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August 1999 - Vol. 1, No 5

• GAO Reports on Effect of Declining Welfare Caseload on Child Support Financing
• TANF Reform Legislation Introduced
• Welfare-to-Work Reauthorization Would Add Focus on Noncustodial Fathers
• Food Stamp Participation Falls; Program Changes Proposed
• Responsible Fatherhood Bill Introduced

GAO Reports on Effect of Declining Welfare Caseload on Child Support Financing

The United States General Accounting Office (GAO), in a June 1999 report, Child Support Enforcement: Effects of Declining Welfare Caseloads Are Beginning to Emerge, analyzed and reported on the shift in child support enforcement financing that has occurred in recent years. Since 1994, an increasing number of states have begun to pay out more to operate their child support enforcement programs than they receive back in recovered welfare payments and incentive payments. The GAO attributes this declining revenue to shrinking welfare caseloads. Thus far, states have generally been successful at offsetting the declines in child support enforcement (CSE) welfare cases through their ability to intercept more money from noncustodial parents' income tax refunds, and because many states now retain the full child support payment rather than passing through the $50 required by law prior to welfare reform. The GAO predicts that CSE welfare collections will continue to decline in the coming years due to: 1) future caseload declines; 2) nonwelfare caseloads and costs which are expected to increase; 3) implementation of a "families first" policy that gives families priority over the state in receiving child support arrearage payments once the custodial parent leaves welfare, and 4) a new incentive payment structure that caps the incentive payment pool, leading to a less stable source of funding to states. It is expected that states will attempt to offset some of these declines using the powerful new tools to enforce child support payments, created by the welfare reform law, such as federal and state child support case directories and new employee hire information.

TANF Reform Legislation Introduced

Two bills that would modify the TANF program have been introduced in the Senate:

• Senator Paul Wellstone (D-MN) introduced an amendment to the Fiscal Year 2000 Defense Authorization (S. 1059) legislation that would require states to collect data about former TANF recipients, including their employment status, wages, health insurance status, and child care information for 24 months after the recipients' cases are closed, and require the Department of Health and Human Services to include this information in its annual report to Congress. In his remarks to Congress on the amendment, Senator Wellstone noted the dramatic decline in welfare caseloads as a result of welfare reform, a drop of 44% since 1993 and 4.5 million recipients since the implementation of the most recent welfare reforms. The Senator also noted that, "no one seems to know what has happened to these families. Yet, we keep trumpeting the 'victory' of welfare reform. The declining caseloads tell us nothing at all about how families are faring once they no longer receive assistance. I am worried that they are just disappearing and this amendment is all about a new class of citizens in our country. I call them the disappeared." The Senator asked for a recorded vote on the amendment and promised, if it was dropped, to continue to reintroduce it until it passes.
• Senator Moynihan (D-NY) introduced S. 209, which would prohibit states from imposing a family cap under TANF. The family cap, now imposed on TANF families in more than 20 states, denies assistance to any individuals born after a family became eligible for or began receiving assistance. The bill has been referred to the Senate Committee on Finance.

Welfare-to-Work Reauthorization Would Add Focus on Noncustodial Fathers

The Welfare-to-Work Amendments of 1999 (H.R. 1482/S. 1317), introduced by Congressman Cardin (D-MD) and Senator Akaki (D-HI), would invest an additional

$1 billion in the Welfare-to-Work initiative, and would emphasize the employment of low income fathers through several changes to the present program:

• At least 20% of formula funds allotted to a Sate would be used to serve noncustodial parents, and eligibility for program services would be simplified.
• Job training, and in some cases basic education would be permitted activities.
• Noncustodial parents would be required to enter into a Personal Responsibility Contract with the service provider and state child support enforcement agency, committing to: cooperate in the establishment of paternity or the appropriate modification of a child support order, make regular child support payments, and to work.

It is not clear whether the training activities would fulfill the requirements of the Personal Responsibility Contract. The House version of the bill has been referred to the House Committee on Ways and Means. The Senate version has been referred to the Senate Committee on Finance.

Food Stamp Participation Falls; Program Changes Proposed

A GAO report, several executive actions and recent Food and Nutrition Service proposed rule changes could each have a significant impact on the federal Food Stamp program.

