House committee to consider draft TANF reauthorization bill

By Kermit Kaleba, July 14, 2015

Last week, the House Ways and Means Subcommittee on Human Resources released a discussion draft for legislation that would reauthorize and update the Temporary Assistance for Needy Families (TANF) program. The draft bill combines eight smaller bills introduced earlier this month by committee Republicans, and would make a number of significant changes to the existing program, including substantial modifications to work requirements for TANF recipients and increased emphasis on access to education and training services. The subcommittee will hold a hearing on the draft bill on Wednesday, July 15th.   

Key provisions of the discussion draft include:

  • Reauthorizing the basic state family assistance grant for Fiscal Years 2016- 2020 at $16.6 billion, essentially the same levels authorized under current law.
  • Maintaining the current “all-families” work participation rate of 50% – under current law, states are required to ensure that a percentage of work-eligible individuals in families receiving TANF assistance are engaged in work activities on a weekly basis. This requirement has long been criticized because it provides limited incentives for states to develop work strategies that lead to sustainable employment for TANF recipients, and imposes substantial administrative burdens on TANF recipients and providers. The draft bill also includes language that would prohibit the Department of Health and Human Services from implementing any waivers to state work requirements, a response to 2012 guidance issued by HHS that would have permitted states to request such waivers in order to test strategies that would improve employment outcomes for TANF recipients.
  • Eliminating the separate 90% two-parent work participation rate – in addition to the all-families work participation rate described above, states are also required to meet higher work participation rates with respect to two-parent families. The discussion draft would remove this requirement, which would provide greater flexibility for states in designing services for such families.   
  • Eliminating the “caseload reduction credit” – states are currently eligible to receive credits against their workforce participation rates based on a formula that compares current TANF caseloads to their caseloads in 2005. While the caseload reduction credit reduces the percentage of individuals who must engage in work activities – allowing states – there have been concerns that it encourages states to maintain lower caseloads than they might otherwise enroll.
  • Eliminating the current distinction between “core” and “non-core” work activities – under current law, activities defined as job skills training, education relating to employment for individuals who have not obtained a HS diploma, and secondary school attendance may be counted as work participation activities only where the individual has at least 20 hours of work participation in other defined “core” activities. The discussion draft would remove this distinction, meaning that these educational activities could be counted toward work participation rates without first meeting the 20-hour core activity requirement.
  • Allows for partial credit toward work participation rate – currently, states receive no credit if a work-eligible individual fails to meet the minimum hour requirements (generally 20 or 30 hours, depending on family status); the discussion draft would allow states to take partial credit if the work-eligible individual participates in a reduced number of hours of work activity.
  • Extends the lifetime limit on “vocational educational training”  – current law limits creditable participation in vocational educational training programs to a total of 12 months, which limits engagement in longer-term training programs for TANF recipients. The discussion draft would extend the lifetime limit to 24 months. 
  • Flagging as an “open question” whether to lift or modify the cap on share of work participation rate that can be met through participation in vocational educational training or secondary school attendance – TANF currently caps participation in certain education and training activities at 30 percent of families counted towards the work participation rate, a provision that has significantly limits the availability of training for TANF recipients. The discussion draft does not indicate whether the cap would be lifted entirely or simply increased to a higher percentage.
  • Changing the penalties for state failure to meet work participation rates – instead of reducing federal funding, states that failed to meet work participation rates for a given year would be required instead to increase their “maintenance of effort” (MOE) spending – generally set at 80 percent of state spending levels relative to spending in 1994 – by five percent, up to a maximum of 100 percent.
  • Replacing the current language authorizing high performance bonus payments to states – a provision that has not been funded in more than a decade – with new requirements that dedicate a portion of state funds to support “increased employment and retention” of former TANF recipients. The discussion draft adopts employment and median earnings indicators similar to those applied to core programs under the Workforce Innovation and Opportunity Act, and requires states to negotiate performance rates with respect to each indicator in order to receive funds under this section.
  • Repealing the TANF Contingency Fund and redirects the funding to a new “Improving Opportunity Fund” that will support five new grants:
      • $308 million for coordinated case management demonstration grants
      • $75 million for subsidized employment demonstration grants
      • $75 million for “social impact” demonstration grants
      • $75 million for two-generation demonstration grants
      • $75 million for demonstration grants for training in in-demand jobs
  • Flagging as an “open question” the possibility of establishing a floor on expenditures for child care, cash assistance, and work activities. The discussion draft does not provide language around this proposal.
  • Imposing new state planning requirements – the draft bill would generally require states to develop and submit a “combined state plan” that meets or exceeds the TANF state plan requirements and section 103 of WIOA. States may opt out of the combined plan requirement, but if they do they must enter into an agreement with the state workforce agency that describes how the state will (A) coordinate and avoid duplication among other employment, training, education, and human services programs, including those funded under WIOA; (B) share performance accountability goals under new section 403(a)(4) with the state workforce agency; (C) align activities with the strategic planning elements developed by the State Workforce Development Board; and (D) provide written notification to the Departments of Labor and HHS describing why the state chose to opt TANF out of a combined plan and provide a copy of the MOU.

National Skills Coalition, in partnership with the Center on Law and Social Policy and the Center on Budget and Policy Priorities, recently released a fact sheet outlining key areas of potential alignment between TANF and WIOA-funded programs, and we are encouraged to see that Congress is considering steps to better connect TANF recipients to meaningful employment and training opportunities, including through greater coordination with other federal skills investments. While we believe the discussion draft is a useful starting point, we will seek to work with policymakers to improve the existing draft legislation to ensure that it meets the needs of all TANF recipients.