Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002 1 Welfare Reform & Beyond PowerPoint Presentation The Brookings Institution Spring

Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002 1

Welfare Reform & Beyond PowerPoint Presentation

The Brookings InstitutionSpring 2002


Session 1Session 1Overview and History of Welfare ReformOverview and History of Welfare Reform


Poverty Rates for Children in the U.S. Have Been Higher than Those for Other Age Groups

0

5

10

15

20

25

30

35

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

Year

Pe

rce

nt

in P

ov

ert

y

65 years and over

Under 18 years

18 to 64 years

Source: U.S. Census Bureau

16.2

10.2

9.4


Two Views of PovertyTwo Views of Poverty• The poor are victims of their circumstances and do not have The poor are victims of their circumstances and do not have

opportunities to advanceopportunities to advance

• The poor are responsible for their circumstances and do not The poor are responsible for their circumstances and do not take advantage of available opportunitiestake advantage of available opportunities

• The emphasis of antipoverty policy in the U.S. has shifted The emphasis of antipoverty policy in the U.S. has shifted between these two viewsbetween these two views

• The Personal Responsibility and Work Opportunity The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 emphasizes the second viewReconciliation Act of 1996 emphasizes the second view


The Measurement of PovertyThe Measurement of Poverty• The Census Bureau uses a set of money income thresholds that vary by The Census Bureau uses a set of money income thresholds that vary by

family size and composition to determine who is poorfamily size and composition to determine who is poor

• The poverty thresholds do not vary geographically; they are updated The poverty thresholds do not vary geographically; they are updated annually for inflation but they have not kept pace with rising real annually for inflation but they have not kept pace with rising real incomesincomes

• In determining who’s poor the Census Bureau counts money income In determining who’s poor the Census Bureau counts money income before taxes and does not include non-cash benefits, the EITC, or work-before taxes and does not include non-cash benefits, the EITC, or work-related expenses. The National Academy of Sciences has recommended related expenses. The National Academy of Sciences has recommended changes to deal with these and other issues. The thresholds in 2000 changes to deal with these and other issues. The thresholds in 2000 were:were:

1-person under 651-person under 65 $8,959$8,959

3-person family (adult and 2 children)3-person family (adult and 2 children) 13,874 13,874

4-person family (adult and 3 children)4-person family (adult and 3 children) 17,524 17,524



Countries that Spend More on Social Welfare (as percent of GDP) Have Lower Child Poverty Rates

Cash and noncash social expenditures exclude health, education, and social services, but include all forms of cash benefits and near-cash housing subsidies, active labor market program subsidies, and other contingent cash and near-cash benefits. Nonelderly benefits include only those accruing to household heads under age 65.

Source: Institute for Research on Poverty (IRP), University of Wisconsin-Madison


Work Pays Better than Welfare

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

$20,000

$0 Full-time, minimum-wage job Full-time job at $7.50 an hour

Annual Family Earnings (2000 dollars)

An

nu

al F

amily

In

com

e (2

000

dol

lars

)

2000 Poverty Threshold for a Single-Parent, Two-Child Family

TANF

Net Earnings Net Earnings

Food Stamps

Food Stamps

Food Stamps

EITC

EITC

Source: Sawhill/Thomas Brookings (2002)

Government Benefits Lift Children Out of PovertyGovernment Benefits Lift Children Out of Poverty

Source: Center on Budget and Policy Priorities; U.S. Census Bureau


0%

10%

20%

30%

40%

50%

60%

70%

80%

Female head, no worker Female head, with worker Married couples

Pov

erty

Rat

e (2

000)

70%

21%

6%

Poverty is Related to Work and Family StructurePoverty is Related to Work and Family Structure



Political Background to the 1996 Political Background to the 1996 Welfare Reform LegislationWelfare Reform Legislation


Overview of the Aid to Families with Overview of the Aid to Families with Dependent Children Program (AFDC)Dependent Children Program (AFDC)

• Established in 1935 as part of the Social Security ActEstablished in 1935 as part of the Social Security Act

• Shared cost program between federal government and statesShared cost program between federal government and states

• Originally intended primarily for widows, AFDC increasingly Originally intended primarily for widows, AFDC increasingly served never-married mothersserved never-married mothers

• States had discretion primarily over setting income eligibility States had discretion primarily over setting income eligibility limits and benefit levelslimits and benefit levels

• Activity requirements were weak and generally focused on Activity requirements were weak and generally focused on education and training rather than workeducation and training rather than work

• States were not allowed to time limit beneficiariesStates were not allowed to time limit beneficiaries

• Beginning in early 1990s, states increasingly used waivers to Beginning in early 1990s, states increasingly used waivers to try new approaches to reducing welfare dependencetry new approaches to reducing welfare dependence


Characteristics of the AFDC CaseloadCharacteristics of the AFDC Caseload

• Majority are racial and ethnic minoritiesMajority are racial and ethnic minorities

• 4 percent of mothers in 1995 worked full-time, 4 percent of mothers in 1995 worked full-time, and another 5 percent worked part-timeand another 5 percent worked part-time

• Total expected duration of all Total expected duration of all welfare spellswelfare spells was was 13 years; more than 76 percent were expected to 13 years; more than 76 percent were expected to stay on for more than 5 years totalstay on for more than 5 years total


Efforts at ComprehensiveEfforts at Comprehensive Welfare Reform Usually Failed Welfare Reform Usually Failed

• Nixon’s Family Assistance Plan (1969-1972)--Nixon’s Family Assistance Plan (1969-1972)--failed to pass Congressfailed to pass Congress

• Carter’s Program for Better Jobs and Incomes Carter’s Program for Better Jobs and Incomes (1977)--failed to pass Congress(1977)--failed to pass Congress

• Reagan’s 1981 Budget Act changes--moderate Reagan’s 1981 Budget Act changes--moderate cutbackscutbacks

• Reagan’s New Federalism (1982)--never Reagan’s New Federalism (1982)--never introduced in Congressintroduced in Congress

