WORKING TOWARD

INDEPENDENCE

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Table of Contents
Page

Executive Summary 1

Achievements of the Welfare Reform Law of 1996 4

Strengthen the Federal-State Partnership 12

Maximize Self Sufficiency Through Work 15

Promote Child Well-Being and Healthy Marriages 20

Encourage Abstinence and Prevent Teen Pregnancy 23

Improve Program Performance 25

Enhance Child Support Enforcement 28

Reform Food Stamps to Promote Work 31

Provide Food Stamps for Legal Immigrants 34

Facilitate Program Integration 35

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Executive Summary
The welfare reform law of 1996 marked a turning point in national welfare policy. The
new policy aimed to encourage personal responsibility by promoting work, reducing
nonmarital births, and strengthening and supporting marriage. No longer could able-
bodied adults remain on welfare year after year without working. Individuals were given
strong financial incentives to leave welfare for work; families were given essential
support for child care and health care to facilitate the transition to work; states were given
equally strong incentives to help parents prepare for and find jobs. And state and local
governments were given more control over welfare than ever before.

The result has been an historic decline in the welfare rolls, substantial increases in
employment by low-income mothers, unprecedented increases in earnings by low-income
females heading families, and a sustained decline in child poverty, particularly among
African-American children. In addition, for the first time in several generations, the
percentage of children born outside wedlock leveled off and has remained nearly flat for
the last five years.

But there is plenty of work left to do as Congress reauthorizes the 1996 legislation. The
Bush Administration’s detailed plan for reauthorization is explained in this document.
The plan has four major pillars, all of which build on the achievements of the 1996 law.

Promoting work is the key to both the 1996 reforms and the Administration’s
reauthorization plan. Although nearly three million families have left welfare, most of
them for work, there are still over two million families remaining on the rolls.
Policymakers and welfare administrators have an obligation to help these families follow
in the footsteps of those who have already abandoned welfare for work. The
Administration’s plan makes a $22 billion per year Federal commitment to cash welfare,
work preparation, and childcare through the Temporary Assistance for Needy Families
and Childcare and Development block grants.

Strengthening families is the second major element of the Administration plan. One of
the hardest jobs in America is being a single parent. Yet millions of the lowest income
single parents have shown over the past several years that they are capable of achieving
self support through work. But their earnings are often modest and leave their families
below the poverty line. Thus, it is vital that Federal policy continue to provide supports
to low-income working families and even expand these supports. The Administration’s
plan continues the current high level of spending for childcare, maintains the commitment
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to providing health insurance to the children of low-income working families, and
expands the child support enforcement program so that more payments by fathers will be
given directly to mothers and children. In addition, the Nation’s most important program
for assisting low-income working families with children, the Earned Income Tax Credit,
will continue to provide income supplements of up to $4,000 per year to single mothers
leaving welfare for work.

Although our policy must and does continue to support single-parent families, national
policy must do a better job of promoting healthy marriages. Research shows that both
adults and children are better off in two-parent families. Children reared by married
parents in intact families are more likely to complete high school and are less likely to be
poor, to commit crimes, or to have mental health problems than are children reared in
single-parent families. It is no criticism of single parents to acknowledge the better
outcomes for children of married-couple families. Rather, it is simply wise and prudent
to reorient our policies to encourage marriage, especially when children are involved. For
this reason, the Administration plan commits up to $300 million per year for states to
design and implement programs that reduce nonmarital births and increase the percentage
of children in married-couple families. The states have established a strong track record
of innovation in helping dependent adults move to work; there is every reason to believe
that states will find new and effective ways to encourage healthy marriage in appropriate
circumstances. The Administration’s approach to promoting marriage is to provide
financial incentives for states, often working together with private and faith-based
organizations, to develop and implement innovative programs. These demonstration
programs will be carefully evaluated and successful programs will be disseminated to
other states.

Acknowledging the immense capacity of states and localities to design and conduct
effective social programs is the third foundation of the Administration’s plan. The
Federal Government devolved a great deal of authority and responsibility for social
programs to states as a fundamental part of the 1996 reforms. Now the Federal
Government’s primary responsibilities are to set broad goals for social programs, help
fund them, evaluate their efficiency and effectiveness, and provide assistance to states
trying to implement programs that have a proven track record. This revolution in Federal
and state roles should be continued and expanded. Specifically, the Administration’s plan
includes legislation that would allow cabinet-level agencies to have expanded authority to
grant waivers to states for the purpose of improving the efficiency and effectiveness of
cash, housing, nutrition, and especially workforce programs. The primary goal of the
expanded state flexibility is to improve coordination across programs so that more adults
can achieve independence from welfare while attaining greater financial and social

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security for themselves and their children.

Finally, the Administration’s plan includes an important restoration of nutrition benefits

for legal immigrants. The 1996 reforms imposed a five-year ban on most welfare benefits
for legal immigrants and a permanent ban on food stamps and Supplemental Security
Income. Federal policy should strive to find a balance between the needs of poor
immigrants and the obligation to ensure that welfare policy neither attracts noncitizens to
the U.S. to take advantage of welfare programs nor induces welfare dependency among
immigrants who receive welfare benefits. Thus, the Administration supports continuation
of the five-year ban but proposes to align food stamp rules with the rules for cash welfare
and Medicaid by allowing legal immigrants to receive food stamps after five years. This
policy helps ensure adequate nutrition among children and other vulnerable immigrant
groups, while continuing to require new entrants to the country to support themselves and
their families through work.

Taken together, the elements of the Administration’s plan represent a balanced approach
to continuing the immense success of the 1996 reforms. America has made great
progress in welfare reform. Doors of opportunity that were shut and sealed have been
opened – in no small measure because of the efforts of welfare recipients themselves.
But there is no acceptable level of despair and hopelessness in America. We will not
abandon people in need to their own struggle. The successes of the past few years should
not make us complacent. They prove what is possible when we press forward with
bipartisan reform efforts. And the Bush Administration is determined to press forward.

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________________________________________________
Achievements of the Welfare Reform Law of 1996
The War on Poverty
In 1964, President Johnson declared war on poverty. At the time, the Federal
commitment to solving domestic social problems was modest, as measured by either the
number of programs or the level of spending. But in that remarkable year, the Nation
embarked on a path that led to an expansion of programs and spending designed to attack
poverty and other domestic problems. Over the next decade, the Federal Government
enacted Medicare, Medicaid, Head Start, food stamps, Supplemental Security Income,
and an array of additional programs. By 1995, the Nation had over 300 social programs,
and Federal and state spending on the poor had jumped from around $40 billion to about
$360 billion.

These programs were the Federal Government’s first sustained attempt to address low
income and poverty. Two important results of the new programs are that poverty among
the elderly has been reduced by about two-thirds and affordable health care for the elderly
has become universal. These are great achievements.

