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The Personal Responsibility and Work Opportunity Reconciliation Act of 1996
On August 22, President Clinton signed into law "The Personal
Responsibility and Work Opportunity Reconciliation Act of 1996," a
comprehensive bipartisan welfare reform plan that will dramatically change
the nation's welfare system into one that requires work in exchange for time-
limited assistance. The bill contains strong work requirements, a
performance bonus to reward states for moving welfare recipients into jobs,
state maintenance of effort requirements, comprehensive child support
enforcement, and supports for families moving from welfare to work
-- including increased funding for child care and guaranteed medical
coverage.
Highlights of "The Personal Responsibility and Work Opportunity
Reconciliation Act of 1996" follow.
MAKING WELFARE A TRANSITION TO WORK
o Work requirements. Under the new law, recipients must work after two
years on assistance, with few exceptions. Twenty-five percent of all
families in each state must be engaged in work activities or have left the
rolls in fiscal year (FY) 1997, rising to 50 percent in FY 2002. Single
parents must participate for at least 20 hours per week the first year,
increasing to at least 30 hours per week by FY 2000. Two-parent families
must work 35 hours per week by July 1, 1997.
o Supports for families transitioning into jobs. The new welfare law
provides $14 billion in child care funding -- an increase of $3.5 billion
over current law -- to help more mothers move into jobs. The new law also
guarantees that women on welfare continue to receive health coverage for
their families, including at least one year of transitional Medicaid when
they leave welfare for work.
o Work Activities. To count toward state work requirements, recipients
will be required to participate in unsubsidized or subsidized employment, on-
the-job training, work experience, community service, 12 months of vocational
training, or provide child care services to individuals who are participating
in community service. Up to 6 weeks of job search (no more than 4
consecutive weeks) would count toward the work requirement. However, no more
than 20 percent of each state's caseload may count toward the work
requirement solely by participating in vocational training or by being a teen
parent in secondary school. Single parents with a child under 6 who cannot
find child care cannot be penalized for failure to meet the work
requirements. States can exempt from the work requirement single parents
with children under age one and disregard these individuals in the
calculation of participation rates for up to 12 months.
o A five-year time limit. Families who have received assistance for
five cumulative years (or less at state option) will be ineligible for cash
aid under the new welfare law. States will be permitted to exempt up to 20
percent of their caseload from the time limit, and states will have the
option to provide non-cash assistance and vouchers to families that reach the
time limit using Social Services Block Grant or state funds.
o Personal employability plans. Under the new plan, states are
required to make an initial assessment of recipients' skills. States can
also develop personal responsibility plans for recipients identifying the
education, training, and job placement services needed to move into the
workforce.
o State maintenance of effort requirements. The new welfare law
requires states to maintain their own spending on welfare at at least 80
percent of FY 1994 levels. States must also maintain spending at 100 percent
of FY 1994 levels to access a $2 billion contingency fund designed to assist
states affected by high population growth or economic downturn. In addition,
states must maintain 100 percent of FY 1994 or FY 1995 spending on child care
(whichever is greater) to access additional child care funds beyond their
initial allotment.
o Job subsidies. The law also allows states to create jobs by taking
money now used for welfare checks and using it to create community service
jobs or to provide income subsidies or hiring incentives for potential
employers.
o Performance bonus to reward work. $1 billion will be available
through FY 2003 for performance bonuses to reward states for moving welfare
recipients into jobs. The Secretary of HHS, in consultation with the
National Governors' Association (NGA) and American Public Welfare Association
(APWA), will develop criteria for measuring state performance.
o State flexibility. Under the new law, states which receive approval
for welfare reform waivers before July 1, 1997 have the option to operate
their cash assistance program under some or all of these waivers. For states
electing this option, some provisions of the new law which are inconsistent
with the waivers would not take effect until the expiration of the applicable
waivers in the geographical areas covered by the waivers.
PROMOTING RESPONSIBILITY
Comprehensive child support enforcement. The new law includes the child
support enforcement measures President Clinton proposed in 1994 -- the most
sweeping crackdown on non-paying parents in history. These measures could
increase child support collections by $24 billion and reduce federal welfare
costs by $4 billion over 10 years. Under the new law, each state must
operate a child support enforcement program meeting federal requirements in
order to be eligible for Temporary Assistance to Needy Families (TANF) block
grants. Provisions include:
o National new hire reporting system. The law establishes a Federal
Case Registry and National Directory of New Hires to track delinquent parents
across state lines. It also requires that employers report all new hires to
state agencies for transmittal of new hire information to the National
Directory of New Hires. This builds on President Clinton's June 1996
executive action to track delinquent parents across state lines. The law
also expands and streamlines procedures for direct withholding of child
support from wages.
o Streamlined paternity establishment. The new law streamlines the
legal process for paternity establishment, making it easier and faster to
establish paternities. It also expands the voluntary in-hospital paternity
establishment program, started by the Clinton Administration in 1993, and
requires a state form for voluntary paternity acknowledgement. In addition,
the law mandates that states publicize the availability and encourage the use
of voluntary paternity establishment processes. Individuals who fail to
cooperate with paternity establishment will have their monthly cash
assistance reduced by at least 25 percent.
o Uniform interstate child support laws. The new law provides for
uniform rules, procedures, and forms for interstate cases.
o Computerized state-wide collections. The new law requires states to
establish central registries of child support orders and centralized
collection and disbursement units. It also requires expedited state
procedures for child support enforcement.
o Tough new penalties. Under the new law, states can implement tough
child support enforcement techniques. The new law will expand wage
garnishment, allow states to seize assets, allows states to require community
service in some cases, and enable states to revoke drivers and professional
licenses for parents who owe delinquent child support.
o "Families First." Under a new "Family First" policy, families no
longer receiving assistance will have priority in the distribution of child
support arrears. This new policy will bring families who have left welfare
for work about $1 billion in support over the first six years.
o Access and visitation programs. In an effort to increase
noncustodial parents' involvement in their children's lives, the new law
includes grants to help states establish programs that support and facilitate
noncustodial parents' visitation with and access to their children.
