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NCSL Interim Policy on Welfare Reform Reauthorization - Click here for printer friendly version of this policy which was approved at the May 2002 meeting of the NCSL Assembly on Federal Issues and temporarily in effect pending final approval at the Annual Meeting of NCSL in Denver in July, 2002.

The National Conference of State Legislatures (NCSL) believes in the continuing process of welfare reform. In 1996, Congress enacted and the President signed the welfare reform legislation, the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA). NCSL supported the enactment of this historic agreement and partnership between the states and the federal government. NCSL urges Congress and the Administration to ensure that the reauthorization of welfare reform continues this successful bipartisan partnership between the states and the federal government. This revolution of social policy allowed state legislatures to transform a system of income maintenance to one focused on work and self-sufficiency with support for families and vulnerable children. It is critical that states retain the flexibility given to them in the TANF statute and in the April 1999 regulations to enable them to focus their efforts and build on successes. States and territories have shown that they can use this flexibility to find innovative ways to address poverty. We urge the federal government to continue to make flexibility a key theme in all aspects of welfare reform including TANF, MOE, child care, child welfare and child support.

NCSL believes that everyone who is able should be engaged in efforts toward self-sufficiency while he or she is receiving public assistance. If our goals are personal and economic independence then the place to realize these goals is where Americans have historically achieved them, in private sector employment. When a state requires a welfare recipient to work in exchange for a welfare benefit, that person is still on welfare. The majority of states have focused on getting welfare recipients into unsubsidized jobs in the private sector - a proven strategy to increase earnings, promote family stability and end the cycle of dependence. States have succeeded with this strategy. State lawmakers urge Congress and the Administration to not make it difficult for states to continue this success.

State legislators are responsible for writing, financing and implementing laws governing the TANF program in their states, for overseeing the programs in their states, and for appropriating TANF and Maintenance of Effort (MOE) funds. Our choices and successes offer the federal government a chance to learn what really works to help struggling families, just as the federal government drew on state efforts to reform welfare in crafting the 1996 law. As states have transformed the nation's welfare system to better serve local needs and different populations, our nation's state legislatures have made different choices. States have crafted different approaches that respond better to local economies. Many states further devolved policymaking responsibility to localities. State legislatures' policy choices and funding decisions mean that any further changes in the program may impact states in different ways.

States and territories have used the flexibility in the TANF program to move large numbers of former welfare recipients from primary dependency on a welfare check onto the path to self-sufficiency, and to fund services such as expanded child care, substance abuse treatment, pre-kindergarten classes, training to help parents get better jobs and after school programs aimed at reducing teen pregnancy. The caseload for cash assistance has declined nearly 60% nationally since passage of PRWORA. However, as we provide increasing support to ensure job retention and advancement as well as services for children and families, the total caseload receiving services has increased, and this is why continued full funding is critical. The upcoming reauthorization of the TANF program presents an incredible opportunity to continue the progress that has been possible under PRWORA.

The TANF program today serves a very different population than the AFDC program at its inception in the 1930s. People accessing our services are no longer widows and most children on welfare are not orphans. Most women work outside the home and our economy has changed the type of job opportunities available to low-skilled workers.

State legislators continue to work on the challenge of adopting programs that serve the best interests of needy families in their respective states. As the federal government reauthorizes this program, all federal policy changes must be examined as they may impact different state programs and financing differently.

Many families struggle with barriers to self-sufficiency. Mental illness, substance abuse, physical challenges, low literacy, limited English proficiency, domestic violence, and learning disabilities are among the challenges faced by our clients, especially long-term recipients.

State legislators also believe that welfare reform is an ongoing process of sustaining the work effort of former welfare recipients. This includes services that support job placement, retention and advancement to prevent welfare recidivism and improve the lives of children and families. Our work has also focused on welfare prevention strategies including teen pregnancy prevention, noncustodial parents and fatherhood programs, and other family formation strategies.

Given the declining economy and the impact of the tragic events of September 11^th on industries that have traditionally hired former welfare recipients, we urge the federal government to pay special attention to ensure that there are no adverse unintended consequences in its reform proposals.

NCSL urges the federal government to keep in mind the requirements of the Unfunded Mandates Reform Act as you develop policies and proposals in reauthorization. The breadth of change mandated in P. L. 104-193 was historic and unprecedented. In many states, it took time to understand the requirements of the law and the opportunities that it provides. NCSL believes that Congress and the Administration must address the concerns of the states, commonwealths, territories and tribes as reauthorization goes forward.

