July 31, 1996
THE CONFERENCE ON THE WELFARE BILL
On Friday, July 26, the White House circulated a list of 11 key welfare
conference priorities. The priorities called for:
Adopting the Senate
rather than the House provision in four key areas and avoiding backsliding from
a provision common to both bills in a fifth area;
Dropping two
extraordinarily draconian provisions that were unexpectedly added in the House
two weeks ago and that go far to the right of any provisions in the vetoed bill
or in previous House or Senate version of the welfare bill;
In
four other critical areas, making improvements for children not contained in
either the Senate or House bills.
The outcome is disappointing.
In the four key areas where the Senate
position needed to be maintained, the Senate prevailed in only two. In the
fifth area, the joint House/Senate provision appears to have been maintained,
but this is not yet final.
Only one of the two extreme provisions the
House unexpectedly added two weeks ago was dropped. Much of the other draconian
provision the provision cutting off food stamps for large numbers of
unemployed workers was retained. The conference agreement limits food
stamps to unemployed workers not raising children to only three months while
unemployed in each 36-month period and allows no hardship exemptions to be
granted. The Senate bill would effectively have limited food stamps to six
months in each year for this group and also allowed a substantial number of
hardship exemptions to be granted.
None of the four improvements
contained in neither bill was made.
The bottom line is that: 1) only four of the Administration's 11 priority
items have been agreed to in whole or in large part; and 2) while the conference
came out between the House and Senate version, it appears closer to the House
than the Senate in the key policy areas.
The Four Priority Senate Provisions
As noted, the conference adopts the Senate approach in two of these four
areas. The conference drops the optional food stamp block grant. It also
includes the Senate provision on the funding mechanism for certain child welfare
services.
But the conference departs from the Senate position in the other two areas.
On
the crucial issue of allowing states to withdraw large sums of state money from
cash assistance and work programs, the conference rejected the Senate approach
and came out very close to the House. The Senate bill required states to
maintain state funding at 80 percent of their 1994 funding level. The House
bill required states to maintain only 75 percent of their 1994 level, except for
states failing to meet the bill's work participation requirements. The
conference adopts the House's 75 percent figure, except for states failing to
meet the work rates. A maintenance requirement of 75 percent rather than 80
percent enables states to withdraw an additional $4 billion over six years from
income support and work programs.
In addition, the conferees adopted a
damaging House provision permitting states to transfer up to 10 percent of
welfare block grant funds to the Social Services Block Grant. The social
services in question cover an array of politically popular services, many of
which go to the elderly and to families well above the poverty line. The
Administration has opposed this transfer authority because it will lead to
further reductions in the amount of money available for work slots and cash
assistance for poor families with children. That, in turn, would lead to fewer
work slots being provided for these families, cuts in cash benefit levels that
are already well below the poverty line in most areas, still-shorter time
limits, or some combination of these steps. The Senate bill did not allow
states to transfer funds to the Social Services Block, but the conference
adopted the House approach.
(Note: The conference agreement says that
funds transferred from the welfare block grant to the Social Services Block
Grant may only be used for services to children with family incomes below 200
percent of the poverty line. This provision is purely cosmetic and will have no
effect. States could simply shift a portion of their existing Social Services
Block Grant funds from children to the elderly at the same time they transferred
funds from the welfare block grant to the Social Services Block Grant. The net
effect would be to transfer resources from the welfare block grant to the
elderly without violating the statute.)
Between the 75 percent
maintenance-of-effort provision and this transfer authority, states would be
able to withdraw $38 billion in state funds from income support and work
programs over the next six years without losing any federal money. This would
provide a powerful incentive for states to withdraw funds whenever they face
budget difficulties.
The Administration's priority list also calls
for keeping the Senate language on fair and equitable treatment of families
under the welfare block grant and on federal enforcement if a state fails to
comply with its own state rules. The conference dropped these Senate
protections. As a result, the federal government would be able to take no
action if a state failed to follow its own rules or any federal rules. This
effectively renders rather meaningless any protection for children under the
welfare block grant. For example, state plans are required to describe a
hearing or appeals process. If, however, a state refused to make that process
available to families, the federal government could take no action.
In the fifth area, the Administration's priority list called for maintaining
a provision in both the House and Senate bills to prevent women and children
from losing Medicaid when a state converts AFDC to a block grant. This
provision has been rewritten but essentially maintained. As of 4:00 pm, the new
language has been sent to Governor Engler and is awaiting his approval.
