HHS FACT SHEET

U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

Contact: HHS Press Office
(202) 690-6343

August 22, 1997

CLINTON ADMINISTRATION MOVING FORWARD ON THE PROMISE OF WELFARE REFORM

On August 22, 1996, President Clinton signed into law "The Personal Responsibility and Work Opportunity Reconciliation Act of 1996," a comprehensive bipartisan welfare reform plan that has dramatically changed the nation's welfare system into one that requires work in exchange for time-limited assistance. The law 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.

The Clinton Administration has taken numerous steps to ensure the success of the law. In the past year, the Clinton Administration has provided assistance to states and communities in implementing the law; created partnerships with the business, religious and non-profit communities to hire and train welfare recipients; and delivered on the President's pledge to invest in moving people from welfare to work and fix provisions in the law that had nothing to do with welfare reform. As a result of the Clinton Administration's focused efforts this year -- and throughout the last four years -- the welfare caseload fell by 3.4 million recipients, from 14.1 million in January 1993 to 10.7 million in May 1997, the largest welfare caseload decline in history.

TRANSFORMING THE BROKEN WELFARE SYSTEM:

Overhauling the Welfare System Nationwide: On July 1, the historic welfare law that the President signed last August went in to effect in every state, making work and responsibility the law of the land. The Department of Health and Human Services has certified welfare plans for each state. In accordance with the welfare law, all plans require and reward work, impose time limits, and demand personal responsibility.

Building on the Administration's Welfare Reform Strategy: Even before welfare reform, many states were well on their way to changing their welfare programs to jobs programs. By waiving certain provisions in federal statutes, the Clinton Administration allowed 43 states -- more than all previous Administrations combined -- to require work, time-limit assistance, make work pay, improve child support enforcement, and encourage parental responsibility. A vast majority of states have chosen to continue or build on their welfare demonstration projects approved by the Clinton Administration.

Largest Caseload Decline in History: The welfare caseload fell by 3.4 million recipients, from 14.1 million in January 1993 to 10.7 million in May 1997, a drop of 24 percent since President Clinton took office. Forty-eight out of fifty states have seen their caseloads decline, with ten states reducing their rolls by 40 percent or more in the last four years. This is the largest welfare caseload decline in history and the lowest percentage of the population on welfare since 1970. According to the Council of Economic Advisors (CEA) analysis, the reduction in the welfare rolls can be attributed to the strong economic growth during the Clinton Administration, the waivers granted to states to test innovative strategies to move people from welfare to work, and other factors, which may include the Administration's expansion of the Earned Income Tax Credit, strengthened child support enforcement, and increased funding for child care.

Mobilizing the Business Community: To make welfare reform a success and help move a million people from welfare into the workforce by the year 2000, President Clinton has enlisted the business community's leadership. At the President's urging, the Welfare to Work Partnership, chaired by United Airlines CEO Gerald Greenwald, was launched in May 1997, to lead the national business effort to hire people from the welfare rolls. So far 800 companies, large and small, have accepted the President's challenge to forge a national effort to help move those on public assistance into jobs in the private sector. In August 1997, the Welfare to Work Partnership launched: a toll-free hotline (1-888-USAJOB1), a web page (www.welfaretowork.org), a "Blueprint for Business" manual to help companies across the nation hire people off welfare; and a city to city challenge to help promote innovative and effective welfare to work initiatives in 12 cities with high levels of poverty during the next year.

Helping Welfare Recipients Get Off and Stay Off Welfare: The Vice President created the Welfare to Work Coalition to Sustain Success, a coalition of civic groups committed to helping former welfare recipients stay in the workforce and succeed. Tailoring their services to meet welfare recipients' needs and the organizations' strengths, the Coalition will focus on providing mentoring and other support services. Charter members of the Coalition include: the Boys and Girls Clubs of America, the Baptist Joint Committee, the United Way, the YMCA, and fourteen other civic groups.

Federal Government's Hiring Initiative: As the nation's largest employer, the federal government is also doing its fair share to hire people from the welfare rolls. In March 1997, the President directed each head of a Federal agency or department to develop a plan to hire and retain welfare recipients in jobs in the government. The President asked the Vice President to oversee this initiative, in which the federal agencies have agreed to directly hire at least 10,000 welfare recipients in the next four years without displacing current employees.

ADDRESSING BARRIERS TO MOVING FROM WELFARE TO SELF-SUFFICIENCY

Increasing Funding for and Improving Quality of Child Care: The welfare law increased child care funding by nearly $4 billion over 6 years, providing child care assistance to low-income working families and parents moving from welfare to work. In October 1996, HHS released the child care block grant funds for FY 1997 providing up to $1.92 billion to states, a significant increase over the estimated FY 1996 level of $1.35 billion. The Clinton Administration also has taken steps to ensure the health and safety of child care. In July 1997, President Clinton proposed new child care regulations, which include a new approach to help more children in child care receive the immunizations they need on time.