The 1996 law should be seen in the context of devolution. States accepted a block grant and assumed the risk that caseloads might increase in return for the freedom to try new approaches to providing welfare. The devolution process has continued, as some states have devolved considerable authority for the welfare program to the county level. States have appreciated the ability to target their programs to meet the specific needs of their populations. However, because of the differences in the ways states have implemented programs, any changes in the TANF program made at the federal level must be carefully crafted so as not impede the progress made by innovative state and county programs. A key feature of the 1996 law was broadened state flexibility within a federal structure focused on work and temporary assistance. The law set out goals for the program and gave states the authority to determine how to best accomplish the goals. We urge the federal government to avoid earmarks, preemption of state authority or mandates on the states as they compromise the spirit of state/federal partnership critical to our success.

Devolution of responsibility to the states was such a fundamental part of the 1996 effort that the law clearly limited the authority of HHS to promulgate TANF regulations. The law states that unless such authority is granted for specific provisions, HHS may not regulate them. To honor the spirit of the law, HHS should keep welfare regulations to a minimum and work with states to preserve the law's flexibility to the maximum extent possible. For regulations in the other titles of the legislation, from child care to child support enforcement to Medicaid, we urge the federal government to provide the states with maximum flexibility.

We have been especially pleased by the Administration's efforts to hear from state and local governments, current and former clients and the public prior to the creation of its proposal for welfare reform reauthorization. We hope the recent listening sessions are only the beginning of opportunities for legislators to discuss these issues with HHS, Congress and the White House.

Devolution includes the ability of states, territories, commonwealths and tribes to have their unique needs considered. NCSL urges Congress and the Administration to keep this in mind. Unfortunately, too often, solutions considered by Congress and the Administration add new requirements with no additional funding, resulting in less flexibility for the states.

NCSL supports the inclusion of commonwealths and territories in programs in which they have been left out of or receive limited funds to carry out the responsibilities and obligations under PRWORA Act. Territories and commonwealths have concerns about how their unique circumstances, including the section 1108 cap, interact with these programs. This should be remedied.

The National Conference of State Legislatures (NCSL) strongly believes that comprehensive reform of our federal welfare system achieved in 1996 should be maintained. The children who rely on TANF are among our most vulnerable, and any reform of the system must keep their best interests in the forefront. Our income assistance program should emphasize flexibility for the states to design their own programs in accord with community needs and should include: (1) financing of the program without cost-shifting to state government and without targeting other vulnerable populations, (2) the promotion of family formation and stability, (3) parental responsibility, (4) training and education that are geared toward lifetime career opportunities as well as community and business needs as a path to self-sufficiency, (5) support services necessary to self-sufficiency such as health care, child care and transportation during education, training and subsidized employment and transitional services for those who successfully leave cash assistance, (6) short term assistance to able-bodied heads of households, (7) long term support for the disabled and the elderly, (8) strengthening child support services

NCSL reiterates its concern for children and their well-being in consideration of welfare reform. Children will be better off with parents who are self-sufficient. However, NCSL urges the federal government to consider the impact of any new welfare strategies on other state and federal systems that serve children and their families. There must be coordination with the myriad employment and training and retraining programs. The child welfare system, including foster care, may be inadvertently impacted by welfare reform if parents are unable to support their children. The federal government must continue to allow states the flexibility to fashion and fund programs that assist relatives caring for children. This system is more costly to both the states financially and to children in personal terms. There must be coordination in child care among systems that serve those on public assistance and those that serve the working poor. NCSL also supports coordination with Head Start and other early childhood education opportunities to provide assistance to children while their parents pursue employment opportunities.

State and federal policymakers agreed to forego the sixty-year old AFDC entitlement program in exchange for greater state authority and a capped, guaranteed funding stream for six years, the Temporary Assistance to Needy Families Block Grant (TANF). Over the five years of implementation of welfare reform, the demand for cash assistance has fallen dramatically, but the overall caseload receiving TANF and MOE funded services has not. In this time of economic uncertainty, no one knows how much caseloads will increase.

States have upheld and continue to uphold their part of the welfare reform agreement. The National Conference of State Legislatures urges Congress and the Administration to resist all efforts to cut the welfare block grant (TANF), the Social Services Block Grant, LIHEAP or any related welfare program, to restore TANF supplemental grants and contingency fund, and preserve the full integrity of the historic welfare agreement.

With TANF and MOE funds, states can serve families who receive cash assistance and families who formerly received cash assistance, as well as families who have never received cash assistance. States use these funds to provide critical services to families who are working, usually at low wage jobs and therefore ensure that those families do not turn to welfare or return to welfare. This insures the best possible outcomes for the children in those families and breaks the cycle of welfare dependency.