However, the effects of War on Poverty programs on children, young adults, and parents
have been far less positive. Indeed, despite the dramatic increase in programs and
spending, child poverty stayed at high levels and actually drifted upwards between the
1970s and the early 1990s. Even worse, more and more children were born outside
marriage, a circumstance associated with high levels of poverty, youth violence and
crime, and welfare dependency, all of which increased during this period.

The Welfare Reform Law of 1996

By 1995 there was broad agreement that the guaranteed benefits of the welfare state had
failed to help young adults establish economic independence. A new direction was
needed to break rising welfare dependency and return more young people, especially
parents, to lives of self-reliance and dignity.

Following the Republican sweep of the Congressional elections of 1994, Republicans

introduced legislation to reform the Nation’s leading welfare programs. The goals of the
reforms were to stimulate work, promote healthy marriages, and reduce non-marital
births. Work was promoted both by making continued receipt of cash welfare conditional

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on serious efforts to prepare for and find work, and by making it clear to recipients that
welfare was temporary. Thus, families were limited to a total of five years of cash
welfare over their lifetime. States were also directed to place a specific percentage of
their welfare recipients in work programs or suffer penalties. The 1996 law also
streamlined childcare programs and greatly increased childcare funding, improved child
support enforcement so that more money could be collected for single mothers and
children, changed Medicaid rules so that virtually all families leaving welfare would have
at least one year of guaranteed Medicaid, and enacted a series of reforms designed to
reduce non-marital births. States were also given unprecedented flexibility to design and
conduct programs to increase employment and reduce non-marital births.

After a spirited debate, Congress overwhelmingly passed a bipartisan bill which was
signed into law on August 22, 1996.

Welfare Reform Works

Welfare Receipt, Employment, Earnings, and Poverty

The results of these reforms, which were implemented during one of the hottest
economies of recent decades, are nothing short of spectacular. Taken together,
information from state surveys, large-scale surveys from the Census Bureau, and other
sources portrays a very
consistent picture.

As shown in Figure 1,
the number of families
on welfare (now called
Temporary Assistance
for Needy Families or
TANF) has been
declining rapidly for the
first time ever.
Although many
commentators claim
that welfare rolls rise
during recessions and
decline during
economic booms, this
claim is refuted by the information in Figure 1. After 1960, welfare declined in only a few

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years until the mid-1990s. The gray areas representing recessions in Figure 1 show that
the rolls tended to rise during both recessions and economic expansions. Even the
booming economies of the 1960s and the 1980s could not substantially reduce the welfare
rolls. Yet for the first time ever, following the 1996 reforms, the rolls declined rapidly as
the economy expanded.

Because so many people left the rolls after the mid-1990s, many observers predicted
disaster during a recession. This prediction is now being put to the test by the recession
that began in March of 2001. Although the welfare rolls have started to increase in
several states for the first time since the mid-1990s, total enrollment in welfare across all
the states continued to decline slightly through September of last year as compared with
September of 2000. Thus, even during the recession, states have continued to have some
success in helping mothers leave welfare, albeit less success than they were able to have
when jobs were more plentiful.

Declining rolls suggest reduced welfare dependency, but a full evaluation of welfare
reform requires careful study of more than caseload declines. What happens to mothers
who leave welfare? More than 40 states have now conducted studies to answer this
question. These studies show that on average around 60 percent of mothers leaving
welfare are employed at any given moment and that over a period of time more than 80
percent are employed.

National survey data from the U.S. Census Bureau confirm this finding. Because Census
Bureau studies are based on representative samples of the entire population, they provide
the most reliable and valid estimates of how the economic fortunes of Americans change
over time. Consistent with the state studies of mothers leaving welfare, Census Bureau
employment data for all females who head families show dramatic increases in work
beginning in the mid-1990s. After a decade in which the annual employment rate of
single mothers hovered around 58 percent, the rate increased every year through 2000, the
last year for which information is available. By 2000, well over 73 percent of mothers
heading families were working, an increase of 25 percent in 6 years.

Even more to the point, most of the increased employment occurred among low-income
mothers. Figure 2 shows employment levels for never-married mothers, the most
disadvantaged subgroup of mothers heading families. These mothers are the least
educated, the least job experienced, and the most likely to have long spells on welfare
often lasting well over a decade. Yet between 1995 and 2000, their employment rates
increased from under 46 percent to nearly 66 percent, an increase of more than 40 percent
in just five years.

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These employment increases by single mothers and former welfare mothers are
unprecedented. By
2000, the percentage of
single mothers with a
job reached an all-time
high. Thus, the decline
in welfare rolls has led
to substantial increases
in employment.

Even those who raised

doubts about welfare
reform must concede
that millions of mothers
previously dependent on
welfare have proven
themselves capable of
holding jobs. But
skeptics might still question whether the rise in work has contributed to increased
economic well-being among female-headed families. After all, during the welfare debate
of 1996, a highly publicized study had predicted that at least a million children would be
cast into poverty by welfare reform.

Again, the Census

Bureau surveys provide
reliable information on
changes in economic
well-being among all
female-headed families.
In most years since the
mid-1990s, the Census
Bureau data paint a
consistent picture of
economic progress by
low-income mothers
heading families. Figure
3 captures the essential
features of the portrait for

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the bottom 40 percent of mother-headed families (total income under $21,000). Between
1993 and 2000, earnings increased dramatically while income from welfare fell. The
figure shows that welfare income, primarily from cash and food stamps, has declined by
about $2,500 per family. However, income from earnings and the Earned Income Tax
Credit (EITC), a program that provides a cash subsidy to low-income working parents,
has more than offset this loss of welfare income for many families. Earnings and the
EITC climbed by an average of $5,300 per family over the period. Thus, when these and
all other sources of income are combined, the total income of families headed by low-
income single mothers increased by well over 25 percent between 1993 and 2000. This
pattern of rapidly increasing employment and earnings accompanied by decreasing
welfare income is the very definition of breaking welfare dependency.

Not surprisingly, the

surge in employment
and earnings was also
successful in reducing
child poverty rates. As
Figure 4 shows, the
predictions of increased
child poverty have
proven to be incorrect.
In fact, child poverty
has declined every year
since the mid-1990s.
The total decline of
about 30 percent, from
22.7 percent in 1993 to
16.2 percent in 2000,
has brought overall
child poverty to its lowest level since 1978. Equally important, poverty among African-
American children has fallen dramatically to its lowest level ever, and Hispanic children
are not far behind.

Additional data from the Census Bureau not shown here provide the key to understanding
these large reductions in child poverty. Historically, poverty rates among children in
female-headed families have been five or six times higher than poverty rates for children
in married-couple families. As the percentage of children living in female-headed
families increased every year after the early 1970s, the child poverty rate drifted upwards,
reaching almost 23 percent in 1993, its highest level in almost 30 years. The

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straightforward explanation for this unfortunate trend is that an increasing percentage of
American children lived in female-headed families, and an increasing percentage of the
mothers heading these families did not work steadily and became dependent on welfare.
But beginning in the welfare reform era of the mid-1990s, more and more of these
mothers went to work, their earnings increased greatly, and child poverty fell. The
poverty rate among female-headed families is now at its lowest level ever.

