Temporary Assistance for Needy Families
Summary of the Personal Responsibility, Work, and Family Promotion Act of 2003 (H. R. 4) as Approved by the U.S. House of Representatives
on February 13, 2003
On February 13, 2003, the U.S. House of Representatives approved H.R. 4 a bill to reauthorize the Temporary Assistance for Needy Families (TANF) block grant, Title IV-A of the Social Security Act. The legislation was adopted largely along party lines with a vote of 230 to 192. Eleven Democrats voted for it and 2 Republicans voted against it. The bill also reauthorizes the main federal child care block grant the Child Care and Development Fund (CCDF). The legislation was not considered in committee, but was instead brought directly to the House floor for a vote.
- Maintains the current TANF funding level at $16.5 billion through 2008. Continues to provide $319 million a year in supplemental grants to 17 states from 2004 through 2007.
- Redesigns the existing two state bonuses. Currently, $200 million is provided to states in the form of a high performance bonus. This bonus has been split between many states based on their accomplishments in moving people to work and reaching other targets. A second $100 million bonus has been awarded to the top 4 or 5 states that reduced the out-of-wedlock birth rates for the entire state population. H.R. 4 eliminates the $100 million out-of-wedlock bonus fund and turns it into a marriage promotion fund. It reduces the high performance bonus to $100 million and makes it into a bonus to reward employment of TANF recipients.
- Creates a new a $100 million matching grant fund for "healthy marriage promotion" grants for fiscal years 2003 through 2008. Funds can be used for: 1) ad campaigns on the value of marriage and the skills needed to have a stable and healthy marriage; 2) high school classes on the value of marriage, relationship skills and budgeting; 3) marriage skill classes for non-married women or men; 4) training for engaged couples; 5) training for married couples; and 6) divorce reduction, marriage mentoring, and programs to reduce disincentives to marriage in means-tested programs. To receive funds under this new program, a state must provide a 50% match and can use its federal TANF funds for the match.
- Creates a second $100 million fund for fiscal year 2003 through 2008 to be spent on research and demonstration projects on activities that promote marriage.
- Creates a new $20 million fatherhood program (a new Subtitle C of Title IV of the Social Security Act). Competitive grants are awarded to local entities with matches of at least 80% in federal dollars. Funds can be used for: (1) responsible parenting; (2) enhancing the ability of low-income unemployed fathers to provide support; (3) improving fathers ability to manage family business affairs through education, mentoring, household management, budgeting, etc.; and (4) encouragement of healthy marriages through premarital education, premarital inventories, marital therapy, divorce education, and mediation and relationship enhancement programs, including those designed to reduce child abuse and domestic violence. Applicants must describe how they will address child abuse and domestic violence and how they will coordinate with state and local entities on these issues.
- Reduces the existing TANF high performance bonus to $100 million per year and converts it into a bonus to reward employment achievement. Funding is for fiscal years 2004 through 2009. This bonus is currently funded at $200 million per year with a complex formula set up to measure job placement, job advancement, and access to certain support services such as child care.
Social Services Block Grant
- Funding for the Social Services Block Grant (SSBG) remains at its current level of $1.7 billion. H.R. 4 will restore state's ability to transfer 10% of their federal TANF funds into SSBG.
- In 1996, SSBG was cut from $2.8 billion to $2.38 billion as a way to offset the costs of the 1996 TANF act. Under that 1996 law, it was to be restored to $2.8 billion by 2003. Congress has consistently reduced funding. SSBG is currently funded at $1.7 billion.
Child Care Reauthorization
- H.R. 4 reauthorizes the Child Care and Development Fund (CCDF) through 2008. Mandatory ("guaranteed") funding would increase from $2.7 billion to $2.9 billion in 2004 and remain at that same level through 2008.
- H.R. 4 also increases the annual authorization of discretionary CCDF funding by $200 million per year in fiscal years 2004 through 2008. Discretionary funding, now at $2.1 billion, could increase $200 million a year until it reaches $3.1 billion in 2008. These increases are discretionary and therefore subject to the annual appropriations process-future child care funding increases would have to compete on an annual basis for scarce dollars against other key child welfare programs, including the Promoting Safe and Stable Families program, Child Abuse Prevention and Treatment Act, and the Child Welfare Services program.
