[Congressional Record Volume 140, Number 28 (Tuesday, March 15, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]
[Congressional Record: March 15, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTION
By Mr. WELLSTONE (for himself, Mr. Hatfield, Mr. Jeffords, and
Mr. Metzenbaum):
S. 1928. A bill to require the availability of adequate waste
emplacement capacity for the future licensing of construction and
operations of nuclear utilization facilities, and for other purposes;
to the Committee on Environment and Public Works.
second generation nuclear waste act
Mr. WELLSTONE. Mr. President, today I rise to address a subject that
has received too little attention here. I am talking about nuclear
waste. Since the Senate's last major action on this issue, 7 years have
passed, extremely little progress has been made, and more questions
have been raised than resolved.
Today, I propose a two-pronged approach to dealing with this problem.
The first part deals with our current nuclear waste crisis, and to help
resolve that issue I am sending a letter to the President with 12
Senators signatures asking him to convene an independent review
commission on nuclear waste programs and policies. The second part
tries to keep us from ending up embroiled in another nuclear waste
crisis, and to that end I will introduce and send to the desk in a few
minutes, with three other cosponsors, the ``Second Generation Nuclear
Waste Act.''
The nuclear waste issue is coming to a boil throughout our country.
We all know about--and hear every day about--the Department of Energy's
difficulties in figuring out what to do with our high-level nuclear
wastes. The New York Times Magazine of two Sundays ago, which I have
right here, is telling it like it is. This problem will not go away,
and burying it beneath a mountain in Nevada will not make it go away.
This is a fine piece written by Kai Erikson. ``Nuclear waste buried
now in haste will still be deadly in 12001 A.D.'' I recommend this
article to my colleagues.
Another high-level nuclear waste issue is the question of an interim
storage facility--a monitored retrievable storage facility MRS. The
congressional view of that program was made all too clear when we
essentially killed Federal funding for it last year.
But there are many, many other facets to the nuclear waste crisis
besides high-level waste. There is also so-called low-level waste,
which was addressed in legislation in 1982, but States have failed to
open any new low-level dump sites. Part of the problem there is that
what we are calling low-level often is about as dangerous as the high-
level.
We also have military facilities run by the Department of Energy that
have been making headlines for years for their high contamination
levels. To clean up these sites, DOE has just come to Congress to ask
for $6.3 billion--one-third of DOE's budget request for fiscal year
1995. The variety of nuclear waste problems at military facilities is
mind-boggling, including transuranic waste, both high- and low-level
waste, and liquid wastes.
And that is just the problems that we have here now. How about the
nuclear wastes that we import rather than allow them to be reprocessed
abroad? Right now they seem to be ending up, at least temporarily, at
the Savannah River site in South Carolina. Where will future imported
wastes go? And how about wastes from future nuclear powerplants here in
the United States? Do we even have a plan about how we are going to
deal with these problems? How about a fallback plan in case Yucca
Mountain proves to be an unacceptable site for deep geologic disposal?
Congress often does not act unless it absolutely has to. A crisis is
sometimes necessary to move us into action. Well, that crisis--a
national crisis--has arrived. Pieces of the crisis are manifesting
themselves around the country--in Ward Valley, CA, Hanford, WA, and
both the waste isolation pilot plant and the Mescalero Apache
Reservation in New Mexico.
My own State of Minnesota now finds itself at the forefront of this
complex issue. The legislature is currently trying to make a critical
and difficult decision, whether to allow dry-cask storage of high-level
nuclear waste on the site of the Prairie Island nuclear plant. People
are confused by the advertisements and varying claims the different
sides make about the permanency and safety of such a waste dump, and
about alternatives to nuclear power electricity generation. And the
Federal Government is not helping the State of Minnesota, or any of our
States, make a decision. Just 2 weeks ago today, the director of DOE's
Office of Civilian Radioactive Waste Management told the Senate Energy
and Natural Resources Committee that if Minnesota allows dry-casks at
Prairie Island, he cannot guarantee that the waste will ever leave. I
asked him: 20 years, 60 years, 80 years--how long will it be there? And
Minnesotans are all too aware that if Yucca Mountain fails to meet the
need as a permanent repository, there is no Federal policy for what to
do then.
Today I want to take a step toward breaking the current gridlock.
There have been many calls for independent reviews of DOE's Nuclear
Waste Program in the past, but today, along with 11 other Senators, I
want to go much further. It is obvious from the litany of nuclear waste
problems I have mentioned that this issue is significantly bigger than
the finances and management of the Yucca Mountain project. We need to
step back and see where we are and to decide whether, given our
investment in our current course, we ought to do anything differently.
We need an independent, comprehensive review of our nuclear waste
policies and programs. We need a credible, public commission to take
stock of where we are and to make recommendations about where we ought
to be headed. If such a commission finds that we are doing everything
right, then the program is served by giving it that seal of public
approval that it so desperately needs. If the commission finds problems
and makes recommendations for change, then those recommendations and
findings will help inform the public as it takes part in this debate.
In this letter, which I am sending to the President today, Senators
Jeffords, Boxer, Leahy, Metzenbaum, Feinstein, Reid, Kennedy, Kohl,
Bryan, Feingold, and John Kerry join me in asking the administration to
set up such a commission. There has never been such a comprehensive,
public review of our nuclear waste policies and programs, and at least
this one dozen Senators think that such a review is long overdue.
Representative Wyden and many of our House colleagues have also sent a
similar letter.
I ask unanimous consent that our letter to the President be printed
in the Record at this point.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
U.S. Senate,
Washington, DC, March 15, 1994.
The President,
The White House,
Washington, DC.
Dear President Clinton: The problem of nuclear waste
management has been a burden on our national energy and
environmental policies for decades. We urge you to appoint a
Presidential Commission to perform an independent review of
our nation's needs, policies, and programs with respect to
this persistent and troubling subject.
The nuclear waste issue is coming to a boil throughout our
country. Nuclear power plants are running out of existing
storage capacity for spent fuel rods, states are repeatedly
failing in their efforts to site ``low-level'' waste dumps,
public opposition grows against the siting of a Monitored
Retrievable Storage (MRS) facility for spent nuclear fuel,
and the clean-up of the Department of Energy's (DOE)
facilities is posing a monumental task in dealing with a wide
range of nuclear wastes, including transuranic, spent fuel,
``high-level'' and liquid wastes. In addition, nuclear
utilities around the country believe that in 1998, DOE will
be obligated to take title to the spent nuclear fuel
currently stored at nuclear power plants around the nation.
Each of these aspects of the nuclear waste problem brings
additional costs to ratepayers and taxpayers.
Meanwhile, the only site being considered as a possible
location for a permanent spent fuel repository is Yucca
Mountain, Nevada. As the nuclear waste problem grows, the
pressure will continue to build to elevate Yucca Mountain
from potential site to construction site. Nevertheless, the
project is currently behind schedule and fraught with
technical and political uncertainties.
Nuclear waste in this country has historically been
addressed not based on its hazardous nature or length of
life, but by other, non-scientific delineations, such as the
source of waste. Thus, our nuclear waste programs deal with
waste issues in a piecemeal fashion, not in the integrated
and presumably safer and more cost-effective manner that
would be preferable.
This difficulty in addressing our nuclear waste dilemma is
cast against a background of continued waste generation. In
fact, Congress regularly appropriates money to fund research
and development for a second generation of commercial
reactors. Somehow, there is a disconnect in our policies
regarding the generation and disposal of nuclear waste.
An independent review by a Presidential Commission would
clearly be appropriate and useful in discovering and
rectifying that disconnect. There has never been a
comprehensive, public review of our nuclear waste programs
across the wide range of technical, managerial, and policy
issues that make this problem so complex. The review we
envision would consider all nuclear wastes, including ``high-
level'' wastes, transuranic wastes, and ``low-level'' wastes.
We feel that such a review would enjoy greater credibility
if it were conducted by a truly independent body operating in
full public view. Accordingly, we urge the creation of a
Presidential Commission that would:
1. Be independent from DOE;
2. Include members of communities affected by nuclear
waste, representatives of tribal and state governments,
facility workers, and representatives from concerned
environmental, consumer, and taxpayer organizations;
3. Make information readily available to the public;
4. Engage in an extensive public hearing process including
consideration of and response to all public comments;
5. Open all meetings to the public; and
6. Issue a comprehensive report including evaluations of
current programs and recommendations for change.
Your decision to step back and take a broad, comprehensive
look at our nation's health care system speaks volumes about
your willingness and ability to address very complex and
important problems created during previous administrations.
We look forward to hearing from you with respect to our
recommendations and appreciate your consideration of this
issue of national concern.
Sincerely,
Paul Wellstone, Barbara Boxer, James M. Jeffords, Patrick
J. Leahy, Howard M. Metzenbaum, John F. Kerry, Edward
Kennedy, Richard Bryan, Dianne Feinstein, Harry Reid,
Herb Kohl, Russell D. Feingold.
Mr. WELLSTONE. Now let us look to the future. If this Commission
comes back with recommendations that lead to the resolution of the
current waste crisis, how do we avoid falling into another one?
Today on behalf of Senators Hatfield, Jeffords, Metzenbaum, and
myself, I introduce a bill that should have been the first law Congress
passed upon entering the atomic age. It is nothing short of common
sense.
The bill I introduce today simply requires that we build no more
nuclear powerplants until we have someplace to permanently store the
waste they will generate. That's all there is to this piece of
legislation.
There is nothing radical about this idea. It is not a partisan idea--
just look at the list of cosponsors: Two Democrats and two Republicans.
All this bill does is put the nuclear cart back behind the horse, where
it belongs.
It is true that no utility has yet stepped forward to site a new
nuclear powerplant, and that is exactly why now is the time to pass
this law. Once utilities make a huge investment in siting, licensing,
and building new plants, the pressure upon Congress to provide a waste-
disposal option for them becomes immense. Unfortunately, if Congress
acts under such pressure, it might not come up with the best
resolution. Let's ensure that for future plants, we deal with the waste
issue in a deliberate way, free from pressure applied by utilities with
vested interests.
I want to make this point crystal clear: This bill would not impact
any existing plants. It would apply only to plants that would be
licensed after the date of enactment. It would, therefore, not apply to
renewal of existing licenses.
Here is the current commercial high-level nuclear waste situation in
a nutshell: We have DOE, by congressional mandate, putting all of its
eggs in the Yucca Mountain basket. Even when Yucca Mountain in on-
line--if ever--it will be able to hold only the waste that has been and
will be generated by our current generation of reactors.
Where will the waste from a new generation of reactors be disposed
of? This bill requires that we answer this question before that second
generation is born.
There is a common belief that no utility is likely to step forward
with plans to build another nuclear powerplant anytime soon.
While there may be some truth in this, do my colleagues know that two
standardized advanced reactor designs will finish Nuclear Regulation
Commission staff review within only a few months?
Do my colleagues know that after that there is only a 1\1/2\-year
period before the designs are certified and ready to be built?
Do my colleagues know that DOE is offering to pay up to $58 million
toward siting and licensing expenses and up to $100 million toward
design work for second-generation reactors?
This bill does not judge the ``deep geologic repository'' approach
that the DOE is currently pursuing. Nor does it make any mention of the
monitored retrievable storage facility that the nuclear waste
negotiator is working to site.
It only says that we ought to always have enough permanent storage
capacity to take care of the waste that will be generated by any new
nuclear power plant. It is not enough to have a plan for adequate
storage. It is not enough to have begun construction on a storage
facility. It is not enough to have finished building but not yet
licensed a storage facility. The permanent storage facility must be
sited, built, and licensed for operation before any new plant can be
licensed under this piece of legislation.
Mr. President, it is written that way because of the huge difference
between the planning and building of a nuclear waste facility, on the
one hand, and its actually accepting waste on the other. With a
politically charged issue like nuclear waste, it is wise to make
absolutely certain that there is water in the pool before jumping in,
rather than just turning on the spigot, taking a deep breath, and
diving.
I will circulate a ``Dear Colleague'' letter with this bill attached
asking for other Senators to become cosponsors. I urge Senators to do
so. I think this piece of legislation, which I will send to the desk,
is long overdue and I believe it represents just plain, good common
sense.
Mr. President, let me just conclude by saying that I really do
believe that Kai Erikson did a real service for the country in the
piece he wrote Sunday 2 weeks ago.
For all too long, the nuclear waste problem has been sort of put in
parentheses or put into brackets or swept under the rug. I commend
Secretary O'Leary and the Department of Energy for trying to deal with
this very difficult issue. But I have to say, Mr. President, one more
time, that Yucca Mountain is not a certainty. There have been years of
delay. The people in Nevada have raised important questions, and my
State of Minnesota and many other States are going to be faced with an
absolutely impossible position unless we have some kind of independent
public commission that studies this issue, that has credibility and can
build the political and public support in this country for the kind of
decisions we have to make. I sent the bill to the desk on second-
generation nuclear waste because I believe that it is absolutely
unconscionable for us to even think about building any more nuclear
power plants until we know for certain what we are going to do with the
waste.
That is the two-pronged approach I take today on the floor of the
Senate. I hope we will get a positive response from the letter I and 11
Senate colleagues have sent to the President. I will ask other Senators
to cosponsor the bill I introduced on second-generation nuclear
facilities, and I hope that we will begin to address this question
because I think it has the potential to be an absolutely huge disaster
for this Nation. We just cannot hide from it any longer. We have to get
serious about what we are going to do with this nuclear waste. I
believe that now is the time.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1928
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Second Generation Nuclear
Waste Act''.
SEC. 2. PERMIT AND LICENSING REQUIREMENTS.
Section 185 of the Atomic Energy Act of 1954 (42 U.S.C.
2235) is amended by adding at the end the following new
subsection:
``(c)(1) Notwithstanding any other law, no construction
permit or combined construction and operating license shall
be issued for a utilization facility used for the generation
of electricity for commercial sale until such time as--
``(A) there is a facility licensed by the Federal
Government for the permanent emplacement of spent nuclear
fuel and high-level radioactive waste from the utilization
facility; and
``(B) there is an adequate volume of capacity within the
emplacement facility to accept all of the spent nuclear fuel
and high-level radioactive waste that will be generated by
the utilization facility during the reasonably foreseeable
operational lifetime of the utilization facility.
``(2) At not time shall the total volume of spent fuel and
high-level radioactive waste generated, or reasonably
expected to be generated, by all utilization facilities used
for the generation of electricity for commercial sale
receiving construction permits or combined licenses after the
date of enactment of this subsection, exceed the total volume
of capacity available in facilities licensed by the Federal
Government for the permanent emplacement of spent nuclear
fuel and high-level radioactive waste.''.
