[Congressional Record Volume 158, Number 120 (Monday, September 10, 2012)]
[Senate]
[Pages S6047-S6050]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
TANF
Mr. HATCH. Mr. President, I ask unanimous consent to have printed in
the Record the GAO opinion letter dated September 4, 2012, and the TANF
Information Memorandum dated July 12, 2012.
There being no objection, the material was ordered to be printed in
the Record, as follows:
U.S. Government
Accountability Office,
Washington, DC, September 4, 2012.
Hon. Orrin Hatch,
Ranking Member, Committee on Finance, U.S. Senate.
Hon. Dave Camp,
Chairman, Committee on Ways and Means, House of
Representatives.
By letter of July 31, 2012, you asked whether an
Information Memorandum issued by the Department of Health and
Human Services (HHS) on July 12, 2012 concerning the
Temporary Assistance for Needy Families (TANF) program
constitutes a rule for the purposes of the Congressional
Review Act (CRA). The CRA is intended to keep Congress
informed of the rulemaking activities of federal agencies and
provides that before a rule can take effect, the agency must
submit the rule to each House of Congress and the Comptroller
General. For the reasons discussed below, we conclude that
the July 12, 2012 Information Memorandum is a rule under the
CRA. Therefore, it must be submitted to Congress and the
Comptroller General before taking effect.
BACKGROUND
The Temporary Assistance for Needy Families block grant,
administered by the U.S. Department of Health and Human
Services, provides federal funding to states for both
traditional welfare cash assistance as well as a variety of
other benefits and services to meet the needs of low-income
families and children. While states have some flexibility in
implementing and administering their state TANF programs,
there are numerous federal requirements and guidelines that
states must meet. For example, under section 402 of the
Social Security Act, in order to be eligible to receive TANF
funds, a state must submit to HHS a written plan outlining,
among other things, how it will implement various aspects of
its TANF program. More specifically, under section
402(a)(1)(A)(iii) of the Social Security Act, the written
plan must outline how the state will ensure that TANF
recipients engage in work activities. Under section 407 of
the Social Security Act, states must also ensure that a
specified percentage of their TANF recipients engage in work
activities as defined by federal law.
In its July 12 Information Memorandum, HHS notified states
of HHS' willingness to exercise its waiver authority under
section 1115 of the Social Security Act. Under section 1115,
HHS has the authority to waive compliance with the
requirements of section 402 in the case of experimental,
pilot, or demonstration projects which the Secretary
determines are likely to assist in promoting the objectives
of TANF. In its Information Memorandum, HHS asserted that it
has the authority to waive the requirement in section
402(a)(1)(A)(iii) and authorize states to ``test approaches
and methods other than those set forth in section 407,''
including definitions of work activities and the calculation
of participation rates. HHS informed states that it would use
this waiver authority to allow states to test various
strategies, policies, and procedures designed to improve
employment outcomes for needy families. The Information
Memorandum sets forth requirements that must be met for a
waiver request to be considered by HHS, including an
evaluation plan, a set of performance measures that states
will track to monitor ongoing performance and outcomes, and a
budget including the costs of program evaluation. In
addition, the Information Memorandum provides that states
must seek public input on the proposal prior to approval by
HHS.
ANALYSIS
The definition of ``rule'' in the CRA incorporates by
reference the definition of ``rule'' in the Administrative
Procedure Act (APA), with some exceptions. Therefore, our
analysis of whether the July 12 Information Memorandum is a
rule under the CRA involves determining whether it is rule
under the APA and whether it falls within any of the
exceptions contained in the CRA. The APA defines a rule as
follows:
``[T]he whole or a part of an agency statement of general
or particular applicability and future effect designed to
implement, interpret, or prescribe law or policy or
describing the organization, procedure, or practice
requirements of an agency and includes the approval or
prescription for the future of
[[Page S6048]]
rates, wages, corporate or financial structures or
reorganizations thereof, prices, facilities, appliances,
services or allowances therefor or of valuations, costs, or
accounting, or practices bearing on any of the foregoing[.]''
This definition of a rule has been said to include ``nearly
every statement an agency may make.''
The CRA identifies 3 exceptions from its definition of a
rule: (1) any rule of particular applicability; (2) any rule
relating to agency management or personnel; or (3) any rule
of agency organization, procedure, or practice that does not
substantially affect the rights or obligations of non-agency
parties. 5 U.S.C. 804(3).
