S. Rept. 104-96 - THE FAMILY SELF-SUFFICIENCY ACT OF 1995104th Congress (1995-1996)
Committee Report
Reports for H.R.4
S. Rept. 104-96 - 104th Congress (1995-1996)
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Senate Report 104-96 - THE FAMILY SELF-SUFFICIENCY ACT OF 1995
[Senate Report 104-96]
[From the U.S. Government Printing Office]
Calendar No. 125
104th Congress Report
SENATE
1st Session 104-96
_______________________________________________________________________
THE FAMILY SELF-SUFFICIENCY ACT OF 1995
_______
June 9 (legislative day, June 5), 1995.--Ordered to be printed
Filed, under authority of the order of the Senate of June 8
(legislative day, June 5), 1995
_______________________________________________________________________
Mr. Packwood, from the Committee on Finance, submitted the following
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany H.R. 4]
The Committee on Finance, to which was referred the bill
(H.R. 4) to amend the Social Security Act to replace the AFDC
program with block grants for needy families with children, to
replace child welfare, adoption assistance and foster care
programs with a block grant for child protection, to make
various reforms to the Supplemental Security Income program, to
strengthen the child support enforcement program (along with
various reforms to other programs under other laws), and which
would restore the American family, reduce illegitimacy, control
welfare spending, and reduce welfare dependence, having
considered the same, reports favorable thereon with an
amendment in the nature of a substitute, and recommends that
the bill as amended do pass.
TABLE OF CONTENTS
Page
I. Purpose and Scope...............................................3
II. Explanation of Provisions.......................................4
Title I--Block Grants for Temporary Assistance for Needy Families4
1. Section 101.--Block grants to States.................. 5
a. AFDC programs consolidated into Temporary Family 5
Assistance block grant program.
b. Purposes.......................................... 5
c. State Plan Requirements........................... 6
d. Eligibility for assistance........................ 6
e. Payments to States and uses of funds............. 7
f. Supplemental assistance for needy families federal 8
loan fund.
g. Penalties against States.......................... 8
h. Mandatory work requirements....................... 9
i. Religious character and freedom................... 9
j. Data collection and reporting..................... 9
k. Research, evaluations, and national studies....... 9
l. Study by the Census Bureau........................ 10
m. Assistant Secretary for Family Support............ 10
n. State demonstration programs...................... 10
o. No individual entitlement......................... 10
2. Section 102.--Report on data processing............... 10
3. Section 103.--Continued application of current 10
standards under medicaid program.
4. Section 104.--Waivers................................. 11
5. Section 105.--Deemed income requirement for Federal 11
and federally funded programs under the Social
Security Act.
6. Section 106.--Conforming amendments to the Social 11
Security Act.
7. Section 107.--Conforming amendments to the Food Stamp 11
Act of 1977 and related provisions.
8. Section 108.--Conforming amendments to other laws..... 11
9. Section 109.--Secretarial submission of legislative 11
proposal for technical and conforming amendments.
10. Section 110.--Effective date; transition rule........ 12
Title II--Modifications to the Jobs Program (and Title I--Work 12
Requirements).
Title III--Supplemental Security Income.........................15
Subtitle A--Eligibility Restrictions.................... 15
1. Section 301.--Denial of SSI benefits by reason of 15
disability to drug addicts and alcoholics.
2. Section 302.--Limited eligibility of noncitizens 15
for SSI benefits.
3. Section 303.--Denial of SSI benefits for 10 years 16
to individuals found to have fraudulently
mispresented residence in order to obtain
benefits simultaneously in 2 or more states.
4. Section 304.--Denial of SSI benefits for fugitive 16
felons and probation and parole violators.
5. Section 305.--Effective dates; application to 16
current recipients.
Subtitle B--Benefits for Disabled Children.............. 17
1. Section 311.--Benefits for disabled children..... 20
2. Section 312.--Continuing disability reviews....... 20
3. Section 313.--Treatment requirements for disabled 21
individuals under the age 18.
Subtitle C--Study of Disability Determination Process.... 21
1. Section 321.--Study of Disability Determination 21
Process.
Subtitle D--National Commission on the Future of 21
Disability.
Section 331.--National Commission on the Future of 21
Disability.
Title IV--Child Support Enforcement.............................21
Subtitle A--Eligibility for Services; Distribution of 22
Payments.
1. Section 401.--State obligation to provide child 22
support enforcement services.
2. Section 402.--Distribution of child support 22
collections.
3. Section 403.--Rights to notification and hearings. 23
4. Section 404.--Privacy safeguards.................. 23
Subtitle B--Locate and Case Tracking..................... 23
1. Section 411.--State case registry................ 23
2. Section 412.--Collection and disbursement of 23
support payments.
3. Section 413.--State directory of new hires........ 24
4. Section 414.--Amendments concerning income 25
withholding..
5. Section 415.--Locator information from interstate 25
networks..
6. Section 416.--Expansion of the Federal parent 25
locator service..
7. Section 417.--Collection and use of social 26
security numbers for use in child support
enforcement..
Subtitle C--Streamlining and Uniformity of Procedures.... 26
1. Section 421.--Adoption of uniform State laws...... 63
2. Section 422.--Improvements to full faith and 26
credit for child support orders.
3. Section 423.--Administrative enforcement in 26
interstate cases.
4. Section 424.--Use of forms in interstate 26
enforcement..
5. Section 425.--State laws providing expedited 26
procedures..
Subtitle D--Paternity Establishment..................... 27
1. Section 431.--State laws concerning paternity 27
establishment..
2. Section 432.--Outreach for voluntary paternity 28
establishment..
3. Section 433.--Cooperation by applicants for and 28
recipients of temporary family assistance..
Subtitle E--Program Administration and Funding..........
1. Section 441.--Federal matching payments........... 28
2. Section 442.--Performance-based incentives and 28
penalties.
3. Section 443.--Federal and State reviews and audits 29
4. Section 444.--Required reporting procedures....... 29
5. Section 445.--Automated data processing 29
requirements.
6. Section 446.--Technical assistance................ 30
7. Section 447.--Reports and data collection by the 30
Secretary.
Subtitle F--Establishment and Modification of Support 30
Orders.
1. Section 451.--National Child Support Guidelines 30
Commission.
2. Section 452.--Simplified process for review and 30
adjustment of child support orders.
3. Section 453.--Furnishing consumer reports for 31
purposes relating to child support.
4. Section 454.--Nonliability for depository 31
institutions providing financial records to State
child support enforcement agencies in child
support cases.
Subtitle G--Enforcement of Support Orders............... 31
1. Section 461.--Federal income tax refund offset.... 31
2. Section 462.--Internal Revenue Service collection 31
of arrearages.
3. Section 463.--Authority to collect support from 31
Federal employees.
4. Section 464.--Enforcement of child support 32
obligations of members of the Armed Forces.
5. Section 465.--Voiding of fraudulent transfers..... 32
6. Section 466.--Work requirement for persons owing 32
child support.
7. Section 467.--Definition of support order......... 32
8. Section 468.--Reporting arrearages to credit 32
bureaus.
9. Section 469.--Liens............................... 33
10. Section 470.--State law authorizing suspension of 33
licenses.
11. Section 471.--Denial of passports for nonpayment 33
of child support.
Subtitle H--Medical Support............................. 33
1. Section 475.--Technical correction to ERISA 33
definition of medical child support order.
2. Section 476.--Enforcement of orders for health 33
care coverage.
Subtitle I--Enhancing Responsibility and Opportunity for 33
Nonresidential Parents.
1. Section 481.--Grants to States for access and 33
visitation programs.
Subtitle J--Effect of Enactment......................... 34
1. Section 491.--Effective dates.................... 34
III.
Regulatory Impact of the Bill..................................34
IV. Votes of the Committee.........................................35
V. Budgetary Impact of the Bill...................................42
VI. Additional Views...............................................63
VII. Changes in Existing Law Made by Bill...........................78
I. PURPOSE AND SCOPE
The Committee bill fundamentally reshapes the Nation's
welfare programs. The most important change is to devolve to
the States (and U.S. territories) primary responsibility for
the Aid to Families with Dependent Children (AFDC) program and
related programs under the Social Security Act. The Committee
bill replaces the present AFDC entitlement to cash welfare, and
the myriad of complicated Federal rules and regulations for the
AFDC program, with block grants under which the States (and
U.S. territories) are given great latitude to design a program
to assist needy families with minor children become self-
sufficient and productive members of the work force. States
determine who will be eligible to receive assistance and the
types of assistance to be provided. States are authorized to
deny assistance to noncitizens if they so choose.
The Committee bill transforms welfare into a temporary
program that places strong emphasis on employment skills and
work activities. Able-bodied adults who have received benefits
for 2 years must participate in JOBS activities for at least 20
hours a week. The JOBS program for AFDC recipients is modified
to give States more flexibility in serving the needs of welfare
recipients and to strengthen work requirements. Welfare is made
temporary by limiting the receipt of benefits to 5 years except
in the case of hardship.
The Committee bill also makes much needed reforms to the
Supplemental Security Income (SSI) welfare program, which is
funded solely by Federal dollars and has experienced rapid
growth of certain populations in recent years. The Committee
bill changes SSI eligibility for drug addiction and alcoholism
impairments, for noncitizens who enter the U.S. on the basis
that they not become a public charge and who have not worked in
the U.S. for specified time periods, and for certain children
with disabilities.
The Committee bill provides a uniform rule for ``deeming''
a sponsor's income and resources to noncitizens for all means-
tested programs in the Social Security Act. The sponsor's
income and resources are deemed to the noncitizen for the
greater of 5 years after lawfully entering the U.S. or the time
specified in the sponsor's affidavit of support.
The Committee bill strengthens the child support
enforcement program by requiring States to improve paternity
establishment programs, establish uniform tracking systems and
a directory of new hires, and adopt uniform laws to expedite
interstate child support collections.
II. EXPLANATION OF PROVISIONS
Title I--Block Grants for Temporary Assistance for Needy Families
Present law
The Aid to Families with Dependent Children (``AFDC'')
program was enacted in 1935 to provide Federal matching funds
to allow States to make cash payments on behalf of needy
dependent children. AFDC programs are currently operated in all
50 States, the District of Columbia, and three territories
(Guam, Puerto Rico, and U.S. Virgin Islands).
The original AFDC legislation imposed very few requirements
on States. Amendments to the program over the years have
drastically increased requirements on States. Although States
still set ``standards of need'' and benefit levels for the
program, there is an extensive set of Federal eligibility
rules, especially with respect to how a family's income and
resources are determined. Income and resources of a sponsor of
a noncitizen are ``deemed'' to the noncitizen for the first
three years after lawfully entering the United States in
determining eligibility for the AFDC program.
States must submit, for approval by the Secretary of HHS, a
State plan that describes the cash benefits and services
offered by the State and explains how the State intends to
comply with 43 requirements of present law.
States must also have in effect an approved child support
program, an approved plan for JOBS, foster care and adoption
assistance programs, and an eligibility and verification
program.
Reasons for change
Consolidating the AFDC program and related programs into a
block grant provides States with much needed flexibility in the
use of Federal funds to help needy families with minor
children. Streamlining Federal requirements will allow States
to devote more time to serving needy families and to develop
programs that address the special circumstances of localities.
States are guaranteed Federal funding for 5 years so they can
make long-term plans without fear of reduced funding. The
primary condition placed on Temporary Family Assistance funds
is an increased commitment to make able-bodied adults on
welfare work. Removing the individual entitlement to cash
benefits sends a clear message to welfare recipients that
welfare assistance is temporary and is not intended to continue
on year after year leading to welfare dependency.
Summary of principal provisions
1. Section 101.--Block grants to States.
a. AFDC programs consolidated into Temporary Family
Assistance block grant program
The AFDC program along with related programs are
consolidated into a new grant to States called the ``Temporary
Family Assistance'' grant to increase the flexibility of States
in operating an assistance program for needy families with
minor children. The Temporary Family Assistance grant replaces
the following AFDC programs under the Social Security Act:
(1) AFDC cash benefits.
(2) AFDC administration.
(3) AFDC work-related child care.
(4) Transitional child care.
(5) At-risk families child care.
(6) Emergency assistance.
(7) Funding for the JOBS program.
b. Purposes
The purposes of the new grant program are to provide
Federal funds for temporary assistance to needy families with
minor children so that such children can be maintained in their
homes or the homes of relatives, to promote self-sufficiency of
parents of needy children by placing greater emphasis on job
preparation and employment, and to prevent and reduce the
incidence of out-of-wedlock pregnancies, generally understood
to be one of the root causes of welfare dependency.
c. State plan requirements
Under the Temporary Family Assistance grant, States must
submit to the Secretary of Health and Human Services (HHS), and
update annually, a plan outlining how the State intends to do
the following:
(1) Offer a program to serve needy families with
minor children throughout the State (assistance may
vary from locality to locality within a State);
(2) Provide assistance to needy families with minor
children for up to 5 years (longer for hardship cases)
and provide job preparation and work experience to
adults in the family so that they become self-
sufficient;
(3) Require at least one parent in a needy family
receiving benefits for more than 24 months (whether or
not consecutive) to engage in work activities in
accordance with section 404 and Title IV-F (as amended
by the Committee bill);
(4) Meet participation rates for the JOBS program;
(5) If different from other recipients, provide
benefits paid to needy families moving into the State
and to noncitizens;
(6) Safeguard and restrict the use and disclosure of
information about needy families receiving benefits;
and
(7) Reduce the incidence of out-of-wedlock
pregnancies with special emphasis on teenage pregnancy.
States must certify annually that they will operate a child
support enforcement program under Title IV-D; a child
protection program under Title IV-B; adoption assistance and
foster care programs under Title IV-E; a JOBS program under
Title IV-F; and an income and eligibility verification system
under section 1137. States must certify which State agency or
agencies are responsible for the administration and supervision
of the program. In this regard, a State may contract with
public and private organizations to provide services to welfare
recipients. States must certify that any reports required under
Title IV-A and IV-F will be filed with the Secretary of HHS and
must provide an estimate of State funding for the program.
d. Eligibility for assistance
The Temporary Family Assistance grant is to be used to
serve needy families with minor children. A minor child is an
individual under 18 years old or, if a full-time student, under
19 years old and who resides with the individual's custodial
parent or other caretaker relative.
States are to determine standards of need, eligibility
criteria, and types and levels of assistance under the State's
program funded under the Temporary Family Assistance grant,
subject to work requirements and limitations on assistance
under Title IV-A and IV-F. States may reduce or deny assistance
to families that refuse to comply with work requirements.
States may apply the rules of another State to families who
move from the other State for up to 12 months. States are
authorized to deny assistance to noncitizens, if they so
choose, and must ``deem'' the income and resources of a sponsor
to the noncitizen for five years after lawfully entering the
United States (longer if required in the affidavit of support).
A family cannot receive assistance under a State's program
funded under the Temporary Family Assistance grant for more
than 60 months (whether or not consecutive) after September 30,
1995, unless the State exempts the family by reason of
hardship. States determine what constitutes a hardship for this
purpose and are limited to granting hardship for a maximum of
15 percent of the average monthly caseload for the fiscal year.
The 60-month period begins for an individual who was previously
a minor child in a needy family when that individual becomes
the head of household of a needy family with a minor child.
Individuals receiving other Federal assistance payments,
such as Social Security benefits, Supplemental Security Income
payments, or foster care payments, are not eligible for
assistance under a State program funded under the Temporary
Family Assistance grant.
An individual who is convicted in a Federal or State court
of having made a fraudulent statement or representation with
respect to the place of such individual's residence in order to
receive assistance or benefits simultaneously from two or more
States under programs in Titles IV, XVI, or XIX, or the Food
Stamp Act of 1977 is not eligible to receive assistance under a
State program funded under the Temporary Family Assistance
grant for 10 years beginning with the date of conviction. An
individual who is a fugitive felon or who is violating
probation or parole is not eligible to receive assistance under
a State program funded under the Temporary Family Assistance
grant.
e. Payments to States and uses of funds
The total amount of the Temporary Family Assistance grant
is $16,779,000,000 for each of the fiscal years 1996 through
2000. Each eligible State is entitled to receive a State Family
Assistance Grant equal to the actual Federal AFDC and related
program expenditures paid to the State for fiscal year 1994.
Payments to States are made quarterly. States are allowed to
carry forward unused grant funds to future years. Federal grant
funds may be subject to appropriation by a State legislature,
consistent with the terms and conditions of the Temporary
Family Assistance grant. Indian tribes and Alaska Native
organizations currently operating a JOBS program will continue
to receive Federal funds directly at the same level paid to
them for fiscal year 1994.
States may use Temporary Family Assistance funds in any
manner reasonably calculated to accomplish the purposes of
Title IV-A, including assistance to families who left welfare
for employment (for a transition period) and families at risk
of going on welfare. The Committee intends that the types of
expenditures which were authorized by Title IV-A before the
effective date of the Committee bill will continue to be an
authorized use of funds. For example, authorized expenditures
under present Title IV-A include cash benefits; JOBS program
services for recipients and noncustodial parents; work
supplementation payments; child care services for recipients,
families who left welfare for employment (for a transition
period) and families at risk of going on welfare;
transportation and other work-related expenses for recipients
and families who left welfare for employment (for a transition
period); pregnancy prevention education, medical and
counselling services; emergency assistance to avoid destitution
of a child or to provide temporary shelter; reasonable
administration costs, including quality control systems; and
welfare fraud detection. The Committee intends that Temporary
Family Assistance funds not be used to pay expenses related to
other federally funded programs, such as medical services
covered by Medicaid, or to supplant State funding of such other
programs.
f. Supplemental assistance for needy families Federal loan
fund
The Federal Government is authorized to establish a
revolving loan fund of $1.7 billion to be administered by the
Secretary of HHS for supplemental funding needs for State
programs funded under the Temporary Family Assistance grant.
Loan funds may be used to provide assistance under such State
programs and welfare anti-fraud activities. Eligible States may
borrow from the revolving fund if the State has not been found
to misuse funds under the Temporary Family Assistance grant. A
State's outstanding loan balance may not exceed 10 percent of
the State Family Assistance grant at any time. States must
repay their loans, with interest based on short-term Treasury
rates, within three years. In the event of default, the State's
grant for the quarter after the default is reduced by the
amount of the loan in default.
g. Penalties against States
The Secretary of HHS is authorized to collect the following
penalties from States for noncompliance with Temporary Family
Assistant grant requirements:
(1) Any amount found by audit to be in violation of
this program, plus 5 percent of such amount as a
penalty (unless reasonable cause is shown), will be
withheld from the next quarterly payment;
(2) 5 percent of the amount otherwise payable for a
fiscal year will be withheld if the State fails to
submit an annual report regarding the use of funds
within 6 months after the end of the fiscal year unless
the Secretary of HHS determines the State has
reasonable cause for such failure (the penalty is
rescinded if the report is submitted within 12 months);
(3) Up to 5 percent (within discretion of the
Secretary of HHS) of the amount otherwise payable for
the next fiscal year will be withheld if the State
fails to meet the JOBS participation rates for a fiscal
year;
(4) Up to 5 percent (within discretion of the
Secretary of HHS) of the amount otherwise payable for
the next fiscal year will be withheld if the State
fails to participate in the Income and Eligibility
Verification System designed to reduce welfare fraud;
(5) Up to 5 percent if the Secretary of HHS
determines a State fails to ensure that families are
cooperating with the child support enforcement agency
in establishing paternity or assigning child support
rights to the State; and
(6) Any amount borrowed from the revolving loan fund
which is not repaid within 3 years, plus interest, will
be withheld from the next quarterly payment.
The Secretary of HHS may not reduce any quarterly payment
to the States by more than 25 percent. Any remaining penalty
(above 25 percent) will be withheld from the State's payments
during succeeding payment periods.
States must provide State funds to replace reductions in
State Family Assistance grants for the above penalties.
h. Mandatory work requirements
[See discussion at Title II--Modifications to JOBS
program.]
i. Religious character and freedom
The Committee bill provides that any religious organization
participating in a State's program funded under the Temporary
Family Assistance grant shall retain its independence from
Federal, State, and local government, including such an
organization's control over all aspects of its religious
beliefs, and must not deny needy families and children
assistance on the basis of religion, religious beliefs, or
refusal to participate in a religious practice.
j. Data collection and reporting
Each State receiving Temporary Family Assistance grant
funds is required, not later than six months after the end of
each fiscal year, to transmit to the Secretary of HHS an annual
report describing the use of Federal funds and any State funds
and providing aggregate information on needy families receiving
assistance under the State's program funded under the Temporary
Family Assistance grant during the fiscal year. States are to
include the percentage of funds used for cash assistance, the
JOBS program, child care, transitional services, administrative
costs and overhead; child support received by the States for
needy families receiving assistance; the number non-custodial
parents participating in the JOBS program; and aggregate
information on needy families receiving assistance during the
fiscal year.
k. Research, evaluations, and national studies
The Secretary of HHS may conduct research on the effects,
costs, and benefits of State programs funded under the
Temporary Family Assistance grant. The Secretary of HHS may
assist States in developing innovative approaches to helping
welfare recipients attain self-sufficiency through employment
and shall evaluate the effectiveness of such approaches.