• Family Support Act (1988)--incremental reformFamily Support Act (1988)--incremental reform


Why Did Welfare Reform Legislation Why Did Welfare Reform Legislation Pass in 1996 After Many Previous FailuresPass in 1996 After Many Previous Failures

• Dramatic caseload increases after 1988 fostered perception Dramatic caseload increases after 1988 fostered perception that program was “out of control”that program was “out of control”

• Public opinionPublic opinion– Public opinion had not united around all of the Public opinion had not united around all of the

proposals in PRWORA: public had shifted to proposals in PRWORA: public had shifted to overwhelming support for work requirements for overwhelming support for work requirements for custodial parents, while remaining more divided on custodial parents, while remaining more divided on “hard time limits” and family caps“hard time limits” and family caps

– Republicans in Congress were not trusted more than Republicans in Congress were not trusted more than President Clinton on welfare reform issues in 1996President Clinton on welfare reform issues in 1996

– The AFDC program was very unpopular because seen The AFDC program was very unpopular because seen as anti-work and anti-family. The public was willing to as anti-work and anti-family. The public was willing to accept almost any alternative to the status quoaccept almost any alternative to the status quo


• Social Science knowledge and evaluation studiesSocial Science knowledge and evaluation studies– increased policymaker concern about intergenerational increased policymaker concern about intergenerational

transmission of welfare receipt and length of welfare transmission of welfare receipt and length of welfare spellsspells

– gave support to “work first” approachesgave support to “work first” approaches

• Budgetary considerations: Republicans needed to find Budgetary considerations: Republicans needed to find budget savings (especially from cuts in Food Stamps and budget savings (especially from cuts in Food Stamps and benefits to legal immigrants) in order to finance tax cut and benefits to legal immigrants) in order to finance tax cut and budget balancing promises in the Contract with Americabudget balancing promises in the Contract with America

• State experiments under waivers increased confidence in State experiments under waivers increased confidence in innovative capacity of statesinnovative capacity of states

Why Did Welfare Reform Legislation Why Did Welfare Reform Legislation Pass in 1996 After Many Previous Failures Cont.Pass in 1996 After Many Previous Failures Cont.


• Critical role for political bargaining:Critical role for political bargaining:

– Bill Clinton promised to “end welfare as we know it” Bill Clinton promised to “end welfare as we know it”

– Republicans in Congress committed to welfare reform Republicans in Congress committed to welfare reform by Contract with Americaby Contract with America

– Moderate Democrats in Congress followed President Moderate Democrats in Congress followed President Clinton to the right in order to avoid being seen as more Clinton to the right in order to avoid being seen as more liberal than President Clinton on welfare issuesliberal than President Clinton on welfare issues

Why Did Welfare Reform Legislation Why Did Welfare Reform Legislation Pass in 1996 After Many Previous Failures Cont.Pass in 1996 After Many Previous Failures Cont.


Session 2Session 2A Primer on the Major ProgramsA Primer on the Major Programs


Overview of the 1996 Welfare Reform LawOverview of the 1996 Welfare Reform Law

• Temporary Assistance for Needy FamiliesTemporary Assistance for Needy Families

• Non-marital BirthsNon-marital Births

• Supplemental Security Income for ChildrenSupplemental Security Income for Children

• Child Support EnforcementChild Support Enforcement

• Welfare for Non-citizensWelfare for Non-citizens

• Child CareChild Care

• Food StampsFood Stamps


1. 1. End Cash EntitlementEnd Cash Entitlement

2. Block Grant Funding2. Block Grant Funding

3. Work Requirements3. Work Requirements

4. Sanctions4. Sanctions

5. 5-Year Time Limit5. 5-Year Time Limit

Five Components of TANFFive Components of TANF


1. 1. Provide assistance to needy families with Provide assistance to needy families with childrenchildren

2. End welfare dependency by promoting job 2. End welfare dependency by promoting job preparation, work and marriagepreparation, work and marriage

3. Prevent non-marital pregnancies3. Prevent non-marital pregnancies

4. Encourage formation and maintenance of 4. Encourage formation and maintenance of two-parent familiestwo-parent families

Purposes of TANFPurposes of TANF


Provisions in Welfare Reform Provisions in Welfare Reform Law Designed to Reduce Non-marital BirthsLaw Designed to Reduce Non-marital Births

• Congressional findings on the negative effects of non-marital birthsCongressional findings on the negative effects of non-marital births• Three of four TANF purposes address family formationThree of four TANF purposes address family formation• Performance bonuses tied to purposes of lawPerformance bonuses tied to purposes of law• Illegitimacy reduction bonusIllegitimacy reduction bonus• Require teens to attend schoolRequire teens to attend school• Require teens to live at home or other supervised settingRequire teens to live at home or other supervised setting• Abstinence educationAbstinence education• Child support enforcementChild support enforcement• Paternity establishmentPaternity establishment• National goals to prevent teen pregnancyNational goals to prevent teen pregnancy• States establish numerical goals for reducing non-marital birthsStates establish numerical goals for reducing non-marital births• Annual ranking of states on non-marital pregnancy ratios by HHSAnnual ranking of states on non-marital pregnancy ratios by HHS• Allow family capAllow family cap• Allow reduction in cash benefits for non-marital birthsAllow reduction in cash benefits for non-marital births


Elements of the Work Support SystemElements of the Work Support System• Earned Income Tax Credit (EITC)Earned Income Tax Credit (EITC)

• Food Stamps and Child NutritionFood Stamps and Child Nutrition

• Medicaid and SCHIPMedicaid and SCHIP

• Child CareChild Care

• HousingHousing

• Child Tax CreditChild Tax Credit

• Child Support EnforcementChild Support Enforcement

• Workforce Development & Job Advancement ServicesWorkforce Development & Job Advancement Services

• State Income SupplementsState Income Supplements


Support for Working Families Support for Working Families Increases Dramatically, 1984-1999Increases Dramatically, 1984-1999

