SPEAKERS CONTENTS INSERTS
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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
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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
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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
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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
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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,
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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
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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:]
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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?
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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?
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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.
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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.
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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——
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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.
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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.
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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.
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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.
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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?
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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.
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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.
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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.
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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.
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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.
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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
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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.
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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.
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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
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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.
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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.
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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).
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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.
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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.
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• 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.
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• 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.
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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.
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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:
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• 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.
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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
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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.
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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.
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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.
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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.
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• 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 Fede