"Children's Advocates' Welfare Proposal"
Principles and Recommendations for California Implementation of
Temporary Assistance for Needy Families Block Grant
Children's Advocates' Reform Proposal
February 1997
Beginning with a retreat last December, a coalition of children's
and anti-poverty organizations have crafted a proposal to
implement the federal Temporary Assistance for Needy Families
(TANF) Block Grant in California. Among its supporters are
Children NOW, the Children's Advocacy Institute, the California
Council of Churches, and the Western Center on Law & Poverty. The
following describes underlying principles and the main elements
of this proposed plan.
Introduction
Any welfare reform program should address the reasons why
families need public assistance. This requires an understanding
of the depth and persistence of poverty, not just public
assistance. We must confront the inadequacies of the economy and
labor markets, health and child care systems, educational
opportunities, and social supports, as well as the need to
restructure public assistance. Claims that the availability of
safety net assistance causes people to need it, or to have out-
of-wedlock births, or to be unwilling to work, are unsupported by
voluminous evidence examining poverty and public assistance
programs in the United States and by the experiences described by
the poor themselves. If myths about welfare and poverty drive
public policy making, we will only experience further failures.
Programs should recognize that the vast majority (89%) of adult
recipients of aid have work experience, that many parents work at
various points but do so in unstable and low-paid jobs. The
typical welfare experience is not a lifetime, intergenerational
one; many leave aid because of work but return because jobs don't
last. Policy makers should also appreciate that the market for
lesser-skilled workers has worsened considerably over the past 20
years. Wages for workers without a high school education
declined by 22.5% for men and 6.3% for women (whose wages are
still nearly 30% below men's) from 1979 to 1993. Competition for
jobs is severe. Unemployment rates for those without high school
education is double that for the general population. For women
without a diploma in 1993, the unemployment rate was 18% among
whites, 42% among African-Americans and 26% among Latinas. When
fast-food restaurants were surveyed in a northern inner city with
18% unemployment, researchers found 14 applications for every
available opening.
Efforts should address the fact that poverty has increased over
the past decade, even during the economic recovery. Some 28% of
California's children are poor, the 40th worst rate in the
nation. Moreover, inequality has grown significantly over the
past two decades, especially in California, so that the ratio of
incomes at the 80th percentile to those at the 20th percentile
grew by 48% from 1976 to 1994. With cuts in aid enacted in five
successive years in the 1990's, the purchasing power of AFDC has
declined by over one-third since 1989, further increasing the
poverty of low-income families, so that combined with Food Stamps
a typical family of a mother and two children without other
income must subsist on less than $800 per month, nearly 30% below
the poverty line.
Basic Principles of the Proposal
Our proposal promotes, rewards and requires work of parents with
the aim of ending their reliance on public assistance. To achieve
success in this effort, the state must increase its investment in
job development, employment programs and social services which
permit parents to compete for jobs which can support their
families. The state will realize an additional $820 million in
federal funds under the block grant formula through 1997-98, and
these funds should be used to augment aid and services for low-
income families rather than supplanting state funds as proposed
by the Governor. Efforts to increase employment will not succeed
unless parents are assured of the availability of adequate child
care and transportation when they are engaged in the work force
or participating in employment programs.
The existing competition for jobs in the labor market demands
that welfare reform efforts increase employment opportunities and
avoid displacement of existing or potential jobs and workers.
Those who work must be rewarded for their efforts -- work must
pay better than welfare. This is attained not by worsening the
plight of the unemployed, but by increasing the income of the
working family through wage supplements such as the earned income
tax credit and improved earned income disregards. Additionally,
transitional services must be provided to those who find work --
two years of child care and medical coverage, but also case
management and counseling with workers and their employers.
Despite the creation of new requirements and incentives to work,
and despite the desperate desire of the vast majority of needy
families to support themselves with work rather than welfare,
there is an unavoidable need to maintain a safety net for
families and children given the limits of our economic system and
the personal and social barriers many families will continue to
face. Families which "play by the rules" and comply with work
requirements should not be made destitute because of an
inadequate labor market. Reform should also value families and
parenting, recognizing the demands placed especially upon single
parents, and adopting strategies to maintain family integrity
wherever possible.
Living standards among the poor, both for those who work and
those who are unemployed, should not be allowed to deteriorate
further, and, where possible, should be improved.
Additionally, non-welfare alternatives to income assistance,
through such devices as child support assurance, a state earned
income tax credit, and reformed unemployment insurance policies,
should also be adopted.
The following describes key elements of the proposal.
