[Congressional Record Volume 141, Number 171 (Wednesday, November 1, 1995)]
[Senate]
[Pages S16466-S16467]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            HHS REPORT ON THE SENATE AND HOUSE WELFARE BILLS

  Mr. MOYNIHAN. Mr. President, a September 14, 1995, report by the 
Department of Health and Human Services concludes that the Senate 
welfare bill would push 1,100,000 children into poverty, and that the 
House bill would force 2 million children below the poverty line. The 
report, which has not been officially released by HHS, was the subject 
of a front-page news story in the Los Angeles Times on Friday, October 
27. The New York Times and Washington Post ran their own stories about 
the report the next day.
  I first learned of the existence of this report 2 weeks ago, but was 
unable to obtain a copy until last Friday. The administration had 
previously refused to acknowledge that any such report existed.
  Mr. President, over the years Congress has on occasion missed 
opportunities to help our Nation's dependent children, but never before 
in our history have we calculatedly set out to injure them. The 
administration's own analysis shows that this is precisely what will 
occur under either bill now before the conference committee on welfare. 
Surely we will not permit this to happen. Surely the President will not 
permit this to happen.
  I urge all Senators to read the administration's report, and I ask 
unanimous consent that it be printed in Record.
  There being no objection, the report was ordered to be printed in the 
Record, as follows:

  The Preliminary Impact of the Senate Republican Welfare Proposal on 
         Children (The Work Opportunity Act of 1995 (S. 1120))


             the impact on poverty and income distribution

       On Child Poverty:
       S. 1120 will push 1.1 million more children into poverty, 
     an increase of almost 11 percent in the number of children 
     living below the poverty line.
       The child poverty rate will rise from 14.5 percent to 16.1 
     percent. (See methodology for a description of the poverty 
     measure used.)
       On Poverty in Families:
       An additional 1.9 million persons in families with children 
     will fall below the poverty line.
       The poverty gap for families with children will increase 
     $4.1 billion, or 25 percent. As a result, a total of $4.1 
     billion in additional income will be required to bring these 
     families up to the poverty threshold.
       On Income Distribution:
       The poorest families will face the largest program cuts 
     under S. 1120. In families with children, those in the lowest 
     income quintile will lose an average of almost $800 of their 
     annual income, or 6 percent.
       Eleven percent of families with children in the lowest 
     income quintile will face significant losses in annual income 
     of 15 percent or more. For families in the lowest quintile, 
     who have an average income of $13,400, this represents a loss 
     of more than $2,000 in annual income.
       The severity of the impact of S. 1120 on poor families 
     exacerbates the deteriorating economic situation for these 
     families who have lost a greater share of their income in the 
     past 15 years than families with higher income. Income for 
     families with children in the lowest income quintile has 
     declined by 20.7 percent over the period 1979-1990, compared 
     to 24 percent growth for families in the highest income 
     quintile.

   TABLE 1.--THE IMPACT OF THE SENATE WELFARE REFORM PROPOSAL ON CHILD  
                                 POVERTY                                
       [Simulates effects of full implementation in 1993 dollars]       
------------------------------------------------------------------------
                                          Current     Senate     Change 
                                            law      proposal   current 
------------------------------------------------------------------------
           CHILDREN UNDER 18                                            
                                                                        
Number of people in poverty (in                                         
 millions).............................       10.1       11.2        1.1
Poverty rate (in percent)..............       14.5       16.1        1.6
                                                                        
         FAMILIES WITH CHILDREN                                         
                                                                        
Number of people in poverty (in                                         
 millions).............................       17.1       19.0        1.9
Poverty rate (in percent)..............       11.8       13.2        1.5
Poverty gap (in billions)..............      $16.3      $20.4       $4.1
                                                                        
              ALL PERSONS                                               
                                                                        
Number of people in poverty (in                                         
 millions..............................       29.2       30.5        2.3
Poverty rate (in percent)..............       10.9       11.7        0.8
Poverty gap (in billions)..............      $45.9      $52.0       $5.1
------------------------------------------------------------------------
85tes: Senate Republican welfare reform proposal simulations include the
  impact of S. 1120, as amended, on AFDC, SSI, and Food Stamps. Model   
  incorporates a labor supply and state response.                       
This definition of poverty utilizes a measure of income that includes   
  case income plus the value of food stamps, schools lunches, housing   
  programs, and EITC, less federal taxes to compare to the poverty      
  thresholds.                                                           
                                                                        
Source: TRIM2 model based on data from the March 1994 Current Population
  Survey. Prepared on Sept. 14, 1995.                                   


                   TABLE 2.--THE IMPACT OF THE SENATE WELFARE REFORM PROPOSAL ON FAMILY INCOME                  
         [By Income Quintiles and Family Type Stimulates effects of full implementation in 1996 dollars]        
----------------------------------------------------------------------------------------------------------------
                                                                                                        Percent 
                                                                                                           of   
                                                                Total     Average   Average             families
                                                              reduction   income     income   Percent    losing 
                                                              in income    under   reduction   change    15% or 
                                                                 (in      current     per               more of 
                                                              billions)     law      family              their  
                                                                                                         income 
----------------------------------------------------------------------------------------------------------------
  FAMILIES WITH CHILDREN                                                                                        
                                                                                                                
Lowest......................................................      -$6.0   $13,441      -$798     -5.9       10.9
Second......................................................       -3.2    21,838       -422     -1.9        4.2


                                                                                                                