______
By Mr. KERRY (for himself and Mr. Kennedy):
S. 1929. A bill to authorize the Secretary of Transportation to issue
a certificate of documentation with appropriate endorsement for
employment in the coastwise trade for each of the vessels Shamrock V
and Endeavor; to the Committee on Commerce, Science, and
Transportation.
jones act waiver
Mr. KERRY. Mr. President, I am pleased to join my colleague, the
distinguished senior Senator from Massachusetts, in introducing a bill
to allow the vessels Shamrock V and Endeavor to be employed in
coastwise trade of the United States. These boats have a small
passenger capacity, normally 8 to 12 passengers on overnight trips and
up to 30 passengers on day trips, and their owners intend to operate a
charter business based out of Boston Harbor. The purpose of this bill
is to waive those sections of the Jones Act which prohibit foreign-made
vessels from operating in coastwise trade. The waiver is necessary
because, under the law, a vessel is considered built in the United
States if all major components of its hull and superstructure are
fabricated in the United States, and the vessel is assembled entirely
in the United States. Both of these boats were originally foreign built
in the 1930's, but since the mid-1980's they have been owned and
operated by American citizens, repaired in American shipyards, and
maintained with American products. The owners bought the boats due to
their historical significance. These vessels are the only two remaining
boats of a class of enormous sailing yachts built in the 1930's to
compete for the America's Cup and, as such, are a very significant part
of American maritime and yachting history. To better showcase these
historic vessels the owners now want to start a charter boat operation
based out of Boston offering voyages of various durations to various
destinations.
After reviewing the facts in the cases of both the Shamrock V and the
Endeavor, I find that these waivers do not compromise our national
readiness in times of national emergency, which is the fundamental
purpose of the Jones Act requirement. While I generally support the
provisions of the Jones Act, I believe the specific facts of this case
warrant a waiver to permit both the Shamrock V and the Endeavor to
engage in coastwise trade. I hope and trust the Senate will agree and
will speedily approve the bill being introduced today. Mr. President, I
ask unanimous consent that the full text of my bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1929
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, That
notwithstanding section 27 of the Merchant Marine Act, 1920
(46 U.S.C. App. 883), the Act of June 19, 1886 (46 U.S.C.
App. 289), and section 12106 of title 46, United States Code,
the Secretary of Transportation may issue a certificate of
documentation with appropriate endorsement for employment in
the coastwise trade for each of--
(1) the vessel Shamrock V (United States official number
900936); and
(2) the vessel Endeavor (United States official number
947869).
______
By Mr. LEAHY (for himself and Mr. Conrad):
S. 1930. A bill to amend the Consolidated Farm and Rural Development
Act to improve the administration of claims and obligations of the
Farmers Home Administration, and for other purposes; to the Committee
on Agriculture, Nutrition, and Forestry.
Farmers Home Administration Improvement Act of 1994
Mr. LEAHY. Mr. President, the Washington Post ran a front page story
recently about millions of dollars in delinquent debts owed by several
wealthy farm loan borrowers to the Department of Agriculture's Farmers
Home Administration.
Delinquencies on large loans made by Farmers Home more than a decade
ago are unpaid not because of the debtors' inability to pay--many of
them are millionaires--but because they apparently feel no obligation
to repay the loans made to them in good faith by the taxpayers.
It is time to clean up the mess.
The farmers who milked FmHA instead of cows will be forced to part
with their profits and pay back the American taxpayers.
Payback time has come.
These poorly underwritten loans should not have been made in the
first place. The problem at hand now is doing everything that is
possible and lawful to collect from the well-heeled deadbeats who
unjustly give real farmers a bad name, and who by avoiding their
legitimate debts insult the thousands of small, limited resource
farmers who play fair and pay regularly.
It is time to stop communicating, negotiating, threatening,
deliberating--it is time to send the private bar after the public
scofflaws.
It can be done. A threat will not do it. A real good lawsuit will.
I cannot explain why somebody who has the means to repay a loan does
not. It is unconscionable. I do not know how the people identified in
the Washington Post story can live with themselves. This is an insult
to the thousands of farmers who wait for years for modest FmHA loans.
American taxpayers should not have to live with the delinquent debts
of millionaires who thought they took our loans for a song--the time
has come to pay the piper.
I do not cast blame on Justice Department attorneys for not fully
prosecuting these cases. They are excellent attorneys who have many
demands placed on them and simply do not have time nor resources. They
are up against some high-powered legal gunslingers, paid for by the
same sophisticated scofflaws who claim they cannot afford to pay back
the Federal farm loans.
In addition to the horror stories we read about in the Post, there
are currently pending over 4,000 foreclosures on bad debts from loans
made by Farmers Home.
Over $4.2 billion is involved in these delinquent debts. We need to
act vigorously to recoup as much of the taxpayers' money as possible.
The Farmers Home Administration is often the only credit source
available to beginning or limited resource farmers to obtain operating
loans for their farms.
In times of disaster Farmers Home provides essential financial
assistance to farmers, the majority of whom have small, modest
operations.
The millionaires in the Post story are exceptions to the typical
borrower who is a bona fide farmer. Unlike bona fide farmers, these
wealthy deadbeats are abusing the corrective legislation to ensure that
such abuses do not occur again.
It is clearly time to toughen the law and accelerate efforts to clear
up this huge backload of delinquent debt.
The bill I am introducing today would allow Agriculture Secretary
Espy, who has requested this legislation, to hire private attorneys to
work at collecting on this debt.
This would result in recouping up to one third of the $4.2 billion
the taxpayers loaned out. Using private attorneys would not cost any
additional public money; part of the debt collected could be used to
reimburse the private attorneys.
I am sick and tired of reading about part-time farmers living in
$800,000 houses, developing golf courses, and running big nonfarm
businesses when they owe Farmers Home millions of dollars. I am sick
and tired of frivolous, time consuming legal defenses that have no
merit.
The FmHA was created to assist farmers who are nothing like the
``farmers'' in the Post story. They live along rocky hillsides, not
oceanside vistas. They drive tractors--often very old ones--and do not
collect vintage airplanes. They do not have expensive lawyers on
retainer, but hire them only when absolutely necessary. And they milk
Holstein and Jersey cows--not Federal farm credit programs.
In the interest of these real farmers and all American taxpayers, we
need to act decisively now to serve and protect the taxpayer by
protecting the integrity of the Farmers Home Administration.
______
By Mr. LUGAR (for himself and Mr. Coats):
S. 1931. A bill to provide duty-free privileges to participants in,
and other individuals associated with, the 1994 World Rowing
Championships; to the Committee on Finance.
world rowing championships
Mr. LUGAR. Mr. President, this September over 1,000 athletes from
more than 40 countries will travel to Indianapolis to compete in the
World Rowing Championships. This year marks the first time that this
championship has been held in the United States, and I am naturally
quite pleased that the men and women who compete in the championships'
23 events will honor my State's capital with their presence.
Indianapolis is the home of USRowing, the national governing body for
this sport. The Eagle Creek Reservoir in Indianapolis is the only
internationally sanctioned rowing course in the United States. Hoosiers
are looking forward to hosting this premier sporting event, which will
take place September 11-18.
Equipment for the championship events ranges from 10-inch-wide, 30-
foot, single-person sculls to eight-person shells as long as 62 feet.
Because of the equipment's length and delicacy, it poses shipping
challenges and will enter the United States separately from the
competing athletes.
Partly for this reason, in order to ease the Customs clearance
process for the athletes, the World Rowing Championships has requested
a Customs waiver, providing duty-free entry privileges for participants
and other individuals associated with the 1994 championships. Such a
waiver will greatly simplify athletes' entry and streamline the
transportation process for their equipment. Such waivers have often
been granted for sporting events such as this, where sporting equipment
is in the United States only on a temporary basis. I rise today to
introduce legislation granting the waiver for participants in the 1994
World Rowing Championships.
Congressman Jacobs has introduced a similar measure in the House of
Representatives, and I am honored to introduce this legislation in
support of a prestigious championship event which is, for the first
time, coming to America. I hope my colleagues will support this bill.
______
By Mr. LIEBERMAN:
S. 1932. A bill to establish demonstration projects to expand
innovations in State administration of the Aid to Families With
Dependent Children Program under title IV of the Social Security Act,
and for other purposes; to the Committee on Finance.
welfare reform through state innovation act
Mr. LIEBERMAN. Mr. President, today I am introducing the Welfare
Reform Through State Innovation Act of 1994. The welfare system is in
crisis. The United States has one of the most expensive welfare systems
in the world. But last year 20 percent of America's children were
poor--a higher percentage than any other industrialized country.
There is a consensus that we need to do something different from what
we have done for the past 25 years to move poor children out of poverty
and despair. The primary welfare program--aid to families with
dependent children [AFDC]--is viewed by those participating in it and
those paying for it as a failure. And there is some consensus about the
objectives of reform--Americans agree that welfare should strengthen,
not weaken, the benefits of work and family. But little consensus
exists on how best to achieve our goals, and the welfare reform debate
is increasingly polarized.
As a legislator and law enforcer, I have worked on welfare issues for
nearly 25 years. Over the past year, I have tried to pull together the
best welfare reform idea. In the process, I have talked to those
studying the system, those working in the system, and those dependent
on the system. I am particularly appreciative of the counsel of Audrey
Rowe, Connecticut's commissioner of social services. Most of all, I
have benefited from my discussions with people who have been on
welfare, and who have been willing to talk candidly with me about their
experiences and their ideas.
The bill I am introducing today is designed to move the debate
forward and respond to the concerns of all who are justifiably
disappointed with welfare as we know it. It is designed to supplement
the administration's pending legislation that will make wholesale
national changes in the welfare system. My bill embraces certain
national reforms about which there is broad agreement, and gives States
the responsibility and the opportunity to test innovative solutions to
this complicated crisis. Making the States central players in our
reform strategy is good policy and enlisting their involvement will
help us pass a welfare reform bill this year.
The focus of a reformed welfare system must be to move people back
into the work force. The administration is preparing welfare reform
legislation that will, among other things, impose a national 2-year
limit on welfare benefits, followed by a requirement to work in private
sector, or if necessary, public service jobs. I commend and support
this effort.
My bill will work in concert with the President's proposal to ensure
we achieve meaningful reform. It provides the flexibility, resources,
and guidance States need to implement innovative solutions not ready
for application at the national level. It makes States full partners in
our efforts to put people back to work, strengthen families, reduce
teenage pregnancies, and reinvent the welfare bureaucracy.
I believe States must take center stage in order for us to fully meet
the objectives of reform. Let me review those objectives.
First, we need to change the many perverse incentives in the current
system that discourage work and weaken families. Today's welfare system
demands little of people on welfare. It impedes, rather than empowers,
those who seek to help themselves. It provides direct rewards for
behaviors--including teenage childbearing--that contribute to the cycle
of poverty. In multiple ways, it undermines our fundamental American
values of work, family, and responsibility.
Let me give you some specific examples. Under current AFDC rules:
If an AFDC mother goes back to work, her income increases only
minimally--often not enough to cover child care--and she loses her
Medicaid benefits. She is likely to be economically worse off if she
returns to the work force; so she stays on welfare;
If she or her children save money for education, the family becomes
ineligible for welfare because they have too much money in the bank.
Their inability to save without losing AFDC helps trap her children in
the cycle of poverty;
Getting married reduces or eliminates a mother's benefits; and
If a mother identifies the father of her child and works with
authorities to secure child support payments, she receives only a
limited portion of the benefit, $50 per month. She therefore has
limited incentives to seek child support. The result is that few
children of poor mothers see any portion of their father's earnings.
There are reasons for each of these rules. They seek to target
benefits toward our most needy citizens. But the lines they draw to
keep the undeserving out inadvertently discourage those in the system
from leaving it. For welfare mothers, it is more often than not a
rational economic decision to stay single and stay on welfare. That
result is absurd. Welfare reform must reverse these incentives.
Second, welfare reform must also seek to address some of the causes
of poverty that bring people onto the system in the first place. The
recent growth in the number of people on welfare is alarming. Between
1979 and 1989, about 7 million children were in the AFDC Program at any
given time. But between 1989 and 1993, the number of children receiving
AFDC increased by about 30 percent to 9.3 million children. Today 14
million people--5 million families--receive AFDC assistance.
And the numbers alone don't tell the worst part of the story. An
increasing percentage of those entering the system are never-married
mothers at greatest risk of long-term welfare dependency. Between 1983
and 1992, families headed by unwed mothers accounted for about four-
fifths of the growth in people on welfare, and at least 40 percent of
never-married mothers receiving AFDC remain in the system for 10 years
or more.
Never-married teen parents are particularly likely to fall into long-
term welfare dependency. More than one-half of welfare spending goes to
women who first gave birth as teens. As William Raspberry noted in a
recent Washington Post column aptly entitled ``Out of Wedlock, Out of
Luck,'' children born to parents who had their first child out-of-
wedlock before they finished high school and reached the age of 20 are
almost guaranteed a life of poverty. In other words, they and their
parents are almost guaranteed a life on welfare. Citing William A.
Galston's analyses, Raspberry notes that a startling 79 percent of
children in this category lived in poverty in 1992. In contrast, only 8
percent of children whose parents had achieved all three milestones--
marriage, graduation, and the 20th birthday--before having their first
child were living in poverty.
These numbers make it clear that we must make preventing teenage
pregnancy a central part of our welfare reform strategy. If we do not,
more and more children and their unwed teenage mothers will be
condemned to lives of poverty and hopelessness.
Reducing teenage, out-of-wedlock childbearing will not be easy. As
Senator Daniel Patrick Moynihan points out, the illegitimacy rate in
1970 was about 10 percent. Since that time it has continued its steady,
linear rise and has now reached an alarming 30 percent.
The potential effect of welfare itself on illegitimacy has taken
center stage in the welfare reform debate. David Ellwood, economist and
Department of Health and Human Services official, has found little
evidence that welfare contributes to the increase in illegitimacy. In
his book, ``Poor Support,'' he points to several other concurrent
social changes that are likely contributors to the increase--the
growing percentage of women in the work force, the drop in earnings and
rise in unemployment among young men, and changes in attitudes toward
marriage.
Others interpret the data differently. Most notably, Charles Murray
believes that welfare is the primary cause of the increase in
illegitimate births. In a catalytic Wall Street Journal article
published October 29, 1993, Murray argues that welfare has reduced the
economic penalty associated with out-of-wedlock childbearing and, in
turn, has reduced the social stigma associated with it. He concludes
that the removal of both of these disincentives has led to more out-of-
wedlock births. Based on this conclusion, Murray recommends the
dramatic step of ending welfare altogether. Murray recognizes that his
approach may put this generation of children at risk and advocates,
among other things, Government investment in new facilities to care for
these children.
