THE JOB OPPORTUNITIES AND BASIC SKILLS TRAINING PROGRAM (JOBS) The Family Support Act of 1988 established a new employment, education and training program for recipients of AFDC. Called the Job Opportunities and Basic Skills (JOBS) Training Program, this program replaced the Work Incentive (WIN) Program. The law required most able-bodied AFDC parents whose youngest child was at least 3 years old to participate in JOBS. The WIN Program had exempted parents of preschoolers. (As noted earlier, JOBS was repealed by Public Law 104-193, which established TANF.) Purpose and Administration The purpose of JOBS was to assure that needy families with children obtained education, training and employment that would help them avoid long-term welfare dependence. Each State was required to operate JOBS in every subdivision where it was feasible to do so. According to the U.S. Department of Health and Human Services (1995a), 12 States found it infeasible to operate JOBS in all political subdivisions. Nine of these States (Alaska, Colorado, Florida, Kansas, Kentucky, Louisiana, Montana, Nevada, and West Virginia) met a regulatory standard by offering a complete JOBS Program (see below for definition) in all metropolitan statistical areas and in political subdivisions with 75 percent of AFDC adults and a minimal program in areas where 95 percent of adults lived. The other three States without a statewide program were Idaho, New Mexico, and Texas, which made JOBS available in certain counties and political subdivisions. JOBS was administered at the Federal level by the Assistant Secretary for Children and Families in DHHS, and at the State level by the State welfare agency. The State welfare agency could offer services and activities through its own staff and facilities, through Job Training Partnership Act (JTPA) administrative entities, through State and local educational agencies, and through other public agencies or private organizations (including community- based organizations). For a summary of JOBS Programs from State plans for fiscal years 1995-96, see the 1996 Green Book. Employability Plan and Case Management JOBS required States to develop an employability plan for each participant, based upon an assessment of the person's needs, skills, past work experience, and employability. The agency could require the participant to enter into an agreement specifying her obligations and the activities and services to be provided by the State. As of August 1996, six States required this kind of agreement. Further, all but two States-- Iowa and Oklahoma--assigned a case manager to each participant to assist the family in obtaining needed services. JOBS Activities States were required to offer supportive services and these four ``mandatory'' activities: (1) education activities, including high school or equivalent education, basic and remedial education to achieve a basic literacy level, and education for individuals with limited English proficiency; (2) job skills training; (3) job readiness activities; and (4) job development and job placement. In addition, States were required to offer two of the following four optional activities: (1) group and individual job search; (2) on-the-job training; (3) work supplementation; and (4) community work experience (CWEP) or any other work experience program approved by the Secretary. Further, States were allowed to offer postsecondary education to JOBS participants and other State- determined education, employment and training activities approved by the Secretary. All jurisdictions but three (Michigan, Nevada, and Oregon) offered postsecondary education under JOBS. A complete JOBS Program contained the four mandatory components above and at least two of the four optional activities. A minimal program included high school or equivalent education and information and referral to available non-JOBS employment services. Some details about the JOBS rules for job search, CWEP, and work supplementation programs follow. Nondisplacement JOBS law contained nondisplacement rules; a JOBS assignment could not displace a worker or position, or infringe upon promotional opportunities of a worker; a JOBS participant could not fill a position from which a worker had been laid off. Job search States could require up to 8 weeks of job search for applicants and up to 8 weeks of job search for AFDC recipients each year. However, States could not require a person to engage in more than 3 weeks of job search before assessing the person's employability. Community work experience JOBS law required that CWEP Programs be designed to improve the employability of participants through actual work experience and training and restricted them to projects serving a useful public purpose in fields such as health, social service, environmental protection, education, urban and rural development and redevelopment, welfare, recreation, public facilities, public safety or day care. Maximum hours of required CWEP activity during the first 9 months were determined by dividing the participant's AFDC benefit (less any AFDC amount for which the State received reimbursement through child support collection) by the Federal minimum wage (or, if greater, the State minimum wage). After 9 months in a CWEP position, a participant's required weekly hours were to be recalculated on the basis of the rate of pay for individuals employed in the same or similar occupations by the same employer at the same site. The law specified that it was not to be construed as authorizing payment of AFDC as ``compensation for work performed'' and said that CWEP participation was not to entitle a person to ``a salary or any other work or training expense.'' Work supplementation JOBS law permitted a State to ``divert'' all or part of a family's AFDC grant to an employer for use as a wage subsidy. The State welfare agency could itself be the employer who provided a ``supplemented'' job. To carry out a work program, States could adjust the level of their AFDC standard of need, vary benefit amounts paid to different categories of participants, and reduce or eliminate the amount of their earned income disregards. On the other hand, States could treat participants' earnings more liberally (extending duration of the earned income disregard), and the law made work supplementation wages eligible for the earned income credit. Federal funding under the program was limited for each participant to the aggregate of 9 months' worth of the maximum AFDC grant that the family would have received if it had no income. JOBS law was explicit about the ``worker'' status of persons in supplemented jobs: those whose job was provided by the welfare agency were not to be given ``employee'' status; nor, for the first 13 weeks of a job provided by any other entity was employee status to be required. Exemptions, Child Care, and Participation Requirements Exemptions To the extent resources were available, States were obliged to require nonexempt AFDC recipients to participate in JOBS. Exempt applicants and recipients could participate as volunteers. Exempt were persons who were: (1) ill, incapacitated, or of advanced age; (2) needed at home because of the illness or incapacity of another family member; (3) the parent or other caretaker relative of a child under age 3 (or, at State option) any age less than 3 but not less than 1; (4) employed 30 or more hours a week; (5) a child under age 16 or attending, full time, an elementary, secondary or vocational school; (6) a pregnant woman (in at least the second trimester); or (7) residing where JOBS was not available. As of August 1996, 37 jurisdictions exempted the parents of a child under 3; 3 lowered the age threshold to age 2 (Connecticut, New Jersey, and the Virgin Islands); and 14 lowered the threshold to age 1 (Arizona, Arkansas, Colorado, Indiana, Louisiana, Michigan, Montana, Nebraska, Oklahoma, Oregon, South Carolina, South Dakota, Wisconsin, and Wyoming). Child care for welfare parents JOBS law required States to ``guarantee'' child care (by direct provision, reimbursement, vouchers, etc.) for JOBS participants who needed it, and for other AFDC parents already in school, training, or work. States were required to continue child care benefits for 1 year to families who left AFDC for work (transitional care), charging them an income-related fee. In general, the parent of a child under age 6 could be required to participate no more than 20 hours weekly and, then, only if child care were ``guaranteed.'' In the case of an AFDC-UP family, the exemption relating to age of child applied to only one parent, unless child care were guaranteed. (For more information on child care, see section 9). Minimum participation standards JOBS law set minimum participation standards for fiscal years 1990-95 for the overall AFDC caseload (and for fiscal years 1994-98 for the unemployed-parent caseload). The minimum participation rates for the overall caseload rose from 7 percent (of the nonexempt caseload, not the entire caseload) in fiscal years 1990-91 to 20 percent in fiscal year 1995 (none thereafter). Special participation rules applied to the unemployed-parent caseload. One parent in these families was required to participate at least 16 hours a week in one of these work activities: work supplementation, community work experience or other work experience program, on-the-job training, or a State-designed work program approved by the Secretary. However, in low-benefit States, fewer than 16 hours of weekly CWEP participation were required since work hours calculated at the minimum wage could not exceed the number needed to yield the family's AFDC benefit. The percentage of nonexempt AFDC-UP families required to meet this work rule rose from 40 percent in fiscal year 1994 to 75 percent in fiscal year 1997. The prescribed penalty for failing to meet the general participation rate was a reduction in the Federal matching rate, but the penalty always was waived, as allowed under certain conditions. Definition of JOBS participant The law did not define ``participant,'' but Federal regulations required that JOBS participation rates be measured by a 20-hour-per-week standard. Welfare agencies were directed to count as participants the largest number of persons whose combined and averaged hours in specified JOBS activities equaled or exceeded 20 per week. Creditable activities included any component of the State's JOBS plan except job development and job placement. Persons who entered a job were counted as participants only if they engaged in a JOBS activity or received job development and placement services during the month of job entry or the preceding month. Targeting of JOBS Funds The JOBS Program included a financial penalty--a reduced Federal matching rate--for failure to spend at least 55 percent of JOBS funds on certain populations, namely: (1) families in which the custodial parent was under age 24 and had not completed high school or had little or no work experience in the preceding year; (2) families in which the youngest child was within 2 years of being ineligible for assistance because of age; (3) families that had received assistance for 36 or more months during the preceding 60-month period; and (4) applicants who had received AFDC for any 36 of the 60 months immediately preceding application. Funding of JOBS and Supportive Services Federal matching for JOBS was available as a capped entitlement, limited to $1 billion annually in fiscal year 1996. The Federal matching rate was 90 percent for expenditures up to the amount allotted to the States for the WIN Program in fiscal year 1987. Of additional amounts, the Federal match was at the Medicaid rate (between 50 and about 78 percent), but with a minimum Federal match of 60 percent for nonadministrative costs and for full-time JOBS personnel costs. The match for other administrative costs was 50 percent. However, the law provided for a reduction in the JOBS Federal matching rate to 50 percent unless: (1) 55 percent of funds were spent on target populations listed above; and (2) the States met participation rate requirements. The entitlement cap for JOBS was allocated as follows: States received an amount equal to their WIN allotment for fiscal year 1987 ($126 million across all States) and the remainder was allocated on the basis of each State's relative number of adult AFDC recipients. Federal program funds could not be used to supplant non-Federal funds for existing services and activities, and States were required to spend on JOBS, from State/local funds, at least as much as they did for comparable activities in fiscal year 1986. AFDC/JOBS child care and transitional child care were reimbursed as a separate, open-ended entitlement at the Medicaid matching rate. Transportation and other work-related expenses were reimbursed at a rate of 50 percent and were among expenditures subject to the JOBS entitlement cap. Table 7-33 provides information on fiscal year 1996 Federal allocations to the States for JOBS, along with information on the amount of these funds States had expended and obligated. Authorized for JOBS was $1 billion; the Federal share of JOBS expenditures claimed by States as of April 2, 1997, however, was only $870.4 million. The table also includes information on federally reimbursed expenditures for child care. For AFDC/JOBS and transitional child care, States claimed Federal reimbursement of $1.189 billion in fiscal year 1996, compared with $893 million in fiscal year 1995. Table 7-34 displays the percentage of JOBS allocations, after Indian set-asides, used by each jurisdiction in fiscal years 1990-96. The number of States that used their full allocation rose to 22 in fiscal year 1996. Four States spent 100 percent of their JOBS allocation in each year since 1990: Alaska, North Dakota, Oregon, and Wisconsin. Table 7-35 shows the average monthly number of JOBS participants reported by States during fiscal year 1995 (data not reported by Alaska, the District of Columbia, Virgin Islands, and Guam) and their percentage distribution by program component. In the 50 reporting jurisdictions a monthly average of 632,054 persons were active JOBS participants, up 9 percent from the previous year. However, more than 20 percent of these participants were not ``countable'' for purposes of calculating official participation rates (see table 7-37). More than 40 percent of JOBS participants were in five States: California, New York, Ohio, Michigan, and Pennsylvania. TABLE 7-33.--FEDERAL ALLOCATIONS AND EXPENDITURES FOR THE JOBS PROGRAM, BY STATE, FISCAL YEAR 1996 [In millions of dollars] ---------------------------------------------------------------------------------------------------------------- Title IV-A States JOBS total Indian set- Awarded to Total Total child care authoriz.\1\ aside \2\ States \3\ obligated \4\ expended \5\ \6\ ---------------------------------------------------------------------------------------------------------------- Alabama.......................... $7.3 0.0 $7.3 $7.3 $7.3 $16.6 Alaska........................... 3.1 $1.1 2.0 3.1 2.0 3.4 American Samoa................... 0.1 0.0 0.0 0.0 0.0 0.00 Arizona.......................... 12.9 1.8 11.2 12.9 11.2 22.7 Arkansas......................... 4.3 0.0 4.3 4.3 3.7 3.9 California....................... 186.2 0.7 121.9 122.6 28.3 83.3 Colorado......................... 9.3 0.0 9.2 9.2 9.3 10.2 Connecticut...................... 13.1 0.0 9.2 9.2 11.4 25.1 Delaware......................... 2.0 0.0 2.0 2.0 2.0 5.2 District of Columbia............. 5.6 0.0 5.6 5.6 4.9 4.5 Florida.......................... 39.8 0.0 25.4 25.4 14.1 47.1 Georgia.......................... 24.8 0.0 24.8 24.8 24.4 46.1 Guam............................. 0.6 0.0 0.4 0.4 0.4 0.0 Hawaii........................... 5.2 0.0 5.2 5.2 5.2 4.5 Idaho............................ 2.6 (\7\) 2.6 2.6 2.6 2.1 Illinois......................... 49.8 0.0 42.0 42.0 36.9 78.6 Indiana.......................... 13.5 0.0 13.5 13.5 10.3 27.9 Iowa............................. 8.3 0.0 8.3 8.3 8.3 6.9 Kansas........................... 5.9 (\7\) 5.9 5.9 5.9 10.7 Kentucky......................... 13.6 0.0 13.6 13.6 7.8 16.9 Louisiana........................ 16.5 0.0 16.5 16.5 16.5 13.2 Maine............................ 5.2 (\7\) 5.1 5.2 5.1 3.5 Maryland......................... 16.6 0.0 13.1 13.1 8.8 21.3 Massachusetts.................... 23.6 0.0 23.0 23.0 22.8 50.0 Michigan......................... 49.0 0.6 48.4 49.0 48.4 30.3 Minnesota........................ 13.5 1.0 12.5 13.5 12.5 24.0 Mississippi...................... 8.6 (\7\) 8.6 8.6 8.6 6.2 Missouri......................... 17.5 0.0 16.1 16.1 15.1 26.1 Montana.......................... 2.9 0.4 2.5 2.9 1.9 3.3 Nebraska......................... 3.0 0.1 2.9 3.0 2.9 8.6 Nevada........................... 2.8 (\7\) 2.1 2.1 1.5 2.9 New Hampshire.................... 2.2 0.0 2.2 2.2 1.3 4.3 New Jersey....................... 25.3 0.0 25.3 25.3 24.6 40.9 New Mexico....................... 7.8 0.1 2.2 2.3 2.1 8.7 New York......................... 99.5 (\7\) 99.5 99.5 70.2 52.2 North Carolina................... 22.2 0.1 22.1 22.2 22.1 61.2 North Dakota..................... 1.4 0.4 1.0 1.4 0.5 1.9 Ohio............................. 46.3 0.0 46.3 46.3 38.4 65.0 Oklahoma......................... 8.4 0.2 8.1 8.4 8.1 25.7 Oregon........................... 10.2 0.1 10.1 10.2 10.1 25.7 Pennsylvania..................... 44.3 0.0 44.3 44.3 36.2 55.8 Puerto Rico...................... 11.6 0.0 11.6 11.6 11.1 0.0 Rhode Island..................... 4.8 0.0 4.8 4.8 4.1 6.5 South Carolina................... 7.5 0.0 7.5 7.5 7.3 12.1 South Dakota..................... 1.5 0.5 0.9 1.4 0.9 1.7 Tennessee........................ 18.5 0.0 6.8 6.8 5.9 41.0 Texas............................ 47.2 0.0 40.7 40.7 33.1 66.7 Utah............................. 4.1 0.0 4.0 4.0 4.0 13.2 Vermont.......................... 3.0 0.0 3.0 3.0 2.7 3.6 Virgin Islands................... 0.4 0.0 0.3 0.3 0.3 0.0 Virginia......................... 13.0 0.0 13.0 13.0 13.0 18.7 Washington....................... 25.5 0.8 24.7 25.5 22.3 39.9 West Virginia.................... 9.3 0.0 8.4 8.4 8.5 8.7 Wisconsin........................ 17.5 0.4 17.1 17.5 17.1 27.8 Wyoming.......................... 1.2 0.1 1.1 1.2 0.8 2.2 ------------------------------------------------------------------------------ U.S. total................. 1,000.0 8.5 870.4 878.9 684.7 1,188.7 ---------------------------------------------------------------------------------------------------------------- \1\ JOBS total authorization: Total Federal funds available for the JOBS Program for fiscal year 1996. \2\ Indian set-aside: Ratio of adult recipients in a tribal service area to the State's total of adult recipients multiplied by the State's total allocation. \3\ Excludes the Indian set-aside. \4\ Total obligated: The amount of funds obligated by the State by September 30, 1996, 1995 and 1994. For example, if a contract is signed by the State to provide services based on a set fee, the amount owed for those services is an obligation. That obligation becomes an expenditure only when the invoice for the service is actually paid. \5\ Federal share of expenditures claimed by States for the JOBS Program. Preliminary data. \6\ Federal share of expenditures claimed by States for AFDC and transitional child care. Does not include child care administrative costs. \7\ Less than $50,000. Note.--Data as of April 2, 1997, and based on best available data reported by States. Source: Administration for Children and Families, U.S. Department of Health and Human Services. TABLE 7-34.--FEDERAL SHARE OF JOBS EXPENDITURES AS A PERCENT OF JOBS ALLOCATION, FISCAL YEARS 1990-96 ---------------------------------------------------------------------------------------------------------------- State 1990 1991 1992 1993 1994 1995 1996 ---------------------------------------------------------------------------------------------------------------- Alabama.................................................. 9.3 42.9 64.9 96.3 100.0 85.1 100.0 Alaska................................................... 0.0 100.0 100.0 100.0 100.0 100.0 100.0 Arizona.................................................. 0.0 35.2 41.9 53.8 55.2 74.2 94.3 Arkansas................................................. 97.6 100.0 99.1 100.0 67.5 78.4 87.2 California............................................... 77.0 67.5 61.2 63.5 66.3 91.6 23.3 Colorado................................................. 25.2 51.7 65.3 77.3 83.0 86.3 100.0 Connecticut.............................................. 99.0 83.8 62.9 50.5 71.9 61.9 87.1 Delaware................................................. 76.1 71.8 82.9 76.3 99.0 100.0 100.0 District of Columbia..................................... 49.1 69.0 75.5 100.0 93.4 76.8 86.8 Florida.................................................. 64.3 50.0 46.8 41.2 33.3 32.9 93.4 Georgia.................................................. 36.4 35.4 42.0 60.6 62.1 75.8 98.6 Guam..................................................... 0.0 60.5 73.5 95.1 43.6 32.8 69.2 Hawaii................................................... 0.0 40.7 100.0 100.0 100.0 100.0 100.0 Idaho.................................................... 0.0 100.0 100.0 100.0 100.0 97.0 100.0 Illnois.................................................. 19.0 35.8 40.0 49.5 61.9 59.2 77.8 Indiana.................................................. 0.0 29.3 47.1 61.6 64.5 62.5 76.1 Iowa..................................................... 63.1 58.4 65.6 70.7 100.0 100.0 100.0 Kansas................................................... 72.7 67.1 88.9 100.0 96.2 100.0 100.0 Kentucky................................................. 0.0 55.4 66.0 78.0 84.4 70.3 97.0 Louisiana................................................ 0.0 38.9 85.0 100.0 100.0 100.0 100.0 Maine.................................................... 0.0 65.3 58.2 64.2 60.2 85.7 100.0 Maryland................................................. 99.2 84.2 86.9 80.5 87.6 64.0 53.2 Massachusetts............................................ 67.9 80.6 76.3 86.7 77.5 72.1 99.5 Michigan................................................. 41.6 33.6 50.2 63.6 71.0 75.7 100.0 Minnesota................................................ 67.8 58.6 75.3 77.9 87.1 89.8 100.0 Mississippi.............................................. 0.0 11.4 81.4 91.7 94.0 100.0 100.0 Missouri................................................. 4.7 16.8 34.3 51.9 55.3 63.9 86.4 Montana.................................................. 10.0 67.2 100.0 100.0 93.5 100.0 74.6 Nebraska................................................. 56.5 63.0 90.2 78.0 75.2 69.5 100.0 Nevada................................................... 30.9 36.6 49.4 50.2 43.5 42.0 53.0 New Hampshire............................................ 75.3 100.0 97.9 100.0 100.0 100.0 59.9 New Jersey............................................... 99.0 93.6 90.5 100.0 100.0 100.0 97.1 New Mexico............................................... 17.6 27.9 22.7 25.5 29.1 24.3 29.8 New York................................................. 0.0 60.2 100.0 94.7 92.6 94.8 75.9 North Carolina........................................... 0.0 42.9 71.8 79.2 81.9 93.6 100.0 North Dakota............................................. 49.1 100.0 100.0 100.0 100.0 100.0 100.0 Ohio..................................................... 48.7 75.6 85.4 100.0 100.0 85.8 83.1 Oklahoma................................................. 68.3 63.8 85.6 78.1 97.9 83.3 100.0 Oregon................................................... 0.0 100.0 100.0 100.0 100.0 100.0 100.0 Pennsylvania............................................. 70.0 61.7 67.5 64.9 91.5 95.3 95.3 Puerto Rico.............................................. 0.0 11.5 51.1 73.3 53.1 74.2 95.9 Rhode Island............................................. 92.4 80.7 89.7 100.0 99.0 79.5 85.2 South Carolina........................................... 50.1 46.3 53.2 54.7 64.8 66.6 96.9 South Dakota............................................. 87.0 76.1 99.5 100.0 100.0 100.0 100.0 Tennessee................................................ 0.0 15.0 30.0 32.6 46.1 79.7 96.9 Texas.................................................... 