The Brookings Institution, Washington, D.C. Goals of Welfare Reform & Beyond: To identify the major issues and opportunities for improved policy that should be addressed during the welfare reform reauthorization debate. To improve the general level of debate by helping Congress and interested parties outside Congress understand what has been learned from research about the successes and shortcoming of welfare reform. To identify alternative policies that could be adopted by Congress to address the shortcomings of welfare reform.

The Brookings Institution, Washington, D.C. TANF Reauthorization Issues Issue # 1: Purposes of TANF Issue # 2: Funding of TANF Issue # 3: Time Limits Issue # 4: Family Formation Issue # 5: Providing a Safety Net for Children Issue # 6: Child Care Other Issues

The Brookings Institution, Washington, D.C. Issue #1: Purposes of TANF Status Quo: –Provide assistance to needy families –End dependency via job preparation, work, and marriage –Reduce out-of-wedlock pregnancies –Encourage formation of two-parent families Liberal Argument: –Too much emphasis on reducing caseloads; not enough on reducing poverty Conservative Argument: –Even more emphasis needed on family formation Options: –A rewrite of purposes reflecting political environment in 2002 –An attempt to establish performance measures linked to purposes –Re-evaluation of rewards and penalties for performance (e.g. caseload reduction credit)

The Brookings Institution, Washington, D.C. Issue #2: Funding of TANF Status Quo: –Funding of $16.5 billion per year expiring in 2002 –States required to spend 75-80% of FY 1994 level Arguments for Reduced Funding: –Current funding levels set when caseloads higher –Many states not using full block grant allocations Counter Arguments: –Reneges on bargain made earlier with states –Funding declining in real terms –No longer adjusts automatically during recessions –Funds needed to provide help to hard-to-employ and working poor Options: –Lower funding –Adjust block grant for inflation –Add adjustment for economic conditions

The Brookings Institution, Washington, D.C. Issue #3: Time Limits Status Quo: –Five year lifetime limit on use of federal funds for most recipients –20% of caseload exempted from this limit Arguments for Retaining: –Time limits needed to send clear national message about changed nature of welfare system –Shorter time limits implemented by some states do not appear to have had any major consequences –States can use their own funds to keep people on rolls longer Continued---

The Brookings Institution, Washington, D.C. Issue #3: Time Limits Counter Arguments: –Five year limit begins to kick-in Fall 2001; have not yet seen full effects –May create undue hardship, especially if it takes effect in the middle of a recession –Time limits less important than sanctions in motivating mothers to work –Large number of families are floundering because of severe barriers to work –20% exemption is insufficient Options: –Eliminate federal time limit but allow states to establish own limits –Stop the clock for mothers who work a minimum number of hours while receiving welfare –Liberalize exemptions from time limit –Allow “earnback” of time for those off welfare

The Brookings Institution, Washington, D.C. Issue #4: Family Formation Status Quo: –Emphasized in purposes of law –Law contains numerous small carrots but few big sticks for discouraging childbearing outside marriage –Family caps and denial of benefits to minor mothers permitted Conservative Arguments: –Despite law’s emphasis on this goal, states have emphasized work and largely ignored this critical area –Illegitimacy is still a big problem Liberal Arguments: –Far less public consensus about values here –We don’t know how to promote childbearing within marriage –Emphasis should be on assisting all family types equally Continued---

The Brookings Institution, Washington, D.C. Issue #4: Family Formation Options: –Reduce the marriage penalty in the EITC (as part of a tax bill) –Provide “bonuses” to those that have children within marriage –Enact legislation that assists fathers –Provide more funding for teen pregnancy prevention (e.g., abstinence education, family planning, media campaigns, after-school programs) –Tie the “illegitimacy bonus” in current law more closely to state efforts –Experiment with complete elimination of welfare benefits for young unwed mothers

The Brookings Institution, Washington, D.C. Issue #5: Providing a Safety Net for Children Status Quo: –No individual entitlement to welfare –Food stamps and Medicaid only safety net Liberal Arguments: –Too little attention has been paid to the impact of welfare reform on children –Children likely to be harmed by removal of safety net Conservative Arguments: –Safety net has encouraged out-of-wedlock childbearing –Children benefit from having parents who model mainstream behaviors –No evidence of significant harm so far –Child poverty has declined since 1993 Continued---

The Brookings Institution, Washington, D.C. Issue #5: Providing a Safety Net for Children Options: –Restore individual entitlement to welfare –Provide more assistance to families with children, but primarily for those who are working –Further reduce benefits, especially to minor mothers who have children out of wedlock –Use state funds or Social Service Block Grant vouchers to assist needy children

The Brookings Institution, Washington, D.C. Issue #6: Child Care Status Quo: –Congress provided $4.5 billion in extra funding for child care over 6 years –States can spend up to 30% of TANF dollars for child care –States responsible for regulating quality Liberal Arguments: –If require mothers to work, must address what happens to kids –HHS estimates only 10% of children eligible for child care block grant are served –Much child care of poor quality –Not enough available during nonstandard hours Conservative Arguments: –Funding of child care has increased dramatically –No evidence of unmet demand for child care –Little evidence that quality matters Continued---

The Brookings Institution, Washington, D.C. Issue #6: Child Care Options: –Provide more funding for child care –More funding for Head Start and universal pre-K –Allow states to spend a higher percentage of TANF money on child care

The Brookings Institution, Washington, D.C. Other Issues: Allocation of Funds among the States Participation in food stamps and Medicaid Supports for Working Families (EITC, earnings disregards, health care, child care, minimum wages, etc.) Community Service Jobs or Work Programs Child Support Enforcement Education, Job Retention, and Advancement The Adequacy of the Safety Net during Recessions Benefits for Legal Immigrants Services for Floundering Families