The stigma of illegitimacy was not just an accident of social
history; it was a societal attempt to protect children. The stigma is
largely gone. Raspberry's article cites polling results indicating that
70 percent of Americans aged 18 to 34 believe that people having
children out of wedlock do not deserve any moral reproach. But the
decision to bear a child has profound moral and practical content. We
must infuse our children with a clear understanding of the consequences
of teenage childbearing.
Few would argue that a national campaign to discourage unmarried
teenagers from having children is not a good thing to do. The question
for those of us working on welfare reform is this: Can we supplement
that campaign with changes in welfare policy that also discourage out-
of-wedlock births?
Some might say no, believing that there is little correlation between
welfare and out-of-wedlock births. The empirical evidence is generally
viewed as inconclusive. Some controlled studies have demonstrated a
positive association between welfare payments and out-of-wedlock
births, and my own conversations with teenage mothers bear this out.
However, imposing nationwide changes in welfare payments to reduce
teenage parenthood is not yet appropriate, given the lack of conclusive
evidence, and the impact of those changes on the people on welfare. But
it is important to test these ideas at the State level, in a way that
poses little risk, yet possesses the potential for very positive
results. Our goal for this aspect of welfare reform should be to reduce
the number of children born into poverty, while providing greater
assistance and opportunities for children who are born poor.
We must pursue several paths to reform:
Improving the economic outlook for young men and women by enhancing
their education and job opportunities. That increases their hope for
success and therefore the ``opportunity costs'' associated with early
childbearing;
Requiring young people on welfare to stay in school and/or work, and
to live at home, to reduce the advantages of welfare; and
Strengthening child support enforcement, and holding parents of young
men financially accountable for their sons' children, to increase the
teenagers' disincentives to father children.
As we try to discourage out-of-wedlock births, we must not forget the
children who are born, despite the disincentives. That involves a
redirection of welfare support from the parents of poor children to the
children themselves.
A portion of the welfare population--perhaps a small but significant
portion--is unlikely to respond to stronger inducements and penalties.
In a recent Los Angeles Times article, Adela de la Torre, and economist
at California State University at Long Beach, writes that the children
of such parents ``become victims of trickle down welfare programs--if
we deem the parent unfit for welfare support, the child, too, loses.''
De la Torre rejects the notion that building stronger parental
inducements into the welfare system will change the behavior of all
parents and calls instead for a more child-centered social service
agenda that recognizes and serves the needs of children in a more
direct, comprehensive, and integrated fashion. She makes an important
point.
Similarly, Thomas Corbett of the University of Wisconsin asks in a
spring 1993, Focus article whether it is ``compassionate to throw a
little bit of welfare into troubled families and do little else to aid
the children?'' The answer is, of course, relative. AFDC reflects our
best intentions toward these children, but it often fails them. Whether
cash payments to unresponsive parents is the most compassionate
approach, Corbett concludes, ``depends partly on how many children are
involved and whether we can design and finance the technologies
required to assist them.'' It is incumbent on us, as part of welfare
reform, to explore the alternatives to a largely parent-based system,
and find the answers to his question. One way to do this is to enable
States to reduce and convert part or all of AFDC payments to block
grants and combine the grants with other funds available under this
bill to care for children, strengthen families, and implement other
reforms.
Taken together, these reforms, I believe, would begin to address the
underlying problems that Ellwood and Murray have highlighted.
Changing the welfare system to move people back into the work force
and to better serve the needs of children will require changing the way
the welfare bureaucracy does business. Many welfare offices don't know
how many children they have in foster care. Many still operate out of
cardboard files and lose people in the shuffle of paper. Offices often
suffer from interagency rivalry and bureaucratic bickering. It is
tragic when a child suffers needlessly because the system fails under
the weight of its own inefficiency.
This need not happen. Some innovative States and municipalities have
tried to make their welfare systems more efficient and service
oriented. At a hearing I held last December, Carmen Nazario, the
secretary of Health and Human Services in Delaware, testified that her
State has brought public and private social services together in a
single location and is now developing a computer network to link
programs.
David Truax from the Maryland Department of Human Resources described
a second approach to improving services. Maryland now provides each
participant with a debit card that has AFDC, Food Stamps, and General
Assistance benefits on it. Electronic benefit cards have several
advantages: They preclude the trading of food stamps for drugs; they
introduce people to the banking system; they make it easier for them to
budget their money since they don't have to cash one single check; and,
they reduce their vulnerability to crime.
Further, offices should encourage and empower, not discourage and
demean, those they serve. It can be done. America Works, a private
organization that trains people on welfare for work and places them in
jobs, provides proof. During my visit to their Hartford, CT office I
found that clients felt they were getting the help they needed to
succeed, and were motivated and optimistic. I asked one young woman who
had just completed her training if she expected to be placed
successfully in a job. She responded with enthusiasm, ``absolutely.''
This spirit does not typically pervade traditional welfare offices.
Most important, welfare offices should be held accountable for
results. They need to make the shift from writing checks to moving
people on welfare into jobs. To promote this change, we should seek to
establish competition among agencies and greater choice for people on
welfare. We should encourage public agencies to contract with effective
private sector companies and to better reward those public employees
who successfully help people become self-sufficient.
These welfare reform goals are a tall order, and we cannot, and
should not, expect far-reaching reform to happen overnight. In fact,
several factors will temper our pace.
First, cost. Changing the disincentives for work in the current
system, providing recipients with the tools they need to return to the
work force, strengthening the family and increasing efforts to prevent
teen pregnancy--these reforms will cost money.
In a recent article in The New Republic, Paul Offner of the Senate
Finance Committee staff advises us to learn an important lesson from
the 1988 Family Support Act: Overly ambitious and underfunded reform
efforts are doomed to failure. They do little to change the
expectations of those working in the system or those using it.
Second, uncertainty. We have few proven reforms, and those that have
been tested, such as the model education and training programs launched
in California and Florida, have delivered only marginal results to
date. Absent better information, we would be wise to heed the advice of
Proverbs: ``It is not good to have zeal without knowledge.'' Changes in
welfare are consequential. They affect people's lives, children's
lives.
How then should we proceed?
First, we should implement on a national level reforms about whose
effects we are most certain. For example, the Federal Government should
take the lead in making work pay. Congress has already taken an
important step in this direction by increasing the earned income tax
credit. And I hope and expect that this Congress will pass a health
care reform bill that ensures all individuals have health insurance,
regardless of their economic status, so that health care worries will
no longer provide a disincentive for leaving welfare.
We must also make returning to work the primary focus of the welfare
system. President Clinton's pending legislation establishing a 2-year
time limit followed by work will be central to this effort. To avoid
the dangers of underfunding, the administration appears to be
considering targeting its program to younger, new entrants, those most
at risk for welfare dependency. This approach makes sense. And I fully
support the administration's effort.
The Federal Government must also take the lead in improving child
support enforcement. As a starting point, it should fully implement the
recommendations of the U.S. Commission on Interstate Child Support.
Senator Bill Bradley, a member of the Commission, has introduced S.
689, the Interstate Child Support Enforcement Act, to implement the
Commission's recommendations. My Connecticut colleague, Congresswoman
Kennelly, also a Commission member, has introduced a similar bill, H.R.
1961, in the House. I am cosponsoring Senator Bradley's bill, which
will, among other things: Mandate hospital-based paternity
acknowledgment programs; require employers to submit W-4 forms for all
new employees to State child support enforcement agencies; and provide
States the authority they need to assert jurisdiction over nonresident
parents. The era of deadbeat dads should end.
Further, the Federal Government should take the lead on improving our
understanding of the causes of and solutions to welfare dependency.
Senator Moynihan advocates, and I support, a national effort to develop
and track indicators or correlates of poverty, welfare participation,
and the performance of welfare programs. That kind of baseline
information is essential if we are to measure the benefits of reforms.
And while we are studying the problem, we should aggressively test
new solutions. That is the part of the puzzle my bill targets. States
should be the testing ground for those proposals that are promising but
unproven, or that involve some human or financial risk. States have
both the willingness and the ability to test multifaceted, targeted
solutions to the problem. They understand the unique needs of their
citizens and are best able to creatively bring together public and
private resources to affect change.
States are willing and eager to play this role. In testimony before
the Senate Finance Committee's Subcommittee on Social Security and
Family Policy, the American Public Welfare Association and other State
organizations indicated their strong desire to pursue innovative
strategies. My own State of Connecticut has developed a comprehensive
reform proposal, and I believe the Federal Government should assist in
implementing it. While States can already pursue their own welfare
reform initiatives through a Federal waiver process, certain waiver
conditions, particularly the requirement for budget neutrality, limit
their ability to move forward.
My bill will provide States with the resources, technical support and
flexibility necessary to organize and test the additional solutions we
need. The bill authorizes the Department of Health and Human Services
to spend $500 million over 3 years to support a series of specific
demonstration projects set forth in the bill as well as other, State-
initiated reforms. These State demonstrations will be reviewed and
approved by the Department's Secretary. At the end of the 3 years of
demonstration projects, the Secretary will recommend to Congress which
are ready to be imposed nationally. My proposal requires States to
obtain independent evaluations of these projects, but allows for
flexibility in how such evaluations are conducted so as not to hinder
program design. Some of the demonstration projects in the bill are
already underway in one or two States, but have not yet been fully
evaluated. The added resources and flexibility will allow more States
to test a broader range of ideas.
Specifically, the bill supports the following reforms:
Title I includes initiatives to move people on welfare into the work
force. Two pilot programs focus on teenage parents. The first allows
States to condition AFDC benefits for single parents under 20 years of
age on: First, attending school, participating in job training or
holding a job; and second, living at home. The second allows States to
include young AFDC clients in the Jobs Corps--a successful, residential
antipoverty program for youths 16 to 22 years of age.
Title I also permits States to require 30 days of State-assisted job
search or, where appropriate, substance abuse treatment, during the
usual lag time between application for and receipt of benefits. Other
provisions in this title assist people on welfare in accumulating
assets to invest in education or to start a small business.
Title II supports State demonstrations that strengthen families and
break the cycle of welfare dependency. States could establish a more
child-centered welfare program through conversion of all or part of
AFDC and JOBS funds into a block grant. Under this pilot program,
States could apply the block grant funds, supplemented by additional
funds made available under the act, to: Establish residential homes for
teenage mothers and their children which include enhanced social and
employment services; improve child care; speed adoption; made available
residential schooling for children enrolled at the request of their
parents; and provide other services to needy children. No State program
under this title could move forward unless the Secretary of the
Department of Health and Human Services found that the program fully
protected the well-being of affected children. State welfare
administrators I spoke with were interested in the block grant approach
because they felt it could provide the flexibility and resources they
need to tackle real program reforms.
Another section of title II allows States to discourage people on
welfare from having additional children. States could eliminate the
payment increase for additional children while increasing the financial
reward for work. The title also allows States to liberalize eligibility
rules for two-parent families to encourage marriage. It also supports
States seeking to strengthen child support collection by raising the
amount of child support people on welfare can keep without reducing
their benefits, by holding parents accountable for the child support
obligations of their sons who are minors, and through other means
proposed by the State. Finally, title II supports innovative State
teenage pregnancy prevention programs.
Title III seeks to diversify and improve the performance of welfare
services and change the culture of welfare offices. The title supports
State pilots to provide incentives to private sector, for-profit and
nonprofit groups to place people on welfare in private sector jobs.
Companies would keep a portion of welfare savings as payment for
successful job placements. Title III also supports State pilots to
improve the performance of welfare office employees through, for
example, providing direct bonuses to employees and judging their
performance based on the clients' progress toward self-sufficiency.
Finally, title IV authorities offsetting expenditure reductions to
ensure the bill is budget neutral. In other words, the bill pays for
itself. Specifically, it eliminates the three-entity rule. Currently,
an individual farmer can qualify for up to $125,000 per year in certain
Government subsidies. If he forms two other business entities with two
other individuals, say, a friend and a sister, each of these entities
can qualify for another $125,000 per year. So the individual farmer can
receive up to $250,000 in subsidies per year--$125,000 for his first
business entity, and half of $125,000 for each of his second and third
entities. My bill says, ``enough is enough,'' and caps the amount of
agricultural subsidies any one person gets from the Federal Government
at $125,000. A preliminary Congressional Budget Office estimate
indicates this change will save $675 million over 5 years--money that
is better spent on the truly needy.
Americans continue to show concern for the poor, and particularly
poor children. A recent poll commissioned by the Children's Defense
Fund and others found that 64 percent of Americans believe we should
spend more on poor children. But the same poll found that 55 percent
think we spend too much on welfare, and 68 percent think we should not
increase payments to parents for any additional children they have
while on welfare.
Our current approach to helping the poor is clearly not working. The
goal of welfare reform is to transform the status quo into a system
that promotes work, family and responsibility, and protects children
from a life of poverty. This bill, with the administration's proposal,
will begin to allow us to do just that.
Mr. President, I ask unanimous consent that the full text of the bill
and a short summary of the bill be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 1932
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
Reform Through State Innovation Act''.
(b) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Purpose.
Sec. 3. Definitions.
Sec. 4. General provisions relating to demonstration projects.
Sec. 5. Authorization of appropriations.
TITLE I--INITIATIVES TO MOVE WELFARE RECIPIENTS INTO THE WORK FORCE
Sec. 101. Demonstration projects which condition AFDC benefits for
certain individuals on school attendance or job training,
limit the time period for receipt of such benefits, and
require teenage parents to live at home.
Sec. 102. Pilot Job Corps program for recipients of aid to families
with dependent children.
Sec. 103. Demonstration projects requiring up-front 30-day assisted job
search, or substance abuse treatment before receiving
AFDC benefits.
Sec. 104. Disregard of education and employment training savings for
AFDC eligibility.
Sec. 105. Incentives and assistance in starting a small business.
Sec. 106. Increased emphasis in JOBS program on moving people into the
work force.
Sec. 107. Additional demonstration projects to move AFDC recipients
into the work force.
TITLE II--INITIATIVES TO STRENGTHEN FAMILIES AND BREAK THE CYCLE OF
WELFARE DEPENDENCY
Sec. 201. Demonstration projects to establish child centered programs
through conversion of certain AFDC and JOBS payments into
block grants.
Sec. 202. Demonstration projects providing no additional benefits with
respect to children born while a family is receiving AFDC
and allowing increases in the earned income disregard.
Sec. 203. Demonstration projects providing incentives to marry.
Sec. 204. Demonstration projects reducing AFDC benefits if school
attendance is irregular or preventive health care for
dependent children is not obtained.
Sec. 205. Demonstration projects to increase child support collection.
Sec. 206. Demonstration projects to develop community-based programs
for teenage pregnancy prevention and family planning.
Sec. 207. Additional demonstration projects to strengthen families and
break the cycle of welfare dependency.