0.0 49.6 69.5 77.8 68.9 57.7 70.0 Utah..................................................... 89.0 83.5 100.0 98.7 99.8 100.0 100.0 Vermont.................................................. 0.0 69.6 80.6 93.1 99.9 95.3 90.2 Virgin Islands........................................... 11.7 100.0 NA 100.0 84.4 80.7 68.6 Virginia................................................. 0.0 46.5 55.4 72.1 72.4 64.8 100.0 Washington............................................... 0.0 51.0 85.7 86.3 76.9 88.7 96.4 West Virginia............................................ 35.3 40.5 78.0 88.3 78.2 69.1 91.0 Wisconsin................................................ 98.9 100.0 100.0 100.0 100.0 100.0 100.0 Wyoming.................................................. 1.4 72.0 95.7 90.1 94.3 86.4 68.9 Number of States at maximum allocation............... 0 8 9 17 13 15 22 ---------------------------------------------------------------------------------------------------------------- NA--Not available. Source: Table prepared by the Congressional Research Service (CRS) based on data from the U.S. Department of Health and Human Services (DHHS). JOBS expenditure data are as of August 20, 1997. The U.S. distribution of JOBS participants by activity: --Educational activities--39.4 percent of participants (22.7 percent in high school, GED, remedial education, or English as a second language; 16.7 percent in higher education). --Training--16.2 percent (8.0 percent in job skills training, 7.8 percent in vocational training; and 0.4 percent in on-the-job training). --Job entry (in survey month or preceding month)--12.3 percent. --Assessment and employability plan--11.1 percent. --Job readiness--6.2 percent. --Job search--6.1 percent. --Community Work Experience Program (CWEP) and work supplementation--4.1 percent. --Job development--0.8 percent. --Other--3.9 percent. State variations were large. For instance, the share of participants in higher education ranged from 0.3 percent in Florida to 38.0 percent in Oklahoma. Among reporting States, JOBS participants in job entry ranged from zero percent in Kentucky to above 30 percent in Iowa, Montana, Oregon, and Utah. Although 21 States placed no one in CWEP, more than 15 percent of JOBS participants in Missouri and West Virginia were in CWEP. Table 7-36 summarizes State JOBS participation rates for fiscal year 1995. The table shows that nationwide 1.9 million persons, 43 percent of AFDC adult recipients, were classified as required to participate in JOBS (nonexempt from JOBS). Among the States the percentage of mandatory participants ranged from 15 percent in Indiana and 18 percent in Florida to 77 percent in Utah. As noted above, the 1995 minimum JOBS participation standard was 20 percent of nonexempt adults (roughly equivalent to 8 percent of all adults that year). Column 6 of the table gives a rough approximation of ``countable'' participation rates achieved by States in 1995; official calculations are more exacting. The table indicates a U.S. participation rate of 26.8 percent, with variations among States. TABLE 7-35.--AVERAGE MONTHLY PERCENTAGE OF JOBS PARTICIPANTS BY STATE AND COMPONENT, FISCAL YEAR 1995 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ High Self Total Job school Assigned init. Vocational Job Job Job Assess Job Work State participants entry and other higher higher training skills readiness development emp. search OJT supp. CWEP Other \2\ ed. ed. training plan ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Alabama....................................... 6,183 14.1 39.5 8.8 7.2 0.0 9.7 1.3 0.5 5.7 8.6 0.1 0.0 0.0 4.3 Alaska........................................ (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) Arizona....................................... 5,222 13.4 23.7 8.5 3.2 0.2 8.2 4.9 0.1 20.9 9.2 0.1 0.0 7.4 0.3 Arkansas...................................... 6,591 7.7 13.2 1.5 0.8 1.4 2.2 14.7 0.4 44.2 8.0 0.3 0.0 0.1 5.6 California.................................... 80,070 15.4 30.4 5.0 4.7 5.2 1.9 10.0 0.7 15.8 4.3 0.2 0.1 4.8 1.4 Colorado...................................... 5,680 10.3 21.2 9.9 9.7 0.0 11.5 4.8 0.1 13.8 8.5 0.2 2.7 7.2 0.2 Connecticut................................... 6,997 8.4 28.0 18.5 6.9 13.5 4.0 3.9 2.0 2.2 7.4 2.0 0.0 3.2 0.0 Delaware...................................... 944 9.2 16.5 1.1 13.8 1.8 7.7 0.2 0.5 27.3 12.1 0.2 0.0 5.1 4.6 District of Columbia.......................... (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) Florida....................................... 27,630 19.5 29.6 0.3 0.0 32.1 1.8 15.7 0.0 0.0 0.2 0.7 0.0 0.0 0.0 Georgia....................................... 17,306 27.1 26.3 11.1 10.0 1.3 1.9 4.0 0.1 7.1 0.9 4.5 0.0 0.0 5.9 Guam.......................................... (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) Hawaii........................................ 1,449 11.5 16.0 26.8 4.1 0.0 3.1 6.7 0.1 1.2 14.4 0.0 0.0 14.4 1.6 Idaho......................................... 1,014 13.0 18.5 3.6 10.6 8.5 11.3 5.2 0.0 7.8 7.0 0.1 0.0 14.2 0.2 Illinois...................................... 31,096 3.7 18.9 18.5 0.2 0.2 12.2 5.9 0.0 5.1 8.5 0.0 0.0 1.0 25.8 Indiana....................................... 9,245 12.0 42.7 15.5 0.8 0.0 12.0 7.8 0.0 0.3 8.9 0.0 0.0 0.0 0.0 Iowa.......................................... 12,782 36.7 12.4 7.4 2.5 1.3 7.8 2.6 0.0 20.6 5.4 0.0 0.0 0.0 3.4 Kansas........................................ 4,928 19.0 15.0 15.3 7.5 1.6 6.6 5.0 0.5 3.7 9.5 0.1 0.0 10.5 5.8 Kentucky...................................... 9,478 0.0 30.0 13.7 16.6 4.4 7.7 1.7 0.0 0.5 1.5 0.0 0.0 1.5 22.4 Louisiana..................................... 8,650 12.6 37.7 1.4 3.0 9.3 13.3 4.8 0.0 9.5 4.0 0.1 0.0 4.3 0.0 Maine......................................... 3,477 19.4 13.4 10.6 3.9 1.2 8.1 8.1 0.2 5.8 15.6 1.0 0.0 0.3 12.5 Maryland...................................... 7,432 8.9 14.4 4.9 8.7 2.4 11.9 11.8 3.9 12.5 6.5 0.3 0.7 0.0 13.1 Massachusetts................................. 18,524 16.0 19.8 5.4 3.0 25.8 17.0 1.6 0.0 0.6 7.7 0.0 0.2 0.0 3.0 Michigan...................................... 41,986 14.7 16.5 0.3 20.0 2.1 6.5 8.3 1.6 17.8 10.6 0.4 0.0 1.2 0.2 Minnesota..................................... 6,227 13.4 14.6 15.4 0.0 0.0 32.0 5.6 0.1 1.6 8.1 0.4 0.4 8.4 0.0 Mississippi................................... 5,887 1.9 33.5 15.3 1.7 0.6 9.3 4.4 0.5 18.0 2.9 0.1 0.0 0.0 11.8 Missouri...................................... 7,194 2.7 18.6 6.4 19.3 0.0 14.8 0.0 0.4 13.8 3.1 0.2 0.9 16.0 3.7 Montana....................................... 1,648 32.4 11.7 16.3 0.2 0.0 5.6 10.5 0.0 1.1 9.6 0.3 0.0 0.0 12.3 Nebraska...................................... 5,778 0.4 26.0 18.9 0.0 0.0 6.7 9.0 0.0 10.1 21.5 0.2 0.0 0.9 6.2 Nevada........................................ 742 14.3 13.8 0.8 10.4 0.8 10.5 1.8 0.8 25.7 13.1 0.3 0.0 7.8 0.0 New Hampshire................................. 1,991 2.2 24.5 33.1 1.2 0.6 6.0 17.0 0.0 1.0 7.9 0.1 0.0 1.1 5.4 New Jersey.................................... 15,401 10.2 36.8 13.8 0.0 20.8 7.7 6.0 0.1 0.1 4.4 0.0 0.0 0.0 0.0 New Mexico.................................... 8,251 7.5 25.8 30.9 5.4 3.5 0.0 0.1 0.0 6.6 10.0 0.0 0.0 0.2 10.0 New York...................................... 52,332 3.0 23.6 3.5 14.9 30.8 3.9 5.9 2.4 0.5 3.7 0.0 1.2 6.4 0.0 North Carolina................................ 12,789 9.1 21.5 0.0 17.5 0.0 23.2 8.5 0.0 15.8 2.1 0.3 0.0 2.1 0.0 North Dakota.................................. 1,398 21.1 8.3 8.4 14.5 9.4 11.7 14.6 0.0 6.1 2.9 0.2 0.1 1.7 0.9 Ohio.......................................... 45,288 10.1 17.1 17.8 5.1 0.1 2.0 0.2 1.3 26.0 3.1 0.0 0.1 14.9 2.1 Oklahoma...................................... 6,577 10.4 22.0 17.2 20.8 4.8 0.0 3.0 0.7 0.0 10.7 0.0 0.0 0.0 10.5 Oregon........................................ 2,725 37.5 11.5 0.0 3.3 0.0 5.3 5.9 0.0 9.8 21.7 0.0 0.7 0.0 4.3 Pennsylvania.................................. 35,119 6.5 12.9 3.0 9.1 11.5 39.8 6.7 0.0 0.8 3.3 0.1 0.0 5.8 0.6 Puerto Rico................................... 6,326 13.8 19.1 14.3 8.1 3.3 20.6 2.2 0.1 8.8 7.1 0.0 0.1 0.0 2.5 Rhode Island.................................. 4,051 13.0 17.2 2.9 11.4 0.1 13.5 3.8 0.0 2.7 7.3 0.0 4.8 4.8 18.7 South Carolina................................ 7,013 15.5 23.2 7.8 2.7 0.4 8.6 1.8 3.7 11.3 16.6 0.1 0.0 0.0 8.4 South Dakota.................................. 1,453 20.7 10.6 3.9 32.5 0.0 1.1 0.8 0.0 10.5 12.0 1.9 0.0 0.0 5.9 Tennessee..................................... 11,163 2.2 24.5 16.7 5.9 0.8 3.7 3.6 0.9 37.2 0.5 0.1 0.0 0.0 3.8 Texas......................................... 23,148 15.2 22.5 7.0 6.6 7.1 1.8 5.9 0.0 25.7 7.4 0.8 0.0 0.0 0.0 Utah.......................................... 6,377 41.1 7.7 8.5 0.9 0.0 9.0 1.6 0.0 15.1 11.9 0.0 0.0 0.0 4.2 Vermont....................................... 2,175 9.7 12.9 27.3 0.5 0.0 6.1 5.1 0.0 7.7 21.3 0.1 0.1 9.1 0.0 Virgin Islands................................ (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) Virginia...................................... 6,994 8.7 18.0 17.9 2.2 1.6 9.8 5.1 5.4 7.8 13.0 0.3 0.5 0.0 9.7 Washington.................................... 22,229 5.2 27.3 25.8 11.8 0.0 0.0 9.9 0.4 17.8 1.6 0.2 0.0 0.0 0.0 West Virginia................................. 9,377 23.1 33.0 11.0 1.0 11.8 0.0 2.2 0.2 2.3 0.2 0.1 0.0 15.1 0.0 Wisconsin..................................... 14,731 21.2 12.2 5.6 11.1 0.0 0.0 3.6 1.3 6.7 22.6 0.3 1.6 5.2 8.7 Wyoming....................................... 986 7.0 22.5 4.4 0.0 4.6 3.2 12.0 0.1 0.0 0.0 46.3 0.0 0.0 0.0 ------------------------------------------------------------------------------------------------------------------------------------------------- U.S. total.............................. 632,054 12.3 22.7 9.2 7.5 7.8 8.0 6.2 0.8 11.1 6.1 0.4 0.3 3.8 3.9 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ \1\ Data not reported. \2\ Includes high school, GED, remedial education, and English as a second language. Source: U.S. Department of Health and Human Services, Administration for Children and Families. TABLE 7-36.--JOBS PARTICIPATION BY STATE, AVERAGE MONTHLY DATA, FISCAL YEAR 1995 -------------------------------------------------------------------------------------------------------------------------------------------------------- Total adult recipients Total JOBS participants Countable JOBS --------------------------------------------------------- Percent of participants, State JOBS AFDC adults as a percent AFDC (1) mandatories Active \1\ Countable \2\ mandatory for of mandatories (2) (3) (4) JOBS (5) (6) -------------------------------------------------------------------------------------------------------------------------------------------------------- Alabama........................................................ 30,782 9,251 6,184 5,429 30.1 58.7 Alaska......................................................... 13,326 3,520 0 1,390 26.4 39.5 Arizona........................................................ 60,370 12,406 5,222 3,678 20.5 29.6 Arkansas....................................................... 17,809 4,298 6,590 864 24.1 20.1 California..................................................... 846,450 359,182 80,073 83,480 42.4 23.2 Colorado....................................................... 34,776 23,396 5,681 4,826 67.3 20.6 Connecticut.................................................... 56,511 26,840 6,997 7,399 47.5 27.6 Delaware....................................................... 8,021 3,068 947 693 38.2 22.6 District of Columbia........................................... 22,272 8,702 0 1,309 39.1 15.0 Florida........................................................ 189,872 34,103 27,632 16,258 18.0 47.7 Georgia........................................................ 114,012 45,658 17,307 15,849 40.0 34.7 Guam........................................................... 2,273 797 0 22 35.1 2.8 Hawaii......................................................... 22,210 9,356 1,450 1,828 42.1 19.5 Idaho.......................................................... 7,643 1,627 1,013 780 21.3 47.9 Illinois....................................................... 218,495 125,058 31,095 31,192 57.2 24.9 Indiana........................................................ 59,551 8,642 9,242 1,542 14.5 17.8 Iowa........................................................... 34,523 16,403 12,782 5,101 47.5 31.1 Kansas......................................................... 24,905 14,717 4,930 5,515 59.1 37.5 Kentucky....................................................... 61,809 32,401 9,478 8,200 52.4 25.3 Louisiana...................................................... 77,825 26,187 8,652 7,277 33.6 27.8 Maine.......................................................... 22,343 12,764 3,496 4,028 57.1 31.6 Maryland....................................................... 71,196 27,563 7,431 5,724 38.7 20.8 Massachusetts.................................................. 97,191 47,286 18,526 12,685 48.7 26.8 Michigan....................................................... 200,112 121,797 41,986 26,802 60.9 22.0 Minnesota...................................................... 59,380 21,230 6,227 4,493 35.8 21.2 Mississippi.................................................... 38,313 13,642 5,888 2,790 35.6 20.5 Missouri....................................................... 78,685 31,076 7,192 8,369 39.5 26.9 Montana........................................................ 11,685 5,476 1,646 1,701 46.9 31.1 Nebraska....................................................... 12,778 5,532 5,777 3,979 43.3 71.9 Nevada......................................................... 12,071 4,288 745 888 35.5 20.7 New Hampshire.................................................. 9,898 3,937 1,991 2,042 39.8 51.9 New Jersey..................................................... 102,858 66,115 15,400 15,062 64.3 22.8 New Mexico..................................................... 36,597 11,369 8,250 3,534 31.1 31.1 New York....................................................... 444,093 200,167 52,327 46,375 45.1 23.2 North Carolina................................................. 102,151 43,955 12,848 11,161 43.0 25.4 North Dakota................................................... 4,796 1,678 1,399 465 35.0 27.7 Ohio........................................................... 196,557 97,040 45,290 32,795 49.4 33.8 Oklahoma....................................................... 38,101 15,742 6,581 3,579 41.3 22.7 Oregon......................................................... 33,470 19,335 2,724 8,906 57.8 46.1 Pennsylvania................................................... 193,502 93,900 35,119 21,861 48.5 23.3 Puerto Rico.................................................... 54,009 19,796 6,324 3,933 36.7 19.9 Rhode Island................................................... 20,644 14,216 4,052 3,062 68.9 21.5 South Carolina................................................. 33,231 9,150 7,013 3,012 27.5 32.9 South Dakota................................................... 4,719 2,262 1,451 1,500 47.9 66.3 Tennessee...................................................... 86,374 21,333 11,164 6,527 24.7 30.6 Texas.......................................................... 223,589 57,816 23,149 13,833 25.9 23.9 Utah........................................................... 15,081 11,580 6,376 5,187 76.8 44.8 Vermont........................................................ 10,408 5,368 2,178 1,102 51.6 20.5 Virgin Islands................................................. 1,195 738 0 183 61.8 24.8 Virginia....................................................... 56,106 20,296 6,993 4,859 36.2 23.9 Washington..................................................... 102,255 36,849 22,229 17,185 36.0 46.6 West Virginia.................................................. 37,859 17,237 9,377 5,177 45.5 30.0 Wisconsin...................................................... 62,922 35,580 14,843 12,617 56.5 35.5 Wyoming........................................................ 4,530 2,879 986 1,340 63.6 46.5 ---------------------------------------------------------------------------------------- U.S. total............................................... 4,382,134 1,864,602 632,253 499,388 42.6 26.8 -------------------------------------------------------------------------------------------------------------------------------------------------------- \1\ The number of active participants is based on monthly reports. \2\ The number of countable participants is based on quarterly reports. Source: U.S. Department of Health and Human Services, Administration for Children and Families. Table 7-37 gives comparable data for the AFDC-UP caseload, for which the 1995 minimum JOBS participation rate was 50 percent. Column 4 shows that ``countable'' participation rates among the 50 States ranged from 6 percent in Hawaii to 80 percent in Kentucky. Although some States in some years failed to meet participation standards, none has been penalized by a reduced matching rate. The DHHS Secretary has waived this penalty, as permitted by law, if a State has made a good faith effort to meet the standard and has submitted a plan for improvement. TABLE 7-37.--PARTICIPATION OF AFDC-UP ADULTS IN JOBS, BY STATE, AVERAGE MONTHLY DATA, FISCAL YEAR 1995 ---------------------------------------------------------------------------------------------------------------- Total AFDC- No. UP adult required to No. meeting State recipients participate participation Participation (1) in JOBS rules (3) rate \1\ (in (2) percent) (4) ---------------------------------------------------------------------------------------------------------------- Alabama................................................. 243 116 37 32 Alaska.................................................. 3,788 791 384 49 Arizona................................................. 2,282 512 274 54 Arkansas................................................ 514 277 50 18 California.............................................. 257,171 143,160 49,705 35 Colorado................................................ 915 292 86 29 Connecticut............................................. 5,632 2,555 1,518 59 Delaware................................................ 131 50 9 18 District of Columbia..................................... 391 207 6 3 Florida................................................. 6,657 1,384 475 34 Georgia................................................. 988 541 308 57 Guam.................................................... 378 198 3 2 Hawaii.................................................. 2,819 1,410 85 6 Idaho................................................... 1,117 355 136 38 Illinois................................................ 21,021 9,706 5,436 56 Indiana................................................. 4,134 2,206 272 12 Iowa.................................................... 6,259 3,325 2,059 62 Kansas.................................................. 2,919 1,665 585 35 Kentucky................................................ 6,912 3,027 2,429 80 Louisiana............................................... 1,366 582 224 38 Maine................................................... 3,667 1,905 1,143 60 Maryland................................................ 1,311 533 205 38 Massachusetts........................................... 6,503 3,070 2,012 66 Michigan................................................ 40,729 19,251 9,641 50 Minnesota............................................... 8,749 4,209 973 23 Mississippi............................................. 79 41 3 7 Missouri................................................ 3,971 1,392 642 46 Montana................................................. 1,793 588 370 63 Nebraska................................................ 1,417 292 125 43 Nevada.................................................. 652 254 131 52 New Hampshire........................................... 550 247 28 11 New Jersey.............................................. 6,908 3,321 949 29 New Mexico.............................................. 2,699 697 376 54 New York................................................ 38,245 15,646 6,114 39 North Carolina.......................................... 4,783 2,696 251 9 North Dakota............................................ 263 72 44 61 Ohio.................................................... 28,031 15,423 5,177 34 Oklahoma................................................ 638 157 97 62 Oregon.................................................. 5,065 2,224 611 27 Pennsylvania............................................ 16,051 7,122 4,281 60 Puerto Rico............................................. 0 0 0 0 Rhode Island............................................ 1,164 611 348 57 South Carolina.......................................... 625 214 107 50 South Dakota............................................ 41 12 8 67 Tennessee............................................... 3,263 1,462 879 60 Texas................................................... 14,735 4,056 1,035 26 Utah.................................................... 179 76 60 79 Vermont................................................. 2,642 1,026 550 54 Virgin Is............................................... 0 0 0 0 Virginia................................................ 835 292 59 20 Washington.............................................. 28,662 14,630 3,601 25 West Virginia........................................... 9,920 5,747 1,872 33 Wisconsin............................................... 9,917 4,980 2,788 56 Wyoming................................................. 