work by virtue of his or her job search activities after that individual has participated in such an activity for six weeks, or if the participation is for a week that immediately follows four consecutive weeks of such participation.
In calculating its work participation rate, a state must only base its percentage on those families in which there is an adult or minor head of household receiving cash assistance. In approximately 26 percent of Georgia’s AFDC cases, only a minor is receiving assistance–not an adult or minor head of household.
Id. 110 Stat. 2105, 2142, § 103 (amending 42 U.S.C. 601 et seq. by adding § 409(a)(3)). The first failure carries a 5 percent penalty. For each consecutive failure thereafter, the state will lose another 2 percent of its grant. This penalty, however, is never to exceed 21 percent.
Id. 110 Stat. 2105, 2132, § 103 (amending 42 U.S.C. 601 et seq. by adding § 407(c)(2)).
Id. 110 Stat. 2105, 2148, § 103 (amending 42 U.S.C. 601 et seq. by inserting § 411).
Id. 110 Stat. 2105, 2142, § 103 (amending 42 U.S.C. 601 et seq. by inserting § 409(a)(2)).
Id. 110 Stat. 2105, 2113, § 103 (amending 42 U.S.C. 601 et seq. by inserting § 402(a)(1)).
Id. 110 Stat. 2105, 2140, § 103 (amending 42 U.S.C. 601 et seq. by inserting § 408(b)(1)).
Id. 110 Stat. 2105, 2139, § 103 (amending 42 U.S.C. 601 et seq. by inserting § 408(a)(9)(A)).
Id. 110 Stat. 2105, 2136, § 103 (amending 42 U.S.C. 601 et seq. by inserting § 408(a)(5)(A)).
Id. 110 Stat. 2105, 2114, § 103 (amending 42 U.S.C. 601 et seq. by inserting § 402(a)(1)(A)(vi)).
Id. 110 Stat. 2105, 2135, § 103 (amending 42 U.S.C. 601 et seq. by inserting § 408(a)(4)).
Id. 110 Stat. 2105, 2136, § 103 (amending 42 U.S.C. 601 et seq. by inserting § 409(a)(5)).
Id. 110 Stat. 2105, 2135, § 103 (amending 42 U.S.C. 601 et seq. by inserting § 408(a)(3)(A)).
Id. 110 Stat. 2105, 2161, § 104. Subsection 104 goes on to provide that the eligibility of religious organizations to provide goods and services to a state is to be determined on the same basis as any other nongovernmental provider so long as the programs it implements are consistent with the Establishment Clause of the United States Constitution.
Id. 110 Stat. 2105, 2163, § 104(j). The old law not only required the programs conducted by these groups to be non-religious, but also the settings in which they were conducted, and their criteria for hiring staff. See Robyne E. Blumner, Another part of the welfare law that needs fixing, The Honolulu Star Bulletin, September 7, 1996, at B4.
David Osborne, What Works. Welfare Reality Check, The Washington Post, November 10, 1996, at W06.
Id. 110 Stat. 2105, 2113, § 103 (amending 42 U.S.C. 601 et seq. by adding § 402(a)(1)(A)(ii)).
Id. 110 Stat. 2105, 2114, § 103 (amending 42 U.S.C. 601 et seq. by adding § 402(a)(1)(B)(iv)).
Id. 110 Stat. 2105, 2131, § 103 (amending 42 U.S.C. 601 et seq. by adding § 407(b)(5)).
Id. 110 Stat. 2105, 2124, § 103 (amending 42 U.S.C. 601 et. seq. by adding § 404(c)).
Id. 110 Stat. 2105, 2125, § 103 (amending 42 U.S.C. 601 et seq. by adding § 404(f)).
Id. 110 Stat. 2105, 2115, § 103 (amending 42 U.S.C. 601 et seq. by adding § 402(a)(7)).
Id. 110 Stat. 2105, 2180, § 115 (1996).
Georgia had planned to launch a pilot EBT program in November 1996, but an announcement made in August indicated that the program’s start had been delayed until February 1997, with statewide implementation to take place within a year. Georgia’s Department of Human Resources estimated that EBTs will save $1.57 million a year. Unfortunately, implementation could be delayed indefinitely if Transactive Corp., a company that processes electronic benefits for the State of Texas, is successful in reopening the bidding process by which Citibank was awarded the contract to coordinate EBTs in the Southern Alliance of States. See Mickey Higginbotham, Ruling delays high-tech welfare payment program, Atlanta Journal & Constitution, August 17, 1996, at C2.
Act of August 22, 1996, 110 Stat. 2105, 2125, § 103 (amending 42 U.S.C. 601 et seq. by adding § 404(h)).
Id. 110 Stat. 2105, 2127, § 103 (amending 42 U.S.C. 601 et seq. by adding § 404(i)).
Id. 110 Stat. 2105, 2133, § 103 (amending 42 U.S.C. 601 et seq. by adding §§ 407(e)(1) and (2)).
Id. 110 Stat. 2105, 2135, § 103 (amending 42 U.S.C. 601 et seq. by adding § 408(a)(3)(A)).
Id 110 Stat. 2105, 2135, § 103 (amending 42 U.S.C. 601 et seq. by adding § 408(a)(2)).
Id. 110 Stat. 2105, 2141, § 103 (amending 42 U.S.C. 601 et seq. by adding § 408(b)(3)).