The definition of a rule under the CRA is very broad. See
B-287557, May 14, 2001 (Congress intended that the CRA should
be broadly interpreted both as to type and scope of rules
covered). The CRA borrows the definition of a rule from 5
U.S.C. Sec. 551, as opposed to the more narrow definition of
legislative rules requiring notice and comment contained in 5
U.S.C. Sec. 553. As a result, agency pronouncements may be
rules within the definition of 5 U.S.C. Sec. 551, and the
CRA, even if they are not subject to notice and comment
rulemaking requirements under section 553. See B-316048,
April 17, 2008 (the breadth of the term ``rule'' reaches
agency pronouncements beyond those that require notice and
comment rulemaking) and B-287557, cited above. In addition to
the plain language of the CRA, the legislative history
confirms that it is intended to include within its purview
almost all rules that an agency issues and not only those
rules that must be promulgated according to the notice and
comment requirements in section 553 of the APA. In his floor
statement during final consideration of the bill,
Representative McIntosh, a principal sponsor of the
legislation, emphasized this point:
``Although agency interpretive rules, general statements of
policy, guideline documents, and agency policy and procedure
manuals may not be subject to the notice and comment
provisions of section 553(c) of title 5, United States Code,
these types of documents are covered under the congressional
review provisions of the new chapter 8 of title 5.
Under section 801(a), covered rules, with very few
exceptions, may not go into effect until the relevant agency
submits a copy of the rule and an accompanying report to both
Houses of Congress. Interpretive rules, general statements of
policy, and analogous agency policy guidelines are covered
without qualification because they meet the definition of a
`rule' borrowed from section 551 of title 5, and are not
excluded from the definition of a rule.''
On its face, the July 12 Information Memorandum falls
within the definition of a rule under the APA definition
incorporated into the CRA. First, consistent with our prior
decisions, we look to the scope of the agency's action to
determine whether it is a general statement of policy or an
interpretation of law of general applicability. That
determination does not require a finding that it has general
applicability to the population as a whole; instead, all that
is required is that it has general applicability within its
intended range. See B-287557, cited above (a record of
decision affecting the issues of water flow in two rivers was
a general statement of policy with general applicability
within its intended range). Applying these principles, we
have held that a letter released by the Centers for Medicare
and Medicaid Services to state health officials concerning
the State Children's Health Insurance Program (SCHIP) was of
general applicability because it extended to all states that
sought to enroll children with family incomes exceeding 250
percent of the federal poverty level in their SCHIP programs,
as well as all states that had already enrolled such
children. Similarly, the July 12 Information Memorandum is of
general, rather than particular, applicability because it
extends to all states administering Temporary Assistance for
Needy Families (TANF) programs that seek a waiver for a
demonstration project.
Next we must determine whether the action is prospective in
nature, that is, whether it is concerned with policy
considerations for the future and not with the evaluation of
past conduct. In B-316048, we held that the SCHIP letter was
intended to clarify and explain the manner in which CMS
applies statutory and regulatory requirements to states that
wanted to extend coverage under the SCHIP programs.
Similarly, the July 12 Information Memorandum is concerned
with authorizing demonstration projects in the future, rather
than the evaluation of past or present demonstration
projects. Specifically, the Information Memorandum informs
states that HHS will use its statutory authority to consider
waiver requests, and sets out requirements that waiver
requests must meet. Accordingly, it is designed to implement,
interpret, or prescribe law or policy.
In addition, the Information Memorandum does not fall
within any of the three exclusions for a rule under the CRA.
As discussed above, the Information Memorandum applies to all
states that administer TANF programs, and therefore is of
general applicability, rather than particular applicability.
The Information Memorandum applies to the states, and does
not relate to agency management or personnel. Finally, the
Information Memorandum sets out the criteria by which states
may apply for waivers from certain requirements of the TANF
program. These criteria affect the obligations of the states,
which are non-agency parties.