Here’s the bottom line: welfare reform worked because single mothers left welfare and
went to work in unprecedented numbers. Good for them. Good for their children.

Family Composition

The news on family composition is encouraging. The negative effects of single parent
families were brought forcefully to the Nation’s attention in 1965 by Daniel Patrick
Moynihan, then an Assistant Secretary in the Department of Labor. Moynihan noted the
dramatic increase in non-marital births and reviewed evidence to argue that these births
were the underlying cause of several of the Nation’s leading domestic problems,
including violence and welfare dependency. But the public reaction to Moynihan’s report
was so negative that the problem he diagnosed with such clarity was ignored for three
decades.

It was not until the welfare reform law of 1996, some three decades later, that the Federal
Government launched its first major attack on the problem of non-marital births. Among
other policies, states were given great flexibility in their use of Federal resources to
reduce non-marital births and increase the number of children growing up in two-parent
families; rules on paternity establishment were strengthened; the child support
enforcement program was overhauled; teen mothers were required to attend school and
live at home or lose their welfare benefits; and a bold new abstinence education program
was launched.

Although most observers agree that states have not been as aggressive in launching
programs to increase the number of children in two-parent families as they have been in
mounting programs to help mothers work, they have, nonetheless, taken the first steps
toward what could become a robust and multi-front attack on the problem of family
composition. As shown in Figure 5, after several generations of relentless increases, both
the rate of births to unmarried mothers and the percentage of all births to unmarried
mothers have leveled off. Similarly, teen birth rates have enjoyed a decline every year
since 1991 and are now as low as they were in the 1960s (not shown in the figure). This
is a promising beginning, but much more remains to be done to increase the number of

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children reared in two-parent families.

Working Toward Independence

There is little doubt that the Federal Government and the states have found a new strategy
to reduce welfare dependency. The strategy has two parts. First, strong measures –
especially work requirements backed by sanctions and time limits – have been taken to
convince young mothers that they must leave welfare for work. States responded to these
Federal requirements by implementing programs that helped welfare mothers search for
and find work. Combined with a robust economy, this approach has pushed welfare rolls
to their lowest point in three decades and work by single mothers to its all-time high.

The second part of the strategy has received far less attention. Over the past 15 years or
so, Congress has expanded a series of programs that provide support to low-income
working families. These programs include Medicaid, childcare, the child tax credit, the
EITC, and food stamps. Taken together, these programs convert even a minimum wage
job into the equivalent of a job paying $8 per hour with benefits. More specifically, if a
mother with two children works almost full time at the minimum wage, she earns about
$10,000 per year. But thanks to $4,000 in cash from the EITC and around $2,000 in food
stamps, the mother and children have a total income of $16,000. In addition, the mother
has Medicaid coverage for up to a year after she leaves welfare and the children have
Medicaid coverage for as long as the mother has low income. Moreover, the mother may

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benefit from the $17 billion in annual Federal funding for childcare.

The fundamental goal of welfare reform since 1996 has always been to help each family
achieve its highest degree of self-sufficiency. Various work support and training
programs are not only intended to supplement low levels of earnings, but to help enable
people to make the transition to better jobs as they climb the career ladder.

It is the combination of programs that encourage or require work and programs that
subsidize work that accounts for the remarkable outcomes achieved by welfare reform.
To be sure, there are problems with the new approach, including mothers holding low
wage jobs, mothers who face severe barriers to employment, and families that have
difficulty retaining enrollment in the food stamp and Medicaid programs. States are
already beginning to design and implement programs to address these problems.

Given the great successes achieved by the 1996 reforms, the basic structure of the TANF
and childcare programs should remain intact, including the generous funding for both
programs. Beyond retaining the basic features of welfare reform, reasonable changes can
help states augment the employment and earnings gains already achieved and lead to
improved outcomes for many of the families left behind. The more modest success of the
family composition goals of TANF suggests that more innovative solutions must be
found to reduce non-marital births and increase marriage.

In the following pages, the Bush Administration sets forth the details of its plan for
retaining the basic features of TANF while increasing the focus on work, providing
incentives for states to encourage healthy marriages and reduce the incidence of
nonmarital births, and increasing the flexibility states have to create innovative programs
to help poor and low-income Americans work toward independence.

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________________________________________________
Strengthen the Federal-State Partnership
Overview
The Welfare Reform Law of 1996 replaced the old Aid to Families with Dependent

Children (AFDC) program with a new block grant called Temporary Assistance for

Needy Families (TANF), thereby creating a new Federal-state partnership. No longer was

policy set in Washington, with states permitted only a limited number of choices.

Instead, states were given broad flexibility to spend funds in any manner reasonably

calculated to achieve the goals of TANF. The Administration’s proposal will continue

this partnership, maintaining the current level of funding.

In exchange for the increased flexibility of a block grant, states accepted a financial risk.

If caseloads had continued to rise, states would have absorbed the additional costs.

Fortunately, TANF worked. The number of individuals receiving cash assistance has

fallen by 56 percent since the law was enacted. Record numbers of recipients and former

recipients are working. States will not be punished for their success by reducing Federal

funding. In addition, funding will not be cut because states need it to conduct a wide

range of programs to help poor families become and remain employed, care for their

children, and make responsible choices about marriage and parenthood.

During most of its implementation, the TANF program has benefited from a robust

economy. However, the strength of TANF has become most evident during the recent

recession. The sharp increases in caseloads that might have been expected have not

occurred in most states. There is concern, however, about the states’ ability to respond to

a sustained economic downturn. Thus, the Administration proposes to reestablish the $2

billion Contingency Fund, which expired last year, to provide additional funds to states

with high and increasing unemployment. The proposal will also make it easier for states

to reserve portions of their allotments as “rainy day funds” and allow these funds to be

used for supportive services.

Summary of Proposals
To build on the success of TANF and continue the Federal-state partnership, the
Administration proposal will:

Maintain Current Levels of the TANF Block Grant. The basic Federal block grant
will be reauthorized at $16.6 billion annually for fiscal years 2003-2007. This maintains
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the current level of funding. These funds will be distributed among the states and
territories as in current law. Full funding will allow states to continue their recent
investments in welfare-to-work programs and post-employment supports – such as
transportation and training – that enable families to retain employment, enhance skills,
and move up the career ladder. It will also help states develop new and enhance current
programs to promote healthy marriages and family formation.

Continue the State Contribution Through the Maintenance of Effort (MOE)

Requirement. Under current law, states are required to contribute at least 80 percent of
the amount they spent on the programs that TANF replaced. This amount drops to 75
percent if states meet mandated work participation rates. Both features of current law
will be retained.