135 41 19 46 ------------------------------------------------------ Total U.S.......................................... 569,859 284,646 108,580 38 ---------------------------------------------------------------------------------------------------------------- \1\ Participation rate calculated by dividing number of adults meeting participation rules (3) by the number of required participants (2). Source: DHHS Office of Family Assistance. Table prepared by the Congressional Research Service. Indian Tribes and JOBS More than 80 Indian tribes and Alaska Native Organizations in 24 States conducted their own JOBS Programs. These programs, which were 100 percent federally funded, did not have to meet participation rules of the regular JOBS Program. Allocation of JOBS funds for Indian tribes and Alaska Native Organizations was based on the percentage of AFDC adult recipients within the State who lived in their service area, and their grants were subtracted from the State's allocation. In fiscal year 1996, $8.5 million (0.85 percent of total authorized JOBS funds) was set aside for them. (The 1996 welfare reform law appropriates $7.6 million for each of six fiscal years to Indian tribes that were JOBS grantees; this is in addition to any TANF funds they may receive for operating tribal family assistance programs.) Welfare-to-Work Efforts: Some Assessments JOBS Programs differed across States. The Manpower Demonstration Research Corporation (MDRC) has identified and analyzed two basic approaches taken by States: the labor force attachment approach and the human capital development (HCD) approach. The labor force approach used job search, short-term education or training and other services to move parents quickly into jobs; the human capital approach encouraged people to postpone work so as to build skills. Among 2-year findings of impacts at three sites: The labor force approach increased the number employed by 24 percent, reduced the number still on AFDC by 16 percent, and increased earnings by 26 percent. Even so, 57 percent of the labor force treatment group remained on AFDC, and the group's earnings averaged only $285 monthly. Of the labor force attachment control group, 68 percent remained on AFDC, and the group's earnings averaged $226. MDRC said the human capital approach failed to produce consistent gains in earnings or employment, but achieved AFDC savings of 14 percent (Freedman & Friedlander, 1995). However, MDRC also said that the 2-year followup period was not long enough to capture full effects of lengthy basic education or training activities. A mid-1994 survey made by the General Accounting Office (GAO) concluded that county JOBS Programs nationwide lacked a strong employment focus. GAO surveyed a nationally representative random sample of 453 county JOBS administrators and visited programs in four States. Most of the administrators reported that fewer than one-half of their job-ready participants had become employed and that little use was made of subsidized jobs or work experience programs (U.S. General Accounting Office, 1995a). Another GAO study found that most adult AFDC recipients did not participate in JOBS because of the law's allowable exemptions and minimum participation standards. Noting that the program reached only about 13 percent of single female-headed households receiving AFDC each month in 1992, GAO questioned whether a program serving relatively few persons could bring about a widespread transformation of the culture of welfare (U.S. General Accounting Office, 1995b.). Another study of JOBS implementation concluded that the program held promise for further development of ``meaningful welfare employment programs'' across the country and that it would best be served by incremental changes, not dramatic reform. The study urged more funding for services, including child care (Hagen and Lurie, 1994). A Congressional Research Service (CRS) report examined the types of jobs likely to be available to welfare recipients and concluded that some AFDC recipients who found work might still be poor (especially if the job were part time), even with supplementation by the earned income credit. For AFDC recipients to be able to compete for higher paying jobs, their productivity would have to be raised. However, experience with the Job Training Partnership Act Title II-A Training Program suggests that training alone might not be sufficient to enable recipients to earn their way out of poverty (Levine, 1994). EMERGENCY ASSISTANCE Before enactment of TANF, the Social Security Act (title IV-A) offered States 50 percent Federal matching funds for emergency assistance (EA) to families with children if the aid were needed to avoid destitution of a child or to provide living arrangements in a home for him. The law made unlimited EA funds available, but only for aid furnished for a period not in excess of 30 days in any 12-month period. From the program's beginning in fiscal year 1969, regulations interpreted the statute to allow funding for EA that is authorized by the State during one period of 30 consecutive days in any 12 consecutive months. The rules explicitly allowed funding to meet needs that arose before the 30-day authorization period, such as past-due rent, or needs that extend beyond it. In effect, this controversial interpretation of the statute meant that there was no 30-day limit on benefits. State EA plans were required to specify eligibility conditions, which might be more liberal than those for AFDC, and to specify what emergencies they would meet and what services they would provide. The law allowed EA for migrant families and for those excluded from AFDC because they lived with both parents and neither was disabled or unemployed. In the mid-1970s, court suits challenged States' rights to restrict the kinds of emergencies for which EA could be paid, and some States dropped the program; but on June 6, 1978, the U.S. Supreme Court (Quern v. Mandley, 436 U.S. 725) held that States could limit EA eligibility more narrowly than the outer bounds set in the Social Security Act. Before 1980, fewer than half the States operated EA Programs and total expenditures averaged only about $50 million annually. In the 1980s the number of State programs rose to 27, and expenditures averaged $170 million yearly. By 1990, 32 jurisdictions offered EA; by 1995, the total was 51 (all but Alaska, which dropped the program in 1975, and Mississippi and Guam, which never offered it). In the 1990s EA spending exploded, soaring from $378 million in fiscal year 1990 to $1.6 billion in fiscal year 1994 and $3.2 billion in both fiscal year 1995 and 1996. In 1996, as shown in table 7-38, more than one-half of all EA expenditures were made by three States: New York, 32 percent of the total; Pennsylvania, 15 percent, and California, 9 percent. Table 7-39 presents the growth in total State and Federal EA expenditures for selected fiscal years 1970-96. EA funds were used to aid families affected by natural disasters, such as floods, fires, and storms, and other crises threatening family or living arrangements. Other qualifying causes for EA specified by various States include: eviction, potential eviction, or foreclosure; homelessness; utility shutoff or loss of heating energy supply or equipment; civil disorders or crimes of violence; child or spousal abuse; loss of employment or strike; health hazards/risks to health and safety; emergency medical needs; and illness, accident, or injury. Beginning around 1993, some States began expanding the types of activities supported by EA funds; the new activities included child protection, family preservation, juvenile justice, mental health, counseling and referral, parenting education, case management, in-home family services, homemaker support, legal referrals, crisis intervention, and employment counseling (Solomon-Fears, 1995). As a result, EA spending exploded. TABLE 7-38.--CASELOAD AND TOTAL EXPENDITURES IN THE EMERGENCY ASSISTANCE PROGRAM, BY STATE, FISCAL YEARS 1994-96 -------------------------------------------------------------------------------------------------------------------------------------------------------- Caseload Total fiscal year expenditures \2\ Average monthly expenditure/ --------------------------------- (dollars in thousands) family State ----------------------------------------------------------------------- 1994 1995 1996 \1\ 1994 1995 1996 1994 1995 1996 -------------------------------------------------------------------------------------------------------------------------------------------------------- Alabama........................................ 0 0 0 $7,525 $14,871 $18,327 0 0 0 Alaska......................................... 0 0 0 0 0 0 0 0 0 Arizona........................................ 114 150 184 13,541 23,396 23,696 $9,870 $12,998 $10,732 Arkansas....................................... 0 0 0 3,103 6,167 10,896 0 0 0 California..................................... 9,116 13,898 8,548 292,035 486,231 270,958 2,670 2,915 2,642 Colorado....................................... 0 1,505 2,772 25,799 65,500 101,158 0 3,627 3,041 Connecticut.................................... 0 0 0 19,076 117,689 64,296 0 0 0 Delaware....................................... 141 134 138 555 21,602 9,308 328 13,434 5,621 District of Columbia........................... 805 358 191 16,085 8,912 1,145 1,665 2,074 500 Florida........................................ 1,860 2,967 2,489 11,300 58,329 101,180 506 1,638 3,388 Georgia........................................ 1,436 732 1,018 14,784 17,195 21,835 858 1,958 1,787 Guam........................................... 0 0 0 0 0 0 0 0 0 Hawaii......................................... 0 0 0 723 6,446 3,560 0 0 0 Idaho.......................................... 0 0 0 4,647 7,695 7,857 0 0 0 Illinois....................................... 1,263 4,380 7,928 23,378 111,147 157,022 1,543 2,115 1,651 Indiana........................................ 0 0 0 60,115 33,021 4,243 0 0 0 Iowa........................................... 421 415 405 1,758 16,506 42,918 348 3,314 8,831 Kansas......................................... 177 331 342 12,122 23,782 22,595 5,713 5,987 5,506 Kentucky....................................... 0 0 0 0 2,231 14,461 0 0 0 Louisiana...................................... 0 0 0 0 6,260 10,278 0 0 0 Maine.......................................... 326 344 390 738 1,689 5,030 188 409 1,075 Maryland....................................... 2,141 2,063 1,841 10,194 17,425 23,076 397 704 1,045 Massachusetts.................................. 2,025 1,765 1,676 48,524 44,464 46,906 1,997 2,099 2,332 Michigan....................................... 1,135 1,100 936 18,313 22,697 22,083 1,344 1,719 1,966 Minnesota...................................... 1,883 1,927 1,853 15,229 25,037 35,844 674 1,083 1,612 Mississippi.................................... 0 0 0 0 0 0 0 0 0 Missouri....................................... 0 1,687 1,834 15,085 31,634 57,364 0 1,563 2,607 Montana........................................ 33 19 19 386 3,331 3,911 980 14,610 17,154 Nebraska....................................... 151 154 1,009 912 20,203 21,526 505 10,932 1,778 Nevada......................................... 174 1,597 1,582 675 16,060 17,191 323 838 906 New Hampshire.................................. 389 189 316 1,568 2,247 5,919 336 991 1,561 New Jersey..................................... 7,909 6,225 4,897 41,230 66,242 60,058 434 887 1,022 New Mexico..................................... 0 0 0 2 1,386 14,004 0 0 0 New York....................................... 15,911 12,526 11,521 837,710 1,232,551 1,008,984 4,387 8,200 7,298 North Carolina................................. 3,211 5,407 3,111 7,977 79,481 130,997 207 1,225 3,509 North Dakota................................... 549 1,028 1,074 3,004 9,906 12,961 456 803 1,006 Ohio........................................... 3,641 2,715 2,857 7,709 16,174 19,194 176 496 560 Oklahoma....................................... 574 2 0 1,027 4,729 18,671 149 197,042 0 Oregon......................................... 1,583 1,527 867 9,007 19,340 32,705 474 1,055 3,144 Pennsylvania................................... 801 622 650 5,749 390,088 492,332 598 52,263 63,119 Puerto Rico.................................... 491 190 468 171 246 413 29 108 74 Rhode Island................................... 0 269 568 2,011 15,763 10,861 0 4,883 1,593 South Carolina................................. 0 0 0 774 9,204 9,074 0 0 0 South Dakota................................... 227 199 208 1,803 2,965 4,815 662 1,242 1,929 Tennessee...................................... 0 0 0 1,913 43,850 45,592 0 0 0 Texas.......................................... 0 10,937 3,947 3,529 17,170 94,288 0 131 1,991 Utah........................................... 120 182 2,481 506 13,541 12,633 351 6,200 424 Vermont........................................ 267 184 168 963 3,828 4,978 301 1,734 2,469 Virgin Islands................................. 0 0 0 0 0 0 0 0 0 Virginia....................................... 39 34 35 72 56 64 155 137 152 Washington..................................... 594 533 459 5,816 34,998 70,393 815 5,472 12,780 West Virginia.................................. 1,160 1,079 1,028 5,545 4,607 6,380 398 356 517 Wisconsin...................................... 778 418 666 3,356 3,366 8,783 359 671 1,099 Wyoming........................................ 231 242 144 5,216 4,249 2,112 1,886 1,463 1,222 -------------------------------------------------------------------------------------------------------- U.S. total............................... 61,675 80,034 70,620 $1,563,262 $3,185,507 $3,184,875 $2,112 $3,317 $3,758 -------------------------------------------------------------------------------------------------------------------------------------------------------- \1\ Preliminary data. \2\ Represents total expenditures claimed by States and may include prior year claims and amounts deferred. Note.--Based on best available data reported by States. Source: Administration for Children and Families, U.S. Department of Health and Human Services. TABLE 7-39.--TOTAL FEDERAL AND STATE EXPENDITURES UNDER THE EMERGENCY ASSISTANCE PROGRAM, SELECTED FISCAL YEARS 1970-96 \1\ [In millions of dollars] ------------------------------------------------------------------------ Fiscal year Amount ------------------------------------------------------------------------ 1970....................................................... $14 1975....................................................... 70 1980....................................................... 109 1985....................................................... 157 1986....................................................... 175 1987....................................................... 203 1988....................................................... 256 1989....................................................... 310 1990....................................................... 378 1991....................................................... 306 1992....................................................... 627 1993....................................................... 789 1994....................................................... 1,563 1995....................................................... 3,186 1996....................................................... 3,185 ------------------------------------------------------------------------ \1\ Represents total expenditures claimed by States and may include prior year claims. May also include amounts deferred or under review by the Administration for Children and Families. Source: Administration of Children and Families, U.S. Department of Health and Human Services. TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF) Temporary Assistance for Needy Families (TANF) is a block grant, administered by the Department of Health and Human Services, for State-designed programs of time-limited and work- conditioned aid to families with children. Enacted on August 22, 1996, the Personal Responsibility and Work Opportunity Reconciliation Act (Public Law 104-193) repealed Aid to Families with Dependent Children (AFDC), Emergency Assistance for Needy Families, and the Job Opportunities and Basic Skills Training (JOBS) Program, replacing them with TANF. The TANF law combines recent Federal funding levels for AFDC, EA, and JOBS into a single grant ($16.5 billion annually through fiscal year 2002). It entitles each State to the sum it received in a recent year for the replaced programs. Outlying areas also are entitled to TANF grants. Further, Indian tribes, defined to include Alaska Native Organizations, may apply to operate their own tribal family assistance plans. The 1996 welfare law also provides an average of $2.3 billion annually in a new child care block grant (about double the recent Federal funding level for AFDC-related child care; see section 9). TANF has greatly enlarged State discretion in operating family welfare and ended the entitlement of individual families to benefits. Under TANF, States decide what categories of needy families to help (AFDC law defined eligible classes and required States to aid families in these classes if their income were below State-set limits). Under TANF, States decide whether to adopt financial rewards or penalties to induce work and other desired behavior. They set asset limits (AFDC law imposed an outer limit). Moreover, States continue to set benefit levels. TANF explicitly permits States to administer benefits and provide services through contracts with charitable, religious, or private organizations. Attached to the TANF Block Grant are some Federal conditions. For instance, to receive full grants, States must achieve minimum work participation rates and spend a certain sum of their own funds on behalf of eligible families. The latter is known as the maintenance-of-effort (MOE) rule. Moreover, States must impose a general 5-year time limit on TANF-funded benefits and cannot use TANF funds to assist unwed mothers under 18 unless they live in an adult-supervised setting. States were required to commence TANF by July 1, 1997, but most did so earlier. The block grant offered most States more funds than the expiring programs would have because the TANF grant is based on funding during years with larger caseloads. For full State grants, TANF requires participation in specified ``work activities'' by 25 percent of all beneficiary families with an adult parent or caretaker or a teen parent in fiscal year 1997; this all-family participation rate rises to 50 percent by fiscal year 2002. (States may exempt a single parent with a child under the age of 1 from the work requirement and from the calculation of work participation rates for up to 12 months.) However, the law directs DHHS to lower the required rate if a State's caseload is smaller than in fiscal year 1995 (which is the case in most States). For two-parent families, higher participation minimums apply; the minimums start at 75 percent and climb to 90 percent in fiscal year 1999. Work activities that count toward a State's participation requirement exclude education, except for high school dropouts and a limited amount of vocational educational training. In 1997, Congress enacted a program of welfare-to-work grants for the benefit of TANF recipients, administered by the Department of Labor, and revised some provisions of the original TANF law. The description below applies to the program, as amended by the Balanced Budget Act of 1997 (Public Law 105-33). Basic Outline of Program Purpose The purpose of TANF is to increase State flexibility in operating programs designed to: (1) aid needy families so that children may be cared for in their homes or those of relatives; (2) end dependence of needy parents upon government benefits by promoting job preparation, work, and marriage; (3) prevent and reduce out-of-wedlock pregnancies and establish goals for preventing and reducing their incidence; and (4) encourage formation and maintenance of two-parent families. Eligible families A State may give cash TANF benefits to a family it finds needy if it includes: --a minor child (under 18 or under age 19 if a full-time student in a secondary school or the equivalent level of vocational or technical training) who lives with his/her parent or other caretaker relative; --a pregnant person. Ineligible persons A State may not use Federal dollars to provide benefits for: --Unwed mothers under 18 (and their children) unless they live in the home of an adult relative or in another adult-supervised living arrangement; --Unwed mothers under 18 without a high school diploma unless they attend school; --Aliens who enter the United States after August 22, 1996; they are barred from TANF for 5 years, after which TANF eligibility is a State option. TANF benefits for aliens legally in the United States on August 22, 1996 are a State option; --A child who has been (or is expected to be) absent from home for 45 consecutive days, or, at State option, for 30-180 days. States may make ``good cause'' exceptions to this rule; --Persons convicted after August 22, 1996 of a drug-related felony (unless State opts out by State law); --For 10 years, persons who fraudulently misrepresented residence to obtain food stamps, TANF, SSI, or Medicaid in two or more States. Conditions for eligibility TANF may not be paid to a person who fails to assign to the State child support or spousal support rights. If a parent fails to cooperate with the State in establishing paternity and in establishing, modifying, or enforcing a child support order, her benefit must be ended or reduced, unless she qualifies for a good cause or other exception established by the State. Time limit: benefit cutoff Federal TANF funds may not be used for aid to a family that includes an adult who has received 60 months of TANF benefits while an adult, a minor household head, or a minor married to a household head. States must disregard months during which the adult lived in Indian country or in an Alaska Native village with 50 percent of adults unemployed. A State may exempt up to 20 percent of its caseload from the 5-year time limit on grounds of hardship or the family's inclusion of a battered woman. State funds used to aid persons ineligible for TANF because of the 5-year time limit or new alien rules may be counted toward the maintenance-of-effort requirement. Also, States may use TANF funds transferred to title XX social services for aid to the ex-TANF family. The above rules apply to TANF Programs funded by Federal grants or by commingled State funds and Federal grants. According to a January 31, 1997 guidance from DHHS, if States operate TANF Programs in which Federal grant and State funds are segregated, the 5-year time limit and the requirements for teen school attendance and teen parent living arrangements do not apply to families aided with State funds only. Nor do they apply to a wholly separate State program. Time limit: work trigger States must require parents and other caretakers to engage in ``work'' after 24 months of aid and, unless the State opts out, to participate in community service after 2 months of aid. Work requirements After a maximum of 2 years of TANF benefits, parents and other caretakers must be required to engage in ``work,'' as defined by the State. Not later than August 22, 1997, unless they opt out by notice to the Secretary, States must require a parent who has received TANF for 2 months to participate in community service employment, with hours and tasks set by the State (not applicable to a single parent of a child under 6 who is unable to obtain needed child care for a specified reason). In their TANF plans, almost 20 States said they planned to opt out of this requirement; some said they were deferring a decision, and Massachusetts noted that it requires work, which can include community service, after 60 days of benefits. The law imposes no exemptions from the work requirement on States, but permits States to exempt a single parent caring for a child under age 1 and provides that if these parents are exempted, they will not be counted in calculating a State's work participation rate. If a State has chosen to certify that it will ``screen for and identify domestic violence,'' it may waive work requirements, time limits, and other TANF rules for victims of domestic violence, although such States remain obligated to meet overall work participation and time limit requirements. Creditable work activities The law defines ``work activities'' that count toward a State's participation rate as: unsubsidized employment, subsidized private or public sector employment, work experience, on-the-job training, job search and job readiness assistance for a maximum of 6 weeks, including only 4 consecutive weeks (the maximum rises to 12 weeks under any of the following conditions: if the State unemployment rate is 50 percent above average, if the State's seasonally adjusted unemployment rate for the most recent 3 months is at least 6.5 percent and at least 10 percent above the comparable rate in either of the past 2 years, or if its food stamp caseload over the most recent 3-month period is at least 10 percent higher than the food stamp caseload would have been in the corresponding period of fiscal year 1994 or fiscal year 1995, if Public Law 104-193 had been in effect throughout those fiscal years), community service programs, vocational educational training (12 months maximum), job skills training directly related to employment, education directly related to employment for recipients without a high school diploma or equivalent), satisfactory attendance at secondary school, and provision of child care services to a TANF recipient who is participating in a community service program. Not more than 30 percent of all families and of two-parent families may be credited with work activity by reason of vocational educational training or, only in fiscal year 2000 or later (if teen household heads or married teens without high school diploma) by reason of secondary school attendance or education directly related to employment. For fiscal year 1998 or fiscal year 1999, no limit applies to the number of teen high school dropouts who can be counted as participating in a work activity through education. A study by GAO (1997) of three States' experience under waivers found that they succeeded, through policy changes, in increasing the percentage of their AFDC recipients who participated in work activities. However, State officials told GAO that as employable recipients found jobs, the remaining caseload would consist of persons with substantial barriers to employment, ``making the higher future target rates difficult to achieve.'' Required weekly hours of work activity To be counted as a work participant, a person must be engaged in a work activity for at least a weekly minimum average of 20 hours in fiscal years 