Id. 110 Stat. 2105, 2138, § 103 (amending 42 U.S.C. 601 et seq. by adding § 408(a)(8)).
Id. 110 Stat. 2105, 2128, § 103 (amending 42 U.S.C. 601 et seq. by adding § 404(j)).
Id. 110 Stat. 2105, 2200, § 302 (amending Section 457 (42 U.S.C. 657)).
Id. 110 Stat. 2105, 2251, § 369 (amending Section 466(a) (42 U.S.C. 666(a)).
Id. 110 Stat. 2105, 2220, § 317 (amending Section 466(a) (42 U.S.C. 666(a))).
Georgia already maintains a New Hire Directory, but has until October 1, 1998, to ensure that it conforms to the requirements of the federal law.
Act of August 22, 1996, 110 Stat. 2105, 2255, § 373 (amending Section 466(a) (42 U.S.C. 666(a))).
Id. 110 Stat. 2105, 2260, § 400(B).
An estimated 3.2 million illegal immigrants come into the United States each year. Under Section 411(A) (110 Stat. 2105, 2272), state agencies administering TANF, SSI or housing assistance are required to report to the Immigration and Naturalization Service on a quarterly basis the names and addresses of individuals known to be unlawfully residing in the United States.
Act of August 22, 1996, 110 Stat. 2105, 2262, § 401(c), defines “federal public benefit” as any grant, contract, loan, professional license or commercial license provided by an agency of the United States or by appropriated funds of the United States; and any retirement, welfare, health, disability, public or assisted housing, post-secondary education, food assistance, unemployment benefits, or any other similar benefit for which payments or assistance are provided by an agency of the United States or by United States appropriated funds. Illegal aliens remain eligible for emergency medical assistance under Medicaid (pending eligibility under the state plan); short-term, in-kind emergency disaster relief; and public health for immunizations and for the testing and treatment of symptoms of communicable diseases.
As the cases of non-citizens already receiving food stamps and SSI come up for review during 1997, state officials will be expected to reevaluate their eligibility. A federal spending bill signed into law in late September 1996 will allow legal immigrants already receiving food stamps to keep these benefits until at least April 1, 1997.
All current recipients of AFDC, Medicaid and Social Security Block Grant (block grant money that states use for programs like child care, care for the disabled, and combating domestic violence and child abuse) assistance may continue to receive such benefits until January 1, 1997. After that date the states may choose to deny such assistance. New legal immigrants will be denied such benefits during their first five years as U.S. residents.
Cuban and Haitian entrants will remain eligible for Refugee Assistance and Refugee Education Assistance.
Laura Williamson, The Budget Battle. Immigrants facing loss of benefits, Atlanta Journal & Constitution, November 1, 1995, at B2.
Act of August 22, 1996, 110 Stat. 2105, 2140, § 103 (amending 42 U.S.C. 601 et seq. by adding §§ 408(a)(11)(A) and (B)).
Qualified work programs include: workfare programs; programs operated under the Job Training Partnership Act or the Trade Adjustment Assistance Act; and state or local programs approved by the Governor.
The figures in this table are approximations based on 1995 statistics. Department of Human Resources, State of Georgia, 1995 Descriptive Data Book (1996).
A qualifying state is one in which at least 50 percent of the food stamp households also received AFDC during the summer of 1993.
States Leading Parade, Nashville Banner, September 18, 1996, at A6.
From Welfare to Work, State must set bar higher to reform welfare system, Atlanta Journal & Constitution, September 27, 1996, at A20.
Act of August 22, 1996, 110 Stat. 2105, 2137, § 103 (amending 42 U.S.C. 601 et seq. by adding §§ 408(a)(7)(C)(i) and (ii)), provides that “The state may exempt a family from the application…” but “the number of families with respect to which an exemption made by a state…for a fiscal year shall not exceed 20 percent of the average monthly number of families to which assistance is provided under the state program…”
It is estimated that in an average month approximately 13,000 of Georgia’s AFDC recipients are single custodial parents with a child under one year of age.
Job search and job readiness assistance may only count toward the work participation requirement for a total of six weeks, not more than four of which are consecutive.
Vocational education training that satisfies the work participation requirement is limited to 12 months per individual,and a state may not allow more than 20 percent of its families to participate in vocational training in order to achieve the minimum work participation rate. Unfortunately, the legislation does not go so far as to define vocational education training.
Hornbeck and Lewis, supra note 15, at A1.
Judy Daubenmier, State will deny welfare to drug felons but not legal immigrants, The Grand Rapids Press, August 16, 1996, at A8.
State would pay for relocation under welfare plan, Cincinnati Enquirer, September 30, 1996, at B1A.
Suzanne Gamboa, Texas plan for welfare revisions submitted, Austin American-Statesman, October 1, 1996, at B1.
Polly Ross Hughes, Texas blazing welfare trail. Stakes are high as state rushes to privatize system, Houston Chronicle, October 29, 1996.
Nancy Weaver Teichert
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© Georgia Public Policy Foundation (December 2, 1996) Permission is hereby given to reprint this article, with appropriate credit given.
The Foundation should take a lot of pride in your influence on Georgia governmental policy over the past several years. If you look back on several things that you were crying in the wilderness about several years ago, you will find that Governor Miller adopted them…your influence and your pressure on that process has been a major factor in governmental policy in Georgia. You should be congratulated.