Reinstate Supplemental Grants to States that Have Low Levels of Funding Per Poor
Person, or High Rates of Growth. The block grant allocation among states was based
on historical spending patterns. However, supplemental grants were established to help
states that experienced high population growth or had low historical welfare payments.
These grants expired after FY 2001. The Administration proposal will reinstate the
supplemental grants at $319 million annually, the level provided in FY 2001.

Ease Limitations on Serving the Unemployed by Clarifying “Assistance” Definition.

The distinction between “assistance” and “non-assistance” has been a source of
considerable confusion for states and has restricted state creativity in helping those not on
welfare who lose jobs. Our proposal will clarify terminology related to assistance and
services. Childcare and other work support services will not be defined as assistance.
This change in definition will expand state flexibility to help unemployed families avoid
welfare.

Reauthorize and Improve the Contingency Fund. As under a provision of TANF law
that expired last year, $2 billion will be available to help states that experience high or
growing levels of unemployment or increasing food stamp caseloads. Some provisions
will be modified in order to ease access to the contingency funds. Under this proposal,
spending on childcare and separate state programs can now be counted toward the
contingency fund MOE requirement. This will effectively reduce the amount states will
have to increase their own spending before they can qualify for their share of the
contingency fund. Our proposal also modifies the reconciliation process so that states
that qualified for grants for less than a full year will not have their matching rate
increased.

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Allow State Designation of “Rainy Day Funds.” States will be allowed to designate
some or all of their current or previous year TANF funds for placement in a “rainy day
fund.” This provision will clarify that carried-over funds are being allocated by the states
for future use, supporting prudent state efforts to plan for periods of economic downturn.

Increase State Flexibility Regarding Carried-Over Funds. Our proposal will also
allow funds carried over from previous years to be spent on any benefit, service, or
activity otherwise allowed under TANF. Current law allows prior year funds to only be
used for cash assistance. This change, which will greatly increase state flexibility, is
based on the recognition that cash benefits represent only one part of services funded by
TANF.

Restore Full Transfer Authority to the Social Services Block Grant. The 4.25 percent
limit on TANF funds that may be transferred to the Social Services Block Grant will,
over time, be restored to 10 percent, as originally provided for in the 1996 legislation.
The transfer limit will increase to 5 percent in FY 2004, 6 percent in FY 2005, 8 percent
in FY 2006, and 10 percent in FY 2007.

Maintain High Level of Commitment to Childcare. The Administration’s proposal

maintains the historic levels of childcare funding currently enjoyed by states. Entitlement
childcare funding will be continued at $2.7 billion in FY 2003, and the Administration is
requesting $2.1 billion in discretionary spending. The Childcare and Development Block
Grant (CCDBG) provides funding for childcare services for low-income families, as well
as for activities intended to improve the overall quality and supply of childcare for
families in general. The Federal Government provides an additional $6.7 billion in Head
Start funding. Moreover, states use TANF, the Social Services Block Grant, Head Start,
and state and local funds to support childcare. Including both TANF funds used for
childcare and Head Start, the Federal Government is approaching a $17 billion per year
commitment to childcare. And this $17 billion does not include additional Federal
spending on childcare through the tax code, through child nutrition programs, and
through many other Federal programs. The overall goal of TANF reauthorization is child
well-being. Childcare supports this goal as well as being an important work support.
States can and should use the flexibility in the block grant to look for innovative ways to
improve the quality of childcare, including the incorporation of early childhood literacy.
The Department of Health and Human Services can serve as a clearinghouse of best
practices in this area and provide states with any necessary technical assistance.

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________________________________________________________________________
Maximize Self Sufficiency Through Work and
Additional Constructive Activities
Overview
Since welfare reform was enacted in 1996, the number of dependent families has been cut
in half, and more families than ever are working. Yet evidence suggests that almost 1
million of the 1.6 million adults presently on TANF are not engaged in any activity
leading toward self-sufficiency. These families cannot be left behind. The heart of
welfare reform is encouraging work and requiring all welfare recipients to do everything
they can to end their dependency on welfare and gain a secure foothold in the workforce.
The Administration proposal strengthens work rules to ensure that all welfare families are
fully engaged in work and other meaningful activities that will lead to self-sufficiency.
Along with new requirements for individuals, states are expected to closely monitor the
participation and progress of all TANF families. All parents are to be fully and
constructively engaged. States will be required to make certain that, over time, the
percentage of TANF recipients engaged in work and additional productive activities
continues to grow.

At the same time, the Administration proposal gives states greater flexibility to define
activities that will lead toward self-sufficiency and that are consistent with the purposes
of TANF. Beyond the hours that parents must be engaged directly in work, states have
the flexibility to implement education and training programs to help workers advance in
their jobs. Furthermore, states will be able to count individuals who are in treatment for
substance abuse or undergoing rehabilitation related to work abilities, toward their
participation requirement for a limited period of time.

Summary of Proposals
Require Welfare Agencies to Engage All Families. The Administration proposes the
creation of a new universal engagement requirement. States must engage all families in
work and other constructive activities leading to self-sufficiency. TANF agencies will be
required to ensure that:

� Within 60 days of opening an ongoing TANF case, each family has an individualized
plan for pursuing their maximum degree of self sufficiency;

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� All families are participating in constructive activities in accordance with their plan,
or in the process of being assessed or assigned to an activity;
� Each family’s participation in assigned activities is monitored; and
� Each family’s progress toward self sufficiency is monitored and regularly reviewed.

States will have full discretion to define and design appropriate activities, subject to the

work requirement outlined below, as well as to develop methods for monitoring and

review. The provision in current law related to individual responsibility plans will be

eliminated, as will the state-plan requirement that families must begin work no later than

two years after coming on assistance.

Increase Minimum Participation Rate Requirements. The Administration proposes

that in FY 2003, 50 percent of TANF families with one or more adults must be

participating in a combination of work and other activities that lead to self-sufficiency as

quickly as possible. The percentage will increase annually by 5 percentage points until it

reaches 70 percent in 2007. States will be allowed to count families that have left welfare

due to employment as part of their participation rate for up to three months. In contrast,

under TANF, the required percentage of families engaged in work-related activities began

at 25 percent (in 1997) and rose over time to 50 percent in 2002.

Require Families to Participate 40 Hours a Week. This proposal requires that families

be involved in constructive activities averaging 40 hours per week in order to count

toward the required participation rate. States will have discretion to define approved

activities, which must help achieve a TANF purpose. Similar to current law, states will

be able, at their option, to exclude parents with children under 12 months of age from the

participation rate calculation. However, states must still require such parents to

participate at some level.

TANF requires single and two-parent families to be engaged in work-related activities for

30 and 35 hours a week, respectively. The Administration believes that these families

should be engaged in a full workweek of activities. States will continue to have

flexibility in establishing sanctioning policies, except that states must, as in current law,

continue assistance for single, custodial parents who have a child under age 6 but who

cannot obtain childcare.