0

10

20

30

40

50

Bill

ions

of

1999

Dol

lars

Child Care

SCHIP

Child Tax Credit

Medicaid

EITC

Source: Congressional Budget Office

5.6

51.7

Spending in 1999 under: 1984 Law 1999 Law


Session 3Session 3How States Have RespondedHow States Have Responded


Under TANF States Have Discretion To:Under TANF States Have Discretion To:

• Set eligibility limits and benefit levels for cash Set eligibility limits and benefit levels for cash benefits (as before)benefits (as before)

• Define who receives various benefits and servicesDefine who receives various benefits and services• Set income supplements for working familiesSet income supplements for working families• Offer other “carrots” Offer other “carrots” • Set stricter “sticks” than those in federal law Set stricter “sticks” than those in federal law • Spend funds on a variety of services other than Spend funds on a variety of services other than

cash benefitscash benefits• Save block grant funds for economic downturnsSave block grant funds for economic downturns


States Have Very Different Resources Under States Have Very Different Resources Under the TANF Block Grantthe TANF Block Grant


Most States Have Allowed Maximum Benefit Most States Have Allowed Maximum Benefit Levels to Continue to Decline with InflationLevels to Continue to Decline with Inflation

Between 1994 and 2000 maximum benefits Between 1994 and 2000 maximum benefits for a family of 3:for a family of 3:

• Declined more than inflation in 7 statesDeclined more than inflation in 7 states• Declined equal to inflation in 29 statesDeclined equal to inflation in 29 states• Declined less than inflation in 12 statesDeclined less than inflation in 12 states• Increased in real terms in 3 statesIncreased in real terms in 3 states


Many States Have Enacted Earnings Supplementation Many States Have Enacted Earnings Supplementation Policies to Help Low-income Working FamiliesPolicies to Help Low-income Working Families

• 47 states have changed earnings disregard policies47 states have changed earnings disregard policies• 16 states have adopted state earned income credits16 states have adopted state earned income credits

And enacted other policies to help them work:And enacted other policies to help them work:• All states adopted more generous auto asset policiesAll states adopted more generous auto asset policies• 44 states increased asset limits44 states increased asset limits• 40 states ended 100-hour work limit for two-parent families40 states ended 100-hour work limit for two-parent families• 11 extend Transitional Medicaid eligibility beyond 12 11 extend Transitional Medicaid eligibility beyond 12

monthsmonths


TANF and State EITC Policies do not Provide Substantial Earnings TANF and State EITC Policies do not Provide Substantial Earnings Supplementation to Many Low-income Working FamiliesSupplementation to Many Low-income Working Families

In the 13th month of benefit receipt:In the 13th month of benefit receipt:• 4 states would give a family of 3 working 20 hours per week 4 states would give a family of 3 working 20 hours per week

at minimum wage nothing, 21 less than $200 per month, at minimum wage nothing, 21 less than $200 per month, and 26 more than $200 per monthand 26 more than $200 per month

• 22 states would give a family of 3 working 35 hours per 22 states would give a family of 3 working 35 hours per week at minimum wage nothing, 21 less than $200 per week at minimum wage nothing, 21 less than $200 per month, and 8 more than $200 per monthmonth, and 8 more than $200 per month

• 42 states would give a family of 3 working 35 hours per 42 states would give a family of 3 working 35 hours per week at $8.00 per hour nothing, 7 less than $100 per month, week at $8.00 per hour nothing, 7 less than $100 per month, and 2 more than $100 per monthand 2 more than $100 per month

All figures are for 2000All figures are for 2000


Many States Have Enacted “Sticks” to Encourage Many States Have Enacted “Sticks” to Encourage Work Stronger than Those Required by TANFWork Stronger than Those Required by TANF

Initial Work Requirements:Initial Work Requirements:• 43 states require work activities in less than 24 months43 states require work activities in less than 24 months

• 20 states do not exempt caregiver of youngest child of 6 20 states do not exempt caregiver of youngest child of 6

months or oldermonths or older Sanctions:Sanctions:• 15 states have 100% sanction for first-time violators15 states have 100% sanction for first-time violators• 21 states have worst case sanction of 100% for at least 21 states have worst case sanction of 100% for at least

three monthsthree months• 22 states apply sanctions to food stamps or Medicaid22 states apply sanctions to food stamps or Medicaid

Time Limits:Time Limits:• 6 states have lifetime time limits less than 60 months6 states have lifetime time limits less than 60 months• 14 states have intermittent time limits less than 60 months14 states have intermittent time limits less than 60 months


States are Responding to States are Responding to Time Limits in Very Different WaysTime Limits in Very Different Ways

• A few states (e.g., MI, NY) will pay for those A few states (e.g., MI, NY) will pay for those hitting time limits out of state fundshitting time limits out of state funds

• Some states will use state funds to pay benefits Some states will use state funds to pay benefits to children in families hitting time limitsto children in families hitting time limits

• Some states (e.g., WA) will exempt most families Some states (e.g., WA) will exempt most families hitting caseloadshitting caseloads

• Ohio uses outreach to ensure that families hitting Ohio uses outreach to ensure that families hitting time limits retained eligibility for Food Stamps time limits retained eligibility for Food Stamps and Medicaidand Medicaid


But Many States Have Also Been More Reluctant to But Many States Have Also Been More Reluctant to Impose Strong “Sticks” to Discourage Non-marital BirthsImpose Strong “Sticks” to Discourage Non-marital Births

23 states adopted family caps, all by 199723 states adopted family caps, all by 1997 No states adopted teen mother exclusionsNo states adopted teen mother exclusions


What Factors Explain OverallWhat Factors Explain Overall Patterns of State Policy Choices? Patterns of State Policy Choices?

• Little evidence of race to the bottomLittle evidence of race to the bottom• Some evidence of emulation of best practicesSome evidence of emulation of best practices• For “sticks” policies, political factors are For “sticks” policies, political factors are

associated with more conservative policy choicesassociated with more conservative policy choices• States that receive larger TANF grants per poor States that receive larger TANF grants per poor

person are likely to have more generous income person are likely to have more generous income supplementation policiessupplementation policies


States Have Shifted their Funding States Have Shifted their Funding Priorities Away from Cash AssistancePriorities Away from Cash Assistance

.