Child Care State Plan Requirements
- Requires states to certify that they will collect and disseminate information to parents about the availability of child care, research on child development, and the availability of assistance to obtain child care. Also requires states to provide information on low-income support programs such as food stamps, WIC, and child nutrition programs.
- Requires states to demonstrate how they are coordinating child care with other early childhood development services, including Head Start, Early Reading First, Even Start, and state pre-kindergarten programs. States are currently required to generally describe coordination with other agencies without specific instruction to include coordinating activities with child care and early childhood development services.
- Requires states to demonstrate how they encourage public and private partnerships. This is already a state plan requirement.
- Requires an outline of the state strategy to address quality. States must list objective measures used to evaluate child care quality, targets for the measures, and an annual report on progress reaching these goals.
Child Care Quality Set-Asides and Initiatives
- Increases the current 4% quality set-aside of a state's discretionary, mandatory and matching funds to 6%.
- Includes in law some definitions of quality activity, such as professional development, promotion of early literacy, and initiatives to increase compensation. These activities are permitted under the broad CCDF regulations and law currently in place. This change would specify these quality initiatives as allowable activities in the statute.
Child Care Income Eligibility
- Current law allows states to provide services to families up to 85% of state median income. H.R. 4 eliminates this ceiling.
- The ceiling was established in 1990 when a separate Child Care and Development Block Grant (CCDBG) was created. The ceiling clarifies that families who do not receive TANF assistance, or are at risk of needing assistance, are also be eligible for child care subsidies. The maximum income level was originally set at 75% of a state median income and raised to 85% in 1996.
- This change would appear to have little impact since no state now provides services to families near that level of median income. However, this change does eliminate the 85% state median income standard eligibility as a meaningful measure of access to child care, one of the few measures currently in place to measure progress.
- The U.S. Department of Health and Human Services (HHS) uses this maximum ceiling to define what percentage of eligible children are served. For instance, HHS reports that its goal for 2003 is to serve 14% of eligible children.
- Without this measure, each state will set its own maximum ceiling that will be used to define percentage of eligible children served. The result will be that states will be able to report that they are serving 100% of eligible children. This measure will no longer represent the real need for child care in a state.
Transfer and Use of TANF Funds for Child Care
- States are allowed to transfer up to 50% of their TANF block grant into the Child Care and Development Fund - an increase from the current 30%.
- The legislation clarifies that child care that is paid directly out of TANF is not considered "assistance." Under current law, child care paid for with TANF funds had been considered assistance, which was then counted against a TANF recipient's 5-year limit on benefits. If a state spends TANF funds on child care, there is no requirement to include a set-aside of funds for quality initiatives as required under CCDF.
- The legislation also clarifies that any TANF funds a state carries over from the previous fiscal year can be spent on either assistance or services. Current regulations limit TANF funds carried over from previous fiscal years to be spent only on assistance.
- With these two changes included (definition of "assistance" and the ability to spend previous fiscal year TANF funds on assistance or non-assistance), states will have an incentive to spend TANF funds directly on child care. By doing so, they can avoid the current child care law requirement to set-aside 4% for quality or the child care requirement that funds be spent within 3 years.
State TANF Maintenance-of-Effort
- The current requirement that states spend 75% to 80% of what that state had spent under the previous AFDC program-the TANF Maintenance-Of-Effort (MOE) requirement-is broadened. Under the bill, states would be allowed to count total expenditures made by the state during the fiscal year under all state programs that address purposes three and four of the TANF act. This means any state spending for the reduction and prevention of out-of-wedlock pregnancies, and programs to promote and encourage responsible fatherhood and healthy two-parent families can now be counted by the state toward meeting their 75% to 80% MOE spending level. This is true even if these programs were not countable toward MOE in the past.