Increase Work Requirements. This proposal requires that families counted toward

participation must also average at least 24 hours per week in work, including:

� unsubsidized employment;

� subsidized private sector employment;

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� subsidized public sector employment;

� on-the-job-training;

� supervised work experience; and

� supervised community service.

This 24-hour work requirement is part of the 40-hour full participation requirement.

TANF payments to families participating in supervised work experience or supervised

community service are not considered compensation for work performed. Thus, these

payments do not entitle an individual to a salary or to benefits provided under any other

provision of law.

Give Work Credit to Families Engaged in Short-Term Substance Abuse Treatment,

Rehabilitation, and Work-Related Training. This proposal allows states to count

certain activities as meeting the work requirement for limited periods of time. Individuals

participating in substance abuse treatment, rehabilitative services designed to maximize

self sufficiency through work, and work-related training enabling the recipient to work,

can be deemed to have met the three days a week work requirement. This exception

would be available for no more than three consecutive months within any 24 month

period.

Improve Calculation of Participation. States will be allowed to count only families

that meet both the 24-hour work requirement and the 40-hour full participation

requirement toward their participation rate. States will be able to obtain pro-rata credit

for families engaged in appropriate activities less than full time as long as they meet their

24-hour direct work requirement. States will have the option of not counting cases for the

purpose of determining participation rates for the first month after a case is opened.

Eliminate Separate Two-Parent Family Participation Rates. The Administration’s

proposal will end the separate participation rate for two-parent families; the same

participation rate will apply to both single- and two-parent families. This policy removes

a disincentive to equitable treatment of two-parent families. Under current law, two-

parent families have a far more rigorous work participation rate requirement than do

single-parent families (90 percent compared to 50 percent).

Phase Out the Caseload Reduction Credit. The Administration’s proposal will phase

out the current credit for caseload reduction because it reduces states’ minimum required

work participation rates. Currently, states receive credit toward meeting participation

rates for caseload declines since 1995. With national caseloads declining by more than

half, many states effectively have no work participation standards. In FY 2003 the full

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caseload reduction credit will apply as under current law; in FY 2004 the credit will be
halved; beginning in FY 2005, the credit will be eliminated. During this phase-out period
the credit will be based on reductions since 1995, as in current law.

Conform Requirements for Teenage Parents. The Administration proposal will

conform current law provisions regarding teenage parents who are heads of household.
Teen parents who maintain satisfactory school attendance will satisfy both the 24 hours of
direct work and the 40 hours of full participation requirements. Teen parents who are not
satisfactorily attending school will have to meet the work and full participation standards
in order to be counted toward a state’s participation rate.

Provide Technical Assistance for Tribes. The Administration proposes to provide

technical assistance to Indian tribes to identify and disseminate promising program
models and other research information. This approach will help tribes design and
implement more effective TANF programs and family formation activities in tribal lands.

Discontinue Outdated State Program Waivers. The Administration proposes to

discontinue the few remaining state welfare reform waivers granted prior to the 1996
welfare reform legislation. Flexibility under current law allows states to accomplish all
the purposes of TANF without waivers. Furthermore, the requirements of TANF no
longer represent an experiment. Abolishing the remaining waivers will put all states on
an equal footing. Broad new state waiver authority for integrating programs is proposed
in a separate section of this document.

Conform State Penalty Provision to New Requirement. The penalty structure under
current law for states failing to meet work participation rates will now apply when a state
fails to meet either or both the universal engagement or full participation rate
requirements. Penalties will still be limited to a combined maximum of five percent of a
state’s TANF grant for a fiscal year.

Retain Five-Year Time Limits and Continue Allowing 20 Percent to be Exempted.

The Administration’s proposal will retain current law provisions with respect to time
limits. These provisions restrict families to 60 cumulative months of Federally-funded
assistance (or less at state option). States may exempt up to 20 percent of their caseload
from the time limit without penalty. These provisions make it clear that TANF assistance
is temporary. At the same time, the policy recognizes that certain hardship cases require
more time to achieve self-sufficiency.

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________________________________________________
Promote Child Well-Being and Healthy Marriages
Overview
The Administration’s proposal encourages states to increase their efforts to promote child
well-being and healthy marriages. There is an abundant body of research proving that
children raised in households headed by continuously married parents fare, on average,
better than children growing up in any other family structure. Children growing up
without a married mother and father are more likely to experience school failure, to suffer
from emotional disturbance or depression, and to abuse drugs. These differences in
outcomes for children in two-parent, married families and other families persist even after
controlling for family characteristics such as race and parents’ education. For example,
children growing up without a married mother and father are about twice as likely to drop
out of school, over 50 percent more likely to have a child themselves as a teenager, and
over 50 percent more likely to abuse controlled substances. As adults, they are over 30
percent more likely to be both out of school and out of work, and tend to have less stable
relationships.

The better outcomes experienced by children in two-parent, married families are only
partly attributed to higher incomes. Married parents also tend to spend more time with
their children, be more connected to their community, and have more stable relationships.

Cohabitation is not equivalent to marriage in promoting the well-being of children. By

the time they reach age 16, three quarters of children born to cohabiting parents will see
their parents separate, compared to only about one third of children born to married
parents. In the last decade, the proportion of cohabiting mothers who eventually marry
their child's father fell from 57 percent to 44 percent.

Congress recognized the fact that two-parent, married families represent the ideal
environment for raising children when it enacted TANF in 1996. TANF features a variety
of family formation provisions. However, state efforts to promote healthy marriages
represent just one percent of total TANF program expenditures. The limited attention
paid to family formation by states is due in part to the lack of knowledge about how to
implement successful marriage and family formation programs.

Our proposal will place a greater emphasis in TANF on strengthening families and
improving the well-being of children. Enhanced funding will be made available for

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research, demonstrations, technical assistance, and matching grants to states. An
increased focus on marriage and child well-being will be added to both the purposes of
the program and the state plan requirements. The Administration proposal will
reauthorize the Abstinence Education Program (see below). Our approach will provide
states with greater resources to pursue these goals while maintaining necessary flexibility
so that states can design programs that work.

Summary of Proposals
Establish an Overarching Purpose to Improve the Well-being of Children. The
Administration’s proposal will amend the overall purpose of TANF to state, “The
purpose of this part is to increase the flexibility of states in operating a program designed
to improve the well-being of children . . . .” This change is based on the recognition that
the goals of TANF are important core strategies for improving the well-being of children.

Clarify the Encouragement of Healthy Marriages as a TANF Goal. The proposal

will clarify the meaning of the TANF goal to encourage the formation and maintenance of
two-parent families. The revised goal will read “to encourage the formation and
maintenance of healthy two parent married families and responsible fatherhood.”

Support Demonstrations, Research, and Technical Assistance. The Administration’s

proposal will establish a $100 million annual fund to conduct research and demonstration
projects, and provide technical assistance primarily focusing on family formation and
healthy marriage activities. This provision will be funded by elimination of the
Illegitimacy Reduction Bonus. The Administration believes that funds previously used
for the Illegitimacy Reduction Bonus can be more effectively spent on developing
innovative approaches to supporting family formation and healthy marriages.