GAO has consistently emphasized the broad scope of the
definition of ``rule'' in the CRA in determining the
applicability of the CRA to an agency document. Other
documents deemed to be rules include letters, records of
decision, booklets, interim guidance, and memoranda. See, for
example, B-316048, April 17, 2008 (a letter released by the
Centers for Medicare & Medicaid Services of HHS concerning a
State Children's Health Insurance Program measure, to ensure
that coverage under a state plan does not substitute for
coverage under group health plans, described by the agency as
a general statement of policy, was a rule) and B-287557, May
14, 2001 (a ``record of decision'' issued by the Fish and
Wildlife Service of the Department of Interior in connection
with a federal irrigation project was a rule).
Finally, the cases where we have found that an agency
pronouncement was not a rule involved facts that are clearly
distinguishable from the July 12 Information Memorandum.
We requested the views of the General Counsel of HHS on
whether the July 12 Information Memorandum is a rule for
purposes of the CRA by letter dated August 3, 2012. HHS
responded on August 31, 2012, stating that the Information
Memorandum was issued as a non-binding guidance document, and
that HHS contends that guidance documents do not need to be
submitted pursuant to the CRA. Furthermore, HHS notes that it
informally notified Congress by providing notice to the
Majority and Minority staff members of the House Ways and
Means Committee and Senate Finance Committee on the day the
Information Memorandum was issued.
We cannot agree with HHS's conclusion that guidance
documents are not rules for the purposes of the CRA and HHS
cites no support for this position. The definition of
``rule'' is expansive and specifically includes documents
that implement or interpret law or policy. This is exactly
what the HHS Information Memorandum does. It interprets
section 402(a) and section 1115 to permit waivers for a
demonstration program HHS is initiating. We have held that
agency guidance, including guidance characterized as non-
binding, constitutes a rule under the CRA. See B-281575,
cited above. In addition, the legislative history of the CRA
specifically includes guidance documents as an example of an
agency pronouncement subject to the CRA. A joint statement
for the record by Senators Nickles, Reid, and Stevens,
submitted to the Congressional Record upon enactment of the
CRA, details four categories of rules covered by the
definition in section 551. These categories include formal
rulemaking under sections 556 and 557, notice-and-comment
rulemaking under section 553, statements of general policy
and interpretations of general applicability under section
552, and ``a body of materials that fall within the APA
definition of a `rule' . . . but that meet none of procedural
specifications of the first three classes. These include
guidance documents and the like.'' Finally, while HHS may
have informally notified the cited Congressional committees
of the issuance of the Information Memorandum, informal
notification does not meet the reporting requirements of the
CRA.
CONCLUSION
We find that the July 12 Information Memorandum issued by
HHS is a statement of general applicability and future
effect, designed to implement, interpret, or prescribe law or
policy with regard to TANF. Furthermore, it does not come
within any of the exceptions to the definition of rule
contained in the CRA. Accordingly, the Information Memorandum
is a rule under the Congressional Review Act.
We note that this opinion is limited to the issue of
whether the Information Memorandum is a rule under the CRA.
We are not expressing an opinion on the applicability of any
other legal requirements, including, but not limited to,
notice and comment rulemaking requirements under the APA, or
whether the Information Memorandum would be a valid exercise
or interpretation of statutes or regulations.
Accordingly, given our conclusions above, and in accordance
with the provisions of 5 U.S.C. 801(a)(1), the Information
Memorandum is subject to the requirement that it be submitted
to both Houses of Congress and the Comptroller General before
it can take effect.
If you have any questions concerning this opinion, please
contact Edda Emmanuelli Perez, Managing Associate General
Counsel.
Lynn H. Gibson,
General Counsel.
____
Temporary Assistance for Needy Families Information Memorandum
U.S. Department of Health and Human Services, Administration for
Children and Families, Office of Family Assistance, Washington, DC.
Transmittal No. TANF-ACF-IM-2012-03, July 12, 2012
To: States administering the Temporary Assistance for Needy
Families (TANF) Program and other interested parties
Subject: Guidance concerning waiver and expenditure
authority under Section 1115
Reference: Section 1115 of the Social Security Act. [42
U.S.C. 1315]; Section 402 of the Social Security Act. [42
U.S.C. 602]
Background: Section 1115 of the Social Security Act
provides authority for the Secretary of the Department of
Health and
[[Page S6049]]
Human Services (HHS) to consider and approve experimental,
pilot, or demonstration projects which, in the Secretary's
judgment, are likely to assist in promoting the objectives of
Title IV-A. Section 1115 allows for waiver of compliance with
section 402 of the Social Security Act to the extent and for
the period necessary to enable a state to carry out an
approved project. The statute also provides authority for
costs of such projects which would not otherwise be an
allowable use of funds under Part A of Title IV to be
regarded as an allowable use of funds, to the extent and for
the period approved.
