The Brookings Institution, Washington, D'C'www'brookings'edu

1
Goals of Welfare Reform Beyond

• To identify the major issues and opportunities
  for improved policy that should be addressed
  during the welfare reform reauthorization
  debate.
• To improve the general level of debate by helping
  Congress and interested parties outside Congress
  understand what has been learned from research
  about the successes and shortcoming of welfare
  reform.
• To identify alternative policies that could be
  adopted by Congress to address the shortcomings
  of welfare reform.

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TANF Reauthorization Issues

• Issue 1 Purposes of TANF
• Issue 2 Funding of TANF
• Issue 3 Time Limits
• Issue 4 Family Formation
• Issue 5 Providing a Safety Net for Children
• Issue 6 Child Care
• Other Issues

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Issue 1 Purposes of TANF

• Status Quo
• Provide assistance to needy families
• End dependency via job preparation, work, and
  marriage
• Reduce out-of-wedlock pregnancies
• Encourage formation of two-parent families
• Liberal Argument
• Too much emphasis on reducing caseloads not
  enough on reducing poverty
• Conservative Argument
• Even more emphasis needed on family formation
• Options
• A rewrite of purposes reflecting political
  environment in 2002
• An attempt to establish performance measures
  linked to purposes
• Re-evaluation of rewards and penalties for
  performance (e.g. caseload reduction credit)

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Issue 2 Funding of TANF

• Status Quo
• Funding of 16.5 billion per year expiring in
  2002
• States required to spend 75-80 of FY 1994 level
• Arguments for Reduced Funding
• Current funding levels set when caseloads higher
• Many states not using full block grant
  allocations
• Counter Arguments
• Reneges on bargain made earlier with states
• Funding declining in real terms
• No longer adjusts automatically during recessions
• Funds needed to provide help to hard-to-employ
  and working poor
• Options
• Lower funding
• Adjust block grant for inflation
• Add adjustment for economic conditions

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Issue 3 Time Limits

• Status Quo
• Five year lifetime limit on use of federal funds
  for most recipients
• 20 of caseload exempted from this limit
• Arguments for Retaining
• Time limits needed to send clear national message
  about changed nature of welfare system
• Shorter time limits implemented by some states do
  not appear to have had any major consequences
• States can use their own funds to keep people on
  rolls longer
• Continued---

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Issue 3 Time Limits

• Counter Arguments
• Five year limit begins to kick-in Fall 2001 have
  not yet seen full effects
• May create undue hardship, especially if it takes
  effect in the middle of a recession
• Time limits less important than sanctions in
  motivating mothers to work
• Large number of families are floundering because
  of severe barriers to work
• 20 exemption is insufficient
• Options
• Eliminate federal time limit but allow states to
  establish own limits
• Stop the clock for mothers who work a minimum
  number of hours while receiving welfare
• Liberalize exemptions from time limit
• Allow earnback of time for those off welfare

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Issue 4 Family Formation

• Status Quo
• Emphasized in purposes of law
• Law contains numerous small carrots but few big
  sticks for discouraging childbearing outside
  marriage
• Family caps and denial of benefits to minor
  mothers permitted
• Conservative Arguments
• Despite laws emphasis on this goal, states have
  emphasized work and largely ignored this critical
  area
• Illegitimacy is still a big problem
• Liberal Arguments
• Far less public consensus about values here
• We dont know how to promote childbearing within
  marriage
• Emphasis should be on assisting all family types
  equally
• Continued---

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Issue 4 Family Formation

• Options
• Reduce the marriage penalty in the EITC (as part
  of a tax bill)
• Provide bonuses to those that have children
  within marriage
• Enact legislation that assists fathers
• Provide more funding for teen pregnancy
  prevention (e.g., abstinence education, family
  planning, media campaigns, after-school programs)
• Tie the illegitimacy bonus in current law more
  closely to state efforts
• Experiment with complete elimination of welfare
  benefits for young unwed mothers

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Issue 5 Providing a Safety Net for Children

• Status Quo
• No individual entitlement to welfare
• Food stamps and Medicaid only safety net
• Liberal Arguments
• Too little attention has been paid to the impact
  of welfare reform on children
• Children likely to be harmed by removal of safety
  net
• Conservative Arguments
• Safety net has encouraged out-of-wedlock
  childbearing
• Children benefit from having parents who model
  mainstream behaviors
• No evidence of significant harm so far
• Child poverty has declined since 1993
• Continued---

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Issue 5 Providing a Safety Net for Children

• Options
• Restore individual entitlement to welfare
• Provide more assistance to families with
  children, but primarily for those who are working
• Further reduce benefits, especially to minor
  mothers who have children out of wedlock
• Use state funds or Social Service Block Grant
  vouchers to assist needy children

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Issue 6 Child Care

• Status Quo
• Congress provided 4.5 billion in extra funding
  for child care over 6 years
• States can spend up to 30 of TANF dollars for
  child care
• States responsible for regulating quality
• Liberal Arguments
• If require mothers to work, must address what
  happens to kids
• HHS estimates only 10 of children eligible for
  child care block grant are served
• Much child care of poor quality
• Not enough available during nonstandard hours
• Conservative Arguments
• Funding of child care has increased dramatically
• No evidence of unmet demand for child care
• Little evidence that quality matters
• Continued---

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Issue 6 Child Care

• Options
• Provide more funding for child care
• More funding for Head Start and universal pre-K
• Allow states to spend a higher percentage of TANF
  money on child care

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Other Issues

• Allocation of Funds among the States
• Participation in food stamps and Medicaid
• Supports for Working Families (EITC, earnings
  disregards, health care, child care, minimum
  wages, etc.)
• Community Service Jobs or Work Programs
• Child Support Enforcement
• Education, Job Retention, and Advancement
• The Adequacy of the Safety Net during Recessions
• Benefits for Legal Immigrants
• Services for Floundering Families