The Secretary of HHS is required annually to rank the
States in order of their success in moving individuals
receiving assistance into long-term private sector jobs. In
addition, the Secretary is to undertake an annual review and
evaluation of the three States most recently ranked highest and
the three States ranked lowest.
The Secretary of HHS is required to conduct a study of
outcomes measures for evaluating the success of a State in
moving individuals receiving assistance off of welfare through
employment and report to the Committee on Finance of the Senate
and the Committee on Ways and Means of the House of
Representatives not later than September 30, 1998.
l. Study by the Census Bureau
The Bureau of the Census is directed to expand the Survey
of Income and Program Participation as necessary to obtain
information to enable interested persons to evaluate the impact
of State programs funded under the Temporary Family Assistance
grant, with particular attention to the issues of out-of-
wedlock births, welfare dependency, the beginning and ending of
welfare spells, and the cause of repeat welfare spells.
m. Assistant Secretary for Family Support
The Assistant Secretary for Family Support within the
Department of Health and Human Services will administer the
programs under Title IV-A, IV-D, and IV-F.
n. State demonstration programs
The Committee bill is not intended to limit in any way the
ability of a State to conduct demonstration projects in one or
more political subdivisions directed at identifying innovative
or effective programs.
o. No individual entitlement
The Committee bill ends the individual entitlement to
assistance under the AFDC programs under Title IV-A and IV-F.
2. Section 102.--Report on data processing
Not later than 6 months after the date of enactment, the
Secretary of HHS is required to submit to the Congress a report
on the status of State automated data processing systems to
assist in managing the State's program funded under Temporary
Family Assistance grant, tracking program participants, and
checking for individuals participating in more than one State
program.
3. Section 103.--Continued application of current standards under
Medicaid program
The Committee does not intend the changes to Title IV-A,
made in the Committee bill, to change Medicaid eligibility.
Therefore, the Committee bill requires States to continue
Medicaid eligibility based on AFDC eligibility rules in effect
on June 1, 1995. That is, families who could have qualified
under a State's June 1, 1995, AFDC eligibility requirements
will continue to qualify for Medicaid in the future, even
though such families may not qualify for assistance under a
State program funded under the Temporary Family Assistance
grant. Similarly, families receiving adoption assistance and
foster care maintenance payments under Title IV-E will continue
to qualify for Medicaid in the future based on eligibility
requirements in effect on June 1, 1995.
4. Section 104.--Waivers
States that have a waiver under section 1115 or otherwise
relating to AFDC programs under Title IV-A in effect on October
1, 1995, may continue to operate a program under the terms of
the waiver notwithstanding any other provision of the Committee
bill. The State is not, however, entitled to any Federal
payments under the waiver.
A State may terminate a waiver, if it so chooses, and must
submit a report to the Secretary of HHS on the result or effect
of such waiver. A State is relieved of any accrued cost
neutrality liabilities under the waiver if the State terminates
the waiver by the later of January 1, 1996, or 90 days
following the adjournment of the first regular session of the
State legislature that begins after the date of enactment of
the Committee bill.
5. Section 105.--Deemed income requirement for Federal and federally
funded programs under the Social Security Act
The present law-deeming rules for determining the
eligibility of noncitizens for selected programs under the
Social Security Act are replaced with a uniform deeming rule
that applies to all means-tested programs under the Social
Security Act. The uniform deeming rule requires that the income
and resources of a sponsor and the sponsor's spouse be deemed
to a noncitizen for the later of 5 years beginning on the date
the noncitizen lawfully entered the United States or the period
specified in an affidavit of support.
The uniform deeming rule applies to State means-tested
programs that are funded under the Social Security Act,
including programs funded under the Temporary Family Assistance
grant, Medicaid, and Supplemental Security Income. However,
noncitizens will continue to be eligible for emergency medical
services.
6. Section 106.--Conforming amendments to the Social Security Act
The Committee bill contains a series of technical
amendments to conform the provisions of the Committee bill to
other provisions of the Social Security Act.
7. Section 107.--Conforming amendments to the Food Stamp Act of 1977
and related provisions
The Committee bill contain a series of technical amendments
to conform the provisions of the Committee bill to the Food
Stamp Act of 1977 and related provisions.
8. Section 108.--Conforming amendments to other laws
The Committee bill contains a series of technical
amendments to conform the provisions of the Committee bill to
other laws.
9. Section 109.--Secretarial submission of legislative proposal for
technical and conforming amendments
Not later than 90 days after the date of enactment of the
Committee bill, the Secretary of HHS, in consultation with the
heads of appropriate other Federal agencies, must submit to the
appropriate committees of the Congress, a legislative proposal
providing for such technical conforming amendments to the law
as are required to fully implement the provisions of the
Committee bill.
10. Section 110.--Effective date; transition rule
The provisions and amendments made by Title I of the
Committee bill are generally effective on October 1, 1995.
States may elect to continue their present law AFDC programs
until March 31, 1996, and the State Family Assistance Grant for
fiscal year 1996 will be reduced by the amount of Federal
payments made before April 1, 1996.
Title II--Modifications to the Jobs Program (and Title I--Work
Requirements)
Present law
The Family Support Act of 1988 established a new program,
the Job Opportunities and Basic Skill Training Program (JOBS),
to help needy families with children obtain the education,
training and employment needed to avoid long-term welfare
dependence. A JOBS program is currently operated in all 50
States, the District of Columbia, and three territories (Guam,
Puerto Rico, and the U.S. Virgin Islands). In addition, Indian
tribes and Alaska Native organizations can operate a JOBS
program and receive funds directly from the Federal Government.
States must make available a range of services and
activities under the JOBS program. States are required to
offer:
(1) Educational activities (as appropriate),
including high school or equivalent education (combined
with training as needed), basic and remedial education
to achieve a basic literacy level, and education for
individuals with limited English proficiency;
(2) Job skills training;
(3) Job readiness activities to help prepare
participants for work; and
(4) Job development and job placement.
States are also required to offer at least two of the
following:
(1) Group and individual job search;
(2) On-the-job training;
(3) Work supplementation programs; and
(4) Community work experience programs (CWEP) or
other approved work experience programs.
States may offer postsecondary education in appropriate
cases and such other education, training, and employment
activities.
A work assignment under the JOBS program must not result in
the:
(1) Displacement of any currently employed worker or
position;
(2) Impairment of contracts for services or
collectively bargained agreements;
(3) Filling of a position when an employee has been
laid off from an equivalent position or when an
employer has reduced its work force to create a vacancy
for a subsidized worker; and
(4) Filling of any established position vacancy.
To the extent resources are available, a State must require
non-exempt AFDC recipients to participate in the JOBS program.
States must guarantee child care for AFDC recipients who need
care for children under age 6 in order to engage in JOBS
activities.
Recipients exempt from participation in the JOBS program
are those who are:
(1) A parent or other relative caring for a child
under age 3 (younger at State option);
(2) A parent or other relative caring for a child
under age 6 if the State does not guarantee child care;
(3) Employed 30 hours or more a week;
(4) Under age 16 attending school full time;
(5) Pregnant women past their first trimester;
(6) Living in areas where the program is not
available;
(7) Ill, incapacitated, or of advanced age; and
(8) Needed in the home because of the illness or
incapacity of another household member.
The Congressional Budget Office estimates that 60 percent
of the AFDC caseload is exempt from participating in the JOBS
program.
Beginning with FY 1990, a State must meet specified
participation rates--i.e., a specified percentage of all non-
exempt recipients must participate in the JOBS program for at
least 20 hours weekly. Job search activities do not count as
participation after the first 4 months of receiving benefits.
The participation rate was set at 7 percent in FY 1990 and has
risen to 20 percent by FY 1995. This participation requirement
expires at the end of FY 1995.
In addition, a State must meet specified participation
rates for two-parent families. At least one parent in a two-
parent family must participate at least 16 hours weekly in a
work experience program, a work supplementation program, on-
the-job training, or a State-designed work program (or
educational activities for a parent under age 25 without a high
school diploma). The participation rate for two-parent families
is 50 percent for FY 1995; 60 percent for FY 1996; and 75
percent for FY 1997 and 1998. This participation requirement
expires at the end of FY 1998.
Five States are allowed to offer JOBS activities to non-
custodial parents.
Reasons for change
The Committee believes that the most effective way to
escape welfare and become self-sufficient is through
employment. Able-bodied adults should not be allowed to stay on
welfare year after year without working. However, because of
exemptions and weak participation standards, less than 10
percent of welfare recipients now participate in some type of
job readiness or work activity under the JOBS program. The
Committee bill addresses this problem by strengthening
participation requirements and modifying the JOBS program to
give States more flexibility in offering employment activities
to welfare recipients.
Summary of principal provisions
States must continue to have a JOBS program to be eligible
to receive funds under the Temporary Family Assistance grant.
Federal funding for the JOBS program is included in the State
Family Assistance Grant. Indian tribes and Alaska Native
organizations currently operating a JOBS program may continue
to receive Federal funding (at FY 1994 levels) directly for
that purpose.
The JOBS program is modified to give States more
flexibility in offering JOBS activities. States may offer any
combination of present law JOBS activities (instead of the six
mandatory activities). Requirements for job search and work
supplementation are streamlined. New JOBS activities are
authorized for community service programs approved by the State
and job placement voucher programs. All States are allowed to
open their JOBS program to non-custodial parents. A work
assignment under the JOBS program may fill an established
unfilled position vacancy.
States must guarantee child care for recipients who need
care for children under age 6 in order to participate in JOBS
activities.
States must meet new minimum participation requirements
based on the entire caseload:
Fiscal year: Percent
1996.......................................................... 25
1997.......................................................... 30
1998.......................................................... 35
1999.......................................................... 40
2000.......................................................... 45
2001 and thereafter........................................... 50
Participation rates are measured by averaging monthly
participation rates for a year. The monthly participation rate
is equal to the number of recipient families in which at least
one parent is engaged in JOBS program activities (job search is
limited to the first 4 weeks) for at least 20 hours per week in
a month divided by the total number of recipient families that
received cash benefit for the month. For FY 1996, 1997 and
1998, States have the option to compute these participation
rates using present law exemptions. After FY 1998, no
exemptions will be allowed in computing participation rates.
Beginning with FY 1996, participation for two-parent
families means that one parent in a two-parent family must
participate in work activities for at least 30 hours a week. In
addition, the participation rate for two-parent families will
be increased to 90 percent for FY 1999 and thereafter.
States may reduce or terminate assistance for families who
refuse to participate in JOBS program activities.
States not meeting the required participation rates in a
fiscal year will have their grant reduced by up to 5 percent
the succeeding fiscal year.
The Secretary of HHS is to conduct research on the cost/
benefit of the JOBS program and to evaluate promising State
approaches to employing welfare recipients. The Secretary of
HHS must also rank the States in order of their success in
moving recipients into long-term private sector jobs, and
review the three most and three least successful programs. The
Department of Health and Human Services will develop these
rankings based on data collected under the bill.
Title III--Supplemental Security Income
General description
The Supplemental Security Income (SSI) program was
established by the 1972 amendments to the Social Security Act
to provide cash assistance to needy aged (age 65 and over),
blind, and disabled individuals. Disabled individuals are those
unable to engage in any substantial gainful activity by reason
of a medically determined physical or mental impairment
expected to result in death or last at least 12 months. The SSI
program is entirely funded by the Federal Government (States
may provide supplemental payments).
SUBTITLE A--ELIGIBILITY RESTRICTIONS
1. Section 301.--Denial of SSI benefits by reason of disability to drug
addicts and alcoholics.
Present law
Individuals whose drug addiction or alcoholism is a
contributing factor material to their disability are eligible
to receive SSI cash benefits for up to 3 years if they meet SSI
income and resource requirements. These recipients must have a
representative payee, must participate in an approved treatment
program when available and appropriate, and must allow their
participation in a treatment program to be monitored. Medicaid
benefits continue beyond the 3-year limit unless the individual
was expelled from SSI for failure to participate in a treatment
program.
Reasons for change
The number of SSI recipients whose alcoholism or drug
addiction is a contributing factor material to their disability
has grown from 5,000 in 1985 to 101,000 in 1994. Costs have
risen from $14 million in 1985 to $433 million in 1994. The
Committee believes this trend is inappropriately diverting
scarce Federal resources from severely disabled individuals and
is providing a perverse incentive, contrary to the long-term
interests of alcoholics and addicts, by providing them with
cash payments so long as they do not work.
Summary of principal provisions
An individual will no longer be considered disabled for the
SSI program if alcoholism or drug addiction is a contributing
factor material to the individual's disability.
2. Section 302.--Limited eligibility of noncitizens for SSI benefits
Present law
Aged, blind, and disabled noncitizens can qualify for SSI
cash benefits if they meet SSI income and resource
requirements. In determining a noncitizen's income and
resources, the income and resources of a sponsor is deemed to
be those of the noncitizen for 5 years after the noncitizen
lawfully entered the United States.
Reasons for change
Except for asylees and refugees, noncitizens granted entry
into the United States stipulate that they will be self-
sufficient while living in the United States and will not
become a public charge. Notwithstanding this stipulation, the
number of noncitizens receiving SSI cash benefits have grown
dramatically in the last decade from 240,000 in 1986 to 740,000
in 1994. Costs have risen from $684 million in 1986 to $2.9
billion in 1994. The Committee believes that noncitizens should
abide to the condition of self-sufficiency under which they
gained entry into the United States. Limiting SSI eligibility
for noncitizens who have not worked in the United States for
significant time periods will ensure that scarce Federal
resources will continue to be available to needy citizens.
Summary of principal provisions
Noncitizens will no longer be eligible to qualify for SSI
cash benefits unless they have worked in the United States for
a sufficient period to qualify for Social Security disability
income (20 quarters of work) or old age benefits (40 quarters
of work). Noncitizens who entered the United States as an
asylee or refugee will be eligible for SSI cash benefits for up
to 5 years after entering the United States (if they otherwise
meet the SSI program requirements). Noncitizens who served in
the United States Armed Forces and their spouses and dependent
children will also be eligible for SSI cash benefits.
3. Section 303.--Denial of SSI benefits for 10 years to individuals
found to have fraudulently misrepresented residence in order to
obtain benefits simultaneously in two or more States
An individual who is convicted in a Federal or State court
of having made a fraudulent statement or representation with
respect to the place of such individual's residence in order to
receive assistance or benefits simultaneously from two or more
States under programs under Titles IV, XVI, or XIX, or the Food
Stamp Act of 1977 is not eligible to receive SSI benefits for
10 years beginning with the date of conviction.
4. Section 304.--Denial of SSI benefits for fugitive felons and
probation and parole violators
An individual who is a fugitive felon or who is violating
probation or parole is not eligible to receive SSI benefits
5. Section 305.--Effective dates; application to current recipients
The eligibility changes to the SSI program are generally
effective for months beginning on or after the date of
enactment of the Committee bill.
Individuals receiving SSI cash benefits on the date of
enactment who will no longer qualify for SSI because of
alcoholism or drug addiction or because of noncitizen status
will continue to receive SSI cash benefits until January 1,
1997 (if the individual otherwise continues to be eligible).
The Social Security Administration must notify such individuals
of the change in law within 90 days after the date of
enactment. An individual so notified who wishes to reapply for
SSI benefits on another basis must reapply to the Commissioner
of Social Security within 4 months after the date of enactment
and the Commissioner must make a determination of such
individual's eligibility within 1 year after the date of
enactment.
SUBTITLE B--BENEFITS FOR DISABLED CHILDREN
Present law
There is no definition of childhood disability in statute.
Instead, a needy individual under age 18 is determined eligible
for SSI ``if he suffers from any medically determinable
physical or mental impairment of comparable severity'' with
that of an adult considered disabled and eligible for SSI
benefits.
Under current disability evaluation procedures, the Social
Security Administration begins by collecting information about
an individual's impairments(s) and ability to function from
many sources, including, as appropriate, parents, physicians,
psychologists, other health professionals, and teachers. With
this information, the Social Security Administration first
decides if the impairment(s) of an individual under age 18
``meets or equals'' an impairment in the ``Listing of
Impairments''--over 100 specific physical or mental conditions
relating to individuals under age 18 described in regulations.
If an individual does not have a listed impairment, the Social
Security Administration next determines if the individual's
impairment is of sufficient severity to equal a listing. If
indicated, the Social Security Administration may also consider
whether the combined effect of all impairments are of
sufficient severity to be disabling (regardless of whether any
single impairment is severe enough to meet a listing), or
whether an individual's overall functional limitations
resulting from his or her impairment(s) are of sufficient
severity to be disabling.
If the Social Security Administration finds that the
impairment(s) of an individual under age 18 cannot meet or
equal the Listing as described above, it applies another set of
disability evaluation rules, an ``individualized functional
assessment'' (IFA).
Current law provides for continuing disability reviews of
current recipients to ensure that such individuals remain
disabled. Under the Social Security Independence and Program
Improvements Act of 1994 (P.L. 103-296), beginning on October
1, 1995, the Commissioner of Social Security is required to
conduct at least 100,000 continuing disability reviews each
year of disabled SSI recipients. The provision expires on
October 1, 1998.
Reasons for change
The Committee believes the provisions of the Committee bill
are the minimum changes needed to restore Congressional and
public confidence in the children's SSI program and to preserve
the program for families with children with severe
disabilities.
The Committee is concerned about significant program growth
experienced in recent years. Over the last 5 years the SSI
rolls have grown from 300,000 to over 900,000 children, and
costs have increased from $1.5 billion to $4.5 billion.
Although a significant amount of this growth followed from
Congressional mandates to the Social Security Administration,
e.g., to conduct outreach programs to locate children eligible
for the program and to improve the Listing for mental
impairments, other growth resulted from regulations issued in
1991 establishing the IFA that liberalized the eligibility
regulations beyond Congressional intent. Substantial further
growth in this program is projected.
The lack of a childhood disability definition is a
fundamental defect in the current statute, and has led to
substantial confusion over program eligibility. The Social
Security Administration has been required to translate what are
essentially two definitions of adult work disability in statute
into a childhood disability definition.
The Committee bill establishes a statutory definition of
childhood disability. By this definition, the Committee intends
that only needy children with severe disabilities be eligible
for children's SSI. The Committee believes that the Listing and
the other disability determination regulations as modified by
the Committee bill properly reflect the severity of disability
contemplated by the statutory definition. In those areas of the
Listing that involve domains of functioning, the Committee
expects no less than two marked impairments as the standard for
qualification. The Committee suggests the Social Security
Administration revisit the Listing, as appropriate, to ensure
that it meets this standard.
However, the Committee does not intend to suggest by its
definition of childhood disability that every child need be
especially evaluated for functional limitations, or that this
definition creates a supposition for any such examination. The
Committee notes that under the current procedure for writing
individual listings, level of functioning is an explicit
consideration in deciding which impairments, with what medical
or other findings, are of sufficient severity to be included in
the Listing. Nonetheless, the Committee does not intend to
limit the use of functional assessments and functional
information, if reflecting sufficient severity and are
otherwise appropriate.
The Committee bill includes a technical change to the
Listing for mental disorders. The Committee has eliminated
references to maladaptive behavior in the domain of personal/
behavioral function. Under the Listing for childhood mental
disorders, maladaptive behavior may be counted twice in
determining disability; once in the domain of personal/
behavioral function, and again in the domain of social
function. Under the Committee bill, such behavior may continue
to be scored, but only once, and within the domain of social
function. This change has been endorsed by various expert
groups.
The Committee bill repeals the regulations establishing the
IFA, and IFAs are no longer grounds for disability
determinations. In the Committee's view, the IFA is a misnomer.
Although the term conjures up images of a special kind of
evaluation of a child's ability to function, such as a unique
medical examination or clinical assessment by a psychologist,
or perhaps special consideration of the disabling effects of
multiple impairments, in reality the IFA is a set of
regulations that permits individuals with modest conditions or
impairments to be eligible for this program. The Committee is
also aware that there is considerable confusion about the use
of functional information in making disability determinations.
The Committee notes that findings from functional assessments
are substantially considered in the current Listing, and will
continue to be. For example, a substantially improved Listing
for childhood mental disorders was promulgated by the Social
Security Administration in 1990, which emphasized functional
assessment criteria and added new listings for certain specific
conditions, such as Attention Deficit Hyperactivity Disorder
(ADHD). As a disability determination methodology, the
Committee also notes that the General Accounting Office in a
March 1995 report sharply criticized the IFA, citing a number
of fundamental flaws.
The Committee urges those who seek changes in eligibility
standards or other program features to resolve such matters
directly with Congress. As a general matter, it is impossible
for Congress to properly oversee any program, especially an
entitlement program, when rules are reinterpreted by a court
and unilaterally implemented by an agency. The Committee is
also deeply concerned about the false hopes such behavior
creates for individuals who then expect to benefit from a
program.
This circumstance certainly applies to children's SSI. As
noted above, in 1991 the Social Security Administration
substantially liberalized program eligibility regulations. This
action was prompted by its reading of the Supreme Court
decision in Sullivan v. Zebley. The Zebley decision was based
on limited legislative history and obscure statutory language
regarding the children's SSI program, which the Committee is
now correcting. But the Committee notes that several relevant
bills were before the Congress at the time of the Zebley
decision, but that the Congress had not yet determined to act
on any of those measures. In the future, the Committee invites
the Social Security Administration to consult with it on any
substantive matter to avoid such misunderstandings.
