Federal & State Welfare Reform Laws: Preparing for Reauthorization

Panelists: Congressman Benjamin L. Cardin, U.S. House of Representatives; Hon. Samuel Rosenberg, MD House of Delegates; Deepak Bhargava, Director, National Campaign for Jobs & Income Support.

In 1996, President Clinton signed the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), known popularly as welfare reform. Now, six years later, debate on the reauthorization of welfare reform legislation is expected to begin immediately after Congress convenes in January 2002. Funding to continue Temporary Assistance for Needy Families (TANF) must be enacted no later than October 1, 2002. Throughout the United States, discussion is occurring on how to reshape and improve this legislation.

Congressman Cardin provided an overview of the welfare reform debate in the U.S. Congress. Since 1996 child poverty has decreased nationwide and there are fewer people receiving cash assistance. These figures, however, are due to a multiplicity of factors, most notably the economic boom of the late 1990s. The impact of the current economic recession on states' welfare rolls remains to be seen. Other indicators suggest that welfare reform was not as successful as it was intended to be. For example, while PRWORA reduced welfare caseloads, the number of people who have left welfare since 1996 remains higher than the number of former welfare recipients who are employed. Even among the employed, poverty has not been substantially reduced. Additionally, programs such as the Earned Income Credit, which is designed to assist low-income families, are in jeopardy because of current economic and political circumstances.

Congressman Cardin offered three major themes that he and other House democrats support concerning TANF reauthorization:

Increase resources to states
Due to a number of factors, including the passage in 2001 of a $2 trillion tax cut, funding has been reduced for both the Safe & Stable Families Act and the $2 billion TANF contingency fund for states experiencing economic downturns. Spending levels for tax cut initiatives and the military, however, remain unchanged. In order for welfare reform to be successful, the federal government must continue and augment funding to states.

Make poverty reduction a key goal
TANF must primarily be a tool to help individuals out of poverty. Congressman Cardin proposes dedicating more funding for childcare, restoring benefits to legal immigrants, promoting two - parent families through elimination of the "illegitimacy fund," and developing improved methods of tracking the progress of welfare leavers as they transition into the workforce. Additionally, states should make TANF funds and services accessible to non-working poor populations and implement more effective conciliation procedures so that individuals' due process is ensured.

Maintain emphasis on work and financial self-sufficiency
Welfare policies should focus on helping individuals find and retain jobs, rather than simply reducing the welfare rolls. Fair treatment of low-wage workers should be a priority of states. Together with Congressman Charles Rangel, Congressman Cardin introduced legislation that would:

· Make part-time employees eligible for unemployment compensation
· Require states to use the most recent wage data available to calculate unemployment compensation, and
· Increase to 39 weeks the amount of time claimants can receive unemployment compensation.

Delegate Rosenberg encouraged attendees to make the case to the Maryland General Assembly for programs they consider important, even if they have a fiscal impact during this period of budgetary constraint. Otherwise, he said, they will not receive the attention they merit. While the General Assembly is awaiting action by Congress regarding reauthorization, it hopes to influence the debate in a constructive manner. Delegate Rosenberg said the focus of the General Assembly will remain consistent with objectives and policies of the past five years, but that the legislature will place emphasis on poverty reduction and skills training.

In January 2002, Delegate Rosenberg and other legislators will introduce the Welfare Innovation Act of 2002. This legislation proposes that TANF funds in the state's dedicated purpose account can only be used to support existing federal TANF laws and poverty reduction strategies.

Mr. Bhargava said a third of the public assistance recipients who have left welfare since 1996 have not found employment. Among those who have entered the workforce, there is a high turnover rate. Most of the jobs these individuals find are low-wage and offer few benefits. Concerning public programs designed to help low-income families, only 40% of people without jobs are able to access unemployment insurance and only 60% of eligible families receive Food Stamps.

According to Mr. Bhargava, public opinion toward TANF and other welfare policies has improved in the five years since the passage of PRWORA. He encouraged concerned citizens to energize their representatives at the federal and state levels by emphasizing poverty reduction strategies. These include:

  • Lifting caps on funding for education and training;
  • Stopping the clock for families who are in compliance with welfare-to-work requirements;
  • Restoring public benefits to immigrants, who comprise approximately 20% of low-wage workers nationwide;
  • Recognizing the strain on low-income families caused by low-wage jobs and stringent regulations for the receipt of public assistance;
  • Ensuring fair treatment by states of public assistance recipients and a fair process, both at entry into the system and at termination of benefits, and
  • Provide publicly subsidized employment opportunities, especially, in areas of high unemployment.

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