TITLE III--INITIATIVES TO DIVERSIFY AND IMPROVE THE PERFORMANCE OF
WELFARE SERVICES
Sec. 301. Demonstration projects for providing placement of AFDC
recipients in private sector jobs.
Sec. 302. Demonstration projects providing performance-based incentives
for State public welfare providers.
TITLE IV--OFFSETTING EXPENDITURE REDUCTIONS
Sec. 401. Offsetting expenditure reductions.
SEC. 2. PURPOSE.
It is the purpose of this Act to implement the
demonstration projects established under this Act as part of
a comprehensive national program which would--
(1) terminate aid to families with dependent children after
2 years; and
(2) make employment available to such families where
necessary.
SEC. 3. DEFINITIONS.
For purposes of this Act:
(1) Aid to families with dependent children.--The term
``aid to families with dependent children'' has the meaning
given to such term by section 406(b) of the Social Security
Act (42 U.S.C. 606(b)).
(2) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.
SEC. 4. GENERAL PROVISIONS RELATING TO DEMONSTRATION
PROJECTS.
(a) Applications.--
(1) In general.--Each State desiring to conduct a
demonstration project under this Act shall prepare and submit
to the Secretary an application in such manner and containing
such information as the Secretary may require. The Secretary
shall actively encourage States to submit such applications.
(2) Approval.--The Secretary shall consider all
applications received from States desiring to conduct
demonstration projects under this Act and shall approve such
applications in a number of States to be determined by the
Secretary, taking into account the overall funding levels
available under section 5.
(b) Duration.--A demonstration project under this Act shall
be conducted for not more than 3 years plus an additional
time period of up to 12 months for final evaluation and
reporting. The Secretary may terminate a project if the
Secretary determines that the State conducting the project is
not in substantial compliance with the terms of the
application approved by the Secretary under this Act.
(c) Evaluation Plan.--
(1) In general.--Each State conducting a demonstration
project under this Act shall submit an evaluation plan
(meeting the standards developed by the Secretary under
paragraph (2)) to the Secretary not later than 90 days after
the State is notified of the Secretary's approval for such
project. A State shall not receive any Federal funds for the
operation of the demonstration project or be granted any
waivers of the Social Security Act necessary for operation of
the demonstration project until the Secretary approves such
evaluation plan.
(2) Standards.--Not later than 3 months after the date of
the enactment of this Act, the Secretary shall develop
standards for the evaluation plan required under paragraph
(1) which shall include the requirement that an independent
expert entity provide an evaluation of each demonstration
project to be included in the State's annual and final
reports to the Secretary under subsection (d)(1).
(d) Reports.--
(1) State.--A State that conducts a demonstration project
under this Act shall prepare and submit to the Secretary
annual and final reports in accordance with the State's
evaluation plan under subsection (c)(1) for such
demonstration project.
(2) Secretary.--The Secretary shall prepare and submit to
Congress annual reports concerning each demonstration project
under this Act.
(e) Legislative Proposal.--Within 6 months after the date
that the Secretary has received the last final report due
under subsection (d)(1), the Secretary shall submit proposed
legislation to Congress which would nationally implement
(taking into account factors important in determining
implementation of a demonstration project on a national
scale, including population density and poverty) those
demonstration projects--
(1) which are established under this Act; and
(2) for which the Secretary has made a determination of
effectiveness in breaking the cycle of welfare dependency,
unemployment, and poverty after evaluation of the final
report for such project.
(f) Provisions Subject To Waiver.--The Secretary may waive
such requirements of title IV of the Social Security Act (42
U.S.C. 601 et seq.) as the Secretary determines to be
necessary to carry out the purposes of the demonstration
projects established under this Act.
(g) Expenditures Otherwise Included Under the State plan.--
The costs of a demonstration project under this Act which
would not otherwise be included as expenditures under the
applicable State plan under title IV of the Social Security
Act (42 U.S.C. 601 et seq.) shall to the extent and for the
period prescribed by the Secretary, be regarded as
expenditures under the applicable State plan under such
title, or for administration of such State plan or plans, as
may be appropriate.
SEC. 5. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--There is authorized to be appropriated
$150,000,000 for each of fiscal years 1995 and 1996, and
$200,000,000 for fiscal year 1997 to carry out the provisions
of sections 101, 103, 105(b), 105(c), 105(d), 107, 201, 202,
203, 204, 205, 206, 207, 301, and 302.
(b) Allocation of Funds.--Of the amount appropriated
pursuant to subsection (a), the Secretary shall obligate--
(1) 75 percent of such amount to--
(A) offset any increase in the amount of the Federal share
resulting from any demonstration project established under a
section described in subsection (a) (other than demonstration
projects established under sections 107 and 207 of this Act);
and
(B) to the extent such amount remains after any such
offset--
(i) increase the otherwise applicable Federal share rate
under a State plan under title IV of the Social Security Act
(42 U.S.C. 601 et seq.) for such demonstration projects; and
(ii) increase the amount of a State's block grant under the
demonstration project under section 201 of this Act; and
(2) 25 percent of such amount to--
(A) offset any increase in the amount of the Federal share
resulting from any demonstration project established under
sections 107 and 207 of this Act; and
(B) to the extent such amount remains after any such offset
increase the otherwise applicable Federal share rate under a
State plan under title IV of the Social Security Act (42
U.S.C. 601 et seq.) for such demonstration projects.
(c) Reservation of Certain Amounts Until Final Report
Submitted.--The Secretary shall reserve 10 percent of any
amounts obligated to a State for a demonstration project
under subsection (b), and shall not pay such reserved amounts
until such State has submitted a final report on such
demonstration project.
TITLE I--INITIATIVES TO MOVE WELFARE RECIPIENTS INTO THE WORK FORCE
SEC. 101. DEMONSTRATION PROJECTS WHICH CONDITION AFDC
BENEFITS FOR CERTAIN INDIVIDUALS ON SCHOOL
ATTENDANCE OR JOB TRAINING, LIMIT THE TIME
PERIOD FOR RECEIPT OF SUCH BENEFITS, AND
REQUIRE TEENAGE PARENTS TO LIVE AT HOME.
(a) Establishment.--The Secretary shall provide for
demonstration projects described in subsection (b) in States
with applications approved under this Act.
(b) Project Described.--
(1) In general.--Except as provided in paragraph (2), each
State conducting a demonstration project under this section
shall provide that--
(A) a family described in paragraph (3) shall not receive
aid to families with dependent children--
(i) unless the individual described in paragraph (3)(A) is,
for a minimum of 35 hours a week--
(I) attending school,
(II) studying for a general equivalency diploma, or
(III) participating in a job, job training, or job
placement program; and
(ii) except in the case of a situation described in clause
(i) through (v) of section 402(a)(43)(B) of the Social
Security Act (42 U.S.C. 602(a)(43)(B))--
(I) such individual is residing in a place of residence
maintained by a parent, legal guardian, or other adult
relative of such individual as such parent's, guardian's, or
adult relative's own home, or residing in a foster home,
maternity home, or other adult-supervised supportive living
arrangement, and
(II) such aid (where possible) shall be provided to the
individual's parent, legal guardian, or other adult relative
on behalf of such individual and the individual's dependent
child; and
(B) such family shall be entitled to receive such aid for a
time period determined appropriate by the State which shall,
at a minimum, permit such individual to complete the
activities described in subparagraph (A)(i).
(2) Limitation.--A State conducting a demonstration project
under this section shall not apply the provisions of
paragraph (1) to a family unless--
(A) the State has made adequate child care available to
such family;
(B) the State has paid all tuition and fees applicable to
the activities described in paragraph (1)(A); and
(C) such application does not endanger the welfare and
safety of a dependent child who is a member of such family.
(3) Family described.--A family described in this paragraph
is a family which--
(A) includes a parent under 20 years of age;
(B) includes at least 1 dependent child of such parent; and
(C) does not include a child under 6 months of age.
SEC. 102. PILOT JOB CORPS PROGRAM FOR RECIPIENTS OF AID TO
FAMILIES WITH DEPENDENT CHILDREN.
Section 433 of the Job Training Partnership Act (29 U.S.C.
1703) is amended by adding at the end the following new
subsection:
``(f)(1) The Secretary may enter into appropriate
agreements with agencies as described in section 427(a)(1)
for the development of pilot projects to provide services at
Job Corps centers to eligible individuals--
``(A) who are eligible youth described in section 423;
``(B) whose families receive aid to families with dependent
children under part A of title IV of the Social Security Act
(42 U.S.C. 601 et seq.); and
``(C) who are mothers of children who have not reached the
age of compulsory school attendance in the State in which the
children reside.
``(2) A Job Corps center serving the eligible individuals
shall--
``(A) provide child care at or near the Job Corps center
for the individuals;
``(B) provide the activities described in section 428 for
the individuals; and
``(C) provide for the individuals, and require that each
such individual participate in, activities through a parents
as teachers program that--
``(i) establishes and operates parent education programs,
including programs of developmental screening of the children
of the eligible individuals;
``(ii) provides group meetings and home visits for the
family of each such individual by parent educators who have
had supervised experience in the care and education of
children and have had training; and
``(iii) provides periodic screening, by such parent
educators, of the educational, hearing, and visual
development of the children of such individuals.
``(3) The Secretary shall prescribe specific standards and
procedures under section 424 for the screening and selection
of applicants to participate in pilot projects carried out
under this subsection. In addition to the agencies described
in the second sentence of such section, such standards and
procedures may be implemented through arrangements with
welfare agencies.
``(4) As used in this subsection:
``(A) The term `developmental screening' means the process
of measuring the progress of children to determine if there
are problems or potential problems or advanced abilities in
the areas of understanding and use of language, perception
through sight, perception through hearing, motor development
and hand-eye coordination, health, and physical development.
``(B) The term `parent education' includes parent support
activities, the provision of resource materials on child
development and parent-child learning activities, private and
group educational guidance, individual and group learning
experiences for the eligible individual and child, and other
activities that enable the eligible individual to improve
learning in the home.''.
SEC. 103. DEMONSTRATION PROJECTS REQUIRING UP-FRONT 30-DAY
ASSISTED JOB SEARCH, OR SUBSTANCE ABUSE
TREATMENT BEFORE RECEIVING AFDC BENEFITS.
(a) Establishment.--The Secretary shall provide for
demonstration projects described in subsection (b) in States
with applications approved under this Act.
(b) Project Described.--
(1) In general.--Except as provided in paragraph (2), each
State conducting a demonstration project under this section
shall require a parent or other relative of a dependent child
to undergo 30 days of assisted job search or substance abuse
treatment (or both) before the family may receive aid to
families with dependent children as part of the application
process for the receipt of such aid.
(2) Limitation.--A State conducting a demonstration project
under this section shall not apply the provisions of
paragraph (1) to a family unless--
(A) all of the dependent children in the family are over 6
months of age;
(B) the State has made adequate child care available to
such family;
(C) the State has paid all fees applicable to the
activities described in paragraph (1); and
(D) such application does not endanger the welfare and
safety of a dependent child who is a member of such family.
SEC. 104. DISREGARD OF EDUCATION AND EMPLOYMENT TRAINING
SAVINGS FOR AFDC ELIGIBILITY.
(a) Disregard as Resource.--Subparagraph (B) of section
402(a)(7) of the Social Security Act (42 U.S.C. 602(a)(7)) is
amended--
(1) by striking ``or'' before ``(iv)'', and
(2) by inserting ``, or (v) except in the case of the
family's initial determination of eligibility for aid to
families with dependent children, any amount up to $10,000 in
a qualified education and employment account (as defined in
section 406(i)(1))'' before ``; and''.
(b) Disregard as Income.--
(1) In general.--Subparagraph (A) of section 402(a)(8) of
such Act (42 U.S.C. 602(a)(8)) is amended--
(A) by striking ``and'' at the end of clause (vii), and
(B) by inserting after clause (viii) the following new
clause:
``(ix) shall disregard any qualified distributions (as
defined in section 406(i)(2)) made from any qualified
education and employment account (as defined in section
406(i)(1)) while the family is receiving aid to families with
dependent children; and''.
(2) Nonrecurring lump sum exempt from lump sum rule.--
Section 402(a)(17) (42 U.S.C. 602(a)(17)) is amended by
adding at the end the following: ``; and that this paragraph
shall not apply to earned and unearned income received in a
month on a nonrecurring basis to the extent that such income
is placed in a qualified education and employment account (as
defined in section 406(i)(1)) the total amount which, after
such placement, does not exceed $10,000.''.
(c) Qualified Education and Employment Accounts.--Section
406 of such Act (42 U.S.C. 606) is amended by adding at the
end the following:
``(i)(1) The term `qualified education and employment
account' means a mechanism established by the State (such as
escrow accounts or education savings bonds) that allows
savings from the earned income of a dependent child or parent
of such child in a family receiving aid to families with
dependent children to be used for qualified distributions.
``(2) The term `qualified distributions' means
distributions from a qualified education and employment
account for expenses directly related to the attendance at an
eligible postsecondary or secondary institution or directly
related to improving the employability (as determined by the
State) of a member of a family receiving aid to families with
dependent children.
``(3) The term `eligible postsecondary or secondary
institution' means a postsecondary or secondary institution
determined to be eligible by the State under guidelines
established by the Secretary.''.
(d) Effective Date.--The amendments made by this section
shall apply to payments under part A of title IV of the
Social Security Act (42 U.S.C. 601 et seq.) for calendar
quarters beginning on or after January 1, 1995.
SEC. 105. INCENTIVES AND ASSISTANCE IN STARTING A SMALL
BUSINESS.
(a) Authority for States To Permit Certain Self-Employment
Program Participants a One-Time Election To Purchase Capital
Equipment for a Small Business in Lieu of Depreciation;
Repayments by Such Persons of the Principal Portion of Small
Business Loans Treated as Business Expenses for Purposes of
AFDC.--
(1) Amendments to the social security act.--Section
402(a)(8) of the Social Security Act (42 U.S.C. 602(a)(8)) is
amended--
(A) in subparagraph (B)(ii)(II), by striking ``and'' after
the semicolon;
(B) by redesignating subparagraph (C) as subparagraph (D);
and
(C) by inserting after subparagraph (B) the following new
subparagraph:
``(C) provide that, in determining the earned income of a
family any of the members of which owns a small business and
is a participant in a self-employment program offered by a
State in accordance with section 482(d)(1)(B)(ii), the State
may--
``(i)(I) during the 1-year period beginning on the date the
family makes an election under this clause, treat as an
offset against the gross receipts of the business the sum of
the capital expenditures for the business by any member of
the family during such 1-year period; and
``(II) allow each such family eligible for aid under this
part not more than 1 election under this clause; and
``(ii) treat as an offset against the gross receipts of the
business--
``(I) the amounts paid by any member of the family as
repayment of the principal portion of a loan made for the
business; and
``(II) cash retained by the business for future use by the
business; and''.