The Committee believes that the children's SSI program
requires further examination. The Committee bill requires both
a study of the disability determination process and a National
Commission on the Future of Disability. The National Commission
also has the larger purpose of examining dramatic projected
growth in SSI, generally, and SSDI and the concerns of
individuals with disabilities about barriers to independence
and employment created by these programs.
For example, there is an ongoing controversy over the
purpose of the children's SSI program. According to history of
the original SSI legislation, the House Ways and Means
Committee included children with disabilities in the SSI
program to assist families with the extra expenses associated
with their child's disability (see H. Rpt. 92-231 at 147-148).
The Senate Finance Committee did not agree, believing the needs
of children with disabilities were generally only greater for
health care, and that most children would qualify for Medicaid
(see S. Rpt. 92-1230 at 385). The Senate receded in conference.
The Committee believes this is an important issue that
needs to be revisited. It is easy to imagine extra expenses for
a child with a disability, and helping families with such
expenses is an appropriate rationale for this program. However,
the best data available indicate that for many children
receiving SSI their families do not incur extra disability-
related expenses on their behalf, and that SSI is often used
for general household expenses. Moreover, there is a small
percentage of children who incur huge disability-related
expenses barely touched by the SSI payment. These data raise
fundamental questions of fairness and equity.
The Committee also believes there are many unmet needs for
children with disabilities, and is aware of the controversy
over whether some children would be better served by services,
such as mental health treatment or purchase of items of
assistive technology, rather than by cash payments. In the 23
years since the SSI program was created, substantial new
programs have been created to assist children with
disabilities, including Federal funding for special education
and expansion of Medicaid. The impact of these programs on cash
needs of children with disabilities merits careful evaluation
as well.
The Committee is determined to treat fairly those current
recipients affected by the rules changes, and has included
explicit protection for appeal and due process procedures and a
partial grandfathering (until January 1, 1997), with a hold
harmless provision for any overpayments. The Committee expects
the Social Security Administration to be mindful of its
experience with the hazards of large scale continuing
disability reviews and urges it to conduct these reviews in an
orderly fashion.
Summary of principal provisions
1. Section 311.--Benefits for disabled children
Section 311 repeals the ``comparable severity'' test in
statute for determining disability of individuals under age 18,
and adds a definition of childhood disability to the statute:
An individual under the age of 18 shall be considered
disabled for the purposes of this Title if that
individual has a medically determinable physical or
mental impairment, which results in marked, pervasive,
and severe functional limitations, and which can be
expected to result in death or which has lasted or can
be expected to last for a continuous period of not less
than 12 months.
Under the Listing that relates to mental disorders, the
Social Security Administration is directed to eliminate
references to maladaptive behavior in the domain of personal/
behavior functioning.
For children whose eligibility for SSI may be affected by
provisions of this bill, the Commissioner shall conduct a
continuing disability review within 1 year after enactment.
However, no individual shall be removed until such review is
completed, and an individual's right to appeal and other due
process procedures are preserved. Notwithstanding such review,
no individual shall be removed from the rolls until January 1,
1997. A recipient shall be held harmless for any payments made
until removed from the rolls.
2. Section 312.--Continuing disability reviews
The Commissioner is required to conduct a continuing
disability review every 3 years for every individual under age
18 except for those individuals whose condition is not expected
to improve. The Commissioner is required to redetermine
eligibility for SSI for an individual whose low birth weight is
a contributing factor to that individual's disability
determination no later than 12 months after birth. The
Commissioner is required to redetermine eligibility for SSI for
an individual who has reached 18 years of age.
3. Section 313.--Treatment requirements for disabled individuals under
age 18
Each representative payee of an individual under age 18
shall ensure that a treatment plan prepared by a physician for
such individual is followed, and shall file a copy of the
treatment plan with the State agency that makes disability
determinations.
SUBTITLE C--STUDY OF DISABILITY DETERMINATION PROCESS
1. Section 321.--Study of Disability Determination Process
The Commissioner is directed to contract with the National
Academy of Sciences, or other independent entity, for a study
of the disability determination procedure, of both individuals
under age 18 and adults.
SUBTITLE D--NATIONAL COMMISSION ON THE FUTURE OF DISABILITY
1. Section 331.--National Commission on the Future of Disability
A National Commission on the Future of Disability is
established to examine growth in the SSDI and SSI and reported
barriers to employment and independence of individuals with
disabilities created by these programs; and to make appropriate
recommendations.
Title IV--Child Support Enforcement
Present law
The Child Support Enforcement (CSE) program was enacted in
1975 to address the problem of nonsupport of children. The 1975
legislation added a new part D to Title IV of the Social
Security Act. This legislation authorized Federal matching
funds to be used for locating absent parents, establishing
paternity, establishing support obligation owed by the
noncustodial parent, and obtaining child and spousal support.
The basic responsibility for administering the program is left
to the States, but the Federal Government plays a major role in
funding, monitoring and evaluating State programs, providing
technical assistance, and in certain instances, in giving
direct assistance to the State in locating absent parents and
obtaining support payments from them.
The current CSE program requires States to offer child
support enforcement services for both welfare and nonwelfare
families. For welfare families, services are automatic. Once an
individual applies for AFDC or Medicaid the individual is
required to cooperate with the State in establishing paternity
and locating the father unless she is found to have good cause
for refusing to cooperate. If an individual does not have a
good cause for noncooperation, the family's AFDC benefit is
reduced.
Applicants or recipients of AFDC must assign their rights
to child or spousal support to the State. If the State collects
child support from the noncustodial parent, the State and
Federal government get to keep the amount of money needed to
offset the costs the State and Federal government incurred
because the family was on welfare. If any money is leftover, it
is paid to the family. In an attempt to get individuals to
cooperate, the first $50 of any amount collected goes to the
family.
States that do not comply with their State child support
plan face a reduction of their AFDC matching funds by 1 to 5
percent, depending on the severity of noncompliance. Penalties
are suspended if the State submits a corrective action plan
that is approved by the Secretary.
Reasons for change
The current child support system can be strengthened and
improved to increase paternity establishment and collections of
child support. An important part of child support enforcement
is the ability to track a nonpaying, noncustodial parent.
Because individuals can frequently change jobs to avoid paying
support, a new system will be established to require employers
to send to State registries information on all new hires within
a specified time period. These new hire registries will match
information with outstanding support orders so support orders
can be enforced more quickly.
Because most of the problems in the current system stem
from interstate cases, the current Federal Parent Locator
Service is expanded to include information from the State
registries so that support orders can be more easily matched
with workers. In addition, all States are required to adopt the
Uniform Interstate Family Support Act (UIFSA) so that all
States have uniform laws and procedures governing child
support.
Summary of principal provisions
The Committee bill strengthens child support enforcement by
increasing paternity acknowledgement, establishing more support
orders, and increasing child support collections through
additional enforcement techniques. In addition, a new system
will be established that will better track the noncustodial
parent.
SUBTITLE A--ELIGIBILITY FOR SERVICES; DISTRIBUTION OF PAYMENTS
1. Section 401.--State obligation to provide child support enforcement
services
States must provide child support services to recipients of
programs under the Temporary Family Assistance grant, Medicaid,
and Title IV-E. In addition, child support services must be
provided to individuals who apply for services.
2. Section 402.--Distribution of child support collections
The $50 passthrough to families is ended. Instead, States
are given the option of passing the entire child support
payment through to the family. If a State elects this option,
the State must still pay the Federal share of the collection to
the Federal Government. For arrearages that accrued before the
custodial parent went on welfare, the money is first paid to
the family if the family leaves welfare. Only after all
arrearages owed to the custodial parent have been repaid, any
arrearages owed to the State and Federal Government are repaid.
3. Section 403.--Rights to notification and hearings
All individuals involved in the process of establishing or
modifying child support orders must be notified and have access
to a fair hearing or other formal complaint procedure.
4. Section 404.--Privacy safeguards
States must implement safeguards against unauthorized use
or disclosure of information relating to proceedings to
establish paternity or to enforce child support. These
safeguards must include prohibitions on release of information
where there is a protective order or where the State has reason
to believe a party is at risk of physical or emotional harm
from the other party. This provision is effective October 1,
1997.
SUBTITLE B--LOCATE AND CASE TRACKING
1. Section 411.--State case registry
States are required to collect information using automatic
data processing systems. These systems must include:
(1) Each case in which an order has been entered or
modified on or after October 1, 1998, and must use
standard data elements such as name, Social Security
number, and other uniform identification numbers;
(2) Payment records for cases being enforced by the
State agency, including amount of current and past due
support owed, amounts collected and distributed, birth
date of the child to whom the obligation is owed, and
the amount of any lien imposed by the State;
(3) Updates on case records in the State registry
being enforced by the State on the basis of information
received from judicial and administration actions, from
proceedings, from orders relating to paternity and
support, from data matches, and from other sources; and
(4) Extracts for purposes of sharing and matching
with Federal and State data bases and locator services,
including the Federal Parent Locator Service, and with
the child support enforcement programs in other States.
2. Section 412.--Collection and disbursement of support payments
State child support agencies are required, beginning
October 1, 1998, to operate a centralized, automated unit for
collection and disbursement of child support under orders
enforced by the child support agency. The purpose of the
Disbursement Unit is to collect and disburse support payments,
to generate orders and notices of withholding to employers, to
keep an accurate identification of payments, to promptly
distribute money to custodial parents or other States, and to
furnish parents with a record of the current status of support
payments. The Disbursement Unit must distribute all amounts
payable within 2 business days after receiving the money and
identifying information from the employer. The State
Disbursement Unit may be established by linking local
disbursement units through an automated information network.
3. Section 413.--State directory of new hires
States are required to establish, by October 1, 1997, a
State Directory of New Hires to which employers and labor
organizations in the State must furnish a W-4 form for each
newly hired employee. Employers must submit the W-4 form within
15 days after the date of hire or the first business day of the
week following the date the employee is first paid. The
employer or labor organization may submit the report
magnetically, electronically, or by first class mail.
Government agencies are considered employers for purposes of
New Hire reporting.
An employer failing to make a timely report is subject to a
$25 fine for each unreported employee. There is also a $500
penalty on employers for every employee for whom they do not
transmit a W-4 form if, under the laws of the State, there is
shown to be a conspiracy between the employer and the employee
to prevent the proper information from being filed.
By October 1, 1997, each State Directory of New Hires must
conduct automated matches of the Social Security numbers of
reported employees against the Social Security numbers of
records in the State Case Registry being enforced by the State
agency and must report the information on matches to the State
child support agency. Then, within 2 business days, the State
must issue a withholding order directing the employer to
withhold wages in accordance with the child support order.
In addition, within 2 working days of receiving the W-4
information from employers, the State Directory of New Hires
must furnish the information to the National Directory of New
Hires for matching with the records of other State case
registries. The State Directory of New Hires must also report
quarterly to the National Directory of New Hires information on
wages and unemployment compensation (this information is taken
directly from a report that States are currently required to
submit to the Secretary of Labor).
The State child support agency must use the new hire
information for purposes of establishing paternity as well as
establishing, modifying, and enforcing child support
obligations.
New hire information must also be disclosed to the
Temporary Family Assistance, Medicaid, Unemployment
Compensation, Food Stamp, and territorial cash assistance
programs for income eligibility verification; to the Social
Security Administration for use in determining the accuracy of
Supplemental Security Income payments under Title XVI and in
connection with benefits under Title II of the Social Security
Act; to the Secretary of the Treasury for administration of the
Earned Income Tax Credit program and for verification of claims
concerning employment on tax returns; to State agencies
administering unemployment and workers' compensation programs
to assist determinations of the allowability of claims; and to
researchers (but without individual identifiers) conducting
studies that serve the purposes of the child support
enforcement program.
4. Section 414.--Amendments concerning income withholding
Since January 1, 1994, States are required to use immediate
wage withholding for all new support orders, regardless of
whether a parent has applied for child support enforcement
services. There are two times when this rule does not apply:
(1) One of the parents demonstrates and the court or
administrative agency finds that there is good cause
not to do so; or
(2) A written agreement is reached between both
parents which provides for an alternative arrangement.
States must have laws providing that all child support
orders issued or modified before October 1, 1996, which are not
otherwise subject to income withholding, will become subject to
income withholding immediately if arrearage occurs.
5. Section 415.--Locator information from interstate networks
All State and Federal child support enforcement agencies
must have access to the motor vehicle and law enforcement
locator systems in all States.
6. Section 416.--Expansion of the Federal Parent Locator Service
FPLS is already a central component of the Federal child
support effort, and is especially useful in interstate cases.
The FPLS would be expanded to include new sources of timely
information that is to be used for the purposes of establishing
parentage and establishing, modifying, or enforcing child
support obligations and locating the custodial parent so that
visitation orders can be enforced. Within the FPLS, an
automated registry known as the Federal Case Registry of Child
Support Orders would be established. The Federal Case Registry
contains abstracts of child support orders and other
information specified by the Secretary (such as names, Social
Security numbers or other uniform identification numbers, State
case identification numbers, wages or other income, and rights
to health care coverage) to identify individuals who owe or are
owed support, and the State which has jurisdiction over the
case.
In addition to the Federal Case Registry, the provision
establishes within the FPLS a National Directory of New Hires
containing information supplied by State Directories of New
Hires. When fully implemented, the Federal Directory of New
Hires will contain identifying information on virtually every
person who is hired in the United States. In addition, the
Federal Case Registry will contain quarterly data supplied by
the State Directory of New Hires on wages and unemployment
compensation paid. Provisions are included in the bill to
ensure accuracy and to safeguard information in the FPLS from
inappropriate disclosure or use.
The Secretary is required to match data in the National
Directory of New Hires against the child support order
abstracts in the Federal Case Registry of Child Support Orders
and to report information obtained from matches to the State
child support agency responsible for the case within 2 days.
The information is to be used for purposes of locating
individuals to establish paternity, and to establish, modify,
or enforce child support.
7. Section 417.--Collection and use of Social Security numbers for use
in child support enforcement
States must have laws requiring that Social Security
numbers be placed on applications and in the files for
professional licenses, commercial drivers licenses,
occupational licenses, marriage licenses, divorce decrees,
death certificates, child support orders, and paternity
determination or acknowledgement orders.
SUBTITLE C--STREAMLINING AND UNIFORMITY OF PROCEDURES
1. Section 421.--Adoption of uniform State laws
By January 1, 1997, all States must have UIFSA and the
procedures required for its implementation in effect.
2. Section 422.--Improvements to full faith and credit for child
support orders
The provision changes and expands the recently enacted
Federal law governing full faith and credit for child support
orders by adding several provisions. One provision clarifies
the definition of a child's home State; another makes several
revisions to ensure that full faith and credit laws can be
applied consistently with UIFSA; another clarifies the rules
about which child support order States must honor when there is
more than one order.
3. Section 423.--Administrative enforcement in interstate cases
States are required to have laws that facilitate the
enforcement of child support orders across State lines. States
are required to have laws that permit them to send and receive,
without registering the underlying order unless the enforcement
action is contested by the obligor on the grounds of mistake of
fact or invalid order. The transmission of the order itself
serves as certification to the responding State of the arrears
amount and of the fact that the initiating State met all
procedural due process requirements. No court action is
required or permitted by the responding State. In addition,
each responding State must match the case against its data
bases, take appropriate action if a match occurs, and send the
collections, if any, to the initiating State. States must keep
records of the number of requests they receive, the number of
cases that result in a collection, and the amount collected.
States must respond to interstate requests within 5 days.
4. Section 424.--Use of forms in interstate enforcement
The Secretary must issue standardized forms that all States
must use for income withholding, for imposing liens in
interstate cases, and for issuing administrative subpoenas in
interstate cases. The forms must be issued by June 30, 1996,
and States must begin using the forms by October 1, 1996.
5. Section 425.--State laws providing expedited procedures
States must adopt procedures to expedite both the
establishment of paternity and the establishment, enforcement,
and modification of support:
(1) Ordering genetic testing;
(2) Entering a default order;
(3) Issuing subpoenas to obtain information necessary
to establish, modify, or enforce an order;
(4) Obtaining access to records from State and local
government agencies, law enforcement records, and
corrections records;
(5) Directing parties to pay support to the
appropriate government entity;
(6) Ordering income withholding;
(7) Securing assets to satisfy arrearages by
intercepting or seizing periodic or lump-sum payment
from States or local agencies; these payments include
unemployment compensation, workers' compensation,
judgments, settlements, lottery winnings, assets held
by financial institutions, and public and private
retirement funds; and
(8) Increasing automatically the monthly support due
to include amounts to offset arrears.
SUBTITLE D--PATERNITY ESTABLISHMENT
1. Section 431.--State laws concerning paternity establishment
States must strengthen their paternity establishment laws
by requiring that paternity may be established until the child
reaches age 21 and by requiring the child and all other parties
to undergo genetic testing upon the request of a party, where
the request is supported by a sworn statement establishing a
reasonable possibility of parentage or nonparentage. When the
tests are ordered by the State agency, States must pay for the
costs, subject to recoupment at State option from the father if
paternity is established.
States must have procedures that: create a simple civil
process for establishing paternity under which benefits, rights
and responsibilities of acknowledgement are explained to unwed
parents; establish a paternity acknowledgement program through
hospitals and birth record agencies (and other agencies as
designated by the Secretary) and that require the agencies to
use a uniform affidavit developed by the Secretary that is
entitled to full faith and credit in any other State; create a
signed acknowledgement of paternity that is considered a legal
finding of paternity, unless rescinded within 60 days, and
thereafter may be challenged in court only on the basis of
fraud, duress, or material mistake of fact; allow minors who
sign a voluntary acknowledgement to rescind it until age 18 or
the date of the first proceeding to establish a support order,
visitation, or custody rights; and provide that no judicial or
administrative proceedings are required or permitted to ratify
an acknowledgement which is not challenged by the parents.
States must also have procedures for admitting into
evidence accredited genetic tests, unless any objection is made
within a specified number of days, and if no objection is made,
clarifying that test results are admissible without the need
for foundation or other testimony; creating a rebuttable or, at
State option, conclusive presumption of paternity upon genetic
testing results indicating a threshold probability that the
alleged father is the father of the child; requiring a default
order to be entered in a paternity case upon a showing of
service of process on the defendant and any additional showing
required by the State law; providing that parties in a
contested paternity action are not entitled to a jury trial;
requiring issuance of an order for temporary support, upon
motion of a party, pending an administrative or judicial
determination of parentage, where paternity is indicated by
genetic testing or other clear and convincing evidence;
providing that bills for pregnancy, childbirth, and genetic
testing are admissible without foundation testimony; ensuring
that putative fathers have a reasonable opportunity to initiate
paternity action; and providing for voluntary acknowledgements
and adjudications of paternity to be filed with the State
registry of birth records for data matches with the central
registry established by the State.
The Secretary is required to develop an affidavit to be
used for voluntary acknowledgement of paternity which includes
the Social Security number of each parent.
2. Section 432.--Outreach for voluntary paternity establishment
States will publicize the availability and encourage the
use of procedures for voluntary establishment of paternity and
child support by means the State deems appropriate.
3. Section 433.--Cooperation by applicants for and recipients of
temporary family assistance
Individuals who apply for or receive public assistance
under the Temporary Family Assistance Program must cooperate
with child support enforcement efforts by providing specific
identifying information about the other parent, unless the
applicant or recipient is found to have good cause for refusing
to cooperate. ``Good cause'' is defined by States. States may
also require the applicant and child to submit to genetic
testing. Responsibility for determining failure to cooperate is
shifted from the agency that administers the Temporary Family
Assistance Program to the agency that administers the child
support program.
SUBTITLE E--PROGRAM ADMINISTRATION AND FUNDING
1. Section 441.--Federal matching payments
The Committee bill maintains the Federal matching payment
for child support activities at 66 percent.
2. Section 442.--Performance-based incentives and penalties
Beginning in 1999, a new incentive system will be put in
place. This system will reward good State performance by
increasing the State's basic matching rate of 66 percent by
adding up to 12 percentage points for outstanding performance
in establishing paternity and by adding up to an additional 12
percentage points for overall performance. The Secretary will
design the specific features of the system and, in doing so,
will maintain overall Federal reimbursement of State programs
through the combined matching rate and incentives at the level
projected for the current combined matching and incentive
payments to States.
The minimum paternity establishment ratio is either 90
percent or:
(a) If the State paternity establishment ratio is
between 50 percent and 90 percent for the fiscal year,
the paternity establishment ratio of the State for the
immediately preceding fiscal year plus 6 percentage
points; or
(b) If the State ratio is less than 50 percent for a
fiscal year, the paternity establishment ratio for the
immediately preceding fiscal year plus 10 percentage
points.
States are required to recycle incentive payments back into
the child support program.