Create a Competitive Matching Grant Program. The Administration proposes to

redirect funds from the High Performance Bonus to create a competitive $100 million
grant program available to a limited number of states, territories, and tribal organizations
to develop innovative approaches to promoting healthy marriage and reducing out-of-
wedlock births. A dollar-for-dollar match to participate in the grant program will be
required; states can use Federal TANF to meet this matching requirement.

Require States to Describe Efforts to Promote Marriage as Part of Their State Plan.
States will be required to provide: (1) explicit descriptions of their family formation and
healthy marriage efforts; (2) numerical performance goals; and (3) annual reporting of
state achievement.

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Encourage States to Provide Equitable Treatment of Two-Parent Married Families
under State TANF Programs. As part of a state’s plan, the proposal will require states
to describe their efforts to provide equitable treatment of two-parent married families
under their TANF program.

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________________________________________________________________________
Encourage Abstinence
and Prevent Teen Pregnancy
Overview

The sexual revolution that began in the 1960s has left two major problems in its wake.
The first is the historic increase in non-marital births that have contributed so heavily to
the Nation’s domestic problems including poverty, violence, and intergenerational
welfare dependency. The second is the explosion of sexually transmitted diseases (STDs)
that now pose a growing hazard to the Nation’s public health.

To address these problems, the goal of Federal policy should be to emphasize abstinence
as the only certain way to avoid both unintended pregnancies and STDs.

Summary of Proposals
Reauthorization for Abstinence Education Funding. The 1996 welfare reform bill
appropriated $50 million per year for five years for states to establish abstinence
education programs. As long as states carefully observe the definition of abstinence
education in the statue, states have great flexibility in the type of abstinence education
program they implement. For example, states could establish classroom programs in the
public schools or they could conduct media campaigns. Nearly every state has used this
money to implement a wide range of programs aimed at promoting abstinence. In 1997,
Congress appropriated funds to conduct a scientific evaluation of several of these state
programs. This evaluation is now well underway and is expected to begin yielding results
on program impacts on sexual activity, pregnancy, and other measures by 2003. Given
the pending welfare reform reauthorization, Congress cannot wait on these results. Thus,
the Administration is recommending that the Abstinence Education program, including
its strong definition of how its funds must be spent, be reauthorized at the same level of
funding as in 1996.

Community Based Abstinence Education. The President’s 2003 budget increases

funding for the Human Resources and Services Administration’s Community-Based
abstinence education grants from $40 million in 2002 to $73 million in 2003, a 83 percent
increase. The funding increase will ensure that more communities across the country are
able to deliver the message that abstinence is the surest way to avoid out-of-wedlock

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pregnancy and STDs. This funding will also finance comprehensive evaluations of
abstinence education programs.

Adolescent Family Life. The Adolescent Family Life (AFL) abstinence program
provides abstinence education to more than 112,000 adolescents by emphasizing that
abstinence is the most effective means of preventing out-of-wedlock pregnancy and
abortion. Most of the abstinence education programs financed by AFL occur in school
settings, both during and after school. The Administration proposes continuing the
current funding of $12 million for this program.

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________________________________________________________________________
Improve Program Performance
Overview
Maintaining state flexibility and the existing TANF goal structure are two of the basic
principles underlying the Administration’s proposal. TANF has allowed States to
become great innovators. At the same time, the shift to work and family-based aid has
presented management challenges.

In keeping with the President’s focus on governing with accountability, increased

emphasis should be focused on results rather than dollars spent. Outcome-based
performance measurement is an important component of an overall management and
accountability system. State and local administrators seeking to provide increasingly
better customer service and TANF outcomes must set clear and measurable goals.

States currently submit to the U.S. Department of Health and Human Services a state plan
that describes the basic elements of their TANF programs. This proposal will modify
current law by requiring states to explain how they intend to pursue the key objectives of
TANF and how they will review their performance. States will be required to establish
program goals and report annually on their success in meeting those goals. This new
emphasis on information systems and accountability will have the added benefit of further
increasing states’ flexibility because reporting systems will allow the Federal Government
to exercise necessary oversight without falling into the trap of micro-management.

Summary of Proposals
Focus on Employment Achievements. Under current law, states can compete for
bonuses that are designed to recognize and reward high performing states. This proposal
will replace the current High Performance Bonus with a $100 million a year Bonus to
Reward Employment Achievement. Emphasis will be placed on outcomes in achieving
the employment goals of TANF. The formula for measuring state performance will be
developed in consultation with the states and will specify annual numerical targets for
individual states. This approach will make the bonus more predictable and useful for
management purposes than is the case with the current bonus. States will compete
against their performance in the previous year. All states could be eligible for a bonus in
any given year if their performance meets established targets. The Secretary of HHS will

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annually rank all states in the order of their performance on indicators measuring
employment, retention, and wage increase.

Address All TANF Purposes. This proposal will require states to describe in their state
plan how they are addressing each of the TANF purposes, and how these will help to
improve the well-being of children. The Secretary’s certification of state plan
completeness will include a finding that the plan addresses each of the TANF purposes.

Set Performance Goals. Under this proposal, the general structure of the state plan
provisions will be retained, but new attention will be focused on performance goals and
measurement. States will be required to establish specific numerical performance goals
for accomplishing each of the TANF purposes, including measures consistent with the
Employment Achievement Bonus indicators. States will have full flexibility to define
their performance goals, but will have to describe them in their state plans.

Measure and Report Performance. States will have to take necessary actions to
achieve their performance goals, and measure their annual performance relative to these
goals. States will have full flexibility to define their measurement methodology, as long
as they describe it in their state plans. States will prepare annual performance reports
updating their progress in achieving their numerical goals.

Conduct Research and Provide Technical Assistance. Under this proposal, HHS will
research the best ways to construct performance measures that relate to the various goals
of the TANF program. HHS will collaborate with states to identify key measures and
build uniform data support and reporting methodologies; this approach will help states
better measure their progress toward fulfilling the goals of TANF.

Revise Data Reporting Requirements. This proposal will modify state data collection
requirements to focus on the data that are most useful in helping state and local program
administrators improve management and performance. These data will also be useful for
Federal oversight and research. Data will include information on TANF-funded services
and supports, including Federal and state expenditures and expenditures for major
categories of activities. This policy will be an important improvement over current law,
which requires states to submit quarterly reports with disaggregated case record
information on families receiving TANF assistance, but that do not address TANF-funded
services.

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Addressing Areas of Special Attention. States will be required to describe in their state

plans particular strategies and programs they are employing to address the following

important TANF challenges:

� employment retention and advancement;

� outreach to, and services for, struggling and non-compliant families;

� services and programs for clients with special problems;

� youth development;

� use of faith-based organizations and efforts related to charitable choice;

� improved program management and performance; and

� program integration

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________________________________________________________________________
Enhance Child Support Enforcement
Overview
Child support enforcement is an important component of the Federal and state effort to
promote family self-sufficiency. For the low-income families who receive it, child
support makes up a significant portion of the family budget (26 percent). Moreover,
families that receive child support are less likely to return to TANF.

