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Human Services Committee Information Alert
Senate Committee Passes State-Friendly Welfare Reform Legislation

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June 26, 2002

On June 26^th, by a vote of 13 to 8, the Senate Finance Committee passed the "Work, Opportunity, and Responsibility for Kids (WORK) Act of 2002," a welfare reform reauthorization bill that differs from and improves on the House-passed legislation, H.R. 4737. Many provisions sought by NCSL are in the Work bill. Three Republicans joined all Democrats but one in voting for passage. The bill proposed by the Chairman, Senator Baucus (D-Montana) resembles the "tripartisan" proposal put forward by Senators Breaux (D-Louisiana), Hatch (R-Utah), Lincoln (D-Arkansas), Jeffords (I-Vermont), Snowe (R-Maine) and Rockefeller (D-West Virginia), who all voted for final passage. A third Republican Senator, Senator Murkowski of Alaska, also voted for the measure.

Senator Daschle (D-South Dakota), the Senator Majority Leader, differed from his fellow Democrats and voted against final passage. In a statement, Senator Daschle, citing state budget woes, indicated his concern that the bill contains insufficient child care funding. He stated "My vote on this mark does not diminish my commitment to getting this bill -- including strong child care provisions -- enacted this year." Both the House bill and a Senate version of the House bill (S 2648) were scheduled to be offered by Senator Nickles (R-Oklahoma) and Senator Lott (R-Mississippi), respectively, but were not offered during committee consideration. The Ranking Member, Senator Grassley (R- Iowa), voted against the bill while expressing his hope that issues of disagreement could be worked out before Senate floor action.

The WORK bill, a substitute for H.R. 4737, has many state-friendly provisions. While the bill increases work participation rates to 70% over 5 years, the hours of work a recipient must work are retained at 30, a broad definition of work activities apply and it retains the 20 hour work requirement for a parent with a child under 6. The bill features an employment credit replacing the caseload reduction credit that provides states with credit for a percentage of those who leave TANF for full and part time employment or those who work and receive child care or transportation assistance. Two years of vocational education including community college may count toward the work requirement, "Rehabilitative services" including substance abuse and mental illness treatment, may count for three months which can be extended for an additional three months. It sets a new standard for universal engagement of all TANF recipients with flexibility for states to determine which activities are appropriate. Other good news for states: The Child Care and Development Block

Grant would receive an additional $5.5 billion in mandatory funding, with no state match required for the first three years.

The Committee amended the Chairman's mark to increase the Social Services Block Grant (SSBG) to $1.952 for FY 2005. NCSL fought hard for SSBG funding to be included in the bill. If it was not included, SSBG funding could not be an issue in conference with the House. While the CARE Act, awaiting Senate floor consideration, includes additional funding for SSBG, it is only for FYs 03-04. Without a change in the statutory level for funding of the SSBG, the amount for FY 05 would return to the lower level of $1.7 billion. Notably, the bill gives states long-sought options to use TANF funds to serve legal immigrants and to provide Medicaid and SCHIP to pregnant legal immigrant woman and children. Supplemental TANF grants are increased, included in the TANF block grant and expanded to include 24 states.

The Committee engaged in significant discussion about the adequacy of the increase in the level of child care funding in the bill. An amendment offered by Senator Bingaman (D-New Mexico) to increase mandatory child care funding from $5.5 billion over five years to $7 billion over five years was withdrawn after a commitment by Senator Baucus to address the issue on the floor. Members also raised concerns about the overall level of spending in the bill (approximately $10 billion) and that increasing child care could lead to effort to increase the number of hours in the work participation requirement.

The bill also features a 5 year extension of Transitional Medicaid and permits states to provide continuous Medicaid eligibility for 12 months and, for families with average gross monthly earnings below 185% of federal poverty guidelines (less work needed child care costs) as of the first year of transitional benefits, to extend benefits for another year for a total of 24 months. Also, it adopts a new marriage promotion fund, extension of child welfare waiver authority, simplification of child support distribution and child support pass through at state option.

There were changes to the Chairman's mark. The amendments accepted prior to the Finance Committee consideration were as follows:

• Nonsupplantation of Child Care. Senator Bingaman's amendment to ensure that states will supplement, not supplant, current child care - states must maintain their level of spending on child care at the FY 02 level to receive new guarantee child care fund increases above FY02.
• Child Support. Senator Rockefeller's amendment to require states to update their child support guidelines based on the 2001 Uniform Family Support Act.
• State Plans. Senator Bingaman's amendment to require public comments periods before submission of state TANF plans when they are amended to reflect policy changes, and to require states to provide information on the complaints they have received about fair and equitable treatment.
• Two Parent Families. Senator Rockefeller's amendment to prohibit states from imposing stricter eligibility rules for 2-parent families.

The following amendments to the mark were adopted in committee:

• An NCSL-supported amendment by Senator Graham (D-Florida) to give states a new option to provide Medicaid and SCHIP to cover legal immigrant pregnant women and children, 11-9.
• On voice vote, an amendment by Senator Snowe to give states the option to count up to 10% of their TANF caseload as working while engaged in postsecondary education.
• Senator Rockefeller, supported by NCSL, to increase SSBG funding to $1.952 billion in FY 2005, and to restore transferability to 10% for one year, by voice vote.
• Senator Conrad (North Dakota) amendment, to allow states to exempt from work requirements up to 10% of their caseload from work requirements if they are caring for a disabled family member, by voice vote.
• Senator Bingaman amendment to allow all states to apply for waivers identical to current state waivers. Waivers are time-limited for 4 years, accepted by Chairman.
• Senator Bingaman amendment to clarify that state and local governments may provide health services to immigrants (including non qualified immigrants) with their own revenue, changes current law which requires states to adopt new statutes to do so, 13-8.
• Senator Baucus amendment to provide an additional $50 million for a new "abstinence-first" teen pregnancy prevention programs, by voice vote.

Calls from state legislators to Senate offices played a critical role in the outcome of today's mark up. The bill adopted by the Senate Finance Committee today is a definite improvement over the House version.