(2) Amendment to the internal revenue code of 1986.--
Section 167 of the Internal Revenue Code of 1986 (relating to
depreciation), as amended by section 13261(b) of the Omnibus
Budget Reconciliation Act of 1993, is amended by
redesignating subsection (g) as subsection (h) and by
inserting after subsection (f) the following new subsection:
``(g) Certain Property of AFDC Recipients Not
Depreciable.--No depreciation deduction shall be allowed
under this section (and no depreciation or amortization
deduction shall be allowed under any other provision of this
subtitle) with respect to the portion of the adjusted basis
of any property which is attributable to expenditures treated
as an offset against gross receipts under section
402(a)(8)(C)(i) of the Social Security Act.''.
(3) Effective date.--
(A) Social security act amendments.--The amendments made by
paragraph (1) shall apply to payments made under part A of
title IV of the Social Security Act (42 U.S.C. 601 et seq.)
on or after January 1, 1995.
(B) Internal revenue code amendment.--The amendments made
by paragraph (2) shall apply to property placed in service on
or after January 1, 1995.
(b) Demonstration Projects Establishing Public-Private
Partnerships for Technical Assistance to Self-Employed AFDC
Recipients.--
(1) In general.--The Secretary shall provide for
demonstration projects to be conducted in States with
applications approved under this Act under which one or more
partnerships are developed between State agencies and
community businesses or educational institutions to provide
assistance to eligible participants.
(2) Eligible participants.--For purposes of this
subsection, the term ``eligible participants'' means--
(A) individuals who are receiving aid to families with
dependent children; and
(B) individuals who cease to be eligible to receive such
aid who have been participating in a demonstration project
conducted by a State under this subsection.
(3) Permissible expenditures.--Funds from any demonstration
project conducted under this subsection may be used to pay
the costs associated with developing and implementing a
process through which businesses or educational institutions
would work with the State agency to provide assistance to
eligible participants seeking to start or operate small
businesses, including--
(A) mentoring;
(B) training for eligible participants in administering a
business;
(C) technical assistance in preparing business plans; and
(D) technical assistance in the process of applying for
business loans, marketing services, and other activities
related to conducting such small businesses.
(c) Demonstration Projects for Training AFDC Recipients as
Self-Employed Providers of Child Care Services.--
(1) In general.--The Secretary shall provide for
demonstration projects to be conducted in States with
applications approved under this Act under which one or more
partnerships are developed between State agencies and
community businesses or educational institutions to provide
assistance to eligible participants in the establishment and
operation of child care centers in the home or in the
community which would provide child care services.
(2) Eligible participants.--For purposes of this
subsection, the term ``eligible participants'' means--
(A) individuals who are receiving aid to families with
dependent children; and
(B) individuals who cease to be eligible to receive such
aid who have been participating in a demonstration project
conducted by a State under this subsection.
(3) Permissible expenditures.--Funds from any demonstration
project conducted under this subsection may be used to pay
the costs associated with developing and implementing a
process through which businesses or educational institutions
would work with the State agency to provide assistance to
train eligible participants to provide licensed child care
services, including--
(A) mentoring;
(B) training in the provision of child care services;
(C) training for eligible participants in administering a
business;
(D) training in early childhood education;
(E) technical assistance in preparing business plans;
(F) technical assistance in the process of applying for
loans, marketing services, qualifying for Federal and State
programs, and other activities related to the provision of
child care services; and
(G) technical assistance in obtaining a license and
complying with Federal, State, and local regulations
regarding the provision of child care.
(d) Demonstration Project To Promote Ownership of Family-
Owned Businesses by AFDC Recipients.--
(1) Establishment.--The Secretary shall provide for
demonstration projects described in paragraph (2) in States
with applications approved under this Act.
(2) Project described.--Each State conducting a
demonstration project under this subsection shall develop a
program under which the State shall--
(A) encourage incentives for families receiving aid to
families with dependent children to work together as managers
and employees in family-owned businesses;
(B) develop State and private partnerships for making or
guaranteeing small business loans, including seed money,
available to such families;
(C) provide such families with technical training in small
business management, accounting, and bookkeeping;
(D) regularly evaluate the status of the recipients of
assistance under the project; and
(E) continue a transitional period of benefits under title
IV and title XIX of the Social Security Act for recipients of
assistance under the project until such time as the State
determines such family is self-sufficient.
For purposes of this paragraph, a family-owned business may
include other relatives of the family receiving aid to
families with dependent children regardless if such relatives
are also receiving aid to families with dependent children.
SEC. 106. INCREASED EMPHASIS IN JOBS PROGRAM ON MOVING PEOPLE
INTO THE WORK FORCE.
Section 481(a) of the Social Security Act (42 U.S.C.
681(a)) is amended by adding at the end the following new
sentence: ``It is further the purpose of this part to
encourage individuals receiving education and training to
enter the permanent work force by developing programs through
which such individuals enter the work force and then receive
post-employment education and training.''.
SEC. 107. ADDITIONAL DEMONSTRATION PROJECTS TO MOVE AFDC
RECIPIENTS INTO THE WORK FORCE.
(a) Establishment.--The Secretary shall provide for
additional demonstration projects described in subsection (b)
in States with applications approved under this Act.
(b) Project Described.--Each State conducting a
demonstration project under this section shall develop a
program or programs to better move recipients of aid to
families with dependent children into the work force.
TITLE II--INITIATIVES TO STRENGTHEN FAMILIES AND BREAK THE CYCLE OF
WELFARE DEPENDENCY
SEC. 201. DEMONSTRATION PROJECTS TO ESTABLISH CHILD CENTERED
PROGRAMS THROUGH CONVERSION OF CERTAIN AFDC AND
JOBS PAYMENTS INTO BLOCK GRANTS.
(a) Establishment.--The Secretary shall provide for
demonstration projects described in subsection (b) in States
with applications approved under this Act.
(b) Project Described.--
(1) In general.--Each State conducting a demonstration
project under this section shall elect to receive payments
under paragraph (2) in lieu of--
(A) all payments to which the State would otherwise be
entitled to under section 403 of the Social Security Act (42
U.S.C. 603) for aid to families with dependent children under
part A of title IV of such Act or the job opportunities and
basic skills training program under part F of such title; or
(B) any portion of the payment described in subparagraph
(A) to which the State would otherwise be entitled under such
section for benefits (identified by the State) under part A
or part F of such title for populations (identified by the
State) who receive such benefits.
(2) Payment.--The Secretary shall make payment under this
paragraph for each year of the project in an amount equal
to--
(A) during fiscal year 1995--
(i) 100 percent of the total amount to which the State was
entitled under section 403 of the Social Security Act (42
U.S.C. 603) for aid to families with dependent children under
part A of title IV of such Act or the job opportunities and
basic skills training program under part F of such title; or
(ii) the amount to which the State was entitled to under
such section for those benefits and populations identified by
the State in paragraph (1)(B),
for fiscal year 1994 plus the product of such amount and the
percentage increase in the consumer price index for all urban
consumers (U.S. city average) during fiscal year 1995; and
(B) during each subsequent fiscal year, the amount
determined under this paragraph in the previous fiscal year
plus the product of such amount and the percentage increase
in such consumer price index during such previous fiscal
year.
(3) Description of activities.--
(A) In general.--Each State which is paid under paragraph
(2) shall expend the amount received under such paragraph and
the amount, if any, made available to such State under
section 5(b)(1)(B)(ii) for one or more of the following
purposes:
(i)(I) Establish residential programs for teenage mothers
with dependent children where education, job training,
community service, or other employment is provided.
(II) Support the pilot project described in section 433(f)
of the Jobs Training Partnership Act, as added by section 102
of this Act, to provide such services to teenage mothers with
dependent children.
(ii) Establish programs to promote, expedite, and ensure
adoption of children, particularly neglected or abused
children.
(iii) Expand child care assistance for the children of
needy working parents (as determined by the State).
(iv) Establish residential schooling with appropriate
support services for children from needy families (as
determined by the State) enrolled at the request of the
parents of such children.
(v) Establish other services which will be provided
directly to children from needy families (as determined by
the State).
(vi) Implement other reforms consistent with this Act.
(4) Community-based activities.--The Secretary shall ensure
that each State receiving a grant under this section--
(A) takes adequate steps to assure the well-being of the
children affected by the State's receipt of the grant; and
(B) to the fullest extent possible, utilizes the grant
under this section to support community-based services in
communities affected by the State's receipt of the grant.
SEC. 202. DEMONSTRATION PROJECTS PROVIDING NO ADDITIONAL
BENEFITS WITH RESPECT TO CHILDREN BORN WHILE A
FAMILY IS RECEIVING AFDC AND ALLOWING INCREASES
IN THE EARNED INCOME DISREGARD.
(a) Establishment.--The Secretary shall provide for
demonstration projects described in subsection (b) in States
with applications approved under this Act.
(b) Project Described.--If a child is born to a family
after the date on which such family begins receiving aid to
families with dependent children, a State conducting a
demonstration project under this section--
(1) shall not take such child into account in determining
the need of such family for such aid; and
(2) shall increase the amounts disregarded from earned
income under section 402(a)(8)(A) of such Act (42 U.S.C.
602(a)(8)(A)).
SEC. 203. DEMONSTRATION PROJECTS PROVIDING INCENTIVES TO
MARRY.
(a) Aid to Two-Parent Families.--
(1) Establishment.--The Secretary shall provide for
demonstration projects described in paragraph (2) in States
with applications approved under this Act.
(2) Project described.--
(A) In general.--Each State conducting a demonstration
project under this subsection shall not apply the
requirements described in subparagraph (B) to a parent of a
dependent child who is married to the natural parent of such
child.
(B) Requirements waived.--The requirements described in
this subparagraph are:
(i) The work history requirement described in section
407(b)(1)(A)(iii) of such Act (42 U.S.C. 607(b)(1)(A)(iii)).
(ii) The 100-hour rule under section 233.100(a)(1)(i) of
title 45, Code of Federal Regulations.
(b) Increase in Stepparent Earned Income Disregard.--
(1) Establishment.--The Secretary shall provide for
demonstration projects described in paragraph (2) in States
with applications approved under this Act.
(2) Project described.--For purposes of making
determinations for any month under section 402(a)(7) of the
Social Security Act (42 U.S.C. 602(a)(7)), each State
conducting a demonstration project under this subsection
shall modify the income disregards provided in subparagraphs
(A) through (D) of section 402(a)(31) of such Act (42 U.S.C.
602(a)(31)) in order to decrease the amount of income
determined under such section with respect to a dependent
child's stepparent.
SEC. 204. DEMONSTRATION PROJECTS REDUCING AFDC BENEFITS IF
SCHOOL ATTENDANCE IS IRREGULAR OR PREVENTIVE
HEALTH CARE FOR DEPENDENT CHILDREN IS NOT
OBTAINED.
(a) Establishment.--The Secretary shall provide for
demonstration projects described in subsection (b) in States
with applications approved under this Act.
(b) Project Described.--
(1) In general.--Each State conducting a demonstration
project under this section shall reduce the amount of aid to
families with dependent children received by a family if the
State agency determines that one or both (at the State's
option) of the following conditions exist:
(A) A member of such family is attending school or
participating in a course of vocational or technical training
and such family member is absent from such school or training
with no excuse for more than a number of days per month
determined appropriate by the State.
(B) A member of such family is a child under the age of 6
who has not received appropriate immunizations (as determined
by the State).
(2) Limitation.--Each State conducting a demonstration
project under this section shall establish procedures which
ensure that no reduction in aid to families with dependent
children under paragraph (1) will endanger the welfare and
safety of any dependent child.
SEC. 205. DEMONSTRATION PROJECTS TO INCREASE CHILD SUPPORT
COLLECTION.
(a) Establishment.--The Secretary shall provide for
demonstration projects described in subsection (b) in States
with applications approved under this Act.
(b) Project Described.--Each State conducting a
demonstration project under this section shall increase the
State's child support collection efforts through one or more
of the following methods:
(1) Enhanced child support enforcement and collection,
including holding a parent accountable for supporting any
children of the parent's minor children.
(2) Applying section 402(a)(8)(vi) of the Social Security
Act (42 U.S.C. 602(a)(8)(vi)) by substituting an amount
greater than $50 (to be determined by the State) for ``$50''
each place such dollar amount appears.
(3) Any other method that the State deems appropriate.
SEC. 206. DEMONSTRATION PROJECTS TO DEVELOP COMMUNITY-BASED
PROGRAMS FOR TEENAGE PREGNANCY PREVENTION AND
FAMILY PLANNING
(a) Establishment.--The Secretary shall provide for
demonstration projects described in subsection (b) in States
with applications approved under this Act.
(b) Project Described.--Each State conducting a
demonstration project under this section shall develop a
community-based program for teenage pregnancy prevention and
family planning.
SEC. 207. ADDITIONAL DEMONSTRATION PROJECTS TO STRENGTHEN
FAMILIES AND BREAK THE CYCLE OF WELFARE
DEPENDENCY.
(a) Establishment.--The Secretary shall provide for
additional demonstration projects described in subsection (b)
in States with applications approved under this Act.
(b) Project Described.--Each State conducting a
demonstration project under this section shall develop a
program or programs to strengthen families and break the
cycle of welfare dependency.
TITLE III--INITIATIVES TO DIVERSIFY AND IMPROVE THE PERFORMANCE OF
WELFARE SERVICES
SEC. 301. DEMONSTRATION PROJECTS FOR PROVIDING PLACEMENT OF
AFDC RECIPIENTS IN PRIVATE SECTOR JOBS.
(a) Establishment.--The Secretary shall provide for
demonstration projects described in subsection (b) in States
with applications approved under this Act.
(b) Project Described.--Each State conducting a
demonstration project under this section shall--
(1) contract with private for-profit and nonprofit groups
to provide any individual receiving aid to families with
dependent children with training, support services, and
placement in a private sector job which permits such
individual to cease receiving aid to families with dependent
children; and
(2) upon employment of such individual, pay such groups a
negotiated portion of the total amount that such individual's
family would have received over the course of the year in
which such individual began such employment in the form of
aid to families with dependent children.
SEC. 302. DEMONSTRATION PROJECTS PROVIDING PERFORMANCE-BASED
INCENTIVES FOR STATE PUBLIC WELFARE PROVIDERS.
(a) Establishment.--The Secretary shall provide for
demonstration projects to establish performance-based
incentives for State public welfare providers in States with
applications described in subsection (b)(1) which are
approved under this Act.