Developing Strategies to Address Transportation Issues: In May 1997, President Clinton announced Department of Transportation grants to 24 states to develop welfare to work transportation strategies. The President also urged Congress to adopt a six-year, $600 million grant program in his NEXTEA transportation bill that would support flexible, innovative transportation systems in rural, urban and suburban areas to get people to jobs.

Continuing to Strengthen Child Support Enforcement: Due to the President's unprecedented and sustained campaign to make noncustodial parents pay the child support they owe, the Clinton Administration collected a record $12 billion in child support in 1996, an increase of 50% since 1992. Paternity establishment almost doubled to nearly 1 million cases in FY 1996, from 516,000 in 1992. And the number of families actually receiving child support rose to 4 million cases with collections, an increase of 43 percent, over 2.8 million in 1992.

149Implementing the Provisions in the Welfare Law: The welfare law included tough child support measures long-supported by the President, including: a national new hire reporting system; streamlined paternity establishment; uniform interstate child support laws; computerized state-wide collections; and tough new penalties. So far over half the states have enacted these provisions. The President has urged all states to put these enforcement tools in place to ensure that children and families get the support they need. These measures are projected to increase child support collections by an additional $24 billion over the next ten years.

149Executive Actions: While working toward comprehensive improvement of child support enforcement, President Clinton used his executive authority to increase child support collections. Since taking office, President Clinton has: directed the Treasury Department to collect past-due child support from Federal payments including Federal income tax refunds and employee salaries; taken steps to deny Federal loans to any delinquent parents; and made the Federal government a model employer in the area of child support enforcement.

Preventing Teen Pregnancy:As a result of the Administration's focused effort since President Clinton took office, the national birth rate for teens aged 15-19 has continued to decline four straight years in row, decreasing by eight percent between 1991 and 1995. Significant components of the President's comprehensive effort to reduce teen pregnancy were included in the welfare law. The welfare law requires unmarried minor parents to stay in school and live at home, or in an adult-supervised setting; supports the creation of Second Chance Homes, which will provide teen parents with the skills and support they need; and provides $50 million a year in new funding for state abstinence education activities, beginning in FY 1998.

149Launching a National Strategy: In January 1997, the Clinton Administration launched a new comprehensive effort to prevent teen pregnancy and encourage adolescents to remain abstinent. The initiative, led by the Department of Health and Human Services, responded to a call from the President and Congress for a national strategy to prevent out-of-wedlock teen pregnancies and to a directive, under the new welfare law, to assure that at least 25 percent of communities in this country have teen pregnancy prevention programs in place. The strategy sends the strongest possible message to all teens that postponing sexual activity, staying in school, and preparing for work are the right things to do. It strengthens ongoing efforts across the nation by increasing opportunities through welfare reform; supporting promising approaches; building partnerships; improving data collection, research, and evaluation; and disseminating information on innovative and effective practices. The national strategy places a special emphasis on encouraging abstinence, especially among 9- to 14-year-old girls, through HHS' new Girl Power! campaign, which was launched in November 1996.

149Providing Resources to Promote Abstinence: The welfare law included $50 million a year in new funding for state abstinence education activities. In July, 1997 every state applied for this money to build on their state efforts to prevent teen pregnancy.

BALANCED BUDGET HELPS MOVE MORE PEOPLE FROM WELFARE TO WORK

The balanced budget that the President signed on August 5, 1997 delivered on the President's pledge to fulfill the promise of welfare reform by investing in moving people from welfare to work and fixing the provisions in the law that had nothing to do with welfare reform. Specifically:

$3 Billion to Help Move 1 Million People from Welfare to Work. As a result of the President's leadership, the balanced budget includes the total funding he requested to create a $3 billion Welfare to Work Jobs Challenge fund. This program will help states and local communities move long-term welfare recipients into lasting, unsubsidized jobs. These funds can be used for job creation, job placement and job retention efforts, including wage subsidies to private employers, and other critical post-employment support services. The Labor Department will provide oversight but the dollars will be placed in the hands of the localities who are on the front lines of the welfare reform effort.

A Welfare to Work Tax Credit. This provision will give employers an added incentive to hire long-term welfare recipients by providing a credit equal to 35 percent of the first $10,000 in wages in the first year of employment, and 50 percent of the first $10,000 in the second year, paid for new hires who have received welfare for an extended period. The credit, administered by the Treasury Department, is for two years per worker to encourage not only hiring but retention.

Focusing the Welfare Law on Work. The budget includes $12 billion to restore both disability and health benefits to legal immigrants who are currently receiving benefits or become disabled in the future, and to continue Medicaid coverage for currently disabled children receiving SSI. The budget bill will help 350,000 legal immigrants (in FY 2002) who would otherwise have been denied assistance. It also extended the SSI and Medicaid eligibility period for refugees and asylees from 5 years after entry in the country to 7 years to give these residents more time to naturalize. In addition, the budget bill improves the food stamp provisions in the welfare law by creating work slots and preserving food stamp benefits for those who are willing to work, but through no fault of their own, have not found employment.

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