A critical component of the 1996 law explicitly gave state legislatures the specific authority to appropriate their state's TANF, child care, and welfare to work funds. This authority invests state legislators fully in the TANF program and increases state oversight of TANF funds. This is a critical point of the 1996 law that must be maintained.

The TANF block grant must be fully funded, which includes TANF supplemental grants in the baseline. The TANF block grant must not be reduced. We appreciate that the Administration and key Congressional proposals support full funding.

NCSL urges Congress and the Administration to consider an inflationary adjustment to the TANF block grant. Congress should provide an inflationary increase in the overall block grant. This will allow us to address the increased demand for non-cash assistance, economic uncertainty and any new expectations of welfare reform. If Congress were to include increased state MOE as a condition, it should be optional for states to receive this adjustment. States are currently struggling with severe budget deficits and funding constraints. Therefore, it should be optional for states that can contribute above 75% state MOE.

NCSL will oppose any effort to earmark the TANF block grant as a limitation on critical flexibility and antithetical to the notion of devolution. Any earmarks of TANF funds will also have a disproportionate impact on states that rely on their supplemental grants or states that spent all of their TANF funds and do not have any carried over funds.

The 1996 law provided grants to states with historically low levels of welfare spending under the old Aid to Families with Dependent Children program and high population growth, ensuring that they were not disadvantaged under the block grant formula. These grants actually expired at the end of FY 2001, one year before TANF is to be reauthorized. Without restoration of these grants, states that received them will be hard pressed to continue innovative programs and a divisive formula fight will ensue. Already these states have had to curtail or cut programs. NCSL urges Congress to ensure that states continue to receive supplemental grants and that these grants are incorporated into their TANF baseline. NCSL applauds administration and congressional proposals to maintain or improve supplemental grants to the states.

According to the April 1999 regulations, TANF block grant funds carried over from one fiscal year to the next can only be spent on assistance -- cash, food, and housing. This severely impacts state flexibility to provide services that might keep a family from needing cash assistance. Carried-over TANF funds should be as flexible as current year TANF funds. NCSL appreciates the administration's responsiveness to this topic, which was raised by legislators in the HHS listening sessions, and is pleased to see congressional proposals includes this as well.

The present economic recession, the effects of which were compounded by the terrorist attacks on the United States, has hit state budgets hard. If the present recession continues, and welfare caseloads increase, states will be pressured to spend a greater percentage of their TANF funds on cash assistance, and there will be less money available for supports such as child care and transportation that help low-wage workers keep their jobs. A contingency fund should be part of any reauthorization proposal. It must be a contingency fund with a less restrictive trigger mechanism and with less complicated requirements for state participation than the contingency fund in the 1996 law. NCSL urges the federal government to construct the reconciliation and maintenance of effort provisions so that needy states can have greater access to the fund. Additionally, the commonwealths, territories and tribes should be allowed to participate in the contingency fund. NCSL appreciates the Administration's proposal to continue the contingency fund. NCSL urges Congress to adopt a less restrictive trigger mechanism and MOE requirement than in the 1996 law that will make the contingency fund more accessible when states' caseloads and spending increase.

In addition, states are discouraged from maintaining their own contingency funds because such funds remain in the federal treasury and are considered unobligated, thus making it appear that those funds are not needed or not allocated for any purpose. This issue should be addressed in reauthorization and is an example of the unfortunate interactions between the block grant and the Cash Management Improvement Act. We also urge HHS to work with the Department of the Treasury to resolve these problems. We urge Congress to recognize state rainy day TANF funds as a legitimate use of TANF block grant consistent with state budgeting principles.

NCSL supports the ability of states to transfer up to 30% of their TANF funds into the Social Services Block Grant (SSBG), the Child Care and Development Fund, and the Access to Jobs Program. We also support the continuation of the ability of states to transfer at least 10% of this amount into the SSBG. This transfer authority preserves the flexibility of states in spending their TANF funds.

NCSL believes that work is a critical component of welfare reform. State lawmakers transformed the welfare system to a work-focused program, first by waivers and then by implementing the 1996 law. Welfare recipients want to work for themselves and their children. The goal of reform should be to enable clients to become self-sufficient, strengthen their families and work their way off welfare. The diversity of the welfare population means that states must have the ability to choose different strategies for families receiving assistance. Federal law should support state efforts to create a continuum of self-sufficiency. This would range from job search for those with skills and work histories to treatment for parents with substance abuse problems that are a barrier to employment to mandatory work for those unable to find employment. It also should include part-time work with increased earning disregards as well as work focused educational assistance including English as a Second Language and other supports for the employed so that work is always better than public assistance.