3. Section 443.--Federal and State reviews and audits
The Committee provision shifts the focus of child support
audits from process to performance outcomes. This goal is
accomplished by adding a new State plan provision that requires
States to annually review and report to the Secretary, using
data from their automatic data processing system, both
information adequate to determine the State's compliance with
Federal requirements for expedited procedures and timely case
processing as well as the information necessary to calculate
their levels of accomplishment and rates of improvement on the
new performance indicators established by the Committee bill
(percentage of cases in which an order was established,
percentage of cases in which support is being paid, ratio of
child support collected to child support due, and cost-
effectiveness of the program). The Secretary is required to
determine the amount (if any) of incentives or penalties; the
Secretary must also review State reports on compliance with
Federal requirements and provide States with recommendations
for corrective action. Audits must be conducted at least once
every 3 years, or more often in the case of States that fail to
meet Federal requirements. The purpose of the audits is to
assess the completeness, reliability, accuracy, and security of
data reported for use in calculating the performance indicators
and to assess the adequacy of financial management of the State
program.
These provisions take effect beginning with the calendar
quarter that begins 12 months after enactment.
4. Section 444.--Required reporting procedures
The Secretary is required to establish procedures and
uniform definitions for State collection and reporting of
required information necessary to measure State compliance with
expedited processes and timely case processing as well as the
data necessary to perform the incentive calculations.
5. Section 445.--Automated data processing requirements
States are required to have a single statewide automated
data processing and information retrieval system which has the
capacity to perform the following functions: to account for
Federal, State, and local funds; to maintain data for Federal
reporting; to calculate the State's performance for purposes of
the incentive and penalty provisions; and to safeguard the
integrity, accuracy, and completeness of, and access to, data
in the automated systems (including policies restricting access
to data).
The statutory provisions for State implementation of
Federal automatic data processing requirements are revised to
provide that, first, all requirements enacted in or before the
Family Support Act of 1988 are to be met by October 1, 1997,
and second, that the requirements enacted in the Family Self-
Sufficiency Act of 1995 are met by October 1, 1999. The October
1, 1999 deadline will be extended by 1 day for each day by
which the Secretary fails to meet the deadline for regulations.
6. Section 446.--Technical assistance
The Secretary can use 1 percent of the Federal share of
child support collections on behalf of families in the
Temporary Family Assistance program from the preceding year to
provide technical assistance to the States. Technical
assistance can include training of State and Federal staff,
research and demonstration programs, and special projects of
regional or national significance.
The Secretary must use 2 percent of the Federal share of
collections on behalf of Temporary Family Assistance recipients
for operation of the Federal Parent Locator Service to the
extent that costs of the Parent Locator Service are not
recovered by user fees.
7. Section 447.--Reports and data collection by the Secretary
The Committee provision amends current data collection and
reporting requirements to conform the requirements to changes
made by this bill and to eliminate unnecessary and duplicative
information. More specifically, States are required to report
the following data each fiscal year: the total amount of child
support payments collected, the cost to the State and Federal
governments of furnishing child support services, the number of
cases involving families that became ineligible for aid under
part A with respect to whom a child support payment was
received, the total amount of current support collected and
distributed, the total amount of past-due support collected and
distributed, and the total amount of support due and unpaid for
all fiscal years.
SUBTITLE F--ESTABLISHMENT AND MODIFICATION OF SUPPORT ORDERS
1. Section 451.--National Child Support Guidelines Commission
A national child support guidelines commission is
established to consider the adequacy of State child support
guidelines, feasibility of adopting uniform terms in all child
support orders, how to define income and under what
circumstances income should be imputed, and the tax treatment
of child support payments. In addition, they would recommend
procedures to automatically adjust child support orders
periodically and to help noncustodial parents address
grievances regarding visitation and custody orders.
2. Section 452.--Simplified process for review and adjustment of child
support orders
As under present law, States must review and, if
appropriate, adjust child support orders enforced by the State
child support agency every 3 years. However, States are given
two simplified means by which they can use automated means to
accomplish the review. First, States may adjust the order by
applying the State guidelines and updating the reward amount.
Second, States may apply a cost-of-living increase to the
order. In either case, both parties must be given an
opportunity to contest the adjustment.
States must also review and, upon a showing of a change in
circumstances, adjust orders pursuant to the child support
guidelines upon request of a party. States are required to give
parties one notice of their right to request review and
adjustment, which may be included in the order establishing the
support amount.
3. Section 453.--Furnishing consumer reports for purposes relating to
child support
Authorized individuals seeking to establish or modify a
child support order will be given access to the consumer report
agency to determine the appropriate levels of payment.
4. Section 454.--Nonliability for depository institutions providing
financial records to State child support enforcement agencies
in child support cases
A depository institution shall not be liable under any
Federal or State law to any person for disclosing any financial
record of an individual to a State child support enforcement
agency attempting to establish, modify, or enforce a child
support obligation. An individual can only be sued for
disclosing information if they knowingly, or by reason of
negligence, disclosed a financial record of an individual for
purposes other than those listed above.
SUBTITLE G--ENFORCEMENT OF SUPPORT ORDERS
1. Section 461.--Federal income tax refund offset
The offsets of child support arrears owed to individuals
take priority over most debts owed to Federal agencies. It also
eliminates disparate treatment of families not receiving public
assistance by repealing provisions applicable only to support
arrears not assigned to the State.
2. Section 462.--Internal Revenue Service collection of arrearages.
No additional fee may be assessed for adjustments to an
amount previously certified with respect to the same obligor.
3. Section 463.--Authority to collect support from Federal employees
The rules governing wage withholding for Federal employees
are clarified and simplified by:
(1) Establishing that Federal employees are subject
to wage withholding and other legal processes to
collect child support;
(2) Establishing rules that Federal agencies must
respond to wage withholding or other legal processes to
collect support;
(3) Deleting existing laws governing designation of
agents to receive and respond to process and replace
with streamlined provisions that require Federal
agencies to designate agents and publish their name,
title, address, and telephone number in the Federal
registry annually;
(4) Requiring agents, upon receipt of process, to
send written notice to the individual involved as soon
as possible;
(5) Amending existing law governing allocation of
monies owed by an individual to give priority to child
support; and
(6) Broadening the definition of income to include
funds such as insurance benefits, retirement and
pension pay, survivor's benefits, compensation for
death and black lung disease, veteran's benefits, and
workers' compensation.
4. Section 464.--Enforcement of child support obligations of members of
the Armed Forces
The Secretary of Defense must establish a central personnel
locator service that contains residential or, in specified
instances, duty addresses of every member of the Armed Services
(including retirees, the National Guard, and the Reserves). The
locator service must be updated within 30 days of the
individual member establishing a new address. Information from
the locator service must be made available to the Federal
Parent Locator Service. The Secretary of Defense must issue
regulations to facilitate granting of leave for members of the
Armed Services to attend hearings to establish paternity or to
establish child support orders.
The Secretary of each branch of the Armed Forces (including
retirees, the Coast Guard, the National Guard, and the
Reserves) is required to make child support payments directly
to any State to which a custodial parent has assigned support
rights as a condition of receiving public assistance. The
Secretary of Defense must also ensure that payments to satisfy
current support or child support arrears are made from
disposable retirement pay. The Secretary of Defense must begin
payroll deduction within 30 days or the first pay period after
30 days of receiving a wage withholding order.
5. Section 465.--Voiding of fraudulent transfers
States must have in effect the Uniform Fraudulent
Conveyance Act of 1981, the Uniform Fraudulent Transfer Act of
1984, or an equivalent law providing for voiding transfers of
income or property in order to avoid payment of child support.
6. Section 466.--Work requirement for persons owing child support
States must have laws that direct courts to order
individuals owing past-due support with respect to a child
receiving assistance under the Temporary Family Assistance
program either to pay support due or participate in work
activities.
7. Section 467.--Definition of support order
A support order is defined as an order issued by a court or
an administrative process that requires support of a child or
of a child and the parent with whom the child lives.
8. Section 468.--Reporting arrearages to credit bureaus
States must establish procedures where the State must
report periodically to consumer reporting agencies the name of
any parent who is delinquent in the payment of support, and the
amount of overdue support owed by such parent. The parent who
is delinquent in payment of support must be afforded all due
process required under State law, including notice and
reasonable opportunity to contest the accuracy of such
information.
9. Section 469.--Liens
States must establish procedures under which liens are
imposed against real and personal property for amounts of
overdue support owed by an absent parent who resides or owns
property. States must accord full faith and credit to liens
established in another State, without registration of the
underlying order.
10. Section 470.--State law authorizing suspension of licenses
Each State must have in effect laws under which the State
has (and uses in appropriate cases) authority to withhold,
suspend, or restrict the use of driver's licenses, professional
and occupational licenses, and recreational licenses of
individuals owing overdue support or failing, after receiving
appropriate notice, to comply with subpoenas or warrants
relating to paternity or child support proceedings.
11. Section 471.--Denial of passports for nonpayment of child support
If an individual owes arrearages of child support in an
amount exceeding $5,000 or in an amount exceeding 24 months of
child support, the Secretary shall transmit a certification to
the Secretary of State to deny, revoke, or limit a passport.
SUBTITLE H--MEDICAL SUPPORT
1. Section 475.--Technical correction to ERISA definition of medical
child support order
This provision expands the definition of medical child
support order in ERISA to clarify that any judgment, decree, or
order that is issued by a court of competent jurisdiction or by
an administrative adjudication has the force and effect of law.
2. Section 476.--Enforcement of orders for health care coverage
Establishes procedures so that when a noncustodial parent
provides health care coverage for a child, and the parent
changes employment, the State agency shall transfer coverage to
the new employer, unless the noncustodial parent contests the
notice.
SUBTITLE I--ENHANCING RESPONSIBILITY AND OPPORTUNITY FOR NONRESIDENTIAL
PARENTS
1. Section 481.--Grants to States for access and visitation programs
The Committee bill authorizes grants to States for access
and visitation programs including mediation, counseling,
education, development of parenting plans, and visitation
enforcement. Visitation enforcement can include monitoring,
supervision, neutral drop-off and pick-up, and development of
guidelines for visitation and alternative custody agreements.
The Administration for Children and Families at HHS will
administer the program. States are required to monitor and
evaluate their programs and are given the authority to
subcontract the program to courts, local public agencies, or
private non-profit agencies. Programs operating under the grant
will not have to be Statewide. Funding is authorized as capped
spending under section IV-D of the Social Security Act.
Projects are required to supplement rather than supplant State
funds.
The amount of the grant to a State is equal to 90 percent
of the State expenditures during the year for access and
visitation programs or the allotment for the State for the
fiscal year. The allotment to the State bears the same ratio to
the amount appropriated for the fiscal year as the number of
children living in the State with one biological parent divided
by the national number of children living with one biological
parent. The Administration for Children and Families will
adjust allotments to ensure that no State is allotted less than
$50,000 for fiscal year 1996 or 1997 or less than $100,000 for
any year after 1997.
SUBTITLE J--EFFECT OF ENACTMENT
1. Section 491.--Effective dates
Except as noted in the text of the bill for specific
provisions, the general effective date for provisions in the
bill is October 1, 1996. However, given that many of the
changes required by this bill must be approved by State
Legislatures, the bill contains a grace period tied to the
meeting schedule of State Legislatures. More specifically, in
any given State, the bill becomes effective either on October
1, 1996 or on the first day of the first calendar quarter after
the close of the first regular session of the State Legislature
that begins after the date of enactment of this bill. In the
case of States that require a constitutional amendment to
comply with the requirements of the bill, the grace period is
extended either 1 year after the effective date of the
necessary State constitutional amendment or 5 years after the
date of enactment of this bill.
III. REGULATORY IMPACT OF THE BILL
In Compliance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the following evaluation is made
concerning the regulatory impact of carrying out the changes
proposed in the bill:
Individuals and businesses affected.--Because States will
have the flexibility to determine the assistance to be provided
and who will receive assistance under a State program for needy
families with minor children funded under the Temporary Family
Assistance grant, the Committee is unable to estimate the
numbers of individuals affected by this legislation. The
Committee expects that the restrictions on eligibility for the
SSI program will disqualify certain individuals from receiving
SSI cash benefits. The Committee expects the child support
provisions of the bill to have some impact on businesses as a
result of the requirement to report new hires. Because
businesses already report such information to other agencies,
the impact will be minimal.
Economic impact of regulations on individuals, consumers,
and businesses.--The Committee understands that there would be
an economic impact on individuals who fail to move off welfare
within the 5-year time limit. However, as shown in the
unemployment compensation program, it is expected that many of
these individuals will find work shortly after being dropped
from the roles. Because the Committee expects increased
collections due to reforms in child support enforcement, there
will be an economic impact for individuals who are owed or owe
child support.
Impact on personal privacy.--The Committee bill will have a
minimal impact on personal privacy due to the child support
provisions which authorize increased access to credit reports
and require Social Security numbers on applications for a
variety of licenses.
Amount of additional paperwork.--The Committee bill will
greatly reduce the amount of Federal restrictions placed on
State programs that assist needy families with minor children.
States will receive a fixed sum of money to provide assistance
to needy families with minor children in the manner that the
State feels is most likely to help the family avoid long-term
welfare dependence. States are required to provide data to show
how the money is spent and who it is spent on. The Committee
expects a temporary increase in processing SSI determinations
for one year after the date of enactment.
IV. VOTES OF THE COMMITTEE
In compliance with paragraph 7 of rule XXVI of the Standing
Rules of the Senate, the following statements are made
concerning the votes of the Committee in its consideration of
the Committee bill.
A. MOTION TO REPORT THE BILL
The Committee bill was ordered favorably reported by
recorded vote (12 yeas and 8 nays) on May 26, 1995, with a
quorum present. The following rollcall vote was as follows:
YEAS NAYS
Mr. Packwood Mr. Moynihan
Mr. Dole Mr. Bradley
Mr. Roth Mr. Pryor
Mr. Chafee Mr. Rockefeller
Mr. Grassley Mr. Breaux
Mr. Hatch Mr. Conrad
Mr. Simpson Mr. Graham
Mr. Pressler Ms. Moseley-Braun
Mr. D'Amato
Mr. Murkowski
Mr. Nickles
Mr. Baucus
B. VOTES ON AMENDMENTS
The Committee defeated an amendment in the nature of a
substitute (8 yeas and 12 nays) offered by Mr. Moynihan to
enhance the JOBS program, reform SSI for children, and improve
child support. The rollcall vote was as follows:
YEAS NAYS
Mr. Moynihan Mr. Packwood
Mr. Bradley Mr. Dole
Mr. Pryor Mr. Roth
Mr. Rockefeller Mr. Chafee
Mr. Breaux Mr. Grassley
Mr. Conrad Mr. Hatch
Mr. Graham Mr. Simpson
Ms. Moseley-Braun Mr. Pressler
Mr. D'Amato
Mr. Murkowski
Mr. Nickles
Mr. Baucus
The Committee defeated an amendment in the nature of a
substitute (8 yeas and 12 nays) offered by Mr. Conrad to block
grant JOBS, JOBS child care, AFDC administration, and emergency
assistance, and require teen mothers to live at home. The
rollcall vote was as follows:
YEAS NAYS
Mr. Moynihan Mr. Packwood
Mr. Bradley Mr. Dole
Mr. Pryor Mr. Roth
Mr. Rockefeller Mr. Chafee
Mr. Breaux Mr. Grassley
Mr. Conrad Mr. Hatch
Mr. Graham Mr. Simpson
Ms. Moseley-Braun Mr. Pressler
Mr. D'Amato
Mr. Murkowski
Mr. Nickles
Mr. Baucus
The Committee defeated an amendment in the nature of a
substitute (8 yeas and 12 nays) offered by Ms. Moseley-Braun to
emphasize job creation, provide State flexibility, and improve
child support. The rollcall vote was as follows:
YEAS NAYS
Mr. Moynihan Mr. Packwood
Mr. Bradley Mr. Dole
Mr. Pryor Mr. Roth
Mr. Rockefeller Mr. Chafee
Mr. Breaux Mr. Grassley
Mr. Conrad Mr. Hatch
Mr. Graham Mr. Simpson
Ms. Moseley-Braun Mr. Pressler
Mr. D'Amato
Mr. Murkowski
Mr. Nickles
Mr. Baucus
The Committee accepted a modification offered by the
Chairman, Mr. Packwood, to make various adjustments to the
Committee bill.
The Committee defeated an amendment (9 yeas and 11 nays)
offered by Mr. Breaux to require a State maintenance of effort.
The rollcall vote was as follows:
YEAS NAYS
Mr. Moynihan Mr. Packwood
Mr. Baucus Mr. Dole
Mr. Bradley Mr. Roth
Mr. Pryor Mr. Chafee
Mr. Rockefeller Mr. Grassley
Mr. Breaux Mr. Hatch
Mr. Conrad Mr. Simpson
Mr. Graham Mr. Pressler
Ms. Moseley-Braun Mr. D'Amato
Mr. Murkowski
Mr. Nickles
The Committee defeated an amendment (8 yeas and 12 nays)
offered by Mr. Graham to change the way block grant funds are
distributed to States from FY 1994 expenditures for AFDC and
related programs to a poverty based formula. The rollcall vote
was as follows:
YEAS NAYS
Mr. Baucus Mr. Packwood
Mr. Pryor Mr. Dole
Mr. Rockefeller Mr. Roth
Mr. Breaux Mr. Chafee
Mr. Conrad Mr. Grassley
Mr. Graham Mr. Hatch
Ms. Moseley-Braun Mr. Simpson
Mr. Nickles Mr. Pressler
Mr. D'Amato
Mr. Murkowski
Mr. Moynihan
Mr. Bradley
The Committee accepted an amendment (by voice vote) offered
by Mr. D'Amato to clarify that funds from the supplemental
assistance loan fund could be used for welfare anti-fraud
activities.
The Committee defeated an amendment (10 yeas and 10 nays)
offered by Mr. Conrad to tighten the eligibility for the
children's SSI program. The rollcall vote was as follows:
YEAS NAYS
Mr. Moynihan Mr. Packwood
Mr. Baucus Mr. Dole
Mr. Bradley Mr. Roth
Mr. Pryor Mr. Grassley
Mr. Rockefeller Mr. Hatch
Mr. Breaux Mr. Simpson
Mr. Conrad Mr. Pressler
Mr. Graham Mr. D'Amato
Ms. Moseley-Braun Mr. Murkowski
Mr. Chafee Mr. Nickles
The Committee accepted a provision (without objection)
offered by Mr. Moynihan to require that a representative payee
of an individuals under age 18 ensure that a treatment plan
prepared by a physician is followed and that the treatment plan
is filed with the State agency that makes disability
determinations.
The Committee defeated an amendment (8 yeas and 11 nays)
offered by Mr. Nickles to require States to take action to
reduce the incidence of out-of-wedlock pregnancies without
increasing the number of pregnancy terminations. The rollcall
vote was as follows:
YEAS NAYS
Mr. Dole Mr. Packwood
Mr. Roth Mr. Chafee
Mr. Grassley Mr. Simpson
Mr. Hatch Mr. Moynihan
Mr. Pressler Mr. Bradley
Mr. D'Amato Mr. Pryor
Mr. Murkowski Mr. Rockefeller
Mr. Nickles Ms. Breaux
Mr. Conrad
Mr. Graham
Ms. Moseley-Braun
The Committee defeated an amendment (9 yeas and 11 nays)
offered by Mr. Rockefeller to provide a hardship waiver based
on good cause. The roll call vote was as follows:
YEAS NAYS
Mr. Moynihan Mr. Packwood
Mr. baucus Mr. Dole
Mr. Bradley Mr. Roth
Mr. Pryor Mr. Chafee
Mr. Rockefeller Mr. Grassley
Mr. Breaux Mr. Hatch
Mr. Conrad Mr. Simpson
Mr. Graham Mr. Pressler
Ms. Moseley-Braun Mr. D'Amato
Mr. Murkowski
Mr. Nickles
The Committee accepted an amendment (without objection)
offered by. Mr. Baucus to increase the hardship waiver from 10
percent to 15 percent.
The Committee defeated an amendment (6 yeas and 13 nays)
offered by Mr. Graham to remove the option for States to
prohibit assistance to certain noncitizens. The roll call vote
\1\ was as follows:
YEAS NAYS
Mr. Moynihan Mr. Packwood
Mr. Bradley Mr. Dole
Mr. Breaux Mr. Roth
Mr. Conrad Mr. Chafee
Mr. Graham Mr. Grassley
Ms. Moseley-Braun Mr. Hatch
Mr. Simpson
Mr. Pressler
Mr. D'Amato
Mr. Murkowski
Mr. Nickles
Mr. Baucus
Mr. Rockefeller
\1\ Mr. Pryor did not vote.
