[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 209 Introduced in Senate (IS)]







104th CONGRESS
  1st Session
                                 S. 209

 To replace the Aid to Families with Dependent Children Program under 
  title IV of the Social Security Act and a portion of the food stamp 
program under the Food Stamp Act of 1977 with a block grant to give the 
 States the flexibility to create innovative welfare-to-work programs, 
  to reduce the rate of out-of-wedlock births, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

             January 12 (legislative day, January 10), 1995

 Mr. Grassley (for himself and Mr. Thurmond) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To replace the Aid to Families with Dependent Children Program under 
  title IV of the Social Security Act and a portion of the food stamp 
program under the Food Stamp Act of 1977 with a block grant to give the 
 States the flexibility to create innovative welfare-to-work programs, 
  to reduce the rate of out-of-wedlock births, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Welfare-to-Work 
and Strong Families Act of 1995''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Purpose.
Sec. 4. Definition of State.
Sec. 5. Applications by States.
Sec. 6. State welfare-to-work and stronger families program described.
Sec. 7. State grants.
Sec. 8. Termination of certain Federal welfare programs.
Sec. 9. Secretarial submission of legislative proposal for amendments 
                            to medicaid eligibility criteria and 
                            technical and conforming amendments.
Sec. 10. Savings.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) The current welfare system is broken and requires 
        replacement.
            (2) ``Work'' is what works best for American families.
            (3) Since State and local governments know the best methods 
        of connecting welfare recipients to work and since each 
        community faces different circumstances, Federal assistance to 
        the States should be flexible.
            (4) Government has the responsibility to provide a helping 
        hand to assist individuals but individuals have the 
        responsibility to use the assistance to help themselves.
            (5) Between 1970 and 1991, the total number of all out-of-
        wedlock births in the United States has increased from 10 to 30 
        percent and, if that rate of increase continues, by 2015, 50 
        percent of all births in the United States will be out-of-
        wedlock.
            (6) The negative consequences of out-of-wedlock births on 
        the child, mother, and society are well-documented as follows:
                    (A) Children born into families receiving welfare 
                assistance are 3 times more likely to receive welfare 
                assistance when they reach adulthood than children born 
                into families that do not receive welfare.
                    (B) Young women who have children before finishing 
                high school are more likely to receive welfare 
                assistance for a substantial period of time.
                    (C) A single parent family is 6 times more likely 
                to live in poverty than a two-parent family.
            (7) Due to the crisis caused by the growing rate of out-of-
        wedlock births in the United States, the Congress deems the 
        reduction of out-of-wedlock births to be an important 
        governmental interest.

SEC. 3. PURPOSE.

    The purpose of this Act is to create a block grant program to 
replace the aid to families with dependent children program under title 
IV of the Social Security Act and a portion of the food stamp program 
under the Food Stamp Act of 1977 and give the States the flexibility to 
create innovative welfare-to-work programs and programs designed to 
reduce the increasing rate of children born out-of-wedlock.

SEC. 4. DEFINITION OF STATE.

    For purposes of this Act, the term ``State'' means each of the 
several States of the United States, the District of Columbia, the 
Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American 
Samoa.

SEC. 5. APPLICATIONS BY STATES.