1995 2000

Cash:$21.973%

Admin:$3.411%

JOBS:$1.65%

Emergency Assistance:

$3.211%

Cash:$11.550%

Admin:$2.411%

Work activities:$2.310%

Child care:$2.310%

Other:$4.319%

$ in billions$31.1

$22.8

Source: Congressional Research Servive


Proportion of TANF Funds Proportion of TANF Funds That Were Left Unspent, 1997-2001That Were Left Unspent, 1997-2001

Source: Center on Budget and Policy Priorities


Implications for TANF ReauthorizationImplications for TANF Reauthorization

• Absence of “race to the bottom” weakens case Absence of “race to the bottom” weakens case for increased federal control of TANF choices-- for increased federal control of TANF choices-- but things may change during a recessionbut things may change during a recession

• States may respond to time limits in very States may respond to time limits in very different waysdifferent ways

• Poorer states need more resources to carry out Poorer states need more resources to carry out

more effective work support policiesmore effective work support policies • States will need more resources to carry out both States will need more resources to carry out both

safety net and work support policies during a safety net and work support policies during a recessionrecession


Session 4Session 4Welfare Reform Results to Date I: Welfare Reform Results to Date I:

CaseloadsCaseloads


0

1

2

3

4

5

6

19

60

19

63

19

65

19

67

19

69

19

71

19

73

19

75

19

77

19

79

19

81

19

83

19

85

19

87

19

89

19

91

19

93

19

95

19

97

19

99

20

01

Year

Mil

lio

ns

of

Fam

ilie

sAFDC/TANF Caseload, 1960-2001AFDC/TANF Caseload, 1960-2001

*Based on nine month average (October 2000-June 2001); Recessions are noted by shaded area. Source: Congressional Research Service and U.S. Department of Health and Human Services

2.103*

TANF Caseload, 2001

2

2.05

2.1

2.15

2.2

O N D J F M A M J J A S

Month

Mil

lion

s of

Fam

ilie

s


Declines in Overall TANF Caseloads Declines in Overall TANF Caseloads Since the Early 1990s Resulted FromSince the Early 1990s Resulted From

• Hot EconomyHot Economy

• Welfare ReformWelfare Reform

• Policies to Make Work PayPolicies to Make Work Pay

Source: Rebecca Blank, September 2001


Declines in Caseloads Have Varied Declines in Caseloads Have Varied Dramatically Across StatesDramatically Across States


Differences in Federal Food Stamp Payments Do Not Differences in Federal Food Stamp Payments Do Not Compensate for TANF Funding DifferencesCompensate for TANF Funding Differences


Differences in States’ Rates of TANF Differences in States’ Rates of TANF Caseload Decline Result From:Caseload Decline Result From:

• State policy choicesState policy choices– Strictness of work requirements, especiallyStrictness of work requirements, especially

• Immediate work requirementsImmediate work requirements• Strict policies on exempting mothers of Strict policies on exempting mothers of

young childrenyoung children– Strict sanctions policiesStrict sanctions policies– Generosity of benefits and earnings disregardsGenerosity of benefits and earnings disregards

• State economic conditions (e.g., unemployment State economic conditions (e.g., unemployment rates)rates)


Caseload Change Has Been Inconsistent Caseload Change Has Been Inconsistent Across States Over the Past YearAcross States Over the Past Year

Source: Center for Law and Social Policy


The TANF Caseload is Changing Over TimeThe TANF Caseload is Changing Over Time

• increasing share of of cases are “child only”increasing share of of cases are “child only”• increasing share of cases live in large citiesincreasing share of cases live in large cities

But:But:• national caseload does not show significant national caseload does not show significant

change in characteristics of those remaining on change in characteristics of those remaining on the rollsthe rolls


0

5000

10000

15000

20000

25000

3000019

69

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

Year

Num

ber

of P

arti

cipa

nts

(Tho

usan

ds)

Monthly Food Stamp Participation Rate, 2001

18440

16000165001700017500180001850019000

J F M A M J J A S O

Months

Par

tici

pant

s (T

hous

ands

)

Note: Recessions are noted by shaded area;* Participation for January-October, 2001

18440 *

Annual Average Food Stamp Participation, 1969-2001Annual Average Food Stamp Participation, 1969-2001

Source: U.S. Department of Agriculture


Participation Rates in the Food Participation Rates in the Food Stamp Program Have Fallen DramaticallyStamp Program Have Fallen Dramatically

67.7

89.5

0

10

20

30

40

50

60

70

80

90

100

1994 1995 1996 1997 1998 1999

Year

Par

ticip

atio

n R

ate

of A

ll E

ligib

le C

hild

ren



Food Stamp Participation Rates Have Fallen BecauseFood Stamp Participation Rates Have Fallen Because::

• Low-income working families:– leave TANF without informing welfare office– unaware of eligibility– have trouble with office visits– are not willing to put up with “hassle

• State welfare offices:– “divert” families– erect barriers to avoid federal sanctions– do not follow up with TANF leavers

• Federal policies, especially quality control system


0

100

200

300

400

500

600

700

Year

Ave

rage

Nu

mb

er o

f C

laim

s (T

hou

san

ds)

Unemployment Insurance Claims, 2001

454

0

200

400

600

J F M A M J J A S O N

Months

Mo

nth

ly A

ver

age

(Th

ou

san

ds)

367 *

Annual Average Number of Unemployment Annual Average Number of Unemployment Insurance Claims, 1967-2001Insurance Claims, 1967-2001

Source: U.S. Department of Labor

Note: Recessions are noted by shaded area; *Average for January-November, 2001

Prepared by The Brookings Welfare Reform & Beyond Initiative, Spring 2002

0

2

4

6

8

10

1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

Year

Ann

ual A

vera

ge P

erce

ntag

e

Note: Recessions are noted by shaded area, *Average for January-February, 2002

Annual Average Unemployment Rate, 1961-2002Annual Average Unemployment Rate, 1961-2002

Source: Bureau of Labor Statistics

5.55*5.55*


TANF Leavers Who Lose Their Jobs Often Do Not TANF Leavers Who Lose Their Jobs Often Do Not Qualify for Unemployment Insurance Because:Qualify for Unemployment Insurance Because:

• they leave work “voluntarily” because of child they leave work “voluntarily” because of child care problems, illness, etc.care problems, illness, etc.