1997-98, 25 hours in fiscal year 1999, and 30 hours in fiscal year 2000 and thereafter. For a single parent or caretaker relative of a child under 6, weekly hours remain at 20. Of required hours, at least 20 generally must be spent in these specified ``priority'' activities: employment, work experience, on-the-job training, job search and job readiness, community service, vocational educational training, or provision of child care to a participant in community service. However, a single teen household head or married teen without diploma is credited with work if she maintains satisfactory high school attendance or, for an average of at least 20 hours weekly, engages in schooling directly related to work. Special rules apply to two- parent families: (1) they must work at least 35 hours weekly with at least 30 hours in the priority activities specified above (the two parents may share the work hours); (2) if the family receives federally-funded child care aid and an adult in the family is not disabled or caring for a severely disabled child, the shared work requirement rises to 55 hours, of which 50 hours must be in a priority activity. If the second parent in a family is disabled, the State must treat it as a single- parent family. Nondisplacement A TANF recipient may fill a vacant position, but may not be assigned to a position from which a worker has been laid off. Minimum work participation rates To receive their full TANF Block Grant, States must achieve minimum work participation rates. The share of all families that must participate in a work activity (except single-parent families with an infant, if States exempt them) begins at 25 percent in fiscal year 1997 and rises by 5 percentage points a year, reaching 50 percent in fiscal year 2002 and thereafter. Included within the all-family group are two-parent families, for whom higher participation rates are required, namely, 75 percent in fiscal years 1997-98 and 90 percent in fiscal year 1999 and thereafter. However, the DHHS Secretary is to issue regulations for reducing required participation rates each fiscal year by the number of percentage points by which a State's caseload in the preceding fiscal year is smaller than in fiscal year 1995 unless she finds that the decrease was required by Federal law or results from changes in State eligibility criteria, a relationship to be proved by the Secretary. Because caseloads generally have been shrinking, the actual required participation rates in the near future, at least for most States, will be smaller than the statutory ones. During the first 9 months of fiscal year 1997, the national average monthly AFDC/TANF caseload (4.056 million families) was 16.9 percent smaller than its fiscal year 1995 counterpart (4.881 million) (see table 7-48). These statistics on caseload declines suggest that the average State could fulfill its 30 percent all-family work requirement in 1998 by having 13.1 percent of its caseload in work activities (30 percent minus 16.9 percent). However, actual caseload reductions varied widely among the States, and two jurisdictions had caseload increases rather than declines. The law does not state whether adjustments in minimum participation rates are to be calculated separately for all families and two-parent families. A State's monthly participation rate, expressed as a percentage, equals: (1) the number of all recipient families in which an adult or minor head of household is engaged in work activity for the month, divided by (2) the number of recipient families with an recipient adult or teen household head (but excluding families subject that month to a penalty for refusal to work, provided they have not been penalized for more than 3 months, whether or not consecutive, in the preceding 12; and excluding families with children under 1, if the State exempts them from work). The same method is used to calculate participation rates of two-parent families. Penalties against States for failing participation rates If a State falls short of the required participation rate for a fiscal year, its TANF Block Grant for the next year is to be reduced by 5 percent (first failure to meet the standard). For subsequent years of failure, annual penalties rise by 2 percentage points (thus, 7 percent in second year, 9 percent in third, etc.) with a maximum penalty of 21 percent in any one year. However, the law says that grant reductions shall be based ``on the degree of noncompliance,'' and the Secretary may reduce the penalty if noncompliance is due to ``extraordinary circumstances, such as a natural disaster or regional recession.'' In the latter case, the Secretary must justify the penalty reduction to Congress in writing. Penalties against individuals for refusing work If an adult recipient refuses to engage in required work, the State must reduce aid to the family ``pro rata'' (or more, at State option) with respect to the period of work refusal, or shall discontinue aid, subject to good cause and other exceptions that the State may establish. However, a State may not penalize a single parent caring for a child under age 6 for refusal to work if the parent has a demonstrated inability to obtain needed child care for a reason listed in the law. The law does not define ``pro rata'' reduction. It could be interpreted to require that the benefit reduction expressed as a percentage, equal the percentage of required hours that are not worked. Treatment of income TANF has no provision about treatment of earned or unearned income (except one requiring States to disregard interest accruing to a recipient in an individual development account). States set their own income limits and make their own rules governing treatment of earnings and other income. Treatment of resources TANF has no provision about resource limits. However, it permits States to subsidize individual development accounts (IDAs) established by TANF recipients to save funds for specified purposes (postsecondary educational expenses, first home purchase, or business capitalization). Client contracts/agreements States must assess the skills, work experience, and employability of each adult recipient (at least age 18) who has not completed high school and is not attending school. In consultation with the recipient and on the basis of the assessment, the State may develop an individual responsibility plan (IRP) that sets forth obligations of the recipient and describes services to be provided by the State. The law explicitly allows the IRP to require a recipient to undergo appropriate treatment for substance abuse and provides that States cannot be prohibited by the Federal Government from testing welfare recipients for use of controlled substances and sanctioning those who test positive. Child care for TANF families TANF ended the requirement that States ``guarantee'' child care for welfare recipients needing it to work or study, but entitles States to an average of $2.3 billion annually for child care under title IV-A for 6 years (fiscal years 1997-2002 total: $13.9 billion). This total consists of $1.2 billion per year in 100 percent Federal grants and an average of about $1.1 billion yearly in matching grants. The 1996 law entitles individual States to what they received for AFDC work-related child care, transitional child care, and at-risk child care in a recent year. States that maintain the higher of their 1994 or 1995 spending on these programs are entitled also to extra funds at the fiscal year 1995 Medicaid matching rate. The law earmarks 70 percent of entitlement child care funds for recipients or ex-recipients of TANF or persons at risk of TANF eligibility and states that a substantial portion of the remaining entitlement funds should be used for low-income working families not on welfare. It also transfers these IV-A child care funds to the lead agency under the Child Care and Development Block Grant (CCDBG) and makes them subject to rules of CCDBG (see section 9). Privatization of administration The 1996 welfare law authorizes States to administer and provide TANF services (and those under Supplemental Security Income) through contracts with charitable, religious, or private organizations. States are authorized to pay recipients by means of certificates, vouchers, or other disbursement forms redeemable with these organizations. Any religious organization with a contract to provide welfare services must retain independence from all units of government. However, States must ensure an alternative provider for a beneficiary who objects to the religious character of the designated organization. Penalties against States Penalties against a State for any quarter must not exceed 25 percent of the basic grant; unrecovered penalties are to be carried forward. In the case of all penalties, States must replace Federal funds with their own so that the amount of TANF funds spent for the benefit of recipients is not diminished by penalties. Other than the penalty for failing to meet the work participation rates discussed previously, States are subject to 13 penalties. In the case of five of these penalties, the Secretary has no discretion and must, in most cases, impose the full penalty each year the States are out of compliance. In the case of the remaining eight penalties, the Secretary may not impose penalties if the State corrects the violation or if the Secretary finds reasonable cause for the violation. The five penalties that the Secretary must impose are: --Failure to maintain 100 percent of historic State spending under the State TANF Program during a year in which the State received contingency funds. The Secretary must reduce the next year's TANF grant by the total amount of contingency funds paid to the State; --Failure to maintain a certain level of historic State spending--generally, the sum equal to 75 percent of spending from State funds on replaced programs (including AFDC-related child care) in fiscal year 1994. The Secretary must reduce the following year's TANF grant by the shortfall in MOE spending. In addition, if the State received welfare-to-work grant funds for the year, the Secretary must reduce the following year's TANF grant by the amount of those welfare-to-work funds; --Failure to timely repay a loan from the Federal loan fund for State welfare programs. The Secretary must reduce the TANF grant for the next quarter by the outstanding loan amount, plus the interest owed; --Failure to comply substantially with child support enforcement requirements (see section 8), including performance measures and data reporting. The Secretary must reduce the TANF grant for each quarter of noncompliance as follows: first finding of noncompliance, by 1-2 percent; second consecutive finding, 2-3 percent; and third and later findings, 5 percent; --Failure to replace Federal penalty funds (TANF grant reductions) with State funds. The Secretary must reduce the next year's TANF grant by the sum of 2 percent of the grant and the amount of State funds equal to the earlier grant reduction. The penalties for which the Secretary may allow States to enter into corrective compliance plans or for which the Secretary may find reasonable cause are: --Failure to comply with the 5-year TANF benefit limit; reduction of 5 percent in the TANF grant for the next fiscal year; --Failure to enforce penalties required by the child support agency against TANF recipients who fail to cooperate in establishing paternity or in establishing, modifying, or enforcing a child support order (good cause exceptions allowed); reduction of up to 5 percent in TANF grant for the next fiscal year; --Failure to submit a required report; reduction of 4 percent in TANF grant for the next year, to be rescinded if the State submits the report before the end of the next fiscal quarter; --Failure to participate in the income and eligibility verification system; reduction of up to 2 percent in TANF grant for the next fiscal year; --Use of TANF funds in violation of the law; reduction of the next year's TANF grant by the amount of funds wrongfully used; if the violation is found to be intentional, the Secretary must reduce the next year's TANF grant by 5 percent; --Misuse of competitive welfare-to-work funds; the State must pay the Secretary of the Department of Labor an amount equal to the misused funds; --Failure to maintain aid for a single parent who cannot obtain care (for specified reasons) for a child under 6; reduction of up to 5 percent in the TANF grant for the next fiscal year; --Failure to reduce TANF aid for recipients who refuse without good cause to work; reduction of not less than 1 percent nor more than 5 percent in the next year's TANF grant. Interaction of TANF with other major benefit programs Medicaid.--Although the 1996 law ended AFDC, it retained AFDC eligibility limits for Medicaid use. States must provide Medicaid coverage and benefits to children and family members who would be eligible for AFDC cash aid (under terms of July 16, 1996) if that program still existed. For this purpose, States are allowed to lower AFDC income and resource standards to those in effect on May 1, 1988 and to increase them by the percentage rise since July 16, 1996 in the Consumer Price Index for all Urban Consumers (CPI-U). The law permits States to end Medicaid for adults who refuse TANF work requirements, but requires continued Medicaid for their children. State plans must ensure Medicaid for children receiving foster care or adoption assistance, provide 12 months of medical assistance to those who lose eligibility for cash aid (TANF) because of increased earnings, and provide 4 months of extended medical benefits to those who lose eligibility because of receiving payments of child or spousal support. Public Law 105-33, enacted in August 1997, authorizes a new program called the State Children's Health Insurance Program. This law provides Federal matching funds, starting in fiscal year 1998, to enable States to expand health care to targeted, uninsured, low-income children, generally, those with family income below 200 percent of the Federal poverty income guidelines. Food stamps.--TANF recipients not living with others automatically are eligible for food stamps, but States can opt to operate a ``simplified Food Stamp Program'' under which they may apply many of their TANF rules to determination of food stamp benefits for TANF families, so long as the program does not increase Federal costs. TANF recipients disqualified for noncompliance with TANF rules may be disqualified also for food stamps; persons whose TANF benefits are lowered for noncompliance or fraud will not receive an increase in food stamps. Food stamps can be merged with TANF cash benefits in work supplementation programs (jobs subsidized with welfare benefits) and in workfare programs, where a person may receive food stamps as compensation for certain hours and cash welfare for other hours of employment (and where total compensation must equal or exceed the minimum wage for each hour worked). Child nutrition.--TANF children automatically are eligible for free school meals and other child nutrition programs. Women, infants, and children enrolled in TANF automatically are income- eligible for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). Earned income credit (EIC).--The TANF law has no provision about treatment of EIC payments. Thus, States decide whether to count or disregard EIC payments as income and/or a resource. Public or assisted housing.--If a TANF family living in public or assisted housing is penalized with a cash benefit reduction for an act of fraud under TANF, its rent may not be decreased in response to the loss of income. Foster care and adoption assistance.--Although the 1996 law ended AFDC, it retains AFDC eligibility limits for foster care and adoption assistance. Foster care and adoption assistance matching funds are available for children who would have been eligible for AFDC cash aid under the income and resource limits that were in effect in the respective States on July 16, 1996. TANF Funding Capping of Federal payments The 1996 welfare law severed the link between State and Federal spending on cash benefits and work-related services for needy families with children. Before TANF, the Federal Government reimbursed States for a share of expenditures in their AFDC, EA, and JOBS Programs. Federal payments rose with increased caseloads and declined with falling ones. In contrast, TANF provides a fixed basic grant, $16.5 billion yearly through fiscal year 2002 (plus expanded child care funding in a new block grant). The TANF Program provides all States with a basic block grant based on past Federal expenditures on the programs it replaces. It also entitles qualifying States to five additional grants: a supplemental fund for certain States with low TANF grants relative to poverty and high population growth; a bonus fund for States that reduce out-of-wedlock birth rates without increasing abortion rates; a bonus fund for ``high performance'' States; a contingency fund for States that experience high unemployment and/or increased food stamp caseloads; and welfare-to-work grants. The basic grants and the five additional grants all are capped. The basic block grant: the State Family Assistance Grant--$99 billion (fiscal years 1997-2002) TANF's basic block grant entitles the 50 States and the District of Columbia to a total of $16.5 billion annually through fiscal year 2002. Each State's basic grant equals Federal payments received for AFDC, EA and JOBS in recent years. States are given the most favorable base: Average fiscal years 1992-94 payments; fiscal year 1994 payments (increased by 85 percent of the fiscal year 1995 increase over fiscal year 1994 in EA payments if the State amended its EA plan in fiscal years 1994 or 1995); or fiscal year 1995 payments. Table 7-40 shows the annual State family assistance grant for each of the 50 States and the District of Columbia, through fiscal year 2002. Puerto Rico, Guam, and the Virgin Islands also are eligible to operate TANF and receive a family assistance grant, but they are not shown in the table, as special funding rules apply to them (see section 12 for information on the territories). The amounts shown in table 7- 40 are ``gross'' amounts; as under AFDC law, States are to pay the Federal Government for its share of child support collections made on behalf of TANF families. TABLE 7-40.--ANNUAL STATE FAMILY ASSISTANCE GRANTS THROUGH FISCAL YEAR 2002 [In thousands of dollars] ------------------------------------------------------------------------ Family State assistance grant ------------------------------------------------------------------------ Alabama.................................................... $93,315 Alaska..................................................... 63,609 Arizona.................................................... 222,420 Arkansas................................................... 56,733 California................................................. 3,733,818 Colorado................................................... 136,057 Connecticut................................................ 266,788 Delaware................................................... 32,291 District of Columbia....................................... 92,610 Florida.................................................... 562,340 Georgia.................................................... 330,742 Hawaii..................................................... 98,905 Idaho...................................................... 31,938 Illinois................................................... 585,057 Indiana.................................................... 206,799 Iowa....................................................... 131,525 Kansas..................................................... 101,931 Kentucky................................................... 181,288 Louisiana.................................................. 163,972 Maine...................................................... 78,121 Maryland................................................... 229,098 Massachusetts.............................................. 459,371 Michigan................................................... 775,353 Minnesota.................................................. 267,985 Mississippi................................................ 86,768 Missouri................................................... 217,052 Montana.................................................... 45,534 Nebraska................................................... 58,029 Nevada..................................................... 43,977 New Hampshire.............................................. 38,521 New Jersey................................................. 404,035 New Mexico................................................. 126,103 New York................................................... 2,442,931 North Carolina............................................. 302,240 North Dakota............................................... 26,400 Ohio....................................................... 727,968 Oklahoma................................................... 148,014 Oregon..................................................... 167,925 Pennsylvania............................................... 719,499 Rhode Island............................................... 95,022 South Carolina............................................. 99,968 South Dakota............................................... 21,894 Tennessee.................................................. 191,524 Texas...................................................... 486,257 Utah....................................................... 76,829 Vermont.................................................... 47,353 Virginia................................................... 158,285 Washington................................................. 404,332 West Virginia.............................................. 110,176 Wisconsin.................................................. 318,188 Wyoming.................................................... 21,781 ------------ U.S. total............................................. 16,488,667 ------------------------------------------------------------------------ Source: Table prepared by the Congressional Research Service (CRS) based on allocations from DHHS. Allocations are revised as of January 7, 1997. DHHS revised its allocations to account for corrections in the AFDC and related program expenditure data available as of the dates specified in law. Table 7-41 shows that total family assistance grants under TANF exceed grants made in fiscal year 1996 for the replaced programs of AFDC, EA, and JOBS by $1.6 billion, or 10 percent. TANF grants in several jurisdictions exceeded comparable fiscal year 1996 funding by 30 percent or more: Indiana, Louisiana, Massachusetts, Ohio, Tennessee, Virginia, Wyoming, and the District of Columbia. However, in some States family assistance grants were smaller than fiscal year 1996 Federal funding for the pre-TANF Programs: Colorado, Delaware, Illinois, New Mexico, North Carolina, Pennsylvania, and Washington. Supplemental grants to States with high population growth and/or low Federal grants per poor person--$800 million (fiscal years 1998-2001) For 4 years, certain States will qualify for supplemental funds based on their population growth and/or low fiscal year 1994 grant amounts per poor person (with poverty counts based on the 1990 census). Some States will qualify automatically for each year from fiscal year 1998 to fiscal year 2001. The law makes a State eligible for a supplemental grant if: (1) fiscal year 1994 Federal expenditures for AFDC and related programs per poor person in the State were 35 percent below national average Federal spending on these programs per poor person; or (2) the State's population grew by more than 10 percent from April 1, 1990 to July 1, 1994. Based on Congressional Research Service (CRS) calculations, 11 States automatically qualify for supplemental funds: Alabama, Arkansas, Louisiana, Mississippi, and Texas met the criterion of low Federal welfare spending per poor person criteria; Alaska, Arizona, Colorado, Idaho, Nevada, and Utah met the criterion of high population growth. TABLE 7-41.