[[Page S 16467]]
             TABLE 2.--THE IMPACT OF THE SENATE WELFARE REFORM PROPOSAL ON FAMILY INCOME--Continued             
         [By Income Quintiles and Family Type Stimulates effects of full implementation in 1996 dollars]        
----------------------------------------------------------------------------------------------------------------
                                                                                                        Percent 
                                                                                                           of   
                                                                Total     Average   Average             families
                                                              reduction   income     income   Percent    losing 
                                                              in income    under   reduction   change    15% or 
                                                                 (in      current     per               more of 
                                                              billions)     law      family              their  
                                                                                                         income 
----------------------------------------------------------------------------------------------------------------
Third.......................................................       -1.1    32,016       -150     -0.5        0.9
Fourth......................................................       -0.4    45,868        -50     -0.1        0  
Highest.....................................................       -0.4    79,154        -52     -0.1        0  
                                                             ---------------------------------------------------
  Total.....................................................      -11.2    38,735       -292     -0.8        3.2
----------------------------------------------------------------------------------------------------------------
Notes: The comparison shown is between the Senate Republican Leadership welfare reform proposal and current law.
  The simulations include the impact of the provisions in S. 1120, as amended, on AFDC, SSI, and Food Stamps.   
  Model incorporates a labor supply and state response.                                                         
The definition of quintile in this analysis uses adjusted family income and sorts an equal number of persons    
  into each quintile. Adjusted family income is derived by dividing family income by the poverty level for the  
  appropriate family size.                                                                                      
                                                                                                                
Source: TRIM2 model based on data from the March 1994 Current Population Survey.                                




                              methodology

       These preliminary results are based on the TRIM2 
     microsimulation model, using data from the March 1994 Current 
     Population Survey. Overall, these estimates tend to be a 
     conservative measure of the impact of S. 1120 on poverty and 
     income distribution. The analysis assumes that states will 
     continue to operate the program like the current AFDC program 
     (i.e., they will service all families eligible for 
     assistance); that states will maintain their 1994 spending 
     levels; and that recipients are not cut off from benefits 
     prior to the five year limit. Additionally, the results are 
     conservative because not all provisions are included and 
     because the data do not identify all persons who would 
     potentially be affected by the program cuts. The model also 
     assumes dynamic change in the labor supply response for those 
     affected by the time limit provision, based on the best 
     academic estimates of labor supply response.
       The results compare the impact of the Senate Republican 
     welfare reform proposal with current law. The computer 
     simulations include the impact of the fully implemented 
     provisions in S. 1120, as amended, on AFDC, SSI, and the Food 
     Stamp Program in 1996 dollars and population. S. 1120 will 
     decrease spending on AFDC-related programs by $8.8 billion, 
     in 1996 dollars. Spending on children formerly eligible for 
     SSI will decline by $1.5 billion. The Food Stamp Program will 
     be reduced by $1.5 billion.
       The poverty analysis is displayed in 1993 dollars. The 
     definition of poverty in this analysis utilities a measure of 
     income that includes cash income plus the value of food 
     stamps, school lunches, housing programs, and the EITC less 
     federal taxes. This income is then compared to the Census 
     Bureau's poverty thresholds, adjusted for family size. For 
     example, a family of three today (1995), is living in poverty 
     with the income below $12,183; a family of four with income 
     below $15,610.
       The following are the specific provisions of S. 1120 that 
     were modeled (these provisions may not reflect the final 
     version of the Senate welfare reform bill):


                                  afdc

       Reduce AFDC spending as a result of the block grant; Limit 
     receipt of AFDC benefits to five years with a 15 percent 
     hardship exemption; Deny benefits to immigrants; and 
     Eliminate $50 child support disregard.
       Deny benefits to immigrants; and Deny benefits to some 
     children formerly eligible because of changes in the 
     definition of disabilities.


                                 stamps

       Reduce the standard deduction; Reduce benefits to eligible 
     households from 103 percent of the cost of the Thrifty Food 
     Plan to 100 percent; include energy assistance as income in 
     determining a household's eligibility and benefits; Eliminate 
     indexing for one- and two-person households; and Lower age 
     cutoff for disregard of students' earned income from 21 to 15 
     years; Require single, childless adults to work.

    TABLE 1.--THE IMPACT OF CONGRESSIONAL PROPOSALS ON CHILD POVERTY    
       [Simulates effects of full implementation in 1993 dollars]       
------------------------------------------------------------------------
                                                                 Change 
                                          Current     House       from  
                                            law     proposals   current 
                                                                  law   
------------------------------------------------------------------------
           CHILDREN UNDER 18                                            
                                                                        
Number of people in poverty (in                                         
 millions).............................       10.1       12.1        2.0
Poverty rate (in percent)..............       14.5       17.4        2.9
                                                                        
         FAMILIES WITH CHILDREN                                         
                                                                        
Number of people in poverty (in                                         
 millions).............................       17.1       20.6        3.5
Poverty rate (in percent)..............       11.8       14.2        2.4
Poverty gap (in billions)..............       16.3       24.5        8.1
                                                                        
              ALL PERSONS                                               
                                                                        
Number of people in poverty (in                                         
 millions).............................       28.2       32.2        4.0
Poverty rate (in percent)..............       10.9       12.4        1.5
Poverty gap (in billions)..............       46.9       55.8        9.9
------------------------------------------------------------------------
Notes: The comparison shown is between Congressional House Republicans  
  proposals and current law. Simulations include the impact of the House
  of Representatives welfare plan, HR 4 on AFDC, SSI, food stamps, and  
  housing programs; the EITC proposal adopted by the Committee on Ways  
  and Means; the House of Representatives proposal affecting LIHEAP     
  appropriations; and the Budget Resolution proposal concerning federal 
  employee pension contributions. Model incorporates a labor supply and 
  state response to the welfare block grant.                            
This definition of poverty utilizes a measure of income that includes   
  cash, the EITC, less federal taxes, to compare the poverty threshold. 
                                                                        
Source: TRIM2 model based on data from the March 1994 Current Population
  Survey. Dated on Oct. 2, 1995.                                        

  

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