NCSL believes that part-time employment with some support is preferable to no employment. We strongly believe that federal rules that create financial disincentives for work should be repealed. Working should always improve a family's financial and economic situation.

NCSL supports the current requirement that after 24 months, all families should be engaged in work, as defined by the state.

NCSL supports the Administration's focus on universal engagement for all adults receiving public assistance. State lawmakers want to work with all families, understanding that each has different needs and barriers to employment, but all can make progress. State legislators agree that all families should have a self-sufficiency plan, which updates the employability plan under current law. However, the details of these plans, how participants are engaged and how these plans are monitored must be left up to state discretion. HHS should be required to provide technical assistance to the states on the implementation of these provisions. NCSL does not see the need for such a severe penalty - loss of TANF funds, increase in state funding to make up the difference and increase of state MOE - to ensure that states comply with this new requirement.

NCSL urges the following changes in the work participation rates:

• Eliminate the two-parent work participation rate and have all families count in one consistent work participation requirement, which will help strengthen families and remove a barrier to marriage.
• Eliminate the hourly threshold for who can count so that all recipient work effort can be counted.
• Give states greater flexibility to define what activities count as work, especially the combination of activities such as work, job training and preparation, education and treatment for alcohol and other substance abuse, and mental illness, and activities to meet the requirements of a domestic violence plan.
• Retain the 30 hour work participation rate as the standard
• Continue to give states credit for those who leave welfare. If the current caseload reduction credit is reduced or eliminated, it must be phased out so as to give states time to adjust to any changes.
• Give states the option of including education leading to employment as part of the first 20 hours of work for the purpose of meeting state work participation rates.
• Retain 20 hour requirement for a parent with a child under six.

The focus on work should not come at the exclusion of necessary basic or vocational education that would enhance skills, job retention and earnings. NCSL has always urged the federal government to leave the decision on when and how education should count for each client up to the states, similar to other TANF benefit and services decisions. The current policy that limits the amount of time and caps the number of clients engaged in vocational education does not take into account state decision making. We support efforts to expand the length of time a recipient can be in vocational education, and to lift or increase the cap on a percentage of the caseload that can be counted. NCSL supports giving states more flexibility to define education, and to give credit to those engaged in Adult Basic Education and English as a Second Language and post-secondary education.

State legislators are very concerned about the impact of the Administration and Congressional proposals to increase the work participation rate requirements, increasing the overall rate as well as the number of hours required per participant and limitations on what activities count for the core work requirements. Increasing these requirements will force states to only concentrate their efforts on those receiving cash assistance and move away from supporting those who have left welfare to go to work It will also force states to move away from putting clients into private sector jobs and force states to direct resources toward community service jobs. States will also be forced to reallocate TANF funding away from creative and innovative services including family formation efforts and mental health treatment to fund these new efforts. There are particular difficulties for finding employment and mandatory work in rural areas, where jobs may be few and access to child care and transportation services is limited. Administering these requirements in remote, rural and tribal land areas is especially costly. It will exacerbate the difficulties states face in providing child care to those on welfare and poor working families including former welfare recipients - especially if no new child care funds are included.

State welfare programs have honored and rewarded work. State legislators are concerned that if new and inflexible work requirements are added to the program, states, constrained by the fixed sum of money available from the block grant and their own economic difficulties, will be forced to establish costly community work programs for those on public assistance at the expense of those who have left or have never been on public assistance. States will have to fund an administrative structures to create slots and monitor activities to meet the work participation rates. To do otherwise would leave states vulnerable to substantial fiscal penalties - losing 5% of TANF block grant, backfilling this penalty with state dollars and an increase in 5% for the state maintenance of effort requirement. Diverting program funds to pay for these new administrative structures and technological changes will compromise state success. Forcing states to allocate additional funds to administrative purposes endangers the desired results of welfare reform.

NCSL supports the adoption of credits to reward state success in moving families to employment. Such credits would benefit states that focus their efforts to get recipients into jobs that promote long-term self-sufficiency. Part time work should also be counted, as we believe part time work is an achievement. Additionally, states must be given the ability to account for those who are in the application process for Supplemental Security Income. States should be given credit for providing services that keep potential recipients from having to go on public assistance. This is often referred to as "diversion." Additionally, it is critical that states receive credit for providing significant child care and transportation assistance that allows people to stay on the job. This would better reflect state efforts to encourage self-sufficiency.