--COMPARISON OF FISCAL YEAR 1996 FUNDING FOR AFDC AND RELATED PROGRAMS AND ANNUAL FAMILY ASSISTANCE GRANTS ---------------------------------------------------------------------------------------------------------------- Fiscal year 1996 Annual State Increase from State grants for AFDC, Family Assistance fiscal year 1996 EA and JOBS \1\ Grant level ---------------------------------------------------------------------------------------------------------------- Alabama............................................... $75,908,850 $93,315,207 $17,406,357 Alaska................................................ 58,664,824 63,609,072 4,944,248 Arizona............................................... 197,753,945 222,419,988 24,666,043 Arkansas.............................................. 51,853,908 56,732,858 4,878,950 California............................................ 3,622,756,184 3,733,817,784 111,061,600 Colorado.............................................. 158,311,240 136,056,690 (22,254,550) Connecticut........................................... 215,259,386 266,788,107 51,528,721 Delaware.............................................. 35,190,385 32,290,981 (2,899,404) District of Columbia.................................. 70,813,403 92,609,815 21,796,412 Florida............................................... 497,539,038 562,340,120 64,801,082 Georgia............................................... 288,409,702 330,741,739 42,332,037 Hawaii................................................ 97,907,577 98,904,788 997,211 Idaho................................................. 31,296,914 31,938,052 641,138 Illinois.............................................. 601,058,735 585,056,960 (16,001,775) Indiana............................................... 133,118,506 206,799,109 73,680,603 Iowa.................................................. 128,852,537 131,524,959 2,672,422 Kansas................................................ 89,752,672 101,931,061 12,178,389 Kentucky.............................................. 157,237,976 181,287,669 24,049,693 Louisiana............................................. 114,252,276 163,971,985 49,719,709 Maine................................................. 74,785,593 78,120,889 3,335,296 Maryland.............................................. 214,291,797 229,098,032 14,806,235 Massachusetts......................................... 353,059,715 459,371,116 106,311,401 Michigan.............................................. 632,231,649 775,352,858 143,121,209 Minnesota............................................. 220,838,750 267,984,886 47,146,136 Mississippi........................................... 70,340,945 86,767,578 16,426,633 Missouri.............................................. 195,387,537 217,051,740 21,664,203 Montana............................................... 40,390,953 45,534,006 5,143,053 Nebraska.............................................. 56,014,025 58,028,579 2,014,554 Nevada................................................ 41,357,154 43,976,750 2,619,596 New Hampshire......................................... 34,677,119 38,521,261 3,844,142 New Jersey............................................ 383,177,479 404,034,823 20,857,344 New Mexico............................................ 132,128,581 126,103,156 (6,025,425) New York.............................................. 2,160,652,011 2,442,930,602 282,278,591 North Carolina........................................ 312,629,857 302,239,599 (10,390,258) North Dakota.......................................... 25,659,754 26,399,809 740,055 Ohio.................................................. 543,665,551 727,968,260 184,302,709 Oklahoma.............................................. 118,234,490 148,013,558 29,779,068 Oregon................................................ 142,045,360 167,924,513 25,879,153 Pennsylvania.......................................... 770,098,137 719,499,305 (50,598,832) Rhode Island.......................................... 89,478,850 95,021,587 5,542,737 South Carolina........................................ 94,400,660 99,967,824 5,567,164 South Dakota.......................................... 20,241,648 21,893,519 1,651,871 Tennessee............................................. 137,444,809 191,523,797 54,078,988 Texas................................................. 419,020,833 486,256,752 67,235,919 Utah.................................................. 64,694,728 76,829,219 12,134,491 Vermont............................................... 42,378,331 47,353,181 4,974,850 Virginia.............................................. 121,386,081 158,285,172 36,899,091 Washington............................................ 415,384,424 404,331,754 (11,052,670) West Virginia......................................... 87,683,489 110,176,310 22,492,821 Wisconsin............................................. 276,357,058 318,188,410 41,831,352 Wyoming............................................... 14,968,548 21,781,446 6,812,898 --------------------------------------------------------- U.S. total........................................ $14,931,043,974 $16,488,667,235 $1,557,623,261 ---------------------------------------------------------------------------------------------------------------- \1\ Excludes IV-A child care. AFDC benefits include the Federal share of child support collections in order to be comparable to the Family Assistance Grant. Source: Administration for Children and Families, U.S. Department of Health and Human Services. To qualify otherwise, States must meet each of two conditions: (1) fiscal year 1994 Federal spending per poor person on AFDC and related programs below the fiscal year 1994 national average, and (2) the State's population growth rate for the most recent fiscal year greater than that of the Nation. In order to qualify for supplemental funds on these dual grounds, States must meet the qualification criteria in fiscal year 1998. CRS calculates that six additional States will qualify on these grounds: Florida, Georgia, Montana, New Mexico, North Carolina, and Tennessee. For a qualifying State, the supplemental funds provide approximately an annual 2.5 percent addition to TANF funding. For fiscal year 1998, the supplemental grant is computed as 2.5 percent of Federal payments to the State for AFDC and related programs in fiscal year 1994. In subsequent years, the grant is computed as 2.5 percent of the prior year's supplemented grant (basic grant plus supplement) plus the prior year's supplemental grant. If the $800 million appropriation is insufficient to pay the full supplemental amounts, grants are to be proportionately reduced. CRS estimates that $800 million will be sufficient to pay the full supplemental grant for the first 3 years only. Table 7-42 shows CRS estimates of supplemental grants. Seventeen States are estimated to receive supplemental funds. Florida and Texas account for 34 percent of the total; Georgia and North Carolina, for another 22 percent. TABLE 7-42.--ESTIMATED SUPPLEMENTAL GRANTS TO STATES WITH HIGH POPULATION GROWTH AND/OR LOW FEDERAL WELFARE SPENDING PER POOR PERSON, FISCAL YEARS 1998-2001 [In thousands of dollars] ------------------------------------------------------------------------ State 1998 1999 2000 2001 ------------------------------------------------------------------------ Alabama..................... $2,671 $5,410 $8,216 $10,603 Alaska...................... 1,659 3,359 5,102 6,583 Arizona..................... 5,762 11,667 17,720 22,867 Arkansas.................... 1,497 3,032 4,606 5,943 California.................. 0 0 0 0 Colorado.................... 3,268 6,617 10,051 12,970 Connecticut................. 0 0 0 0 Delaware.................... 0 0 0 0 District of Columbia........ 0 0 0 0 Florida..................... 14,547 29,457 44,740 57,735 Georgia..................... 8,978 18,181 27,614 35,635 Hawaii...................... 0 0 0 0 Idaho....................... 842 1,706 2,591 3,343 Illinois.................... 0 0 0 0 Indiana..................... 0 0 0 0 Iowa........................ 0 0 0 0 Kansas...................... 0 0 0 0 Kentucky.................... 0 0 0 0 Louisiana................... 4,100 8,303 12,611 16,274 Maine....................... 0 0 0 0 Maryland.................... 0 0 0 0 Massachusetts............... 0 0 0 0 Michigan.................... 0 0 0 0 Minnesota................... 0 0 0 0 Mississippi................. 2,176 4,406 6,692 8,636 Missouri.................... 0 0 0 0 Montana..................... 1,133 2,294 3,484 4,496 Nebraska.................... 0 0 0 0 Nevada...................... 899 1,821 2,765 3,568 New Hampshire............... 0 0 0 0 New Jersey.................. 0 0 0 0 New Mexico.................. 3,236 6,553 9,953 12,844 New York.................... 0 0 0 0 North Carolina.............. 8,696 17,609 26,745 34,514 North Dakota................ 0 0 0 0 Ohio........................ 0 0 0 0 Oklahoma.................... 0 0 0 0 Oregon...................... 0 0 0 0 Pennsylvania................ 0 0 0 0 Rhode Island................ 0 0 0 0 South Carolina.............. 0 0 0 0 South Dakota................ 0 0 0 0 Tennessee................... 5,193 10,516 15,973 20,612 Texas....................... 12,693 25,703 39,039 50,378 Utah........................ 2,096 4,245 6,447 8,320 Vermont..................... 0 0 0 0 Virginia.................... 0 0 0 0 Washington.................. 0 0 0 0 West Virginia............... 0 0 0 0 Wisconsin................... 0 0 0 0 Wyoming..................... 0 0 0 0 ------------------------------------------- Annual total............ 79,447 160,881 244,350 315,322 ------------------------------------------- Cumulative total........ 79,447 240,328 484,678 800,000 ------------------------------------------------------------------------ Source: Table prepared by CRS based on data from DHHS and the Bureau of the Census. Population growth that qualifies the State is based on information consistent with the July 1, 1995 and July 1, 1996 Census estimates of State population issued in Department of Commerce Press Release CB96-224, December 30, 1996. CRS obtained this data from the Census Bureau internet site (www.census.gov). For fiscal years 1999- 2001, estimates assume that States that qualify in fiscal year 1998 also qualify in subsequent years. Grants to States that reduce out-of-wedlock birth rates--$400 million (fiscal years 1999-2002) The 1996 welfare reform law provides up to $400 million over 4 years for bonuses to States that reduce their out-of- wedlock birth rates and abortion rates below fiscal year 1995 levels. The five States with the greatest annual decline in out-of-wedlock birth rates are to receive a bonus of $20 million, provided they also reduce the abortion rate. If fewer than five States qualify for these funds, the bonus would increase to $25 million per State. Bonus to reward ``high performance'' States--$1 billion (fiscal years 1999-2003) The 1996 legislation contains additional funds for States that are successful in meeting the goals of the TANF Program. The law directed the Secretary of DHHS, in consultation with the National Governors' Association (NGA) and the American Public Welfare Association (APWA), to develop a formula by August 22, 1997, for measuring State performance under the program. The Secretary is required to set a performance threshold that States must meet in order to receive a payment on grounds of being a ``high performance'' State. Total bonuses for the 5 years are set at $1 billion. In July 1997, DHHS indicated that it was considering four performance measures: employment, job retention, earnings progression, and birth rates of females aged 15-17. Contingency fund--$2 billion (fiscal years 1997-2001) TANF provides matching grants for States that experience high and increasing unemployment rates or increased food stamp caseloads. To qualify for contingency funds, a State must spend from its own funds on TANF an amount equal to at least 100 percent of the amount it spent on AFDC, EA, and JOBS in fiscal year 1994. It must also meet one of two criteria of need: --its seasonally adjusted unemployment rate averaged over the most recent 3-month period must be at least 6.5 percent and at least 10 percent higher than the rate in the corresponding period in either of the previous 2 years; or --its food stamp caseload over the most recent 3-month period must be at least 10 percent higher than the food stamp caseload would have been in the corresponding period of fiscal year 1994 or fiscal year 1995 if Public Law 104-193 had been in effect throughout those fiscal years, as determined by the Secretary of Agriculture. Qualifying States are entitled to advance payments from the contingency fund. They may request up to one-twelfth of 20 percent of the State family assistance grant for each month that they qualify as a needy State (and for 1 month after they cease being ``needy''). A State's full year entitlement to contingency funds cannot be determined until after the close of the fiscal year because it is based on its expenditures, the number of months it qualified, and its matching rate during the fiscal year. An annual reconciliation is performed in this way: Countable expenditures are computed as those made under the State TANF Program on TANF-eligible families, including spending from contingency fund advances, but excluding spending on child care. ``Historic'' State expenditures are subtracted from countable expenditures. For contingency fund purposes, ``historic State spending'' is fiscal year 1994 State spending on AFDC, JOBS, and EA. The result of the subtraction is a measure called ``reimbursable expenditures.'' The amount to which a State is entitled under the contingency fund equals reimbursable expenditures multiplied by its Medicaid matching rate times the number of months during which the State was eligible. The State must remit to the Secretary any contingency funds that exceed its share of reimbursable expenditures. Further, if a State that received contingency funds is determined to have failed to meet the maintenance of effort requirement for those funds, its next year's family assistance grant must be reduced by any contingency funds that it received. Welfare-to-work grants ($3 billion, fiscal years 1998-99) Added to TANF in 1997 were special welfare-to-work grants to help States achieve work participation rates. Most grants must focus on long-term recipients with specified barriers to work (for details, see below). Maintenance of effort (required State spending) The 1996 welfare reform bill established block grant programs to replace the Federal-State cost-sharing that existed under AFDC, EA, JOBS, and AFDC-related child care programs. Before TANF, the Federal Government reimbursed States for about 55 percent and the States paid the other 45 percent of total expenditures on these activities. In fiscal year 1994, the State share of expenditures for them totaled about $13.9 billion. The 1996 law converted the Federal share of expenditures for these programs into the TANF grants and a child care block grant. It also established some requirements and incentives for States to maintain some fiscal effort in assisting families with children. TANF penalizes a State that does not spend a specified amount of its own funds on families eligible for TANF and those who would be eligible but for the program's 60-month time limit or prohibitions for aiding immigrants. The specified level is 75 percent of ``historic State expenditures'' for States that meet TANF work requirements, 80 percent of historic expenditures for States that fail to meet the work requirements. The required State spending levels are known as maintenance-of-effort (MOE) thresholds. Historic State expenditures are the State share of fiscal year 1994 AFDC, EA, JOBS, and AFDC-related child care expenditures. Table 7-43 provides historic State expenditures and the State maintenance- of-effort thresholds (75 percent and 80 percent). As noted earlier, the penalty for failing to meet the MOE requirement is reduction of the next year's family assistance grant by the amount of the State spending shortfall; further, if the State received welfare-to-work formula grant funds in the year of the MOE shortfall, the next year's TANF grant is to be further reduced, by the amount of those welfare-to-work funds. TABLE 7-43.--TANF MAINTENANCE-OF-EFFORT LEVELS [In thousands of dollars] ---------------------------------------------------------------------------------------------------------------- 75 percent 80 percent Historic State of historic of historic State expenditures \1\ State State expenditures expenditures ---------------------------------------------------------------------------------------------------------------- Alabama........................................................... $52,285 $39,214 $41,828 Alaska............................................................ 65,257 48,942 52,205 Arizona........................................................... 126,704 95,028 101,363 Arkansas.......................................................... 27,785 20,839 22,228 California........................................................ 3,643,208 2,732,406 2,914,566 Colorado.......................................................... 110,495 82,871 88,396 Connecticut....................................................... 244,561 183,421 195,649 Delaware.......................................................... 29,028 21,771 23,222 District of Columbia.............................................. 93,932 70,449 75,146 Florida........................................................... 494,559 370,919 395,647 Georgia........................................................... 231,158 173,369 184,926 Hawaii............................................................ 97,309 72,981 77,847 Idaho............................................................. 18,238 13,679 14,591 Illinois.......................................................... 572,027 429,021 457,622 Indiana........................................................... 151,367 113,525 121,093 Iowa.............................................................. 82,618 61,963 66,094 Kansas............................................................ 82,333 61,750 65,866 Kentucky.......................................................... 89,891 67,418 71,913 Louisiana......................................................... 73,887 55,415 59,109 Maine............................................................. 50,370 37,778 40,296 Maryland.......................................................... 235,954 176,965 188,763 Massachusetts..................................................... 478,597 358,948 382,877 Michigan.......................................................... 624,691 468,518 499,753 Minnesota......................................................... 239,660 179,745 191,728 Mississippi....................................................... 28,966 21,724 23,173 Missouri.......................................................... 160,161 120,121 128,129 Montana........................................................... 20,919 15,689 16,735 Nebraska.......................................................... 38,629 28,971 30,903 Nevada............................................................ 33,985 25,489 27,188 New Hampshire..................................................... 42,820 32,115 34,256 New Jersey........................................................ 405,274 303,956 324,219 New Mexico........................................................ 49,934 37,450 39,947 New York.......................................................... 2,281,060 1,710,795 1,824,848 North Carolina.................................................... 205,568 154,176 164,454 North Dakota...................................................... 12,092 9,069 9,674 Ohio.............................................................. 520,734 390,551 416,588 Oklahoma.......................................................... 81,667 61,250 65,334 Oregon............................................................ 123,006 92,255 98,405 Pennsylvania...................................................... 542,834 407,126 434,267 Rhode Island...................................................... 80,489 60,367 64,392 South Carolina.................................................... 47,786 35,839 38,229 South Dakota...................................................... 11,699 8,774 9,359 Tennessee......................................................... 110,413 82,810 88,331 Texas............................................................. 314,300 235,725 251,440 Utah.............................................................. 33,721 25,291 26,977 Vermont........................................................... 34,205 25,653 27,364 Virginia.......................................................... 170,898 128,173 136,718 Washington........................................................ 362,748 272,061 290,198 West Virginia..................................................... 43,601 32,701 34,881 Wisconsin......................................................... 225,638 169,229 180,511 Wyoming........................................................... 14,220 10,665 11,376 --------------------------------------------- U.S. total.................................................... 