SPEAKERS       CONTENTS       INSERTS    
 Page 1       TOP OF DOC
40–906 CC
1997
TECHNICAL CORRECTIONS TO WELFARE REFORM LEGISLATION

HEARING

before the

SUBCOMMITTEE ON HUMAN RESOURCES

of the

COMMITTEE ON WAYS AND MEANS

HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTH CONGRESS

FIRST SESSION

FEBRUARY 26, 1997

Serial 105–1

Printed for the use of the Committee on Ways and Means
 Page 2       PREV PAGE       TOP OF DOC

COMMITTEE ON WAYS AND MEANS
BILL ARCHER, Texas, Chairman

PHILIP M. CRANE, Illinois
BILL THOMAS, California
E. CLAY SHAW, Jr., Florida
NANCY L. JOHNSON, Connecticut
JIM BUNNING, Kentucky
AMO HOUGHTON, New York
WALLY HERGER, California
JIM McCRERY, Louisiana
DAVE CAMP, Michigan
JIM RAMSTAD, Minnesota
JIM NUSSLE, Iowa
SAM JOHNSON, Texas
JENNIFER DUNN, Washington
MAC COLLINS, Georgia
ROB PORTMAN, Ohio
PHILIP S. ENGLISH, Pennsylvania
JOHN ENSIGN, Nevada
JON CHRISTENSEN, Nebraska
WES WATKINS, Oklahoma
J.D. HAYWORTH, Arizona
JERRY WELLER, Illinois
 Page 3       PREV PAGE       TOP OF DOC
KENNY HULSHOF, Missouri
CHARLES B. RANGEL, New York
FORTNEY PETE STARK, California
ROBERT T. MATSUI, California
BARBARA B. KENNELLY, Connecticut
WILLIAM J. COYNE, Pennsylvania
SANDER M. LEVIN, Michigan
BENJAMIN L. CARDIN, Maryland
JIM McDERMOTT, Washington
GERALD D. KLECZKA, Wisconsin
JOHN LEWIS, Georgia
RICHARD E. NEAL, Massachusetts
MICHAEL R. McNULTY, New York
WILLIAM J. JEFFERSON, Louisiana
JOHN S. TANNER, Tennessee
XAVIER BECERRA, California
KAREN L. THURMAN, Florida
A.L. Singleton, Chief of Staff

Janice Mays, Minority Chief Counsel

Subcommittee on Human Resources
E. CLAY SHAW, Jr., Florida, Chairman
DAVE CAMP, Michigan
JIM McCRERY, Louisiana
 Page 4       PREV PAGE       TOP OF DOC
MAC COLLINS, Georgia
PHILIP S. ENGLISH, Pennsylvania
JOHN ENSIGN, Nevada
J.D. HAYWORTH, Arizona
WES WATKINS, Oklahoma
SANDER M. LEVIN, Michigan
FORTNEY PETE STARK, California
ROBERT T. MATSUI, California
WILLIAM J. COYNE, Pennsylvania
JIM McDERMOTT, Washington

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records of the Committee on Ways and Means are published in electronic form. The printed hearing record remains the official version. Because electronic submissions are used to prepare both printed and electronic versions of the hearing record, the process of converting between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process is further refined. The electronic version of the hearing record does not include materials which were not submitted in an electronic format. These materials are kept on file in the official Committee records.
C O N T E N T S

  Advisory of February 19, 1997, announcing the hearing

WITNESSES

 Page 5       PREV PAGE       TOP OF DOC
  U.S. Department of Health and Human Services, Hon. Olivia A. Golden, Ph.D., Acting Assistant Secretary for Children and Families

  American Public Welfare Association, Elaine Ryan

  Center for Law and Social Policy, Mark H. Greenberg

  Herger, Hon. Wally, a Representative in Congress from the State of California

  National Conference of State Legislatures, Sheri Steisel

  National Governors' Association, Susan Golonka

SUBMISSIONS FOR THE RECORD

  American Public Welfare Association, statement

  Cave, Pamela, Chantilly, Va, statement

TECHNICAL CORRECTIONS TO WELFARE REFORM LEGISLATION

WEDNESDAY, FEBRUARY 26, 1997
House of Representatives,
Committee on Ways and Means,
Subcommittee on Human Resources,
 Page 6       PREV PAGE       TOP OF DOC
Washington, DC.

  The Subcommittee met, pursuant to notice, at 2:11 p.m., in room B–318, Rayburn House Office Building, Hon. E. Clay Shaw, Jr. (Chairman of the Subcommittee), presiding.
  [The advisory announcing the hearing follows:]

  ADVISORY

FROM THE COMMITTEE ON WAYS AND MEANS

SUBCOMMITTEE ON HUMAN RESOURCES

CONTACT: (202) 225–1025

FOR IMMEDIATE RELEASE

February 19, 1997

No. HR–2

Shaw Announces Hearing on

Technical Corrections to Welfare Reform

Legislation
 Page 7       PREV PAGE       TOP OF DOC

  Congressman E. Clay Shaw, Jr., (R–FL), Chairman, Subcommittee on Human Resources of the Committee on Ways and Means, today announced that the Subcommittee will hold a hearing on suggestions for technical corrections that need to be made in the recently enacted welfare reform legislation. The hearing will take place on Wednesday, February 26, 1997, in room B–318 Rayburn House Office Building, beginning at 2 p.m.
  
   Oral testimony at this hearing will be from invited witnesses only. Witnesses will include representatives of the administration, Governors, state legislators, program administrators, and advocates. Any individual or organization not scheduled for an oral appearance is encouraged to submit a written statement for consideration by the Subcommittee and for inclusion in the printed record of the hearing.
  
BACKGROUND:
  
   Last year, Congress passed and President Clinton signed legislation (P.L. 104–193) that substantially reformed the nation's welfare policy. Major programs or program areas under the jurisdiction of the Committee on Ways and Means that were reformed include: The Aid to Families with Dependent Children program; the Supplemental Security Income Program; the Child Support Enforcement program; welfare policy for noncitizens; and child care policy.
  
  Section 113 of the legislation required the Secretary of Health and Human Services and the Commissioner of Social Security to submit to the Committee within 90 days of enactment a legislative proposal for technical and conforming amendments ''to bring the law into conformity with the policy embodied'' in the legislation. The Subcommittee, in consultation with the administration and the Senate Finance Committee, is now reviewing the proposal submitted by the Secretary. Only items that are purely technical are being considered as part of this corrections package.
 Page 8       PREV PAGE       TOP OF DOC
  
  In announcing the hearing, Chairman Shaw stated: ''The new welfare reform law enacted last year was important and far-reaching. We want to be sure that any purely technical errors in the drafting of the statutes created by the magnitude of last year's changes are quickly cleared up by technical corrections legislation. The Administration did an excellent job of preparing the first draft. In consultation with the administration and our counterparts in the Senate, we hope to develop a thorough technical corrections bill.''
  
DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
  
   Any person or organization wishing to submit a written statement for the printed record of the hearing should submit at least six (6) copies of their statement and a 3.5-inch diskette in WordPerfect or ASCII format, with their address and date of hearing noted, by the close of business, Wednesday, March 12, 1997, to A.L. Singleton, Chief of Staff, Committee on Ways and Means, U.S. House of Representatives, 1102 Longworth House Office Building,
Washington, D.C. 20515. If those filing written statements wish to have their statements distributed to the press and interested public at the hearing, they may deliver 200 additional copies for this purpose to the Subcommittee on Human Resources office, room B–317 Rayburn House Office Building, at least 1 hour before the hearing begins.
  
FORMATTING REQUIREMENTS:

Each statement presented for printing to the Committee by a witness, any written statement or exhibit submitted for the printed record or any written comments in response to a request for written comments must conform to the guidelines listed below. Any statement or exhibit not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.
 Page 9       PREV PAGE       TOP OF DOC

1. All statements and any accompanying exhibits for printing must be typed in single space on legal-size paper and may not exceed a total of 10 pages including attachments. At the same time written statements are submitted to the Committee, witnesses are now requested to submit their statements on a 3.5-inch diskette in WordPerfect or ASCII format.

2. Copies of whole documents submitted as exhibit material will not be accepted for printing. Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee.

3. A witness appearing at a public hearing, or submitting a statement for the record of a public hearing, or submitting written comments in response to a published request for comments by the Committee, must include on his statement or submission a list of all clients, persons, or organizations on whose behalf the witness appears.

4. A supplemental sheet must accompany each statement listing the name, full address, a telephone number where the witness or the designated representative may be reached and a topical outline or summary of the comments and recommendations in the full statement. This supplemental sheet will not be included in the printed record.

The above restrictions and limitations apply only to material being submitted for printing. Statements and exhibits or supplementary material submitted solely for distribution to the Members, the press and the public during the course of a public hearing may be submitted in other forms.
 Page 10       PREV PAGE       TOP OF DOC
  
  Note: All Committee advisories and news releases are available on the World Wide Web at 'HTTP://WWW.HOUSE.GOV/WAYS—MEANS/'.
  

  The Committee seeks to make its facilities accessible to persons with disabilities. If you are in need of special accommodations, please call 202–225–1721 or 202–225–1904 TTD/TTY in advance of the event (four business days notice is requested). Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above.

—————


  Chairman SHAW. Excuse me for being 10 minutes later starting the Subcommittee hearing. This afternoon we continue the process of writing a bipartisan—and I underline that, bipartisan—technical correction bill that ensures that the statute, especially title IV–A of the Social Security Act, conforms to the policies we enacted as part of last year's welfare reform bill. Anyone willing to subject themselves to pouring over the draft bill will quickly recognize that this legislation is truly technical. We are correcting errors and references and other minor inconsistencies in the legislation as enacted last year.
  The administration has been working on the technical corrections bill since the welfare reform legislation was signed by President Clinton last August 22. In mid-December, the administration presented a draft legislation to the House and the Senate. I want to again commend the administration for the excellent draft they gave us. At least 75 percent of the issues we will address in the bill were raised by the administration. Even more important, the administration draft contains straightforward solutions to most of these issues.
 Page 11       PREV PAGE       TOP OF DOC
  Since December, the bill has been nurtured by a staff working group composed of Republican and Democrat staffers from the Committee on Ways and Means, Education and the Work Force and Judiciary in the House, and from the Finance and Education and Labor Committees in the Senate. In addition, this merry—I do not know why he wrote that. In addition, this merry little band—[Laughter.]
  I have to start reading this stuff before you give it to me—has been joined frequently by officials from the administration and by the—I will put in the record. [Laughter.]
  I cannot read this. Without objection, I will submit the rest of this statement to the record. But I would like to make it very clear that we have received excellent cooperation from both sides of the aisles, from the administration, as well as from the Senate, and of course, my colleagues on this Subcommittee and the staff in working on this together. This will be truly a technical corrections bill.
  [The opening statement follows:]

Opening Statement of Chairman Shaw

   This afternoon we continue the process of writing a bipartisan technical corrections bill that ensures that the statutes, especially Title IV–A of the Social Security Act, conform to the policies we enacted as part of last year's welfare reform bill. Anyone willing to subject themselves to pouring over the draft bill will quickly recognize that this legislation is truly technical: we are correcting errors in references and other minor inconsistencies in the legislation as enacted last year.
   The Administration has been working on the technical corrections bill since the welfare reform legislation was signed by President Clinton last August 22. In mid-December, the administration presented draft legislation to the House and Senate. I want to once again commend the administration for the excellent draft they gave us. At least 75 percent of the issues we will address in the bill were raised by the administration. Even more important, the administration draft contained straightforward solutions to most of these issues.
 Page 12       PREV PAGE       TOP OF DOC
   Since December, the bill has been nurtured by a staff working group composed of Republican and Democratic staffers from the Committees on Ways and Means, Education and the Work Force, and Judiciary in the House and from the Finance and Education and Labor Committees in the Senate. In addition, this merry little band has been joined frequently by officials from the administration and by the Legislative Counsels from both the House and Senate.
   I asked our staff to run an open process by soliciting suggestions from anyone who had an interest in the bill. As a result, more than 30 outside individuals and organizations have contributed suggestions for the bill.
   After many hours of meetings and discussions, last Thursday, February 20, the staff working group produced a draft bill that we circulated to our Members and made available to anyone who wanted a copy. Since last week, we have been receiving suggestions and making minor corrections to the draft bill.
   This hearing occurs at a very opportune moment in the legislative process. We are close to getting a good bill for the Subcommittee to mark up, but there are several issues that I believe members should hear more about before we decide whether they should be included in the markup bill. We have invited witnesses today who will give us important information on some of these issues. In addition, the staff working group will need to have another meeting or two to prepare final recommendations for us to consider prior to markup.
   After today's hearing, I will meet with Mr. Levin and then decide how soon the Subcommittee will be able to mark up the bill. I am hoping that we will be ready for the Subcommittee markup next week, but we may need an additional week to ensure that all our members are satisfied that they know what's in the bill and that their own concerns have been addressed.
   Once again, I want Members and interested parties to know that this is truly, and will remain, a bipartisan technical corrections bill. We have followed two criteria in accepting provisions. First, most provisions are objective corrections to errors in the enacted bill. Examples of errors are incorrect section numbers and cross-references, poorly worded text and headings, and internally contradictory provisions. Second, we have agreed to slightly more substantive provisions if all parties the House and Senate, the Congress and the administration, and Republican sand Democrats agree.
 Page 13       PREV PAGE       TOP OF DOC
   I am fully committed to continuing this bipartisan approach and to avoiding issues that divide us. Now, when the bill hits the Senate floor, all bets are off. We have made excellent and rapid progress so far, and I fully expect that Mr. Levin and I will introduce a bill in the Subcommittee that needs little or no amendment.
   Mr. Levin, would you care to make an opening statement.

—————


  Chairman SHAW. Sandy.
  Mr. LEVIN. Thank you.
  Mr. Chairman, that merry little band indeed has been a bipartisan merry little band, and I want to express my appreciation for your proceeding on that basis. Lots of suggestions are coming in and have done so after the administration compiled its suggestions, and I know there is a desire to move as expeditiously as possible, and I share that desire.
  But I think we want to be sure we look at, as you and I have discussed, the possible substantive implications of any of these proposed technical corrections. I think we have done that with some success, with great success up to this point. I think, though, the hearing may show there are several issues which may burgeon into substantive ones, and we need to carefully look at those before we mark up the bill. I assume we will have adequate time to do that.
  I would also like to join you in thanking HHS for its very diligent work and its prompt submittal of many of these suggestions.
  So, with you, I look forward to the testimony, and why don't we start right away, then, with our distinguished colleague from California.
  Chairman SHAW. To all the witnesses, your prepared statements will be made a part of the record, without objection.
 Page 14       PREV PAGE       TOP OF DOC
  The Chair now will recognize Mr. Herger for whatever comments he might wish to make to us.

STATEMENT OF HON. WALLY HERGER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

  Mr. HERGER. Thank you, Mr. Chairman. Let me begin by applauding your efforts and those of Chairman Archer in making substantial and long overdue changes to our Nation's welfare system. The welfare reform bill enacted last year was truly historic, and I am proud to be part of the Congress that finally overhauled this failed system.
  In particular, Mr. Chairman, I want to thank you for your outstanding leadership in the ongoing effort to prevent the needless waste of taxpayer dollars. Last year you were instrumental in assuring that legislation I introduced with Representative Bob Clement, the Criminal Welfare Prevention Act, was included in the welfare reform package that was sent to conference last summer. As you may recall, that bill sought to deny SSI and OASDI payments to inmates of local and State jails. Although it was already illegal for prisoners to receive these benefits under existing Federal law, it was difficult to match prisoners in local institutions with benefit checks mailed by the Federal Government.
  Because major portions of that bill were included in the welfare legislation signed by the President, there now exists a voluntary bridge between local sheriffs and the Federal Government, helping us identify individuals that are ineligible for SSI. This common-sense reform will save the taxpayers millions of dollars—without imposing unfunded mandates or establishing new government bureaucracies.
  However, Mr. Chairman, during conference with the Senate, the portions of my legislation dealing with OASDI were dropped for procedural reasons unrelated to policy. Consequently, many local prisoners are still receiving OASDI benefits for which they are currently ineligible under Federal law.
 Page 15       PREV PAGE       TOP OF DOC
  To address this problem, I have introduced H.R. 530, the Criminal Welfare Prevention Act, Part II. Mr. Chairman, I am grateful to see you have been working with Social Security Subcommittee Chairman Jim Bunning to include the language of H.R. 530 in section 224 of today's discussion draft. This provision will create monetary incentives for State and local law enforcement authorities to enter into voluntary data-sharing contracts with SSA, the Social Security Administration. This exchange of information will help get prisoners off our OASDI rolls and could, according to one estimate made last Congress, save taxpayers $35 million.
  Under this proposal, participating local authorities could elect to provide the Social Security numbers of their inmates to the SSA. With this information, SSA could identify inmates that would otherwise receive an illegal benefit check. For each check the SSA intercepts, the participating local authority would be reimbursed by as much as $400. Again, participation in these contracts is strictly voluntary.
  Last Congress, the original Criminal Welfare Prevention Act attracted nearly 200 bipartisan cosponsors, was endorsed by numerous private groups, and was approved by the bipartisan ''Corrections Day'' Commission. The language contained in section 224 passed the House late last year in the Social Security technical corrections bill, but Congress adjourned before Senate action could be taken. Our staffs have been negotiating with the Social Security Administration, and it is my understanding that SSA supports the fundamental principle of providing incentives to local authorities.
  Mr. Chairman, in this time of severe budgetary constraints, I strongly believe Congress needs to cut off this wasteful and illegal flow of scarce resources. I appreciate that you have sought to include the language of H.R. 530 in this technical corrections bill, and I look forward to working with you closely on this proposal.
  Thank you for this opportunity to testify before you today.
  [The prepared statement follows:]
 Page 16       PREV PAGE       TOP OF DOC