(b) Applications.--
(1) Application described.--An application described under
this paragraph is an application which--
(A) identifies the State offices or administrative units
which will participate in the demonstration project;
(B) describes indicators of employee or program performance
based on outcome measures for--
(i) training and education;
(ii) job search and placement assistance;
(iii) child support collection;
(iv) teen pregnancy prevention programs; and
(v) any other program objective that the State finds
appropriate;
(C) describes budgetary incentives for program performance,
including direct financial incentives for employees where
appropriate;
(D) describes a process for developing, in cooperation with
employees of participating offices or units, a job evaluation
system based on performance measures; and
(E) describes the way in which State public welfare
providers, private providers, welfare clients, and members of
the community have been or shall be involved in the planning
and implementation of a performance based welfare delivery
system.
(2) Technical assistance.--The Secretary shall provide a
State desiring to submit an application for a demonstration
project under this section with technical assistance in
preparing an application described under paragraph (1).
TITLE IV--OFFSETTING EXPENDITURE REDUCTIONS
SEC. 401. OFFSETTING EXPENDITURE REDUCTIONS.
(a) In General.--Subparagraph (C) of section 1001(5) of the
Food Security Act of 1985 (7 U.S.C. 1308(5)(C)) is amended to
read as follows:
``(C) In the case of corporations and other entities
included in subparagraph (B) and partnerships, the Secretary
shall attribute payments to natural persons in proportion to
their ownership interests in an entity and in any other
entity, or partnership, that owns or controls the entity, or
partnership, receiving the payments.''.
(b) Removal of 3-Entity Rule.--Section 1001A(a)(1) of the
Food Security Act of 1985 (7 U.S.C. 1308-1(a)(1)) is
amended--
(1) in the first sentence--
(A) by striking ``substantial beneficial interests in more
than two entities'' and inserting ``a substantial beneficial
interest in any other entity''; and
(B) by striking ``receive such payments as separate
persons'' and inserting ``receives the payments as a separate
person''; and
(2) by striking the second sentence.
(c) Effective Date.--The amendments made by this section
shall take effect on October 1, 1994.
____
Summary of the Welfare Reform Through State Innovation Act
Sections 1-4: Purpose of bill and general provisions
relating to state pilot projects.
Sec. 2. States that the purpose of the bill is to implement
the demonstration projects established in the bill as part of
a comprehensive national program which would terminate aid to
families with dependent children after 2 years, and would
make employment available to such families where necessary to
ensure their employment (i.e. this bill complements, and is
not an alternative to, Administration's).
Sec. 4. Sets forth general provisions relating to
demonstration projects. Authorizes $150 million/yr for two
years and $200 million in the third year to support pilots,
and requires states to have HHS-approved evaluation plans
before receiving funds. A portion of these funds (25%) would
support innovative pilot programs not specified in the bill
but proposed by states.
title i.--initiatives to move welfare recipients into the work force
Sec. 101. Supports State pilots to condition AFDC benefits
for single parents under 20 years of age with at least one
dependent child and no children under 6 months of age on
attending school or participating in a job or job training
program for a minimum of 35 hours per week and on living at
home. States would also impose a time limit (not specified)
on benefits, and make child care available during training
and work activities. Since the program would be expensive, it
targets those at greatest risk of long-term welfare
dependency--teenage mothers.
Sec. 102. Authorizes the Secretary of HHS to establish a
pilot program with the Jobs Corps (a successful, residential
anti-poverty program for youths 16-22 years of age) targeting
teenage mothers on AFDC with below school-age children. The
pilot would include a Parents-as-Teachers type program
designed to teach parents how to help prepare their children
for school and learning.
Sec. 103. Supports state pilots to require 30 days of
assisted job search or, where appropriate, substance abuse
treatment immediately following application for AFDC,
coinciding with the usual lag time between application for
and receipt of benefits. Applicants would have to complete
the assigned activities before receiving AFDC payments.
Sec. 104. A national change to permit states to allow AFDC
families to save money (up to $10,000) for education and
training or starting a small business.
Sec. 105. Expands on legislation introduced in 1993 with
Senator Dodd.
A national change to permit states to help recipients start
a small business by allowing participants a one-time election
to fully deduct capital equipment purchases in one year;
Supports state pilots to establish public-private
partnerships to provide technical assistance to self-employed
AFDC recipients;
Supports state pilots to train AFDC recipients as self-
employed providers of child care services; and
Supports state pilot projects to promote ownership of
extended family-owned businesses by AFDC recipients. Would
provide incentives and assistance for families receiving aid
to families with dependent children to work together as
managers and employees in extended family-owned businesses.
Sec. 106. Amends JOBS provisions to emphasize efforts to
move people into the work force over training and education.
TITLE II--Initiatives to Strengthen Families and Break the Cycle of
Welfare Dependency
Sec. 201. Supports state pilots to establish child centered
programs through conversion of AFDC and JOBS payments into
block grants, plus funds available under other sections of
this bill. States could apply portions of funds to: (1)
establish residential homes for teenage mothers with
children, including supporting the pilot described in section
107; (2) expand programs to expedite and improve adoption of
children; (3) expand child care assistance for needy children
of working families; (4) establish supportive residential
schools for children enrolled at the request of their
parents; (5) provide other services directly to needy
children; and (6) fund other programs that are consistent
with the purposes of the Act. The Secretary of DHHS, in
reviewing the application, must ensure that the State's
program will protect the well-being of affected children.
Sec. 202. Supports state pilots to discourage welfare
recipients from having additional children while on welfare
and increase the financial reward for work. Recipients who
had a second child would not get additional benefits but
would be allowed to keep a higher portion of job earnings.
Sec. 203. Supports state pilots to improve incentives to
get married. States would disregard to a greater extent the
second parent's earnings and work patterns in determining
benefits.
Sec. 204. Supports state pilots to reduce AFDC benefits if
school attendance of mother or child is irregular or
preventive health care for the dependent children is not
attained.
Sec. 205. Supports demonstration projects to increase child
support collection, including: increasing the child support
disregard, from $50 to a higher level decided by the state;
and, holding parents accountable for the child support
obligations of their minor children.
Sec. 206. Supports state demonstrations of innovative
teenage pregnancy prevention programs.
TITLE III--Initiatives to Diversify and Improve Performance of Welfare
Services
Sec. 301. Supports state pilots to provide incentives to
private sector, for-profit and non-profit groups to place
welfare recipients in private sector jobs. Companies would
keep a portion of welfare savings as payment for successful
job placements.
Sec. 302. Supports state pilots to implement performance-
based management systems for public welfare providers.
TITLE IV--Offsetting Expenditure Reductions
Sec. 401. Eliminates the ``three-entity'' rule, reducing
the amount of certain Federal subsidies individual farmers
can receive from $250,000 to $125,000 per year.
______
By Mr. McCAIN:
S. 1933. A bill to repeal the Medicare and Medicaid coverage data
bank, and for other purposes; to the Committee on Finance.
repeal of medicare/medicaid data bank
Mr. McCAIN. Mr. President, I am pleased to introduce a bill that
would eliminate a large and unjustified administrative burden imposed
on employers by an ill-considered piece of legislation passed last
year. It would repeal a law that is extremely expensive, burdensome,
punitive, and in my view, entirely unnecessary.
Specifically, the bill would repeal section 13581 of OBRA 1993, which
established the Medicare and Medicaid data bank. This remarkably
intrusive law requires every employer who offers health care coverage
to provide substantial and often difficult-to-obtain information on
current and past employees and their dependents, including names,
social security numbers, health care plans and period of coverage. This
information would have to be provided on each employee's W-2 form
beginning this year. Employers that do not satisfy this considerable
reporting obligation are subject to substantial penalties, possibly up
to $1,000 per violation.
According to the law that created the requirement, the purpose of the
Medicare and Medicaid data bank is to assist in ``the identification
of, and the collection from, third parties responsible for the
reimbursement of'' costs under Medicare and Medicaid. Thus, its
purported objective is to ensure reimbursement of costs to Medicare or
Medicaid when a third party is the primary payor. This is a legitimate
objective. However, if the objective of the data bank is to preserve
Medicare and Medicaid funds, why is it necessary to mandate information
on all employees, the vast majority of whom have no direct association
with either the Medicare or Medicaid program.
While employers have to report on over 140 million individuals, HCFA
has estimated that only about 5 percent of the work force is
potentially affected by Medicare or Medicaid's coordination of benefits
and secondary payor provisions. Private sector groups, such as those
included in the Coalition on Employer Health Coverage Reporting and the
Medicare/Medicaid Data Bank, believe that only 2 percent of employees
would be subject to these provisions. This would mean that 98 percent
of the required data is irrelevant to the stated objective of the data
bank law. At the very least, the law is unduly broad and needs to be
seriously reconsidered.
I would add that the law applies only to employers that provide
health insurance coverage to their employees. It is unconscionable that
we are adding costs and penalties to those who have been most diligent
in providing health coverage to their employees. The last thing that
the Federal Government should do is impose disincentives to employee
health care coverage. These are precisely the employers who we should
be rewarding.
We must not underestimate how burdensome the reporting requirement of
this law is. The information required is often not maintained on a
routine basis by employers for any business reason and will be
expensive to obtain. For example, businesses typically do not maintain
the names and social security numbers of the dependents of employees.
Moreover, due to the vague statutory language and the lack of HCFA
guidance, it is not clear exactly what information must be provided.
For instance, employers do not know how far back they must go in
reporting on former employees.
What makes the reporting requirement particularly egregious is that
HCFA is already obtaining this information in a much more efficient
manner than that required under OBRA 1993. The data bank duplicates
other legislative and administrative efforts to ensure that Medicare
and Medicaid are reimbursed by primary payors. For example, OBRA 1989
provides for HCFA to periodically match Medicare beneficiary data with
Internal Revenue Service employment information. Also, HCFA directly
asks beneficiaries about primary payor coverage. To the extent that the
data bank duplicates these efforts, any potential savings will not be
realized. It is clearly preferable to require HCFA to use the
information it already has than to require the private sector to
provide duplicative information.
In addition to these administrative problems imposed on employers, no
funds have been appropriated by Congress to implement the data bank and
no administrative regulations have been drafted by HCFA. Still,
employers are being required to provide the data with a threat of
substantial penalties for failing to do so. Once again, the Federal
Government is imposing substantial financial burdens on the private
sector without fully accepting its share of the burden to implement a
program. Mr. President, we should expect the worst case scenario to
occur: employers will provide the required information at substantial
administrative burden and there will be no data bank in which to make
use of it.
I do not want this bill to be construed, in any way, as opposition to
HCFA obtaining the information it needs to administer the Medicare and
Medicaid programs efficiently, and obtaining reimbursement from third
party payors when appropriate. To assure that HCFA has the information
it needs, the bill would also require the Secretary of HHS to conduct a
study and report to Congress on how to achieve the purported objectives
of the data bank in the most cost-effective manner possible.
The Secretary's study would have to take into consideration the
administrative costs and burden on the private sector and the
Government of processing and providing the necessary information versus
the benefits and savings that such reporting requirements would
produce. It must also consider current HCFA reporting requirements and
the ability of entities to obtain the required information.
Too often, Congress considers only the cost savings to the Federal
Government of legislation while ignoring costs to other parties. The
Medicare and Medicaid data bank is a case in point. Congress required
information on millions of employees to save the Federal Government
money. Yet, it will cost employers more money to comply than the
Government saves. Congress must stop passing laws that impose large,
unjustified administrative burdens on other entities.
I was initially planning to introduce this bill as an amendment to S.
4, the Competitiveness Act, due to the adverse effect of the reporting
requirement on businesses. However, I have decided instead to introduce
it as a free standing bill to allow the Labor and Human Resources
Committee or the Finance Committee an opportunity to consider it. I
reserve the right to raise it as an amendment at a later time if it is
not being addressed adequately and in a very timely manner to avoid
further unnecessary costs to employers.
In summary, the reporting requirement for the Medicare and Medicaid
data bank is duplicative, burdensome, ineffective, and unnecessary. In
addition, it penalizes employers who provide health care benefits to
their workers--exactly the opposite of the goal we should be pursuing.
The data bank should be repealed and a more cost-effective approach
should be found to ensure that Medicare and Medicaid are appropriately
reimbursed by primary payors.
Mr. President, I request unanimous consent that the text of this bill
be included in the Record, as well as a statement by the Coalition on
Employer Health Coverage Reporting and the Medicare/Medicaid Data Bank
and several representative letters from employers and employer groups.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 1933
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. REPEAL OF MEDICARE AND MEDICAID COVERAGE DATA
BANK.
(a) Repeal.--
(1) In general.--Section 13581 of the Omnibus Budget
Reconciliation Act of 1993 is hereby repealed.
(2) Application of the social security act.--The Social
Security Act shall be applied and administered as if section
13581 of the Omnibus Budget Reconciliation Act of 1993 (and
the amendments made by such section) had not been enacted.
(b) Study and Report.--
(1) Study.--The Secretary of Health and Human Services
(hereafter in this subsection referred to as the
``Secretary'') shall conduct a study on how to achieve the
objectives of the data bank described in section 1144 of the
Social Security Act (as in effect on the day before the date
of the enactment of this Act) in the most cost-effective
manner, taking into account--
(A) the administrative burden of such data bank on private
sector entities and governments,
(B) the possible duplicative reporting requirements of the
Health Care Financing Administration in effect on such date
of enactment, and
(C) the legal ability of such entities and governments to
acquire the required information.
(2) Report.--The Secretary shall report to the Congress on
the results of the study described in paragraph (1) by not
later than 180 days after the enactment of this Act.
____
Coalition on Employer Health Coverage Reporting and the
Medicare/Medicaid Data Bank,
March 14, 1994.
Hon. John McCain,
U.S. Senate, Russell SOB, Washington, DC.
Dear Senator McCain: I have been informed that you may
offer an amendment to S. 4, the National Competitiveness Act
of 1994, to repeal the employer reporting requirement
associated with the Health Care Financing Administration's
Medicare and Medicaid Data Bank. I am writing to urge you to
offer the amendment and to urge all your colleagues in the
Senate to support it.
Enclosed is a copy of the written statement submitted by 28
members of the Coalition on Employer Health Coverage
Reporting and the Medicare/Medicaid Data Bank for inclusion
in the record of the Senate Finance Committee's February 23,
1994 hearing on the President's fiscal year 1995 budget. The
written statement urges the Committee to help ensure that
implementation of the data bank is excluded from the 1995
budget until the current employer reporting requirement is
replaced with a more efficient and cost-effective source of
health coverage information.
The Coalition is a broad-based, ad hoc group of more than
70 associations, organizations and individual companies
reflecting a cross-section of the employer community. It was
formed to work with Congress and the Administration to
identify an alternative means to address the secondary payer
enforcement and compliance needs of the Health Care Financing
Administration (HCFA) that does not impose such a
disproportionate financial and administrative burden on
employers.