13,913,282 10,434,961 11,130,625 ---------------------------------------------------------------------------------------------------------------- \1\ Historic State expenditures: 100 percent of fiscal year 1994 State expenditures on all IV-A programs and IV- F. Source: Table prepared by the Congressional Research Service (CRS) based on data from the U.S. Department of Health and Human Services (DHHS). State expenditure data are as reported by the States to DHHS and are as of May 1995. Countable toward the TANF maintenance of effort requirement are expenditures on behalf of TANF-eligible families (including those who have reached TANF's 5-year time limit but have income within TANF limits) for these activities: cash aid, including child support collected for TANF recipients and distributed to the family without reducing their benefit; child care assistance; education, job training, and employment services; administrative costs; and other activities that a State is authorized to use TANF grants to finance. Administrative costs are capped at 15 percent of the total expenditures counted toward meeting the spending requirement. Expenditures for educational activities exclude public education for services or assistance available to the general public. State expenditures for these families made under any State program are countable toward the TANF-MOE rule. A State could use its own funds to supplement Federal grants within the TANF Program, or use them in a separate State program of assistance. Expenditures that qualify for MOE must be made from State funds and cannot be used to obtain Federal matching funds from another program. A special limitation also applies to child care spending. According to DHHS guidelines issued January 31, 1997, a State may not count toward the MOE requirement spending that exceeds the amount it spent on AFDC-related child care programs in either fiscal year 1994 or fiscal year 1995. Also, a special condition restricts MOE-countable State spending for activities other than those the State was authorized to provide under its AFDC, EA, JOBS, or AFDC-related child care programs as of August 21, 1996. For these other activities, States can count only spending above fiscal year 1994 levels toward the TANF-MOE requirement. Loan fund TANF provides a $1.7 billion revolving loan fund. States may receive loans for up to 3 years, which must be repaid with interest. The interest rate for the loans is the current average market yield on outstanding marketable obligations of the Federal Government. Any State that is not subject to a penalty for misspending TANF funds is eligible for a loan. Transfer and reservation of TANF funds States may transfer up to 30 percent of TANF grants (except contingency funds) to the Child Care and Development Block Grant (CCDBG) and the Title XX Social Services Block Grant (SSBG), but no more than 10 percent to the SSBG. Funds transferred to SSBG must be used to assist families with children that have incomes below 200 percent of the poverty income guidelines. TANF for Indians The welfare law gives federally recognized Indian tribes (defined to include certain Alaska Native organizations) the option to design and operate their own cash welfare programs for needy children with funds subtracted from their State's TANF Block Grant. The law also authorizes direct Federal funding to recognized Indian tribes for operation of Child Support Enforcement Programs, and it sets aside a share of new child care funds for them. The repealed program of AFDC made no provision for tribal design or administration of cash aid, although it did allow some tribes to operate JOBS. The Balanced Budget Act of 1997 (Public Law 105-33), which established a program of welfare-to-work (WTW) grants for TANF recipients, sets aside 1 percent of funding ($30 million over 2 years) for Indian WTW programs. Unlike State WTW programs, Indian programs do not require any State matching funding. Recognized tribes and tribal organizations may operate TANF family assistance programs in their service areas. A tribe's grant equals Federal AFDC payments to the State for fiscal year 1994 attributable to Indians in its service area, and tribal grant funds are subtracted from the grant of the State(s) containing the tribe's service areas. Tribal TANF plans are for 3 years (rather than 2, as for States) and contain many fewer required elements than State plans. The Secretary of DHHS, with participation of the tribe, is to establish work participation rules, time limits for benefits, and penalties for each tribal family assistance program. In general, Indian tribes in Alaska must operate plans in accordance with rules adopted by the State of Alaska for its TANF Program (but waivers are allowed). The State Governor, in submitting a TANF plan, must certify equitable access from the regular TANF Program to Indians not eligible for help from a tribal family assistance plan. The law gives explicit permission for State TANF Programs to use money from a new loan fund for aid to Indian families that have moved out of the service area of a tribe with a tribal family assistance plan. The law also appropriates funds each year ($7.6 million) to those tribes that operated JOBS in fiscal year 1994. The appropriation is in addition to any tribal assistance TANF grant made to them. The law exempts from the 60-month TANF benefit time limit any month of aid during which the recipient lived in Indian country (or in an Alaska Native village) of at least 1,000 persons in which 50 percent of adults were unemployed. As of early August 1997, 11 tribes had submitted plans to operate tribal family assistance programs: Red Cliff Band of Lake Superior Chippewas (WI), Osage Nation (OK), Forest County Potawatomi (WI), Citizen Potawatomi Nation (OK), Klamath Tribe (OR), Sokogon Chippewa (WI), Stockbridge-Munsee (WI), Sisseton- Wahpeton (SD), Pascua Yaqui (AZ), White Mountain Apache (AZ), and Confederated Tribes of Siletz Indians (OR). State TANF Plans The law requires TANF plans to outline how the State intends to conduct a program that provides cash aid to needy families with (or expecting) children and that provides parents with job preparation, work, and support services. State plans must indicate whether the State intends to treat families who move into the State differently from others, and, if so, how; and whether it intends to give aid to noncitizens. State plans must certify that the State will operate programs of child support and foster care and adoption assistance, provide equitable access to Indians; and establish and enforce standards against fraud and abuse. Table 7-44 summarizes selected major provisions of State TANF plans. These include the maximum time before mandatory work, the time limit on benefits, whether the State imposes a family cap, whether the State provides benefits for noncitizens, and whether the State has special rules for interstate migrants. Additional details concerning State plans are summarized and analyzed in a document written by Vee Burke and her colleagues (1997) at the Congressional Research Service. TABLE 7-44.--TEMPORARY ASSISTANCE FOR NEEDY FAMILIES BLOCK GRANT: SUMMARY OF SELECTED MAJOR PROVISIONS IN STATE PLANS -------------------------------------------------------------------------------------------------------------------------------------------------------- Maximum time before Benefits for Special rules for State mandatory work Time limit on benefits Family cap? noncitizens? interstate migrants? -------------------------------------------------------------------------------------------------------------------------------------------------------- Alabama........................... 24 months............. 60 months............. Did not say.......... No................... No Alaska............................ 24 months............. 60 months............. Did not say.......... Yes.................. No Arizona........................... 24 months............. 24 months within a 60- Yes.................. Yes.................. No month period for adult recipients. Arkansas.......................... Did not say........... 24 months............. Yes.................. Yes.................. No California........................ Immediate............. 60 months............. Yes.................. Yes.................. Yes Colorado.......................... 24 months............. 60 months for adults.. No................... Yes.................. No Connecticut....................... Did not say........... 21 months............. Yes.................. Yes.................. No Delaware.......................... Immediate............. 48 months............. Yes.................. Yes.................. No District of Columbia.............. 24 months............. 60 months............. Did not say.......... Yes.................. Yes Florida........................... Immediate............. 24 months in a 60- Yes.................. Yes.................. Yes month period. Lifetime total of 48 months as an adult. Georgia........................... 24 months............. Did not say........... Yes.................. Yes.................. Yes Guam.............................. 24 months............. 60 months............. Did not say.......... No................... No Hawaii............................ 24 months............. 60 months............. Did not say.......... Yes.................. No Idaho............................. With few exceptions, 24 months............. Did not say.......... Yes.................. No adults will be expected to participate in work activities immediately, including a job search requirement for all adult applicants. Illinois.......................... 24 months............. 60 months............. Yes.................. Yes.................. No Indiana........................... 24 months............. 24 months............. Yes.................. Yes.................. No Iowa.............................. Did not say........... Individualized. TANF Did not say.......... Yes.................. No funds will not be used for an adult beyond 60 months unless the family meets criteria for extending assistance. Kansas............................ 24 months............. 60 months............. Did not say.......... Yes.................. No Kentucky.......................... 24 months............. 60 months............. Did not say.......... Yes.................. No Louisiana......................... Did not say........... 24 months within a 60- Did not say.......... Yes.................. No month period. Maine............................. 24 months............. 60 months............. Did not say.......... Yes.................. No Maryland.......................... Did not say........... 60 months............. Yes.................. Yes.................. Yes Massachusetts..................... 60 days............... 24 months within a 60- Yes.................. Yes.................. No month period. Michigan.......................... 24 months............. 60 months............. Did not say.......... Yes.................. No Minnesota......................... 6 months; counties 60 months............. Did not say.......... Yes.................. Yes have the option of requiring work sooner. Mississippi....................... 24 months............. 60 months............. Yes.................. No................... No Missouri.......................... 24 months............. 60 months generally. Did not say.......... Yes.................. No JOBS mandatory recipients subject to self-sufficiency limit of 48 months. Montana........................... 24 months............. 60 months............. Did not say.......... Yes.................. No Nebraska.......................... Immediate 60 months............. Yes.................. Yes.................. No participation in Job Support Program; earned income required within 2 years. Nevada............................ 24 months............. 60 months............. Did not say.......... Yes.................. No New Hampshire..................... Immediate job search 60 months............ Did not say.......... Yes.................. No for 26 weeks followed by 26 weeks of community work experience (cycle repeated each year). New Jersey........................ 24 months............. 60 months............. Yes.................. Yes.................. Yes New Mexico........................ 60 days............... 36 months............. Did not say.......... Yes.................. No New York.......................... 24 months............. 60 months............. Did not say.......... Yes.................. Yes North Carolina.................... Did not say........... 24 months at a time; Yes.................. Yes.................. No lifetime maximum of 60 months. North Dakota...................... 24 months............. 60 months............. Yes.................. Yes.................. Yes Ohio.............................. 24 months............. 36 months plus a Did not say.......... Yes.................. No possible renewal of 24 months after 24 months of ineligibility (60 months over an 84- month period). Oklahoma.......................... 24 months............. 60 months............. Did not say.......... Yes.................. No Oregon............................ Did not say........... 24 months within 84- Did not say.......... Yes.................. No month period. Pennsylvania...................... 24 months............. 60 months............. Did not say.......... Yes.................. Yes Puerto Rico....................... 24 months for Did not say........... Did not say.......... Yes.................. No participants determined not ready to work (lack high school diploma or equivalent). Participants who are ready to work will be engaged in work within 6 months. Rhode Island...................... Participate in work or 60 months............. Did not say.......... Yes.................. Yes work-readiness activities within 45 days; work within 2 years. South Carolina.................... 24 months............. 24 months out of 120 Yes.................. Yes.................. No months; no more than 60 months in a lifetime. South Dakota...................... 24 months............. 60 months............. Did not say.......... Yes.................. No Tennessee......................... Immediate............. 18 months in a 60- Yes.................. Yes.................. No month period. 60- month lifetime time limit. Texas............................. Did not say........... Did not say........... Did not say.......... Yes.................. No Utah.............................. Immediate............. 36 months............. Did not say.......... Yes.................. No Vermont........................... Did not say........... Did not say........... Did not say.......... Yes.................. No Virgin Islands.................... Did not say........... 60 months (for adult). Did not say.......... Yes.................. No Virginia.......................... 90 days............... 24 months within a 60- Yes.................. Yes.................. No month period. Washington........................ Immediate job search 60 months............. Did not say.......... Yes.................. Yes required. West Virginia..................... 24 months............. 60 months............. Did not say.......... Yes.................. No Wisconsin......................... Immediate............. 60 months............. Yes.................. Yes.................. Yes Wyoming........................... Did not say........... 60 months............. Did not say.......... Yes.................. No -------------------------------------------------------------------------------------------------------------------------------------------------------- Note.--Information is from TANF State plans submitted to DHHS, supplemented by provisions in new State statutes of Arizona, California, New York, and Ohio. Some provisions may not be fully phased in. Some, notably, family caps and differential rules for interstate migrants, have been challenged in State courts. The family cap provision either prevents a family receiving welfare from getting additional benefits or provides the family with reduced benefits if they have additional children. Table is from CRS Report 97-380. Source: Congressional Research Service (CRS). State TANF Data Caseloads under AFDC/TANF Both 1996 and 1997 were transition years during which States moved from the AFDC Program to the new TANF Program. Four States (Massachusetts, Michigan, Vermont, and Wisconsin) replaced AFDC with TANF at the earliest possible time, in September 1996, and another 14 started TANF in October 1996. Only 12 jurisdictions waited until the mandatory July 1, 1997 deadline to make the change (Alaska, Arkansas, Colorado, Guam, Hawaii, Idaho, Illinois, Minnesota, New Mexico, North Dakota, Puerto Rico, and the Virgin Islands). Table 7-45 shows that the total number of AFDC/TANF families declined throughout the fiscal year 1997 transition period, from 4.301 million in October 1996 to 3.546 million in September 1997. This reduction in the number of families receiving AFDC/TANF continued a decline underway since March 1994 when AFDC numbers peaked at 5.098 million. Compared with September levels in earlier years, the September 1997 caseload was down 19 percent from 1996, 25 percent from 1995, and 29 percent from 1994. TABLE 7-45.--NUMBER OF AFDC/TANF FAMILIES BY STATE FOR SELECTED MONTHS, FISCAL YEAR 1997 [In thousands] ---------------------------------------------------------------------------------------------------------------- Month and Year ------------------------------------------------------ State September October December March June 1997 1996 1996 1997 1997 (preliminary) ---------------------------------------------------------------------------------------------------------------- Alabama.................................................. 40.5 38.0 36.1 32.0 27.2 Alaska................................................... 12.0 11.9 12.8 12.0 11.0 Arizona.................................................. 60.6 58.3 55.0 52.5 50.0 Arkansas................................................. 22.0 21.6 21.5 20.7 16.7 California............................................... 861.0 846.5 829.6 789.9 757.0 Colorado................................................. 33.1 32.2 31.1 28.7 24.6 Connecticut.............................................. 56.9 56.4 55.7 55.5 55.2 Delaware................................................. 10.3 10.2 10.0 9.5 9.2 District of Columbia..................................... 25.2 25.0 24.4 23.7 22.4 Florida.................................................. 197.0 186.6 177.1 160.6 140.9 Georgia.................................................. 120.2 116.6 112.5 98.2 90.7 Guam..................................................... 2.3 2.3 2.4 2.2 2.6 Hawaii................................................... 21.8 21.5 23.0 23.4 23.5 Idaho.................................................... 8.2 8.0 7.8 6.7 2.1 Illinois................................................. 213.1 209.6 201.2 191.6 189.2 Indiana.................................................. 49.5 45.8 45.7 42.4 41.2 Iowa..................................................... 30.4 29.7 29.1 28.4 27.3 Kansas................................................... 22.8 21.9 21.3 18.2 16.9 Kentucky................................................. 69.9 68.1 66.5 62.5 59.5 Louisiana................................................ 65.9 62.6 56.8 51.7 50.0 Maine.................................................... 19.6 19.1 19.0 18.2 16.6 Maryland................................................. 67.4 63.4 59.9 55.0 53.4 Massachusetts............................................ 83.4 81.3 78.9 76.0 72.4 Michigan................................................. 166.2 159.6 152.0 145.8 140.9 Minnesota................................................ 56.2 55.3 54.1 52.3 48.8 Mississippi.............................................. 43.9 42.1 40.3 36.4 31.1 Missouri................................................. 78.2 76.4 73.3 67.6 65.5 Montana.................................................. 9.7 9.7 9.5 8.8 7.8 Nebraska................................................. 13.7 13.4 13.6 13.3 14.0 Nevada................................................... 12.9 12.6 12.2 11.7 11.2 New Hampshire............................................ 8.7 8.4 8.3 7.9 6.7 New Jersey............................................... 105.8 103.7 100.9 97.6 93.8 New Mexico............................................... 32.4 30.6 28.6 25.9 17.8 New York................................................. 411.1 399.2 387.2 371.0 359.7 North Carolina........................................... 107.8 104.5 101.0 95.6 89.0 North Dakota............................................. 4.6 4.4 4.3 4.0 3.7 Ohio..................................................... 201.4 196.2 190.3 180.5 160.2 Oklahoma................................................. 34.9 33.5 31.0 28.3 26.9 Oregon................................................... 27.5 26.0 25.2 22.7 20.6 Pennsylvania............................................. 178.1 172.4 166.3 157.0 147.2 Puerto Rico.............................................. 49.0 48.6 47.8 47.3 45.9 Rhode Island............................................. 20.4 20.0 19.8 19.5 19.6 South Carolina........................................... 43.7 38.1 33.8 30.3 28.4 South Dakota............................................. 5.5 5.3 5.3 5.0 4.4 Tennessee................................................ 87.5 79.0 70.1 64.4 60.4 Texas.................................................... 237.5 228.3 221.6 204.0 166.9 Utah..................................................... 13.7 13.1 12.5 11.6 11.3 Vermont.................................................. 8.6 8.4 8.4 8.2 7.8 Virgin Islands........................................... 1.3 1.3 1.3 1.2 1.2 Virginia................................................. 59.5 57.2 54.8 50.9 47.5 Washington............................................... 95.9 95.1 95.4 91.4 86.8 West Virginia............................................ 37.6 36.2 34.4 28.7 28.1 Wisconsin................................................ 50.7 46.9 43.4 38.1 31.3 Wyoming.................................................. 4.1 4.1 2.6 2.0 1.6 ------------------------------------------------------ Totals............................................... 4,301.0 4,166.4 4,026.7 3,788.6 3,545.7 ---------------------------------------------------------------------------------------------------------------- Source: Congressional Research Service based on data from the Department of Health and Human Services. Benefit levels under TANF, July 1, 1997 Table 7-46 shows State-by-State trends in AFDC/TANF family numbers since fiscal year 1994 when national enrollment reached a historic peak of 5 million. The national caseload declined 3.3 percent in fiscal year 1995, 6.7 percent in fiscal year 1996, and another 13.3 percent in 1997. The cumulative result was that the average caseload in 1997 was down 21.8 percent from the 1994 average and down 16.9 percent from its fiscal year 1995 average level. TABLE 7-46.--AID TO FAMILIES WITH DEPENDENT CHILDREN AND TANF FAMILIES: FISCAL YEARS 1994-97 \1\ ---------------------------------------------------------------------------------------------------------------- 1997 Percentage change to fiscal year (monthly 1997 from State 1994 1995 1996 average, ----------------------------------- first 9 fiscal fiscal fiscal months) year 1994 year 1995 year 1996 ---------------------------------------------------------------------------------------------------------------- Alabama........................ 50.3 46.0 42.4 36.7 -27.1 -20.3 -13.4 Alaska......................... 12.8 12.4 12.3 12.3 -3.5 -0.9 0.5 Arizona........................ 72.0 69.6 63.4 56.0 -22.2 -19.5 -11.7 Arkansas....................... 26.0 24.3 22.7 21.4 -17.8 -12.0 -6.0 California..................... 909.0 919.5 896.0 832.2 -8.5 -9.5 -7.1 Colorado....................... 41.6 38.6 35.4 31.2 -25.1 -19.2 -12.1 Connecticut.................... 59.2 61.0 58.1 56.0 -5.4 -8.1 -3.6 Delaware...................... 11.5 10.8 10.4 9.9 -13.7 -8.2 -4.8 District of Columbia.......... 27.1 26.8 25.7 24.5 -9.6 -8.5 -4.7 Florida........................ 247.1 230.8 212.0 179.2 -27.5 -22.4 -15.5 Georgia........................ 141.5 139.1 130.4 111.8 -20.9 -19.6 -14.2 Guam........................... 1.9 2.1 2.1 2.3 21.2 8.6 6.6 Hawaii......................... 20.4 21.7 22.0 22.5 10.1 3.8 2.4 Idaho.......................... 8.7 9.1 9.0 7.8 -10.3 -14.2 -13.6 Illinois....................... 240.3 236.2 224.1 202.0 -15.9 -14.5 -9.9 Indiana........................ 73.8 65.6 52.9 45.7 -38.0 -30.3 -13.5 Iowa........................... 39.6 36.5 32.8 29.3 -25.8 -19.6 -10.5 Kansas......................... 30.1 28.2 25.1 21.1 -30.0 -25.4 -16.2 Kentucky....................... 79.8 75.4 71.8 66.5 -16.7 -11.8 -7.4 Louisiana...................... 86.9 79.8 70.6 58.7 -32.5 -26.5 -16.9 Maine.......................... 22.9 21.7 20.5 19.0 -17.3 -12.6 -7.3 Maryland....................... 80.1 80.4 74.1 60.9 -23.9 -24.2 -17.8 Massachusetts.................. 111.8 100.9 88.4 79.0 -29.3 -21.7 -10.6 Michigan....................... 224.0 201.7 178.0 154.7 -30.9 -23.3 -13.1 Minnesota...................... 63.0 61.3 58.3 54.2 -13.9 -11.6 -6.9 Mississippi.................... 56.8 52.5 48.0 40.6 -28.6 -22.8 -15.4 Missouri....................... 92.1 89.3 82.7 73.6 -20.1 -17.6 -11.0 Montana........................ 11.9 11.5 10.8 9.1 -23.7 -21.0 -16.1 Nebraska....................... 15.9 14.8 14.2 13.5 -15.4 -9.1 -4.9 Nevada......................... 14.2 15.7 14.8 12.1 -14.9 -23.2 -18.7 New Hampshire.................. 11.5 10.8 9.5 8.3 -27.6 -23.1 -12.9 New Jersey..................... 122.4 118.9 112.0 102.0 -16.7 -14.2 -8.9 New Mexico..................... 33.6 34.4 33.9 29.3 -13.0 -15.1 -13.6 New York....................... 455.0 456.9 433.3 391.0 -14.1 -14.4 -9.8 North Carolina................. 131.2 125.5 113.1 101.8 -22.4 -18.9 -10.0 North Dakota................... 5.9 5.2 4.9 4.3 -26.4 -17.0 -11.5 Ohio........................... 250.2 228.2 206.7 191.4 -23.5 -16.1 -7.4 Oklahoma....................... 47.0 44.8 38.8 31.7 -32.4 -29.1 -18.2 Oregon......................... 42.1 39.3 33.4 25.3 -39.9 -35.5 -24.3 Pennsylvania................... 210.2 204.8 190.3 167.9 -20.1 -18.0 -11.8 Puerto Rico.................... 58.8 54.8 50.9 48.1 -18.2 -12.1 -5.4 Rhode Island................... 22.7 22.2 21.2 19.9 -12.2 -10.4 -6.3 South Carolina................. 51.9 49.0 45.8 35.8 -31.1 -26.9 -21.8 South Dakota................... 6.9 6.3 6.0 5.3 -24.1 -16.3 -12.3 Tennessee...................... 110.8 104.0 99.1 73.6 -33.5 -29.2 -25.7 Texas.......................... 283.7 274.5 255.0 222.0 -21.7 -19.1 -12.9 Utah........................... 17.8 16.6 14.8 12.6 -29.2 -24.3 -14.6 Vermont........................ 9.9 9.6 9.1 8.4 -15.1 -13.0 -7.3 Virgin Islands................. 1.1 1.3 1.4 1.3 18.2 -0.8 -7.2 Virginia....................... 74.8 72.1 64.9 55.2 -26.2 -23.4 -14.9 Washington..................... 