Statement of Hon. Wally Herger

   Thank you, Mr. Chairman. Let me begin by applauding your efforts, and those of Chairman Archer, in making substantial and long-overdue changes to our nation's welfare system. The welfare reform bill enacted last year was truly historic, and I was proud to be part of the Congress that finally overhauled our failed system.
   In particular, Mr. Chairman, I want to thank you for your outstanding leadership in the ongoing effort to prevent the needless waste of taxpayer dollars. Last year, you were instrumental in assuring that a bill I introduced with Rep. Bob Clement, ''The Criminal Welfare Prevention Act,'' was included in the welfare reform package that was sent to conference last summer. As you may recall, that bill sought to deny S.S.I and O.A.S.D.I. payments to inmates of local and state jails. Although it was already illegal for prisoners to receive these benefits under existing Federal law, it was difficult to match prisoners in local institutions with benefit checks mailed by the Federal Government.
   Because major portions of that bill were included in the welfare legislation signed by the President, there now exists a voluntary bridge between local sheriffs and the Federal Government, helping us identify individuals that are ineligible for S.S.I. This common-sense reform will save taxpayers millions of dollars—without imposing unfunded mandates or establishing new government bureaucracies.
   However, Mr. Chairman, during conference with the senate, the portions of my bill dealing with O.A.S.D.I. were dropped for procedural reasons unrelated to policy. Consequently, many local prisoners are still receiving O.A.S.D.I. benefits for which they are currently ineligible under Federal law.
   To address this problem, I have introduced H.R. 530, ''The Criminal Welfare Prevention Act, Part II.'' Mr. Chairman, I am grateful to see that you have been working with Social Security Subcommittee Chairman Jim Bunning to include the language of H.R. 530 in section 224 of today's discussion draft. This provision will create monetary incentives for state and local law enforcement authorities to enter into voluntary data-sharing contracts with the Social Security Administration. This exchange of information will help get prisoners off our O.A.S.D.I. rolls and could, according to one estimate made last Congress, save taxpayers $35 million by the year 2002.
 Page 17       PREV PAGE       TOP OF DOC
   Under this proposal, participating local authorities could elect to provide the Social Security numbers of their inmates to the S.S.A. With this information, S.S.A. could identify inmates that would otherwise receive an illegal benefit check. For each check the S.S.A. intercepts, the participating local authority would be reimbursed by as much as $400. Again, participation in these contracts is strictly voluntary.
   Last Congress, the original ''Criminal Welfare Prevention Act'' attracted nearly 200 bipartisan cosponsors, was endorsed by numerous private groups, and was approved by the bipartisan ''Corrections Day'' commission. The language contained in section 224 passed the House late last year in the Social Security Technical Corrections bill, but Congress adjourned before Senate action could be taken. Our staffs have been negotiating with the Social Security Administration, and it is my understanding that S.S.A. supports the fundamental principle of providing incentives to local authorities.
   Mr. Chairman, in this time of severe budgetary constraints, I strongly believe that Congress needs to cut off this wasteful and illegal flow of scarce resources. I appreciate that you have sought to including the language of H.R. 530 in this Technical Corrections bill, and I look forward to working with you closely on this proposal. Thank you for this opportunity to testify before you today.

—————


  Chairman SHAW. Thank you, Wally.
  Do any of the Members of the Subcommittee have any questions for Mr. Herger?
  If not, we thank you for your testimony and your good work on this particular issue, and we look forward to working with you again this year.
  Mr. HERGER. Thank you very much, Mr. Chairman.
 Page 18       PREV PAGE       TOP OF DOC
  Chairman SHAW. Olivia Golden, Dr. Olivia Golden, the Acting Assistant Secretary for Children and Families, U.S. Department of Health and Human Services. Welcome back, and we look forward to your testimony. We have your full statement which will be made a part of the record, and you may proceed as you see fit.
  Thank you for being with us.

STATEMENT OF HON. OLIVIA A. GOLDEN, PH.D., ACTING ASSISTANT SECRETARY FOR CHILDREN AND FAMILIES, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

  Ms. GOLDEN. Thank you very much.
  Mr. Chairman and Members of the Subcommittee, I am pleased to have the opportunity to appear before you today to discuss our proposed technical amendments to the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. The administration is committed to an effective implementation of this historic welfare reform legislation, and our mutual effort to make technical corrections to this legislation is an important step in the process.
  States and the Federal Government alike are promptly implementing each of the major pieces of the act, including those under the jurisdiction of the Administration for Children and Families—the Temporary Assistance for Needy Families, or TANF Program, child care programs for families on welfare and other low-income working families, and the Child Support Enforcement Program. We are encouraged by the early progress being made.
  Section 113 of the act directed the Secretary of Health and Human Services and the Commissioner of Social Security, in consultation with other Federal agencies, to submit legislative proposals for technical and conforming amendments necessary to bring the statutory language into conformity with the policies embodied in the legislation. I am pleased to report the administration has met the directive.
 Page 19       PREV PAGE       TOP OF DOC
  On December 16, 1996, the Department of Health and Human Services joined with the Social Security Administration in submitting the technical amendment proposals required under the act. Our package addresses technical problems in the law beginning with TANF and ending with the miscellaneous provisions in title IX.
  As part of our process for identifying and developing the proposed amendments package, we conducted a thorough review of the statute and consulted extensively with our regional offices and other Federal agencies affected by the legislation, such as the Department of Justice and the Department of Agriculture. We consulted with a range of other interested parties: State administrators, the National Governors' Association, the American Public Welfare Association, the National Conference of State Legislatures, and a range of advocates and human services providers.
  We remain firmly committed to fully implementing the act to fulfill the central goal of welfare reform: Moving people from welfare to work. Thus, our guiding principle in developing the technical amendments package was to include only proposals that were technical, and maintain the spirit and intent of the new law. We limited our focus to problems of a technical nature that required correction to make the law work.
  Using this framework, we identified 88 technical corrections which we thought were needed in the act. I would like to provide a general summary of these corrections with just a few illustrative examples. Among the specific problems we identified were inconsistent terminology and date references, inconsistencies between the expressed legislative intent and statutory language, and gaps in rules during the transition period.
  In several instances, the new law inadvertently uses incorrect or inconsistent terminology. For example, the statute establishes mandatory work requirements, but uses different phrases to describe them in different places. We have suggested proposed language to resolve such inconsistencies.
  We have also proposed to conform or revise a number of dates in the statute. For example, the new law requires States to ''look back'' to prior AFDC eligibility standards in order to determine eligibility for Medicaid and for foster care and adoption assistance. However, the statute uses two different dates for the two programs, June 1, 1995, and July 16, 1996, and that creates administrative burdens for the States. So we proposed an amendment to use the July 16, 1996, look-back date for both programs.
 Page 20       PREV PAGE       TOP OF DOC
  Several of our amendments are proposed to clarify congressional intent. For example, we believe it was Congress' intent to make Indian tribes eligible for the Federal loans available to the States under TANF since the law specifies that Indian tribes are subject to the penalty if they do not repay the loans. However, the section of the law which provides for the loans speaks only in terms of loan-eligible States. So we have in here a technical amendment to clarify that the loans are available to Indian tribes as well.
  Finally, in a few instances, the transition from the previous law to the new law inadvertently left gaps in the application or coverage of various laws. For example, reporting requirements under the AFDC and JOBS Programs, we have proposed an amendment to fill in a potential gap for States that submit plans after January 1, 1997.
  We have been working closely with your staff to ensure these proposals are incorporated into bipartisan legislation with broad support. While our cooperative efforts have been extremely useful in identifying additional technical amendments, we are concerned that several of our proposed corrections have not been accepted. In addition, some of the draft amendments developed by your staff might weaken the fiscal partnership envisioned in the act between States and the Federal Government. We are particularly concerned about provisions that would allow States to transfer funds to the Social Services Block Grant Program without proportionate transfers to child care and provisions that may undercut the maintenance-of-effort requirements. We hope you will reconsider these proposals before finalizing your legislation. The administration may have additional comments on other technical amendments once a formal proposal is introduced by the Subcommittee.
  We want to work with you and the States to include an additional change in the package to ensure that each State's overall work effort meets the statute's work participation requirements. Specifically, we want to make it clear that the calculation of whether a State has met the applicable participation rate shall take into account the State's success in placing in work activities participants both in TANF and in State maintenance-of-effort programs. In addition, we will work with the States and Congress to develop legislation, if necessary, to ensure that State flexibility in maintenance-of-effort programs does not result in costs to the Federal Government due to the potential loss of child support collections.
 Page 21       PREV PAGE       TOP OF DOC
  As the President has said, the enactment of the Personal Responsibility and Work Opportunity Act was the beginning, not the end, of welfare reform. I am pleased at the progress we have made together in cooperating to make this law work, and we are committed to continuing to work with you and others in Congress to make welfare reform a success.
  I want to thank you again for inviting me to speak with you about this important legislation, and I will be happy to answer any questions you may have.
  [The prepared statement follows:]

Statement of Olivia A. Golden, Ph.D, Acting Assistant Secretary for
Children and Families, U.S. Department of Health and Human Services

  Mr. Chairman and Members of the Subcommittee, I am pleased to have the opportunity to appear before you today to discuss our proposed technical amendments to the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA). The Administration is committed to an effective implementation of this historic welfare reform law and our mutual effort to make technical corrections to this legislation is an important step in this process.
  States and the Federal Government alike are promptly implementing each of the major pieces of the Act, including those under the jurisdiction of the administration for Children and Families—the Temporary Assistance for Needy Families (TANF) program, child care programs for families on welfare and other low-income working families, and the child support enforcement program. We are encouraged by the early progress being made.
  Section 113 of the Personal Responsibility and Work Opportunity Reconciliation Act directed the Secretary of Health and Human Services and the Commissioner of Social Security, in consultation with other Federal agencies, to submit legislative proposals for technical and conforming amendments necessary to bring the statutory language into conformity with the policies embodied in this new legislation. I am pleased to report that the administration has met that directive. On December 16, 1996, the Department of Health and Human Services joined with the Social Security Administration in submitting the technical amendment proposals required under the Act. Our package addresses technical problems in the law beginning with TANF and ending with the miscellaneous provisions in Title IX.
 Page 22       PREV PAGE       TOP OF DOC
  As part of our process for identifying and developing our proposed amendments package, we conducted a thorough review of the statute and consulted extensively with our regional offices and other Federal agencies affected by the legislation such as the Department of Justice and the Department of Agriculture. We consulted with other interested parties, including State administrators, the National Governors' Association, the American Public Welfare Association, the National Conference of State Legislatures and a range of general advocates and human services providers.
  We remain firmly committed to fully implementing PRWORA to fulfill the central goal of welfare reform: moving people from welfare to work. Thus, our guiding principle in developing the technical amendments package was to include only proposals that maintain the spirit and intent of the new law. We limited our focus to problems of a technical nature but which required correction to make the law work.
  Using this framework, we identified 88 technical corrections which we thought were needed in PRWORA. I'd like to provide a general summary of these corrections with a few illustrative examples. Among the specific problems we identified were inconsistent terminology and date references, inconsistencies between the expressed legislative intent and statutory language, and gaps in rules during the transitional period.
  In several instances, the new law inadvertently uses incorrect or inconsistent terminology. For example, the statute establishes mandatory work requirements, but uses different phrases to describe them. We have suggested proposed language to resolve such inconsistencies.
  We have also proposed to conform or revise a number of dates utilized in the statute. For example, the new law requires states to ''look back'' to prior AFDC eligibility standards to determine eligibility for Medicaid and for Foster Care and Adoption Assistance. However, the statute utilizes two different look-back dates, June 1, 1995 and July 16, 1996, creating administrative burdens for the states. We proposed an amendment to use the July 16, 1996 look-back date for both programs.
 Page 23       PREV PAGE       TOP OF DOC
  Several of our amendments are proposed to clarify congressional intent. For example, we believe it was Congress' intent to make Indian tribes eligible for the Federal loans available to the States under TANF since the law specifies that Indian tribes are subject to the penalty for failure to repay such loans. However, the section of the law which provides for the loans speaks only in terms of loan-eligible States. As such, we included an amendment to clarify that the loans are available to Indian tribes as well.
  Finally, in a few instances, the transition from the previous law to the new law inadvertently left gaps in the application or coverage of various laws. For example, reporting requirements under the AFDC and JOBS Programs are repealed effective July 1, 1997, and new reporting requirements do not apply to a State until the later of July 1, 1997, or 6 months after a TANF plan is submitted. This leaves a gap in reporting for States submitting TANF plans after January 1, 1997. To maintain continuity of State reporting, we propose requiring States submitting TANF plans after January 1, 1997, to make reports, following either the old or new requirements, during the transitional period.
  We have been working closely with your staff to ensure that these proposals are incorporated into bipartisan legislation with broad support. While our cooperative efforts have been extremely useful in identifying additional technical amendments, we are concerned that several of our proposed corrections have not been accepted. In addition, some of the draft amendments developed by your staff may weaken the fiscal partnership envisioned in the PRWORA between States and the Federal Government. We are particularly concerned about provisions that would allow States to transfer funds to the Social Services Block Grant without proportionate transfers to child care and provisions that may undercut the maintenance of effort requirements. I hope you will reconsider these proposals before finalizing your legislation. The Administration may have additional comments on other technical amendments once a formal proposal is introduced by the Subcommittee.
 Page 24       PREV PAGE       TOP OF DOC
  We want to work with you and the States to include an additional change in this package to ensure that each state's overall work effort meets the statute's work participation requirements. Specifically, we want to make it clear that the calculation of whether a state has met the applicable participation rate shall take into account the state's success in placing in work activities participants both in TANF and in state maintenance of effort programs. This clarification will protect the welfare law's tough work requirements. In addition, we will work with the States and Congress to develop legislation, if necessary, to ensure that State flexibility in maintenance of effort programs does not result in costs to the Federal Government due to the potential loss of child support collections.
  As the President has said, the enactment of the Personal Responsibility and Work Opportunity Reconciliation Act was the beginning—not the end—of welfare reform. He made it clear that we all have a responsibility to cooperate to make this law work. I am pleased at the progress we have made, and we are committed to continue working with you and others in Congress to make welfare reform a success. Just as we worked together to make work and responsibility the basic principles of the new law, we must continue this bi-partisan effort to ensure that the statute clearly and effectively accomplishes our goals.
  I want to thank you again for inviting me to speak with you about this very important legislation. I will be happy to answer any questions you have at this time.