• they have not worked enough or have insufficient they have not worked enough or have insufficient earnings to qualify (most recent quarter issue)earnings to qualify (most recent quarter issue)

• they are not available for full-time workthey are not available for full-time work


Small Percent of Eligible Families Small Percent of Eligible Families Receive Child Care SubsidiesReceive Child Care Subsidies

• Studies show Child Care subsidies are received by only 12% Studies show Child Care subsidies are received by only 12% of families who meet federal income eligibility guidelines of families who meet federal income eligibility guidelines and by less than half of those leaving welfare and by less than half of those leaving welfare

• Many low-income families have access to unpaid or informal Many low-income families have access to unpaid or informal carecare

• States ration care by: States ration care by: – Setting eligibility below the federally-permitted 85% of Setting eligibility below the federally-permitted 85% of

state median incomestate median income– Establishing administrative processes and waiting lists Establishing administrative processes and waiting lists

that discourage applicationsthat discourage applications– Co-payment requirements or limited reimbursement of Co-payment requirements or limited reimbursement of

providersproviders

Source: U.S. Department of Health and Human Services


Session 5Session 5Welfare Reform Results to Date II: Welfare Reform Results to Date II:

Economic Well-BeingEconomic Well-Being


Percentage of Married, Single,Percentage of Married, Single,and Never-Married Mothers Working, and Never-Married Mothers Working,

1985-20001985-2000

65.8

39.3

35

40

45

50

55

60

65

70

75

80

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

Year

Per

cen

tage

of

Mot

her

s W

ork

ing

Married Mothers

Single Mothers

Never Married

Source: Gary Burtless, The Brookings Institution, 2001


0

1

2

3

4

5

6

7

8

9

Decem

ber 2

000

Janu

ary 2

001

Febru

ary 2

001

Mar

ch 20

01

April 2

001

May

2001

June

2001

July

2001

Augus

t 200

1

Septe

mber 2

001

Octobe

r 200

1

Novem

ber 2

001

Decem

ber 2

001

Janu

ary 2

002

Unemployment Rate Among Women who Maintain Families

Overall Unemployment Rate

Overall Unemployment Rate Vs. Rate Among Overall Unemployment Rate Vs. Rate Among Women who Maintain FamiliesWomen who Maintain Families

Source: Bureau of Labor Statistics


State Leavers Studies: State Leavers Studies: Employed After Leaving Welfare Employed After Leaving Welfare

56.8

74.7

0

10

20

30

40

50

60

70

80

Employed at Interview Ever Employed

Pe

rce

nt

of

We

lfa

re L

ea

ve

rs

Source: Congressional Research Service


$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

$20,000

$0 Full-time, minimum-wage job Full-time job at $7.50 an hour

Annual Family Earnings (2000 dollars)

Ann

ua

l F

am

ily I

nco

me (

200

0 d

ollars

) 2000 Poverty Threshold for a Single-Parent, Two-Child Family

TANF

Net Earnings Net Earnings

Food Stamps

Food Stamps

Food Stamps

EITC

EITC

Work Pays Better than WelfareWork Pays Better than Welfare

Source: Isabel Sawhill and Adam Thomas, Brookings Institution, 2001


395 495 582 570 598 740 888

1,3771,608 1,774 1,906 1,890 1,998

2,500

3,148

4,448

4,6594,758 4,121 3,809 3,681

3,380

3,298

1,068

1,1581,196

1,3111,333 1,373

1,457

1,533

216

1993 1994 1995 1996 1997 1998 1999 2000

Year

Inc

om

e

Other

Means-tested

Earnings

EITC

6,941

7,6908,080

7,7597,447 7,480

7,866

8,597

Family Income by Source for Female Heads Family Income by Source for Female Heads with Children (Bottom Fifth), 1993-2000with Children (Bottom Fifth), 1993-2000

Source: U.S. Census BureauNote: Components do not equal total because taxes are not shown


1,121 1,349 1,421 1,615 1,942 2,040 2,084

4,9795,708

6,898 6,6757,069

8,6719,931

11,710

6,477

6,415

5,678 5,605 4,901

4,080

3,289

2,636

1,927

1,919

2,195 2,089 2,433

2,2002,212

2,328

701

1993 1994 1995 1996 1997 1998 1999 2000Year

Inco

me

Other

Means-tested

Earnings

EITC

13,653

14,649

15,47615,154

15,35916,126

16,567

17,631


Family Income by Source for Female Heads Family Income by Source for Female Heads with Children (Second Fifth), 1993-2000with Children (Second Fifth), 1993-2000

Note: Components do not equal total because taxes are not shown


Child Poverty Rates Have Fallen Since 1993Child Poverty Rates Have Fallen Since 1993

0

5

10

15

20

25

30

Year

Per

cen

t in

Po

vert

y

Percent in Poverty, 1960-2000

Percent in Poverty by Broader Definition, 1978-2000


1996: TANF Enacted

20.5%

12.2%

16.2%

9.6%


Measures of Food Insecurity Measures of Food Insecurity Have Not Increased for Children in HouseholdsHave Not Increased for Children in Households