    (a) In General.--Each State desiring to receive a grant to operate 
a State welfare-to-work and stronger families program described in 
section 6 shall annually submit an application to the Secretary of 
Health and Human Services (hereafter in this Act referred to as the 
``Secretary'') containing the matter described in subsection (b) in 
such manner as the Secretary may require.
    (b) Contents.--
            (1) Fiscal year 1996.--An application for a grant to 
        operate a State welfare-to-work and stronger families program 
        during fiscal year 1996 shall contain a description of the 
        program in accordance with section 6.
            (2) Subsequent fiscal years.--
                    (A) Contents.--
                            (i) In general.--Except as provided in 
                        clause (ii), an application for a grant to 
                        operate a State welfare-to-work and stronger 
                        families program during fiscal year 1997 and 
                        each subsequent fiscal year shall contain--
                                    (I) a description of the program in 
                                accordance with section 6;
                                    (II) the State work percentage (as 
                                determined under subparagraph (B)) for 
                                each of the 2 preceding fiscal years;
                                    (III) a statement of the number of 
                                participants who became ineligible for 
                                participation in the program due to 
                                increased income for each of the 2 
                                preceding fiscal years;
                                    (IV) the State out-of-wedlock birth 
                                rate percentage (as determined under 
                                subparagraph (D)) for each of the 2 
                                preceding fiscal years; and
                                    (V) a statement of the amount of 
                                non-Federal resources that the State 
                                invested in the program in the 
                                preceding fiscal year.
                            (ii) Special rule for fiscal year 1997.--An 
                        application for fiscal year 1997 need only 
                        contain the information described in subclauses 
                        (II), (III), and (IV) of clause (i) for fiscal 
                        year 1996.
                    (B) State work percentage.--For purposes of 
                subparagraph (A)(i)(II), the State work percentage 
                (prior to any adjustment under subparagraph (C)) for a 
                fiscal year is equal to--
                            (i) the average weekly number of 
                        participants in the State welfare-to-work and 
                        stronger families program who were employed in 
                        private sector or public sector jobs for at 
                        least 20 hours per week, divided by
                            (ii) the average weekly number of 
                        participants in the State welfare-to-work and 
                        stronger families program.
                    (C) Adjustment.--
                            (i) In general.--The State work percentage 
                        determined under subparagraph (B) for a fiscal 
                        year shall be adjusted by subtracting 1 
                        percentage point from such State work 
                        percentage for each 5 percentage points by 
                        which the percentage of individuals described 
                        in subparagraph (B)(i) who are also described 
                        in clause (ii) of this subparagraph 
                        participating in the program in such fiscal 
                        year falls below 75 percent of the number of 
                        individuals described in subparagraph (B)(i) in 
                        such fiscal year.
                            (ii) Individual described.--An individual 
                        described in this clause is a custodial parent 
                        or other individual who is primarily 
                        responsible for the care of a child under the 
                        age of 18.
                    (D) State out-of-wedlock birth rate percentage.--
                For purposes of subparagraph (A)(i)(IV), the State out-
                of-wedlock birth rate percentage for a fiscal year is 
                equal to--
                            (i) the total number of children in the 
                        State who were born out-of-wedlock during the 
                        fiscal year, divided by
                            (ii) the total number of children in the 
                        State who were born during the fiscal year.
                    (E) Monitoring of data.--The Secretary shall ensure 
                the validity of the data provided by a State under this 
                paragraph.
    (c) Approval.--
            (1) Fiscal years 1996 and 1997.--The Secretary shall 
        approve each application for a grant to operate a State 
        welfare-to-work and stronger families program--
                    (A) during fiscal year 1996, if the application 
                contains the information described in subsection 
                (b)(1); and
                    (B) during fiscal year 1997, if the application 
                contains the information described in subsection 
                (b)(2).
            (2) Automatic approval in subsequent fiscal years.--The 
        Secretary shall approve any application for a grant to operate 
        a State welfare-to-work and stronger families program during 
        fiscal year 1998 and each succeeding fiscal year if--
                    (A) the State's application reports that--
                            (i) the State work percentage for the 
                        preceding fiscal year is greater than the State 
                        work percentage for the second preceding fiscal 
                        year; or
                            (ii) more participants became ineligible 
                        for participation in the State welfare-to-work 
                        and stronger families program during the 
                        preceding fiscal year due to increased income 
                        than became ineligible for participation in the 
                        program in the second preceding fiscal year as 
                        a result of increased income;
                    (B) the State's application reports that the State 
                out-of-wedlock birth rate percentage for the preceding 
                fiscal year is less than the State out-of-wedlock birth 
                rate percentage for the second preceding fiscal year; 
                and
                    (C) the State's application reports that the number 
                of participants in the State welfare-to-work and 
                stronger families program for the preceding fiscal year 
                is less than the number of participants in the State 
                welfare-to-work and stronger families program for the 
                second preceding fiscal year.
            (3) Secretarial review.--
                    (A) In general.--If a State application for a grant 
                under this Act is not automatically approved under 
                paragraph (2), the Secretary shall approve the 
                application upon a finding that the application--
                            (i) provides an adequate explanation of why 
                        the application was not automatically approved; 
                        and
                            (ii) provides a plan of remedial action 
                        which is satisfactory to the Secretary.
                    (B) Adequate explanations.--An adequate explanation 
                under subparagraph (A) may include an explanation of 
                economic conditions in the State, failed program 
                innovations, or other relevant circumstances.
            (4) Resubmission.--A State may resubmit an application for 
        a grant under this Act until the Secretary finds that the 
        application meets the requirements of paragraph (3)(A).

SEC. 6. STATE WELFARE-TO-WORK AND STRONGER FAMILIES PROGRAM DESCRIBED.