NCSL believes that states should retain the flexibility they currently have to define sanctions for noncompliance with welfare rules including work requirements. Federal mandates regarding the definition, occurrence and duration of sanctions are contrary to the spirit of devolution. Such decisions should be made at the local level. NCSL opposes efforts to mandate a full family, full check sanction policy. Legislators strongly believe that states should retain full flexibility on the use of state MOE funds. Therefore, NCSL opposes any efforts that would restrict a state's ability to provide state funding to serve sanctioned families including children.

It is important for federal policymakers to recognize that time limit policy is implemented differently across the states. Many states feel that there is sufficient flexibility under current law to exempt, delay and extend time limits as they choose for appropriate candidates, notably families facing tough challenges. However, some states with historically lower state welfare spending with resulting smaller MOE requirements report less flexibility within current time limit policy. While federal policy recognizes the ability to exempt families from time limits, it does not explicitly allow extensions of time limits. NCSL believes that federal policy should always encourage work. When a parent is working and receiving benefits, states should have an option to extend or exempt these workers and their families from the federal time limits. The current policy should continue to:

• Give states flexibility to determine their own time limits.
• Allow states to decide to maintain separate state programs under MOE or segregate their MOE spending in an existing program to be able to use the funds with greater flexibility.
• Maintain the ability of states to exempt 20% of their caseload, as defined by the state, from federal time limits.

A related issue is the definition of "assistance". Receipt of assistance triggers time limit requirements. NCSL urges Congress to continue the practice of applying time limits only to "assistance" funded by TANF and to continue to allow states flexibility to decide time limit policy for MOE funded programs. State lawmakers continue to support efforts that would distinguish cash support from non-cash support. Currently housing, food and cash count as "assistance." NCSL urges Congress to separate housing from other forms of assistance.

There are some individuals with severe barriers to employment that may not be best served in time-limited assistance program. NCSL urges Congress and the Administration to carefully examine how the SSI and SSDI programs can be better coordinated with the TANF program and state efforts to help each individual achieve the maximum level of self-sufficiency possible.

NCSL supported the purposes of the TANF block grant in 1996. These purposes allow states to target state resources to meet local needs. The purposes ensure accountability, as all TANF or MOE spending must meet one of the purposes. The purposes were kept flexible, giving states the responsibility to manage the use of TANF funds, while not dictating state actions. This allowed and encouraged state innovation.

The current four purposes focus state attention not only on caring for children and moving families from welfare to work, but allowing states to target funds on some of the key reasons for dependency - lack of employment, job preparation, formation and maintenance of two parent families, marriage and out-of-wedlock child bearing.

The focus of the TANF program should be not just on getting a recipient into the workforce, but on job retention and wage enhancement strategies and supports that allow the recipient to become truly self-sufficient. NCSL would support a change to the purposes of the TANF grant, adding, "to ensure self sufficiency through job retention and wage enhancement strategies that result in improved child well-being."

FAMILY FORMATION AND MARRIAGE

While marriage is an issue that transcends discussion of the reauthorization of the TANF program, promoting the formation of stable families is part of ensuring that the cycle of dependency on government programs is broken. Marriage provides important benefits, including economic ones, for adults and children. Government policy should be to support healthy marriages, and, perhaps as critically, not to set up barriers to marriage. Great progress has been made in reducing the welfare cash assistance caseload since the passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) in 1996, but state legislators recognize that much remains to be done in addressing the underlying causes of poverty. That includes strengthening two-parent families.

State legislators recognize that not everyone will choose to marry or choose to stay married.

State legislators believe that any federal discussion of the issue of marriage must be based on the following principles:

• NCSL recognizes that efforts to salvage some relationships may not be appropriate and there needs to be special awareness of the prevalence of domestic violence, family violence and abuse. Therefore, NCSL supports the family violence option;
• Marital status must never be a condition of receiving TANF benefits or services. Because people approaching human services agencies are in a vulnerable position, great care must be taken to respect personal decisions;
• Efforts to encourage marriage should respect cultural differences and should be conducted in culturally sensitive ways;
• States must have maximum flexibility as they utilize a range of approaches to promote marriage, especially within the finite resources of the TANF block grant. Marriage laws have been the purview of state government, not the federal government;
• A central focus of these efforts must be child well-being. NCSL supports efforts to assist parents with parenting skills, even in the absence of marriage, so the children involved have a stable support system;
• Rules for the TANF program and other federal programs must be examined to ensure that they do not penalize couples that choose to marry; and
• TANF program restrictions that apply solely to two-parent families must also be re-examined, especially the two-parent family work rate. Examples of federal areas of law that can discourage couples from marriage include the tax code and federal low-income housing regulations.