14.9

17.4

3.7

5.8

0

2

4

6

8

10

12

14

16

18

20

1995 1996 1997 1998 1999

Year

Per

cen

t Percent of Food Insecure without Hunger

Percent of Food Insecure with Hunger



Child Victimization Rates, 1990-1999Child Victimization Rates, 1990-1999

11.813.4

0

5

10

15

20

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

Year

Vic

tim

izat

ion

Per

Tho

usan

d

Source: Congressional Research Service


Other Important Research on ImpactsOther Important Research on Impacts

• RAND Study Synthesizing Available Academic ResearchRAND Study Synthesizing Available Academic Research– Positive impacts on caseload, employment, earnings, poverty, and family incomePositive impacts on caseload, employment, earnings, poverty, and family income– Negative impacts on the use of Medicaid and food stampsNegative impacts on the use of Medicaid and food stamps– Uncertain but weakly positive effects on marriage and fertilityUncertain but weakly positive effects on marriage and fertility

• MDRC Studies of Adult Outcomes Under State WaiversMDRC Studies of Adult Outcomes Under State Waivers– Work requirements increase employment and earnings but not incomeWork requirements increase employment and earnings but not income– Work requirements combined with earnings supplements do increase incomeWork requirements combined with earnings supplements do increase income

• MDRC Studies of Child Outcomes Under State WaiversMDRC Studies of Child Outcomes Under State Waivers– No adverse impacts from work requirementsNo adverse impacts from work requirements– Positive impacts when work requirements combined with earnings supplements for Positive impacts when work requirements combined with earnings supplements for

school aged kidsschool aged kids– Some evidence of negative impacts for adolescentsSome evidence of negative impacts for adolescents


Session 6Session 6Welfare Reform Results to Date III: Welfare Reform Results to Date III:

Family FormationFamily Formation



• Reducing Teen Pregnancy and ChildbearingReducing Teen Pregnancy and Childbearing

• Reducing Non-marital Childbearing Among AdultsReducing Non-marital Childbearing Among Adults

• Encouraging Unmarried Parents to Get MarriedEncouraging Unmarried Parents to Get Married

• Helping Married Parents Stay MarriedHelping Married Parents Stay Married

• Ensuring that Non-custodial Parents Fulfill their Ensuring that Non-custodial Parents Fulfill their ResponsibilitiesResponsibilities


Poverty Rate for Children in Poverty Rate for Children in Female-Headed and Married-Couple Families, 1974-2000Female-Headed and Married-Couple Families, 1974-2000

0

5

10

15

20

25

30

35

40

45

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

Year

Per

cen

t in

Po

vert

y

Female-Headed

Married


27.9

4.7

36.4

5.3


The Impact of Changes in Family The Impact of Changes in Family Structure on Child Poverty RatesStructure on Child Poverty Rates

14.9%

0%

5%

10%

15%

20%

25%

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

Actual Child Poverty Rate

Child Poverty Rate if no change in the percent offemale-headed families

18.3

13.9

Source: Isabel Sawhill and Adam Thomas, Brookings


Teen Birthrate, 1980-2000Teen Birthrate, 1980-2000

53

62.1

48.5

0

10

20

30

40

50

6019

80

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

Year

Rat

e pe

r 1,

000

Wom

en 1

5-19

Source: National Center for Health Statistics


What Has Contributed to the Decline in What Has Contributed to the Decline in Teen Pregnancy and Birth Rates?Teen Pregnancy and Birth Rates?

• New or more effective efforts to prevent New or more effective efforts to prevent teen pregnancyteen pregnancy

• New messages associated with welfare New messages associated with welfare reformreform

• More conservative attitudesMore conservative attitudes• Fear of AIDS and other STDsFear of AIDS and other STDs• New forms of contraceptionNew forms of contraception


What Do We Know About Effective What Do We Know About Effective Teen Pregnancy Prevention Efforts?Teen Pregnancy Prevention Efforts?

• Two different multi-site programs with rigorous Two different multi-site programs with rigorous evaluation reduced pregnancies by one half evaluation reduced pregnancies by one half

• At least 4 different sex education curricula have At least 4 different sex education curricula have been carefully evaluated and found to be effectivebeen carefully evaluated and found to be effective

• Programs that teach about contraceptives do not Programs that teach about contraceptives do not increase sexual activity increase sexual activity

• Jury still out on abstinence educationJury still out on abstinence education• Media campaigns are a promising new approachMedia campaigns are a promising new approach

Source: National Campaign to Prevent Teen Pregnancy


Number of Births, Birth Rate, and Percent of BirthsNumber of Births, Birth Rate, and Percent of Birthsto Unmarried Women, 1940-2000to Unmarried Women, 1940-2000

Source: National Center for Health Statistics

0

200

400

600

800

1000

1200

1400

1940 1950 1960 1970 1980 1990 2000Year

Nu

mb

er

in 1

00

0's

0

10

20

30

40

50

60

70

Ra

te o

r P

erc

en

t

Number of Births (1000s)Birth Rate Per 1,000 Women 15-44Percent of Births to Unmarried Women

7.1

45.2

89.5

1345.9

3.79

33.2


Contribution of Teen Birth Rate to Contribution of Teen Birth Rate to Nonmarital Birth RatioNonmarital Birth Ratio

29%

30%

31%

32%

33%

34%

35%

Year

No

nm

ari

al B

irth

Rati

o

Nonmarital Ratio if no decline in teenbirth rateActual Nonmarital Birth Ratio

34.1%

33.0%

Source: National Center for Health Statistics, 2000 and 2001.