    (a) In General.--A State welfare-to-work and stronger families 
program described in this section shall--
            (1) provide that during fiscal year 1996, the State shall 
        designate individuals who are eligible for participation in the 
        program and such individuals may include those individuals who 
        received benefits under the State plan approved under part A of 
        title IV of the Social Security Act during fiscal year 1995;
            (2) provide that during fiscal year 1997 and each 
        subsequent fiscal year, the State shall designate individuals 
        who are eligible for participation in the program (as 
        determined by the State), with priority given to those 
        individuals most in need of such services;
            (3) with respect to increasing the State work percentage, 
        be designed to move individuals from welfare to self-
        sufficiency and may include--
                    (A) job placement and training;
                    (B) supplementation of earned income;
                    (C) nutrition assistance and education;
                    (D) education;
                    (E) vouchers to be used for rental of privately 
                owned housing;
                    (F) child care;
                    (G) State tax credits;
                    (H) health care;
                    (I) supportive services;
                    (J) community service employment;
                    (K) asset building programs; or
                    (L) any other assistance designed to move such 
                individuals from welfare to self-sufficiency; and
            (4) with respect to reducing the State out-of-wedlock birth 
        rate percentage, be designed to strengthen two-parent families 
        and may include--
                    (A) education;
                    (B) family planning services (except abortion-
                related services);
                    (C) a cap of benefits under the program with 
                respect to additional children conceived out-of-wedlock 
                after a participant has entered the program;
                    (D) the denial of benefits under the program to a 
                potential participant in the program if that potential 
                participant has a child born out-of-wedlock after a 
                date established by the State;
                    (E) State tax credits for marriage; or
                    (F) any other assistance designed to reduce out-of-
                wedlock births and encourage marriage.
    (b) No Entitlement.--Notwithstanding any criteria a State may 
establish for participation in a State welfare-to-work and stronger 
families program created in accordance with this Act, no individual 
shall be considered to be entitled to participate in that program.

SEC. 7. STATE GRANTS.