NCSL requests that the federal government consider existing efforts and how those efforts might be strengthened. States are already working to promote marriage outside the TANF program. Some examples of actions states have taken include establishing fatherhood programs, providing incentives for marriage education, enacting earned income tax credits without penalizing marital status, enacting family law related to both marriage and divorce and creating programs to sustain the marriages of parents of children with disabilities with respite care services. State legislators urge federal policymakers to affirm the value of these efforts.

NCSL supports the Administration's proposal to use the funds in the current out-of-wedlock bonus fund to create a demonstration fund for states to implement marriage and family formation initiatives. NCSL opposes any efforts to earmark the TANF block grant for the purpose of family formation or marriage.

While research shows that teen pregnancy has begun to decline, efforts must continue to reduce out-of-wedlock births. Eighty percent of teen births are non-marital and a significant percentage of teen mothers have second births out-of-wedlock.

State legislators realize that teen pregnancy occurs across all income levels, regardless of race and ethnicity, and over time teen parents have worse outcomes than other teens in educational attainment, and income expectations. Teen parents have more difficulty remaining self-sufficient and are more vulnerable to economic downturns.

NCSL believes that this national problem deserves full attention and strongly supports a nationwide campaign to prevent out-of-wedlock births. NCSL supports highlighting this issue, especially in the popular media, including a National Day to Prevent Teen Pregnancy. NCSL further believes assistance for teen parents to complete high school or obtain a GED will strengthen their futures.

Young welfare recipients need mentors and strong support services including intensive case management and child care. State legislators have been strong supporters of federal policy to strengthen families. State legislators have been responsible for model programs of family preservation and support that have successfully intervened with at-risk families. We wish to reiterate our support for federal family preservation and support policy to assist states in these efforts. NCSL believes that these programs are integral to welfare reform. NCSL also believes that teen parents need special assistance beyond education and training programs to become self-sufficient. Programs to promote better parenting skills including nutrition and basic health must be added as well. Teen fathers also must not be left out of these programs. If their issues are not addressed, we will have a continuation of the break-up of these families.

Child support enforcement is a critical component of welfare reform. Our separate policy on Child Support Enforcement details NCSL's position. State legislators have been at the forefront of innovative efforts to improve child support including establishment of orders, collection, enforcement and work with noncustodial parents. We are concerned, however, about unfunded mandates and preemption of state law in any new federal child support law.

NCSL strongly supports the creation of options for states to pass through child support directly to families without having to reimburse the federal government. Noncustodial parent programs are also critical to this effort. We reiterate our concern that as states update their child support legislation, technical assistance is needed to assist the states as they come into compliance with federal goals. State legislators should have the option of extending child support benefits beyond the age of majority for those children in college.

Federal child support policy can be a barrier to improving the payment of support by non-custodial parents. NCSL supports federal legislation that lifts the barriers to states choosing to implement pass-through of child support payments directly to families. Currently federal law requires that state pay not only the state share of collected child support, but reimburse the federal government for their share if the state chooses to pass-through to families. NCSL strongly supports a change in federal law that eliminates the requirement that states reimburse the federal government if the state chooses to pass-through child support to families. This will also strengthen the relationship between fathers, mothers, and their children. It may also lead to reconciliation and/or marriage.

NCSL also urges the federal government to continue to provide states with MOE credit if states choose to pass-through child support to families. NCSL urges the federal government to provide technical assistance to the states on the usage of current policy toward compromising of arrearages.

More attention needs to be focused on the fathers, especially low-income non-custodial fathers. As NCSL's policy "Nurturing Responsible Families" details, NCSL believes that children deserve two involved parents. States have established innovative programs to reach out to low-income non-custodial parents, and can share their successes with the federal government. Child support is an especially critical issue for many low-income fathers. NCSL cautions the federal government, however, to remember that there are 50 state systems collecting child support. Any changes in federal child support enforcement law must be carefully crafted to avoid unintended consequences.

State legislators have long supported efforts to increase paternity establishment, recognizing how important it is to have both parents emotionally and economically involved in the life of their child. Establishment of paternity represents a point at which all options, including marriage, can be discussed with unwed parents. Paternity establishment should be accomplished in the least coercive way possible.

State legislators remain concerned that the reporting requirements in the law are unrealistic and do not gather the information both the federal and state legislatures need to adequately provide oversight over welfare reform implementation. The new law should pay attention to these provisions to ensure that the data required are collectible by the states and relevant to the policy questions we have. Adequate time must be allowed to provide states an opportunity to create and design systems to collect all the required data by the deadlines stipulated in the law. Additionally, state legislators question the ability of states to track the time a recipient receives TANF funds when that recipient moves across state lines.