- Current TANF law includes four purposes that determine how states can spend federal and state TANF funds: (1) provide assistance to needy families so that children may be cared for in their own homes or the homes of relatives; (2) end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage; (3) prevent and reduce the incidence of out-of-wedlock pregnancies and establish numerical goals for prevention and reducing the incidence of these pregnancies; and (4) encourage the formation and maintenance of two-parent families. H.R. 4 amends the introductory section to the four purposes of the act to state that the overall purpose is "to improve child well-being by increasing" state flexibility to address the four purposes. The fourth purpose is amended to emphasize "strengthening healthy two-parent married families and encourage responsible fatherhood."
- States are required to include performance goals. States would be required to indicate how they address each of the purposes of the TANF law. States will have specific numerical goals they must achieve. Included in these goals and outcomes are employment retention and advancement, youth development, use of faith-based organizations, and program integration. While the legislation requires states to measure outcomes for the four purposes, it does not specify how the states measure child well-being.
- H.R. 4 changes the current second purpose of the law from "end dependence of needy parents on government benefits by promoting job preparation, work, and marriage" to "end the dependence of needy families on government benefits and reduce poverty by promoting job preparation, work, and marriage."
- The legislation requires states to impose what is referred to as a full "check" sanction. In effect, these are "full family" sanctions. If individuals fail to meet certain work and TANF requirements, the entire family benefit must be eliminated, at least for a period of time. This full family sanction provision requires states that currently impose a partial sanction on families (reducing their monthly cash assistance) for refusal to meet certain TANF requirements, to cut-off all benefits to the sanctioned family. If an adult fails to meet TANF activities and requirements partially or for one month, then there must be at least a partial reduction in benefits. If the individual fails to meet all TANF requirements for two months or more, then the entire family has to be cut-off from receiving any federal or state TANF assistance for at least one month.
- As of August 2000, 13 states had implemented a full family sanction policy for first instances of noncompliance. Thirty-four states imposed a full family sanction only as an ultimate sanction. The remaining 16 states do not impose a full cut off of TANF benefits for sanctioned families.
- Current law requires states to have 50% of their caseload in federally- defined work. In addition, if a state chooses to serve two-parent families, these families are calculated separately, and a state must have 90% of these families in federally-defined work. H.R. 4 will increase the 50% work requirement by 5% a year until it reaches 70% in 2007. No separate calculation is required for two-parent families.
- Under current law, states can reduce both of these work requirements when they receive a caseload credit. That credit has been based on how much a state's cash assistance caseload had dropped since 1995. H.R. 4 modifies the current caseload reduction credit which is based on how much a state's caseload has decreased since 1995. The credit for 2004 would be based on the drop in caseload from 1996. For 2005 it would be based on the drop in the caseload from 1998. Eventually, the credit would be based on the caseload that existed four years earlier. The formula is intended to be an incentive for states to continually reduce the number of families receiving cash assistance. A "superachiever" credit is created for states that have reduced their caseloads by 60% or more.
- The entire credit is based on a goal of permanently eliminating families on assistance regardless of their status, income or well-being.
- Currently, TANF recipients must work 30 hours per week. Mothers with children under age six are required to work 20 hours. An individual meets this goal only if they are engaged in activities that are defined as "work." H.R. 4 requires TANF recipients to be engaged 40 hours a week in work and activity. Twenty-four hours of that 40-hour total must be in work. Substance abuse treatment, rehabilitation services, work-related education or training, or job search for three months over a two-year period can be counted as work. For the remaining 16 of the 40 hours, an individual must be engaged in activities defined by the state. There will no longer be a reduced work week (of 20 hours) for mothers with children under six.
- The bill proposes no changes to current law allowing states to exempt 20% of their caseload from the work requirements.
Universal Engagement and Family Self-Sufficiency Plans
- The requirement to have an individual assessment is replaced with a requirement that every family have a self-sufficiency plan developed by the state and it requires a parent, caretaker, or families to engage in activities in accordance with the plan.
- The Family Self-Sufficiency Plan requires the state to assess, in a manner deemed appropriate by the state, skills, work experience, and employability of each work-eligible individual. The plan would specify appropriate activities, including direct work activities; require, at a minimum, each member of the family who is work-eligible to participate in these activities; monitor the participation of these family members; regularly review the self-sufficiency plan; and revise the plan as appropriate.