—————


  Chairman SHAW. Thank you, Dr. Golden.
  Mr. Camp may inquire.
  Mr. CAMP. Thank you, Mr. Chairman.
  Dr. Golden, States are asking to be exempt from—or at least to exempt their expenditures on data reporting from—the 15-percent cap on administrative spending under the cash block grant. My question is, wouldn't that be a good idea in the sense it would allow States to use block grant funds for data reporting, even if it means it is above that whole 15-percent administrative cap. It would mean that we would be receiving more information and then more—there would be more programs dedicated to evaluating the program or more resources dedicated to evaluating the program in these early stages? Could you comment on that?
 Page 25       PREV PAGE       TOP OF DOC
  Ms. GOLDEN. Sure. Let me tell you a little bit about how we thought about that in the administration in the context of technical amendments. We did not identify that area as one that needed clarification in our proposal. The statute, as you know, has a 15-percent cap on administrative expenses, and already it exempts information technology, computerization, from that cap.
  Regarding the question of whether any further clarification is needed, we did not see a need on a technical basis when we looked at it. As we have been consulting in the early stages of our regulatory process, some people have asked us to provide more clarity in that context. We have not made a decision yet, and your deliberations would be helpful.
  I would urge you to balance two considerations. It is clearly enormously important to focus on data, evaluation, and on accountability. It is central, I think, to know whether we have achieved our goals in moving families from welfare to work. At the same time, services and benefits are very important, and in the context of a block grant, there is a tradeoff within a cap.
  I think we do not yet have very much detailed information about exactly how that tradeoff will play off for States. So we will certainly be informed by your views as we move forward.
  Mr. CAMP. OK. Thank you, Doctor.
  Thank you, Mr. Chairman.
  Chairman SHAW. Mr. Levin.
  Mr. LEVIN. I think, Dave, that is an issue we ought to discuss. Whether that is really a technical correction I think is questionable because if we change it, we are moving or allowing States to move from spending on services to evaluation, which is very important.
  But let me just ask you, you talk about, in that first full paragraph of your testimony, several of the proposed corrections that have been suggested by you but not accepted, but you do not mention what they are. Do you want to spell out which ones have been suggested but so far not accepted?
 Page 26       PREV PAGE       TOP OF DOC
  Ms. GOLDEN. Sure. Let me give you a couple of examples. There are a number of proposals, particularly in the title that address immigrants. One example of one that we saw as needing technical correction has to do with legal immigrants who might have earned Medicare benefits. That is, they have worked and they have earned Medicare benefits, and should be entitled to them because they have earned them.
  The statute has a special exception regarding Social Security for people who would have earned it. It does not have that same exception for Medicare. That appears, from what we can tell, to be inadvertent, and it seems to us that fixing that exception would be an important element of fairness in carrying out the intent of the legislation. We believe that it is technical.
  Another example, also in the immigrant area, has to do with Cuban and Haitian entrants. The statute has a provision to give them some of the benefits available to refugees. From what we can tell, a section reference inadvertently refers to the wrong section and thereby does not provide that to them. So that is another example of something we think is inadvertent but would have consequences for people if it were not fixed.
  Mr. LEVIN. Thank you. And then the next sentence, you say you are ''particularly concerned about provisions that would allow States to transfer funds to the Social Services Block Grant without proportionate transfers to child care ...'' and then a reference to ''provisions that may undercut the maintenance-of-effort requirements.'' Let's talk first about this issue of the transfer of funds. We spent considerable time on this issue in the discussions on the bill. It was, as I remember, a provision that went through a number of iterations. So, if you would, please comment about the proposal that relates to child care and the Social Services Block Grant.
  Ms. GOLDEN. Sure. This is one of those technical twists and turns that, as you say, has gone through a number of iterations. And when we reviewed it in the administration, we decided the change was more than technical and that it raised some policy concerns relating to the focus on work and program accountability.
 Page 27       PREV PAGE       TOP OF DOC
  Mr. LEVIN. Why don't you spell it out so we all know what——
  Ms. GOLDEN. Yes, well, let me do that. The statute currently sets limits on the amount of money from the TANF Block Grant Program that States can transfer to both child care and to title XX. The statute, in addition to setting those overall limits of 30 and 10 percent, requires that whenever a State does a transfer, they need to transfer $2 to child care for every $1 to title XX. The proposed technical amendment would eliminate that second constraint.
  As we thought about it, the administration's conclusion was that there is a programmatic reason for limiting State transfers because the purpose of TANF is to focus resources on needy families. Expenditures under title XX can be much broader than that and are not accountable to the same purposes. There is clearly a balance of State flexibility versus how much you want to focus on accountability. Our assessment when we made our proposal was that the statute as written got that balance about right.
  Mr. LEVIN. And, quickly, you referred to provisions that might undercut the MOE requirements. Do you want to comment briefly on that?
  Ms. GOLDEN. Sure. Let me highlight one in particular here which has to do with the broadening of the definition of what States can count as maintenance of effort. Right now in the statute as written, there is a set of purposes for States. They need to be spending money on needy families and for a set of purposes. The proposal in the current staff draft would extend that to let them spend maintenance-of-effort money for any purposes that had been approved in emergency assistance plans. And the key issue here is that a number of States were spending money on juvenile justice programs. Our worry, if that is allowed, is that spending would not benefit needy families, nor would it be consistent with the purposes of the statute. The concern would be that that would enable States to count toward maintenance of effort any increases in their juvenile justice system spending, which is potentially quite large. Therefore, that it could undercut the delicate balance of the Federal-State funding partnership and the maintenance-of-effort requirement.
 Page 28       PREV PAGE       TOP OF DOC
  Mr. LEVIN. Thank you.
  Chairman SHAW. Mr. McCrery.
  Mr. MCCRERY. I do not have any questions right now, Mr. Chairman.
  Chairman SHAW. Mr. Stark.
  Mr. STARK. Olivia, I just have a couple of questions. I think you covered the flexibility on block grants in title XX. The child care protections, the issue of giving States authority to define—and I have this in quotes—''distance from home'' in determining whether child care is available. I do not know how that is defined now. Is that defined in statute miles or appropriate care within a reasonable distance from the individual's home? Somebody is suggesting the States can determine that, and I suppose the fear is they, in the worst case, could determine that if child care is anywhere in the State, it is reasonable.
  Is this something you are concerned about as to how we define whether child care is available?
  Ms. GOLDEN. Let me give an overall answer. Let me say first, just to put——
  Mr. STARK. Well, OK. I mean, it would seem that you could certainly make it a time issue, which somehow, to me, is more universal than distance. Distance could mean a lot of things. If there is a subway at the door, distance is one thing. If there is one bus a day, round trip, and you are in a rural community, distance may be another thing, or if they have a car. And I just do not know if you think it is necessary to define it or——
  Ms. GOLDEN. We did not propose a technical amendment in that area in the administration's proposal. Our perspective, which I think would be widely shared, is that the provision itself is very important. However, as to the exact right way to craft it, we are certainly willing to work with the Subcommittee staffs if there is a feeling that improvement is needed. At this point, I have not seen specific words, so I think our basic view would be that the provision——
 Page 29       PREV PAGE       TOP OF DOC
  Mr. STARK. Maybe the question is, what—why? As I read it now, it just says appropriate child care within a reasonable distance from the individual's home. Now, that is pretty broad, but is the worry that somebody is going to eliminate it? There is a court case in Oregon. The judge says the State cannot limit the distance, and so we are fighting with that. OK. Well, that is something I think that staff can fuss with a little bit.
  Ms. GOLDEN. Yes, what we want to underline is that the provision matters a great deal, it is an area we care about a lot.
  Mr. STARK. Yes.
  Ms. GOLDEN. And we would be happy to work with you, if you feel the language needs refining. The States have flexibility to define it their ways. We could address it in regulation. But we care a great deal about the overall provision.
  Mr. STARK. We do not have language now, and I am informed that the Senate Republican staff for some reason objected to changing the language as well. So I——
  Chairman SHAW. If you would yield to me, I would like to make the observation: Once you start narrowing it, you are probably going to hurt some people by narrowing it. It was the intent of the legislation, of course, to make available on a reasonable basis child care in order to implement some of the harsher provisions of the law. So I think the interpretation of it probably will stay pretty much like it is unless we see a problem in the interpretation. I am not familiar with the court case, though, that Deborah just pointed out to you, but I would be interested in taking a look at it to see if it is something we should take another look at.
  Mr. STARK. OK. Thank you. You said the question is whether you were satisfied that the maintenance-of-effort requirements are sufficiently rigorous, and you have indicated one area in which you were afraid that money might not end up being spent on poor children and families. Are there other——
  Ms. GOLDEN. Let me highlight one thing overall and then address that. Obviously, we are talking about the areas where there needs, from our perspective, to be further work. We continue to share the perspective that this has been an excellent bipartisan process. We agree with almost everything that is here and look forward to working on the rest of it.
 Page 30       PREV PAGE       TOP OF DOC
  On the maintenance of effort, I highlighted one area of concern related to juvenile justice expenditures. A second area where I believe there are staff discussions going on has to do with the question of whether it is possible to craft language on child support collections that would have a good effect for families but would not weaken maintenance of effort. And as I understand it, there are conversations going on around that issue to see if it is possible to reach a balance.
  Mr. STARK. Thank you, Mr. Chairman.
  Chairman SHAW. Mr. Collins.
  Mr. COLLINS. No questions, Mr. Chairman.
  Chairman SHAW. Mr. Coyne.
  Mr. COYNE. Thank you, Mr. Chairman.
  Welcome, Secretary. I understand your concerns about flexibility and switching money from the TANF Block Grant to the Social Services Block Grant. I wonder if you would try to comment on the worst-case scenario—some worst-case scenario that you would envision if, in fact, we grant States the ability to more freely transfer funds as legislation.
  Ms. GOLDEN. A worst-case scenario would be one where resources are used to meet another need that a State has that is not related to services for needy families under TANF. Title XX has a variety of uses including services for the elderly. These are important uses and might well be needs that a State has but might not be related directly to accountability for moving families from welfare to work. The limit in the statute is 10 percent of the TANF grant. So the largest effect would be moving 10 percent of TANF resources to a different purpose.
  Mr. COYNE. Well, looking at it from where you are now, what is your assessment of the likelihood of that happening?
  Ms. GOLDEN. I do not know. We are fairly early in the State legislative process, and so States are dealing right now with the intensity of the demands on them, and I do not have a good prediction of where they are going to end up.
 Page 31       PREV PAGE       TOP OF DOC
  Mr. COYNE. Thank you.
  Chairman SHAW. Mr. English.
  Mr. ENGLISH. Thank you, Mr. Chairman.
  I appreciate Mr. Coyne's question, Dr. Golden, because I would like to build on it. What does the administration propose in their current budget iteration for funding next year for the Social Services Block Grant?
  Ms. GOLDEN. I do not have that in front of me.
  Mr. ENGLISH. I believe it is a cut, is it not?
  Ms. GOLDEN. I actually thought it was level funding, but we will check and get back to you.
  Mr. ENGLISH. But given some of the increasing costs on that side——
  Ms. GOLDEN. 2.4—well, we are getting that number for you. I am sorry.
  [The following was subsequently received:]

  The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 reduced the authorization for the SSBG, the Social Services Block Grant, from $2.8 to $2.38 billion for fiscal year 1997 through 2002. The President's fiscal year 1998 budget included $2.38 billion for SSBG.

—————


  Mr. ENGLISH. OK. Given the increasing demand on the service providers that utilize the Social Services Block Grant and given that the National Governors' Association is here to testify precisely for the opposite position that States be allowed to transfer funds into the Social Services Block Grant without a comparable transfer into child care, I wonder if you could, moving away from the worst-case scenario, focus on any likely situations where it would be really against public policy to allow the States to transfer funds into Social Services Block Grants if they choose to do so.
 Page 32       PREV PAGE       TOP OF DOC
  Ms. GOLDEN. I guess my own perspective would be to take it back to the framework that the administration used for technical amendments. We did not really ask ourselves would this have terrible consequences if we changed it. We said to ourselves this is a welfare reform statute that we support and want to make work. So the question was: Is this merely a technical correction, or does it have policy consequences? And so when we looked at this one, we thought it is not merely technical; it has some consequences related to resources being used in other areas than the statute.
  Because that was our standard and our framework, we have not done an analysis of exactly how many dollars would be shifted to other purposes.
  Mr. ENGLISH. Thank you, Doctor, and that is helpful.
  I wonder, you have raised the issue of maintenance of effort, and also the NGA has taken a position that State dollars used on legal aliens who are ineligible for Federal block grant dollars under the bill we passed last year be considered as part of maintenance of effort. Does the administration have a position on including those sorts of expenditures?
  Ms. GOLDEN. I believe a provision was in our technical package and also is in the Subcommittee's. That is a correction of a section reference, I believe.
  Mr. ENGLISH. OK. So you are comfortable with what the Governors' Association is proposing.
  Ms. GOLDEN. Yes, unless I am mistaken about the particular one.
  Mr. ENGLISH. Thank you. I have no further questions——
  Mr. LEVIN. Would the gentleman yield for just 1 minute?
  Mr. ENGLISH. I would be delighted.
  Mr. LEVIN. On the transfer issue, it is no secret that I very much support some changes in what we passed relating to legal immigrants, and a few other areas that are also unrelated to the thrust of welfare reform but are not in our jurisdiction. So what I say can be a two-edged sword, in a sense, but we discussed the issue of transferability, and I think we need to decide how much we are going to get into policy in the technical corrections bill, as much as we would like on a specific occasion—I mean, I would like to get into the legal immigrant provisions more broadly, but that is clearly policy. And I must say I think the proposal to change the transferability provision is really policy and not a technical correction. And I think it is a policy we maybe can revisit, but we should not do it through a technical correction.
 Page 33       PREV PAGE       TOP OF DOC
  Mr. ENGLISH. I agree with the gentleman, and as always, both edges of his sword are sharp. And I appreciate that observation. I am inclined to agree with it.
  Thank you, Mr. Chairman.
  Chairman SHAW. I have got a short question, and perhaps we should refer to one of your staff members on this regarding the California situation. I understand one of them has been working with the folks in California, and this is the funding level and it involves Los Angeles and the State of California. Perhaps the person who has been working on that would like to come up and explain that to the Subcommittee, unless you wish to do so.
  Ms. GOLDEN. Could we get back to you with information on that?
  Chairman SHAW. If you would prefer, yes. I would like for the entire Subcommittee to be advised of that situation so that it will not come as any surprise, if it is indeed included in the technical corrections bill. It is one of those areas that is quite marginal, and I am not quite sure where I should come down on it myself.
  Ms. GOLDEN. OK. So we need to provide you with some additional detailed information.
  Chairman SHAW. If you would, and together with your position on the particular issue.
  [The following was subsequently received:]
  INSERT OFFSET FOLIO 1 HERE
  [The official Committee record contains additional material here.]

  Chairman SHAW. Any further questions?
  Mr. MCCRERY. Mr. Chairman.
  Chairman SHAW. Mr. McCrery.
  Mr. MCCRERY. Let me just get this straight with respect to the transferability to title XX. I think I heard you say a few minutes ago that you did not really look at this from a substantive standpoint; you just looked at it from the standpoint of whether this is really a technical correction or a substantive correction. Is that what I heard you say?
 Page 34       PREV PAGE       TOP OF DOC
  Ms. GOLDEN. Well, I said that was our first framework: Is it technical? And we concluded that it was not. We have policy concerns about it.
  Mr. MCCRERY. And your policy concerns are restricted to your concern about maintenance of effort or is there something else?
  Ms. GOLDEN. The concern is that making transferability easier makes it easier for States to move resources into areas that do not fit under the purpose of the welfare reform, welfare-to-work legislation, and to different purposes serving different families or single persons, not necessarily families. We would worry that that could detract from the welfare-to-work focus of the statute and from the accountability of the statute. It is just moving money from the TANF Block Grant to different purposes that may also be valuable purposes but are not part of the welfare-to-work framework.
  Mr. MCCRERY. Are you aware that the law contains restrictions on the use of that money transferred into Social Services Block Grants, that it is restricted to be used only for families with children below 200 percent of poverty?
  Ms. GOLDEN. All of the resources transferred into title XX?
  Mr. MCCRERY. Yes.
  Ms. GOLDEN. OK. Let me check.
  Mr. MCCRERY. So I do not really get your concern if that is the case.
  Ms. GOLDEN. Let me doublecheck if that is right.
  Mr. MCCRERY. It seems to me that is the same set of folks that we are concerned about.
  Ms. GOLDEN. I do not know if any States are, in fact, setting a standard as high as 200 percent for TANF, but some may well. That is perfectly possible.
  Mr. MCCRERY. Yes, and I was in favor of the maximum flexibility, so, it is no secret where I am coming from. But in light of some of the recent data we have seen about reductions in caseloads and the like, it seems perfectly reasonable to me to allow some States that may not need all of their TANF funds for the specific purposes that they are intended to be able to make this transfer, to utilize them most effectively and efficiently to help the folks in their particular States. So I would hope you would not object strenuously if we decide to keep the restrictions on the use of the money, but do away with this 2 : 1 ratio thing of child care to title XX.
 Page 35       PREV PAGE       TOP OF DOC
  Ms. GOLDEN. There is clearly a difficult balancing act. Our perspective has been that the critical purpose of welfare reform is moving families from welfare to work. Keeping the focus and the accountability is really crucial.
  Mr. MCCRERY. OK.
  Mr. LEVIN. If the gentleman would yield.
  Mr. MCCRERY. Sure.
  Mr. LEVIN. Not to take too much time on this, but I hope we can talk about this, Mr. Chairman, because I think it is clear that the title XX purposes—those are good purposes, but I do not think the assumption should be that carrying out the transition from welfare to work is going to be easy and that States are going to have a lot of resources lying around that they do not need to help families make that transition.
  Mr. MCCRERY. But some States may have more use in accomplishing your objective using this money in title XX than under the strict confines of the block grant.
  Mr. LEVIN. See, but then money is fungible, and then States can essentially transfer funds that I think should be used to focus on moving people from welfare to work for purposes, no matter how important, not related to that. And I think it has some policy implications we need to talk through, including assumptions about how much of a challenge it is going to be to make this welfare-to-work proposal work. And I think we are going to find that, as the Governor of New Jersey has said and is the experience in Michigan, it is really in most cases going to take more resources, not less, early on and there is not going to be this large windfall for States that they could then use for other purposes no matter how important.
  Mr. MCCRERY. But, Sandy, if we all agree that it is preferable to give the States this limited flexibility to shift some 10 percent of their block grant money into title XX—and you may not agree with that—I do not know but it was in the bill, and I am told that it was by agreement that it was put in the bill at the last minute. So if we all agree it is preferable to give the States that flexibility, surely we can see and understand that to hamstring the States with this $2 for $1 thing does not make any sense. A State may not need to put extra money into child care, but it may need to put more money into the Social Services Block Grant. So this requirement that, again, I am told was an error in drafting that amounts to the two-for-one transfer ought to be taken care of in these technical corrections. We ought to make it clear in the technical corrections that we did not mean for the States to have to put $2 in child care for every $1 transferred to title XX. That is all.
 Page 36       PREV PAGE       TOP OF DOC
  Mr. LEVIN. To finish this up, Mr. Chairman, I do not really know that that was an error. I think it was a delicate balance, and there was a desire for State flexibility, but also to try to focus that flexibility within the framework of moving people off of welfare to work, that that was going to be a vital and difficult task, and that the child care provision was an important part of it. And we talked about this, you know, back and forth and finally essentially reached an agreement that increased the amount of funding for child care. But we wanted to make sure that that increase was not reacted to by the States by diminishing their portion of the child care load.
  I am not saying it was a perfect balance scientifically crafted, but I think it was less likely an error than kind of a rough effort, admittedly, to try to make sure that the resources were focused within this bill on the basic purpose. But we will have time before the technical corrections, Mr. Chairman, to discuss it.
  Mr. MCCRERY. Just one last comment, Mr. Levin, and that is, if we follow what is in the law now, the net result will be that this flexibility will only apply and only benefit States that happen to have a need for both additional title XX money and additional child care money. And some States—there may not be any, but maybe there will be a State which does not need additional child care money but needs title XX—will be unable to do that. They will be wasting money if they take advantage of the transfer.
  Chairman SHAW. Dr. Golden, thank you very much for your testimony. As usual, we are glad to see you before the Subcommittee. We appreciate it.
  Ms. GOLDEN. Thank you.
  Chairman SHAW. Thank you.
  The next panel, we have Susan Golonka, who is senior policy analyst for the National Governors' Association; Sheri Steisel, who is the senior committee director, Human Services Committee, the National Conference of State Legislatures; Elaine Ryan, who is the director of government affairs of the American Public Welfare Association; and last, Mark Greenberg, who is senior staff attorney for the Center for Law and Social Policy.
 Page 37       PREV PAGE       TOP OF DOC
  As with the previous witnesses, we have your written statements, which will be made a part of the record, and feel free to summarize if you wish.
  Ms. Golonka.

