Goals of Welfare Reform & Beyond:

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

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

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

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

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

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

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

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

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

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

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

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

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