The 1996 welfare reform law included the most extensive child support reforms ever
enacted. These include new information systems to help locate parents who owe child
support, automatic income withholding from paychecks, driver and professional license
revocation, and other administrative tools. As shown by increased collection amounts
and rates, these reforms have been a great success. Since 1995, collections have
increased by nearly 50 percent, rising by over $1 billion a year.

The 1996 reforms also streamlined paternity establishment, particularly voluntary

paternity establishment, to encourage fathers to take the first step toward providing their
children with financial and emotional support. These provisions have also been
extremely successful. Paternity was established in more than 1.5 million cases in FY
1999, a 60 percent increase from 1995. Paternity is now established through in-hospital
acknowledgment in nearly half of all non-marital births.

The Administration’s proposal continues rigorous enforcement of child support

obligations while targeting additional child support collections to the families with
greatest need. Under current law, states and the Federal Government can retain most
payments on overdue child support for families in which the mother is or has been on
welfare. The Administration’s proposal gives states financial incentives to increase the
amount of collections on over-due child support given to families, especially families that
have left welfare. When fully implemented, the proposal will provide annual payments of
more than $280 million to more than 230,000 families that have left welfare, thereby
helping them maintain their independence from welfare. In addition, fathers will know
that when they pay child support, their families will benefit; their children will know that
they are being supported by both of their parents. A major research study in Wisconsin
has shown that when TANF families receive the child support paid on their behalf,
fathers are more likely to pay child support and to pay more child support.

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 Summary of Proposals
Provide Federal Matching Funds for Child Support Pass-Through Payments to
Families That Currently Receive TANF. Although the state and Federal Governments
generally retain child support collected on behalf of families that receive TANF, almost
half of the states give TANF families some of the support collected on their behalf.
Building upon this state practice, the Administration proposes Federal matching for states
to provide up to the greater of $100 per month or $50 over the current state pass through
to families that receive TANF (starting in October 2004). This support must be ignored
for purposes of calculating a family’s eligibility for TANF.

Encourage States to Give Families That Once Received Welfare All of the Child
Support Collected on Their Behalf. The Administration proposal will simplify child
support distribution rules to give states the option of providing families that have left
welfare the full amount of child support collected on their behalf. This policy, which will
be effective beginning October 2004, stipulates that the Federal Government will share
costs with the states.

Require States to Regularly Review and Adjust Child Support Orders for Families
That Currently Receive TANF. This proposal will require states to review child
support orders for TANF families every three years. This mandatory review and, if
necessary, modification of child support orders will increase the amount of payment
required, which in turn will boost collections in welfare cases.

Collect a User Fee from Families That Have Never Received Welfare. This proposal
will require families that have never used TANF to pay a $25 annual user fee (effective
FY 2003) when child support enforcement efforts on their behalf are successful. Families
that are receiving TANF assistance are already asked to contribute some or all of their
child support to offset part of the cost of the child support enforcement efforts made on
their behalf. The Federal and state governments will share this revenue.

Lower the Threshold for Passport Denial. The Administration proposes lowering the
threshold for passport denial to $2,500 in past-due support, effective FY 2004. This
policy will optimize the use of the successful provision established by the 1996 reforms
that granted the authority to deny a passport to anyone owing over $5,000 of past-due
child support.

Withhold Limited Social Security Benefits. This proposal will expand the Federal
administrative offset program to allow states to collect past-due child support by

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withholding a limited amount of Social Security Disability Insurance payments from
beneficiaries in appropriate cases. Benefits must exceed $760 a month in order to be
subject to withholding.

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________________________________________________________________________
Reform Food Stamps to Promote Work
Overview
For over 30 years, the Food Stamp Program has served as the foundation of America’s
national nutrition safety net, the first line of the Nation’s defense against hunger, and a
powerful tool to improve nutrition among low-income families and individuals. Unlike
most other assistance programs, the Food Stamp Program is available to nearly anyone
with little income and few resources. As a result, it serves a broad cross-section of the
Nation’s poor: single parents and their children, the elderly and disabled, the recently
unemployed, and the working poor.

Since the 1996 reforms, the percentage of food stamp households on welfare has fallen
sharply, and the percentage of food stamp households with earnings has grown. In 2000,
for the first time ever, more food stamp households relied on their own earnings than
depended on welfare’s cash assistance. Now, more than ever, the Food Stamp Program
serves as an important support to ease the transition from welfare to work.

To succeed in this role, national program policies must work in tandem. The food stamp
program’s basic structure provides a strong work incentive by slowly reducing the value
of benefits as earnings rise. However, the details of program operation at the local level
should facilitate participation by families that work. Further improvement in food stamp
policies can support this goal.

It has become increasingly clear that the program is failing to live up to this challenge.
Historically, participation rates among people in households that work have been
relatively low, and there is evidence suggesting that these rates have fallen in recent years.
Several careful studies show that only about half of the families leaving welfare receive
the food stamps for which their low income qualifies them. Some of this decline in food
stamp use once families leave welfare is probably intentional because some families do
not want the stigma of welfare benefits. But many single mothers struggling to earn
$10,000 per year would certainly welcome the additional $2,000 in benefits that food
stamps would provide.

Working families often have circumstances that make complying with the program’s
procedural requirements difficult. It can be hard, for example, for working people to take
time off to appear at certification interviews during working hours. But another part of

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the problem is that the quality control system may result in states inadvertently
discouraging food stamp use by working families. Because food stamp benefits are 100
percent Federally funded and yet are administered by states, a quality control system is an
absolute necessity to ensure that states are not wasting Federal resources by awarding
benefits to unqualified individuals and families. However, states have found over the
years that food stamp cases with earnings cause high error rates because changes in
earnings are so difficult to trace. While states now have new administrative options that
can reduce the potential for risk of error in these cases, more can be done to help working
families. In general, the reforms proposed by the Administration will make it easier for
states to fashion a food stamp program that is friendlier to working families.

Summary of Proposals
The Administration is proposing a comprehensive and balanced approach to reform the
Food Stamp Program that not only improves the nutritional safety-net for the working
poor, but also simplifies the program and allows States to align all of their work-support
programs while ensuring a high degree of program integrity and program access.

Simplify Program Administration. Complex program rules are burdensome for both
agencies and recipients. The Administration’s proposal would standardize the medical
and dependent care deductions, eliminate exceptions to the standard utility allowance, and
simplify vehicle rules.

Modify Sanction Policy. Instead of imposing Federal sanctions on states with error rates
above the national average, the Federal Government will impose sanctions only on states
with error rates above the 75th percentile of the distribution of state error rates. In
addition, to receive a sanction the state must be above the 75th percentile for two years.
This procedure will reduce the number of states being sanctioned and will somewhat
reduce the size of sanctions. The effect of these outcomes will be to reduce the
disincentive for states to provide food stamps to working families.