STATEMENT OF SUSAN GOLONKA, SENIOR POLICY ANALYST, NATIONAL GOVERNORS' ASSOCIATION

  Ms. GOLONKA. Thank you. Good afternoon, Mr. Chairman and Members of the Subcommittee. My name is Susan Golonka, and I am a senior policy analyst for the National Governors' Association. I am pleased to join my colleagues from the National Conference of State Legislatures and the American Public Welfare Association in submitting a joint statement representing our collective views on a technical corrections bill to the welfare law.
  In the 6 months since the passage of the act, States have moved quickly into implementation. At this time, 40 States plus Guam and the District of Columbia have submitted their TANF plans to begin implementing the block grant. Mr. Chairman, we appreciate your continued interest and commitment to preserving the flexibility in the law that will allow States to successfully implement welfare reform.
  At the national level, our three organizations have worked closely with the staff of this Subcommittee in the drafting of a technical corrections bill, and they have been very responsive to our concerns. We also want to thank you for your support of the States' position and for the letter you sent to Secretary Shalala on State flexibility around maintenance-of-effort dollars. We were very pleased with the recent policy guidance from HHS on this issue. However, we are concerned about the administration's recommendation today to include participants in State-only funded welfare programs in the work participation rate calculation. This could greatly restrict States' ability to serve individuals who may have special needs or face unusual circumstances.
 Page 38       PREV PAGE       TOP OF DOC
  We have reviewed the draft bipartisan technical corrections bill and appreciate that you have included so many of our recommendations. However, there are specific provisions that are not included that are important, and we will tell you about them. We hope you will include them in the final bill.
  I will focus my remaining time in two areas: On the contingency fund and legal immigrants. My colleagues will cover the remaining issues.
  With an eye toward future uncertainties, Governors, legislators, and administrators called for a contingency fund to guard against economic downturn or natural disaster. With our support, Congress adopted a $2 billion contingency fund that would provide Federal matching dollars to States, reflecting a bipartisan agreement that both the Federal Government and State governments should share in the costs of meeting increased needs during periods of economic hardship.
  We are concerned, however, that technical changes made in the final bill diminish the value of the fund and make it difficult for States to access funds they need during periods of hardship. First, there is a technical problem in the definition of what State spending counts toward the maintenance-of-effort requirement that States must meet in order to draw down from the fund. Congress had legitimate reasons to require a higher MOE requirement for the contingency fund than for the basic TANF grant—100 percent compared to 75 percent. However, even if the State spending equaled 100 percent MOE for the basic TANF Block Grant, it would not be eligible for the contingency fund because the definition for MOE under the contingency fund is much more narrow than under TANF. As a result, we feel that it would be very difficult for States to meet the criteria, even while investing in a high level of spending on welfare programs. We recommend that the contingency fund MOE requirement be changed to mirror the TANF MOE with respect to qualified State spending.
  A second technical problem in the contingency fund relates to an end-of-the-year reconciliation provision that effectively reduces the match rate unless a State accesses the fund in every month of the fiscal year. Under earlier versions of the contingency fund, including in H.R. 4, a State would have had spending above its fiscal year 1994 level matched at its Federal Medicaid match rate. However, under the version in the final bill, a State's Federal match rate would be reduced if it utilized the contingency fund for fewer than 12 months in any fiscal year. For example, if a State fell into a recession partway through the year and received contingency funds during only 4 months, its Federal match rate for the contingency fund would be reduced by two-thirds, and the State would be required to bear a much larger portion of the additional costs incurred during an economic downturn. For a State with a Federal match rate of 50 percent, this would actually mean a State would have to spend 83 cents to receive 17 cents from the contingency fund.
 Page 39       PREV PAGE       TOP OF DOC
  We recommend that this provision be revised so States will receive their full match rate. Based on CBO estimates, the changes we are proposing can be made without exceeding the $2 billion authorization which was agreed to in the bill. We believe a contingency fund that is too difficult to access is of little value to States.
  Next, I will talk briefly about benefits for legal immigrants because I understand there is some interest on this. In a policy statement adopted by NGA earlier in February, Governors expressed a concern that provisions in the law that deny certain benefits to legal immigrants represent a cost shift to State and local governments. Governors expressed particular concern about immigrants who were in the United States on the date of enactment and could not meet the citizenship requirements because of age or disability. These individuals face the loss of SSI, food stamps, and Medicaid.
  Governors believe this issue could be addressed without reopening the welfare law and look forward to working cooperatively with Congress and the administration to decide the appropriate vehicle.
  We do not anticipate this issue will be resolved in a technical corrections bill. However, there are several technical changes to the immigrant provisions that we would like to propose, and my colleague Sheri Steisel will discuss those with you.
  I will end my remarks now and turn it over to Sheri. I want to thank you for the opportunity to testify before you today.
  Chairman SHAW. Thank you, Ms. Golonka.
  Ms. Steisel.

STATEMENT OF SHERI STEISEL, SENIOR COMMITTEE DIRECTOR, HUMAN SERVICES COMMITTEE, NATIONAL CONFERENCE OF STATE LEGISLATURES
 Page 40       PREV PAGE       TOP OF DOC

  Ms. STEISEL. Mr. Chairman and Members of the Subcommittee, I am Sheri Steisel, and I am the senior committee director for human services at the National Conference of State Legislatures. I am pleased to join my colleagues here today and appreciate being part of the process to review bipartisan technical corrections to the welfare reform legislation. State legislatures are currently, as we speak, crafting, debating, and passing comprehensive legislation to implement Federal welfare reform and child support changes. Governors, legislators, and agency officials are building on the lessons and experience of State welfare reform efforts initiated under waivers and are always mindful that welfare reform is about making a better life for children and their families.
  We urge Congress and the President to sign this bipartisan technical corrections bill as soon as possible. Many of these changes, while technical in nature, dramatically affect State planning, decisionmaking, and budgeting. This is a critical time. Most State legislatures are now in session and must conduct their business within a specific timeframe.
  Mr. Chairman and Members of the Subcommittee, I will focus on three specific provisions: Legal immigrants, work activities, and child support enforcement.
  NCSL, the National Conference of State Legislatures, has had a longstanding position opposing benefit restrictions to legal immigrants and most refugees while supporting provisions to strengthen the legal responsibility of sponsors. While the solution would not be part of a technical corrections bill, NCSL has previously testified these bars and restrictions will create many challenges for States: Cost shifts from Federal programs to State and local safety net programs, secondary consequences such as the loss of Medicaid for elderly legal immigrants made ineligible for SSI, and the costs of implementing new verification programs and potential litigation.
  I am going to first turn to our organization's suggestions on immigration. One is to allow individuals in the process of naturalizing to continue to receive Federal benefits and to allow States the option of continuing their Medicaid benefits. This would prevent a disruption in critical services during the time individuals are waiting for INS to complete the naturalization process.
 Page 41       PREV PAGE       TOP OF DOC
  The draft technical corrections legislation contains one provision in the area of legal immigrants that we find problematic. Section 106(e) reestablishes sponsor deeming for cash assistance. This provision—the welfare law currently gives States the explicit authority to determine legal immigrant eligibility for the TANF Program; therefore, we think this is a preemption of current State authority. We urge you to give States the option to impose sponsor deeming if a clarification is needed in this area as States can already determine whether or not to deny or provide assistance.
  States have also raised two kinds of legal immigrants who have always been treated like refugees in immigration law. We urge you to clarify that Cuban and Haitian entrants and Amerasian children, those children born in Vietnam of U.S. military or civilian personnel, that they can be treated eligible for all benefits afforded to refugees, as they are in immigration law.
  On work requirements, there are two provisions I would like to discuss. First, job search and job readiness. Our organizations strongly believe that job readiness programs and job search programs are important components of a work-focused approach to welfare reform. The law appears to only allow 6 weeks of job search and job readiness over a recipient's lifetime. We believe that extending that to 6 months—6 weeks over a 12-month period—is a cost-effective approach, especially when a recipient is between different work activities or returns to welfare after separation from a job. We recommend that this language be clarified to allow job search and job readiness to count toward the work requirements for 6 weeks in a 12-month period.
  Governors, legislators, and administrators are committed to meeting the work requirements set forth under the law. However, single parents with a disabled child face unique difficulties trying to work while meeting the special needs of their children. We urge you to limit the number of hours a parent with a disabled child must work to meet the work rates to 20 hours per week, which is similar to the flexibility given to parents with a child under 6.
 Page 42       PREV PAGE       TOP OF DOC
  We also hope you will include two parents where one is disabled as part of the all-families work requirement, not as part of the two-parent work requirement. We think this is critical because of the special needs of the second parent.
  We are very pleased the Subcommittee has addressed many of the outstanding technical issues related to child support enforcement, allowing States to improve the way they implement the new provisions in the child support law, especially as it relates to licenses and use of Social Security numbers and the language related to simplified process for review and adjustment of child support. There are some outstanding issues, however.
  First, there are conflicting dates in title I and title III of the new law regarding passing through and disregarding $50 of child support collections for families receiving cash assistance. This conflict shifts the cost to States because sufficient time was not allowed for States to change State laws. The solution to this problem is to allow States to continue to receive a Federal match for passing through the $50 of child support until they have acted to discontinue the disregard or July 1, 1997, whichever is earlier.
  I will finally address the new paternity acknowledgment language that is in the law. The new paternity acknowledgment requires instruction on paternity acknowledgments both in writing and orally. The oral notice requirement is new since the passage of OBRA 1993, and is burdensome for small medical offices, rural clinics, Head Start, and other diverse organizations. We urge that the mandate requiring oral instruction be modified to continue to require written notice, while requiring oral notice when feasible, including through the use of video or audio equipment.
  I will be happy to answer any questions you may have.
  Chairman SHAW. Thank you.
  Ms. Ryan.

STATEMENT OF ELAINE RYAN, DIRECTOR, GOVERNMENT AFFAIRS, AMERICAN PUBLIC WELFARE ASSOCIATION
 Page 43       PREV PAGE       TOP OF DOC

  Ms. RYAN. Yes, Mr. Chairman, Mr. Levin, and Members of the Subcommittee, I am Elaine Ryan, and I am the director of government affairs at the American Public Welfare Association.
  Since the enactment of the new welfare law, State human service administrators have been designing strategies to meet the challenge of moving people from welfare into work in a time-limited, transitional structure. That means that now frontline workers are doing employability plans, meeting with private sector employers to find new work slots, and also diagnosing their caseloads to determine length of stay on welfare. And as States have moved to try to design some creative new strategies to meet the time limit and the work requirements, they have realized an unexpected, unanticipated issue, and that is regarding the drawdown of the TANF Block Grant.
  The administration has told States that they may not draw down their entire TANF Block Grant from the Treasury significantly in advance of the expenditure of funds even though they may have met their 75 percent maintenance-of-effort requirement. And under this rigid and, we believe, incorrect interpretation of congressional intent, TANF dollars that could be used to serve vulnerable children and families in their communities would be left in the Federal Treasury. Furthermore, we understand that States may not be able to use their TANF dollars, for example, to create microenterprise development, community revolving loans for job creation, all things that States are looking into as we meet this new challenge. And we urge you to clarify the congressional intent so that States may be able to draw down their full block grant amount once they have met their MOE requirement.
  Second, I need to address data collection and reporting requirements. The new Federal TANF and child care data-reporting requirements necessitate not only systems reprogramming but more difficult interfaces with Federal, State, and local databases. Case tracking for time limits and tracking clients across State lines and for the rest of their lives create huge new information systems challenges, we believe costly challenges, for States. We think it sets up a new competition, and I think an unfortunate one, between the needs of families and the needs of meeting automation.
 Page 44       PREV PAGE       TOP OF DOC
  Now, State human service administrators understand Congress' interest in these data, and we want to provide them to you. State administrators are interested in client data as well, as they start to design their own programs, but States never anticipated that in a block grant world they would be required to not only recreate but also expand the old AFDC QC system that requires data collection on each client they serve. It is a huge undertaking. Imagine Bill Gates' delight when he thought States may be tracking people for the rest of their lives. It is a huge information systems challenge, and a costly one.
  What we are proposing in our recommendations is a time where we can come together and talk with congressional staff, members of your staff, to try to figure out the best data-reporting requirements that not only meet States' needs but also your needs so that States can be accountable to you and to the American citizens. At the same time, we want to make sure we are not designing huge new information systems databases generating reports that land on a bureaucrat's desk in Washington that never get read and never are put in any context so that we are able to make program changes to meet the requirements under this law.
  Forgive my passion, but there is nothing that has consumed more State budgets and State administrators' time when they should be devoting time to figure out how many resources we should be putting into these vulnerable children's and families' lives, to move them into work environments that will support them for a lifetime, and they are figuring out instead how to retrofit their information systems.
  The final issue I want to address is on Medicaid, and while I know that it is not the jurisdiction of this Subcommittee, we do have a number of recommendations that we would like to bring to your attention.
  First, it also goes to the $500 million that we thank you for including in the law. The HCFA guidelines that have been released say that States may not use these new administrative Medicaid dollars to make any redeterminations in those people who may be redetermined off of SSI, and then have to be redetermined for Medicaid. They have read the statute very narrowly, saying only section 1931 applies. It is a very narrow section, as you know, that just talks about income and resource standards. There are 1.6 million SSI clients that are likely to come to Medicaid offices, and Medicaid offices are going to be required to redetermine their Medicaid status. And yet none of the dollars you set aside under HCFA's interpretation may be used for those redetermination purposes.
 Page 45       PREV PAGE       TOP OF DOC
  Then, finally, an issue that is also of great concern, we are calling on Congress to be able to create a Medicaid category, an optional category. SSI clients might be redetermined off of SSI and lose their Medicaid eligibility. In every other State they can fall into another medically needy category. Eleven States do not have such a category, and we are asking Congress to be able to create a State optional category. Why a State might not do it themselves is that they would create one so large that it would also bring in other populations they never anticipated. We are calling on you to address that issue.
  We thank you so much for some of the changes. We are very concerned about the SSBG transfer from the TANF funds. We consider it a critical amendment, and we viewed it as a technical one. We look forward to taking your questions.
  [The joint statement of Ms. Golonka, Ms. Steisel, and Ms. Ryan follows:]

Joint Statement of Susan Golonka, Senior Policy Analyst, National Governors' Association; Sheri Steisel, Senior Committee Director, Human Services Committee, National Conference of State Legislatures; and Elaine Ryan, Director of Government Affairs, American Public Welfare Association

   Mr. Chairman and Members of the Subcommittee, we are pleased to submit to you today a joint statement representing the views of the National Governors' Association (NGA), the National Conference of State Legislatures (NCSL), and the American Public Welfare Association (APWA) on a technical corrections bill to the welfare law. Today, we would like to discuss some technical corrections that would facilitate successful welfare reform implementation and urge you to make those technical corrections law.
  You may recall that our three organizations appeared together before the Subcommittee in September of last year, shortly after the enactment of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. In the 6 months since the passage of the act, states have moved quickly into implementation. Currently forty states, the territory of Guam, and the District of Columbia have submitted their Temporary Assistance for Needy Families (TANF) plans to begin implementing the provisions of the law, and thirty-seven states have been certified as complete by the U.S. Department of Health and Human Services (HHS).
 Page 46       PREV PAGE       TOP OF DOC
  The new welfare reform law has given rise to a tremendous amount of activity, change, and innovation across the country in Governors' offices, in state agencies, and in state legislatures as states build upon the reforms they began under waivers. We are seeing major changes in the ''culture of welfare'' and an increased emphasis on work and support services.
  Delivering their 1997 state-of-the-state addresses, Governors sent a very strong message we will give recipients a hand up but not a handout, and that those who can work must work. This work-focused message is resonating with frontline workers in welfare agencies and perhaps, most importantly, with recipients. With work requirements and looming time limits, more recipients are moving quickly to find jobs and exit welfare rolls. In fact, many communities report fewer people are applying for assistance. Instead, recipients are making the effort to find work on their own. The mission of the welfare office is also changing. Front-line workers in the welfare offices are being trained in skills that go beyond determining eligibility and benefit amounts and instead focus on assessing the job skills of applicants, developing job placements with local employers, and helping recipients make the transition to work with child care and transportation support.
  State legislatures are currently crafting, debating, and passing comprehensive legislation to implement Federal welfare reform and child support changes. The legislation being constructed reflects the needs of the states' unique communities and economies. State legislators are setting work requirements, adding funds for child care and other work supports, and creating targeted programs for recipients with special needs such as substance abuse all with the aim of moving state residents from welfare to work.