    (a) In General.--The Secretary shall annually award to each State 
with an application approved under section 5(c) an amount equal to--
            (1) in fiscal year 1996, 100 percent of the State's base 
        amount;
            (2) in fiscal year 1997, the sum of 80 percent of the 
        State's base amount, 20 percent of the State's share of the 
        national grant amount, and any applicable bonus payment;
            (3) in fiscal year 1998, the sum of 60 percent of the 
        State's base amount, 40 percent of the State's share of the 
        national grant amount, and any applicable bonus payment;
            (4) in fiscal year 1999, the sum of 40 percent of the 
        State's base amount, 60 percent of the State's share of the 
        national grant amount, and any applicable bonus payment;
            (5) in fiscal year 2000, the sum of 20 percent of the 
        State's base amount, 80 percent of the State's share of the 
        national grant amount, and any applicable bonus payment; and
            (6) in fiscal year 2001 and each subsequent fiscal year, 
        the sum of 100 percent of the State's share of the national 
        grant amount and any applicable bonus payment.
    (b) State Base Amount.--
            (1) In general.--For purposes of subsection (a), a State's 
        base amount is equal to--
                    (A) for fiscal year 1996, 100 percent of the amount 
                determined under paragraph (2); and
                    (B) for fiscal year 1997 and succeeding fiscal 
                years, 96 percent of the amount determined under 
                paragraph (2).
            (2) Amount determined.--The amount determined under this 
        paragraph for a State is an amount equal to the sum of--
                    (A) the amount of Federal financial participation 
                received by the State under section 403 of the Social 
                Security Act (42 U.S.C. 603) during fiscal year 1995; 
                and
                    (B) an amount equal to the sum of--
                            (i) the benefits under the food stamp 
                        program under the Food Stamp Act of 1977 (7 
                        U.S.C. 2011 et seq.), including benefits 
                        provided under section 19 of such Act (7 U.S.C. 
                        2028), during fiscal year 1995 other than 
                        benefits provided to elderly or disabled 
                        individuals in the State (as determined under 
                        section 3(r)) of such Act (7 U.S.C. 2012); and
                            (ii) the amount paid to the State under 
                        section 16 of the Food Stamp Act of 1977 (7 
                        U.S.C. 2025) during fiscal year 1995 for 
                        administrative expenses for providing benefits 
                        to nonelderly and nondisabled individuals.
    (c) State Share of the National Grant Amount.--
            (1) In general.--For purposes of subsection (a), the 
        State's share of the national grant amount for a fiscal year is 
        equal to the sum of the amounts determined under paragraph (2) 
        (relating to economic need) and paragraph (3) (relating to 
        State effort) for the State.
            (2) Economic need.--The amount determined under this 
        paragraph is equal to the sum of the following amounts:
                    (A) State per capita income measure.--The amount 
                which bears the same ratio to one-quarter of the 
                national grant amount as the product of--
                            (i) the population of the State; and
                            (ii) the allotment percentage of the State 
                        (as determined under paragraph (4)),
                bears to the sum of the corresponding products for all 
                States.
                    (B) State unemployment measure.--The amount which 
                bears the same ratio to one-quarter of the national 
                grant amount as the number of individuals in the State 
                who are estimated as being unemployed (determined in 
                accordance with the Department of Labor's annual 
                estimates) bears to the number of individuals in all 
                States who are estimated as being unemployed (as so 
                determined).
            (3) State effort.--The amount determined under this 
        paragraph is the amount which bears the same ratio to one-half 
        of the national grant amount as the product of--
                    (A) the dollar amount the State invested in the 
                State welfare-to-work and stronger families program in 
                the previous fiscal year, as reported in section 
                5(b)(2)(A)(i)(V); and
                    (B) the allotment percentage of the State (as 
                determined under paragraph (4)),
        bears to the sum of the corresponding products for all States.
            (4) Allotment percentage.--
                    (A) In general.--Except as provided in subparagraph 
                (C), the allotment percentage for any State shall be 
                100 percent, less the State percentage.
                    (B) State percentage.--The State percentage shall 
                be the percentage which bears the same ratio to 50 
                percent as the per capita income of such State bears to 
                the per capita income of all States.
                    (C) Exception.--The allotment percentage shall be 
                70 percent in the case of Puerto Rico, the Virgin 
                Islands, Guam, and American Samoa.
            (5) Determination of grant amounts.--Each State's share of 
        the national grant amount shall be determined under this 
        subsection on the basis of the average per capita income of 
        each State and all States for the most recent fiscal year for 
        which satisfactory data are available from the Department of 
        Commerce and the Department of Labor.
            (6) National grant amount.--The term ``national grant 
        amount'' means an amount equal to 96 percent of the sum of the 
        amounts determined under subsection (b)(2) for all States.
    (d) Bonus Payments.--
            (1) Criteria.--Beginning with fiscal year 1997, the 
        Secretary may use 4 percent of the sum of the amounts 
        determined under subsection (b)(2) for all States to award 
        additional bonus payments under this section to those States 
        which have the highest or most improved State work percentages 
        as determined under section 5(b)(2)(B) and the lowest or most 
        improved State out-of-wedlock birth rate percentages as 
        determined under section 5(b)(2)(D).
            (2) Leading job placement and leading out-of-wedlock birth 
        rate reduction states.--The Secretary shall designate one State 
        as the leading job placement State and one State (which may be 
        the same State as the designated leading job placement State) 
        as the leading out-of-wedlock birth rate reduction State and 
        such State or States shall receive the highest bonus payments 
        under paragraph (1).
            (3) Presidential award.--The President is authorized and 
        requested to acknowledge a State designated under paragraph (2) 
        with a special Presidential award.
    (e) Use of Funds for Administrative Purposes.--A State shall not 
use more than 10 percent of the amount it receives under this section 
for the administration of the State welfare-to-work and stronger 
families program.
    (f) Capped Entitlement.--This section constitutes budget authority 
in advance of appropriations Acts, and represents the obligation of the 
Federal Government to provide the payments described in subsection (a) 
(in an amount not to exceed the sum of the amounts determined under 
subsection (b)(2) for all States).

SEC. 8. TERMINATION OF CERTAIN FEDERAL WELFARE PROGRAMS.

    (a) Termination of AFDC and JOBS Programs.--
            (1) AFDC.--Part A of title IV of the Social Security Act 
        (42 U.S.C. 601 et seq.) is amended by adding at the end the 
        following new section:

                       ``termination of authority

    ``Sec. 418. The authority provided by this part shall terminate on 
October 1, 1995.''.
            (2) JOBS.--Part F of title IV of the Social Security Act 
        (42 U.S.C. 681 et seq.) is amended by adding at the end the 
        following new section:

