House Ways and Means Committee Eyes Welfare Reform

New bill would overhaul Clinton-era program by improving accountability, transparency, efficiency

Rep. Kevin Brady and President Trump
Rep. Kevin Brady and President Trump / Getty Images
May 23, 2018

After passing President Donald Trump's tax-reform package last year, the House Ways and Means Committee appears poised to tackle welfare reform next.

The committee on Wednesday is scheduled to take the first step in considering legislation introduced by Rep. Kevin Brady (R., Texas), the committee's chairman, and Rep. Adrian Smith (R., Neb.) to reform the Clinton-era Temporary Assistance for Needy Families (TANF) program.

TANF, which provides cash assistance and employment support to American families living below the poverty line, was created in 1996 as part of the much-heralded welfare reform compromise between Democratic President Bill Clinton and Republican House Speaker Newt Gingrich.

The legislation being considered would rename TANF the "Jobs and Opportunity With Benefits and Services" (JOBS) program and extend family-assistance grants, at current levels, through the 2023 fiscal year.

Since its inception, TANF has only been reauthorized once, as part of the 2005 Deficit Reduction Act, due in part to the inability of Congress to find program parameters on which both parties agreed. The program has operated through short-term continuing resolutions since 2010, meaning no consequential updates have been made and funding has remained flat.

The bill seeks to overhaul the program by improving accountability, transparency, and efficiency to ensure individuals receiving cash assistance are better situated to find gainful employment and remain off welfare rolls long-term.

Brady and Smith believe the first step in developing accountability guidelines and strengthening efficiency is to ensure individuals receiving TANF assistance are universally engaged by state welfare agencies.

One of the hallmark provisions of the 1996 welfare-reform legislation was to mandate that every adult receiving TANF assistance participated in work activities in exchange for benefits. Over the years, however, the program has been modified to include moderate exceptions so today states are only required to engage 50 percent of the individuals in employment-related activities. The Brady-Smith bill would require state welfare agencies to universally engage in hands-on case management with welfare recipients.

Brady told the Washington Free Beacon that it is unfair for society's most vulnerable citizens to be ignored and allowed to fall through the cracks.

"Those are the families that often need the most help in work support to get them in a job and keep them there," Brady said.

The legislation establishes assessment criteria for welfare agencies to adequately measure an individual's progress and requires them to collect data on how recipients are spending their time in work-activity programs. Currently, states only record the names of individuals receiving assistance but not which job-assistance programs recipients are enrolled in and for how long. The data-collection component would allow state governments and program evaluators to understand which services are succeeding and why.

Smith told the Free Beacon that the reforms are intended to improve efficiency while allowing state governments the latitude to craft programs that fit the needs of each TANF recipient.

"We don't want to tie their hands on coming up with new ways to address this," Smith said. "There will be a plan for success and a plan for self-sufficiency. No one will be ignored."

The Brady-Smith bill would also prohibit states from diverting TANF funds for purposes outside of providing conventional welfare and employment services by mandating funds are used to serve families whose monthly income is below 200 percent of the federal poverty level.

Under current law, there are loose restrictions on how states can spend TANF money, resulting in some choosing to divert the funds to close budgetary gaps or replace existing spending. This was the case in 2015, when Maine decided to divert $7.8 million set aside for TANF recipients to pay for support services for elderly and disabled adults. Such practices became increasingly widespread as state-budget revenue shrank amid the economic recession of the late 2000s.

Brady expressed to the Free Beacon that state governments have used TANF's lack of accountability to deviate from the program's original objectives.

"A lot of states have strayed over the years from the intent of the reforms under that law," Brady said. "Really, some have lost sight of what this program was intended to do, which is getting people off the sidelines and into the workforce for good."

Brady and Smith believe the state of the economy under President Donald Trump presents an optimal opportunity to reform the nation's welfare system and ensure more Americans enter the workforce. In May, the nation's unemployment rate hit 3.9 percent—a low unseen since 2000—yet nearly 7 million men of prime working age have left the labor force, according to the American Enterprise Institute.

The situation is compounded by the fact that the United States had 6.6 million job openings on the last business day of March, according to the Bureau of Labor Statistics.

"We have a booming economy because of our new tax code," Brady said. "Our local businesses need more workers. But too many people are on the sidelines. There is a huge jobs gap in the country right now."