As specified in statute, the purpose of Part A is to
increase the flexibility of states in operating a program
designed to: (1) provide assistance to needy families so that
children may be cared for in their own homes or in the homes
of relatives; (2) end the dependence of needy parents on
government benefits by promoting job preparation, work, and
marriage; (3) prevent and reduce the incidence of out-of-
wedlock pregnancies and establish annual numerical goals for
preventing and reducing the incidence of these pregnancies;
and (4) encourage the formation and maintenance of two-parent
families.
Purpose: HHS is encouraging states to consider new, more
effective ways to meet the goals of TANF, particularly
helping parents successfully prepare for, find, and retain
employment. Therefore, HHS is issuing this information
memorandum to notify states of the Secretary's willingness to
exercise her waiver authority under section 1115 of the
Social Security Act to allow states to test alternative and
innovative strategies, policies, and procedures that are
designed to improve employment outcomes for needy families.
States led the way on welfare reform in the 1990s--testing
new approaches and learning what worked and what did not. The
Secretary is interested in using her authority to approve
waiver demonstrations to challenge states to engage in a new
round of innovation that seeks to find more effective
mechanisms for helping families succeed in employment. In
providing for these demonstrations, HHS will hold states
accountable by requiring both a federally-approved evaluation
and interim performance targets that ensure an immediate
focus on measurable outcomes. States must develop evaluation
plans that are sufficient to evaluate the effect of the
proposed approach in furthering a TANF purpose as well as
interim targets the state commits to achieve. States that
fail to meet interim outcome targets will be required to
develop an improvement plan and can face termination of the
waiver project.
The demonstration authority provided by section 1115 and
sound evaluation of approved projects will provide valuable
knowledge that will help lead to improvements in achieving
the purposes of the TANF program.
Information: Scope of Authority. Section 1115 authorizes
waivers concerning section 402. Accordingly, other provisions
of the TANF statute are not waivable. For example, the
purposes of TANF are not waivable, because they are contained
in section 401. The prohibitions on assistance are not
waivable, because they are contained in section 408.
While the TANF work participation requirements are
contained in section 407, section 402(a)(1)(A)(iii) requires
that the state plan ``[e]nsure that parents and caretakers
receiving assistance under the program engage in work
activities in accordance with section 407.'' Thus, HHS has
authority to waive compliance with this 402 requirement and
authorize a state to test approaches and methods other than
those set forth in section 407, including definitions of work
activities and engagement, specified limitations,
verification procedures, and the calculation of participation
rates. As described below, however, HHS will only consider
approving waivers relating to the work participation
requirements that make changes intended to lead to more
effective means of meeting the work goals of TANF.
Moreover, HHS is committed to ensuring that any
demonstration projects approved under this authority will be
focused on improving employment outcomes and contributing to
the evidence base for effective programs; therefore, terms
and conditions will require a federally-approved evaluation
plan designed to build our knowledge base. TANF funds may be
used to fund an approved evaluation and state funds spent on
an approved evaluation may be considered state maintenance-
of-effort (MOE) expenditures. In addition, terms and
conditions will require either interim targets for each
performance measure or a strategy for establishing baseline
performance on a set of performance measures and a framework
for how interim goals will be set after the baseline measures
are established. The terms and conditions will establish
consequences for failing to meet interim performance targets
including, but not limited to, the implementation of an
improvement plan and, if the failure to meet performance
targets continues, termination of the waivers and
demonstration project.
HHS Priorities. In exercising her broad discretion for
waivers, the Secretary is interested in approaches that seek
to improve employment outcomes. Accordingly:
Waivers will be granted only for provisions related to
section 402.
The purposes of TANF, the prohibitions contained in section
408 (including the time limits on assistance contained in
that section), or any other provision of TANF other than
those specified in section 402 will not be waived.
The Secretary will not approve a waiver for an initiative
that appears substantially likely to reduce access to
assistance or employment for needy families.