On behalf of the Coalition, I would like to thank you for
your efforts and again urge you to offer the amendment to
repeal the employer reporting requirement. You have our
strong support for this effort.
Sincerely,
Anthony J. Knettel,
Director, Health Policy, The ERISA Industry Committee,
Coalition Coordinator.
____
Coalition on Employer Health Coverage Reporting and the
Medicare /Medicaid Data Bank,
March 9, 1994.
Wayne Hosier,
Committee on Finance, U.S. Senate, Dirksen Senate Office
Building, Washington, DC.
Dear Mr. Hosier: Enclosed please find five copies of a
written statement, submitted jointly by the undersigned
associations, organizations and companies, for the record of
the Finance Committee's February 23, 1994 hearing on the
President's fiscal year 1995 budget. Per your request, we are
also submitting a copy of the written statement on computer
disk in both Wordperfect (document databank.wpf) and ASCII
(document databank.asc) format.
Each of the associations, organizations and companies
jointly submitting this statement is a participating member
in the Coalition on Employer Health Coverage Reporting and
the Medicare/Medicaid Data Bank.
Submitted by
Aetna Life & Casualty.
American Express Co.
American Restaurant Group Inc.
American Telephone & Telegraph Co.
American Trucking Associations.
Associated Builders & Contractors.
Atlantic Richfield Co.
Bell Atlantic--NSI.
Chevron Corp.
Employers Council on Flexible Compensation.
The ERISA Industry Committee.
Food Marketing Institute.
William M. Mercer, Incorporated.
Motorola Inc.
National Association of Manufacturers.
National Association of Wholesalers.
National Employee Benefits Institute.
National Retail Federation.
NYNEX Corp.
PPG Industries.
Profit Sharing Council of America.
Ralston Purina Co.
Small Business Council of America.
Society of Professional Benefit Administrators.
U.S. Chamber of Commerce.
United Technologies Corp.
Washington Business Group on Health.
Zeneca Inc.
____
[From members of the Coalition on Employer Health Coverage Reporting
and the Medicare/Medicaid Data Bank, Feb. 23, 1994]
The President's Budget for Fiscal Year 1995--Committee on Finance, U.S.
Senate
Members of the Coalition on Employer Health Coverage
Reporting and the Medicare/Medicaid Data Bank submit to the
Committee on Finance, U.S. Senate, the following written
testimony regarding the implementation and operation of the
data bank as proposed by the President's fiscal year 1995
federal budget. Specifically, Coalition members urge the
Committee to ensure that the implementation and operation of
HCFA's Medicare and Medicaid Data Bank be excluded from the
fiscal year 1995 budget until the current employer reporting
requirement is replaced with a more efficient and cost-
effective source of health coverage information.
The Coalition is a broad-based, ad hoc group of
associations, organizations and individual companies
reflecting a cross-section of the employer community. The
Coalition was formed to work with Congress and the
Administration to identify an alternative means to address
the secondary payer enforcement and compliance needs of the
Health Care Financing Administration (HCFA) that does not
impose a disproportionate financial and administrative burden
on employers.
background
Beginning with calendar year 1994, an employer that ``has,
or contributes to, a group health plan, with respect to which
at least 1 employee of such employer is an electing
individual,'' must annually report to a new HCFA Medicare and
Medicaid Data Bank information relating to the health
insurance coverage status of covered employees, their
dependents, and other covered electing individuals. An
``electing individual'' is ``an individual associated or
formerly associated with the employer in a business
relationship who elects coverage under the employer's group
health plan.''
The reporting requirement was created by Sec. 13581 of the
Omnibus Budget Reconciliation Act of 1993 (P.L. 103-66). This
provision adds a new Sec. 1144 at the end of Part A of title
XI of the Social Security Act (see 42 U.S.C. 1301 et seq.).
The information supplied to the data bank is intended to be
used to help prevent mistaken payments to physicians and
hospitals by Medicare and Medicaid.
The budget the President recently submitted to Congress
requested a supplemental amount of $15 million for fiscal
year 1994 to implement the data bank, as well as budget
authority for the ongoing administration of the data bank
in fiscal year 1995 and subsequent years.
analysis
The Coalition's analysis suggests that, so long as the
Medicare and Medicaid Data Bank is based on the current
employer reporting requirement, it will neither successfully
address HCFA's concerns regarding mistaken primary payments
nor justify the financial and administrative burdens imposed
on employers.
1. Employer compliance
In many cases it will be impossible for employers to fully
comply with current law. Employers cannot easily obtain from
employees any missing information that must be reported. For
example, employees' responses are frequently unreliable and
are time-consuming and expensive to verify. Further,
employers' ability to request documentation to verify certain
information to be reported, such as dependents' social
security numbers, is limited by privacy laws.
Obtaining information about dependents, in particular, will
be difficult, time consuming, expensive, and in many cases
impossible--especially for employers with high work force
turnover. The statute is sufficiently broad that employers
appear to be required to report such information about
retirees and their spouses, employees' separated/divorced
spouses and noncustodial dependent children who are still
covered under the employer's health plan, franchisees,
participants in Taft-Hartley plans, and many other persons
who may fit the definition of ``electing individuals'' under
the statute--all of whom are either geographically dispersed
and difficult to locate, or otherwise pose significant
administrative problems for employers trying to obtain
accurate information.
As a result, employers are at risk to be assessed
significant penalties for failure to report information that
they do not routinely possess and which they may not be able
to obtain from any other source.
2. Administrative and financial burden on employers
The administrative and financial burden imposed on
employers by full compliance with the law is enormous. A
significant portion of the information to be reported to the
data bank is not currently maintained by employers for any
business purpose. Nor is all of the required information
routinely maintained by insurers. In many cases, it will have
to be compiled manually, at tremendous cost. In the
aggregate, employers will have to expend hundreds of millions
of dollars annually to comply.
The only persons who have all the information HCFA needs
are Medicare and Medicaid enrollees themselves. HCFA claims
it is too difficult for the government to obtain this
information directly from enrollees; instead, HCFA wants to
burden employers and their insurers. HCFA is relying on a
false premise, however. The information will be far more
difficult and expensive for employers to obtain that it is
for HCFA to obtain, in part because employers are required to
obtain it from tens of millions of additional persons who are
neither Medicare nor Medicaid enrollees.
3. Utility of the data collected:
The rationale for the reporting requirement to allow HCFA
to march the health coverage information received against
other government records in an effort to identify employer
plans that should be paying ``primary'' and thus prevent
mistaken reimbursements for health care services by Medicare
and Medicaid. However, employer reporting is an extremely
inefficient means to obtain the information HCFA is seeking.
Employers will have to report coverage information for more
than 140 million individuals. But only a minute amount of the
information employers will report will be relevant to the
data bank's purpose because, according to a preliminary
General Accounting Office report, only about 2 percent of
employees and their dependents are Medicare and Medicaid
beneficiaries subject to secondary payer rules. In many
industries with a young work force, such as food service and
hospitality, the percentage may be even less.
Even where the data reported by employers is relevant, it
will still not be sufficient in many cases to enable HCFA to
identify or prevent mistaken payments. Moreover, by the time
the information is reported to HCFA, processed by the data
bank, and incorporated into claims payment systems it will
often be a year old or more, further limiting its usefulness.
4. Availability of other sources of data:
HCFA should already receive, when claims are filed, much of
the information that is part of the employer reporting
requirement. For example, under Medicare the UB-92 and other
claims forms require secondary payer information to be
reported. In fact, HCFA has not been successful at enforcing
this claims-based reporting requirement or fully
incorporating the information it does receive into its
systems. HCFA has also been unable to take full advantage of
additional information it receives from other sources, such
as beneficiaries themselves and the Medicare Secondary Payer
data match. It makes far more sense to ensure HCFA makes
better use of the information that it currently receives than
to overwhelm it with data generated by the new employer
reporting requirement.
5. Effective date and guidance
Not only has the federal government imposed an unclear and
unworkable reporting requirement on employers, it also has
compounded the problem with an unrealistic effective date.
Due to several vague provisions in the statutory language, as
well as the complete lack of any timely guidance from HCFA,
many employers either are unaware that they have an
obligation to report this data or cannot determine with any
certainty what their obligation is.
It is already too late to provide the guidance employers
need to prepare to collect and report data on employees'
health coverage status for calendar year 1994. Employers
would need to learn about and understand their obligation,
train staff, rewrite payroll computer programs, modify health
plan open season election forms, and otherwise prepare to
report such information before they can successfully comply
with the law. Despite employers' good-faith efforts, there is
likely to be widespread noncompliance for calender year 1994
and for an indeterminable period following the eventual
publication of guidance.
conclusion
The employer reporting requirement effectively forces
employers to perform HCFA's program administration,
enforcement and compliance responsibilities in a very
inefficient manner. Further, even if the reporting
requirement itself were feasible--which it emphatically is
not--employers who spend (in the aggregate) hundreds of
millions of dollars annually attempting to comply with the
law in good faith will find their effort and expense
squandered since the date received by HCFA will be
incomplete, incompatible, or unusable due to the impossibly
short effective date and the complete lack of any timely
guidance.
Coalition members urge the Committee to ensure that the
implementation and operation of HCFA's Medicare and Medicaid
Data Bank be excluded from the fiscal year 1995 budget until
the current employer reporting requirement is replaced with a
more efficient and cost-effective source of health coverage
information. We hope to work with you and others in Congress
and the Administration to find an alternative means to
address HCFA's secondary payer enforcement and compliance
needs that does not impose such disproportionate financial
and administrative burdens on employers. In particular, we
urge that the multiple sources of data and data collection
vehicles already available to HCFA be adequately funded and
implemented rather than imposing this massive new reporting
burden on employers.
____
National Federation of
Independent Business,
Washington, DC, March 15, 1994.
Hon. John McCain,
U.S. Senate, Washington, DC.
Dear Senator McCain: On behalf of the 600,000 members of
the National Federation of Independent Business (NFIB), I am
writing to support your efforts to repeal the Medicare and
Medicaid data bank reporting requirement. This requirement
will be a new paperwork nightmare for America's small
business men and women who are creating the majority of our
country's new jobs.
The burdensome provision requires all employers to provide
the names, addresses, tax identification numbers, types of
coverage, and enrollment dates for all individuals (including
dependents and part-time workers) participating in any
employer-sponsored health insurance plan to the Health Care
Financing Administration (HCFA). Employers are at risk of
being assessed significant penalties for failure to report
information that they do not routinely possess.
In order to solve a small problem, the government is
requiring far-reaching reporting, resulting in needless
paperwork for employers and the government. The General
Accounting Office has reviewed the data bank proposal
determining it was an expensive and inefficient way to
address the problem of coordination of benefits with
Medicare.
What is a problem of communication between a patient, the
health care provider, Medicare, and insurance companies is
``solved'' by placing a tremendous burden on small business.
Business is not part of the problem, but under the Medicare
data bank they must bear the expense of the solution.
Currently, HCFA receives through other sources much of the
information this requirement would mandate. We believe HCFA
should better manage the information it already has before
creating new burdens on business.
Thank you for your efforts against excessive paperwork
burdens on small business. We look forward to working with
you.
Sincerely,
John J. Motley,
Vice President,
Federal Government Relations.
____
Employee Assistance Program and Behavioral Health Managed
Care Service,
Tempe, AZ, February 22, 1994.
Hon. John McCain,
U.S. Senate, Washington, DC.
Dear Senator McCain: I am the Vice President,
Administration at CONTACT which employs 75 employees in the
Phoenix area. I am writing you today to urge you to repeal
the Medicare/Medicial Data Bank provisions enacted as part of
OBRA 93.
As you may know, the Data Bank law requires employers to
submit extensive information on their employees and the
employees' spouses and dependents. Like Section 89, which
Congress hastily enacted and then repealed, the burdens
imposed by the Data Bank law far outweigh any possible
benefit that could be produced.
The Data Bank provisions were enacted without the benefit
of proper analysis or the input of the employers and human
resource professionals who have to comply with the law and
were slipped into OBRA 1993 just before the bill was passed.
The information to be requested from the employee is overly
broad. Under the new law, an employee is defined as any
individual associated or formerly associated with the
employer in a business relationship. Therefore, employers
have to submit information, not just on employees but on
independent contractors and former employees such as retires
and COBRA recipients. Gathering the detailed information
required is nearly impossible. Should an employer take all
the steps necessary to collect the data about employees,
spouses, and dependents, they risk completely alienating
their workforce or even violating the Privacy Act.
Now, employers are faced with a huge reporting requirement
with penalties of up to $10,000 for each employee or
dependent whose information is not submitted. In addition,
Congress has not appropriated any funding for the Data Bank
to be set up. As a result, employers are being asked to spend
tens of thousands of dollars to gather and submit information
to a Data Bank that does not even exist, or face enormous
fines and penalties.
Enactment of this Data Bank would be overly burdensome and
costly for both the government and employers. I urge you to
enact legislation to repeal the Data Bank law.
Sincerely,
Angela Williams,
Vice President,
Administration.
____
National Employee
Benefits Institute,
Washington, DC, March 14, 1994.
Re Medicare and Medicaid data bank.
Hon. John McCain,
U.S. Senate, Russell Senate Office Building, Washington, DC.
Dear Senator McCain: The National Employee Benefits
Institute (NEBI) supports legislation you propose to
introduce to repeal the employer health coverage reporting
requirement associated with the Medicare & Medicaid Data Bank
(``Data Bank''). NEBI also supports provisions in the
proposed legislation to require the Health Care Financing
Administration (HCFA) to conduct a study of alternative
methods to collecting this information.
As you know, the Medicare & Medicaid Data Bank was enacted
under OBRA '93 (P.L. 103-66) to assist HCFA to identify
mistaken reimbursements for health care services paid by
Medicare and Medicaid. NEBI supports legislation to repeal
the employer reporting requirement for the following reasons:
(1) Inefficient Collection Method. The employer reporting
requirement is not the most efficient method of collecting
the intended information because only a small percentage of
employees are Medicare and Medicaid beneficiaries. Therefore,
only a small amount of the information will fulfill HCFA's
objectives. Employers and HCFA will spend unnecessary
resources and time on processing the information to identify
very little useful data. Alternative methods should be
explored to collect this information more efficiently.
(2) Administrative Burden. The employer reporting
requirement imposes significant administrative and financial
costs on employers. Employers have to install costly new
programs to track the required information and to submit the
reports to HCFA.
(3) Employer Compliance. This information is difficult to
collect due to high employee turnover, incomplete employee
responses, and locating geographically diverse employee
dependents and other ``electing individuals'' for whom the
employer has to report. Therefore, even with good faith
efforts, employers may not be able to fully comply with the
requirement.