103.0 101.9 98.9 94.6 -8.1 -7.2 -4.4 West Virginia.................. 40.7 38.4 36.6 34.7 -14.7 -9.5 -5.0 Wisconsin...................... 77.2 72.4 60.1 44.3 -42.6 -38.7 -26.2 Wyoming........................ 5.7 5.2 4.7 3.1 -46.3 -40.7 -34.8 -------------------------------------------------------------------------------- U.S. totals.............. 5,046.3 4,880.5 4,553.3 4,055.8 -19.6 -16.9 -10.9 ---------------------------------------------------------------------------------------------------------------- \1\ Monthly averages in thousands; fiscal year 1997 data are monthly averages of the first 9 months of the fiscal year. Source: Table prepared by the Congressional Research Service (CRS) based on data from the U.S. Department of Health and Human Services (DHHS). Fiscal years 1994-96 data are from quarterly reports (ACF Form 3637) filed by the States. October 1996 through March 1997 data are from quarterly reports. April through June 1997 data are from AFDC flash reports. These reflect data on October 17, 1997. As noted earlier, caseload decreases from 1995 levels will lower required work participation rates of States. Caseloads fell below 1995 levels in all jurisdictions except Hawaii and Guam, where numbers rose. Declines ranged from 2 percent in Alaska to 47 percent in Wyoming. Table 7-47 presents State maximum TANF benefits by family size on July 1, 1997. Benefits were unchanged from their year- earlier levels in most States. Six States reduced benefits for some recipients, and five States increased benefits for some. TABLE 7-47.--MAXIMUM TANF BENEFITS BY FAMILY SIZE, JULY 1997 ---------------------------------------------------------------------------------------------------------------- Maximum TANF benefit by size of filing unit State ----------------------------------------------------- 1 2 3 4 5 6 ---------------------------------------------------------------------------------------------------------------- Alabama................................................... $111 $137 $164 $194 $225 $252 Alaska.................................................... 514 821 923 1025 1127 1229 Arizona................................................... 204 275 347 418 489 561 Arkansas.................................................. 81 162 204 247 286 331 California \1\ \2\........................................ 279 456 565 673 767 861 Colorado.................................................. 214 280 356 432 512 590 Connecticut \1\........................................... 402 513 636 741 835 935 Delaware.................................................. 201 270 338 407 475 544 District of Columbia...................................... 239 298 379 463 533 627 Florida................................................... 180 241 303 364 426 487 Georgia................................................... 155 235 280 330 378 410 Guam...................................................... 420 537 673 776 874 985 Hawaii \2\................................................ 334 452 570 687 805 922 Idaho..................................................... 276 276 276 276 276 276 Illinois \1\.............................................. 212 278 377 414 485 545 Indiana................................................... 139 229 288 346 405 463 Iowa...................................................... 183 361 426 495 548 610 Kansas \1\................................................ 267 352 429 497 558 619 Kentucky.................................................. 186 225 262 328 383 432 Louisiana \1\............................................. 72 138 190 234 277 316 Maine..................................................... 198 312 418 526 632 739 Maryland.................................................. 167 295 377 455 527 579 Massachusetts \2\......................................... 383 474 565 651 741 832 Michigan: \1\ Wayne County.......................................... 276 371 459 563 659 792 Washtenaw............................................. 305 401 489 593 689 822 Minnesota................................................. 187 437 532 621 697 773 Mississippi............................................... 60 96 120 144 168 192 Missouri.................................................. 136 234 292 342 388 431 Montana................................................... 266 358 450 542 633 725 Nebraska.................................................. 222 293 364 435 506 577 Nevada.................................................... 229 289 348 408 468 528 New Hampshire............................................. 414 481 550 613 673 754 New Jersey................................................ 162 322 424 488 552 616 New Mexico................................................ 231 310 389 469 548 627 New York: \1\ New York City......................................... 352 468 577 687 800 884 Suffolk County........................................ 446 576 703 824 949 1038 North Carolina............................................ 181 236 272 297 324 349 North Dakota.............................................. 228 340 490 528 604 667 Ohio...................................................... 203 279 341 421 493 549 Oklahoma.................................................. 190 238 307 380 445 509 Oregon.................................................... 310 395 460 565 660 755 Pennsylvania \1\.......................................... 215 330 421 514 607 687 Puerto Rico............................................... 132 156 180 204 228 252 Rhode Island.............................................. 327 449 554 634 714 794 South Carolina............................................ 119 159 200 241 281 322 South Dakota.............................................. 304 380 430 478 528 578 Tennessee................................................. 95 142 185 226 264 305 Texas..................................................... 78 163 188 226 251 288 Utah...................................................... 246 342 426 498 567 625 Vermont \1\............................................... 449 554 656 737 824 882 Virgin Islands............................................ 120 180 240 300 360 420 Virginia \1\.............................................. 220 294 354 410 488 534 Washington................................................ 349 440 546 642 740 841 West Virginia............................................. 149 201 253 312 360 413 Wisconsin \1\ \3\......................................... 248 440 517 617 708 766 Wyoming................................................... 195 320 340 360 360 360 ----------------------------------------------------- Median State \4\.................................... 215 310 379 463 528 590 ---------------------------------------------------------------------------------------------------------------- \1\ These States (like Michigan and New York) have regional or urban/rural benefit schedules. Amounts shown are for highest benefit area. \2\ These States pay higher amounts than those shown above for persons exempt from work. See benefit schedule below. ---------------------------------------------------------------------------------------------------------------- Maximum TANF benefit by size of filing unit (exempt from work) State ----------------------------------------------------------------- 1 2 3 4 5 6 ---------------------------------------------------------------------------------------------------------------- California.................................... $311 $509 $631 $750 $855 $961 Hawaii........................................ 418 565 712 859 1,006 1,153 Massachusetts................................. 392 486 579 668 760 854 ---------------------------------------------------------------------------------------------------------------- \3\ Effective September 1, 1997, Wisconsin scheduled statewide implementation of its W-2 (TANF) plan, which pays $555 monthly to all-size families in community service jobs and $518 to all-size families in ``transitional'' activities. Each missed hour of required activity reduces benefits by $4.25 per hour. \4\ Median State among 50 States and the District of Columbia, ranked by benefit size. Source: Table prepared by Congressional Research Service on the basis of a telephone survey. Idaho adopted a flat benefit of $276 for all-size families; and effective September 1, 1997, Wisconsin scheduled adoption of two flat benefits, $555 monthly for persons in community service jobs and $518 for those in ``transitional'' activities. California, Hawaii, and Massachusetts offered higher benefits to families exempt from work than to others: California, $631; Hawaii, $712; and Massachusetts, $579, $14 above the year- earlier maximum (amounts are for three-person families). South Carolina increased benefits for families of four or more persons. WELFARE-TO-WORK GRANTS The Balanced Budget Act of 1997 (Public Law 105-33) provides $3 billion in grants to States and localities for welfare-to-work (WTW) activities over 2 years, fiscal years 1998-99, by adding welfare-to-work grants to the TANF Block Grant Program. Most WTW funds require State matching funds. The law says funds are to be used ``to move individuals into and keep individuals in lasting unsubsidized employment.'' Funds must be spent on work or work-readiness activities, including job creation through wage subsidies, postemployment and job retention services, and on-the-job training. The list of WTW-eligible activities includes many activities countable as TANF ``work activities,'' but it excludes vocational educational training and secondary school attendance. The Department of Labor (DOL) administers the welfare-to- work program at the Federal level, and, generally, private industry councils administer the program at the local level. The Department of Health and Human Services (DHHS) is responsible for evaluation of the program. Funding of Welfare-to-Work Grants The new law provides $1.5 billion in each of fiscal years 1998 and 1999. From the $3 billion total, $100 million is set aside for bonuses to States achieving ``successful performance.'' The law also sets aside 1 percent ($30 million over 2 years) for Indian tribes, 0.6 percent ($18 million) for evaluations of WTW programs, and 0.2 percent ($6 million) for evaluation of abstinence education programs. Funds remaining after set-asides are divided 75 percent for formula grants, which require State cost-sharing (at a one- third State matching rate), and 25 percent for competitive grants. Formula grants The law provides $1.1 billion in fiscal year 1998 and $1.0 billion in fiscal year 1999 for welfare-to-work formula grants, allotted among the States on the basis of their shares of the national TANF adult population and the national poverty population, equally weighted. A small State minimum (0.25 percent of the amount left after set-asides) applies to jurisdictions other than the Virgin Islands and Guam. To be eligible for formula grants, States must submit to DOL an addendum to their TANF State plan that describes how the State will use the funds and specifies the formula for distribution to sub-State entities. Other required elements of the WTW plan include: an agreement that the State will negotiate with the DHHS Secretary on evaluation of the program, an estimate of State funds to be spent on welfare-to-work activities, and a certification that the State will meet the TANF maintenance-of- effort requirement. Formula grants are capped entitlements, but require State cost-sharing. States receive $2 in Federal funds for every dollar of their own funds spent (above the TANF maintenance-of-effort level) on welfare-to-work activities. Formula funds must be spent within 3 years, but unobligated fiscal year 1998 formula funds (including 75 percent of funds set aside for Indians but not obligated) are to be added to fiscal year 1999 formula grants. Table 7-48 shows Congressional Research Service (CRS) estimates of allotments to States for welfare-to-work formula grants for fiscal years 1998-99. Seven States benefit from the small State minimum: Alaska, Delaware, New Hampshire, North Dakota, South Dakota, Vermont, and Wyoming. Within-State administration and distribution of funds States are required to pass through 85 percent of formula funds to service delivery areas (SDA) set up under the Job Training Partnership Act (JTPA). The law requires that the State develop a formula for this allocation, and that half the formula be based on the incidence of ``high'' poverty (above 7.5 percent of the population) in each SDA, relative to the State as a whole. The other half of the formula may be based on the number of long-term welfare recipients and/or unemployed persons in the SDA. TABLE 7-48.--ESTIMATED ALLOTMENTS TO THE STATES FOR WELFARE-TO-WORK GRANTS: FISCAL YEARS 1998-99 [In thousands of dollars] ------------------------------------------------------------------------ Percent of State 1998 1999 total allocation ------------------------------------------------------------------------ Alabama.............................. $13,978 $13,029 1.3 Alaska................................ 2,927 2,728 0.3 Arizona............................... 17,418 16,235 1.6 Arkansas.............................. 8,490 7,914 0.8 California............................ 190,417 177,490 17.2 Colorado.............................. 9,879 9,208 0.9 Connecticut........................... 12,006 11,191 1.1 Delaware.............................. 2,762 2,574 0.3 District of Columbia.................. 4,646 4,331 0.4 Florida............................... 50,757 47,311 4.6 Georgia............................... 28,409 26,481 2.6 Hawaii................................ 5,086 4,740 0.5 Idaho................................. 2,794 2,604 0.3 Illinois.............................. 48,663 45,359 4.4 Indiana............................... 14,552 13,564 1.3 Iowa.................................. 8,332 7,766 0.8 Kansas................................ 6,668 6,216 0.6 Kentucky.............................. 17,723 16,520 1.6 Louisiana............................. 23,707 22,098 2.1 Maine................................. 5,156 4,806 0.5 Maryland.............................. 14,941 13,926 1.4 Massachusetts......................... 20,692 19,288 1.9 Michigan.............................. 42,226 39,360 3.8 Minnesota............................. 14,503 13,519 1.3 Mississippi........................... 12,991 12,109 1.2 Missouri.............................. 19,767 18,425 1.8 Montana............................... 3,194 2,978 0.3 Nebraska.............................. 4,022 3,749 0.4 Nevada................................ 3,384 3,154 0.3 New Hampshire......................... 2,762 2,574 0.3 New Jersey............................ 23,257 21,678 2.1 New Mexico............................ 9,716 9,056 0.9 New York.............................. 96,886 90,309 8.8 North Carolina........................ 25,332 23,612 2.3 North Dakota.......................... 2,762 2,574 0.3 Ohio.................................. 44,608 41,580 4.0 Oklahoma.............................. 11,742 10,944 1.1 Oregon................................ 8,637 8,051 0.8 Pennylvania........................... 44,296 41,289 4.0 Rhode Island.......................... 4,420 4,120 0.4 South Carolina........................ 12,006 11,191 1.1 South Dakota.......................... 2,762 2,574 0.3 Tennessee............................. 21,644 20,175 2.0 Texas................................. 76,059 70,895 6.9 Utah.................................. 4,628 4,314 0.4 Vermont............................... 2,762 2,574 0.3 Virginia.............................. 16,549 15,425 1.5 Washington............................ 22,675 21,135 2.1 West Virginia......................... 9,806 9,140 0.9 Wisconsin............................. 12,886 12,011 1.2 Wyoming............................... 2,762 2,574 0.3 Puerto Rico........................... 34,566 32,219 3.1 Virgin Islands........................ 554 516 0.1 Guam.................................. 585 546 0.1 --------------------------------- U.S. totals....................... 1,104,750 1,029,750 100.0 ------------------------------------------------------------------------ Source: Congressional Research Service (CRS). Estimated allotments for fiscal year 1998 are from the U.S. Department of Labor, and reflect their final estimated allotments released October 15, 1997. Estimated fiscal year 1999 allotments were computed by CRS assuming that States receive the same share of total allotments as they received in fiscal year 1998. JTPA private industry councils (PICs) are to administer formula grants in the SDA and to have sole authority, in coordination with the chief elected official of the area, to spend the grant funds for the benefit of the SDA, unless the Governor receives a waiver from DOL to permit another agency designated by him to administer the funds. The addendum to the TANF State plan must include assurances that the PIC (or alternate agency designated by the Governor) will coordinate expenditure of WTW funds with that of TANF family assistance grants. The remaining 15 percent of formula funds are to be made available to the Governor for distribution for projects to help long-term recipients enter unsubsidized employment. Maintenance of effort To qualify for WTW formula grants, States must meet TANF maintenance-of-effort requirements (MOE). That is, they must spend from their own funds on TANF-eligible families at least 75 percent of ``historic expenditures'' (80 percent if a State fails to meet TANF's work requirements). If a State that receives WTW funds fails to meet the TANF-MOE, the WTW funds are to be deducted from the next year's TANF grant. This penalty, added to the one imposed by TANF itself for MOE failure, enforces the requirement that States first meet the TANF-MOE and then spend additional funds on welfare-to-work activities in order to receive formula grant funds. Targeting of funds The law requires that 70 percent of Federal welfare-to-work funds (both formula grants and competitive grants) be spent on long-term TANF recipients, or noncustodial parents of minors of long-term TANF recipients, who have at least two out of the following three barriers to employment: (1) lack of a high school diploma or equivalent and low reading or math skills; (2) poor work history; and (3) substance abuse. These targeted recipients must have received assistance under AFDC/TANF for at least 30 months or be within 12 months of losing eligibility for benefits because of a durational time limit, without regard to a hardship exemption. States may spend the remaining 30 percent of Federal WTW funds for welfare-to-work activities by other TANF recipients, including the noncustodial parents of minors whose custodial parents are recipients, who have characteristics associated with long-term welfare receipt, such as school dropout, teen pregnancy, or poor work history. Competitive grants The welfare-to-work grant program provides $368.25 million in fiscal year 1998 and $343.25 million in fiscal year 1999 for ``competitive'' grants, to be awarded by the DOL Secretary. Eligible applicants are private industry councils, political subdivisions of States, and private entities applying in conjunction with the PIC or political subdivision. Their proposals must be developed in consultation with the Governor. In making awards, the DOL Secretary must take into account the needs of rural areas and cities with large concentrations of poor persons. Competitive grants are to be used for the same activities and targeted toward the same recipients as formula grant funds. Successful performance bonuses The WTW law sets aside $100 million of fiscal year 1999 funds for performance bonuses, to be paid in fiscal year 2000. To be eligible for one of these bonuses, a State must qualify for welfare-to-work formula grants in fiscal years 1998 and 1999. The DOL Secretary, in consultation with the DHHS Secretary, the National Governors' Association (NGA), and the American Public Welfare Association (APWA), is required by August 5, 1997 to develop a formula for measuring successful performance. The performance formula must include: job placements, duration of job placements, increases in earnings, and other factors deemed appropriate by the DOL Secretary. The formula may take into account general economic conditions on a State-by-State basis. Use of Welfare-to-Work Funds Allowable activities The law says WTW funds must be used to move TANF recipients into lasting unsubsidized employment and to keep them there, by means of: --The conduct and administration of community service or work experience programs; --Job creation through public or private sector employment wage subsidies; --On-the-job training; --Contracts with public or private providers of readiness, placement, and post-employment services; --Job vouchers for placement, readiness, and postemployment services; Contracts or vouchers for job placement services must require that at least one-half of the payment be withheld until a person had been in a job for 6 months; --Job retention or support services if these services are not otherwise available. TANF time limit ``exemption'' Adults who lose TANF eligibility because of reaching the 60-month limit are permitted to receive assistance through the welfare-to-work program. Months in which a recipient receives only noncash aid from WTW funds are not counted toward the TANF time limit. TANF requirements applicable to WTW programs All TANF requirements other than the time limit apply to welfare-to-work recipients. For example, they must cooperate in paternity establishment and must assign support rights to the State. They are counted when determining work participation requirements. State WTW programs are subject to data reporting requirements. Workplace rules Participants in activities funded by WTW may fill a vacant employment position unless another person is on layoff from the same or a substantially equivalent job, the employer has caused an involuntary reduction in the work force with the intention of filling the vacancy with the welfare participant, or the employer has reduced to less than full time the hours of a worker in the same or a substantially equivalent job. A work activity that would violate an existing contract for services or a collective bargaining agreement cannot be undertaken without the written concurrence of the labor organization and employer concerned. Health and safety standards otherwise applicable to working conditions of employees apply to working conditions of participants in WTW work activities. The law forbids discrimination by reason of gender (adding this requirement to other antidiscrimination provisions already in TANF law). States must establish and maintain a procedure for grievances or complaints, including opportunity for a hearing and appeal to an agency other than the agency administering the WTW program. WELFARE DYNAMICS Duration on Welfare The question of how long families receive cash welfare has more than one answer. The answer is affected by characteristics of the parent, whether repeat episodes of enrollment are taken into account, and whether annual or monthly data are examined. But some general answers are possible, based on studies of families' use of the repealed AFDC Program: --New enrollees could be expected to spend an average of 6 years, including repeat spells, on AFDC (table 7- 49). --For families on AFDC at any given time, the average expected length of AFDC receipt, counting repeat spells, was 13 years (table 7-49). --Almost half of the persons on the rolls at a given time had received benefits, counting repeat spells, for more than 5 years (table 7-49). --More than half of welfare spells associated with a first birth to a never-married mother lasted longer than 5 years (table 7-51). --Most episodes of AFDC enrollment were found to end within 12 months (table 7-52), but most families who exited AFDC came back within 24 months (table 7- 53). TABLE 7-49.