CHILD CARE

The Child Care and Development Block Grant (CCDBG) must be reauthorized this year. NCSL policy on Child Care supports an expansion of funding for the Child Care and Development Block Grant. Full funding of TANF is important for child care, as is the ability to transfer up to 30% of the block grant into the CCDBG. In fact, more than 20% of TANF is spend on child care by direct spending and transfers

We continue to oppose further earmarking of the CCDBG or direct TANF spending on child care. State legislators are concerned about meeting the special child care and out of school time needs of certain populations: disabled children, infants and older children. It is critical that states have the necessary flexibility to direct CCDBG funds and the flexibility to target children of all ages. Earmarking the current CCDBG or earmarking further increases in funding would reduce the flexibility to direct these funds and make the provision of child care more difficult. NCSL urges HHS to lift the age restriction on CCDBG funds.

Child care is a critical component of long-term family self-sufficiency. Parents are not able to work if their children are not safely cared for. Child care is needed for recipients participating in education, training, subsidized employment and transitioning to permanent employment. NCSL appreciates that ACF signaled the importance of child care for working families by not considering it assistance, thus allowing families to have this vital service without having it count against their time-limited assistance. NCSL urges the federal government to reconsider the distinction in TANF regulations that counts child care and other work supports for the unemployed as assistance. This will be particularly important if the recession continues and more families, including families formerly on welfare, find themselves in the UI system. We want these families to have a reliable source of child care support while they look for another job rather than offering an incentive for them to return to cash assistance. Having this child care support count toward the time limits also raises equity issues and confusion since different rules apply to different funding sources. Additionally, research suggests that having a consistent child care provider is important to children's early development.

SOCIAL SERVICES BLOCK GRANT

Social Services Block Grant (SSBG or Title XX) funds are a vital part of the delivery of community and home-based services to the most vulnerable segments of society including the disabled, elderly, and children in need of protective services. These services often allow individuals to receive services in their homes and communities, not in more expensive residential settings. NCSL urges the federal government to fund the SSBG at the level agreed to as part of the enactment of the 1996 welfare reform act, $2.8 billion. In addition, it is critical that the amount states can transfer from their TANF grants to the SSBG remains at least 10% and is not reduced. SSBG funds programs that complement TANF's goal of self-sufficiency. States use their SSBG funds to provide protective services for children and adults, adult day care, meal preparation and delivery for the elderly, counseling services, and serve the disabled in their homes, rather than in institutions. Further reductions in funding for this grant would mean programmatic losses and service reductions.

FOOD STAMPS

Federal food stamp provisions are in conflict with state welfare reform efforts and are extremely complex. Complexity leads to quality control errors and penalties. The Quality Control (Q.C.) system that evaluates state performance in the food stamp program focuses on strict compliance with detailed payment accuracy requirements. States that exceed the national average of payment errors are subject to substantial financial penalties. The program was designed to function in a time when most food stamp recipients also received cash payments through the Aid to Families with Dependent Children program. Few recipients worked and recipients' monthly budgets were predictable. States that have large numbers of former welfare recipients entering the workforce have an increased risk of quality control errors simply because of the composition of their population. In effect, they are penalized for their success in welfare reform. These issues are addressed in Farm Bill reauthorization language before the Senate. NCSL urges Congress to enact the Farm Bill as soon as possible.

LEGAL Immigrants and refugees

NCSL continues to urge the Congress and the Administration to reconsider the extent of the denials of eligibility for TANF, SSI and food stamps for legal immigrants and most refugees. P.L. 104-193 eliminated most of the federal safety net that serves legal immigrants and consequently shifted these costs to states. We believe these provisions violate the spirit of the Unfunded Mandates Reform Act. The law further required states to implement costly administrative eligibility determinations without providing any federal resources to do so. While some benefits have been restored to some immigrants, much more should be done. State governments find that of determining immigrant eligibility for programs is a great burden because of the complex legal statuses and differing treatment of legal immigrants. The 1996 federal welfare law not only restricted immigrants' eligibility for critical services, but also deterred eligible U.S. citizen and immigrant family members from securing services for themselves and their children. Restrictions on immigrants directly affect citizens: 85 percent of immigrant families include at least one U.S. citizen family member. Provisions in TANF and related programs concerning immigrants are confusing for caseworkers and policymakers alike, especially since TANF funds provide support for services that support work as well as cash assistance. These provisions must be reexamined. NCSL supports the restoration of the ability of states to use TANF funds for legal immigrants.

The Administration listened to state lawmakers' concerns on this issue and has proposed restoration of food stamp benefits to legal immigrants. NCSL compliments him on this proposal and encourage Congress to support it.