The Secretary will not use her authority to allow use of
TANF funds to provide assistance to individuals or families
subject to the TANF prohibitions on assistance.
The Secretary will not waive section 402(a)(5) relating to
requirements to provide equitable access to Indians.
Waiver demonstration projects may be conducted in
limited geographic areas or statewide. The Administration
for Children and Families (ACF) is interested in more
efficient or effective means to promote employment entry,
retention, advancement, or access to jobs that offer
opportunities for earnings and advancement that will allow
participants to avoid dependence on government benefits.
The following are examples of projects that states may
want to consider--these are illustrative only:
Projects that improve coordination with other components of
the workforce investment system, including programs operated
under the Workforce Investment Act, or to test an innovative
approach to use performance-based contracts and management in
order to improve employment outcomes.
Projects that demonstrate attainment of superior employment
outcomes if a state is held accountable for negotiated
employment outcomes in lieu of participation rate
requirements.
Projects under which a state would count individuals in
TANF-subsidized jobs but no longer receiving TANF assistance
toward participation rates for a specified period of time in
conjunction with an evaluation of the effectiveness of a
subsidized jobs strategy.
Projects that improve collaboration with the workforce and/
or post-secondary education systems to test multi-year career
pathways models for TANF recipients that combine learning and
work.
Projects that demonstrate strategies for more effectively
serving individuals with disabilities, along with an
alternative approach to measuring participation and outcomes
for individuals with disabilities.
Projects that test the impact of a comprehensive universal
engagement system in lieu of certain participation rate
requirements.
Projects that test systematically extending the period in
which vocational educational training or job search/readiness
programs count toward participation rates, either generally
or for particular subgroups, such as an extended training
period for those pursuing a credential. The purpose of such a
waiver would be to determine through evaluation whether a
program that allows for longer periods in certain activities
improves employment outcomes.
Note that this is not a comprehensive list, and HHS will
consider other projects consistent with the statute and the
guidance provided in this IM. HHS is especially interested in
testing approaches that build on existing evidence on
successful strategies for improving employment outcomes.
Waiver requests must include an evaluation plan. In order
to provide the strongest evidence about the effectiveness of
the demonstration, the preferred evaluation approach is a
random assignment methodology, unless the Secretary
determines that an alternative approach is more appropriate
in light of the demonstration proposed. All evaluation plans
and funds to support them must reflect an adequate level of
effort and sound methods to produce credible findings. ACF
anticipates actively engaging with states to ensure that
evaluation plans are appropriate in light of the nature of
the demonstration and that the evaluation findings can
reasonably be expected to provide information that will
enhance understanding of whether the initiative was
successful in furthering HHS priorities. ACF staff members
are available to work collaboratively with states to develop
further or refine the evaluation plan.
Waiver requests must include a set of performance measures
that states will track to monitor ongoing performance and
outcomes throughout the length of the demonstration project,
along with the evaluation. Waiver applications must specify
interim targets for each performance measure, including a
framework for how often the measures will be reported, or a
strategy for establishing baseline performance on a set of
performance measures and a framework for how interim goals
will be set after the baseline measures are established.
Performance measures must be designed to track improvement
across the entire set of families targeted as well as
appropriate subgroups. In developing the final terms and
conditions for an approved waiver, ACF will work with the
state to further refine the appropriate performance measures
and interim targets as needed. All approved waivers will
include a provision that requires timely reporting to HHS on
the agreed upon performance measures and progress toward
meeting established interim targets. States that fail to meet
interim targets will be required to develop improvement
plans. Repeated failure to meet performance benchmarks may
lead to the termination of the waiver demonstration pilot.
The request must specify the proposed length of time for
the demonstration project. The final terms and conditions
will specify the approved length of the project. Absent
special circumstances, the length of an approved project will
not exceed five years.
A state will need to develop and submit a budget that
includes the costs of program
[[Page S6050]]
evaluation. TANF and state MOE funds can be used for the
costs of evaluation, including third party contributions
counting toward meeting a state's MOE requirement.
HHS recognizes the importance of public input into the
process of developing and implementing a waiver demonstration
project. Therefore, the state must provide the public with a
meaningful opportunity to provide input into the decision-
making process prior to the time a proposal is approved by
HHS. Further guidance concerning this requirement will be
forthcoming.
