[Senate Report 104-96]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 125
104th Congress                                                   Report
                                 SENATE

 1st Session                                                     104-96
_______________________________________________________________________
 
                THE FAMILY SELF-SUFFICIENCY ACT OF 1995

                                _______


     June 9 (legislative day, June 5), 1995.--Ordered to be printed

      Filed, under authority of the order of the Senate of June 8 
                    (legislative day, June 5), 1995

_______________________________________________________________________


  Mr. Packwood, from the Committee on Finance, submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                         [To accompany H.R. 4]
    The Committee on Finance, to which was referred the bill 
(H.R. 4) to amend the Social Security Act to replace the AFDC 
program with block grants for needy families with children, to 
replace child welfare, adoption assistance and foster care 
programs with a block grant for child protection, to make 
various reforms to the Supplemental Security Income program, to 
strengthen the child support enforcement program (along with 
various reforms to other programs under other laws), and which 
would restore the American family, reduce illegitimacy, control 
welfare spending, and reduce welfare dependence, having 
considered the same, reports favorable thereon with an 
amendment in the nature of a substitute, and recommends that 
the bill as amended do pass.
                           TABLE OF CONTENTS

                                                                   Page
  I.  Purpose and Scope...............................................3
 II.  Explanation of Provisions.......................................4
     Title I--Block Grants for Temporary Assistance for Needy Families4
        1. Section 101.--Block grants to States..................     5
             a. AFDC programs consolidated into Temporary Family      5
                Assistance block grant program.
            b. Purposes..........................................     5
            c. State Plan Requirements...........................     6
            d. Eligibility for assistance........................     6
             e. Payments to States and uses of funds.............     7
            f. Supplemental assistance for needy families federal     8
                loan fund.
            g. Penalties against States..........................     8
            h. Mandatory work requirements.......................     9
            i. Religious character and freedom...................     9
            j. Data collection and reporting.....................     9
            k. Research, evaluations, and national studies.......     9
            l. Study by the Census Bureau........................    10
            m. Assistant Secretary for Family Support............    10
            n. State demonstration programs......................    10
            o. No individual entitlement.........................    10
        2. Section 102.--Report on data processing...............    10
        3. Section 103.--Continued application of current            10
            standards under medicaid program.
        4. Section 104.--Waivers.................................    11
        5. Section 105.--Deemed income requirement for Federal       11
            and federally funded programs under the Social 
            Security Act.
        6. Section 106.--Conforming amendments to the Social         11
            Security Act.
        7. Section 107.--Conforming amendments to the Food Stamp     11
            Act of 1977 and related provisions.
        8. Section 108.--Conforming amendments to other laws.....    11
        9. Section 109.--Secretarial submission of legislative       11
            proposal for technical and conforming amendments.
        10. Section 110.--Effective date; transition rule........    12
     Title II--Modifications to the Jobs Program (and Title I--Work  12
     Requirements).
     Title III--Supplemental Security Income.........................15
         Subtitle A--Eligibility Restrictions....................    15
             1. Section 301.--Denial of SSI benefits by reason of    15
                disability to drug addicts and alcoholics.
            2. Section 302.--Limited eligibility of noncitizens      15
                for SSI benefits.
            3. Section 303.--Denial of SSI benefits for 10 years     16
                to individuals found to have fraudulently 
                mispresented residence in order to obtain 
                benefits simultaneously in 2 or more states.
            4. Section 304.--Denial of SSI benefits for fugitive     16
                felons and probation and parole violators.
            5. Section 305.--Effective dates; application to         16
                current recipients.
         Subtitle B--Benefits for Disabled Children..............    17
             1. Section 311.--Benefits for disabled children.....    20
            2. Section 312.--Continuing disability reviews.......    20
            3. Section 313.--Treatment requirements for disabled     21
                individuals under the age 18.
        Subtitle C--Study of Disability Determination Process....    21
             1. Section 321.--Study of Disability Determination      21
                Process.
        Subtitle D--National Commission on the Future of             21
            Disability.
            Section 331.--National Commission on the Future of       21
                Disability.
     Title IV--Child Support Enforcement.............................21
         Subtitle A--Eligibility for Services; Distribution of       22
            Payments.
             1. Section 401.--State obligation to provide child      22
                support enforcement services.
            2. Section 402.--Distribution of child support           22
                collections.
            3. Section 403.--Rights to notification and hearings.    23
            4. Section 404.--Privacy safeguards..................    23
        Subtitle B--Locate and Case Tracking.....................    23
             1. Section 411.--State case registry................    23
            2. Section 412.--Collection and disbursement of          23
                support payments.
            3. Section 413.--State directory of new hires........    24
            4. Section 414.--Amendments concerning income            25
                withholding..
            5. Section 415.--Locator information from interstate     25
                networks..
            6. Section 416.--Expansion of the Federal parent         25
                locator service..
            7. Section 417.--Collection and use of social            26
                security numbers for use in child support 
                enforcement..
        Subtitle C--Streamlining and Uniformity of Procedures....    26
            1. Section 421.--Adoption of uniform State laws......    63
            2. Section 422.--Improvements to full faith and          26
                credit for child support orders.
            3. Section 423.--Administrative enforcement in           26
                interstate cases.
            4. Section 424.--Use of forms in interstate              26
                enforcement..
            5. Section 425.--State laws providing expedited          26
                procedures..
         Subtitle D--Paternity Establishment.....................    27
            1. Section 431.--State laws concerning paternity         27
                establishment..
            2. Section 432.--Outreach for voluntary paternity        28
                establishment..
            3. Section 433.--Cooperation by applicants for and       28
                recipients of temporary family assistance..
         Subtitle E--Program Administration and Funding..........
            1. Section 441.--Federal matching payments...........    28
            2. Section 442.--Performance-based incentives and        28
                penalties.
            3. Section 443.--Federal and State reviews and audits    29
            4. Section 444.--Required reporting procedures.......    29
            5. Section 445.--Automated data processing               29
                requirements.
            6. Section 446.--Technical assistance................    30
            7. Section 447.--Reports and data collection by the      30
                Secretary.
         Subtitle F--Establishment and Modification of Support       30
            Orders.
            1. Section 451.--National Child Support Guidelines       30
                Commission.
            2. Section 452.--Simplified process for review and       30
                adjustment of child support orders.
            3. Section 453.--Furnishing consumer reports for         31
                purposes relating to child support.
            4. Section 454.--Nonliability for depository             31
                institutions providing financial records to State 
                child support enforcement agencies in child 
                support cases.
         Subtitle G--Enforcement of Support Orders...............    31
            1. Section 461.--Federal income tax refund offset....    31
            2. Section 462.--Internal Revenue Service collection     31
                of arrearages.
            3. Section 463.--Authority to collect support from       31
                Federal employees.
            4. Section 464.--Enforcement of child support            32
                obligations of members of the Armed Forces.
            5. Section 465.--Voiding of fraudulent transfers.....    32
            6. Section 466.--Work requirement for persons owing      32
                child support.
            7. Section 467.--Definition of support order.........    32
            8. Section 468.--Reporting arrearages to credit          32
                bureaus.
            9. Section 469.--Liens...............................    33
            10. Section 470.--State law authorizing suspension of    33
                licenses.
            11. Section 471.--Denial of passports for nonpayment     33
                of child support.
         Subtitle H--Medical Support.............................    33
            1. Section 475.--Technical correction to ERISA           33
                definition of medical child support order.
            2. Section 476.--Enforcement of orders for health        33
                care coverage.
         Subtitle I--Enhancing Responsibility and Opportunity for    33
            Nonresidential Parents.
            1. Section 481.--Grants to States for access and         33
                visitation programs.
         Subtitle J--Effect of Enactment.........................    34
             1. Section 491.--Effective dates....................    34
 III.
      Regulatory Impact of the Bill..................................34
 IV.  Votes of the Committee.........................................35
  V.  Budgetary Impact of the Bill...................................42
 VI.  Additional Views...............................................63
VII.  Changes in Existing Law Made by Bill...........................78
                          I. PURPOSE AND SCOPE