--DISTRIBUTION OF TIME ON AFDC FOR A BEGINNING COHORT OF RECIPIENTS AND FOR THE CASELOAD AT A POINT IN TIME ---------------------------------------------------------------------------------------------------------------- Current recipients Beginning cohort-- --------------------------- distribution of Distribution Time on AFDC (months) expected lifetime of expected Distribution total lifetime of AFDC time total to date ---------------------------------------------------------------------------------------------------------------- 1-12.......................................................... 27.4 4.5 16.4 13-24......................................................... 14.8 4.8 11.9 25-36......................................................... 10.0 4.9 9.5 37-48......................................................... 7.7 5.0 7.8 49-60......................................................... 5.5 4.5 6.6 More than 60.................................................. 34.8 76.2 47.8 ------------------------------------------------- Total..................................................... 100.0 100.0 100.0 ------------------------------------------------- Average duration (years).................................. 6.1 12.98 6.49 ---------------------------------------------------------------------------------------------------------------- Source: Pavetti (1995). Table 7-49, based on monthly data and prepared by LaDonna Pavetti (1995), examines the distribution of expected lifetime total time on AFDC, including repeat spells. It shows that for a beginning cohort, 34.8 percent could be expected to spend more than 60 months on the program. The picture was different for persons who already were enrolled: 76.2 percent of them were expected to spend more than 60 months on AFDC, and 47.8 percent of them already had done so. The expected duration of welfare for the point-in-time caseload is much longer than for a beginning group of recipients because the probability of being on welfare at a given time is necessarily higher for long-term recipients than for those who have short welfare spells. The large number of persons who use welfare for a short time come and go, but the long-term users remain on the rolls. The estimates in table 7-49 are based on behavior of recipients under the AFDC system. Policy changes, such as the 5-year time limit on TANF-funded aid in the 1996 welfare reform law, might alter the length of time spent on cash assistance. Expected duration on AFDC varied with personal characteristics and with the event that appeared to precipitate the use of welfare. As was seen in table 7-49, 57.8 percent of first-time recipients could be expected to spend more than 24 months on AFDC, counting repeat spells, over their lifetimes. But, as table 7-50 shows, the comparable percentages were 66 percent and above for groups with one of the following characteristics at time of AFDC entry: no high school diploma, no recent work experience, black or Hispanic; never married; and more than three children. Boisjoly et al. (1996) examined events associated with initial welfare spells and duration of those spells. As shown in table 7-51, Boisjoly and her colleagues found that 27 percent of first welfare spells beginning in 1973-82 and 21 percent beginning in 1983-91 were associated with a first birth to a never-married woman. Of these spells, 71 percent lasted at least 2 years and 51 percent at least 5 years. Initial AFDC spells associated with divorce or separation were shorter; 48 percent lasted at least 2 years and 26 percent at least 5 years. Of initial spells associated with a fall in the mother's work hours, 65 percent lasted at least 2 years, and 30 percent at least 5 years. Exits and Returns to Welfare Movement on and off the AFDC rolls was frequent. Exits are portrayed in table 7-52 and returns in table 7-53. Both tables are based on monthly caseload data. Table 7-52 shows that 56 percent of episodes of AFDC ended within 12 months, 70 percent within 24 months, and almost 85 percent within 4 years. The table also shows that work exits from AFDC generally accounted for slightly less than half of all exits within a 5-year period. Table 7-53 shows that many who left AFDC returned to the rolls very quickly. Within 1 year of their exit, 45 percent of ex-recipients returned to the program; within 2 years, 58 percent; within 4 years, 69 percent. Those who left AFDC because of employment remained off the program somewhat longer than those who left for other reasons. A study based on 168 months (14 years) of data about AFDC receipt from the National Longitudinal Study of Youth (NLSY) examined both a parent's first AFDC experience and any subsequent reentry to the rolls after an exit (Cao, 1996). The study found that among females under the age of 21 as of January 1979, having a newborn was the most important reason for first entering welfare and also for recidivism, other things being equal. Other notable findings were that: --The most common cause for first entering AFDC was having a baby within the last 6 months (74 percent). --Giving birth again appeared to be a major cause for reentering AFDC after leaving the program (54 percent among persons making a first return to AFDC; 45 percent and 40 percent among those returning a second and third time, respectively). TABLE 7-50.--TIME ON WELFARE AND SELECTED CHARACTERISTICS FOR A BEGINNING COHORT OF RECIPIENTS ---------------------------------------------------------------------------------------------------------------- Percent Percent Percent of all expected to expected to Characteristics at beginning of first AFDC spell first-time spend longer spend longer recipients than 24 months than 60 months on AFDC on AFDC ---------------------------------------------------------------------------------------------------------------- Education: <9 years................................................. 13.0 75.3 63.4 9-11 years............................................... 34.0 66.2 40.0 12+ years................................................ 53.0 48.2 24.3 Work experience: No recent................................................ 38.7 67.1 44.9 Recent................................................... 61.3 52.0 28.3 Age: Under 24................................................. 52.7 64.5 41.9 25-30.................................................... 24.9 51.9 25.6 31-40.................................................... 19.3 48.4 28.3 Over 40.................................................. 3.1 51.1 25.2 Race: White/other.............................................. 55.6 50.9 26.7 Black.................................................... 28.4 66.4 41.4 Hispanic................................................. 16.0 66.9 50.7 Marital status: Never married............................................ 58.2 65.5 43.1 Ever married............................................. 41.8 47.2 23.0 Age of youngest child: <12 months............................................... 52.1 64.8 39.2 13-36 months............................................. 16.6 55.5 37.9 37-60 months............................................. 10.9 54.3 29.5 61-120 months............................................ 11.2 49.7 29.9 121+ months.............................................. 9.3 37.1 15.2 Number of children: 1........................................................ 57.2 57.0 35.8 2........................................................ 33.2 58.2 31.9 3........................................................ 7.5 58.7 35.9 Over 3................................................... 2.2 71.0 43.1 -------------------------------------------------- All recipients....................................... 100.0 57.8 34.8 ---------------------------------------------------------------------------------------------------------------- Source: Pavetti (1995). TABLE 7-51.--EVENTS ASSOCIATED WITH WELFARE SPELL BEGINNINGS--TRENDS AND DURATIONS OF RECEIPT ------------------------------------------------------------------------ Percentage of all Percentage of beginnings spells lasting at Event associated with beginnings associated with least: of first spell of AFDC the event ------------------- -------------------- 1973-82 1983-91 2 years 5 years ------------------------------------------------------------------------ First birth to never-married mother......................... 27 21 71 51 First birth under other circumstances.................. 14 14 53 28 Second or later birth........... 18 17 60 39 Divorce/separation.............. 23 23 48 26 Mother left parental nest....... 5 7 68 NA Fall in mother's work hours..... 26 23 65 30 Fall of work hours of others in family......................... 32 24 52 33 ------------------------------------------------------------------------ Data are from the Panel Study of Income Dynamics. NA--Not available. Source: Boisjoly (table appears in article, Welfare Dynamics, by G.H. Duncan and G. Caspary, Notre Dame Journal of Law, Ethics, and Public Policy, 1997). TABLE 7-52.--CUMULATIVE PERCENTAGE OF WOMEN LEAVING WELFARE BY DURATION OF TIME ON WELFARE AND TYPE OF EXIT ------------------------------------------------------------------------ Duration (months) Work exits Other exits All exits ------------------------------------------------------------------------ 1-12............................. 25.4 30.4 55.8 13-24............................ 31.7 38.3 70.0 25-36............................ 35.9 42.3 78.2 37-48............................ 39.0 43.6 82.6 49-60............................ 40.9 45.4 86.3 ------------------------------------------------------------------------ Source: Pavetti (1993, p. 46). TABLE 7-53.--CUMULATIVE PERCENTAGE OF WOMEN RETURNING TO AFDC BY DURATION OF TIME OFF AFDC AND TYPE OF EXIT ------------------------------------------------------------------------ Duration (months) Work exits Other exits All exits ------------------------------------------------------------------------ 1-12............................. 39.4 49.5 44.9 13-24............................ 52.5 61.8 57.6 25-36............................ 57.8 69.3 64.2 37-48............................ 62.5 74.3 69.1 49-60............................ 65.0 76.6 71.5 ------------------------------------------------------------------------ Source: Pavetti (1995). --A decline in earnings counted for only about 4 percent of cases first entering AFDC and between 8 and 10 percent of those returning to the program after an exit. --``Becoming unmarried'' accounted for less than 2 percent of first spells of AFDC and for less than 4 percent of first returns to AFDC after an exit. The study noted that these low percentages might reflect the relative youth of recipients in the sample, many of whom became mothers as teens and never married. Meyer and Cancian (1996), in another study based on 14 years of NLSY data, analyzed the poverty status of women in the 5 years after their first observed exit from AFDC. They found that more than half (55 percent) of former recipients were poor 1 year after first departing from AFDC, and about 40 percent after 5 years. Almost one in five (18 percent) was poor in each of the 5 years; more than one-fifth (22 percent) were never poor in the first 5 years. The researchers said that in each of the 5 years, about 60 percent of the women had earnings, and 40 percent income from a spouse or partner. The other major income sources were AFDC, received by 30-40 percent of the women each year (60 percent of the women returned to AFDC), and food stamps, received by 40-50 percent. Child support or alimony was received by 17-19 percent. Intergenerational Patterns of Welfare Use Several researchers have examined the question of intergenerational transmission of receipt of AFDC. In general, using panel data, they have measured AFDC income in parental families and then examined its correlation with later behavior of their daughters, either through simple cross-tabulations or multivariate statistical analyses. A 1990 review of seven studies made between 1986 and 1990 (Moffitt, 1990) concluded that their results provide consistent evidence of strong correlations between parental welfare receipt and later behavior of the daughters. Moffitt concluded that the research showed that daughters from welfare families are much more likely to participate in the welfare system themselves at a later date, and are more likely to have births in general and premarital births in particular. Evidence was weaker for the one study that examined the effect of parental welfare receipt on later work effort by sons. The studies do not answer the question of whether growing up in a family that receives AFDC ``causes'' a daughter to later become an AFDC mother. Many omitted variables, such as the human capital characteristics of the parental family, could be responsible for the observed correlation. Children from AFDC-dependent homes generally have fewer parental resources available to them, live in worse neighborhoods, and go to lower quality schools. All of these factors could have an independent effect on the probability of their receiving AFDC in adulthood. Further, transmission of AFDC receipt from one generation to the next could operate in a number of ways: for example, by lowering the stigma of welfare, by acquainting the AFDC child with rules of the system or by affecting the work effort of the AFDC family or its investments in human capital (Moffitt, 1990). Table 7-54 summarizes findings from a 1988 study that surveyed a sample of daughters whose economic status was observed when the daughters were between the ages of 13 and 15 and later when they were between the ages of 21 and 23. For each of the periods, AFDC dependence was defined as: no dependence--no AFDC income reported; moderate dependence--AFDC reported in 1 or 2 years; high dependence--AFDC in all 3 years. Daughters from highly dependent homes were several times more likely to become highly dependent themselves (20 percent) than were daughters from nonrecipient homes (3 percent). At the same time, 64 percent of the daughters from highly dependent homes received no AFDC as young adults. Another study (Gottschalk, 1992) distinguished between parents who were eligible for AFDC and those who were not, noting that some of the positive correlation found between mothers' and daughters' AFDC use might reflect the low probability that adult daughters of high-income parents would meet the AFDC income test. Gottschalk also controlled for differences between parents who, though AFDC-eligible, did not participate, and those who did. Finally, he used event history analysis to lengthen the observation period (since a short period is likely to miss many mothers and daughters who at some point receive AFDC). TABLE 7-54.--INTERGENERATIONAL PATTERNS OF AFDC RECEIPT ---------------------------------------------------------------------------------------------------------------- Dependence of daughters (percent) Unweighted Dependence of parents --------------------------------- number of No Moderate High cases ---------------------------------------------------------------------------------------------------------------- No................................................................. 91 6 3 811 Moderate........................................................... 62 22 16 127 High............................................................... 64 16 20 147 ---------------------------------------------------------------------------------------------------------------- Source: Duncan, Hill, & Hoffman (1988). The Gottschalk study showed that daughters raised in AFDC households had different economic and demographic characteristics from those raised in nonrecipient households. More specifically, they were disproportionately nonwhite and came from more disadvantaged backgrounds, as measured by family income, mother's education, or the proportion of disadvantaged students in their school. Households eligible for AFDC that did not enroll in the program also were more disadvantaged than recipient households. This study reached three broad conclusions: (1) parental enrollment in AFDC was correlated with daughters' later participation in AFDC; (2) the parents' participation did not seem to be capturing solely the effects of low income; the intergenerational correlation seemed to reflect more than a simple statistical artifact; and (3) the loss of income if the parent did not receive AFDC, even though eligible, raised the probability that the daughter would receive AFDC. Daughters who grew up on AFDC had a higher overall probability of giving birth by the end of the survey than daughters of eligible parents who did not participate in AFDC (53 percent versus 33.4 percent). Further, more than half (55.8 percent) of the young mothers who were raised in AFDC families also received AFDC for their children. In comparison, the probability of a daughter's receiving AFDC for her own child was less than one-third (32.9 percent) if her eligible parent had not participated in AFDC. A recent review of the research (Duncan and Caspary, 1997) concluded that the evidence on the question of intergenerational linkage of welfare use, although not definitive, ``does indeed suggest'' such a linkage, even after adjusting for the conditions associated with welfare-recipient families. ADOLESCENT AND OUT-OF-WEDLOCK CHILDBEARING AND USE OF AFDC Trends Over Time Adolescent pregnancy, declining marriage rates, and increased childbearing among unmarried women have contributed to the rising share of children being born to unwed mothers. Out-of-wedlock birth rates, slowly but steadily moving upward since at least the 1940s, took a sharp upward turn in the mid- 1980s. The diminishing fertility of married women coincident with the growing fertility of unmarried women has increased the likelihood that children born today will be born outside marriage. These trends have placed children at increased risk of being poor and have placed increased demands on the Nation's welfare programs. Among children whose mother has never married, 59 percent were poor in 1996. About one-third of never-married mothers reported receiving AFDC (34 percent) in 1996. The rate of childbearing by unmarried women age 15-44 increased by 54 percent from 1980-91, but has remained stable at about 45.3 births per 1,000 unmarried women for several years. It dropped slightly to 45.1 births per 1,000 unmarried women in 1995. As chart 7-2 depicts, the birth rate of unmarried adolescent women closely tracks that of all unmarried women of childbearing age. Almost one-third (32.2 percent) of all births in 1995 were out of wedlock (and preliminary data for 1996 indicate that 32.4 percent of births were to unmarried women). CHART 7-2. BIRTH RATES FOR ALL WOMEN, ADOLESCENTS, UNMARRIED WOMEN, AND UNMARRIED ADOLESCENTS, 1940-95 Source: Congressional Research Service analysis of National Center for Health Statistics natality data, 1997. Most teen births were out of wedlock. Specifically, 69.8 percent of the 512,115 births to adolescents in 1995 were out of wedlock (Wasem, 1995). On the other hand, the age group that comprises the largest portion of out-of-wedlock births in 1993 was women in their early twenties (34.5 percent). While these two statistics imply that adolescent childbearing is only an overlapping portion of nonmarital births, the following analysis of the birth order patterns (e.g., how many previous births the mother has had) reveals a more complex relationship. Although adolescent childbearing should not be viewed as synonymous with out-of-wedlock births, adolescence appears to be the time in life that most unmarried women who bear children have their first child. First Births to Unmarried Women Not only has the sheer number of births to unmarried women increased sharply over the past few decades, but the birth order patterns of unmarried women have changed as well. As chart 7-3 depicts, 60 percent of the 318,100 births to unmarried women in 1967 were their first child. By 1995, just over half (50.1 percent) of the 1.3 million births to unmarried women were their first child. In other words, almost half of the unmarried women who had a baby in 1995 had given birth previously. Some of these unmarried women, however, may have been previously married. CHART 7-3. BIRTHS TO UNMARRIED WOMEN IN 1967 AND 1995: FIRST BIRTHS AND PREVIOUS BIRTHS Source: Congressional Research Service analysis of National Center for Health Statistics natality data, 1997. When the birth order patterns of unmarried women are broken down by age in chart 7-4, it becomes clear that many of the young women in the largest category (20-24 age group) had previously given birth before they had this child out of wedlock. Only 50.4 percent of these births are the first births these young women have had, suggesting that many of these unmarried mothers began their families as adolescents. Although births to adolescents are only 31 percent of the 1.3 million births to unmarried women, they make up almost half of all first births to unmarried women (49.1 percent). CHART 7-4. BIRTHS TO UNMARRIED WOMEN IN 1995: LIVE BIRTHS BY AGE OF MOTHER AND PREVIOUS BIRTHS Source: Congressional Research Service analysis of National Center for Health Statistics natality data, 1997. Links to AFDC Use The Congressional Budget Office (Adams & Williams, 1990) analyzed data from the National Longitudinal Survey of Youth and found that almost half of all adolescent mothers began receiving AFDC within 5 years of the birth of their first child. Over three-fourths of unmarried adolescent mothers began receiving AFDC within 5 years of the birth of their first child. Moreover, CBO found that observed differences in receipt of AFDC by age and race were largely explained by the marital status of the adolescent mother. In addition to the role of adolescent childbearing, the links between out-of-wedlock childbearing and AFDC use are also being documented. Analysis of Current Population Survey data by the Congressional Research Service found that perhaps as much as half of caseload growth in recent years could be attributed to the increased number of mother-only families (Gabe, 1992). Similarly, an analysis of data from the Survey of Income and Program Participation (SIPP) done by Amara Bachu and Martin O'Connell (1995) of the Bureau of the Census found that nearly half (47.5 percent) of AFDC mothers have never been married. As shown in chart 7-5, this study, which compares the demographic traits of AFDC mothers with non-AFDC mothers as of 1993, found further that the percent of AFDC mothers who had never been married was double the percent of non-AFDC mothers who had never been married (23.6 percent). CHART 7-5. MARITAL STATUS OF AFDC MOTHERS AND NON-AFDC MOTHERS, 1993 Source: March 1995 Survey of Income and Program Participation (SIPP). As chart 7-6 depicts, an analysis of the SIPP by Nicholas Zill of Westat (1996) revealed that 68 percent of AFDC mothers were unmarried at the time their first child was born, while only 27 percent of non-AFDC mothers were. Over half (55 percent) of AFDC mothers were adolescents at the time of their first birth in comparison with just under one-third (31 percent) of non-AFDC mothers. Zill also found that 44 percent of AFDC mothers were unmarried adolescents at the time of their first birth while only 17 percent of non-AFDC mothers were unmarried adolescents at the time of their first birth. The differences in the welfare recipiency patterns of adolescent mothers of different ages could be due to a number of factors. In particular, they are likely to be partially due to marital status differences between the two groups--the younger mothers in this sample were much less likely to be married than were older mothers. Other factors that might play a role include differences in living arrangements and in the likelihood of having a subsequent birth. CHART 7-6. MARITAL STATUS OF AFDC MOTHERS AND NON-AFDC MOTHERS AT THE TIME OF THEIR FIRST CHILDBIRTH, 1993 Source: Zill (1996). LEGISLATIVE HISTORY For detailed legislative history of AFDC from 1980 to 1994, see the 1996 Green Book. REFERENCES Adams, G., & Williams, R.C. (1990). Sources of support for adolescent mothers. Washington, DC: Congressional Budget Office. Bachu, A., & O'Connell, M. (1995). Mothers who receive AFDC payments: Fertility and socioeconomic characteristics. Washington, DC: U.S. Department of Commerce, Bureau of the Census. Boisjoly, J., Harris K.M., and Duncan, G.J. (1996). 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