Welfare Reform Activities in the States

   Building on the lessons and experiences of state welfare reform efforts initiated under waivers, states are using the flexibility provided under the TANF and child care block grants to develop creative and innovative strategies and public/private partnerships to achieve the goals of welfare reform.
 Page 47       PREV PAGE       TOP OF DOC
  States are devoting a tremendous amount of energy to helping recipients find work and are inviting communities and businesses to be part of the solution. New partnerships are being forged among state and local agencies, the business sector and the nonprofit community. A few examples follow.
• In the Grand Boulevard project in Chicago, Illinois, UPS has earmarked fifty jobs for welfare recipients. Community and state agencies will be working together to provide needed supports such as child care and mentoring. In Indiana, Pep Boys is creating 150 new jobs and has pledged that 60 of these will go to welfare recipients.
• In Michigan, more than $75 million has been distributed statewide to twenty-six local work force development boards, with primarily private sector members, that are responsible for local decisionmaking and administration of the welfare-to-work initiative, as a component of the state's totally integrated work force and economic development system.
• In Oregon, the Mount Hood Community College provides a 6-week intensive training program for welfare recipients who will be hired by two businesses Fujitsu Microelectronics, Inc. and LSI that are building computer chip plants in the area. Fujitsu hires trainees at $19,000 a year and will help to subsidize housing and child care costs.
• In Nevada, nearly 2,500 people have been trained and placed in good-paying jobs working for the service industry of Nevada's major hotels and restaurants for Citibank as data entry operators, for Global Travel as reservationists, for Vons' Grocery as clerks and even managers.
• In New York, a project called Built on Pride uses foreclosed properties to teach welfare recipients skills like painting, carpentry, dry-walling, and plumbing. With the help of the talented men and women of the building trades, recipients learn job skills while renovating run-down properties.
• In South Carolina, local chambers of commerce will be entering into partnership agreements with the state to help match their members who need employees with welfare recipients. Similar partnerships are being forged in North Carolina, Oklahoma and Virginia.
 Page 48       PREV PAGE       TOP OF DOC
• In a number of states, recipients are obtaining small loans from nonprofit foundations and organizations to start their own microbusinesses. At least twelve states, including Arizona, California, Delaware, Iowa, Missouri and Tennessee, will be allowing individuals to establish individual development accounts. Savings in these accounts can be used by recipients to start their own businesses or to purchase homes or pursue postsecondary education without having the assets count against their eligibility for public assistance.
  As states continue to focus their energies on job development, placement and retention for welfare recipients, Governors, legislators, and agency officials are always mindful that the goal of welfare reform is to make a better life for children and their families. As you recall, the level of funding provided for child care in the welfare reform law was a major concern of our organizations during the debate on welfare reform. States are committed to providing safe, affordable child care for welfare recipients who are required to go to work and are continuing to provide child care when the family leaves the welfare rolls.
• In Rhode Island, the state will guarantee child care to families with incomes up to 185 percent of poverty and for children up to age thirteen if child care is needed for the parent to work.
• In a number of states, including South Carolina, Texas, and Utah, child care is offered in the state's preassistance diversion program, giving families the help they need to stay off welfare.
• Under Delaware's welfare plan A Better Chance, the state has tripled its investment in child care and entirely eliminated the waiting list for child care assistance for the working poor. The Governor's budget recommended an increase in provider reimbursement rates. In Delaware, the Governor has ensured a seamless child care service delivery system, so that clients don't have to change child care providers when they leave welfare for work.
• In Georgia, prekindergarten education programs are one of the three priority areas receiving support from the Georgia Lottery for Education. Services are provided in a variety of settings for income-eligible families, including those receiving welfare, Medicaid, or food stamps.
 Page 49       PREV PAGE       TOP OF DOC
• In Tennessee, the Governor has proposed to add $22 million to the state's welfare program Families First with $10 million being used to increase the state's reimbursement rates for child care. Ohio anticipates spending an additional 40 percent on subsidized child care in the next 2 years to meet the growing demand.
• In Colorado, the Governor announced a twelve point plan to increase the capacity, quality, affordability, and availability of child care, which includes block-granting child care funds to counties, increasing the reimbursement rate to child care providers an average of 15 percent to ensure that all children can attend quality programs, and utilizing Community Development Block Grant funds to renovate or build child care facilities in remote areas. Colorado is also raising the income ceiling for families that qualify for child care assistance from 140 percent to 185 percent of poverty, thereby ensuring that more low-income working families will have access to child care.
  Mr. Chairman, we appreciate your continued interest and commitment to preserving the flexibility in the law that will allow states to successfully implement welfare reform by designing programs that fit the unique needs of each state. At the national level, our three organizations have continued to work closely with the staff of this Subcommittee in drafting of a technical corrections bill, and they have been very responsive to our concerns.
  Implementation is an ongoing process and each year will bring new approaches, new opportunities, and new challenges as states learn from their experiences. Thus, we agree with the sentiment that many have expressed that Congress and the administration should refrain from making major changes in the TANF block grant at this time and give states a chance to implement the law.
  At the same time, our organizations, along with many others, will be monitoring implementation closely to identify any problems or stumbling blocks that may impede implementation efforts. For example, we believe that the domestic violence provisions are being misinterpreted by a number of organizations involved in advocacy around welfare reform and this may result in states making decisions that have unintended consequences. We would like to see some clarification of these provisions.
 Page 50       PREV PAGE       TOP OF DOC
  Additionally, we have some concerns with the application of the Fair Labor Standards Act (FLSA) and, potentially, other work-related statutes, to state work experience programs, such as community service and work experience. When issues like these arise, we hope we can work with Congress and the administration to develop strategies to address these potential problems.
  Our three organizations also have been working closely with the U.S. Departments of Health and Human Services, Agriculture (USDA), and Justice (DOJ), the Social Security Administration (SSA), and other Federal agencies that have a role in welfare reform. We were very pleased with a recent policy guidance from HHS regarding maintenance-of-effort (MOE) under TANF that reaffirmed what we believed was the law's intent to allow flexibility in the use of a state's maintenance-of-effort dollars. Mr. Chairman, we want to thank you for your support of the states' position and for the letter you sent to Secretary Shalala.
  Although more responsibility for welfare reform has shifted to the states, there are still areas where HHS does have regulatory authority such as in imposing penalties. We are pleased HHS has been willing to consult with us on these issues. Two weeks ago, representatives from more than twenty-five states came to Washington for a formal, day-long consultation with officials at HHS. State officials shared their ideas and concerns about the work requirement, penalties, data reporting requirements, and illegitimacy bonus. They urged the administration to allow states maximum flexibility in the regulations they develop.
  Although states are not interested in ''reopening'' the welfare bill, we do believe it would be useful and appropriate for Congress to make a number of technical changes. We hope Congress will adopt and the President will sign a technical corrections bill as soon as possible. Many of these changes, while technical in nature, dramatically affect state planning, decisionmaking, and budgeting. As you know, states are at a critical time in the planning and implementation of their welfare reform efforts. Most state legislatures are now in session and must conduct their business within a specific time frame. State legislators are reviewing their Governor's comprehensive welfare reform proposals and budget plans and are proposing welfare reform legislation and fiscal 1998 state appropriations. A technical corrections bill could clarify such important issues as the transferability of TANF to other block grants, whether a state may use its unexpended TANF balance to establish revolving loans, and how families with a disabled parent are treated under the work requirement.
 Page 51       PREV PAGE       TOP OF DOC

Recommendations on the Draft Bipartisan Technical Corrections Bill

  NGA, NCSL, and APWA have reviewed the bipartisan technical corrections bill and are pleased that Congress has included so many of the items we recommended. In particular, we strongly support proposed technical changes that would:
• clarify that states may directly transfer funds into the Social Services Block Grant (SSBG) without first having to also transfer funds into the child care block grant;
• permit states to count toward their maintenance-of-effort requirement, state spending on immigrant families who are ineligible for Federal TANF dollars;
• allow states to adjust upward the income and resource standards of their former Aid to Families with Dependent Children (AFDC) programs when determining eligibility for Federal foster care and adoption assistance so that, over time, a child's eligibility for critical child welfare services can be maintained;
• ensure that all unused matching child care funds will be available for redistribution to those states that need them;
• allow two-parent families with a disabled spouse to meet the all-families work requirement;
• allow hours worked by both parents in a two-parent family to count toward meeting the thirty-five hour work requirement; and
• clarify that child support funds passed through to a family will count as qualified state expenditures toward the TANF maintenance-of-effort requirement.
  However, Mr. Chairman and Members of the Subcommittee, there are specific provisions that are not included in the technical corrections legislation that are important to Governors, state legislators, and welfare administrators. We urge you to consider including them in any final legislation. They include recommended changes in the areas of:
 Page 52       PREV PAGE       TOP OF DOC
• the contingency fund;
• the draw-down of the TANF block grant;
• data collection and reporting;
• work activities;
• child support;
• Medicaid;
• legal immigrants; and
• food stamp provisions.

Modify the Contingency Fund

  With an eye toward future uncertainties, Governors, legislators, and administrators called for a contingency fund to guard against an economic downturn or natural disaster, such as a flood or hurricane. These circumstances would result in an increased need for public assistance that could not be met through the fixed funding provided under a block grant. With the strong support of our organizations, Congress adopted a $2 billion contingency fund that would provide additional matching dollars to states experiencing economic hardship. The congressional support for the contingency fund reflected bipartisan consensus that both the Federal and state governments should share the costs of meeting increased needs during such periods. We believe the inclusion of the contingency fund was a significant improvement to the TANF block grant.
  However, technical changes made in the final bill diminish the value of the fund and make it difficult for states to access funds they need during periods of economic hardship. First, there is a technical problem in the definition of what state spending counts toward the maintenance-of-effort (MOE) requirement states must meet in order to draw down additional matching dollars. Congress had legitimate reasons to require a higher MOE requirement for the contingency fund than for the basic TANF block grant 100 percent compared with 75 percent. However, even if the state's spending equaled 100 percent at the MOE for the basic TANF block grant, that state would not be eligible for the contingency fund because the definition for MOE under TANF is different from the definition under the contingency fund where MOE is defined much more narrowly. As a result, it will be very difficult for states to meet the criteria even while investing in a high level of spending on welfare programs. Additionally, administrative and accounting problems are created when states have to track MOE under two different definitions. We recommend that the contingency fund MOE requirement be changed to mirror the TANF MOE with respect to qualified state spending.
 Page 53       PREV PAGE       TOP OF DOC
  A second technical problem in the contingency fund provision relates to an end-of-the-year ''reconciliation provision'' that effectively reduces the match rate unless a state accesses the fund in every month of the fiscal year. Under earlier versions of the contingency fund (including in HR 4), a state would have been eligible for Federal matching funds based on its Federal match rate for state spending that exceeds the level spent by the state in fiscal 1994.
  However, under the version adopted in the final welfare bill, a state's Federal match rate would be reduced if it received contingency funds for fewer than twelve months in any fiscal year. For example, if a state fell into a recession partway through the year and received contingency funds only for 4 months, its Federal match rate for the contingency fund would be reduced by two thirds.
  Consider a state with a Federal match rate of 50 percent. If the state received contingency funds for only 4 months of the year, the state would have to spend 83 cents in state resources for every 17 cents in contingency fund resources it received. In other words, the Federal share would be reduced from 50 percent to 17 percent, requiring the state to bear a much larger portion of the additional costs incurred during a period of economic downturn. Because a state's match rate will vary depending on how long the recession lasts, it will greatly hamper states' ability to plan what resources they must expend to provide for needy families. We recommend that the reconciliation provision be revised to eliminate this problem.
  Based on Congressional Budget Office (CBO) estimates, the changes we are recommending can be made without exceeding the $2 billion authorization provided for the fund for fiscal 1997 through fiscal 2001. A contingency fund that is too difficult to access is of little value to states. We urge Congress to consider these modifications.

Increase Flexibility in the Draw-Down of the TANF Block Grant
 Page 54       PREV PAGE       TOP OF DOC

  Next, we turn to another issue of great importance to states the draw-down of the TANF block grant. In response to an inquiry posed by our three organizations regarding the ability of states to draw down their entire TANF block grant, the U.S. Department of Health and Human Services determined that states may not draw TANF block grant funds from the Treasury ''significantly in advance of the actual expenditure of those funds'' even if they have met their 75 percent maintenance-of-effort-requirement. Under this rigid, and we believe incorrect, interpretation of congressional intent, TANF dollars that could be used to serve vulnerable children and families in their communities would remain in the Federal treasury. Further, under this interpretation, states may not be able to use TANF dollars to create, for example, revolving loan funds, community development funds, or micro-enterprise development funds for innovative job creation and business development activities on behalf of eligible TANF families We urge you to clarify congressional intent in the state draw-down of TANF block grant funds in support of the states' position, and if necessary, include an amendment in this technical bill.

Revise the Requirements for Data Collection and Information Systems

  The welfare law fundamentally alters the mechanism that funds human services information systems. Formerly funded through an earmarked match, systems funds must now come from the TANF block grant itself, creating competition between the needs of families and automation. Since the enactment of the law, concerns have increased as states have had time to assess the degree to which they must either modify their current human services information systems or develop new systems. New federally mandated eligibility requirements necessitate not only system reprogramming, but more difficult interfaces with other Federal, state, and local databases. In addition, case tracking for time limits and screening for duplicate participation among the states will also pose significant systems costs. Collection and reporting requirements of new data elements not formerly required of all TANF families pose both systems design and data storage burdens. This is clearly an unfunded mandate in the new law.
 Page 55       PREV PAGE       TOP OF DOC
  With regard to data collection and reporting, the mandates contained in section 411 (TANF) and section 611 (Child Care) present costly information systems challenges for the states. These are new data collection requirements placed upon the states. For example, the law requires states to report family receipt of subsidized housing or child disability. Not only are these data not currently being collected, but to do so will require the state human service agency to establish costly information exchanges with other state and local agencies that may hold these data.
  Accordingly, we call on Congress to reexamine the data elements prescribed in section 411 and section 611 and to eliminate or revise those that unnecessarily burden states with systems changes. This will enable states to spend more on TANF families and not on systems. We recommend that the Secretary of HHS, working with Congress and the states, develop alternative TANF and child care data collection and reporting requirements to replace those now required under the law, and do so by July 1, 1997.
  Previously fractured child care service delivery systems spawned a complex array of child care information systems that mixed manual and electronic collection and reporting between state child care agencies, further complicating child care data systems. Although the section 611 data collection and reporting requirements demand that states integrate separate systems, Congress has not authorized or appropriated funds for this purpose. We are eager to work with Congress and the administration to revise these reporting requirements and make them reasonable and useful.
  With regard to eligibility determination and interstate tracking, our organizations, together with the National Association of State Information Resource Executives, conducted a joint survey earlier this year to identify the capacity of state human services information systems to meet the TANF requirements. Preliminary analysis of responses indicates that no state has in place a method of identifying TANF recipients across the nation in order to track the 5-year limit across state lines for a recipient's lifetime. Interstate tracking poses both technological and policy challenges. Requirements to determine immigrants' criminal justice and education status by communicating with systems of the Immigration and Naturalization Service (INS), the U.S. Department of Justice, and the U.S. Department of Education will also escalate costs.
 Page 56       PREV PAGE       TOP OF DOC

Clarify That Job Search and Job Readiness Count as Work Activities for Six Weeks Per Year

  NGA, NCSL, and APWA strongly believe that job readiness programs and job search programs are important components of a work-focused approached to welfare reform. The law appears to allow only 6 weeks of job search and job readiness to count as work over a recipient's lifetime. Extending this time beyond 6 weeks for job seeking and job readiness could be a cost-effective approach, especially when a recipient is between different work activities and/or returns to welfare after separation from a job. We recommend that this language be clarified to allow job search and job readiness to count toward the work requirements for 6 weeks in a twelve-month period.

Limit the Work Requirement for Single Parents With a Disabled Child

  Governors, legislators, and administrators are committed to meeting the work requirements set forth in the welfare law. Single parents with a disabled child face unique difficulties, however, in trying to work while also meeting the special needs of their children. We urge you to limit the number of hours a parent with a disabled child must work to meet the work rates to twenty hours per week (similar to the flexibility provided for single parents with a child below age six).

Increase Flexibility in Medicaid Spending

  Although Medicaid is not in this Subcommittee's jurisdiction, our organizations recommend several changes in Medicaid that we hope will be included in the final technical bill. These changes will allow states to protect beneficiaries while improving state flexibility and avoiding Federal penalties or sanctions. We first recommend that the $500 million fund Congress created to assist states in meeting the Medicaid administrative costs that result from the welfare reform legislation be more accessible. We heartily applaud your sensitivity to our fiscal needs, and thank you for creating this funding pool. However, the Health Care Financing Administration's (HCFA) interpretation of the law would bar states from using the funds to modify Medicaid Management Information Systems, or to redetermine Medicaid eligibility for former SSI recipients. States will be required to redetermine eligibility for up to 1.6 million additional recipients this year as a result of the SSI changes in the welfare law, but will not be able to use the fund for this purpose. We call upon Congress to clarify the law so that states would be able to draw on the fund for these purposes.
 Page 57       PREV PAGE       TOP OF DOC
  Second, we ask that the presumptive eligibility for pregnant women and verification of immigrant status be clarified. Section 1920 allows certain providers to make ambulatory prenatal care available to pregnant women during a presumptive eligibility period. Congress created an option for states several years ago to ensure that pregnant women received care promptly, without waiting for formal approval of their Medicaid application. If providers are required to also determine immigration status, it would defeat the intent of section 1920, as verification is time-consuming. Instead, we recommend allowing applicants to self-declare that they satisfy immigration requirements. The state would later be responsible for determining if they are, in fact, qualified. States should not be penalized for providing services if the recipient, the provider or the INS provides incorrect, erroneous, or late information about immigration status.
  The next three issues relate to Medicaid eligibility for SSI recipients.
• The welfare law delays an SSI recipient's first cash payment until the month after the individual meets all eligibility and disability criteria. A recipient who is found eligible on the tenth of the month will not receive cash benefits or Medicaid until the first day of the following month. For elderly, disabled, or sick recipients, this gap in coverage is already proving extremely problematic. States ask that Congress permit a state to deem an SSI recipient Medicaid-eligible for SSI, on the date an applicant meets all eligibility criteria or the date of application for SSI, whichever is later. This would eliminate the gap in medical care between the date the individual is eligible and the first SSI check.
• The welfare law terminates SSI for most qualified aliens. However, they are likely to remain poor and disabled and in need of medical care. The large majority of states are able to continue to cover them under optional Medicaid categories. However, eleven states currently do not offer optional eligibility categories under which these individuals could be covered. These states could not afford to implement the new coverage groups, since they cannot restrict the categories to immigrants only, but would have to cover every person who meets the eligibility criteria. The states ask Congress to create a new optional Medicaid eligibility group that would grandfather these individuals whose SSI benefits were terminated only because of their alien status.
 Page 58       PREV PAGE       TOP OF DOC
• Severe backlogs at the INS result in significant delays in processing citizenship applications. During this time, immigrants will in many cases lose their food stamp, SSI, and Medicaid benefits. The states recommend allowing immigrants who have submitted their citizenship applications to continue receiving food stamps and SSI. While the INS is processing their applications, states would also like the option to continue their Medicaid benefits.