The Committee defeated an amendment (10 yeas and 10 nays)
offered by Mr. Conrad to require teenage mothers to live with
their parents or in a foster home and to establish a new capped
entitlement program to provide funding for supervised living
arrangements. The roll call vote was as follows:
YEAS NAYS
Mr. Moynihan Mr. Packwood
Mr. Baucus Mr. Dole
Mr. Bradley Mr. Roth
Mr. Pryor Mr. Chafee
Mr. Rockefeller Mr. Grassley
Mr. Breaux Mr. Hatch
Mr. Conrad Mr. Simpson
Mr. Graham Mr. Pressler
Ms. Moseley-Braun Mr. D'Amato
Mr. Nickles Mr. Murkowski
The Committee defeated an amendment (9 yeas and 11 nays)
offered by Mr. Rockefeller to exempt individuals in high
unemployment areas from the time limits under the Committee
bill. The roll call vote was as follows:
YEAS NAYS
Mr. Moynihan Mr. Packwood
Mr. Baucus Mr. Dole
Mr. Bradley Mr. Roth
Mr. Pryor Mr. Chafee
Mr. Rockefeller Mr. Grassley
Mr. Breaux Mr. Hatch
Mr. Conrad Mr. Simpson
Mr. Graham Mr. Pressler
Ms. Moseley-Braun Mr. D'Amato
Mr. Murkowski
Mr. Nickles
The Committee defeated an amendment (9 yeas and 11 nays)
offered by Ms. Moseley-Braun to provide that no child is denied
assistance. The roll call vote was as follows:
YEAS NAYS
Mr. Moynihan Mr. Packwood
Mr. Baucus Mr. Dole
Mr. Bradley Mr. Roth
Mr. Pryor Mr. Chafee
Mr. Rockefeller Mr. Grassley
Mr. Breaux Mr. Hatch
Mr. Conrad Mr. Simpson
Mr. Graham Mr. Pressler
Ms. Moseley-Braun Mr. D'Amato
Mr. Murkowski
Mr. Nickles
The Committee defeated an amendment (4 yeas and 16 nays)
offered by Ms. Moseley-Braun to provide any child who is denied
assistance the right to bring an action in court. The roll call
vote was as follows:
YEAS NAYS
Mr. Moynihan Mr. Packwood
Mr. Baucus Mr. Dole
Mr. Bradley Mr. Roth
Ms. Moseley-Braun Mr. Chafee
Mr. Grassley
Mr. Hatch
Mr. Simpson
Mr. Pressler
Mr. D'Amato
Mr. Murkowski
Mr. Nickles
Mr. Pryor
Mr. Rockefeller
Mr. Breaux
Mr. Conrad
Mr. Graham
C. AMENDMENTS OFFERED AND WITHDRAWN
Mr. Conrad offered an amendment to limit educational
activities to not more than 50 percent of a State's work
participation rates in 1996 and 1997.
Mr. Grassley offered an amendment to provide that a State
operate a jobs program in accordance with Part F of the Social
Security Act or another work program to be defined by the
State.
V. BUDGETARY IMPACT OF THE BILL
In compliance with sections 308 and 403 of the
Congressional Budget Act of 1974, and paragraph 11(a) of rule
XXVI of the Standing Rules of the Senate, the following letter
has been received from the Congressional Budget Office
regarding the budgetary impact of the bill:
U.S. Congress,
Congressional Budget Office,
Washington, DC, June 9, 1995.
Hon. Bob Packwood,
Chairman, Committee on Finance,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed estimate of H.R. 4, the Family Self-
Sufficiency Act of 1995, as ordered reported by the Senate
Committee on Finance on May 26, 1995.
Enactment of H.R. 4 would effect direct spending and thus
would be subject to pay-as-you-go procedures under section 252
of the Balanced Budget and Emergency Deficit Control Act of
1985.
If you wish further details on this estimate, we will be
pleased to provide them.
Sincerely,
June E. O'Neill, Director.
congressional budget office--cost estimate
1. Bill number: H.R. 4.
2. Bill title: Family Self-Sufficiency Act of 1995.
3. Bill status: As ordered reported by the Committee on
Finance on May 26, 1995.
4. Bill purpose: To enhance support and work opportunities
for families with children, reduce welfare dependence, and
control welfare spending.
5. Estimated cost to the Federal Government:
Direct spending
The bill would effect federal outlays in the following
mandatory programs: Family Support Payments, Food Stamps,
Supplemental Security Income, Medicaid, and Foster Care. The
following table shows projected outlays for these programs
under current law, the changes that would stem from the bill,
and the projected outlays for each program if the bill were
enacted.
----------------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000 2001 1002
----------------------------------------------------------------------------------------------------------------
Projected spending under current
law:
Family Support Payments..... 18,223 18,544 19,048 19,534 20,132 20,793 21,477 22,184
Food Stamp Program.......... 25,120 25,930 27,400 28,900 30,390 32,030 33,600 35,100
Supplemental Security Income 24,322 24,497 29,894 32,967 36,109 42,749 39,481 46,807
Medicaid.................... 89,216 99,292 110,021 122,060 134,830 148,116 162,600 177,800
Foster Care................. 3,540 4,146 4,508 4,930 5,356 5,809 6,290 6,798
-------------------------------------------------------------------------------
Total..................... 160,421 172,409 190,871 208,391 226,817 249,497 263,448 288,689
-------------------------------------------------------------------------------
Proposed changes:
Family Support Payments \1\. 0 -729 -1,192 -1,603 -2,207 -2,559 -3,234 -3,842
Food Stamps................. 0 238 745 993 1,274 1,511 1,818 2,155
Supplemental Security Income 0 -441 -3,554 -4,482 -4,674 -5,218 -4,646 -5,441
Medicaid.................... 0 -22 -375 -545 -606 -662 -771 -777
Foster Care................. 0 0 0 0 10 25 35 45
-------------------------------------------------------------------------------
Total..................... 0 -954 -4,376 -5,637 -6,203 -6,903 -6,738 -7,750
===============================================================================
Projected spending under H.R. 4:
Family Support Payments..... 18,223 17,815 17,856 17,931 17,925 18,234 18,243 18,342
Food Stamps................. 25,120 26,168 28,145 29,893 31,664 33,541 35,418 37,255
Supplemental Security Income 24,322 24,056 26,340 28,485 31,435 37,531 34,835 41,476
Medicaid.................... 89,216 99,270 109,646 121,515 134,224 147,454 161,889 177,023
Foster Care................. 3,540 4,146 4,508 4,930 5,366 5,834 6,325 6,843
-------------------------------------------------------------------------------
Total..................... 160,421 171,455 186,495 202,754 220,614 242,594 256,710 280,939
----------------------------------------------------------------------------------------------------------------
\1\ Under current law, Family Support Payments includes spending on Aid to Families with Dependent Children
(AFDC), AFDC-related child care, administrative costs for child support enforcement, net federal savings from
child support collections, and the Job Opportunities and Basic Skills Training program (JOBS). Under proposed
law, Family Support Payments would include spending on the Temporary Assistance for Needy Families Block
Grant, administrative costs for child support enforcement, and net federal savings from child support
collections.
H.R. 4 would create a new Temporary Assistance for Needy Families block grant and specifies funding levels
through fiscal year 2000. CBO's estimates for 2001 and 2002 assume that the level of the block grant will
remain the same as in 2000.
Note.--Details may not add to totals because of rounding.
The direct spending costs of this bill fall within budget
functions 500, 550, and 600.
Authorizations of appropriations
The bill would increase the administrative costs of the
Supplemental Security Income (SSI) program, which are funded by
an annual appropriation. Those extra costs stem from provisions
of Title III that would require program administrators to
verify the citizenship of all SSI recipients and conduct
reviews of some disabled recipients.
6. Basis of estimate: CBO estimates the enactment of H.R.
4, as amended by the Committee on Finance, would reduce outlays
for direct spending programs by $1.0 billion in 1996 and $7.8
billion in 2002. The bill would also increase the
administrative costs of the Supplemental Security Income (SSI)
program, which are funded by an annual appropriation. These
estimates incorporate the economic and technical assumptions
from CBO's March 1995 baseline and assume an enactment date of
October 1, 1995. The remainder of this section outlines the
methodology used for the estimates. The attached tables detail
the estimates for each title of the bill.
Titles I and II: Temporary assistance for needy families
block grant and JOBS modification
Title I of H.R. 4 would alter the method by which the
federal government shares in the cost of providing cash and
training assistance to low-income families with children. It
would combine current entitlement programs--Aid to Families
with Dependent Children (AFDC), the Job Opportunities and Basic
Skills Training program (JOBS), and related child care
programs--into a single block grant with a fixed funding level.
In addition, Title I would require that a sponsor's income be
counted in determining an alien's eligibility for the Temporary
Assistance for Needy Families Block Grant, Supplemental
Security Income, and Medicaid for five years after arrival in
the U.S. Title II would modify the definitions of activities
authorized under the JOBS program. By itself, Title II would
have no budgetary effects. The effects of Titles I and II are
detailed in Table 1.
Effect of the block grant on cash and training
assistance.--The new Temporary Assistance for Needy Families
Block Grant would replace federal participation for AFDC
benefit payments, AFDC administrative costs, AFDC emergency
assistance benefits, the JOBS program, and three related child
care programs. The bill would fix the base level of the block
grant at $16.8 billion annually through 2000. CBO assumes the
block grant would continue at the same level in 2001 and 2002,
although the levels are not specified in the bill. Each state
would be entitled to a portion of the grant based on its recent
spending in the AFDC, JOBS, and related child care programs. In
addition, the bill would authorize a loan fund (called the
Supplemental Assistance for Needy Families Federal Fund) with
an initial balance of $1.7 billion from which states could
borrow during economic downturns. States would repay borrowed
amounts, with interest, within three years.\1\
\1\ CBO estimates the creation of the Supplemental Assistance for
Needy Families Federal Fund would not generate additional outlays.
Although up to $1.7 billion would be made available to states for
loans, CBO assumes that every state borrowing funds would repay its
loans with interest. Therefore, the program would involve no long-run
loss to the federal government, and under the credit reform provisions
of the Congressional Budget Act, it would have no cost.
---------------------------------------------------------------------------
CBO estimates federal savings in Title I by comparing
current law projections of AFDC, JOBS, and child care spending
with the block grant levels. In 1996, CBO projects that under
current law the federal government would spend $17.2 billion on
AFDC benefits, AFDC administration, AFDC emergency assistance,
the JOBS program, and related child care, or $0.6 billion more
than the federal government would spend under the block grant.
By 2000, the gap between spending projected under current law
($19.4 billion) and spending permitted under the block grant
($16.8 billion) would grow to $2.6 billion.
Criteria for state participation in the block grant.--To
participate in the block grant program, states would present an
assistance plan to the Department of Health and Human Services
and would ensure that block grant funds would be spent only on
needy families with minor children. States would not be
required to spend any of their own resources to receive the
block grant amounts. However, states would have to satisfy
certain conditions. Notably, states would be prohibited from
providing federal dollars to most families who have received
cash assistance for more than 5 years since September 30, 1995.
At their option, states could choose a shorter time limit and
could grant hardship exemptions for up to 15 percent of all
families. Although no family would encounter a 5-year time
limit until October 1, 2000, the limit's effect on welfare
participation could be noticed sooner if recipients shortened
their stays on welfare or delayed childbearing in order to
preserve access to the system in future years. CBO estimates
that the full, potential effect of such a limit would not be
realized until 2003 or later. Eventually, under current
demographic assumptions, this provision could reduce cash
assistance rolls by 30 percent to 40 percent. The actual effect
of the time limit on families is uncertain however, because
H.R. 4 would permit states and localities to provide cash
assistance to such groups with their own resources. The
inclusion of the time limit in the legislation does not affect
the CBO estimate of federal costs because it would not directly
change the amount of block grant funds disbursed to the states.
Work and training requirements under the block grant.--
Other provisions in Title I would require states to provide
work and training activities for an increasing percentage of
block grant recipients or face penalties of up to 5 percent of
the state's share of the block grant. States would face three
separate requirements, with each becoming increasingly
difficult to satisfy over time. CBO estimates that by 2000 most
states would have difficulty satisfying the requirements. The
following discussion outlines the challenge states would
encounter in 2000.
First, states would have to show on a monthly basis that
individuals in 45 percent of all families are engaged in an
education, work, or training activity. (This requirement would
rise to 50 percent in 2001 and thereafter.\2\) By contrast,
program data for 1994 indicate that, in an average month, only
about 11 percent of all families were engaged in a JOBS
activity or an unsubsidized job at 20 hours per work. Most
states would be unlikely to satisfy this requirement for
several reasons. The costs of administering such a large scale
work and training program would be high and federal funding is
frozen at 1994 levels. Because the pay-off for such programs
has been shown to be low in terms of reductions in the welfare
caseload, states may be reluctant to commit their own funds.
Morever, although states may succeed in reducing their
caseloads through other measures, which would in turn free up
federal funds for training, the requirements would still be
difficult to meet because the remaining caseload would likely
consist of the most needy individuals (incapacitated adults and
parents with very young children) who would be very difficult
and expensive to train.
\2\ The CBO estimate assumes the work participation requirements
would apply to all families assisted under the state plan for needy
families and would not be limited to those who receive federal dollars.
Given the lack of a maintenance of effort requirement in this bill,
however, it is unclear whether the federal government would have the
authority to impose work requirements on individuals who receive
benefits funded with state or local resources.
---------------------------------------------------------------------------
Second, while tracking the work requirement for all
families, states simultaneously would track a separate
guideline for the smaller number of families with two parents
participating in the AFDC-Unemployed Parent (AFDC-UP) program.
By 2000, H.R. 4 would require that 90 percent of such families
participate in a narrow set of work-related activities. States
attempted to implement a similar requirement in 1994 for only
40 percent of AFDC-UP families; although final participation
figures have not been released by the Department of Health and
Human Services, preliminary analyses indicate that roughly 40
states failed the requirement. Given the states' records to
date, CBO is not optimistic about their abilities to meet a 90
percent participation requirement.
Finally, states would also have to ensure that all parents
who have received cash assistance for more than two years would
engage in work activities. CBO estimates that approximately 70
percent of all parents on the cash assistance rolls in 2000
would have received such assistance for two years or more since
the bill's effective date. The experience of the JOBS program
to date suggests that such a requirement is well outside the
states' abilities to implement.
In short, each of three work requirement would represent a
significant challenge to states. Given the costs and
administrative complexities involved, CBO assumes that most
states would simply accept penalties of up to 5 percent of
their block grant amounts rather than implement the
requirements. CBO further assumes--consistent with current
practice--that the Secretary of Health and Human Services would
impose small penalties (less than one-half of one percent of
the block grant) on non-complying states.
Effect of the block grant on the Food Stamp program.--The
federal savings estimated from the block grant conversion was
reduced to account for higher estimated spending in the Food
Stamp program. CBO estimates that enactment of Title I would
result in families receiving lower average cash payments
relative to current law and consequently, higher food stamp
benefits. Under current rules, each dollar lost in cash would
increase a participating family's food stamp benefits by an
estimated 33 cents. CBO estimates the incomes of AFDC families
would decline relative to current projections by $2.2 billion
in 2000, generating a food stamp cost in that year of $0.6
billion. This estimate assumes that states--on average--would
follow the federal example and freeze their spending on cash
benefits at their 1994 levels. Should states decide to spend
more or less than 1994 levels, the costs of the food stamp
program would be smaller or greater than the estimate.
Effect of the block grant on the Food Stamp Employment and
Training program.--The fixed federal contribution under the
block grant may inspire states to seek alternative means of
financing their training and child care programs. One
possibility for states would involve channeling AFDC families
through the Food Stamp Employment and Training program, which
is not altered by this bill and would remain an uncapped
entitlement with the federal government matching 50 percent of
state expenditures. With no maintenance-of-effort requirement
to receive block grant funds, states could use their shares of
JOBS and JOBS child care expenditures (approximately $1.0
billion in 1994) to draw an equal amount of federal funding.
CBO assumes it would take a number of years before states would
turn to this alternative and estimates federal costs would rise
from $100 million in 1999 to $400 million in 2002.
Effect of Title I on the Medicaid Program.--CBO estimates
no change in Medicaid spending associated with the conversion
to a block grant, which reflects the bill's stated intention to
preserve current standards for Medicaid. How states implement
these new programs would determine the ultimate impact on the
Medicaid program. The requirement that states continue to
provide Medicaid benefits to all individuals who meet current
eligibility criteria for AFDC may increase the administrative
burden in state agencies.
The creation of the block grant could affect Medicaid
spending in a second way. Granting funds for cash assistance
(with no requirement for state spending) while leaving Medicaid
as a shared federal-state responsibility would provide states
seeking to maximize federal assistance with an incentive to
spend more money on Medicaid. Under the bill, a state dollar
spent on cash assistance would no longer generate a federal
matching payment while a state dollar spent on Medicaid would.
Consequently, states could decide to expand Medicaid
eligibility, financing the expansion with state dollars that
otherwise would have been devoted to cash assistance. CBO has
little basis upon which to predict such behavior and therefore
has not estimated any change in Medicaid spending.
Title I also includes a provision requiring counting a
sponsor's income (termed deeming) for a period of five years
after an alien's arrival in the U.S. to determine the alien's
eligibility for any need-based program authorized under the
Social Security Act. Programs potentially affected by such a
provision include Aid to Families with Dependent Children,
Medicaid, and Supplemental Security Income. Since other
provisions of the bill would replace AFDC with a program of
block grants to the states and would make most aliens
ineligible for SSI, however, the new deeming rule would affect
only the Medicaid program. CBO estimates that savings in
Medicaid would be about $0.1 billion in 1997 and $0.2 billion a
year thereafter. The population targeted by the provision
comprises primarily those and aged aliens who, under current
law, would seek SSI benefits within five years of arrival. Non-
aged aliens are less likely to have financial sponsors. CBO
assumes that, in the absence of more specific instructions,
deeming regulations like those currently used in SSI would
apply to Medicaid. CBO also assumes that about 25 percent of
the individuals that have financial sponsors would still be
able to obtain Medicaid benefits because their medical
expenditures are high enough that they could still apply for
benefits as a medically needy recipient if their state has such
a program.
Effect of the block grant on the Foster Care program.--
Although H.R. 4 does not directly amend the foster care
program, which would remain an open-ended entitlement with
state expenditures matched by the federal government, the bill
could affect foster care spending in two ways. First,
eligibility for foster care is currently based on eligibility
for AFDC payments in the home from which the child is removed.
Because this bill would repeal the sections of the Social
Security Act upon which AFDC eligibility is based, the effect
of the bill on foster care payments is unclear. Should states
adopt AFDC eligibility requirements that are more restrictive
than current law, fewer children would be deemed eligible for
foster care, and foster care payments could decline. Second, by
retaining the foster care program as a matched entitlement, the
bill would create an incentive for states to shift AFDC
children who also are eligible for foster care benefit into the
foster care program. AFDC administrative data for 1993 suggest
that roughly 500,000 children (5 percent of all children on
AFDC) fall into this category because they live in a household
without a parent. CBO assumes a number of legal and financial
barriers would prevent states from transferring a large share
of such children and estimates states would collect an
additional $10 million in foster care payments in 1996, rising
to $45 million in 2002.
Title III: Supplemental security income
Title III of H.R. 4 would reduce spending in the
Supplemental Security Income program for three distinct groups
of participants: legal aliens, drug addicts and alcoholics, and
disable children. Net savings are estimated to equal $5.1
billion in 2002 (see Table 2).
Legal aliens.--In general, legal aliens are now eligible
for SSI and other benefits administered by the federal
government. Most aliens, other than refugees, do not collect
benefits during the first few years in the U.S., because
administrators must deem a portion of a sponsor's income to the
alien during the period when determining the alien's
eligibility. H.R. 4 would eliminate SSI benefits altogether for
most legal aliens. Exceptions would be made for groups that
make up about one-fifth of aliens on the SSI rolls: refugees
who have been in the country for less than five years, aliens
who receive a Social Security benefit based on their own
earnings, and veterans of the U.S. military. All other legal
aliens now on SSI would be removed from the rolls on January 1,
1997.
CBO bases its estimate of savings on administrative records
for the SSI program. Those data suggested that there were about
700,000 non-citizen beneficiaries in 1994, or 12 percent of all
recipients of federal SSI payments in that year, and that their
numbers might be expected to continue to grow in the absence of
a change in policy. The administrative records, though, are of
uncertain quality. They are not likely to reflect changes in
citizenship status (such as naturalization) that may have
occurred since the recipient first began collecting benefits.
It has not been important for agencies to keep citizenship
status up-to-date so long as they have verified that the
recipient is, in fact, legally eligible. That problem is
thought to be particularly acute for SSI, where some
beneficiaries identified as aliens have been on the program for
many years. Recognizing this problem, CBO assumes that about
one-fifth of SSI beneficiaries coded as aliens are in fact
naturalized citizens.
CBO estimates the number of noncitizen recipients who would
be removed from the SSI rolls by projecting the future caseload
in the absence of policy change and subtracting the three
groups (certain refugees, Social Security recipients, and
veterans) exempted under the bill. CBO also assumes that some
of the remainder will be spurred to become naturalized. The
rest, estimated by CBO at approximately one-half million legal
aliens, would be cut from the SSI rolls. Multiplying by the
average benefits paid to such aliens--assumed to equal 1994
levels plus subsequent cost-of-living adjustments, or about
$4,700 per alien in 1997--yields annual federal budgetary
savings of between $2 billion and $3 billion a year.