• In a July 1999 Report to Congressional Requesters, Food Stamp Program: Various Factors Have Led to Declining Participation, the General Accounting Office (GAO) reports that a strong economy does not fully explain declining food stamp participation. For children, Food Stamp receipt has dropped more sharply than the number of children living in poverty, indicating a growing gap between need and assistance. In some states, households have had problems obtaining food stamps because states and local programs have gone farther than the law permits in limiting benefits, or have not publicized differences in the eligibility requirements for welfare and food stamps. At least seven states have policies that improperly remove eligible households with children from the food stamp rolls as a sanction for a TANF violation. The GAO recommends that the Food and Nutrition Service promulgate regulations to ensure that eligible people receive food stamp benefits.
• Meanwhile, President Clinton has announced a series of executive actions aimed at improving participation rates in the Food Stamp Program. Although somewhat narrow in scope, the actions have received significant media attention. They would allow for a more generous asset limit to increase the allowed value of a vehicle from $4,650 (conforming with the TANF asset test); simplify income reporting requirements for families and states, and initiate a food stamp public education campaign to educate working families about food stamps.
• Not related to the GAO recommendations or the executive actions, the Food and Nutrition Service has issued proposed rules and regulations for the Food Stamp Program to implement the non-discretionary provisions of PROWRA. The proposed rules significantly restrict and reduce food stamp payments. Among other changes, the new rules would: 1) disallow persons age 21 and under who are parents or married, and who live with a parent, from receiving food stamps as a separate household; 2) reduce the maximum allotment calculation to 100% from 103% of the Thrifty Food Plan; 3) change the definition of homeless by setting a time limit (where there was none before) on people whose primary nighttime residence is a temporary accommodation in the home of another; 4) freeze the vehicle exemption at $4,650; 5) increase the number of days in which states have to provide expedited service from 5 to 7 calendar days; 6) eliminate households consisting entirely of homeless people from eligibility for expedited service, and 7) remove the state option to exclude from unearned income up to $50 monthly of child support payments. Comments on the proposed rulemaking may be directed to Margaret Werts Batko, Certification Policy Branch, Program Development Division, Food and nutrition Service, USDA, 3101 Park Center Dr., Alexandria, VA, 22302. Tel: (703) 305-2516, Fax: (703) 305-2486, and must be received on or before September 10, 1999.

Responsible Fatherhood Bill Introduced

On July 14, Senators Evan Bayh (D -IN) and Pete Domenici (R-NM) introduced the Responsible Fatherhood Act of 1999 (S. 1364), which has as its main goals "to increase public awareness regarding the benefits of lasting and stable marriages and community involvement in the promotion of marriage and fatherhood issues, [and] to provide greater flexibility in the Welfare-to-Work grant program for long-term welfare recipients and low income custodial and noncustodial parents."

The bill seeks to accomplish these goals through:

1. an authorization of a $25 million challenge grant program (through which the federal government would match donations one for one) designed to encourage states and local communities to obtain donated air time from broadcasters to promote the bill's goals
2. a $50 million state block grant program to support local efforts to promote marriage and responsible fatherhood
3. $2 million per year to support a National Clearinghouse to promote responsible fatherhood
4. a change in Welfare-to-Work eligibility restrictions to allow states more flexibility to serve noncustodial parents
5. allowing states, under certain circumstances, to use child support funds on fatherhood initiatives instead of paying funds back to TANF
6. a state option to pass $75 of collected child support through to the family, and a release of the state's obligation to pay the federal share as well as the authority to count the passed through child support amount toward the state's TANF maintenance of effort requirement.

Fifty percent of funds received by states must by used to promote the formation and maintenance of married two-parent families, and 50% to strengthen fragile families and promote responsible fatherhood. State grants may be used to fund programs through grants or contracts with local governments, public agencies and private nonprofit organizations, including charitable and religious organizations.

It is not yet clear how the bill would be funded, or how the use of the funds authorized by the bill would meet the stated goals. The Welfare-to-Work changes are similar to those contained in the Welfare-to-Work reauthorization bill (summarized above), and the pass-through is a weaker option than is contained in Senator Kohl's pass through legislation (see June 1999 fax briefing). The bill will likely find some opposition due to its blurring of separation of church and state in its explicit allowance for the use of federal funds to support religious organizations; its large claim of funds (fifty percent) for the promotion of marriage, and its potential use of the federal share of child support collections to pay for fatherhood programs. The bill has been referred to the Senate Committee on Finance.