Clarify Child Support Measures

  We are very pleased that the Committee has addressed many of the outstanding technical issues related to child support enforcement, allowing states to improve the way they implement the new provisions in the child support law. Addressing technical issues related to the suspension of licenses, the collection and use of Social Security numbers in child support enforcement, and the wording of language related to the simplified process for review and adjustment of child support orders will greatly ease the implementation of these new provisions.
  However, there remain some outstanding issues that states urge the Committee to remedy. They include the following:
• Conflicting dates exist in Title I and Title III of the new law regarding passing through and disregarding $50 of the child support collections for families receiving cash assistance. The conflict shifts costs to states because sufficient time was not allowed for states to change state laws. The solution to this problem is to allow states to continue to receive a Federal match for passing through the $50 of child support until they have acted to discontinue the disregard or until July 1, 1997, whichever is earlier.
• The new voluntary paternity acknowledgment language requires instruction on paternity acknowledgments both in writing and orally. Voluntary paternity acknowledgment, with written notice required, has been in effect and working well in states since the passage of the Omnibus Budget and Reconciliation Act of 1993. The oral notice requirement, however, is new. Mandating oral instruction in every case involving voluntary paternity acknowledgment is burdensome for small medical offices, rural clinics, Head Start programs, and other diverse organizations that participate in states' broad efforts to establish paternity. These organizations may not have the resources to dedicate and train staff to provide oral instruction. Further, states need flexibility with oral notice in cases in which the client does not speak English because it is impossible to cover every language orally. States do not want to give up on these cases. Therefore, we recommend that the mandate requiring oral instruction be modified to continue to require written notice, while requiring oral notice when feasible, including through the use of video or audio equipment.
 Page 59       PREV PAGE       TOP OF DOC
• The law changes prior practice by requiring paternity acknowledgments and adjudications to be filed with the state registry of births. Prior law funded this recordkeeping activity only if the records were housed in the child support agency. Some states use other entities as the collection point for all acknowledgments and adjudications of paternity. Therefore, we recommend giving states the option to choose where they will file the acknowledgments and adjudications or, if the filing location remains a mandate, provide Federal matching funds for this activity.
• The new law allows access to consumer reports to establish, enforce, and modify child support orders. However, the provision treats older orders to pay different than initial order establishment. The new law is actually more restrictive about the use of these reports once an order is established than it is before establishment. States' use of consumer information for enforcement and modification of orders after a noncustodial parent has been legally obligated to pay should be treated the same as an initial order establishment.
• Various barriers still exist regarding states' ability to enforce medical child support orders in an efficient, effective manner. For example, the new law contains provisions that prohibit disclosure of the whereabouts of one party to another party in cases in which there is a protective order or in which the state has reason to believe that the release of information may result in physical or emotional harm. Medical child support provisions under ERISA require that a qualified medical child support order contain the name and address of the custodial parent. We recommend a state agency be permitted to list its address in lieu of the custodial parent's address in these cases. We recommend the Committee continue to work with states to address such issues.
• The complex area addressing the flow of child support dollars from the noncustodial parent to the new state central disbursement unit leaves ambiguities regarding the routing of pre-1994 non-IV–D child support orders subject to income withholding. We are developing further recommendations in this area and urge Congress and the administration to continue working with states to address these concerns.
 Page 60       PREV PAGE       TOP OF DOC

Increase Flexibility for Legal Immigrants

  Next, we would like to address the issue of legal immigrant eligibility changes under the new welfare law.
  In a policy statement adopted by the National Governors' Association earlier in February, the Governors recognized Congress' well-intentioned efforts in regard to legal immigrants and agreed that enforceable sponsorship requirements can help prevent immigrants from becoming public charges. However, Governors expressed their concern that provisions in the welfare law that deny certain benefits to legal immigrants represent a cost shift to some state and local governments. The policy expressed particular concern about immigrants who were in the United States on the date of enactment and cannot meet citizenship requirements because of age or disability. These individuals face the loss of SSI, food stamps, and Medicaid benefits. Governors believe this issue could be addressed without reopening the Personal Responsibility and Work Opportunity Reconciliation Act and look forward to working cooperatively with Congress and the administration to decide the appropriate vehicle. The American Public Welfare Association shares the Governors' concerns.
  The National Conference of State Legislatures has had a longstanding position opposing benefit restrictions to legal immigrants and most refugees, while supporting provisions to strengthen the legal responsibility of their sponsors. NCSL has previously testified before many congressional Committees that these new bars and restrictions will create many challenges for states: Cost-shifts from Federal programs to state and local safety net programs, secondary consequences such as the potential loss of Medicaid benefits for elderly legal immigrants made ineligible for SSI, the costs of implementing new verification programs for benefits, and the expected litigation as our options are tested in the courts. Although there is a exemption for refugees who are in the country less than 5 years, the majority of refugees have been here for more than 5 years.
 Page 61       PREV PAGE       TOP OF DOC
  This afternoon, we are jointly proposing several technical changes to the immigrant provisions. First, states have noted that despite the best efforts of the Immigration and Naturalization Service (INS), there is a significant time lag between when individuals submit their applications for naturalization and when the process is complete. During this six to 9 month period, immigrants may lose their food stamps SSI, and Medicaid benefits and then have to go through the eligibility process again, after becoming citizens, to have their benefits reinstated. This creates an unfortunate disruption in critical services and administrative inefficiencies. We ask Congress to consider an amendment to allow those individuals in the process of naturalizing to continue to receive Federal benefits and to allow states the option of continuing their Medicaid benefits.
  States have raised concern about two kinds of legal immigrants who have always been treated like refugees in immigration law. We urge you to clarify that Cuban/Haitian Entrants and Amerasian children (children born in Vietnam of U.S. military or civilian personnel) are treated as eligible for all benefits afforded to refugees. In addition, the technical amendments should clarify, first, that the exemption for veterans include widows and widowers in the definition of ''spouse'' and, second, that those typically considered veterans, such as Filipinos, who are eligible for veteran's benefits will also be exempt.
  The draft technical corrections legislation contains one provision in the area of immigrants that we find problematic. section 106E of the bill reestablishes sponsor-deeming for cash assistance. Our organizations have supported provisions to ensure that new sponsorship agreements are legally enforceable (unlike the current affidavits of support). The welfare law gives states the explicit authority to determine legal immigrants' eligibility for the TANF program. We believe that states will develop their own rule for TANF legal immigrant eligibility consistent with their TANF program design. We assume that under current law, a state could choose to impose sponsor deeming. Therefore, we object to this mandate as a preemption of current state authority. As a minimum, we urge you to give states the option to impose sponsor deeming if a clarification is needed.
 Page 62       PREV PAGE       TOP OF DOC
  Earlier in our testimony on Medicaid changes, we supported legislative changes to the provisions affecting legal immigrants and refugees. First, when determining presumptive Medicaid eligibility for pregnant women, states should not be penalized for providing services if the recipient, the provider, or the INS provides incorrect, erroneous, or late information about immigration status. Second, Congress should create a optional Medicaid eligibility group that would grandfather these individuals whose SSI benefits were terminated only because of their alien status.

Increase Flexibility in Food Stamps Provisions

  Finally, while food stamps are not a program in this Committee's jurisdiction, we want to bring to your attention that there are several amendments to the welfare reform provisions that should be addressed in this technical amendment bill as well. We will be asking the House Agriculture Committee to consider a number of technical changes to the Food Stamp Program.

Conclusion

  We hope the technical changes we are recommending can be made quickly and with bipartisan support. They are technical changes that will go a long way in making welfare reform a success.
  We thank you again for the opportunity to testify before you today and look forward to continuing to work with the Subcommittee during the implementation of welfare reform. We look forward to answering any questions you may have.

—————

 Page 63       PREV PAGE       TOP OF DOC

  Chairman SHAW. Thank you, Ms. Ryan.
  Mr. Greenberg.

STATEMENT OF MARK H. GREENBERG, SENIOR STAFF ATTORNEY, CENTER FOR LAW AND SOCIAL POLICY

  Mr. GREENBERG. Mr. Chairman, Members of the Subcommittee, thank you very much for holding this hearing. Thank you for inviting me to participate in it. My name is Mark Greenberg. I have been engaged in issues around welfare reform efforts for many years. I closely followed the development of the Personal Responsibility and Work Opportunity Reconciliation Act.
  I would like to begin by underscoring the point that a number of other witnesses have made, which is to commend the Subcommittee for the process that you have undergone around technical amendments. It has been an open process. It has been one that has been receptive to receiving views from a broad range of people. Necessarily, there is not always agreement as to what is technical and what is substantive, but I think it has been a genuine, honest effort to emerge with a technical bill that minimizes those aspects that are noncontroversial, and I hope that that process can proceed. There are many provisions that may be technical but, nevertheless, have significant impact both for States and families, and it would be my hope that the bill could move quickly through the process.
  In my testimony, necessarily, I am going to be focusing on a set of areas where there still are substantive disagreements, and I do want to underscore this is a very small part of what is in the bill.
  The areas I would like to focus on particularly are those related to maintenance of effort. There has already been some discussion of that earlier today, but there are several provisions which, though they are structured as technical, potentially could significantly change the nature of State maintenance-of-effort obligations.
 Page 64       PREV PAGE       TOP OF DOC
  The first one, which Acting Assistant Secretary Golden spoke of, is the juvenile justice issue. One of the provisions of the proposed technical corrections bill would alter what would count toward maintenance of effort so that those States which were expending emergency assistance funds on juvenile justice on September 30, 1995, could now count juvenile justice funds and increased expenditures in juvenile justice as maintenance of effort. That is not technical. It is a substantive change. It raises serious policy issues about expenditure of funds in areas which have very little relation to the statutory purposes of TANF. We would urge this change not be included.
  The second concern is in the area of child support. The technical corrections bill, as drafted, would say that child support collected by a State and distributed to families could count toward maintenance of effort. Here there is both a technical problem with the drafting of the proposed amendment and then a broader issue. The technical problem with the drafting of the proposed amendment is that it seems to say that whenever the State collected child support for low-income families, even if those families are not part of the TANF Program, that child support could count toward the State's maintenance-of-effort requirements. That may not have been what is intended, but that does appear to be the way the provision is drafted, and hopefully that could be addressed.
  The broader problem that is really raised by this provision is the whole relationship between child support and maintenance of effort. It does appear that the way this provision is drafted, if a family coming in has child support, assigns the child support to the State, and then the State gives the child support back to the family, that would then be counted as an expenditure by the State even though there is no benefit being provided to the family. All the State is doing is returning to the family the child support that the family assigned to the State.
  There are some difficult issues about the relationship between child support and maintenance of effort. We would welcome working with the Subcommittee and with the representatives of States toward trying to develop a more appropriate treatment of the circumstances where a family receives assistance under TANF and part of that assistance is reimbursed by the collection of child support. There is a need to address that issue.
 Page 65       PREV PAGE       TOP OF DOC
  Let me move now to several areas where there are provisions which are not currently included in the draft technical corrections bill but where amendments might be considered either technical or perfecting and which we would hope could be considered. There has already been some discussion today of the importance of the child care protections in this bill. One provision of TANF says that in the context of single custodial parents of children under age 6, if they are unable to comply with the work requirements of the law as a result of the inability to obtain needed child care, the State may not reduce or terminate assistance to them.
  As to the scope of that provision, there are a couple of groups where it is not clear where they are covered, and we would hope it could be clarified that they ought to be covered. One group is single adult caretaker relatives other than parents, such as a grandparent or an aunt of the child who needs that child care protection. The second group is minor parents who are required to attend school as a condition of receiving TANF assistance. There is some statutory ambiguity as to whether they are covered here. For minor parents, we would hope the State will provide needed child care and they will be able to attend school, but in instances where they are not able to attend school because of the lack of needed child care, there needs to be some protection built in.
  The final provision which I would hope would be considered is one which would provide States be required to submit amendments to their TANF plans when they change the approaches that they are taking. As the statute is drafted right now, States are required to submit TANF plans periodically. It is unclear whether the State has an obligation to file any amendment in the period before the next TANF plan is due or whether the Secretary would have the authority to to require amendments from States. It is ultimately in all of our interest that the State plans accurately reflect what States are doing in their TANF Programs.
  Thank you very much for your consideration, and, again, we wish to commend the process that the Subcommittee has undergone in developing technical amendments.
 Page 66       PREV PAGE       TOP OF DOC
  [The prepared statement follows:]

Statement of Mark H. Greenberg, Senior Staff Attorney, Center for Law and Social Policy

  Members of the Subcommittee, my name is Mark Greenberg. I am a Senior Staff Attorney at the Center for Law and Social Policy. CLASP is a non-profit organization engaged in research, analysis, technical assistance and advocacy on issues affecting low income families. CLASP receives no Federal grants or contracts, and in my testimony today, I am not representing any entity that receives Federal grants or contracts. I have been involved for many years in the issues arising in Federal and state welfare reform efforts.
  Today's hearing focuses on technical amendments to the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA). The PRWORA includes some very controversial features; CLASP had, and continues to have, serious concerns about the possible adverse effects of many aspects of the new law. However, because this hearing is expressly focused on technical amendments to the PRWORA, I am limiting my testimony to comments on the Subcommittee's draft technical amendments bill dated February 20, 1997. In my testimony, I will identify a limited number of instances where the draft listing presents substantive concerns or there may be technical problems with particular proposed technical amendments. I will also identify a set of areas where there are additional technical or perfecting amendments that the Subcommittee may wish to consider.
  Before turning to specific details, however, I want to express our appreciation to the Subcommittee for holding this hearing and for the process that has been used in identifying possible technical amendments. In legislation as extensive and complex as the PRWORA, it was inevitable that there would be a set of technical issues arising as implementation began. In the months since enactment of the PRWORA, the Subcommittee and its staff have been receptive to hearing from a broad array of interested persons about any possible technical issues that have been identified. Even in a process of identifying technical amendments, there is not always agreement as to when a particular provision is technical and when a provision presents new (or old) substantive issues. However, looking at the Subcommittee draft as a whole, I believe that the document reflects a conscientious and thoughtful attempt to address technical problems and to limit its scope to those problems that are technical in nature and for which the resolution should be noncontroversial. Some of the issues, though technical, have considerable practical significance for states in implementing their programs and for low-income families. I hope that it will be possible to continue to limit the focus to issues for which there are technical and noncontroversial resolutions, so that this bill can move through the legislative process expeditiously.
 Page 67       PREV PAGE       TOP OF DOC

Concerns About Provisions of the Draft Committee Bill

  Turning to specifics, I do want to emphasize that we have no disagreement with the vast bulk of what is contained in the bill. Necessarily, my focus will be on a set of areas in which we have identified problems or concerns, but no concerns are presented by the great majority of provisions that we have reviewed. Here are a set of areas, however, in which proposed amendments do present potentially significant policy issues:

Minor Child Requirement

   Sec. 106(a) of the draft bill is described as clarifying the home residence requirement, but may have the unintended effect of permitting states to expend TANF funds for assistance to adults who are not, and may never have been, living with a minor child.
  As enacted, section 408(a)(1) of the PRWORA provides that a state may not use any part of its TANF grant to assist a family unless the family includes a minor child residing with a custodial parent or other adult caretaker relative (or unless the family contains a pregnant individual). The proposed technical correction would modify section 408(a)(1) to simply provide that the state may not use its grant to assist a family unless the family includes a minor child (or pregnant individual). The intent of this correction may have been to harmonize the language of section 408(a)(1) with section 408(a)(10), which provides that a state may not use TANF funds to assist a child if the child is absent from the home for a significant period of time. While this may have been the intent, the wording of the proposed modification might also be read to allow states to expend TANF funds on assistance to adults who are not residing with minor children, so long as the adult is a member of a family and the family includes a minor child.
 Page 68       PREV PAGE       TOP OF DOC
  A better resolution here would be to maintain the existing language of section 408(a)(1), but to amend it to clarify that the requirement that a family must include a minor child residing with a custodial parent or other adult caretaker must be read consistent with the allowed period of absence from the home for minor children permissible under Sec. 408(a)(10).

Alien Sponsorship Deeming, Sec. 106(e)

  This amendment is described as restoring the deeming rules of prior law for sponsored citizens already in the U.S. or arriving prior to implementation of the new affidavits of support. However, the provision imposes an inappropriate new substantive mandate on states, and imposes deeming rules which are significantly more restrictive than those of prior law.
  Under prior AFDC law, states were required to assist sponsored aliens, and a federally mandated deeming methodology was specified. Under TANF, states can elect whether to assist most qualified aliens in the United States prior to the date of enactment of the legislation. Given that states can choose whether or not to provide assistance at all, it would seem appropriate to also allow states to decide for themselves whether to impose a deeming requirement in connection with the provision of assistance. Since a state's block grant will not vary based on whether the state elects to assist these families, the imposition of a Federal deeming requirement will generate no Federal savings, and will only restrict state discretion.
  If, however, there is a goal of essentially reinstating prior law, this language fails to do so for two reasons. First, prior law specified a set of deductions that would be available to sponsors in calculating what part of their income would be deemed; allowable deductions included a portion of earned income, an allowance for the sponsor's living costs based on the state's Standard of Need, and deductions for amounts the sponsor was paying for child support, alimony, or for the costs of legal dependents not residing with the sponsor. The proposed technical amendment does not contain comparable provisions. Second, the proposed technical amendment would be applicable to all assistance under TANF, including both cash and non-cash assistance. If the goal is to approximate prior law, the deeming provision should be modified to provide for deductions and allowances comparable to prior law, and the scope of the deeming provision should be limited to cash assistance.
 Page 69       PREV PAGE       TOP OF DOC
  Whether deeming is mandated or optional, the basic issue of ensuring that there is a reasonable allowance for the needs of the sponsor and the sponsor's family should be recognized. Prior law provided for such an allowance, and we recommend including it in any mandate or option established in the legislation.

