House And Senate Action on Welfare Reform Reauthorization
Federal Information Alert
March 4, 2004
The fate of welfare reform reauthorization may hang on the outcome of three different actions -- the Senate budget resolution that was marked up in Committee today, whether a short-term extension includes policy changes like those proposed on Friday in the House, or the resolution of differences on the Senate Finance Committee-passed welfare bill that would allow it to move to the Senate floor. Currently, the authorization for TANF, transitional Medicaid and child care and other related programs is only extended through March 31, 2004. At a minimum, action will be needed to extend the program beyond March 31.
SENATE BUDGET RESOLUTION
The Senate Budget Resolution, which controls the rules governing how the Senate will allocate funds for federal fiscal year 2005, was introduced by Budget Chairman Nickles (Oklahoma) and is expected to be adopted in Committee today. The Chairman's mark assumes that TANF will be reauthorized. However, it does not include funding for the extension of the TANF Supplemental Grants (that go to primarily Southern and Western states) or the extension of Transitional Medical Assistance under Medicaid (TMA). It further states that the budget assumes that " reauthorization will be paid for with spending cuts and not increase the deficit". This means, before any further spending changes can be considered, offsets must be identified for the TANF Supplemental and for TMA.
Further, it means that the Senate Finance Committee's version of welfare reauthorization (HR 4 or the PRIDE bill) is not considered to be funded under the Budget Resolution. The PRIDE bill as passed by the Senate Finance Committee has approximately $6 Billion in new spending. This includes funding for continuation of TANF Supplemental, for changes and improvements in TMA, for child support pass-through options for states and other child support improvements and for $1 billion of child care over 5 years. It means that any increases for any programs, including child care, that will be considered on the Senate floor also must be accompanied by spending reductions.
Any spending without accompanying offsets would be subject to a budget resolution point of order. This means that 60 votes would be required to overturn a budget point of order objection. Consequently, the PRIDE bill must now get 60 votes on the Senate floor for passage. Similarly, amendments to increase child care must get 60 votes. This change was not anticipated by Senators working on the welfare bill. It does make it more difficult to adopt welfare reauthorization legislation.
HOUSE EXTENSION BILL CONTAINS PROBLEMATIC PROVISIONS
On February 26, 2004, Representative Wally Herger (R-CA) introduced H.R. 4838, legislation to extend the Temporary Assistance to Needy Families (TANF) program and related programs through June 30, 2004. These programs are currently operating under the fifth in a series of extensions enacted by Congress. The current extension runs through March 31, 2004. In addition to the $16.5 billion TANF block grant, the extension proposed by Representative Herger covers TANF funding to territories, TANF supplemental grants to states, the TANF contingency fund, the Child Care and Development Block Grant, Transitional Medical Assistance under Medicaid, the Abstinence Education program, and various bonuses. It also includes the extension of current child welfare demonstrations and child welfare waiver authority.
The extension contains an important change to the caseload reduction credit. This would immediately create a problem for states in meeting the work participation requirements of the current welfare law. Some states would immediately face financial penalties from the federal government for not meeting the work requirement -- loss of 5% of TANF, backfill of this reduction with state funds and an increase of 5% in state's maintenance of effort requirements.
The extension bill would continue the caseload reduction credit, which currently gives states credit against the required work rate for reductions in the caseload since FY 95, but it is modified. For many states, the caseload reduction credit has been critical to meeting work participation rates. The "look-back" year for determining the credit is changed. For FY 2004, the credit would be based on the caseload in 1996. For FY 2005, the credit would be based on the caseload in 1998. For FY 2006, the credit would be based on the caseload in 2001. For FY 2007, and any succeeding fiscal year, the credit would be based on the caseload in the fourth preceding fiscal year. This provision is the same as the one in the House-passed reauthorization bill, H.R. 4, except that there is no "super achiever" credit included to give additional credit to states that had 60 percent caseload reduction between FY 1995 and FY 2001.
This is the first extension bill that has not been a "clean" extension. Changing the caseload reduction credit policy seems to be a House signal to the Senate that if the Senate fails to act on a reauthorization law, the House will attach provisions to an extension. In fact, it is expected that further extension bills may include more policy change proposals.
EXTENSION OR BILL? OR BOTH?
An extension will be needed by March 31 to continue these vital programs. It is generally believed that this will be a "clean" short term extension through June 30, 2004. While the House extension proposal is the first shot across the bow, it is only part of an ongoing skirmish between the House and the Senate over welfare reform reauthorization. No cease fire is expected soon.
The House passed a five-year reauthorization bill in February 2003, and the Senate Finance Committee passed its version of the bill out of Committee in September 2003. Senate floor consideration and conference with the House have not occurred. This is the second session of Congress in which the House has passed a bill, but the Senate has not. Because this is an election year and will be a short session, there is limited window of time for action on reauthorization. There are major differences between the House and Senate bills, including work requirements and the amount of childcare funding.
In the Senate, NCSL is working with a group of bipartisan Senators, including Senators Snowe, Hatch, Dodd, Rockfeller and Alexander, on an amendment that significantly expand the funding available to states for child care, since child care funding will be needed to meet any new work requirements. The funds provided in the amendment would not have to be matched by the states in the early years of the programs. NCSL is also working on a bipartisan amendment with Senators Rockefeller, Smith and Lincoln to ensure that states who increase their work effort by at least 5% are not subject to a financial penalty ("penalty relief"). The budget resolution constraints will make Senate consideration much more difficult. Senate Committee efforts continue to be about getting legislation through the floor, rather than pursuing a long-term extension. No one believes that either effort will be easy.
Members of Congress need to hear that extending and reauthorizing TANF and related programs are important to state legislators. Legislators need to be talking to their Senators now about the importance of penalty relief if work rates are increased and about the need for child care in their states.
For additional information, contact Sheri Steisel or Lee Posey at fedhumserv-info@ncsl.org.
|
