Welfare Reform

Rose Karasti is Senior Policy Associate at Chicago Jobs Council. The 23-year-old organization works to ensure access to employment and career advancement opportunities for people in poverty.

At the end of March, the United States Congress approved the sixth extension of our current welfare legislation to June 30, 2004. Enacted in 1996, the welfare reforms in this bill aimed to end the “dependence of needy families on government benefits” through job preparation, work, and marriage. The law requires 30 hours of participation in work activities for most families in need of cash assistance, limits the receipt of assistance in anyone’s lifetime to 60 months, distributes federal funds to states which engage 50 percent of their welfare recipients in mandated work activities, and expects state investment in work supports. Since 1996 the Temporary Assistance for Needy Families (TANF), or welfare caseloads, have declined nationally by 58 percent. In Illinois, the state claims an 89 percent decrease in the “available-to-work” caseload.

Caseload reduction, however, is not the same as poverty reduction. Between 2000 and 2002, the number of US children in poverty increased by 600,000 to 12 million children. The number of individuals experiencing severe poverty – income below 50 percent of the poverty level – rose by 1.5 million.[1]  In Illinois, 15.2 percent of our children live in poverty, as well as over 630,000 of our working age population. [2]  A 2003 study of our welfare population alarmingly revealed that 90 percent of those we have transitioned from welfare to work still live below the poverty level.  Only 6 percent have “good jobs” – jobs that pay $8 or more per hour, are full time, and include benefits.[3]  And a troubling 37 percent of Illinois’ families are neither working nor on welfare.[4]  Consistent with national trends, while the state’s welfare caseloads have declined, both food stamp and medical assistance rolls have ballooned to the hundreds of thousands.

Anti-poverty advocates hoped that the wealth of research available would inform the Bush Administration’s welfare reform vision and Congress’ welfare reauthorization efforts in 2002. Agreeing that poverty reduction is a more commendable goal for welfare legislation, advocates have recommended a greater investment of government funding in work supports like child care, greater state flexibility to meet the needs of low-skilled job seekers for education and training and services for families with multiple barriers to employment, careful assessment of a family’s situation prior to imposing sanctions, and the elimination of restrictions on assistance to legal immigrants. Instead, at the Administration’s urging, the House passed mean-spirited bills in 2002, and early in 2003 after the Senate failed to complete welfare reauthorization in the previous congressional year. The Senate Finance Committee proposed an only slightly improved welfare bill for consideration in late 2003. These bills are still on the table and will be up for debate again before June’s end.

So what’s wrong with these bills? House Resolution 4 raises the required hours of work activities for all parents in need of cash assistance, including parents of young children, to 40 hours per week. It requires states to have 70 percent of their welfare recipients in a narrow list of work activities. The House-passed bill arbitrarily restricts the number of hours that education and training can be considered work activity and limits the time welfare recipients can be engaged in employment barrier remediation activities like mental health counseling and substance abuse treatment. Despite these new mandates to engage more needy families in work activities, the House bill freezes funding at 1996 levels adding only $200 million annually for child care to support families at work. H.R. 4 continues to deny for the first five years, assistance to legal immigrants who have entered our country since 1996 and mandates full family sanctions, or the reduction of assistance to children, for parental noncompliance with the rules. Yet, $300 million in annual funds that could be directed to help meet a poor family’s basic needs or to support work have been diverted to marriage promotion programs. Finally, H.R. 4 includes a provision for “superwaiver” authority, allowing the executive branch and a state’s governor to disregard the state’s obligation to meet federal requirements in a wide range of programs including food stamps, child care, job training, and housing, thus significantly altering program operations and individuals’ rights.

The Senate Finance Committee bill gives states greater flexibility to increase child support awards for needy families and extends funds for temporary medical insurance coverage to those transitioning from welfare to work. It ensures states can receive additional funding when economic downturns result in increased assistance demands and limits the reach of the “superwaiver”. The bill, however, proposes no additional funding for child care beyond the House proposal, while still asking for an increase in work activity hours for families, though slightly less than the 40 hour requirement of the House bill. The Senate bill also imposes the 70 percent participation rate on states and arbitrary restrictions on welfare recipients’ engagement in basic education, vocational training, and barrier remediation activities. And the Senate Finance Committee bill still restricts states from using TANF funds for legal immigrants, while directing limited funds to state-supported marriage promotion activities.

But isn’t work good for poor families?  Remember, 90 percent of those we moved from welfare to work in Illinois still live in poverty.  A welfare bill like H.R. 4 or the Senate Finance Committee proposal does little to further welfare reform’s progress and family self-sufficiency. Raising required work hours and participation rates and narrowing the definition of core work activities ignores Illinois’ labor market realities and caseload limitations, demanding either the impossible or the illogical from state administrators and welfare recipients. Demanding work placement for all TANF recipients and restricting education and training activities and rehabilitative services will continue to strand Illinois’ heads of household in poverty-wage jobs.  Increased participation rates will force states to create “make work” programs - a far cry from the “good jobs” desperately needed in Illinois. New limitations on allowable work activities and continued restrictions on legal immigrant participation in services deny Illinois the flexibility needed to address the multiple employment liabilities of individuals on its caseload and to provide assistance to often hard-working, yet poor immigrants and their children. Finally, a mere $200 million annual increase in federal child care money and TANF appropriations for marriage promotion, on top of new participation mandates, leave Illinois with severely limited resources to support welfare families at work or those who need additional services to succeed at work.

The bad news is also good news. Congress has not managed to reauthorize TANF because these bad bills have been met with opposition on the Senate Floor. Welfare recipients, advocates, state administrators, and researchers have informed and fueled this opposition. Recently, the Senate did approve a $6 billion increase in child care funds over five years, but Senate majority leaders pulled welfare reauthorization off the Floor when it became clear the minority was ready to fight for other significant amendments to the Finance Committee bill. It is not clear whether the Senate will successfully amend the legislation prior to the June 30 deadline to secure reasonable and flexible work participation rates and family work activity requirements, and greater incentives for vocational training, barrier remediation, and skills upgrading that will promote family-sustaining employment for all poor families. And advocates fear that any bill which survives a negotiated Senate-House compromise will be diminished further, and devastating to our best state practices and family efforts. Nationally, anti-poverty advocates are coalescing around a position that recommends extending current law for two years. This would ensure that cash-strapped states have federal funds and greater flexibility to deliver vital safety net benefits and work supports to needy families. It is hoped that two years down the road, Congress will be able to deliver welfare legislation that targets poverty reduction, the most commendable aim of welfare reform.