Child Support and Maintenance of Effort, Sec. 107(b)

  The draft bill would modify the definition of expenditures countable toward maintenance of effort (MOE) to include child support collected by the state and distributed to eligible families. The proposed amendment presents one clear drafting problem, and raises one broader issue for the Subcommittee's consideration.
  Under TANF, a family seeking assistance must assign its child support rights to the state. When the state collects support for a family receiving assistance under the state program funded under TANF, the state must send the Federal share of support to the Federal Government, and may choose to either retain the state share, or distribute that amount to the family. If the state elects to distribute the amount to the family, the state can choose whether to ''disregard'' some or all of the support passed through, or can choose to treat the entire amount as income to the family, and reduce the family's assistance on a dollar-for-dollar basis. The proposed technical amendment would provide that if the state distributes collected support to an eligible family, the amount distributed may count as a ''qualified state expenditure'' in determining whether a state has met its maintenance of effort requirements. The apparent intent is to provide that, in calculating maintenance of effort, there should be no distinction between a state that pays a TANF grant and retains collected support, and a state that distributes collected support to the family.
  The drafting problem with the provision is that it would seem to allow states to count toward MOE all of the child support collected by the state in its IV–D system and distributed to low-income families, even where those families are not otherwise receiving any other assistance under the state program funded under TANF. Most funds collected and distributed in the IV–D system are for families not receiving cash assistance; in FY 95, states collected $2.7 billion in AFDC collections, and $8.1 billion in non-AFDC collections. If the Subcommittee decides to incorporate the proposed amendment, the language of the amendment should be modified to make clear that the state can only count child support collections toward MOE when the funds are distributed to families receiving assistance under the state program funded under TANF.
 Page 70       PREV PAGE       TOP OF DOC
  The broader issue presented by this provision is whether the process for calculating maintenance of effort needs to be modified to more appropriately address the situation where a state pays assistance and also collects child support on behalf of a family. A state's TANF maintenance of effort requirement is based on having ''qualified state expenditures'' that reach or exceed a percentage of the state's ''historic state expenditures.'' Both qualified state expenditures and historic state expenditures are calculated based on the amount of state-paid assistance, without considering what part of that assistance might be reimbursed through a child support collection. As a result, the maintenance of effort calculation overstates the extent to which a state is actually expending state resources to provide assistance.
  For example, suppose the state's TANF grant is $250 (of which the state share is $125), and Ms. Smith applies for assistance while receiving $200 in child support. Ms. Smith would assign the child support to the state, and receive a $250 TANF grant. Of the $200 in child support collected, the state would provide $100 to the Federal Government and retain $100 as the state share. Thus, in this instance, the net cost of assistance to the state would be $25 (i.e., $125 as the state share of TANF assistance, less $100 in child support reimbursement) but the state would be able to claim the entire $125 in state-funded assistance as a maintenance of effort expenditure. Also note that in this instance, the state would be able to claim $125 in maintenance of effort expenditures, even though the net assistance to the family was only $50 (i.e., the $250 TANF grant less the family's $200 in child support), and as noted, the net cost of the assistance to the state was only $25.
  The proposed amendment would allow states to get a maintenance of effort credit if instead of retaining the family's support, the state distributed the support to the family, even if the state then reduced the family's assistance on a dollar-for-dollar basis. This approach would mean that a state would not be disadvantaged (as compared to states that retained support) if the state chose to distribute the support to the family. However, the practical effect would also be that if a family was receiving child support, the state took an assignment, and then gave the family back its child support in lieu of TANF assistance, the state could treat that child support returned to the family as a maintenance of effort expenditure. In the above example, if instead of retaining $100 in child support, the state distributed that money to the family and then reduced the family's TANF grant by $100, the state would be allowed to treat the distribution as a maintenance of effort expenditure, even though it provided no additional benefit to the family.
 Page 71       PREV PAGE       TOP OF DOC
  As these examples suggest, the underlying problem is that the TANF maintenance of effort calculation is not based on the net cost of assistance. Both a state's historic state expenditure level (on which maintenance of effort requirements are based) and the expenditures that count toward maintenance of effort are set based on a state's gross payments for cash assistance, rather than based on the net amount of assistance that would result if the amount of child support retained by the state was subtracted from the amount of gross payments. The proposed amendment would not correct this basic problem, and would instead allow states to count child support distributed to a family toward maintenance of effort even if the support resulted in no additional assistance to the family. We hope that the Subcommittee can explore ways to modify the maintenance of effort calculation to better measure state effort. We would be happy to work with the Subcommittee toward that end.

Broadening Countable Maintenance of Effort Expenditures

  Another provision of the draft bill, Sec. 107(c), would significantly broadens what might be countable toward maintenance of effort for a group of states. The practical effect could be to substantially reduce the effective maintenance of effort requirements for these states by allowing them to count toward maintenance of effort a set of state expenditures for their juvenile justice systems.
  Under the PRWORA as enacted, states may expend TANF dollars in either of two categories:
• Section 404(a)(1) permits expenditure of TANF funds in any manner that is reasonably calculated to accomplish the purposes of TANF;
• Section 404(a)(2) permits expenditure of TANF funds in any manner that the State was authorized to use amounts received under Parts IV–A (AFDC, Emergency Assistance, IV–A Child Care) or IV–F (JOBS) a such parts were in effect on September 30, 1995.(see footnote 1)
 Page 72       PREV PAGE       TOP OF DOC

  As enacted, expenditures of state funds under section 404(a)(1), but not expenditures of state funds under section 404(a)(2), can count toward MOE. The proposed amendment would permit expenditures under section 404(a)(2) to also count.
  Permitting any state expenditures under section 404(a)(2) to count toward MOE would be problematic; to understand why, it is important to appreciate the breadth of what is permitted for some states under section 404(a)(2). The September 30, 1995 date in section 404(a)(2) is significant because of a controversy that arose concerning the Emergency Assistance Program. In recent years, a number of states were using EA funds for the costs of benefits and services provided to children in the juvenile justice system, with EA being used to pay for such costs as room and board, counseling and psychiatric evaluations at State or county-operated correctional facilities or group homes. On September 12, 1995, HHS issued an Action Transmittal indicating that HHS did not consider it appropriate to claim such costs in the EA Program, and providing that effective January 1, 1996, Federal financial participation would not be available ''for costs associated with providing benefits or services to children in the juvenile justice system who have been removed as a result of the child's alleged, charged, or adjudicated delinquent behavior, or who have otherwise been determined to be in need of State supervision by reason of the child's behavior.'' The Action Transmittal also provided that effective immediately, any proposed state plan which defined emergencies in such a way as to include children in the juvenile justice system would be disapproved. AFDC Action Transmittal ACF–AT–95–9 (September 12, 1995).
  As a result of the HHS Action Transmittal, it appears that the described juvenile justice costs were authorized on September 30, 1995 for those states with approved plans on that date, though such costs were not authorized on and after January 1, 1996. However, since section 404(a)(2) references those expenditures authorized on September 30, 1995, it appears that this group of states can expend TANF funds for juvenile justice costs in the future. Whatever the appropriateness of that result, the proposed amendment would now also permit this group of states to count expenditures on their juvenile justice systems toward satisfying their state maintenance of effort requirements. This is not a technical amendment; it is a broadening of allowable MOE expenditures for this group of states, and would allow these states to count expenditures toward MOE that have no obvious relationship to the goals of TANF. We recommend that this proposed amendment be excluded from the Subcommittee's bill.
 Page 73       PREV PAGE       TOP OF DOC

State Match and Maintenance of Effort

  Another provision of the draft bill, Sec. 107(h), would delete language which expressly provides that State funds used to match Federal funds do not count toward MOE. The apparent intent of this provision is to eliminate duplicative language, because other language in the statute provides that any State funds which are expended as a condition of receiving Federal funds (other than under Part IV–A) cannot count toward maintenance (with an exception for certain child care expenditures). There is some question as to whether the language that is proposed to be deleted is truly duplicative; arguably, there are some instances in which state funds may match Federal funds but are not spent as a condition of receiving Federal funds. Given this uncertainty, the elimination of the language might generate confusion rather than clarification. We recommend deleting this proposed provision from the bill.

Clarification of Penalties

  Under the PRWORA, a state that is potentially subject to a penalty may (with limited exceptions) avoid the penalty by proposing and complying with a corrective compliance plan accepted by HHS. As enacted, the PRWORA would require that the plan provide for correction of the violation; the draft bill, Sec. 107(k), would modify the language so that the state's plan must provide for discontinuance of the violation. In a number of instances, discontinuation may be the appropriate expectation, but in at least three instances, discontinuation would seem insufficient.
  First, under Sec. 409(a)(1), a state is subject to penalty for having expended TANF funds in violation of TANF requirements. If there has been a misexpenditure of funds, corrective compliance should involve more than merely discontinuing the violation.
 Page 74       PREV PAGE       TOP OF DOC
  Second, under Sec. 409(a)(11), a state is subject to penalty for failure to comply with the requirement that the state should not reduce or terminate assistance to a single parent family with a child under age six if the parent refuses to engage in work based on the unavailability of needed child care. Under the technical correction, a state that had violated this provision would be allowed to enter into a corrective compliance plan to discontinue the violation. While prospective discontinuation would be important, it would also be appropriate for the state to restore assistance to those families whose assistance was wrongfully reduced or terminated based on the state's violation. Thus, in this instance, a corrective compliance plan ought to require both discontinuation of and correction of the unlawful conduct.
  Third, under Sec. 409(a)(12), a state that receives a reduced TANF grant as a result of a penalty is required to expend additional state funds to replace the grant reductions. If a penalty has been imposed, then the requirements of Sec. 409(a)(12) ought to apply, and those requirements should involve the expenditure of state funds as specified; it does not seem to make sense to speak of a state having an opportunity to ''discontinue'' a violation under Sec. 409(a)(12).

Additional Amendments for Consideration

  In addition to the specific areas of concern identified above, we wish to identify several additional areas in which technical amendments might be considered. Again, we are limiting our scope to areas in which the proposal would seem technical or perfecting, rather than identifying other areas in which substantive amendments might be needed.

State Plan Amendments

 Page 75       PREV PAGE       TOP OF DOC
  The PRWORA provides that an eligible state is one that has, during the 2-year period immediately preceding the fiscal year, submitted to the Secretary a state plan that the Secretary finds includes a set of required information. Sec. 402(a). However, as the statute is drafted, there is no express reference to a state amending its state plan if the state alters its approach after initial submission of the plan. Since the statute makes no express reference to plan amendments, it is unclear whether the Secretary would have the authority to require states to submit such amendments. However, if there is no state responsibility to submit plan amendments, the result could be that the plans on file do not fairly or accurately reflect state approaches, yet the Secretary has no authority to require states to provide updated information at any point until the next state plans are due 2 years later.
  Ultimately, it would seem to be in the interest of states, the Federal Government, and interested persons if the state plans filed with the Secretary were updated to reflect material changes that occurred during the period before the next plans were due. Accordingly, we recommend that Sec. 402(a) be amended to expressly provide that states must file plan amendments, as necessary, to ensure that their plans accurately describe the approach being taken under their programs.

Twenty-four month work requirement

  As drafted, the requirement to be engaged in work by the 24-month point, section 402(a)(1)(A)(ii), appears to apply to all families, including those exempt from the basic participation rates (e.g., because the state has opted to exempt single parents of children under age 1). In contrast, the 2-month community service requirement expressly provides that it only applies to individuals not exempt and not otherwise engaged in work. For consistency, it would seem appropriate to make explicit that the twenty-four month work requirement, like the 2-month community service requirement, only applies to individuals not exempt and not otherwise engaged in work.
 Page 76       PREV PAGE       TOP OF DOC

Individual Development Accounts

   section 404(h) provides that funds in an individual development account meeting statutory requirements shall be disregarded for the purpose of determining eligibility to receive, or the amount of any assistance or benefit under Federal law. In referring to both ''eligibility'' and ''amount of assistance,'' it appears that the statute may have envisioned that funds deposited in an IDA would not count against resource limits and would not count as income in the month deposited. However, the statutory language is not explicit, and might also be interpreted as only providing for a disregard for purposes of program resource limits. A possible amendment would expressly provide that funds deposited in an IDA will be disregarded both for purposes of counting a family's income and for purposes of program resource limits.

Child Care Protection for Nonparent Relatives

   As drafted, the PRWORA provides that a state may not reduce or terminate assistance based on a refusal of an individual to work if the individual is a ''single custodial parent caring for a child who has not attained 6 years of age'' and if the individual proves a demonstrated inability to obtain needed child care. Sec. 407(e)(2). As it is drafted, it is unclear whether this protection also extends to single adult caretakers, e.g., aunts, grandparents. We recommend modifying the statute to explicitly provide that the child care protection applies to both single custodial parents and to single adult caretakers.

Child Care for Teen Parents in School

 Page 77       PREV PAGE       TOP OF DOC
  The statute provides that a state is prohibited from using TANF funds to assist a parent under 18 unless the parent participates in education activities. The statute also provides that a state may not reduce or terminate assistance to a single parent of a child under age 6 if the parent refuses to engage in work based on a demonstrated inability to obtain needed child care. As drafted, the statute does not expressly provide that this protection when needed child care is unavailable also extends to minor parents subject to TANF education requirements. While the statutory language may be ambiguous, it is possible that the language might be interpreted as meaning that a state could deny or terminate assistance to a minor parent who was unable to comply with school attendance requirements due to a lack of needed child care. To prevent the possibility of such an interpretation, we recommend amending Sec. 407(e)(2) to expressly provide that the child care protection extends to both refusal to engage in work and failure to meet required school attendance requirements, and amending Sec. 408(a)(4) to make clear that its prohibition on providing assistance to minor parents not complying with school attendance requirements must be read consistent with Sec. 407(e)(2).

Contingency Fund

  The PRWORA authorizes a $2 billion contingency fund which is intended to make available additional Federal resources to states in periods of economic downturn. It was generally envisioned that a state would qualify for the contingency fund by meeting an economic trigger and satisfying a maintenance of effort requirement, and that qualifying states could draw funds from the contingency fund at their Medicaid match rates. However, there are a set of problems in the language of the contingency fund provisions of the law which, taken together, may significantly reduce the instances in which states qualify for the contingency fund and make the terms under which a state would qualify significantly less favorable.
 Page 78       PREV PAGE       TOP OF DOC
  It is generally recognized that states must meet a basic maintenance of effort requirement to qualify for their full TANF grant, and that the basic MOE level is 80% (or if the state meets TANF participation rates, 75%) of a state's historic expenditure level. In contrast, a state seeking access to the contingency fund must have spending at or above 100% of its historic expenditure level in the year for which the state seeks contingency fund access. While there was a clear intent to set a higher level of spending for contingency fund purposes, the statute also applies different definitions for which expenditures count for basic and contingency fund maintenance of effort. In particular, basic MOE may be satisfied by expenditures which are ''qualified state expenditures'' for ''eligible families,'' whether or not the expenditures are made in the state's TANF Program. In contrast, to count toward contingency fund maintenance, expenditures must be made in the state program funded under TANF. As a result, states now face complicated calculations based on the fact that certain expenditures will count toward basic, but not toward contingency fund, maintenance of effort requirements. To resolve this problem, we recommend applying the same definitions which are used for basic TANF maintenance of effort in determining whether a state has satisfied contingency fund maintenance of effort.
  Second, while access to the contingency fund is generally viewed as being at the state's Medicaid match rate, it turns out that a state's effective match rate will be lower than the Medicaid match rate unless the state qualifies for and receives funds from the contingency fund in all twelve months of the fiscal year. Based on a ''reconciliation'' provision, a state's effective match rate will depend on how many months of the year the state receives contingency funds. For example, if a state would have a 50% match rate, but only receives funds for 6 months, the state's effective match will be 75% state, 25% Federal. As a result, the terms of match will be substantially less favorable than the Medicaid match rate, and will partly depend on when in the fiscal year a state happens to qualify. For example, between two states with 50% match rates, the state that received contingency funds for twelve months beginning with the beginning of the fiscal year will receive funds at the 50% rate; in contrast, a state that received funds for twelve months, but with 6 months in one fiscal year and 6 months in the next fiscal year, will instead face the rate of 75% state, 25% Federal. Here, the best solution would be to simply provide that a qualifying state can receive contingency funds at its Medicaid match rate, without the effective rate being adjusted based on the number of qualifying months in the year.
 Page 79       PREV PAGE       TOP OF DOC

Conclusion

  I hope these comments will be helpful to the Subcommittee. Please let us know if we can provide any additional information.