Removing these aliens from the SSI rolls has indirect
effects on two other programs: Medicaid and food stamps. In
most states, Medicaid is automatically available to anyone on
SSI. Although H.R. 4 does not explicitly bar legal aliens from
Medicaid, some aliens who lose SSI would thereby lose their
only route onto the Medicaid program. CBO assumes that most
aliens who lose SSI disability benefits could keep Medicaid
eligibility under other terms of the program, only about half
of those aliens who lose SSI old-age benefits, however, would
be able to requalify as medically needy. Savings in Medicaid of
$0.2 billion to $0.3 billion a year would result. H.R. 4 is
silent about legal aliens' eligibility for food stamps, a
program that is outside the jurisdiction of the Finance
Committee. Under current law, legal aliens who lose cash income
and who also get food stamps would automatically receive larger
benefits under that program. CBO assumes that only a fraction
of the SSI loss would be made up at the state and local level
through general assistance programs. For aliens participating
in food stamps, food stamp benefits are estimated to increase
by about 33 cents for each dollar of cash income lost. Extra
food stamp costs would be approximately $300 million a year.
These estimates, and other CBO estimates concerning legal
aliens, are rife with uncertainties. First, administrative data
in all programs are of uncertain quality. Citizenship status is
not recorded at all for about 8 percent of SSI recipients,
and--as previously noted--some persons coded as aliens are
certainly naturalized citizens by now. Second, it is hard to
judge how many noncitizens would react to the legislation by
becoming citizens. At least 80 percent of legal aliens now on
the SSI rolls are eligible to become citizens; the fact that
they have not been naturalized may be attributable, in part, to
the lack of a strong financial incentive. Heretofore, all legal
immigrants have not been barred from most jobs, from
eligibility for benefits, or from most other privileges except
voting. Because the naturalization process takes time and
effort, CBO assumes that only about one-third of those whose
benefits would otherwise be eliminated will become citizens by
the year 2000.
Drug addicts and alcoholics.--For many years, the Social
Security Administration (SSA) has been required to identify
certain drug addicts and alcoholics (DA&As) in the SSI program,
when the substance abuse is a material contributing factor to
the finding of disability. Special provisions apply to those
recipients: they must comply with treatment if available, they
must have representative payees, as (as a result of legislation
enacted last year) they can receive a maximum of 36 months'
benefits. About 100,000 recipients classified as drug addicts
and alcoholics received benefits in December 1994.
CBO assumes that, under current law, the DA&A caseload
would grow to about 190,000 by 1997, fall in 1998 (as the first
wave of terminations under last year's legislation occurs),
then resume climbing gradually. Under H.R. 4, awards to DA&As
would stop immediately, and those already receiving benefits
would be removed from the rolls on January 1, 1997, unless they
had another seriously disabling condition.
Estimating the number of DA&As who already have or will
soon develop another disabling condition is a thorny issue. A
sample of 1994 awards with a primary diagnosis of substance
abuse found that two-thirds identified a secondary disabling
condition (predominantly mental rather than physical). That
fact must be interpreted with caution. In order to be worth
noting, the secondary condition must be quite severe--but not
necessary disabling in its own right. On the other hand, there
is no requirement to record secondary conditions; some of the
one-third for whom none was recorded undoubtedly had them. And
the health of many DA&A recipients certainly deteriorates over
time, with or without continued substance abuse. Thus, CBO
assumes that only about one-quarter of DA&A recipients would be
permanently terminated from the program; the rest could
requalify by documenting that they have another sufficiently
disabling condition. Multiplying the number of recipients
terminated times an average benefit yields savings of $200
million to $300 million a year in SSI benefits.
Besides saving on benefits, the Social Security
Administration would also be freed from the requirement to
maintain contracts with referral and monitoring agencies (RMAs)
for its SSI recipients. Those agencies monitor addicts' and
alcoholics' treatment status and often serve as representative
payees. Savings are estimated at about $150 million to $200
million a year in 1997 through 2002. Savings in 1996, however,
are uncertain, as SSA will likely have to pay cancellation
penalties on the contracts to be terminated.
The legislation would also eliminate Medicaid coverage for
DA&As terminated from the SSI program, resulting in another
$100 million a year or so in savings. And because former SSI
recipients would experience a reduction in their cash income,
food stamp costs under correct law would increase slightly--by
approximately $30 million a year.
Disabled children.--H.R. 4 would restructure the SSI
program for disabled children. Under current law, low-income
children can qualify for the SSI program and its federal cash
benefits of up to $458 a month in two ways. They may match one
of the medical listings (a catalogue of specific impairments,
with accompanying clinical findings), or they may be evaluated
under an individualized functional assessment (IFA) that
determines whether an unlisted impairment seriously limits a
child from performing activities normal for his or her age.
Both methods are spelled out in regulation. Until the Supreme
Court's decision in the Zebley case in 1990, the medical
listings were the sole path to eligibility for children.
Adults, in contrast, could receive an assessment of their
functional and vocational capacities even if they did not meet
their own set of listings. The court ruled that sole reliance
on the listings did not comport with the law's requirement to
gauge whether children's disorders were of ``comparable
severity'' to impairments that would disable adults.
H.R. 4 would eliminate childhood IFAs and their statutory
underpinning, the ``comparable severity'' rule, as a basis for
receipt. Many children on the rolls as a result of an IFA
(roughly a quarter of children now on SSI) would be terminated,
and future awards based on an IFA would be barred. Thus, the
program would be restricted to those who met or equaled the
listings. The bill would also remove the reference to
maladaptive behavior--behavior that is destructive to oneself,
others, property, or animals--from the personal/behavioral
domain of the medical listings, the only place where it appears
as a basis for award.
Even as it repealed the ``comparable severity'' language,
the bill would create a new statutory definition of childhood
disability. It states that a child would be considered disabled
if he or she has ``a medically determinable physical or mental
impairment which results in marked, pervasive and severe
functional limitations [and can be expected to last 12 months
or lead to death].'' That language appears to be intended to
preserve SSI eligibility for some of the most severely impaired
children who now qualify by way of an IFA. The exact
implications of this language would remain to be clarified
through regulation (and perhaps court interpretation) and are
difficult for CBO to estimate definitively.
CBO estimated the savings from these changes by judging how
many present and future children would likely qualify under the
new criteria. CBO relied extensively on SSA program data and on
analyses conducted by the General Accounting Office and the
Inspector General of the Department of Health and Human
Services. Approximately 900,000 children now collect SSI
benefits, and CBO projects that the number would reach 1.35
million in 2002 if policies were unchanged. CBO assumed that
more than half of children who qualify through an IFA would be
rendered ineligible under the proposed criteria-specifically,
those who fail to rate a ``marked'' or ``extreme'' impairment
in at least two areas of functioning. CBO chose that assumption
because the bill's key phrase--marked, pervasive and severe
functional impairments--might reasonably be interpreted to mean
limitations in several different areas of functioning, a
tighter standard than the one that now allows some children
with ``moderate'' limitations onto the program. CBO also
assumes that the provisions on maladaptive behavior would bar a
small percentage of children from eligibility for benefits.
Overall, approximately 21 percent of children who would be
eligible under current law would be rendered ineligible.
Because of the room for regulatory interpretation, however,
that figure is uncertain. A tight interpretation might bar up
to 28 percent of children; a loose one might trim the rolls by
about 10 percent or even less.
CBO estimates the savings in cash benefits relative to
current law by multiplying the number of children assumed to
lose benefits by the average benefit. That average benefit was
about $430 a month in December 1994 and would grow with
inflation thereafter. Children already on the rolls would be
reviewed under the new criteria but could keep their benefits
through December 1996 even if found ineligible. CBO assumes
that children who do not meet the new criteria could be removed
from the rolls even if their medical condition has not improved
since award--as is clearly intended by the bill--even though
current law generally requires that SSA document such progress
before it terminates a beneficiary. New awards would be
affected immediately. Total savings in cash benefits would
equal $0.2 billion in 1996 and $2.1 billion in 2002.
H.R. 4 would make several other changes to the SSI program
for disabled children, notably by stepping up requirements for
continuing disability reviews (CDRs). Savings from that
requirement are embedded in CBO's estimate. The bill also
requires that representative payees (usually parents) develop a
treatment plan for the child and demonstrate to SSA's
satisfaction that they followed that plan. Noncompliance would
lead to appointment of another representative payee, not to
termination of benefits. The bill also mandates several studies
of disability issues.
The proposed cutbacks in children's SSI benefits would
affect spending in other programs. Food stamp outlays would
increase, under current law, to replace a portion of the cash
income lost by the children's families. Effects on two other
programs, however, are omitted from CBO's estimate. Under
current law, approximately half of the disabled children losing
SSI benefits would be likely to end up on the AFDC programs;
but because that program would be abolished in Title I and
replaced by a fixed block grant to the states, no extra
spending would result. The cutback in children's SSI benefits
would have only negligible effects on the Medicaid program.
Most children removed from SSI would still qualify for
Medicaid-either through their eligibility for the program of
temporary assistance to needy families (the successor to the
AFDC program) or their poverty status.
Administrative costs.--Several provisions of Title III
would affect the administrative costs of the SSI program. Those
costs are funded out of an overall discretionary appropriation
that limits administrative expenses of the Social Security
Administration. The most significant burdens would be those
involved in checking citizenship status and conducting
continuing disability reviews (CDRs). Title III would
presumably require SSA to check the citizenship status of all
SSI beneficiaries--those coded as citizens as well as those
identified as aliens--to verify their continued eligibility for
benefits. CBO estimates the one-time cost of that effort at
about $50 million; some savings would materialize in later
years, though, as SSA would need to sift through fewer
applications from legal aliens. The disability-related
provisions would, in CBO's judgment, involve approximately $300
million in nonrecurring costs (principally in 1996) as SSA
reviews drug addicts and alcoholics and disabled children for
continued eligibility, and about $100 million a year thereafter
because of the permanent requirement for additional CDRs. SSA
would save small amounts of money (less than $5 million a year)
from processing fewer benefit checks. Extra administrative
costs are expected to total $0.3 billion in 1996 and $0.1
billion a year thereafter.
Title IV: Child support enforcement
Title IV would change many aspects of the operation and
financing of the federal and state child support enforcement
system. CBO estimates that the change in spending relative to
current law would fluctuate between net costs or net savings of
$100 million annually over the seven-year estimation period
(see Table 3). The key provisions of Title IV would mandate the
use of new enforcement techniques with a potential to increase
collections, eliminate a current $50 payment to welfare
recipients for whom child support is collected, allow former
public assistance recipients to keep a greater share of their
child support collections, and authorize new spending on
automated systems. Similar to current law, the bill would
require that states share with the federal government child
support collected on behalf of families who receive cash
assistance through the Temporary Assistance for Needy Families
Block Grant.
New enforcement techniques.--Using reports on the
performance of various enforcement strategies at the state
level, CBO estimates that child support collections received by
families on cash assistance in 2000 would increase under the
bill by roughly 12 percent over current projections (from $3.5
billion to $3.9 billion). Most of the improvement would result
from the creation of a new-hire registry (designed to speed the
receipt of earnings information on noncustodial parents) and
provisions that would expedite the process by which states
seize the assets of noncustodial parents who are delinquent in
their child support payments. Some states have already applied
the proposed enforcement techniques, thereby reducing the
potential of improving collections further. CBO projects that
the additional collections would result in savings of roughly
$0.2 billion in 2000 to the federal government through shared
child support collections, as well as reduced spending in food
stamps and Medicaid.
Elimination of the $50 passthrough.--Additional federal
savings would be generated by eliminating the current $50
passthrough. Under current law, amounts up to the first $50 in
monthly child support collected are paid to the family
receiving cash assistance without affecting the level of the
welfare benefit. Thus, families for whom noncustodial parents
contribute child support get as much as $50 more a month than
do otherwise identical families for whom such contributions are
not made. Eliminating the $50 child support payment beginning
in 1996 would save the federal government between $0.1 billion
and $0.2 billion annually.
Distributing additional child support to former AFDC
recipients.--H.R. 4 would require states to share more child
support collections with former recipients of public
assistance, reducing federal and state recoupment of prior
benefit payments. When someone ceases to receive public
assistance, states continue to collect and enforce the family's
child support order. All amounts of child support collected on
time are sent directly to the family. If a state collects past-
due child support, however, it may either send the amount to
the family or to use the collection to reimburse itself and the
federal government for past AFDC payments. The proposal, which
would take effect in fiscal year 2000, would require states to
send a larger share of arrearage collections to families, which
would reduce recoupment by federal and state governments. Based
on a survey of child support directors, CBO estimates that this
provision would cost the federal government $0.3 billion in
2000 and $0.4 billion in 2001 and 2002.
Additional provisions with budgetary implications.--A
number of other provisions would increase federal outlays.
First, H.R. 4 would fund further improvements in states'
automated systems at an estimated annual cost of $0.1 billion.
Second, the bill would provide about $50 million annually to
provide about $50 million annually to provide technical
assistance to states and to operate a computer system designed
to locate non-custodial parents. Third, the bill would change
federal cost sharing in enforcing child support. Although
individual states would see their share of federal funds change
relative to current law, CBO estimates that the new funding
formula would be cost neutral from the federal standpoint.
7. Pay-as-you-go considerations: The Balanced Budget and
Emergency Deficit Control Act of 1985 sets up pay-as-you-go
procedures for legislation affecting direct spending or
receipts through 1998. The pay-as-you-go effects of the bill
are as follows.
------------------------------------------------------------------------
1995 1996 1997 1998
------------------------------------------------------------------------
Outlays............. 0 -954 -4,376 -5,637
Receipts............ 0 0 0 0
------------------------------------------------------------------------
8. Estimated cost to State and local governments: In
general, H.R. 4 mandates no new or additional spending by state
and local governments and gives those governments the freedom
to cut back on some spending that they already incur. It is
impossible that state and local government will opt to spend
more on certain activities, but that choice would be up to
them.
Title I of H.R. 4 would change the structure of federal
funding for cash assistance and job training for recipients of
welfare benefits. THe bill would repeal the federal entitlement
for these programs to individuals and would allow states to
spend a specified amount of federal money provided in a block
grant with a greater degree of flexibility. To the extent that
demand or eligibility for these programs increases above the
level of federal funding, states could choose to increase their
own spending to keep pace or could reduce the amount of
benefits or limit eligibility to maintain current levels of
spending.
Title III's provisions, which would affect the SSI program,
likewise could increase or decrease state and local spending,
depending on a variety of factors. State and local government
spending for legal immigrants would automatically be reduced by
limiting aliens' eligibility for two programs: SSI (which is
typically supplemented by states) and Medicaid. Legal
immigrants cut off from federal benefits, however, might turn
to state- and locally-funded general assistance (GA) and
general medical assistance (GMA) programs instead, raising the
demand for such benefits. Elsewhere, the bill permits but does
not require states to deny benefits under the new family
assistance block grant to legal aliens.
The proposed removal of drug addicts and alcoholics from
the SSI and Medicaid rolls would probably boost demand for
general assistance payments but trim states' costs for Medicaid
and for SSI supplements, with uncertain overall effects.
Cutbacks in cash SSI benefits to disabled children will
probably increase demands on state and local welfare programs,
but those are extensively restructured by Title I in a way that
affords states great latitude.
Title IV would increase child support collections and
reduce the reliance on welfare for certain families. CBO
estimates the provisions would reduce state and local spending
by $0.3 billion in 2002.
9. Estimate comparison: None.
10. Previous CBO estimate: On March 31, 1995, CBO issued an
estimate of H.R. 4 as passed by the House of Representatives.
Comparisons between the House-passed version of H.R. 4 and this
substitute are difficult to make because this bill amends only
programs under the jurisdiction of the Committee on Finance
(AFDC, Supplemental Security Income, Foster Care, Medicaid, and
Child Support Enforcement). The House-passed bill also
addressed the Food Stamp program, Child Nutrition programs, and
the Child Care and Development Block Grant. The following
outlines the key modifications to the House bill made by the
Committee on Finance.
Titles I and II: Temporary assistance for needy families block grant
and JOBS modification
The Temporary Assistance for Needy Families Block Grant is
funded at a higher level in the Finance Committee substitute
($16.8 billion rather than $15.4 billion a year). The
difference stems from two sources. First, the Finance version
includes $1.0 billion for three AFDC-related child care
programs. The House provided for such funding in a separate,
discretionary child care block grant. Second, the Finance
Committee provides an additional $0.4 billion for the AFDC and
JOBS programs.
In addition, the Finance Committee amended the House-
proposed adjustments to the block grant, dropping the
population adjustment and eliminating the adjustments based on
the so-called illegitimacy ratio. The federal loan fund is
increased from $1.0 billion to $1.7 billion.
Finally, the Finance Committee struck a number of
requirements in the House-passed version that would prohibit
states from providing cash assistance to children born while
their mothers were receiving welfare and to families headed by
a mother who is under age 18 and who gave birth outside of
marriage.
Title III: Supplemental Security Income
Restricting benefits for aliens.--H.R. 4, as reported by
the Committee on Finance, would save more money by restricting
SSI benefits for aliens than would its counterpart passed by
the House. That is chiefly because the House bill contains two
significant exemptions--namely, for legal aliens who are 75
years of age or older or who are developmentally disabled--that
are absent in this version. In contrast, the Finance
Committee's bill exempts another group (Social Security
recipients who have paid enough in taxes to collect benefits on
their own record) that would not be spared by the House.
Although that is a large group, its average SSI benefit is much
lower than that for other aliens, and thus the exemption is not
particularly costly. CBO assumes that there would be a stronger
incentive for aged aliens to become naturalized under the
Finance Committee's version. Under the House-passed bill, many
elderly aliens could simply wait until age 75 to claim SSI
benefits. Since that possibility is blocked in the Senate bill,
naturalization would be the only way to obtain benefits.
H.R. 4, as passed by the House, would bar most legal aliens
from the Medicaid and food stamp programs as well as from SSI.
Those provisions are absent in the Finance Committee-reported
bill.
Restricting benefits for drug addicts and alcoholics.--This
bill and the House-passed act have nearly identical
restrictions on the eligibility of drug addicts and alcoholics
for SSI. The House approved a provision adding $100 million a
year in budget authority beginning in 1997 to drug treatment
and research programs. This bill has no comparable provision.
Restricting benefits for certain disabled children.--Both
the House-passed and Finance Committee-reported bills would
limit the provision of SSI benefits to disabled children by
repealing IFAs and tightening eligibility. The greatest
contrast lies in the two bills' emphasis on cash payments
versus services. The House bill would steer most children
seeking SSI in the future toward noncash benefits. It would set
up a program of block grants to states enabling them to offer
services (chosen from a list authorized by the Commissioner of
Social Security) to disabled children. All qualified children
would be entitled to an evaluation of their need for services,
but no child would be entitled to a specific level or value of
services. The total amount of the block grant would be set at
just under 75 percent of the amount of cash benefits for which
it would substitute. SSA could award cash benefits to future
applicants only if it were convinced that the child would
otherwise be institutionalized. In contrast, the Finance bill
would retain cash benefits for disabled children.
Title IV: Child support enforcement
The differences between this substitute and the House-
passed version are technical in nature and would have no effect
on the federal budget. CBO's estimate of this substitute
differs from that of the House bill because CBO has revised its
estimate of the proposal to distribute additional child support
to former AFDC recipients. Information from states that was
available to CBO at the time of the House's action suggested
that the policy would result in only modest federal and state
costs. Subsequent analyses by states in early May indicate the
proposal would be more costly than previously estimated.
Child protection
The major difference between the Finance Committee
substitute and the House-passed version is that the House bill
would transform Foster Care, Adoption Assistance, and other
child welfare programs into a block grant. The House-passed
version saved between $0.3 billion and $0.8 billion in Child
Protection programs annually. The finance Committee's bill does
not amend Child Protection programs.
11. Estimate prepared by: John Tapogna and Sheila Dacey
(Titles I, II and IV), Kathy Ruffing (Title III), and Robin
Rudowitz (Medicaid).
12. Estimate approved by: Paul N. Van de Water, Assistant
Director for Budget Analysis.
SUMMARY TABLE.--FEDERAL BUDGET EFFECTS OF THE FAMILY SELF-SUFFICIENCY ACT, As reported by the Senate Committee on Finance
[By fiscal year, in millions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
1996-2000 1996-2000
1996 1997 1998 1999 2000 2001 2002 total total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Title I: Temporary Assistance for Needy Families
Direct spending:
Budget Authority............................... (557) (998) (1,429) (1,713) (2,065) (2,355) (2,650) (6,762) (11,767)
Outlays........................................ (473) (943) (1,384) (1,678) (2,030) (2,312) (2,615) (6,508) (11,435)
Title II: Jobs Program
Direct spending:
Budget authority............................... 0 0 0 0 0 0 0 0 0
Outlays........................................ 0 0 0 0 0 0 0 0 0
Title III: Supplemental Security Income
Direct spending:
Budget authority............................... (547) (3,419) (4,221) (4,459) (5,006) (4,427) (5,102) (17,652) (27,181)
Outlays........................................ (405) (3,375) (4,241) (4,432) (4,985) (4,406) (5,082) (17,438) (26,926)
Authorizations of appropriations:
Budget authority............................... 300 125 100 100 100 100 100 NA NA
Outlays........................................ 300 125 100 100 100 100 100 NA NA
Title IV: Child Support
Direct spending:
Budget authority............................... (76) (58) (12) (93) 112 (20) (53) (127) (200)
Outlays........................................ (76) (58) (12) (93) 112 (20) (53) (127) (200)
----------------------------------------------------------------------------------------------------
Totals: Titles I-IV:
Direct spending:
Budget authority......................... (1,180) (4,475) (5,662) (6,265) (6,959) (6,802) (7,805) (24,541) (39,148)
Outlays.................................. (954) (4,376) (5,637) (6,203) (6,903) (6,738) (7,750) (24,073) (38,561)
Authorizations of appropriations:
Budget authority......................... 300 125 100 100 100 100 100 NA NA
Outlays.................................. 300 125 100 100 100 100 100 NA NA
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes.--Numbers in parentheses are negative numbers.