50%

55%

60%

65%

70%

75%

80%

85%

90%

Year

Per

cen

t o

f C

hil

dre

n


85.2

69.9

Percent of Children Living with Percent of Children Living with Two Natural, Step, or Adoptive ParentsTwo Natural, Step, or Adoptive Parents


Child Support Collections and Paternity Establishments Are UpChild Support Collections and Paternity Establishments Are Up

Source: U.S. Department of Health and Human Services

$1

$3

$5

$7

$9

$11

$13

$15

$17

1994 2000 1994 2000

Year

Ch

ild S

up

po

rt C

olle

cti

on

s in

Bill

ion

s

0

200

400

600

800

1,000

1,200

1,400

1,600

Pa

tern

ities

Es

tab

lish

ed

in

Th

ou

sa

nd

s

9.8

17.9

676

1,555


Session 7Session 7Issues for TANF Reauthorization I: Issues for TANF Reauthorization I:

Funding and Program GoalsFunding and Program Goals


Issue: Overall Level of TANF FundingIssue: Overall Level of TANF Funding

Options:• Maintain current funding level (TANF funding of

$16.5 billion per year; States required to spend 75-80% of FY 1994 level)

• Lower funding

• Adjust block grant for inflation

• Add adjustment mechanism for economic conditions


Issue: TANF Allocation FormulaIssue: TANF Allocation Formula

Options:Options:

• Do nothingDo nothing

• Restore expired supplemental grantRestore expired supplemental grant

• Gradually adjust funding formula to give greater Gradually adjust funding formula to give greater weight to number of poor children in a stateweight to number of poor children in a state

• Preserve grant levels for richer states, while Preserve grant levels for richer states, while adding funding for poorer states to bring them up adding funding for poorer states to bring them up to national median in per-poor-child allocationsto national median in per-poor-child allocations


Effect of Restoring Supplemental Effect of Restoring Supplemental Grant on State Funding DifferentialsGrant on State Funding Differentials

Note: Reinstated supplemental; total annual cost = $300 million


Effect of Adjusting TANF Grant forEffect of Adjusting TANF Grant for Inflation on State Funding Differentials*Inflation on State Funding Differentials*


Issue: TANF Funding and RecessionIssue: TANF Funding and Recession

Options:Options:

• Do nothingDo nothing

• Restore and improve contingency fund, and Restore and improve contingency fund, and change eligibility criteria to make it more change eligibility criteria to make it more accessible for statesaccessible for states

• Make TANF block grant explicitly counter-cyclical Make TANF block grant explicitly counter-cyclical (e.g., by tying it to the unemployment rate)(e.g., by tying it to the unemployment rate)

• Allow states to put TANF dollars in rainy day Allow states to put TANF dollars in rainy day fundsfunds


Issue: Goals of TANFIssue: Goals of TANF

Options:Options:• Do nothingDo nothing• Rewrite purposes to include poverty reductionRewrite purposes to include poverty reduction• Rewrite purposed to include child well-beingRewrite purposed to include child well-being• Rewrite purposes to give increased attention to Rewrite purposes to give increased attention to

marriage, responsible fatherhood, and/or teen marriage, responsible fatherhood, and/or teen pregnancy preventionpregnancy prevention

• Increase reporting on goals and outcomesIncrease reporting on goals and outcomes• Revise rewards and penalties for performanceRevise rewards and penalties for performance


Session 8Session 8Issues for TANF Reauthorization II: Issues for TANF Reauthorization II:



Issue: Teen PregnancyIssue: Teen PregnancyOptions:Options:• Do nothingDo nothing• New emphasis on reducing teen pregnancyNew emphasis on reducing teen pregnancy

– fund programs that workfund programs that work– establish a national clearinghouse on programs that workestablish a national clearinghouse on programs that work– make reducing teen pregnancy a purpose of the lawmake reducing teen pregnancy a purpose of the law

• Reauthorize abstinence educationReauthorize abstinence education– change funding levelchange funding level– give states more flexibility to define programgive states more flexibility to define program– allow spending on programs that include allow spending on programs that include informationinformation about about

birth controlbirth control• Tie the “illegitimacy bonus” in current law more closely to state Tie the “illegitimacy bonus” in current law more closely to state

effortsefforts• Experiment with complete elimination of welfare benefits for Experiment with complete elimination of welfare benefits for

young unwed mothersyoung unwed mothers


Options:Options:•Do nothing Do nothing •Require state plans toRequire state plans to

–describe activities to promote family formation and describe activities to promote family formation and

marriagemarriage–review state programs’ treatment of single vs. married review state programs’ treatment of single vs. married

parentsparents•Grants for promoting marriage and reducing out-of- Grants for promoting marriage and reducing out-of-

wedlock birthswedlock births•TANF set-aside for marriageTANF set-aside for marriage•Demonstration and evaluation fundDemonstration and evaluation fund

Issue: MarriageIssue: Marriage


Options:Options:• Do nothingDo nothing• Changes in child support enforcement, Changes in child support enforcement, including pass-throughincluding pass-through• Education, training, employment programsEducation, training, employment programs• Demonstration and evaluation fundDemonstration and evaluation fund

Issue: Responsible FatherhoodIssue: Responsible Fatherhood


Session 9Session 9Issues for TANF Reauthorization III: Issues for TANF Reauthorization III:

State Flexibility and Tribal TANFState Flexibility and Tribal TANF


How Much State Flexibility?How Much State Flexibility?

• Time Limits and SanctionsTime Limits and Sanctions

• Work Participation StandardsWork Participation Standards

• Job Retention and AdvancementJob Retention and Advancement

• Tribal TANFTribal TANF


Issue: Time LimitsIssue: Time Limits

Options:Options:• Do nothing: 5 year federal limit with 20% Do nothing: 5 year federal limit with 20%

exemptionexemption• End 5 year federal limit: let states decide End 5 year federal limit: let states decide • Stop clock or allow earn back of time for work or Stop clock or allow earn back of time for work or

other circumstancesother circumstances• Provide public jobs after time limitProvide public jobs after time limit• Modify 20% exemptionModify 20% exemption


Issue: SanctionsIssue: Sanctions

Options:Options:

• Do nothing: states must reduce or terminate Do nothing: states must reduce or terminate benefits for non-compliancebenefits for non-compliance

• Require full-family sanctions Require full-family sanctions

• Prohibit full-family sanctionsProhibit full-family sanctions

• Require pre/post-sanction review and Require pre/post-sanction review and servicesservices

• Ensure that sanctions can be curedEnsure that sanctions can be cured


Issue: Work Participation StandardsIssue: Work Participation StandardsOptions:Options:• No change: 50% of families in work activities 30 hours/week (90% for 2-No change: 50% of families in work activities 30 hours/week (90% for 2-

parent families). Limits on education and training. Caseload reduction parent families). Limits on education and training. Caseload reduction credit.credit.

