House Passes Welfare Reform Bill

Click here to view a summary of H.R. 4 ,"The Personal Responsibility, Work and Family Promotion Act of 2003"

House Passes Welfare Reform Bill

On February 13, 2003 the House passed H.R. 4, legislation reauthorizing welfare reform for five years in a vote that largely mirrored last year's partisan vote in the House. The final vote was 230 for, and 192 against the bill. 11 Democrats crossed party lines to vote for the bill, and 2 Republicans voted against the bill.

The 1996 welfare reform law expired on October 1, 2002 without being reauthorized and is presently operating by continuing resolution. H.R. 4 is substantially the same bill that the House passed last year, H.R. 473, and it largely resembles Bush Administration's proposals for reauthorization.

Two Democratic substitutes were offered during the floor debate and defeated-- a substitute offered by Representative Kucinich of Ohio, and one offered by Representatives Cardin (Maryland), Kind (Wisconsin) and Woolsey (California). A motion by Representative Cardin to recommit the bill to include $11 billion in child care funding was also defeated.

H.R. 4 continues TANF block grant funding at the current level of $16.5 billion. The bill does contains an increase in funding of $2 billion for child care (only $1 billion is mandatory or guaranteed funding), a positive step, but far less than the amount provided is less that many observers have predicted will be needed. Substantial new financial flexibility for states in the TANF program is included in the legislation.

H.R. 4 It dramatically increased work requirements for the states. Currently, 50% of the caseload must be engaged in work; that percentage would rise to 70% over 5 years. The bill also increases the number of hours per week recipients must be engaged in work and other activities. In general, recipients must work 40 hours a week, an especially large increase for parents with a child under six who currently must only meet a 20 hour requirement. The activities defined as work are reduced from the number in current law and limited job search and vocational education do not count in the first 24 hours of work. If states do not meet these dramatically increased work requirements, they risk significant financial penalties being imposed by the federal government. States lose 5% of their TANF block grant, must replace the loss with state dollars and must increase their state maintenance of effort funding by 5%. This penalty increases if the work rates are not two years in a row and in subsequent years. There is no agreed-upon timetable yet for Senate action on reauthorization

HR 4 also cuts state Medicaid administrative funding. The bill proposes to fund the TMA extension with Medicaid administrative funds obtained through "cost allocation." This year, unlike last year, the Administration's budget includes savings attributed to "cost allocation" in the Medicaid budget baseline, amounting to a $2.35 billion reduction in Medicaid administrative funds over five years.

To read a summary of H.R. 4, go to http://www.ncsl.org/statefed/humserv/HR4Summary03.htm.

Other Welfare-Related News

The House is considering the conference report of HJ Res night, the Hou2, the Omnibus Appropriations bill for FY03. I wanted you to know that it appears that funding for TANF and related programs like child care have only been extended through June 30. Most other programs are continued through September 30, 2003. The June 30 date appears to coincide with the end of the third quarter of FY03. This is clearly to try to hurry up consideration of welfare reform reauthorization legislation in the Senate. From conversations with the Congressional Budget Office, it does appear that full funding for TANF and related programs is in the baseline for FY2003. This means finding an offset to continue funding in the fourth quarter would not be necessary. However, it does seem to be the case that another action would be necessary (whether in a welfare bill or some other piece of legislation) to get the fourth quarter funded. In the Senate version of the omnibus bill, full funding of these programs through September 30. This was reduced to June 30 in conference.

For additional information, please contact Sheri Steisel (sheri.steisel@ncsl.org) or Lee Posey (lee.posey@ncsl.org), or call NCSL's D.C. office at (202) 624-5400.