Waivers are subject to HHS and Office of Management and
Budget (OMB) approval and terms and conditions may include
additional requirements, such as site visits, before
implementation.
Terms and conditions will require periodic reporting on how
the implementation and operation of the demonstration is
progressing, including reporting on the performance measures,
in addition to evaluation reports. To support learning and
knowledge development, ACF staff may conduct on-site visits
to observe demonstration operations and meet with relevant
managers and staff.
Inquiries: Inquiries and applications for projects
involving waiver requests should be directed to the
appropriate Regional TANF Program Manager.
Earl S. Johnson,
Director, Office of Family Assistance.
____
July 12, 2012.
Dear State Human Service Official: Today, the
Administration for Children and Families' Office of Family
Assistance issued an Information Memorandum that informs
states that the Department of Health and Human Services will
use its statutory authority to consider waiver requests that
strengthen the Temporary Assistance for Needy Families (TANF)
program. This Information Memorandum reflects the
Department's commitment to provide states, tribes, and
territories with more flexibility to innovate in the TANF
program with the goal of helping more families find jobs and
move toward self-sufficiency.
On February 28, 2011, President Obama issued a Presidential
Memorandum that directed federal agencies ``to work closely
with state, local, and tribal governments to identify
administrative, regulatory, and legislative barriers in
Federally funded programs that currently prevent states,
localities, and tribes, from efficiently using tax dollars to
achieve the best results for their constituents.''
The Administration for Children and Families took this
charge seriously and held a series of consultation meetings
with states, tribes, and territories on a variety of topics
including TANF. During those consultations, many
jurisdictions expressed a strong interest in greater
flexibility in TANF and indicated that greater flexibility
could be used by states to improve program effectiveness. We
also heard concerns that some TANF rules stifle innovation
and focus attention on paperwork rather than helping parents
find jobs. States offered a range of suggestions for ways in
which expanded flexibility could lead to more effective
employment outcomes for families. Two states--Utah and
Nevada--submitted written comments that specifically
identified waivers as one mechanism for testing new
approaches to promoting employment and self-sufficiency, and
a number of others states--including California, Connecticut,
and Minnesota--have asked about the potential for waivers.
As described in more detail in the Information Memorandum,
the Social Security Act provides the Secretary of the
Department of Health and Human Services with the authority to
grant states waivers of certain TANF provisions for the
purpose of testing new approaches to meeting the goals of the
TANF statute. The Secretary is interested in using her
authority to allow states to test alternative and innovative
strategies, policies, and procedures that are designed to
improve employment outcomes for needy families. The statute
does not permit tribes to receive waivers under Section 1115,
however we are committed to using the underlying flexibility
in federal law to help tribes innovate in their programs.
TANF Waiver demonstration projects under Section 1115 must
be accompanied by a high quality evaluation plan, which is
critical to ensuring that the pilots result in rigorous
evidence about what works and what doesn't in order to inform
future decisions made by policymakers at the federal, state,
tribal, territorial, and local levels. In addition, states
that apply for a waiver must identify interim performance
targets that will be used to hold states accountable for
improving outcomes for families. We will work with states
interested in developing waiver demonstration projects to
design these performance measures and targets.
The Information Memorandum outlines the types of waivers
that will and will not be considered. The Secretary is only
interested in approving waivers if the state can explain in a
compelling fashion why the proposed approach may be a more
efficient or effective means to promote employment entry,
retention, advancement, or access to jobs that offer
opportunities for earnings and advancement that will allow
participants to avoid dependence on government benefits.
States have shown their ability to innovate in ways that
help parents find jobs. In 2009 and 2010, 42 states used the
TANF Emergency Fund authorized under the American Recovery
and Reinvestment Act to create 260,000 subsidized jobs for
jobless parents and disadvantaged youth. Over a short period
of time, states exhibited enormous creativity as they
developed new subsidized employment initiatives that
responded to an urgent need for jobs in communities across
the country.
It is critical that we work together to develop effective
employment strategies that prepare workers for the jobs of
the 21st century. We stand ready to work with states
interested in developing innovative demonstration projects
that test new approaches to helping parents succeed in the
labor market.
Sincerely,
George Sheldon,
Acting Assistant Secretary.
____________________