    The Committee bill fundamentally reshapes the Nation's 
welfare programs. The most important change is to devolve to 
the States (and U.S. territories) primary responsibility for 
the Aid to Families with Dependent Children (AFDC) program and 
related programs under the Social Security Act. The Committee 
bill replaces the present AFDC entitlement to cash welfare, and 
the myriad of complicated Federal rules and regulations for the 
AFDC program, with block grants under which the States (and 
U.S. territories) are given great latitude to design a program 
to assist needy families with minor children become self-
sufficient and productive members of the work force. States 
determine who will be eligible to receive assistance and the 
types of assistance to be provided. States are authorized to 
deny assistance to noncitizens if they so choose.
    The Committee bill transforms welfare into a temporary 
program that places strong emphasis on employment skills and 
work activities. Able-bodied adults who have received benefits 
for 2 years must participate in JOBS activities for at least 20 
hours a week. The JOBS program for AFDC recipients is modified 
to give States more flexibility in serving the needs of welfare 
recipients and to strengthen work requirements. Welfare is made 
temporary by limiting the receipt of benefits to 5 years except 
in the case of hardship.
    The Committee bill also makes much needed reforms to the 
Supplemental Security Income (SSI) welfare program, which is 
funded solely by Federal dollars and has experienced rapid 
growth of certain populations in recent years. The Committee 
bill changes SSI eligibility for drug addiction and alcoholism 
impairments, for noncitizens who enter the U.S. on the basis 
that they not become a public charge and who have not worked in 
the U.S. for specified time periods, and for certain children 
with disabilities.
    The Committee bill provides a uniform rule for ``deeming'' 
a sponsor's income and resources to noncitizens for all means-
tested programs in the Social Security Act. The sponsor's 
income and resources are deemed to the noncitizen for the 
greater of 5 years after lawfully entering the U.S. or the time 
specified in the sponsor's affidavit of support.
    The Committee bill strengthens the child support 
enforcement program by requiring States to improve paternity 
establishment programs, establish uniform tracking systems and 
a directory of new hires, and adopt uniform laws to expedite 
interstate child support collections.