—————


  Chairman SHAW. Thank you, Mr. Greenberg.
  Very quickly, Ms. Steisel, you made reference to State options regarding legal aliens and Medicaid. The bill itself provides that there is a State option involved. If there is a problem with regard to making it temporary for those that are in the process, if there is some verbiage that has to be changed in there, we would be glad to take a look at it, because it was the intention of this Subcommittee and other legislation to allow the States to make that choice. So, if we have hamstrung them because of some of the language, we will be glad to take another look.
  Ms. STEISEL. I would appreciate that, Mr. Chairman. The provision that I spoke of as it relates to deeming is something where we thought States had that option right now, and the technical corrections bill actually would make it a mandate. And as far as correcting the Medicaid provision——
  Chairman SHAW. OK. Thank you.
  Mr. Levin.
  Mr. LEVIN. Mr. Chairman, on the Medicaid provision, we talked a bit about this before, and I hope we can discuss it further. It seems like a pretty complex issue, especially for States which do not have any backup health provision. But I do not think that part of it will be a technical correction, but I think there is a major problem for States to—Ms. Ryan, you are agreeing—for a number of States to essentially exercise the option.
 Page 80       PREV PAGE       TOP OF DOC
  Let me just say a word on the contingency fund. I think, Ms. Golonka, your analysis of the contingency fund is on target. I am afraid if we were in a recession now, we would find the contingency fund was woefully inadequate and was written in a way that would make it very difficult for States to access it.
  I am hopeful you can help us see which are technical corrections, and your suggestions may well fit within a definition of technical corrections so that our intent is carried out. Because, otherwise, I think there are so many rigidities in it that it would be exceptionally difficult for any State to really utilize it.
  So, Mr. Chairman, I hope our staffs can work together with various groups which have an expertise in this to see which might fit a reasonable definition of technical corrections.
  And on your other suggestions, I would agree with most of them. I think your comments on legal immigrants are very much on target. As you acknowledge, we are probably going to have to consider—not all of them, perhaps, but most of them some other day, not under the technical corrections umbrella. But I would encourage you very much to talk with us about it because these provisions are now going into operation, as we all know. And I have to believe this institution has the ability to look at laws as they are implemented, and where there is a clear impact, to take account of that. But we are going to have to receive information from you, so I would very much encourage your interaction with us.
  So thanks to the three of you, and, Mr. Greenberg, for your very constructive efforts.
  Chairman SHAW. Mr. English.
  Mr. ENGLISH. Thank you, Mr. Chairman.
  With regard to some of the testimony we have already received, I was wondering if Ms. Golonka could comment on a couple of points. First of all, you heard Dr. Golden's testimony with regard to the transfer of TANF funds to the Social Services Block Grant, and having heard the position of the administration—and I know from your testimony you have taken a rather different view—can you outline for us some hypotheticals where States could be needlessly constrained in meeting the needs of Social Service providers and their clients if they were required to match any funds transferred in the Social Services Block Grant with a comparable transfer to, say, child care?
 Page 81       PREV PAGE       TOP OF DOC
  Ms. GOLONKA. Well, I think one point raised earlier was that if there is a State that does not believe it needs to transfer funds into child care, it actually reduces the effectiveness of the dollars if the State has to transfer funding into child care that is actually not needed there in order to get some funds into the Social Services Block Grant.
  I think a second issue is, that the TANF Block Grant combines not only AFDC cash payments and jobs, but also emergency assistance. States used to provide a variety of activities, and given some of the requirements in the bill around data collection, work requirements, time limits, and so forth, these requirements may not fit the types of activities that States would want to continue to provide with the funds they received from the Federal Government, things like family preservation, family support services in particular, and one-time types of assistance under emergency situations.
  Mr. ENGLISH. In a related issue, you have advocated here—and the gentleman from Michigan has raised the point—that some of these may be policy issues going beyond mere technical corrections. But from your testimony, I wonder if you would comment. You testified that State dollars spent on—you used the term ''immigrants,'' and I assume that is the same thing as noncitizens, as we have defined it in the bill—the spending of State dollars on noncitizens ineligible for Federal TANF dollars be included in maintenance of effort. And I wonder—I know Pennsylvania is in a situation where its State constitution has been interpreted, in at least an opinion of the attorney general, to require them to continue these funding sources. Are there similar situations where States are now being required to spend money on individuals ineligible for Federal dollars? And is this perhaps one of the rationales for including them under maintenance of effort?
  Ms. GOLONKA. I am familiar with the Pennsylvania situation. There may be as many as 22 States that have some sort of constitutional provision that might require the State to continue to provide benefits to immigrants. Additionally, at least 37 States that have submitted their State plans have decided that they will actually continue to provide TANF benefits for immigrants who are currently in the country. A number of these States are not going to make a distinction between those who arrive after the bill's enactment and will serve these families as well.
 Page 82       PREV PAGE       TOP OF DOC
  I think there is the sense that these individuals, while not citizens, are here in the country; their needs will need to be met by someone; and if States serve these families, then the spending should be eligible to count toward the TANF MOE.
  Mr. ENGLISH. And then that should be included under the MOE.
  One last question, if I could, Mr. Chairman, to direct to Ms. Golonka and Mr. Greenberg. With regard to the contingency fund and the stages at which States might be eligible to draw down those dollars, looking at the language we have in there right now, what situations would you anticipate the States might experience, say, an economic downturn and not be able to draw on those contingency funds?
  Ms. GOLONKA. Well, I think the instance or the situation I discussed was that there is the maintenance-of-effort requirement that is 100 percent MOE; in other words, the State will have to spend at a level it spent in 1994 to access the fund. But the difficulty arises in that most States are focusing on the MOE to meet the TANF Block Grant requirement, just to get their basic TANF dollars. That is a different definition than what will count toward your MOE to try and enter into the contingency fund.
  You know, if we restrict it to this narrower definition, first of all, it does not give States the flexibility in designing and spending on welfare programs that they want and that has been given to them under the TANF Program. A State may have created State-only funded programs that count toward TANF MOE, but if a State increases spending there it will not count toward meeting the MOE contingency fund.
  Mr. ENGLISH. With the Chair's indulgence, Mr. Greenberg.
  Mr. GREENBERG. We share the same concern that has been outlined by Ms. Golonka about the contingency fund provisions. Currently, States face one definition of maintenance of effort for the basic TANF Block Grant and a separate definition for contingency fund. This greatly complicates State planning. A State might structure its program in full compliance with basic maintenance-of-effort requirements, yet much of the spending may not count toward contingency fund maintenance of effort. Right now there is no recession, and States are not anticipating a recession in the immediate future. However, States must ask whether they should restrict the way in which they spend State maintenance-of-effort money now on the possibility that at some point down the line there might be a recession. It becomes an enormously complicated process. It is often very difficult for people to be able to sort out which expenditures will count toward TANF maintenance of effort but will not count toward contingency fund maintenance of effort.
 Page 83       PREV PAGE       TOP OF DOC
  It would make a great deal of sense, for the sake of simplicity and straightforwardness, to have the same definition apply in both.
  Mr. ENGLISH. My thanks for your testimony, all of you. This has been most enlightening, and my thanks to the Chair for his indulgence.
  Chairman SHAW. Thank you, Mr. English.
  Mr. Coyne.
  Mr. COYNE. Thank you, Mr. Chairman.
  Mr. Greenberg, I wonder if you would care to express any concerns you might have about the transfer of funds from TANF to title XX?
  Mr. GREENBERG. There is a potential concern around the transfer of funds to title XX. Ultimately, the Subcommittee needs to determine how much of this is technical and how much is substantive. The legislation as drafted does say that if funds are transferred, those funds must be for families and children with incomes below 200 percent of poverty. In practice, however, a State would still be able to transfer some amount of its TANF funds to title XX, then free up an equivalent amount of title XX money that up until now has been going to low-income families with children and use it for other purposes, for individuals who aren't low income, for individuals who aren't families with children. It is also possible that transferring this money to title XX would free up an equivalent amount of State money that now would no longer need to go into Social Services at all, but could instead go into roads or any other area of State spending.
  The targeting that is currently in the law does not assure that the transferred funds will result in additional services for low-income families with children.
  Mr. COYNE. Thank you.
  Chairman SHAW. Thank you.
  Mr. Watkins.
  Mr. WATKINS. Thank you, Mr. Chairman. I wanted to just ask a question.
 Page 84       PREV PAGE       TOP OF DOC
  Our Subcommittee had a report the other day that showed a number of States had an increase in some revenue, like in Oklahoma where we had saved as high as 30 percent in the welfare, that there was—it freed up a large percent of money there that they could have flexibility in using. What are the limitations on that revenue, welfare dollars that come in, freed up in the States?
  Ms. GOLONKA. If I understand, the report was suggesting States could potentially spend a lot more per person or per family for those remaining on the caseload because cases are declining. And there is also the issue—maybe this is what you are also alluding to—that there is a maintenance-of-effort requirement that is not 100 percent. It is 75 percent. But that 75 percent will have to be spent on needy families, essentially. That is the way the bill has defined it. So it is not really freeing up State dollars that are part of that maintenance-of-effort requirement. They are restricted by the provisions of the bill.
  Mr. WATKINS. What is your definition of needy families?
  Ms. GOLONKA. Well, each State would have the ability to define who they wanted to serve. The basic criteria is that it is a family with a minor child meeting a certain income threshold. It differs from State to State.
  Mr. WATKINS. I am just curious. I met with some of our people, and they indicated they felt like they could also get a greater return for that dollar if they are able to have some money for investigation of fraud and abuse in some different areas, and that is something I thought I would look into just to see if they were able to utilize some of the dollars that way.
  Ms. RYAN. Well, I would say that there is a cap on administration of 15 percent, as you know, in the TANF Block Grant, and the fraud and abuse investigations would most likely fall in that category unless the administration, which has within its authority to define what is administration, could be convinced that they might define fraud and abuse as activities for the purposes of finding additional dollars that could be spent on eligible families.
 Page 85       PREV PAGE       TOP OF DOC
  I think one of the things that States are concerned about is that the definition of what is administrative cost actually could constrain their ability to be able to do just what you are trying to—or what Oklahoma may be trying to accomplish.
  Mr. WATKINS. I think there might be a need for an additional category outside the administration of 15 percent that would allow some dollars to be used for investigation of fraud and abuse.
  Ms. RYAN. I would just say that under the Secretary's authority, she could probably exclude certain things from the administrative cap, one being those activities designed for fraud and abuse. I think that is within her abilities to do. Of course, Congress always has the unique powers of being able to determine whether or not that would be a priority. It is something States are very concerned with, as you know, and now setting up systems to track people across State lines, the potential for—with information systems lagging behind their ability to actually track people, there could actually be more interest in doing that to make sure people are not moving from State to State.
  Mr. WATKINS. That is what we are here for, I guess.
  Ms. RYAN. Yes, sir.
  Mr. WATKINS. To try to have some walls or whatever we need to do. Well, I thank you for that explanation, and maybe it is something we want to try to look into. I do not know.
  Thank you, Mr. Chairman, very much.
  Chairman SHAW. Thank you, Mr. Watkins.
  I would like to thank this panel and all the witnesses and the staff present here today to back them up for a very fine hearing. We look forward to continuing this and going to markup very soon. Thank you.
  We are now adjourned.
  [Whereupon, at 3:39 p.m., the hearing was adjourned.]
 Page 86       PREV PAGE       TOP OF DOC
  [Submissions for the record follow:]

Statement of the American Public Welfare Association

Recommendations To Amend the Data Collection and Reporting Requirements of the Personal Responsibility and Work Opportunity Reconciliation Act (P.L. 104–193)

Summary

• Data collection and reporting requirements of the welfare law pose both systems design and data storage burdens. This is clearly an unfunded mandate in the new law.
• APWA calls on Congress to reexamine the data elements in section 411 (TANF) and section 611 (child care) and to eliminate or revise those that unnecessarily burden states with systems changes.
• APWA recommends that the Secretary of Health and Human Services, working with Congress and the states, develop alternative TANF and child care data collection and reporting requirements to replace those now required under the law, and do so by July 1, 1997.

Context

  The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) fundamentally alters the mechanism that funds human services information systems. Formerly funded through an earmarked match, systems funds must now come from the TANF Block Grant itself, creating competition between the needs of families and automation. Since the enactment of the law, concerns have increased as states have had time to assess the degree to which they must either modify their current human services information systems or develop new systems. New federally mandated eligibility requirements necessitate not only system reprogramming, but more difficult interfaces with other Federal, state, and local databases. In addition, case tracking for time limits and screening for duplicate participation among the states also pose significant systems costs. Collection and reporting requirements of new data elements not formerly required of all AFDC families pose both systems design and data storage burdens. This is clearly an unfunded mandate in the new law.
 Page 87       PREV PAGE       TOP OF DOC

Systems Challenges of Data Collection and Reporting Requirements

  Section 411 and section 611 of PRWORA require the states to collect on a monthly basis and submit to the Secretary of Health and Human Services on a quarterly basis data on the families and children served by the Temporary Assistance for Needy Families (TANF) program and the Child Care Development Fund (CCDF) program. (The sections also require the states to submit other reports, including the use of funds and the availability of child care services.) In order to comply with these reporting requirements, states must:
• substantially expand the capacity of their current systems to handle entirely new groups of recipients from whom additional data is required;
• holistically reprogram their systems to allow for collection and storage of new elements; and,
• amend lines of code and systems rules to modify elements that have been revised under the new law.
  In many instances, data collection and reporting is made extraordinarily difficult because none of the currently separate AFDC, JOBS, or child care systems cover the entire TANF or CCDF client caseload from which the data elements must be collected. In the meantime, as states work toward the integration of and interface among their various systems (a time-consuming task technologically, programatically, operationally, and fiscally), they will coterminously be required to expend staff resources on the manual collection and reporting of data in order to meet immediate TANF deadlines. Thus, the systems impacts of data collection and reporting will force the states to divert funds away from needy families to finance systems costs.
  Complicating matters in the area of child care data collection and reporting is the fact that previously fractured child care service delivery systems spawned a complex array of child care information systems that mix manual and electronic collection and reporting between state child care agencies, further complicating child care data systems. While the section 611 data collection and reporting requirements demand that states integrate their separate systems, Congress has not authorized or appropriated funds for this purpose.
 Page 88       PREV PAGE       TOP OF DOC

State Recommendations

  The states are not unwilling to collect and report data that is essential to the management and measurement of our human service delivery system. However, the data collection and reporting mandates contained in section 411 (TANF) and section 611 (child care) present costly information systems challenges for the states. Neither the Federal Government nor the states, especially in a block grant environment, have the luxury of collecting all potentially desirable data.
  We are eager to work with Congress and the Administration to revise reporting requirements and to make them reasonable and useful. Accordingly, we recommend that the Secretary of Health and Human Services, working with Congress and the states, develop alternative TANF and child care data collection and reporting requirements to replace those now required under the law, and do so by July 1, 1997.
  As an interim measure, we call on Congress to reexamine the data elements prescribed in section 411 and section 611 and to eliminate or revise those that unnecessarily burden states with systems changes. APWA recommends that Congress enact technical amendments to section 411 and section 611 (attached) to accomplish this step. APWA recommends Congressional action on the following data elements:

Section 411 (TANF) Data Elements Requiring Amendment

• Disabled Child and Adult in Family
• Relation of Each Family Member to Youngest Child
• Educational Status of Child
 Page 89       PREV PAGE       TOP OF DOC
• Family Receipt of Subsidized Housing
• Program Termination due to Marriage
  The American Public Welfare Association, in a recent nationwide survey, asked state human service agencies to identify the section 411 data elements that presented them with the greatest operational or technological difficulty. There was a high degree of state coalescence around the barriers posed by the above-listed data elements. Among the factors contributing to this consensus are that:
• Several states do not currently collect some of the data elements newly required by the law (disabled child and adult in family; relation of family members to youngest child, marital status, family receipt of subsidized housing, program termination due to marriage). These elements are new requirements placed upon the states' TANF caseload, despite Administration claims presented to Congress during consideration of the law that none of the elements were new. In fact, the relationship of family members to the youngest child is a complete reversal of the current practice of relating family structures to the head of household.
• For some of the data elements (family receipt of subsidized housing, child disability), not only do states not collect the data, but to do so will require the state human service agency to establish costly information exchanges with other state and local agencies that may hold data. Moreso, those agencies may not have data available in a compatible electronic format, compelling the TANF agency to conduct manual file searches and manual reporting. This is neither a simple nor cost-neutral task.
• Some states do collect some of the data elements (marital status, disability), but not to the depth required by the new law. For example, current marital status is identified; past marriage is not. And, SSI children are identified; non-SSI disabled children are not.
• In yet another data collection challenge, PRWORA requires the states to add an entirely new universe, noncustodial parents, to their TANF systems for purposes of reporting on their participation in work.
 Page 90       PREV PAGE       TOP OF DOC
• Also, PRWORA includes at least one ''hidden'' data element: The information necessary to automate the pro rata reduction in a TANF family's grant for their falure to work.

Section 611 (Child Care) Data Elements Requiring Amendment

• One-parent family
• Sources of family income, including the amount obtained from, Employment
• Sources of family income, including the amount obtained from, TANF
• Sources of family income, including the amount obtained from, Housing assistance
• Sources of family income, including the amount obtained from, food stamps assistance
• Sources of family income, including the amount obtained from, Other Assistance
• Sources of family income, including the amount obtained from, Other Income Sources
• Months child care benefits received
• Average hours of child care per week
  The American Public Welfare Association, in a recent nationwide survey, asked state agencies administering the Child Care Development Fund (CCDF) to identify the section 611 data elements that presented them with the greatest operational or technological difficulty. There was a high degree of state coalescence around the barriers posed by the above-listed data elements. Among the factors contributing to this consensus are that:
• States must add an entirely new population of child care recipients, non-AFDC families, to whatever information system is capable of performing data collection and reporting functions on a disaggregate basis.
• Some of the data elements of section 611 are new requirements placed upon the states' CCDF caseload and thus the systems may not yet accommodate the new elements.
• States collect information on family income, but not to the depth required by the new law. Many states collect and store aggregate income information only and not the different sources of income. In these situations, states will have to contact their entire CCDF caseload to capture the breakdowns. When the clients do not know this information themselves, the agency will have to establish costly information exchanges with other state and local agencies that may hold data. Those agencies may not have data available in a compatible electronic format, compelling the CCDF agency to then conduct manual file searches.
 Page 91       PREV PAGE       TOP OF DOC
• Some data elements (other assistance, other income sources) are practically limitless, burdening the states with extensive income searches that may yield little additional income information.
• Several states do not collect the number of months child care benefits have been received, requiring them to design and operate for the first-time ever an information system capable of tracking receipt of CCDF funds over time.
• Several states do collect data on the time period for which child care is provided, but not on the hourly basis required by the new law. Several states indicated that they do collect the information on a monthly basis, while others classify time periods into broader timeframes (1–4 hours, 5–8 hours, and so forth.). Shifting from the current reporting structure to a weekly period will require system reprogramming.

Conclusion

  Clearly, the consequences of the data collection and reporting requirements of the welfare law call for Congressional intervention, either in the way of additional funding for systems improvements, or relief from data collection and reporting burdens. Without Congressional action, states will face great difficulty in fulfilling their data reporting obligations, while also meeting the substantial new mandates of the law with regard to elgibility determination and interstate case tracking.

APWA Contacts

Elaine Ryan
Director of Government Affairs
 Page 92       PREV PAGE       TOP OF DOC
202/682–0100, ext. 235
eryan@apwa.org

Kelly Thompson
Senior Policy Associate
202/682–0100, ext. 242
kdt@apwa.org

Bob Reeg
Policy Associate
202/682–0100, ext. 256
breeg@apwa.org

  [The official Committee record contains additional material here.]
  INSERT OFFSET FOLIO 2 HERE
  [The official Committee record contains additional material here.]

  STRIP OFFSET FOLIO 3 HERE.
  [The official Committee record contains additional material here.]









(Footnote 1 return)
A separate technical amendment would modify section 404(a)(2) to allow States to elect between use of September 30, 1995, and August 21, 1996 (i.e., the day before the date of enactment of the PRWORA).