Adjust Sanctions for States with Many Cases with Earnings. States that have a high
proportion of cases with earnings will have their sanctions adjusted so that, in effect, they
will receive sanctions only if their error rates are well above the 75th percentile.

Replace Enhanced Funding with State Performance Bonuses. States that perform
well in maintaining payment accuracy and providing better customer services, especially
to working families, will receive bonuses that total $70 million annually.

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Improve the Electronic Benefit Transfer (EBT) Program. The EBT program has
significantly improved the food stamp program by reducing the ability of participants to
traffic benefits and by increasing the Department of Agriculture’s ability to identify
fraudulent retailers. EBT also allows more anonymous delivery of benefits which
participants, especially those leaving welfare for work, greatly prefer. Under current law,
Federal costs for EBT cannot exceed the costs of the paper food stamp system. The
Administration will eliminate this cap on EBT costs and align EBT costs with other state
administrative costs. This reform will facilitate the implementation of EBT in small
states and reduce the disincentive for potential recipients to use food stamps.

Enable Working Families to Own Reliable Transportation. The Administration will

exempt one vehicle per adult from program asset limits, allowing low-income individuals
to own a reliable car for getting to work without losing food stamp benefits. This
proposal eliminates situations in which ownership of a reliable vehicle prevents an
otherwise eligible household from receiving food stamps. States would also continue to
have the option to apply their TANF vehicle rules to the Food Stamp program.

Phase-in a Higher Standard Deduction for Large Households. The Administration

will phase-in a standard deduction at the higher of the current standard or 10 percent of
the poverty threshold, varied by household size. Virtually all of the households
benefiting from this proposal are families with children. This proposal improves the
Food Stamp Program’s ability to operate as a work support for low-income working
families. The current standard deduction is the same amount for all households and has
been frozen since 1995.

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________________________________________________________________________
Provide Food Stamps for Legal Immigrants
Overview
The 1996 welfare reform law substantially changed the circumstances under which
noncitizens could receive welfare benefits. Although the new rules are complex, the most
important provision is that noncitizens who arrive in the United States after 1996 are
subject to a five year ban on most welfare benefits. The major exception is that
noncitizens can receive emergency services. At the end of five years, noncitizens can
receive TANF, Medicaid, and a few other benefits at the discretion of the state in which
they reside. However, the ban continues on food stamps and the Supplemental Security
Income program until the immigrant works for 10 years or becomes an American citizen.
In addition, some immigrants who entered the U.S. before 1996 continue to be eligible for
Supplemental Security Income and food stamps. Data from the U.S. Census Bureau
show that these changes have resulted in a very substantial reduction in receipt of welfare
benefits by noncitizens. Research also suggests that immigrant children have experienced
an increased incidence of difficulty in obtaining the resources to purchase nutritionally
adequate food.

Summary of Proposal
Federal policy should strive to find a balance between the needs of destitute noncitizens
and the need to ensure that welfare policy neither attracts noncitizens to the U.S. to take
advantage of welfare programs nor induces welfare dependency among noncitizens who
do receive welfare benefits. Thus, the Administration supports continuation of the five-
year ban on welfare benefits for noncitizens entering the country after 1996 and proposes
to align food stamps with TANF and Medicaid by allowing legal immigrants to receive
food stamps five years after entry. This policy helps ensure adequate nutrition among
children and other vulnerable immigrant groups, while continuing to require new entrants
to support themselves and their families through work.

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________________________________________________________________________
Facilitate Program Integration
Overview
Under the vision and flexibility provided by TANF, states have transformed their public
assistance programs into innovative and comprehensive workforce assistance programs.
TANF has succeeded because its purposes are not only to help families escape cash
welfare dependency, but also to support families that are working, help them advance in
employment, and help parents build stronger families.

Other major Federal assistance programs serving low-income populations provide similar
assistance to TANF. Yet the potential effectiveness of all these programs combined is
greatly compromised by differences in administrative practices and program rules. This
problem makes serving low-income populations more difficult than need be and hampers
state efforts to help individuals and families escape government dependency.

The Administration proposes new waiver authority that will allow states to build stronger,
more integrated and effective service systems across a broad range of public assistance
and training programs. States and local areas will find it easier to plan and enter into
partnerships with businesses, community-based organizations, and faith-based
organizations to help those who are seeking work, struggling to retain their jobs, or trying
to climb the career ladder. The authority granted under the Administration’s proposed
waivers will allow states to build coherent and comprehensive strategies on behalf of
low-income individuals and families. States will be able to deliver more seamless
services tied to stated program goals and self-sufficiency and employment outcomes.

Summary of Proposals
Establish New State Program Integration Waivers. The Administration’s proposal
will allow states to seek new waivers for integrating funding and program rules across a
broad range of public assistance and workforce development programs. States will
submit waiver applications detailing their plans to the Federal Government. The Cabinet
Secretaries of each Federal Department with jurisdiction over the affected programs will
be able to negotiate specific terms and conditions related to their programs and waive any
rules that are inconsistent with the proposal. The programs include, but are not limited
to:

� TANF
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� Food Stamps

� The Workforce Investment Act

� The Wagner-Peyser Act

� Federal Housing and Homeless Assistance Programs, and

� GED and post-secondary education programs.

Broad State Flexibility to Design New Strategies and Approaches for Achieving

Stated Program Goals. States will be able to establish or modify eligibility criteria and

program rules subject to specific and minimal Federal requirements. States will be

required to assist the same general populations currently targeted by their programs. In

their waiver proposals, states will be required to identify the programs and activities for

which waivers are requested, describe how the program purposes will be achieved, and

show how the proposal will improve or enhance the achievement of such goals.

Waivers Granted on the Basis of Likelihood of Success. Agreements related to

modification of program rules will be made subject to approval by each relevant Cabinet

Secretary. They will be able to waive the specific program requirements if the proposed

project is likely to improve the quality or effectiveness of the programs involved.

Maintain Accountability for Program Performance. States will need to describe the

integrated performance objectives and outcomes for the proposed program, including any

modification to reporting requirements and performance measures. Integrated programs

for which waivers are granted will be operated as demonstration programs and

participating states will be required to evaluate the program.

Require Reforms to be Cost Neutral. The waiver terms and conditions will be subject

to stringent cost neutrality requirements. Proposals will need to be cost-neutral across all

programs for which a waiver is requested, and states will be required to agree to abide by

specific cost neutrality targets. The terms and conditions will specify funding levels

above which waiver program activities will be suspended or terminated. The terms and

conditions will also specify spending levels above which payment or repayment of state

funds will be required.

Regular Reports to Congress. Each Department will be required to report annually on

the number and scope of waivers approved under this provision, the specific statutory

provisions waived, along with any recommendations to the Congress for modification to

current programs based on findings from the state program evaluations.

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