Rows and columns may not add because of rounding.
NA=not available.
Note.--H.R. 4 creates a new block grant of temporary assistance for needy families and specifies funding levels through fiscal year 2000. CBO's
estimates for 2001 and 2002 assume that the level of the block grant will remain the same as in 2000.
TABLE 1.--FEDERAL BUDGET EFFECTS OF THE FAMILY SELF-SUFFICIENCY ACT, TITLES I AND II TEMPORARY ASSISTANCE FOR
NEEDY FAMILIES BLOCK GRANT AND JOBS, AS REPORTED BY THE SENATE COMMITTEE ON FINANCE
[By fiscal year, in millions of dollars]
----------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
Repeal AFDC, Emergency
Assistance, JOBS, and Child
Care Programs
Family support payments:
Budget authority........ (17,454) (17,855) (18,311) (18,845) (19,437) (20,027) (20,622)
Outlays................. (17,194) (17,800) (18,266) (18,810) (19,402) (19,992) (20,587)
Food Stamp Program: \1\
Budget authority........ 50 175 300 450 625 825 1,025
Outlays................. 50 175 300 450 625 825 1,025
Medicaid:
Budget authority........ (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\)
Outlays................. (\2\) (\2\) (\2\) (\2\) (\2\) (\2\) (\2\)
Authorize Temporary Family
Assistance Block Grant
Family support payments:
Budget authority........ 16,787 16,787 16,787 16,787 16,787 16,787 16,787
Outlays................. 16,619 16,787 16,787 16,787 16,787 16,787 16,787
Evaluation of Block Grant
Family support payments:
Budget authority........ 10 10 10 10 10 0 0
Outlays................. 2 10 10 10 10 8 0
Penalties for State Failure
to Meet Work Requirements
Family support payments:
Budget authority........ 0 0 0 0 (50) (50) (50)
Outlays................. 0 0 0 0 (50) (50) (50)
Incentive for States to Pay
Foster Care rather than AFDC
Benefits
Foster Care Program:
Budget authority........ 0 0 0 10 25 35 45
Outlays................. 0 0 0 10 25 35 45
Incentive for States to Fund
Training through the Food
Stamp Employment and
Training Program
Food Stamp Program: \1\
Budget authority........ 0 0 0 100 200 300 400
Outlays................. 0 0 0 100 200 300 400
Denial of Benefits to
Persons who Misrepresent
Residence
Food Stamp Program: \1\
Budget authority........ 0 (5) (5) (5) (5) (5) (5)
Outlays................. 0 (5) (5) (5) (5) (5) (5)
Hold States Harmless for
Cost-Neutrality Liabilities
Family support payments:
Budget authority........ 50 0 0 0 0 0 0
Outlays................. 50 0 0 0 0 0 0
Impose Five-Year Deeming of
Sponsors' Income and
Resources
Medicaid:
Budget authority........ 0 (110) (210) (220) (220) (220) (230)
Outlays................. 0 (110) (210) (220) (220) (220) (230)
-----------------------------------------------------------------------------------
Total Titles I and II,
by account:
Family Support
Payments:
Budget authority.. (607) (1,058) (1,514) (2,048) (2,690) (3,290) (3,885)
Outlays........... (523) (1,003) (1,469) (2,013) (2,655) (3,247) (3,850)
Food Stamp Program:
Budget authority.. 50 170 295 545 820 1,120 1,420
Outlays........... 50 170 295 545 820 1,120 1,420
Medicaid: \2\
Budget authority.. 0 (110) (210) (220) (220) (220) (230)
Outlays........... 0 (110) (210) (220) (220) (220) (230)
Foster Care Program:
Budget authority.. 0 0 0 10 25 35 45
Outlays........... 0 0 0 10 25 35 45
-----------------------------------------------------------------------------------
Total, all accounts:
Budget authority.... (557) (998) (1,429) (1,713) (2,065) (2,355) (2,650)
Outlays............. (473) (943) (1,384) (1,678) (2,030) (2,312) (2,615)
----------------------------------------------------------------------------------------------------------------
\1\ Estimate assumes the Food Stamp program is an open-ended entitlement.
\2\ Medicaid savings shown for Title I reflect only the effect of imposing a 5-year sponsor-to-alien deeming
requirement. Other language in Title I, intended to hold Medicaid beneficiaries harmless from the switch to
temporary assistance for needy families, has unclear effects on the Medicaid program. States may implement
such provisions in a number of ways potentially resulting in small costs, small savings, or budget neutrality.
The impact of the legislation would be largely determined by the implementing regulations.
Note.--H.R 4 creates a new block grant of temporary assistance for needy families and specifies funding levels
through fiscal year 2000. CBO's estimates for 2001 and 2002 assume that the level of the block grant will
remain the same as in 2000.
TABLE 2.--FEDERAL BUDGET EFFECTS OF THE FAMILY SELF-SUFFICIENCY ACT, TITLE III SUPPLEMENTAL SECURITY INCOME, As
reported by the Senate Committee on Finance
[By fiscal year, in millions of dollars]
----------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
Restricting Benefits for Legal Aliens
Supplemental Security Income:
Budget authority................. (170) (2,190) (2,710) (2,710) (2,900) (2,470) (2,760)
Outlays.......................... (170) (2,190) (2,710) (2,710) (2,900) (2,470) (2,760)
Medicaid: \1\
Budget authority................. (10) (180) (230) (240) (260) (270) (290)
Outlays.......................... (10) (180) (230) (240) (260) (270) (290)
Food Stamps: \2\
Budget authority................. 20 270 335 335 330 335 340
Outlays.......................... 20 270 335 335 330 335 340
Drug Addicts and Alcoholics \3\
Supplemental Security Income-
Benefits:
Budget authority................. (29) (200) (215) (249) (260) (230) (280)
Outlays.......................... (29) (200) (215) (249) (260) (230) (280)
Supplemental Security Income-Referral
and Monitoring Costs:
Budget authority................. (142) (186) (166) (193) (214) (235) (255)
Outlays.......................... 0 (142) (186) (166) (193) (214) (235)
Medicaid:
Budget authority................. (12) (81) (89) (108) (117) (125) (136)
Outlays.......................... (12) (81) (89) (108) (117) (125) (136)
Food Stamps: \2\
Budget authority................. 3 25 30 30 30 30 35
Outlays.......................... 3 25 25 30 30 30 35
Disabled Children \2\
Supplemental Security Income
Benefits:
Budget authority................. (242) (1,022) (1,371) (1,549) (1,865) (1,732) (2,056)
Outlays.......................... (242) (1,022) (1,371) (1,549) (1,865) (1,732) (2,056)
Food Stamps: \2\
Budget authority................. 35 145 200 225 250 270 300
Outlays.......................... 35 145 200 225 250 270 300
Additional administrative costs
(authorization of appropriations)
Supplemental Security Income:
Budget authority................. 300 125 100 100 100 100 100
Outlays.......................... 300 125 100 100 100 100 100
--------------------------------------------------------------------------
Total Title III, by account:
Supplemental security Income:
Budget authority........... (583) (3,598) (4,462) (4,701) (5,239) (4,667) (5,351)
Outlays.................... (441) (3,554) (4,482) (4,674) (5,218) (4,646) (5,331)
Medicaid:
Budget authority........... (22) (261) (319) (348) (377) (395) (426)
Outlays.................... (22) (261) (319) (348) (377) (395) (426)
Food Stamps: \2\
Budget authority........... 58 440 560 590 610 635 675
Outlays.................... 58 440 560 590 610 635 675
--------------------------------------------------------------------------
Total, all accounts (direct
spending):
Budget authority........... (547) (3,419) (4,221) (4,459) (5,006) (4,427) (5,102)
Outlays.................... (405) (3,375) (4,241) (4,432) (4,985) (4,406) (5,082)
Authorization of
appropriations:
Supplemental Security Income:
Budget authority................. 300 125 100 1000 100 100 100
Outlays.......................... 300 125 100 1000 100 100 100
----------------------------------------------------------------------------------------------------------------
\1\ The proposal would not bar aliens explicity from Medicaid. However, some aliens would lose Medicaid coverage
by virtue of losing their SSI eligibility.
\2\ Estimate assumes the Food Stamp program is an open-ended entitlement.
\3\ Proposal could increase number of individuals participating in the Temporary Assistance for Needy Families
block grant; however, such an increase would not affect federal spending.
TABLE 3.--FEDERAL BUDGET EFFECTS OF THE FAMILY SELF-SUFFICIENCY ACT,
TITLE IV CHILD SUPPORT ENFORCEMENT--AS REPORTED BY THE SENATE COMMITTEE
ON FINANCE \1\
[By fiscal year, in millions of dollars]
------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002
------------------------------------------------------------------------
New Enforcement
Techniques
State directory
of new hires:
Family
support
payments... 0 0 11 (9) (13) (18) (19)
Food Stamp
Program.... 0 0 (2) (10) (15) (22) (23)
Medicaid.... 0 0 (8) (18) (31) (46) (52)
-------------------------------------------------------
Subtotal.. 0 0 2 (37) (59) (86) (93)
=======================================================
State laws
providing
expedited
enforcement of
child support:
Family
support
payments... 0 0 0 (18) (38) (60) (84)
Food Stamp
Program.... 0 0 0 (6) (14) (22) (30)
Medicaid.... 0 0 0 (6) (14) (24) (37)
-------------------------------------------------------
Subtotal.. 0 0 0 (31) (66) (106) (152)
=======================================================
State laws
concerning
paternity:
Family
support
payments... 0 (17) (18) (20) (22) (24) (26)
Food Stamp
Program.... 0 (3) (3) (4) (4) (4) (5)
Medicaid.... 0 (2) (2) (3) (3) (4) (5)
-------------------------------------------------------
Subtotal.. 0 (22) (24) (26) (29) (32) (36)
=======================================================
Suspend drivers'
licenses:
Family
support
payments... 0 (8) (17) (27) (37) (39) (41)
Food Stamp
Program.... 0 (2) (5) (8) (12) (12) (13)
Medicaid.... 0 (2) (4) (6) (10) (11) (12)
-------------------------------------------------------
Subtotal.. 0 (12) (26) (41) (59) (62) (66)
=======================================================
Adoption of
uniform State
laws:
Family
support
payments... 0 10 2 (8) (13) (18) (24)
Food Stamp
Program.... 0 0 (1) (3) (5) (7) (9)
Medicaid.... 0 0 (2) (4) (7) (11) (16)
-------------------------------------------------------
Subtotal.. 0 10 (1) (15) (25) (36) (49)
=======================================================
Subtotal
, New
Enforce
ment... ...... (23) (49) (151) (239) (323) (396)
=======================================================
Eliminate $50
passthrough:
Family
support
payments... (250) (270) (290) (320) (360) (390) (420)
Food Stamp
Program.... 130 140 150 170 190 200 200
Medicaid.... 0 0 0 0 0 0 0
-------------------------------------------------------
Subtotal.. (120) (130) (140) (150) (170) (190) (200)
=======================================================
Distribute chald
support arrears
to former AFDC
families first:
Family
support
payments... 0 0 0 0 360 420 470
Food Stamp
Program.... 0 0 0 0 (60) (70) (80)
Medicaid.... 0 0 0 0 0 0 0
-------------------------------------------------------
Subtotal.. 0 0 0 0 300 350 390
=======================================================
Other Provisions
with budgetary
implications
Automated data
processing
development:
Family
support
payments... 0 28 59 84 84 5 0
Food Stamp
Program.... 0 0 0 0 0 0 0
Medicaid.... 0 0 0 0 0 0 0
-------------------------------------------------------
Subtotal.. 0 28 59 84 84 5 0
=======================================================
Automated data
processing
operation and
maintenance:
Family
support
payments... 3 12 55 52 52 46 40
Food Stamp
Program.... 0 0 0 0 0 0 0
Medicaid.... 0 0 0 0 0 0 0
-------------------------------------------------------
Subtotal.. 3 12 55 52 52 46 40
=======================================================
Technical
assistance to
State programs:
Family
support
payments... 36 47 51 55 60 56 60
Food Stamp
Program.... 0 0 0 0 0 0 0
Medicaid.... 0 0 0 0 0 0 0
-------------------------------------------------------
Subtotal.. 36 47 51 55 60 56 60
=======================================================
State obligation
to provide
services:
Family
support
payments... 0 0 0 3 11 22 39
Food Stamp
Program.... 0 0 0 0 0 0 0
Medicaid.... 0 0 0 0 0 0 0
-------------------------------------------------------
Subtotal.. 0 0 0 3 11 22 39
=======================================================
Federal and
State reviews
and audits:
Family
support
payments... 0 3 3 3 3 3 3
Food Stamp
Program.... 0 0 0 0 0 0 0
Medicaid.... 0 0 0 0 0 0 0
-------------------------------------------------------
Subtotal.. 0 3 3 3 3 3 3
=======================================================
Performance-
based
incentives:
Family
support
payments... 0 0 0 0 0 0 0
Food Stamp
Program.... 0 0 0 0 0 0 0
Medicaid.... 0 0 0 0 0 0 0
-------------------------------------------------------
Subtotal.. 0 0 0 0 0 0 0
=======================================================
Grants to State
for visitation:
Family
support
payments... 5 5 10 10 10 10 10
Food Stamp
Program.... 0 0 0 0 0 0 0
Medicaid.... 0 0 0 0 0 0 0
-------------------------------------------------------
Subtotal.. 5 5 10 10 10 10 10
=======================================================
Subtotal
, Other
Provisi
ons.... 44 95 178 208 220 143 152
=======================================================
Total Title IV,
by account
Family support
payments....... (206) (189) (134) (194) 96 13 8
Food Stamp
Program........ 130 135 138 139 81 63 60
Medicaid........ 0 (4) (16) (38) (65) (96) (121)
-------------------------------------------------------
Total
title IV. (76) (58) (12) (93) 112 (20) (53)
------------------------------------------------------------------------
\1\ Based on discussions with Committee staff, this estimate assumes a
technical correction will be made to section 461 (Federal tax offset).
Note: Number in parentheses are negative numbers.
VI. ADDITIONAL VIEWS
----------
ADDITIONAL VIEWS OF SENATORS MOYNIHAN, BRADLEY, AND MOSELEY-BRAUN
It is just seven years since the Committee on Finance
reported out the Family Support Act of 1988. It seems almost
unimaginable today, but there was then a vast bipartisan
consensus on this great issue. The final vote in the Senate was
96 to 1.
At the Rose Garden ceremony were Senators Dole, Bentsen,
and Brown, Speaker Foley, Mr. Michel, and Governors Clinton and
Castle, representing the National Governors' Association.
President Reagan, on signing the bill, told the assembled
company that ``They and the members of the administration who
worked so diligently on this bill will be remembered for
accomplishing what many have attempted, but no one has achieved
in several decades: a meaningful redirection of our welfare
system.''
In large measure, he was right. The Family Support Act has
performed well where it was implemented seriously. Every day a
State official reports on some new success, or there is an
announcement of some new initiative funded under the Act. A
week ago, George Allen, Republican governor of Virginia,
announced such an effort. ``Virginia is again making history,''
he said. ``It is the most sweeping, and, I think, the most
compassionate welfare reform plan anywhere in the nation.'' And
it is taking place, he might have added, under the Family
Support Act of 1988.
Yet the bipartisan consensus on welfare matters is gone,
and there is a newly coined view that there is simple solution
to the problem of mothers and children on welfare. Cut them
off.
We have long called attention to the fact that a steadily
growing percentage of children are being born into single
parent homes. We know that these are the children who are most
likely to become dependent on welfare. The problem of a high
and growing percentage of births to single parents is one we
share with other industrialized nations.\1\
\1\ In 1992 the rate was 33 percent in France, and 31 percent in
the United Kingdom.
---------------------------------------------------------------------------
In the United States the proportion of births of children
in single parent families has reached 33 percent. When the
Social Security Act was enacted in 1935, it was around 4
percent. The ratio has gone up every year since 1970. Year in,
year out, it has risen at an annual rate of about .86 percent.
Some have concluded that the answer is simply to repeal title
IV-A of the Social Security Act, and eliminate welfare
benefits. That will somehow induce women to stop having babies.
The problem is, there is no evidence whatever to support that
view.
On March 9, Lawrence Mead, a professor at the Woodrow
Wilson School at Princeton University, who would describe
himself as a conservative, testified before the Finance
Committee on this point:
Can the forces behind growing welfare be stemmed?
Conservative analysts say that unwed pregnancy is the
greatest evil in welfare, the cause not only of
dependency but other social ills. On all sides, people
call for a family policy that would solve this problem.
But it is not that easy, says Dr. Mead:
The great fact is that neither policymakers nor
researchers have found any incentive, benefit or other
intervention that can do much to cut the unwed
pregnancy rate.
``We are told that ending AFDC will reduce illegitimacy,''
says James Q. Wilson, of the University of California at Los
Angeles, ``but we don't know that. It is, at best an informed
guess.''
It seems inconceivable that anyone would propose ending the
basic protection afforded poor children in the Social Security
Act based on ``an informed guess'', yet apparently that is what
we have come to. In the midst of the Depression of the 1930s,
when our economic output was at one-eighth its present level,
we could provide for dependent children as a Federal
responsibility. In the 1990's, with a $7 trillion economy, we
are about to eliminate the Federal guarantee.
The bills passed by the House of Representatives and
ordered reported by this Committee pose an enormous fiscal risk
for State and local governments. The Federal law enacted in
1935 provided the several States with a Federal guarantee that
whatever amount they provide by way of support for dependent
children will be matched, according to formula, by the Federal
government. This is what we mean when we speak of welfare as an
entitlement. It is an entitlement of the several States to
support from the Federal government. (In the 1960s children who
meets the qualifications became entitled to receive whatever
benefits a State prescribes. This is the result of a series of
Supreme Court decisions under the Equal Protection and
Supremacy clauses of the Constitution.) The decision by the
Finance Committee majority to deprive States of this
entitlement is a formula for tumult, recrimination, regression
in which no doubt any number of political reputations will be
won, and only children lose.
There is an elemental fact here. Under the Social Security
Act arrangement, some States chose ``low'' benefits for
children, with a high Federal ``match''. Others chose ``high''
benefits with a low ``match''. This pattern was compounded by
the advent of food stamps as a uniform national benefit paid
for entirely by the Federal government. The lower the AFDC
benefit, the higher the food stamp benefit. Freezing this
arrangement as a block grant invites Federal factionalism to a
degree unknown to this century. Example. According to the
Department of Health and Human Services, under the AFDC block
grant as reported by the Senate Finance Committee, Mississippi
will receive $87 million per year; California $3,706 million.
Even before the Finance Committee acted on this legislation a
group of ``30 mostly conservative senators from the South and
Southwest'' as one editorial put it, complained to our
distinguished chairman that the present welfare bill would
shortchange their States because they are so fast growing. (Not
all are; most are simply low benefit States. But it comes to
the same thing.) The group was led by the distinguished junior
Senator from Texas. Their demand can surely be met, and very
likely will be. But at the expense of the ``high'' benefit
States. (Which are typically States with relatively high costs
of living, which eat up much of the nominal margin.) Thus Texas
might benefit; but at the cost of California, which surely will
lose. As the electoral votes of both States are thought crucial
to victory in the next Presidential election, one can only
await the high comedy of the various candidates explaining
their various positions to the respective constituencies.
It is indeed a constitutional moment. Of self-inflicted
wounds, which may not heal as readily as the mindless might,
well, ``think''.
It would do no harm to give some thought also to the
demographic facts which clearly indicate a rise in the number
of child births, and correspondingly of births of children out
of wedlock.
Between 1980 and 1991, 15 to 19 year olds represented a
decreasing share of women in childbearing ages, falling from
about 20 percent to 14 percent. The downward trend ended in
1991, and their share is projected to rise to 17 percent by
2005. Women in this age group accounted for about 30 percent of
all out-of-wedlock births but only 13 percent of all births in
1992.
There is a similar trend for the larger population of women
aged 15-24. This population as a share of all women in
childbearing ages is projected to rise from 29 percent in 1996
to 33 percent in 2005. Women aged 15-24 accounted for 65
percent of all births out-of-wedlock and 40 percent of all
births in 1992.