An issue that remains to be addressed is reconciling the "look back" date to a state's AFDC plan when determining IV-E eligibility. NCSL urges federal policymakers to reconsider this provision. NCSL supports additional waiver authority and flexibility, especially lifting the cap on the number of states that can receive child welfare waivers.

At a minimum, NCSL urges clarification of the welfare reform requirements as they relate to tribal options. State legislators are concerned about the implications of the tribal options on the states and urge Congress and the Administration to work with state legislators and tribal leaders. NCSL has met with tribal leaders and will continue to work to find areas of mutual agreement in welfare reform.

As Congress considers revisions to the tribal TANF program, we urge inclusion of the following:

• Continuation of and expansion of MOE credit for states who voluntarily provide state funds to tribal TANF programs;
• Trigger mechanisms that allow flexibility in work requirements and time limits for areas in tribal lands with high levels of unemployment,
• Provisions that would encourage state/tribal cooperation, foster a better state/tribal partnership and avoid mandates on the states,
• Access to performance bonuses,
• Funding for technical assistance to tribes including economic development,
• Consider reworking current law to provide a separate funding stream for tribal TANF with provisions for tribes to contract with states, and
• Change the period of time for tribal options to accommodate those states with biennial sessions and budgets.

Welfare Waivers

NCSL strongly believes that states need flexibility for further innovation. State legislators would prefer to have options, rather than waivers, for policy changes that are not in need of further evaluation. NCSL strongly believes that states must be able to continue current federal waivers as well as receive new federal waivers for welfare reform. The elimination of current state waivers will substantially undermine current state programs.

The Administration has proposed a new process for states to apply for waivers across programs and departments. NCSL has urged more coordination across programs and supports the creation of an expedited process to consider state requests. A new waiver process must have cost-neutrality provisions that allow states the ability to count their progress over five years, not year to year. It must include a broad range of programs. It would also be especially helpful if it allowed for data reporting across programs and agencies and allows for information technology to be adapted in a more flexible manner by states. State legislators should be given a role in the waiver application process.

Health Care

Health care is a critical need for all families and is key to long-term self-sufficiency. Lack of access to health care, including mental health care, is often cited as a reason why recipients return to cash assistance after leaving for employment. NCSL believes that health care reform is a component of welfare reform. NCSL's policies on health care detail our positions. State legislators strongly support continuation of the transitional medical assistance (TMA) program to support parents who move from welfare to work. States should have the option of extending Medicaid assistance for longer than the current one year after transitioning to employment.

TRANSPORTATION

Transportation is another barrier to employment. Transportation assistance must be part of any federal welfare reform plan. Too often, work opportunities are provided at a distance from where recipients live. This assistance must take into account transportation needs for child care. Transportation assistance should not be considered "assistance" for the purpose of triggering time limits.

OTHER WORK SUPPORTS

Work expenses are an additional barrier to employment. Uniforms, tools and texts can be especially costly for those beginning employment. NCSL believes that the federal government must provide adequate funds and eligibility disallowance for work expenses. There is little coordination between the various programs that assist low-income families with their housing needs and self-sufficiency efforts. We urge the federal government to link these systems so that those who return to employment are not in danger of losing their housing assistance and can earn their way out of poverty.

Financing

State legislators are extremely concerned about federal financing of welfare reform. NCSL strongly opposes federal efforts to finance welfare reform through cost-shifting to the states. NCSL opposes the following:

• unfunded mandates;
• transfer of support for needy populations to state government through elimination of program and benefit funding by the federal government. The federal government cannot eliminate their responsibility for legal immigrants, substance abusers, homeless families and families in crisis. This does not address legitimate needs -- it transfers the need to state-funded and nonprofit programs and public hospitals;
• capping current open-ended entitlements; and
• unrealistic assumptions about savings from recipients leaving welfare or receipt of child support enforcement.

Technical Assistance/IMPLEMENTATION

State legislators believe that there are many innovative programs around the country that should be shared. Technical assistance to state legislatures will be critical as we consider state revisions. NCSL urges that the federal government include funds for technical assistance to state legislatures as part of the national reform effort. Adequate implementation time is necessary, especially if states must make changes in state law to comply with new federal requirements. Regulations must be issued in a timely fashion and continue to promote state flexibility.

* Policy approved at the May 2002 meeting of the NCSL Assembly on Federal Issues and temporarily in effect pending final approval at the Annual Meeting of NCSL in Denver in July, 2002.

For further information, please contact Sheri Steisel, Senior Director, Human Services Committee, in NCSL's Washington Office at (202) 624-5400.