(4) Lack of Funding. OBRA '93 did not provide funding for
the Data Bank. A funding request was defeated earlier this
year under the supplemental funding bill for the FY1994
budget and a new proposal under the Administration's FY1995
federal budget is still under consideration. Without funding,
HCFA will not be able to effectively process nor enforce the
reporting requirement.
(5) Limited Guidance. HCFA has not yet issued guidance for
employers to use to comply with the requirement. HCFA has
indicated it may release limited guidance in the form of a
press release or some other publication. This underscores the
belief that HCFA is not prepared to utilize the data
effectively.
NEBI is an organization composed of Fortune 1,000-sized
companies which monitors, evaluates and comments upon pending
legislation and regulations affecting employee benefits. NEBI
provides Congress and the federal agencies with facts and
information, positions and alternatives so that Congress and
regulatory agencies understand the impact of proposed
legislation and regulations on employers and the employee
benefit programs maintained by employers.
NEBI urges you to introduce your legislation to repeal the
reporting requirement. NEBI supports the efforts of you and
your Senate colleagues to identify a more effective and less
costly method to collect this information.
Please feel free to contact NEBI Legislative Assistant,
Laura Tomarchio, at (202) 872-8080, with any questions.
Sincerely,
Joseph Semo,
Director.
____
ERISA Industry Committee
Washington, DC, March 14, 1994.
Hon. John McCain,
U.S. Senate, Russell Senate Office Building, Washington, DC.
Dear Senator McCain: We understand that you may offer an
amendment to S. 4, the National Competitiveness Act of 1994,
to repeal the requirement that employers report certain
health coverage information to the Health Care Financing
Administration (HCFA) for use by the Medicare and Medicaid
Data Bank. The members of the ERISA Industry Committee (ERIC)
urge you to offer the amendment and urge your colleagues in
the Senate to support it.
ERIC is a non-profit employer association committed to the
advancement of the employee retirement, health and welfare
benefit plans of America's major employers. ERIC represents
the employee benefits interests of more than 125 of the
nation's largest employers. As sponsors of health,
disability, pension, savings, life insurance, and other
welfare benefit plans directly covering approximately 25
million plan participants and beneficiaries, ERIC's members
provide coverage to about 10 percent of the U.S. population.
Beginning January 1, 1994, employers must report employees'
and dependents' health insurance coverage status, social
security numbers, and related information to HCFA's data
bank. This reporting requirement was created by last year's
budget reconciliation law (OBRA '93, P.L. 103-66). ERIC's
analysis has concluded that the employer reporting
requirement neither successfully addresses HCFA's concerns
regarding the prevention of mistaken primary payments nor
justifies the burdens it imposes on employers.
First, it will be impossible for employers (small and
large) to fully comply with the requirement to report
information regarding health coverage to the data bank
because employers do not possess all the information to be
reported and are prohibited by other laws from requesting
documentation from employees to verify the accuracy of some
of the information they must collect from employees.
Second, even if full compliance were possible, the
financial and administrative burden imposed on employers by
full compliance with the current data bank reporting
requirement is enormous--far exceeding any actual savings to
be realized by HCFA. These hundreds of millions of dollars in
annual employer compliance costs would be far better spent on
benefits for employees and dependents.
Third, the manner in which employers are required to
collect data for HCFA is incredibly inefficient and
impracticable--less than 5 percent of the information
reported by employers will be relevant to Medicare and
Medicaid. Even this data won't prevent most mistaken
Medicare/Medicaid payments.
Fourth, the government has been unable to make use of the
relevant information that it currently receives from other
sources. It would be more efficient to help HCFA manage the
information that will not be effectively utilized.
Fifth, the unrealistic effective date for the reporting
requirement (January 1, 1994), together with the complete
lack of any timely guidance from HCFA, compounds the unclear
and unworkable reporting burden imposed on employers.
ERIC hopes to work with you and others in Congress and the
Administration to find alternative means to address HCFA's
secondary payer enforcement and compliance needs that does
not impose such disproportionate financial and administrative
burdens on employers. In particular, we urge that the
multiple sources of data and data collection vehicles already
available to HCFA be adequately funded and implemented rather
than imposing this massive new reporting burden on employers.
Thank you for your efforts to repeal the employer reporting
requirement. You have our strong support for this effort.
Sincerely,
Mark J. Ugoretz,
President.
____
Washington Business Group
on Health,
Washington, DC, March 14, 1994.
Hon. John McCain,
U.S. Senate, Russell Senate Office Building, Washington, DC.
Dear Senator McCain: On behalf of the Washington Business
Group on Health (WBGH), I would like to express our support
of your efforts to repeal the Medicare and Medicaid Health
Coverage Data Bank, authorized by the Omnibus Budget
Reconciliation Act of 1993, and its attendant reporting
requirements imposed on employers. The WBGH is a nonprofit
organization of 200 of the nation's largest employers,
representing all sectors of American industry, and is devoted
exclusively to health policy and related worksite issues.
WBGH members provide health care benefits to more than 30
million employees, retirees, and dependents.
We have been concerned about the design and implementation
of the Data Bank and the mandate for employers to report
certain health coverage information about employees, their
dependents, and ``other eligible employees'' in the absence
of any regulations or other guidance. Although we support
efforts to ease the administration of the Medicare and
Medicaid programs, we firmly believe that the Data Bank will
not provide meaningful assistance to HCFA. We also know that
it will impose tremendous costs on employers, with little of
value being produced.
We appreciate your recognition of the serious problems the
Data Bank and its reporting requirements pose for employers.
We hope that your colleagues will joint you in supporting
repeal of the Data Bank as designed under OBRA 93.
Sincerely,
Kelly L. Traw, J.D.,
Manager.
____
The Associated General
Contractors of America,
Washington, DC, March 14, 1994.
Hon. John McCain,
U.S. Senate, Washington, DC.
Dear Senator McCain: The Associated General Contractors of
America (AGC), representing 33,000 firms, including 8,000 of
America's leading general contractors, supports your efforts
to repeal the employer reporting requirement included in
Section 13851 of the Omnibus Budget Reconciliation Act of
1993 (OBRA '93) establishing a Medicare/Medicaid Coverage
Data Bank to be housed in the Health Care Financing
Administration (HCFA) at the Department of Health and Human
Services.
I understand that you may offer an amendment repealing the
reporting requirement and replacing it with a requirement
that HCFA conduct a study to identify a better source of
information for the data bank. AGC would support such an
amendment.
The current employer requirement in our estimation will not
solve HCFA's secondary payer enforcement problems while at
the same time imposing enormous new annual compliance
problems on construction industry employers who must comply
with a host of existing burdensome paperwork requirements.
Again, we support your amendment and urge you to offer it
as soon as possible.
Sincerely,
Stephen E. Sandherr,
Executive Director,
Congressional Relations.
____
Food Marketing Institute,
Washington, DC, March 14, 1994.
Hon. John McCain,
U.S. Senate,
Washington, DC.
Dear Senator McCain: We strongly support your effort to
repeal the employer health coverage reporting requirement to
the Health Care Financing Administration (HCFA) associated
with the Medicare and Medicaid Data Bank. The requirement is
unduly burdensome to business and will not serve its intended
purpose of recouping the estimated billion dollars owning to
the government by employers to finance Medicare as Secondary
Payer rules (MSP).
The Food Marketing Institute (FMI) is a nonprofit
association conducting programs in research, education,
industry relations and public affairs on behalf of its 1,500
members--food retailers and wholesalers and their customers
in the United States and around the world. FMI's domestic
member companies operate approximately 19,000 retail food
stores with a combined annual sales volume of $190 billion--
more than half of all grocery store sales in the United
States. FMI's retail memberships is composed of large multi-
store chains, small regional firms and independent
supermarkets.
Less than two percent of all employees and dependents are
subject to the Medicare as secondary payer provision. Thus,
98 percent of the data collected will be irrelevant to the
problem being addressed. This unnecessary overkill would be
disastrous and indicates how poorly thought out this measure
is.
Much of the data required to be reported is not routinely
maintained by employers. Food retailers employ many part-
timers and have a high employee turnover rate. It is
virtually impossible to gather the required information for
thousands of current and former employees and dependents.
Even if it were possible for employers to comply in spite
of privacy of information concerns and the lack of available
data, the information gathered will be useless. HCFA
acknowledges that it simply does not have the resources--
human or financial--or even a data bank system in place--to
begin to handle the data required to be collected.
On behalf of our nation's food distributors, we strongly
support the repeal of this ill-conceived requirement.
Sincerely,
Tim Hammonds,
President.
____
Health Coverage Reporting Requirements
Under existing law Medicare is generally the secondary
payer (MSP) when an individual is covered by employer
provided group health insurance. The Health Care Financing
Administration (HCFA) believes that noncompliance with these
rules costs the U.S. Treasury close to a billion dollars a
year in Medicare overpayments.
The Omnibus Budget Reconciliation Act of 1993 includes a
new provision establishing a data bank to identify employers
responsible for health benefits provided to employees and
their dependents by Medicare or Medicaid. This new law went
into effect on January 1st of this year, with the first
report to be filed on Feb. 28, 1995. As part of the data bank
program, all employers will have to submit a new form (H-2)
that identifies for the prior year:
Name and social security number of each employee and former
employee electing coverage under the employer's health plan.
Name and social security number of each covered dependent.
Type of coverage (single/family).
Name/Address/identifying number of the plan.
The period during the year the coverage was in effect.
This creates huge new burdens for employers because much of
this information is not currently collected. Amazingly, this
data collection and paperwork nightmare will produce little
of value for HCFA. For the following reasons, these reporting
requirements should be repealed:
Enormous burden
Much of the information to be reported to the data bank
(especially the names and social security numbers of
dependents) is not maintained on a routine basis by
employers. There is no business reason to do so. New programs
to collect this data will depend on employee cooperation and
will certainly be effected by privacy concerns. Food
retailers employ many part-timers (more than half of store
employees) and have high employee turnover rates. Their
ability to gather the required data for hundreds, even
thousands of current and former employees and dependents is
problematic. Also, many food distributors' employees are in
multiemployer health plans and do not receive information
from the plan about the type of coverage elected.
paperwork overkill
Less than two percent of all employees and dependents are
subject to the medicare as secondary payer provision. Thus,
98 percent of the data collected will be irrelevant to the
problem being addressed. This is incredible even for a
government program. Even for the covered two percent, HCFA
will be receiving huge amounts of data to find a small number
of violations--and still won't be able to identify those
violators without significant further investigation.
information overload
The magnitude of the data that will be generated by these
reports is so huge that HCFA will be overwhelmed with the
information. HCFA acknowledges that it simply does not have
the resources--human or financial--or the systems in place to
begin to handle the data that will be collected. The agency
is asking for increased funding to handle the data. Reporting
this information to HCFA will be a futile and wasteful
exercise.
employers must comply without instructions
Despite the fact that employers are already required to
comply with the law, no guidance has been issued yet on how
to comply. Employers will be penalized for failing to report
information that they do not routinely possess and which they
may not be able to obtain from any other source. The
Department of Labor may assess civil penalties of up to
$1,000 for each violation of the new reporting requirements.
A violation is per participant or beneficiary, not per group
of employees as a whole. Employers would also be subject to
the same penalties as those for failure to file W-2's--
generally $50/violation, or $1,000/violation with no limit,
if the violation is willful.
health care reform is coming
Health care reform legislation is likely to mean
fundamental changes in employer plans. What is the point of
initiating the extremely costly new systems necessary to
comply with these new requirements when the whole program
could be moot in short order.
For all these reasons, these new reporting requirements
must be repealed.
______
By Mr. DOLE:
S.J. Res. 172. A joint resolution designating May 30, 1994, through
June 6, 1994, as a ``Time for the National Observance of the Fiftieth
Anniversary of World War II''; to the Committee on the Judiciary.
the 50th anniversary of world war ii
Mr. DOLE. Mr. President, I rise today to introduce a joint resolution
to designate the week of May 30, through June 7, 1994, for the National
Observance of the 50th Anniversary of World War II.
1944 was a turning point in the war that was a turning point in
America's history and in world history. It is fitting that Americans
remember that year, and that we remember the soldiers who fought and
died in places like Anzio, Bastogne, and the Phillipine Sea.
On course, June 6 will also mark the 50th anniversary of D-Day--the
greatest amphibious operation in military history. Led by Kansas native
Dwight Eisenhower, allied forces landed on the beaches of Normandy,
marking the beginning of the end of the war in Europe.
We should also remember the words of Franklin Roosevelt, who told
Americans, ``We are all in (this war)--all the way. Every single man,
woman, and child is a partner in the most tremendous undertaking of our
* * * history.''
And here at home, that partnership could be seen as American
agriculture and industry worked together to form the greatest war
machine the world had ever seen. Ships, aircraft, tanks and vehicles
were manufactured at an unprecedented rate, while American farmers
produced enough food to feed the world.
The ingenuity, creativity, and patriotism demonstrated by the
American people not only contributed to victory, but after the war,
also transformed the United States into an unmatched industrial giant.
Mr. President, by commemorating the 50th anniversary of World War II,
we will not only be remembering the past, we will also be looking to
the future, reminding all Americans that we must always be prepared, so
that we may always be free.
Mr. President, I ask unanimous consent that the text of the joint
resolution be printed in the Record.
There being no objection, the joint resolution was ordered to be
printed in the Record, as follows:
S.J. Res. 172
Whereas the brave men and women of the United States of
America made tremendous sacrifices during World War II to
save the world from tyranny and aggression;
Whereas the winds of freedom and democracy sweeping the
globe today spring from the principles for which over four
hundred thousand Americans gave their lives in World War II;
Whereas World War II and the events that led up to that war
must be understood in order that we may better understand our
own times, and more fully appreciate the reasons why eternal
vigilance against any form of tyranny is so important;
Whereas the World War II era, as reflected in its family
life, industry, and entertainment, was a unique period in
American history and epitomized our Nation's philosophy of
hard work, courage, and tenacity in the face of adversity;
Whereas, between 1991 and 1995, over nine million American
veterans of World War II will be holding reunions and
conferences and otherwise commemorating the fiftieth
anniversary of various events relating to World War II; and
Whereas June 4, 1994, marks the anniversary of the Battle
of Midway, and June 6, 1994, marks the anniversary of D-Day:
Now, therefore, be it
Resolved by the Senate and House of Representatives of the
United States of America in Congress assembled, That May 30,
1994, through June 6, 1994, is designated as a ``Time for the
National Observance of the Fiftieth Anniversary of World War
II'', and the President is authorized and requested to issue
a proclamation calling on the people of the United States to
observe that period with appropriate ceremonies and
activities.
____________________