These are not the only problems with the bill approved on
May 26 by the Finance Committee. Consider the work and training
requirement. Everyone is for putting welfare parents to work,
but paying for it is another matter. The Finance Committee bill
says that 45 percent of the adult AFDC caseload must
participate in the Job Opportunities and Basic Skills (JOBS)
program by the year 2000, but it freezes welfare funding at the
1994 level. To meet the target, says the Congressional Budget
Office, States would have to devote 60 percent of their block
grant dollars to work activities and child care. Rather than do
that, the CBO speculates, nearly all the States will simply
accept the 5 percent reduction in block grant funding for
failing to meet the standard. The work and training requirement
will be a fiction.
The Family Support Act of 1995 (S. 828), has none of these
fundamental flaws. It continues the entitlement and protects
States and localities against unforeseen and unforeseeable
financial hazards. It provides sufficient Federal matching
funds to enable States to make participation in the JOBS
program mandatory for welfare parents. The work requirement is
real--a critical point if we are talking about making genuine
change in the welfare system. It allows States to enroll absent
parents who are unemployed and unable to pay child support in
the JOBS program. S. 828 requires teen mothers to live at home
and to go to school. It gives States new tools to enforce child
support. It provides flexibility so that States can test new
ways to administer their AFDC and JOBS programs. It is fully
paid for. And it is all we know.
The point is, welfare can be greatly changed without
repealing essential guarantees. And no one should pretend that
we know how to end welfare without at this point causing
enormous hardships for children, as well as for State and local
governments.
The group that has spoken out most eloquently on the
subject of welfare is the U.S. Catholic Conference. Almost
alone, they have raised the moral issue confronting us:
We cannot support ``reform'' that will make it more
difficult for poor children to grow into productive
individuals. We cannot support reform that destroys the
structures, ends entitlements, and eliminates resources
that have provided an essential safety net for
vulnerable children or permits states to reduce their
commitment in this area.
If the bishops do not persuade, consider Hippocrates.
Primum non nocere. First do no harm.
Daniel Patrick Moynihan.
Bill Bradley.
Carol Moseley-Braun.
ADDITIONAL VIEWS OF SENATOR BRADLEY
This legislation comes before the Committee at a time of
real opportunity to do something about the very serious
problems with the welfare system. We can have no illusions that
the status quo is acceptable. We have an opportunity to
transform Aid to Families with Dependent Children into a short
path to economic self-sufficiency. We can build on innovations
such as microenterprise, job-placement vouchers, maternity
homes, and the Riverside County, California, approach to
employment. We can bring down the barriers to success in the
current system, from the long waits for federal waivers faced
by states that want to innovate, to the penalties on assets,
income and marriage that make it almost impossible for poor
people to escape dependency through their own initiative.
In the weeks and months leading up to the Committee's brief
deliberation on this bill, we held a series of hearings and
heard scores of suggestions about how to improve work
participation, discourage childbearing outside of marriage,
reinforce parental responsibility, give states flexibility, and
make welfare transitional. What did not emerge from these
hearings, however, was any testimony in favor of doing what
this bill proposes to do.
Instead, at a moment of opportunity to do something about
welfare, this committee has chosen to do nothing. Instead of
any substantive reform, we have an open-ended, non-specific,
grant of money from the federal government to state
politicians, for the loosest of abstract purposes. It is
neither compassionate nor tough. It does nothing to ensure that
people move quickly from welfare to work, just as it does
nothing to ensure that children in the neediest families are
protected from hunger, illness, homelessness, and death. It
doesn't send a clear message to individuals about their
responsibilities or the limits of society's willingness to
help. It neither encourages innovation nor preserves the safety
net. It doesn't strengthen the partnership between the federal
government and the states but neither does it clearly hand
responsibility to one level of government or the other.
There are two strongly positive features of this bill. The
first is Title IV, the child support enforcement section. This
section draws heavily on provisions of S. 456, which I
introduced with a broad bipartisan coalition including members
of this committee in February 1995. While I am disappointed by
the substitution of some sections of H.R. 4 for sections of S.
456, on balance it will be a positive step forward for parents,
whether receiving welfare or not, who are owed child support. I
am disappointed by the committee's decision to eliminate the
$50 pass-through of child support payments to families
receiving welfare. While states will be permitted to pass
through any amount of child support to families on assistance,
they will have to reimburse the federal government for its
share of the amount passed through, making it unlikely that
most states will pass through any amount. Thus, for a non-
custodial parent of a child on welfare, there will be no
tangible benefit to the children for paying child support. I
appreciate that there is no consensus among researchers as to
whether the $50 passthrough has had the desired effect of
encouraging payment of support, but I would prefer to continue
it until we can find an alternative means of achieving the same
goal.
Further, with the elimination of the pass-through, the
change in child support distribution rules in this bill becomes
all the more important. Under this provision, included in every
major child support bill introduced by members of either party
in the House or Senate, when the state collects overdue child
support arrearages for a family that had been on welfare, the
family will first receive its share of arrearages accumulated
before the family went on AFDC, as well as any overdue support
from after the family left AFDC, before the state can take its
share of child support to offset costs during the family's time
on AFDC. Families leaving welfare will thus have some
opportunity to become self-sufficient, and non-custodial
parents will have some incentive to pay. I would urge the
committee to resist any effort to reverse this change or to
view it as merely technical or even accidental. It is a very
deliberate policy choice and one that should remain inviolate.
The second positive aspect of the bill is simply that it
does not indulge in the gratuitous meanness--towards legal
immigrants, children born to welfare recipients or teenagers,
and disabled children--that characterizes the version of H.R. 4
that passed the House of Representatives.
While this bill avoids the vicious symbolic politics of the
House bill, it offers nothing in their place. There is only one
substantive requirement upon states for receipt of the funds
under this block grant: they must meet a series of work
requirements, ramping up to a requirement that 50% of
recipients be engaged in work activity by the year 2000. Yet
the Congressional Budget Office predicts that only six states
will have the funds to meet these work requirements. The rest
will simply absorb the five percent penalty and continue doing
business as usual, or even doing much less than they are
required to do under the current JOBS program. I appreciate the
Chairman's willingness to consider the implications of this
unbiased opinion from the CBO, yet I would warn that it is not
a peripheral issue or an oversight, but a fatal flaw at the
very heart of this bill.
The driving idea behind this bill is state flexibility. Yet
this is not enough of a foundation on which to build
substantive welfare reform. The idea of state flexibility is
compelling to anyone who has watched the contortions a state
like New Jersey has had to go through to obtain waivers to try
something new, usually something that involves spending a
little more money now, or loosening restrictions on recipients,
in expectation of savings in the future. But state flexibility
is not an issue of controversy in this year's debate. All three
alternatives offered by Democrats on this committee flatly
eliminated or, in one case, scaled back this waiver process,
and all three alternatives would have given states all the
freedom that every governor ever asked for. This bill goes so
much further beyond flexibility that it would gut the very
basics of the system of assistance it seeks to reform.
Under this bill, states could conceivably do as little as
merely referring needy families to a facility where some
surplus cheese might be available. This may sound absurd or
extreme, and it is, but it would be in full compliance with the
bill's requirement that the state have ``a plan to assist needy
families''--any kind of plan. Under this bill states could do
almost nothing without losing a penny of federal funds.
While I think most states will make an effort to do
something, it is quite easy to see what will happen when states
are hard-pressed for funds. They may provide minimal assistance
in one region of the state. The will probably put very needy
applicants on a waiting list after the federal funds run out.
They might let state bureaucrats choose who to assist in a
completely arbitrary manner. There will be no clear rules, and
without clear rules, there will be none of the positive impact
on behavior that proponents of the bill expect.
Further, without basic standards, work requirements would
become even more meaningless that CBO says they are, because
states would have no basic definition of who is eligible and
therefore who should be in a work program. If a state has
trouble meeting the work participation requirements under the
bill, they can simply stop serving those who are having the
most trouble funding work. States could thus artificially
increase the percentage of those receiving assistance who are
working, without increasing the number who are working.
At the very least, states should be required to set for
themselves basic eligibility standards, basic benefits, rules
governing assets and outside income, just as they do under
current law. States must also clearly define the groups they
would make categorically ineligible for help, whether teen
parents, additional children born to welfare recipients, legal
immigrants, or other categories. Washington would not tell the
states what those rules should be, but states must set those
rules for themselves, and families must know what the rules
are. Then, states must be required to serve everyone who
qualifies under those rules, supplementing federal funds with
state funds if necessary.
Without such a minimal improvement, this bill will become a
dangerous web of unintended consequences. Instead of states
experimenting with time limits for those who have been on
welfare for a long time, there will be waiting lists for those
in need for the first time. Instead of work requirements,
states may do less then they do under current law. Instead of
clear rules that, over time, change individuals' attitudes
about work and childbearing, we will have a muddle of ambiguity
that will abandon some families that are doing their best to
become self-sufficient, while allowing others who are more
aggressive to continue exploiting the system. And instead of a
clear funding mechanism that gives state full control of the
program, we will have a structure that rewards states that
choose to do the least, while leaving states that make a
serious effort to reform welfare desperately strapped for
funds.
A much better solution to all these problems, however, is
to base the funding in each state on the state's current level
of need, as measured by the states' own eligibility and benefit
levels, and to provide states with separate, flexible funding
streams for jobs and training, and for child care. A number of
alternatives offered in Committee, including Senator Conrad's
and Senator Moynihan's, offer this funding structure along with
all the flexibility states need to really change the culture of
welfare. Although they were hastily rejected in Committee, they
deserve full consideration on the Senate floor.
Bill Bradley.
ADDITIONAL VIEWS OF SENATOR JOHN D. ROCKEFELLER IV
I concur with the view expressed by the distinguished
ranking member, Senator Daniel Patrick Moynihan.
Also, I would like to briefly summarize my own guiding
principles regarding the current effort to achieve welfare
reform.
As the vote on the Chairman's mark demonstrated, the
members of the Committee disagreed on how to change the welfare
system. I regret that the opportunity was not used to achieve
consensus as a better route to making such important decisions
affecting millions of children and families across America.
My view is that welfare reform should be a strong effort to
expect work and personal responsibility from parents. Welfare
should not be a hiding-place or a resting-place, and taxpayers
have every reason to expect real change. The current system
fails on both fronts of work and responsibility, although
success requires enormous commitment, focus, and honesty about
the reasons so many families are so poor.
But I do not believe welfare reform should be the route to
abandoning this country's protection of children. The
Chairman's legislation abdicates the federal responsibility for
vulnerable children, which will punish and harm the innocent.
The legislation's shift to a block grant approach will
place an arbitrary limit on funds to each state, regardless of
its future changes in population, regional economic downturns,
or the unpredictable changes affecting poor children and
families.
State flexibility is important, but welfare reform
legislation should ensure that federal tax dollars will truly
be used to get AFDC parents into jobs with the necessary
support of effective job placement and child care.
These are my fundamental concerns and reflect issues that
are especially important to my state of West Virginia.
I do appreciate the Chairman's recognition and support of
some basic provisions from the current JOBS programs designed
to assure that existing workers are not displaced by community
work programs established by states under new programs. The
point is to move AFDC parents into work without displacing
current workers and possibly pushing them into welfare. Such
safeguards for hard working men and women are crucial and most
be preserved. These provisions had bipartisan support over the
years in a variety of federal programs, including the 1988
Family Support Act.
Also, I want to commend the Chairman's mark for supporting
current law on child protective services, which includes a
commitment to maintaining the entitlement status of foster care
and adoption assistance. Services for abused and neglected
children are basic protection for the most vulnerable members
of our society, children who are unsafe in their own homes.
Maintaining federal standards and support for child protective
services is a fundamental and moral obligation.
Welfare reform is an extremely challenging and essential
endeavor. The goal should be to promote independence and
discourage dependence, but the price should not be paid by
children born into poverty through no fault of their own. For
decades, this country has worked on promising opportunity and
hope to every child, regardless of where they live. My hope is
that the Senate will find a way to enact bipartisan legislation
that keeps faith with both the principal of responsibility and
a commitment to children.
John D. Rockefeller IV.
ADDITIONAL VIEWS OF SENATOR JOHN B. BREAUX
This bill does not reform welfare. It simply puts the
welfare problems in a box and ships it to the states. When the
states open that box, they're going to find a whole lot of
problems and less money to help solve them.
The fact is, our nation's welfare problems are big enough
for the federal and state governments, Democrats and
Republicans, to solve together. That's why I think welfare
reform should continue to be a state-federal partnership. Right
now, the federal and state governments share the costs of
supporting children and putting their parents to work. The
Republican block grant plan would simply give states a check
and require nothing in return. States could spend the money
they now spend on poor families on roads or bridges. That is
not fair. We all know that states are more careful spending
money they have to raise themselves. I think both the federal
and state governments should commit resources to reform
welfare. That's why I offered an amendment in committee to
encourage states to match federal welfare funds as they now do
in most all federal state programs.
We need to move beyond the argument over whether the
federal or state governments should handle the welfare
problems. The real debate should be over how to best move
people from welfare to work. Today, we expect too little from
those on welfare. Anyone who can work, should. Everyone should
do something as a condition of receiving assistance. Today, we
also expect too little from the welfare bureaucracy. Its
mission should be to get people off of welfare and into jobs--
as soon as possible. Those who need help finding jobs should
get it. But work, not welfare, should be the goal.
While we transform welfare into a work-based system, we
should continue to protect kids. Welfare is a safety net for
millions of American children living in poor or near-poor
families. Most never need it. But it's there just in case--in
case their mother loses her job or their father abandons the
family. We should keep it that way.
I had hoped that the Committee would report a bill that is
not just a budget cut disguised as welfare reform. A bill that
doesn't just ship the welfare problem off to the states, but
instead requires both levels of government to commit to solving
the welfare problem. One that promotes work but protects kids.
Since this bill does not, I had to oppose the measure. However,
I remain hopeful that when this measure comes up for full
Senate debate we will be able to produce a bipartisan product
that will justify Presidential approval and be true reform for
all Americans.
John B. Breaux.
ADDITIONAL VIEWS OF SENATOR CAROL MOSELEY-BRAUN
A week and half ago the Finance Committee reported out
sweeping welfare reform legislation in the form of the
Chairman's substitute to H.R. 4. It is likely that the full
Senate will take up this bill later this month. The Chairman's
substitute has serious and far reaching implications regarding
this nation's commitment and obligation to poor children.
The House moved through welfare reform hastily, and
produced an unworkable and ill conceived piece of legislation.
Unfortunately, the Senate bill is equally problematic. While
the bills do ``reform welfare as we know it'', neither of them
deal with the underlying problems that cause expanding welfare
rolls nor provide viable solutions. What the House and Senate
Finance Committee bills really offer is a wholesale
capitulation to those who would abandon the war on poverty.
These bills end the federal guarantee to income assistance to
poor children and shift the problem of responding to poverty to
the states.
Welfare is a response to poverty. In 1993, 39.9 million
Americans were poor. 22% or 14.9 million children live in
poverty in this country--nearly one out of every four American
children. This is a 40% increase since 1970. The U.S. rate is
double that of Canada and Australia, and more than four times
that of France, the Netherlands, Germany, and Sweden. Female
headed households account for 23% of all families, and more
than half of all female-headed households (53%) are poor.
Since 1935 the federal government has sought to reduce
poverty and its consequences partly through income support to
poor families. Poverty has been considered a national problem
that required federal involvement. Under the guise of state
flexibility, the Senate Finance bill, in effect, eschews any
federal programmatic responsibility. The bill translates the
universal frustration with the current system into an
abdication of federal responsibility.
Welfare reform is clearly needed. Welfare policies should
not encourage a lifetime of dependency. All recipients who can
work should work. Reform will not work, however, if it does not
attempt to resolve issues of poverty and offer poor families
opportunity.
The Finance Committee bill fails to address poverty or
offer a realistic prescription for reform. The worst
consequence is that it will rob 4 million of children of
opportunity to reach their full potential because it eliminates
any state or federal obligation to poor children.
Several aspects of the bill are of particular concern to
me:
Block grants are proposed as a solution.--The bill turns
the welfare problem over to the states using a block grant
mechanism. The block grant mechanism in effect, eliminates the
current federal and state obligation to care for poor children.
The federal government thus transfers its current obligation to
serve people and replaces it with a guarantee to provide
funding to states.
This route was taken even though past history has shown
that many of the block grants established in the early 1980's
failed to achieve their intended goals. The lack of federal
reporting requirements created a situation where targeted
populations were not well served, comparable data across states
was unavailable, and the federal government could not account
for how funds were spent. Over time, funding for many of the
block grants was reduced while the number of targeted
categorical programs increased.
Funding is inadequate and inflexible.--The bill provides
$16.8 billion dollars to states for each of the next five years
to care for needy children. The funding is capped and cannot
respond to changes in caseload or population. Fast-growing
states would be penalized as would states experiencing a
recession or economic downturn. Federal funds would quickly
disappear but the responsibility for caring for needy children
would not.
The funding level is also inadequate. According to the
Congressional Budget Office (CBO), in the year 2000 two-thirds
of the funding will be necessary to meet the work and child
care requirements alone. Only one-third of the funds would be
available for cash assistance. CBO estimates that only 6 States
could meet the work requirements of the bill. Therefore the
majority of the states would be forced to incur penalties or
reduce the amount of cash assistance available to families with
dependent children.
The bill does not require maintenance of effort.--The bill
would set in stone the current funding allocations which are
based on what states spend. Grant levels vary widely among
states. Children would be treated differently due to the
geography of their birth.
It is one thing to allow such discrepancies when it is
based on state decisions of how much to spend on poor families,
as is the case of the current allotment. But, under the Senate
bill, states would not have to spend state revenue to receive
federal funds. Benefits to poor families could be comprised
solely of federal funds If this is the case, federal dollars
should be allocated more equitably based on need.
Welfare reform should be done fairly. During the mark-up
the decision to lock in the current funding distribution was
defended as the only workable solution; rewriting the formula,
it was said, would be too complicated. The current allocation
system is faulty. If it does not work we should not be swayed
from change because of the prospect of a formula fight.
The bill will create a ``race to the bottom''.--There is a
widely held belief that states which set high benefit levels
will become a magnet for poor families living in low benefit
states. If poor people move to states with generous benefits,
state spending will have to increase due to the inflexibility
of the federal grant. This creates either a hidden unfunded
mandate or a powerful incentive to reduce benefits levels.
States are already competing to reduce benefit levels, even
through current benefits are lower than the poverty level in
all 50 states. (In real dollar terms benefits levels have
fallen 47% since 1970.)
The bill assumes that states will ``do the right thing.''--
While there is merit in the notion that states are closer to
the problems of their constituents and some states have
demonstrated the capacity to innovate, the absolute absence of
a national commitment to income assistance puts the poor at the
mercy of geography and chance. State flexibility is important,
but so fiscal and programmatic accountability. We must not
disregard the lessons learned from the past.
States have the principal responsibility for caring for
abused and neglected children. 20 states, however, are under
court orders to improve their systems. It was the imposition of
federal mandates that are most often cited as the cause for
many of the reforms of the past 20 years. If states can not
adequately care for our abused and neglected children, we
should not assume that states will do a better job with other
poor children.
The bill also ignores past welfare experience. We have
learned from successful state experiments, such as those in
Michigan and Wisconsin, that moving recipients into jobs can be
done but it requires investment.
Investing in people is more expensive in the short run, but
will provide a greater return over time.
The bill does not include provisions for job creation.--
Finally, the bill assumes that recipients will be able to find
jobs after the five year time limit (which could be less at a
state's opinion) but does not provide funding for job creation
or provide adequate funding for support services that will aid
recipients to obtain and keep private sector jobs. In many poor
communities jobs simply do not exist and those that are
available are not easily accessible. Transportation may be
insufficient, unavailable and or expensive. This bill buys into
the ``Field of Dreams'' theory: If you kick them off welfare
they will work. It will be nearly impossible to move recipients
into permanent private sector jobs if there are no jobs.
For those who do find work, salaries are low and benefits
are nonexistent. Many current recipients who work combine work
and welfare benefits wages are not sufficient to support a
family. This bill fails altogether to address the needs of the
marginal poor.
This nation has a 7 trillion dollar economy. It is
unfathomable that the federal government is poised to turn its
back on this nation's children. Less than 2% of the $1.5
trillion federal budget is spent on AFDC, yet it is a target
for billions in budget cuts.
This bill will exacerbate poverty and all of its attendant
problems. Thirty years ago Senator Moynihan accurately
predicted a bleak future for poor communities with increasing
numbers of one-parent families. I believe the future for poor
communities will be even more dire if this legislation passes.
This bill does not provide states with the tools to move
recipients into permanent employment nor does it provide
economic investment or opportunities for impoverished
communities.
The Senate should not rush through deliberations of welfare
reform with inadequate concern for the consequences. I hope my
colleagues will take the time to sort out the real issues that
are involved here and consider meaningful, realistic reforms.
I therefore will not support passage of the Senate Finance
Committee mark.
Carol Moseley-Braun.
VII. CHANGES IN EXISTING LAW MADE BY BILL
In the opinion of the Committee, it is necessary in order
to expedite the business of the State, to dispense with the
requirements of paragraph 12 of Rule XXVI of the Standing Rules
of the Senate (relating to the showing of changes in existing
law made by the provisions of H.R. 4, as reported by the
Committee).