TANF Time Limits
- The bill proposes no changes to the current law, which dictates that no adult may receive more than 5 years of federally funded TANF assistance.
- H.R. 4 includes a section on child welfare that extends HHS's waiver authority to approve demonstration projects that are likely to promote the objectives of child welfare programs authorized under Title IV-B and Title IV-E. This waiver authority is extended through 2008. That authority expired in 2002. The legislation provides that: 1) no limits would be placed on the number of waivers states could receive; 2) no limits would be placed on the number of individual waivers one state could receive; and 3) no limits would be placed on the types of child welfare waivers HHS approves. The bill also directs the Secretary to develop a streamlined process for consideration of amendments to, and extensions of, demonstration projects requiring waivers.
- The bill does not make changes to the current eligibility link between AFDC standards (as of July 16,1996) and Title IV-E Foster Care and Adoption Assistance. To determine Title IV-E eligibility, a state must use the AFDC eligibility rules that existed on July 16, 1996. Over time this becomes not just a burdensome process for administrators but it gradually reduces the number of children eligible under the Title IV-E system. Current data from a recently released report by the Urban Institute estimates that only 57% of children in out-of-home placements now qualify for IV-E funding.
- H.R. 4 creates a waiver that grants broad authority to the Secretaries of the U.S. Departments of Health and Human Services, Education, Labor, Housing and Urban Development, and Agriculture to waive various program requirements and laws.
- This waiver authority covers Child Care, TANF, SSBG, the food stamp program, housing programs (except those under Section 8), the Labor Department's Wagner-Peyser Act and parts of the Workforce Investment Act, and the Department of Education's Adult Education and Family Literacy Act.
- This "super-waiver" proposal does not impose any significant limitations on the types of rules states that can apply to be waived, except that a waiver must not result in higher federal costs than would be incurred under standard federal law. This stands in stark contrast to most waiver provisions of current law, which include certain safeguards. States are only required to show that the waiver would further the purposes of all of the programs involved. If the Secretary of the Department did not respond within 90 days, the waiver would be automatically approved.
- Unlike past waiver policies that allowed states to operate demonstration projects to test the efficacy of new initiatives or alternative approaches, there would be no requirement that these waivers have a research objective or be subject to an independent evaluation.
- Under this super waiver proposal, a state could propose a block grant that could include child care, food stamps, housing, adult education, and other programs. A state might request suspension of market rate-setting requirements or quality set-aside requirements under child care.
- H.R. 4 permanently extends Section 510 of the Maternal and Child Health Block Grant, the abstinence-unless-married education program.
- Current funding for this abstinence education program is $50 million for FY 2002. To receive funding under this program, only an abstinence-unless-married curriculum can be taught. States are restricted from using these funds to teach both abstinence and contraception.
- Currently, states reimburse the federal government for a share of child support that is collected for families on TANF assistance. Under current law, when states collect past child support for a family on assistance, the recovered child support must be used (in part) to reimburse the federal government for past assistance costs. States also take a share of the recovered child support to reimburse their own treasuries. States can pass-through a minimal amount to the family on assistance without being required to reimburse the federal government.
- H.R. 4 allows states to increase the amount of child support funds they pass through to a family by allowing states to increase from $50 to $100 funds passed through to the family. States will not be required to reimburse the federal government for its share of this cost. To qualify, a state must disregard the increased child support passed through to the family in calculating a family's assistance grant level-not reduce the assistance grant by the amount of increased child support received by the family.
- States are also encouraged to pass through all child support to families that have left TANF. The federal government will share in this cost. The legislation also includes numerous provisions that will allow greater intercepts or recoupment of past due child support through changes to the immigration, veterans, and Social Security systems.
Transitional Medical Assistance
For more information, contact John Sciamanna, CWLA Senior Government Affairs Associate, at firstname.lastname@example.org or 202/639-4919.
- H.R. 4 allows for a one-year extension of the transitional medical assistance program (TMA) through FY 2004. TMA provides temporary health care coverage to families who have become ineligible for Medicaid, usually due to the move from welfare to self-sufficiency.
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