The Two Extreme House Provisions
Two weeks ago, the House added an additional $5.8 billion in legal immigrant
cuts in the Medicaid program. These added cuts, which were not in the vetoed
bill, were dropped in conference. But the legal immigrant cuts in conference
remain $1 billion deeper than those in the vetoed bill.
In the food stamp area, the House added a draconian provision far more
extreme than an already-harsh provision in the vetoed welfare bill that would
restrict food stamps for unemployed workers not raising children.
The vetoed
bill would have limited food stamps to these individuals during periods of
unemployment to four months out of each year without offering them a work slot.
The Senate bill would effectively limit food stamps for this group to
six months out of each year and would allow states to exempt 20 percent of this
group from this benefit cut-off.
The President sharply criticized this
type of provision in the budget negotiations with Senator Dole and Speaker
Gingrich last winter because it would cut people off without giving them a work
slot.
The conference agreement limits food stamps for these
individuals during periods of unemployment to just three months in a three-year
period. It allows no hardship exemptions. CBO estimates that in an average
month, one million poor unemployed individuals who are willing to work and would
take a workfare slot if one were available would be denied food stamps because
they can't find work and no workfare slot is made available. If enacted, this
would be the most extreme provision enacted in a major safety net program in at
least 30 years.
Improvements Not Made
The Administration sought improvements beyond the Senate and House bills in
four key areas. None of these improvements have been made.
The
Administration request for vouchers for children made destitute by the time
limit has been ignored. Past Administration proposals and the Chafee-Breaux and
Castle-Tanner proposals would require states to provide vouchers to meet the
needs of children affected by time limits. This would assure that minimal
assistance be provided to children to help cover the costs of such necessities
as rent, diapers, school supplies, or clothes. The conference failed to take
this step.
The Administration sought a reduction in the depth of the
food stamp cuts. This has been ignored. Even with the dropping of the food
stamp block grant option, the total level of food stamp cuts is virtually as
deep as in the welfare bill vetoed in January and $3 billion deeper than in last
year's Senate welfare bill. When the block grant option was removed, it was
replaced with deeper food stamp benefit cuts.
The Administration
request to safeguard food stamp benefits for poor families with children that
pay over half their income for rent by following last year's Senate welfare
bill, the governors proposal, Chafee-Breaux, and Castle-Turner and
leaving the food stamp shelter deduction uncapped has been ignored.
Moreover, the conference agreement is closer in this area to the House than the
Senate. It not only caps the shelter deduction for families with children, but
it cuts much more deeply in this area than the Senate bill did.
There
is no exemption for either children or the disabled from the legal immigrants
bans in food stamps, SSI, and Medicaid. The immigrant cuts remain at $23
billion, some $1 billion deeper than the legal immigrant cuts in the vetoed
bill, which the President sharply criticized.
Other Important Senate Provisions Rejected By The Conference
Both the House and Senate bills contained provisions that prohibited a
state from sanctioning a family if the mother failed to comply with work
requirements if she was unable to obtain child care for a child age 10 and
under. Under pressure from Republican governors, the conference agreement has
lowered this to age five and under. This means that under the bill, a state
would be free to sanction a mother with a 6 or 7 year old who cannot obtain
child care for her children after school. Currently approximately 2.4 million
children between the ages of 6 and 10 receive AFDC. The families of these
children could lose all of their benefits as a result of a work sanction even
though the parent was willing to work but unable to find child care for these
young school-age children.
The Senate bill expanded the extent to
which states could provide education to parents lacking basic skills. The
Senate bill would have permitted states to integrate basic education with
vocational training programs, to provide education and training for up to 24
months instead of just 12 months, to permit all parents who have not finished
high school or received a GED not just teens to combine education
with work activities, and to provide vocational training to up to 30 percent of
their work participants.
The conference agreement eliminated all of
these improvements and added a provision not in the House and Senate bill that
counts teen parents who are completing high school toward the 20 percent limit
on the porportion of work participants who can participate in full-time
training. Because teen parents represent about six percent of the caseload and
nearly all of these teens will be required to participate in education, in many
states the entire 20 percent limit would be filled by teen parents finishing
high school. States would effectively be precluded from counting any adult in
vocational training toward the participation rates.