Work Requirements
The proposal increases GAIN participation, with fewer exemptions
(child under one, aged or disabled or caring for a disabled
family member, increased risk of domestic violence). "Target
groups" and priorities are abolished. An appraisal of a family's
circumstances to ascertain the appropriate next activity would
occur upon application. Work-related activities begin
immediately: job search for 6 weeks would be assigned for most.
If unsuccessful, an assessment of the adult's education, skills
and experience would occur. Options would then include a wide
range of activities: subsidized employment, work experience,
community service, vocational education and training,
postsecondary education leading to employment (combined with
work-study, internships or volunteer work, if available), micro-
enterprise training and support. Cal-Learn would be continued
for teen parents lacking a high school diploma. Current
displacement protections would be maintained to encourage
creation of additional job opportunities.
100 hours of work (or a lesser amount based on minimum wage
rate) are required for non-exempt parents on aid 22 of 24 months,
who have had an opportunity to complete post-assessment activity.
Subsidized employment with a wage is an offered option. The
state would continue operating this component under existing
waivers, asserting an inconsistency between the waiver and the
PRWORA to minimize the risk of financial penalties for failure to
meet work participation rate.
Child Care
Paid child care is assured for those engage in work-related
activities and for those on aid needing child care to work. No
penalty can be assessed for non-participation if appropriate
child care is unavailable for child under 13. Direct payment of
child care costs is provided for those combining work and aid, as
with SB 356 (Campbell) of 1995. Greater GAIN participation
increases costs, but the exemption for children under 1 and fewer
hourly requirements than the Governor's proposal limits expenses
by comparison.
Post employment assistance
The first $100 and 50% of remaining earnings would be disregarded
in calculating aid (based on the Utah rule), and the remaining
"countable income" would be deducted from the "need standard." A
half-time minimum wage ($5.75/hr, $498 per month in wages) worker
gets combined $1034 cash per month: $53 more per month than
current law, and $199 more per month than Governor's proposal in
first 6 months, $284 more per month than Governor's proposal
afterwards.
There would also be transitional counseling and case management
for those finding work to assist in coping employee and employer.
Time Limits
The proposal recognizes that without time limits, most recipients
(63%) spend less than 2 years on aid in their initial spell, and
less than 3 years total time on aid. 89% have work history, and
40-50% work over two years. Families have strong reasons to work
and avoid aid regardless of arbitrary "drop dead" time limits.
As noted, the bill would vastly increased participation in work-
related activities, and provide full GAIN funding.
After two years (22 of 24 months), non-exempt parents would be
subject to a 100 hour work requirement, unless there has been no
opportunity to complete a post-assessment GAIN activity.
After 5 years, aid to adults would end, unless they are exempt
because of (1) disability or advanced age of the parent, or the
parent's need to care for a disabled family member; (2) increased
risk of domestic violence, or (3) compliance by the parent with
all work-related requirements, including active but unsuccessful
employment searches. For those not complying and not exempt, the
parents' aid would be removed, and children would be assisted
through payments to payees.
Administrative Simplification
The state no longer needs to impose arcane rules such as
"deprivation of parental support" (limiting aid to 2-parent
families), strict resource limits, and the convoluted disregard
rules. It can also better coordinate rules between TANF and Food
Stamps. The state should adopt simpler rules which recognize the
costs of work and permit those who work to increase their net
family income without being penalized. The state should create a
simpler, seamless child care system available to all low-income
families who need care to participate in employment programs, or
to obtain or retain employment. The state should establish fair
rules which require expeditious processing of requests for aid,
allow prompt but fair resolution of disputes, and assure adequate
access to aid and services for those in need.
Non-welfare policies -- Unemployment Insurance Reform, State
Earned Income Tax Credit.
Child support assurance, similar to the Child Assistance Program
(CAP) conducted in New York, should be an option for single
parents who have a child support order. This would allow parents
to combine work with a guaranteed support payment, less than a
regular monthly welfare check, but reduced only by 10% of
earnings until phased out at 200% of poverty. For many, this
will be a route out of the welfare system.
The unemployment insurance benefit (UIB) system should be
reformed so that more unemployed workers are aided by UIB instead
of welfare. Fewer than 40% of unemployed Californians qualify for
unemployment insurance benefits because of arcane rules -- base
period and earnings requirements -- which especially
disadvantage lower-wage workers.
A state earned income tax credit (EITC) program could supplement
the federal system and add to the rewards of work
Basic Elements of Children's Advocates' Welfare Reform
February 1997