                       ``termination of authority

    ``Sec. 488. The authority provided by this part shall terminate on 
October 1, 1995.''.
    (b) Food Stamp Program To Serve Only Elderly and Disabled 
Individuals.--
            (1) Definitions.--Section 3 of the Food Stamp Act of 1977 
        (7 U.S.C. 2012) is amended--
                    (A) in subsection (g)--
                            (i) in paragraph (4), by striking ``(and 
                        their spouses)'';
                            (ii) in paragraph (5)--
                                    (I) by striking ``in the case of'' 
                                and inserting ``in the case of elderly 
                                or disabled''; and
                                    (II) by inserting ``disabled'' 
                                before ``children''; and
                            (iii) in paragraph (8), by inserting 
                        ``elderly or disabled'' before ``women and 
                        children temporarily'';
                    (B) in subsection (i)--
                            (i) in the first sentence--
                                    (I) in paragraph (1), by inserting 
                                ``elderly or disabled'' before 
                                ``individual''; and
                                    (II) in paragraph (2), by inserting 
                                ``, each of whom is elderly or 
                                disabled,'' after ``individuals'';
                            (ii) in the second sentence, by inserting 
                        before the period at the end the following: ``, 
                        if each of the individuals is elderly or 
                        disabled'';
                            (iii) in the third sentence--
                                    (I) by striking ``, together'' and 
                                all that follows through ``of such 
                                individual,''; and
                                    (II) by striking ``, excluding the 
                                spouse,''; and
                            (iv) in the fifth sentence--
                                    (I) by striking ``coupons, and'' 
                                and inserting ``coupons, and elderly or 
                                disabled''; and
                                    (II) by inserting ``disabled'' 
                                after ``together with their''; and
                    (C) in subsection (r), by striking ```Elderly'' and 
                all that follows through ``who'' and inserting the 
                following: ```Elderly or disabled', with respect to a 
                member of a household or other individual, means a 
                member or other individual who''.
            (2) Conforming amendments.--
                    (A) Eligibility.--Section 5 of the Food Stamp Act 
                of 1977 (7 U.S.C. 2014) is amended--
                            (i) in the first sentence of subsection 
                        (c)--
                                    (I) by striking ``program if--'' 
                                and all that follows through 
                                ``household's income'' and inserting 
                                ``program if the income of the 
                                household'';
                                    (II) by striking ``respectively; 
                                and'' and inserting ``respectively.''; 
                                and
                                    (III) by striking paragraph (2); 
                                and
                            (ii) in subsection (e)--
                                    (I) in the first sentence, by 
                                striking ``containing an elderly or 
                                disabled member and determining benefit 
                                levels only for all other households'';
                                    (II) in the fifteenth sentence--
                                            (aa) by striking 
                                        ``containing an elderly or 
                                        disabled member''; and
                                            (bb) in subparagraph (A), 
                                        by striking ``elderly or 
                                        disabled members'' and 
                                        inserting ``the members'';
                                    (III) in the seventeenth sentence, 
                                by striking ``elderly and disabled''; 
                                and
                                    (IV) by striking the fourth through 
                                fourteenth sentences.
                    (B) Periodic reporting.--Section 6(c)(1)(A)(iii) of 
                the Food Stamp Act of 1977 (7 U.S.C. 
                2015(c)(1)(A)(iii)) is amended by striking ``and in 
                which all adult members are elderly or disabled''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply on and after October 1, 1995.
    (c) References in Other Laws.--
            (1) In general.--Any reference in any law, regulation, 
        document, paper, or other record of the United States to any 
        provision that has been terminated by reason of the amendments 
        made in subsection (a) shall, unless the context otherwise 
        requires, be considered to be a reference to such provision, as 
        in effect immediately before the date of the enactment of this 
        Act.
            (2) State plans.--Any reference in any law, regulation, 
        document, paper, or other record of the United States to a 
        State plan that has been terminated by reason of the amendments 
        made in subsection (a), shall, unless the context otherwise 
        requires, be considered to be a reference to such plan as in 
        effect immediately before the date of the enactment of this 
        Act.

SEC. 9. SECRETARIAL SUBMISSION OF LEGISLATIVE PROPOSAL FOR AMENDMENTS 
              TO MEDICAID ELIGIBILITY CRITERIA AND TECHNICAL AND 
              CONFORMING AMENDMENTS.

    The Secretary shall, within 90 days after the date of enactment of 
this Act, submit to the appropriate committees of the Congress, a 
legislative proposal providing eligibility criteria for medical 
assistance under a State plan under title XIX of the Social Security 
Act (42 U.S.C. 1396 et seq.) in lieu of the eligibility criteria under 
section 1902(a)(10)(A)(i) of such Act (42 U.S.C. 1396a(a)(10)(A)(i)) 
relating to the receipt of aid to families with dependent children 
under a State plan under part A of title IV of the Social Security Act 
(42 U.S.C. 601 et seq.) and such technical and conforming amendments in 
the law as are required by the provisions of this Act.

SEC. 10. SAVINGS.

    Any savings resulting from the provisions of this Act shall be 
dedicated to reduction of the Federal budget deficit.
                                 <all>
S 209 IS----2