Teen Parent Provisions
o Live at home and stay in school requirements. Under the new law,
unmarried minor parents will be required to live with a responsible adult or
in an adult-supervised setting and participate in educational and training
activities in order to receive assistance. States will be responsible for
locating or assisting in locating adult-supervised settings for teens.
o Teen Pregnancy Prevention. Starting in FY 1998, $50 million a year
in mandatory funds would be added to the appropriations of the Maternal and
Child Health (MCH) Block Grant for abstinence education. In addition, the
Secretary of HHS will establish and implement a strategy to (1) prevent non-
marital teen births, and (2) assure that at least 25 percent of communities
have teen pregnancy prevention programs. No later than January 1, 1997, the
Attorney General will establish a program that studies the linkage between
statutory rape and teen pregnancy, and that educates law enforcement
officials on the prevention and prosecution of statutory rape.
IMPROVEMENTS OVER THE VETOED BILL
President Clinton vetoed the previous welfare reform bill (H.R. 4) submitted
by Congress because it did too little to move people into jobs and failed to
provide the supports -- like child care and health care -- that families need
to move from welfare to work. "The Personal Responsibility and Work
Opportunity Reconciliation Act of 1996" includes several improvements over
the vetoed bill, including:
o Guaranteed medical coverage. The new law preserves the national
guarantee of health care for poor children, the disabled, pregnant women, the
elderly, and people on welfare. H.R. 4 would have ended the guarantee of
Medicaid coverage for cash assistance recipients.
o Increased child care funding and mandatory child care maintenance of
effort. The new law provides $14 billion in child care funding -- an
increase of $3.5 billion over 6 years -- allowing more mothers to leave
welfare for work. States will receive an initial allotment each year from a
fund of approximately $1.2 billion. To access additional funds, states must
maintain their own spending at 100 percent of their FY 1994 or 1995 spending
on child care (whichever is higher). By contrast, H.R. 4 increased child
care funding by just $300 million over current law, and did not require
states to meet child care maintenance of effort requirements to access
additional federal child care funding, allowing states to lower their own
spending.
o Incentives for states to move people into jobs. The new law includes
a $1 billion performance bonus to reward states that meet performance
targets. H.R. 4 did not contain a cash performance bonus.
o Preservation of nutrition programs. H.R. 4 would have given states
the option of block granting food stamp benefits. The bill would have also
capped federal food stamp program expenditures, limiting maximum benefit
increases to 2 percent per year, regardless of growth in need for assistance.
The new law maintains the national nutritional safety net by eliminating the
block grant option as well as the food stamp cap.
o Current law child protection and adoption. Unlike H.R. 4, the new
plan maintains
current law on child protection and adoption, and does not reduce
funds for child welfare, child abuse, foster care and adoption services.
o Improved contingency fund. The new law includes a $2 billion
contingency fund to protect states in times of population growth or economic
downturn. H.R. 4 included a $1 billion contingency fund.
o Current law child care health and safety standards. The new law
protects children by maintaining health and safety standards for day care.
H.R. 4 would have eliminated health and safety protections.
o Protection of disabled children. H.R. 4 would have cut SSI by 25
percent for many disabled children. The new law eliminates this proposed two-
tier system.
o Optional family cap. Under the new law, states have the option to
implement a family cap. H.R. 4 required states to deny cash benefits to
children born to welfare recipients unless the state legislature explicitly
voted to provide benefits.
NECESSARY IMPROVEMENTS
President Clinton has stated that the new law requires several improvements.
Specifically, he has pledged to fix two provisions of the welfare bill which
he believes have nothing to do with welfare reform.
o Food Stamps. According to President Clinton, the new law cuts deeper
than it should in Food Stamps, mostly for working families who have high
shelter costs.
o Legal Immigrants. The law includes provisions that would deny most
forms of public assistance to most legal immigrants for five years or until
they attain citizenship. The President has said that legal immigrants who
fall on hard times through no fault of their own and need help should get it,
although their sponsors should take additional responsibility for them.
BUILDING ON THE PRESIDENT'S WORK TO END WELFARE AS WE KNOW IT
Even before Congress passed welfare reform legislation acceptable to
President Clinton, states were acting to try new approaches. With
encouragement, support, and cooperation from the Clinton Administration, 43
states have moved forward with 78 welfare reform experiments. The Clinton
Administration has also required teen mothers to stay in school, required
federal employees to pay their child support, and cracked down on people who
owe child support and cross state lines. As a result of these efforts and
President Clinton's efforts to strengthen the economy, child support
collections have increased by 40 percent to $11 billion in FY 1995, and there
are 1.6 million fewer people on welfare today than when President Clinton
took office. "The Personal Responsibility and Work Opportunity
Reconciliation Act of 1996" will build on these efforts by allowing states
flexibility to reform their welfare systems and to build on demonstrations
initiated under the Clinton Administration.
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