• Raise work participation ratesRaise work participation rates• Increase number of required hoursIncrease number of required hours• End higher rate for two-parent families End higher rate for two-parent families • Allow more education, training, and treatmentAllow more education, training, and treatment• Let states define allowable activities Let states define allowable activities • Replace caseload reduction credit with employment creditReplace caseload reduction credit with employment credit• Require assessments or universal engagementRequire assessments or universal engagement• End state waiversEnd state waivers


Issue: Education, Training, Issue: Education, Training, Job Retention and AdvancementJob Retention and Advancement

Options:Options:• Do nothing: Some flexibility in current law; Do nothing: Some flexibility in current law;

bonus for job entry, retention, wage gainbonus for job entry, retention, wage gain• Strengthen performance goals and Strengthen performance goals and

incentivesincentives• Allow more education and training - alone or Allow more education and training - alone or

combined with workcombined with work • Fund research and demonstration projectsFund research and demonstration projects


Issue: Making Work Pay Issue: Making Work Pay and Supplementing Incomesand Supplementing Incomes

Options:Options:• Do nothingDo nothing• Raise the minimum wage and index it for inflation Raise the minimum wage and index it for inflation • Add a second tier to EITC and integrate with Child Tax CreditAdd a second tier to EITC and integrate with Child Tax Credit• Provide federal incentive for states to expand their EITCsProvide federal incentive for states to expand their EITCs• Encourage states to strengthen work supports by increasing TANF Encourage states to strengthen work supports by increasing TANF

fundingfunding• Improve application for food stamps and other non-cash benefits, Improve application for food stamps and other non-cash benefits,

provide incentives to increase accessprovide incentives to increase access• Expand Medicaid coverage to parentsExpand Medicaid coverage to parents• Increase funding for child careIncrease funding for child care


Issue: Tribal TANFIssue: Tribal TANFOptions:Options:• Do nothing: Tribes opt to run TANF; negotiate time Do nothing: Tribes opt to run TANF; negotiate time

limits/work requirements; define service limits/work requirements; define service areas/population. Funds transferred from state’s areas/population. Funds transferred from state’s federal block grant.federal block grant.

• Create separate federal tribal block grantCreate separate federal tribal block grant• Access to performance bonus and contingency fundAccess to performance bonus and contingency fund• Strengthen ‘equitable access’ for tribal members Strengthen ‘equitable access’ for tribal members

served by statesserved by states• Research, evaluation, technical assistanceResearch, evaluation, technical assistance• Promote economic developmentPromote economic development


Session 10Session 10Issues for TANF Reauthorization IV:Issues for TANF Reauthorization IV:

Work SupportsWork Supports


Work SupportsWork Supports

• Make Work Pay and Supplement Income

• Child Care

• Provide Safety Net for Unemployed


Existing Work SupportsExisting Work Supports

0

10

20

30

40

50

Bill

ions

of

1999

Dol

lars

Child Care

SCHIP

Child Tax Credit

Medicaid

EITC

Source: Congressional Budget Office

5.6

51.7

Spending in 1999 under: 1984 Law 1999 Law


Issue: Making Work Pay Issue: Making Work Pay and Supplementing Incomesand Supplementing Incomes

Options:Options:• Do nothingDo nothing• Raise the minimum wage and index it for inflation Raise the minimum wage and index it for inflation • Add a second tier to EITC and integrate with Child Tax CreditAdd a second tier to EITC and integrate with Child Tax Credit• Provide federal incentive for states to expand their EITCsProvide federal incentive for states to expand their EITCs• Encourage states to strengthen work supports by increasing TANF Encourage states to strengthen work supports by increasing TANF

fundingfunding• Improve application for food stamps and other non-cash benefitsImprove application for food stamps and other non-cash benefits• Expand Medicaid coverage to parentsExpand Medicaid coverage to parents• Increase funding for child careIncrease funding for child care


Issue: Child CareIssue: Child CareOptions:Options:• Do nothing; many new investments alreadyDo nothing; many new investments already• Provide more federal funding for child careProvide more federal funding for child care• More funding for Head Start and universal pre-KMore funding for Head Start and universal pre-K• Allow states to spend a higher percentage of TANF Allow states to spend a higher percentage of TANF

money on child caremoney on child care• Increase quality set asides within child care block Increase quality set asides within child care block

grantgrant


Issue: Providing a Safety Net for the UnemployedIssue: Providing a Safety Net for the Unemployed

Options:• Do nothing• Provide a contingency fund to pay for increase in

caseloads during recessions• Reform Unemployment Insurance• Encourage states to provide community service jobs


Session 11Session 11Issues for TANF Reauthorization V:Issues for TANF Reauthorization V:

Immigrant IssuesImmigrant Issues


4.9% 5.7%

14.8%19.9%

2.0% 3.9%7.7%

17.0%

-60%

-32%

-48%

-15%

TANF SSI Food Stamps Medicaid

1994

1999

'94-'99 Decrease(if significant)

Non-citizen Declines in Welfare Non-citizen Declines in Welfare Programs, 1994-1999Programs, 1994-1999

Source: Based on Urban Institute analyses of the 1995 and 2000 CPS Data


Issue: Non-citizensIssue: Non-citizensOptions:• Status Quo

– 1996 dividing line

– 5-year ban and permanent ban

– eligibility variations across programs

– exceptions for emergencies, education and training, etc.

– order of decline: SSI, food stamps, TANF, Medicaid

• Expand some or all benefits for pre-1996 entrants • Expand some or all benefits for post-1996 entrants

– food stamps restoration; about $.4 billion per year

– TANF; no federal cost, but unfunded mandate

– Medicaid; about $2 billion per year

– SSI; about $1-1.5 billion per year (without Medicaid)


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