[Congressional Record Volume 141, Number 25 (Wednesday, February 8, 1995)]
[Extensions of Remarks]
[Pages E297-E298]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


              THE INTRODUCTION OF THE SELF-SUFFICIENCY ACT

                                 ______


                            HON. BILL ORTON

                                of utah

                    in the house of representatives

                      Wednesday, February 8, 1995
  Mr. ORTON. Mr. Speaker, there are few things that more people agree 
upon than the fact that our welfare system is a failure. No one likes 
it. Taxpayers don't like it, politicians don't like it, and most of 
all--welfare recipients don't like it.
  Our welfare system often provides people who choose not to work with 
a better deal than those who choose to take a job. We need to create a 
system where work is not penalized, and where the logical choice for 
parents is to work to provide for their children.
  For this reason, I am pleased to reintroduce the Self-Sufficiency 
Act, a bill aimed at encouraging the welfare reform efforts that States 
already have underway. The Self-Sufficiency Act uses a commonsense 
approach to welfare that provides assistance to participants who are 
working toward self-sufficiency, promotes work, and gradually 
eliminates benefits to those who have chosen not to participate in a 
self-sufficiency plan.
  Moreover, the Self-Sufficiency Act may serve as a necessary 
transition to a welfare system that provides States with even greater 
control over the welfare system.
  Many of the reform plans that are on the table right now are based on 
controversial assumptions. For example, while block grants sound like a 
good idea, there are serious concerns about whether most States have 
the capabilities and resources to take over the reigns of a social 
welfare system that spans some 350 programs. The Self-Sufficiency Act 
provides for the coordinated services and State flexibility necessary 
to shape welfare systems that reflect the unique needs of each State 
population. This bill provides a middle ground for those States that 
have reservations about other reform proposals.
  This bill is based upon a program, the single parent employment 
demonstration program, that decreased the Aid to Families with 
Dependent Children caseload in the Kearns demonstration area 33 percent 
in just 2 years. The best part is that the decrease in the number of 
participants is due to success in assisting people in finding jobs that 
exist in the labor market.
  Amazingly, 44 Federal Government waivers had to be approved before 
Utah could begin using this approach to welfare. Other States seeking 
to improve upon the current system have encountered similar obstacles. 
This plan allows States to forgo the redtape and get on with helping 
people enter the labor market.
  Under this act, States may choose an approach to the Aid to Families 
with Dependent
 Children [AFDC] program that requires participants to work toward 
self-sufficiency. This approach requires every participant to negotiate 
a self-sufficiency plan with a caseworker. Each plan specifies an 
employment goal.

  Under this approach, participants will have 25 percent of benefits 
reduced for the first month and a gradual complete phase-out of 
benefits over the course of 2 years if they do not follow their self-
sufficiency plan.
  Once a State receives approval to use the self-sufficiency approach, 
it must phase-in 25 percent of the State recipients at the end of 3 
years, 50 percent at the end of 5 years, 75 percent at the end of 8 
years, and 100 percent at the end of 10 years. In other words, the 
State must be committed to transforming its welfare system into a self-
sufficiency based system.
   States that choose this approach are required to coordinate self-
sufficiency activities with programs operated under the JTPA and any 
other relevant programs.
   States that choose this approach must provide child care for those 
participants that require child care assistance. This provision ensures 
that children will not be neglected due to the activities required of a 
parent participating in the self-sufficiency program. In order to 
lessen the financial burden for States that choose this approach, 
Federal matching rates for AFDC, transitional, and at-risk child care 
are increased by 10 percent for these States.
  In order to encourage States to continually increase the efficiency 
and effectiveness of their welfare program, States may receive half of 
any estimated AFDC grant savings to use to improve their self-
sufficiency programs.
  In addition, certain AFDC eligibility requirements are altered or 
eliminated for States using this approach in order to decrease 
administrative burdens and discourage long-term welfare dependency:
  (1) The requirement that families must have received AFDC for a 
minimum period before becoming eligible for transitional Medicaid and 
child care benefits is eliminated. This provision served as an 
incentive for families to stay on welfare for a certain minimum amount 
of time even if they had to turn down employment opportunities.
  (2) Transitional Medicaid benefits and transitional child care 
benefits are allowed without regard to type of income that would 
otherwise make the family ineligible for benefits. This is a deletion 
of a well-meaning regulation that has resulted in administrative time 
needlessly being spent to determine how the last dollar of income was 
received by a participant.
  (3) The current requirement that minor parents and pregnant minors 
without children must live with a responsible adult is strengthened.
  Finally, the Secretary of HHS and other specified entities are called 
upon to develop performance standards appropriate to judge the 
effectiveness of programs developed under this approach. HHS is allowed 
to modify the AFDC Federal matching rate for participating States to 
reflect the effectiveness of the State in carrying out the program. 
State effectiveness will be judged in part on the basis of the number 
of participants who have become ineligible for AFDC due to earnings.
  A State that has been approved to use the self-sufficiency approach 
may choose any or all of the following options:
  (1) Treat two-parent families in the same manner as single parent 
families--although two-parent families are ineligible for AFDC until 30 
days after the loss of employment, and both parents must follow a 
personal plan or invoke the benefit reduction for the entire family.
  (2) Limit family AFDC benefits to the amount for which the family was 
initially determined eligible--family cap.
  (3) Provide a diversion payment of an amount up to 3 months of the 
benefit for which the family would be eligible if they participated in 
AFDC. This option can only be used for families that are facing a 
crisis or need only temporary assistance to prevent them from coming 
onto AFDC. If the family later decides they must enter the AFDC system, 
the entire amount is subtracted from payments before they begin 
receiving assistance. Families that received diversion payments would 
be eligible for 3 months of transitional child care and Medicaid 
benefits.
  (4) Enhance AFDC payments by not more than $50 per month for 
participants with a full-time self-sufficiency schedule.
  (5) Increase the earned income disregard rate from the current one-
third rate to a rate as and high as one-half, or allow income earned by 
teens in the JTPA summer program to be discounted.
  [[Page E298]] (6) Eliminate the time limit on the earned income 
disregard.
  (7) Increase the cap on asset limitations from $1,000 to $2,000. In 
addition, allowed to exempt up to one vehicle.
  (8) Upon mutual agreement with the participant, use funding from Food 
Stamps as a wage subsidy for that participant or as a direct cash 
payment to a participant following a full-time schedule self-
sufficiency plan.
  (9) Create sanctions based on poor school attendance or failure to 
immunize children.
  In addition, the Self-Sufficiency Act outlines three changes beyond 
the scope of the Aid to Families with Dependent Children program:
  (1) Allows States to deny any need-based benefits and services to 
noncitizens.
  (2) Mandates that consumer credit reports include information on 
overdue child support payments.
  (3) Provides that quarterly payments of earned income credit and 
dependent care credit will be made available.


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