                     II. EXPLANATION OF PROVISIONS

   Title I--Block Grants for Temporary Assistance for Needy Families

                              Present law

    The Aid to Families with Dependent Children (``AFDC'') 
program was enacted in 1935 to provide Federal matching funds 
to allow States to make cash payments on behalf of needy 
dependent children. AFDC programs are currently operated in all 
50 States, the District of Columbia, and three territories 
(Guam, Puerto Rico, and U.S. Virgin Islands).
    The original AFDC legislation imposed very few requirements 
on States. Amendments to the program over the years have 
drastically increased requirements on States. Although States 
still set ``standards of need'' and benefit levels for the 
program, there is an extensive set of Federal eligibility 
rules, especially with respect to how a family's income and 
resources are determined. Income and resources of a sponsor of 
a noncitizen are ``deemed'' to the noncitizen for the first 
three years after lawfully entering the United States in 
determining eligibility for the AFDC program.
    States must submit, for approval by the Secretary of HHS, a 
State plan that describes the cash benefits and services 
offered by the State and explains how the State intends to 
comply with 43 requirements of present law.
    States must also have in effect an approved child support 
program, an approved plan for JOBS, foster care and adoption 
assistance programs, and an eligibility and verification 
program.

                           Reasons for change

    Consolidating the AFDC program and related programs into a 
block grant provides States with much needed flexibility in the 
use of Federal funds to help needy families with minor 
children. Streamlining Federal requirements will allow States 
to devote more time to serving needy families and to develop 
programs that address the special circumstances of localities. 
States are guaranteed Federal funding for 5 years so they can 
make long-term plans without fear of reduced funding. The 
primary condition placed on Temporary Family Assistance funds 
is an increased commitment to make able-bodied adults on 
welfare work. Removing the individual entitlement to cash 
benefits sends a clear message to welfare recipients that 
welfare assistance is temporary and is not intended to continue 
on year after year leading to welfare dependency.
                    Summary of principal provisions

1. Section 101.--Block grants to States.

            a. AFDC programs consolidated into Temporary Family 
                    Assistance block grant program
    The AFDC program along with related programs are 
consolidated into a new grant to States called the ``Temporary 
Family Assistance'' grant to increase the flexibility of States 
in operating an assistance program for needy families with 
minor children. The Temporary Family Assistance grant replaces 
the following AFDC programs under the Social Security Act:
          (1) AFDC cash benefits.
          (2) AFDC administration.
          (3) AFDC work-related child care.
          (4) Transitional child care.
          (5) At-risk families child care.
          (6) Emergency assistance.
          (7) Funding for the JOBS program.
            b. Purposes
    The purposes of the new grant program are to provide 
Federal funds for temporary assistance to needy families with 
minor children so that such children can be maintained in their 
homes or the homes of relatives, to promote self-sufficiency of 
parents of needy children by placing greater emphasis on job 
preparation and employment, and to prevent and reduce the 
incidence of out-of-wedlock pregnancies, generally understood 
to be one of the root causes of welfare dependency.
            c. State plan requirements
    Under the Temporary Family Assistance grant, States must 
submit to the Secretary of Health and Human Services (HHS), and 
update annually, a plan outlining how the State intends to do 
the following:
          (1) Offer a program to serve needy families with 
        minor children throughout the State (assistance may 
        vary from locality to locality within a State);
          (2) Provide assistance to needy families with minor 
        children for up to 5 years (longer for hardship cases) 
        and provide job preparation and work experience to 
        adults in the family so that they become self-
        sufficient;
          (3) Require at least one parent in a needy family 
        receiving benefits for more than 24 months (whether or 
        not consecutive) to engage in work activities in 
        accordance with section 404 and Title IV-F (as amended 
        by the Committee bill);
          (4) Meet participation rates for the JOBS program;
          (5) If different from other recipients, provide 
        benefits paid to needy families moving into the State 
        and to noncitizens;
          (6) Safeguard and restrict the use and disclosure of 
        information about needy families receiving benefits; 
        and
          (7) Reduce the incidence of out-of-wedlock 
        pregnancies with special emphasis on teenage pregnancy.
    States must certify annually that they will operate a child 
support enforcement program under Title IV-D; a child 
protection program under Title IV-B; adoption assistance and 
foster care programs under Title IV-E; a JOBS program under 
Title IV-F; and an income and eligibility verification system 
under section 1137. States must certify which State agency or 
agencies are responsible for the administration and supervision 
of the program. In this regard, a State may contract with 
public and private organizations to provide services to welfare 
recipients. States must certify that any reports required under 
Title IV-A and IV-F will be filed with the Secretary of HHS and 
must provide an estimate of State funding for the program.
            d. Eligibility for assistance
    The Temporary Family Assistance grant is to be used to 
serve needy families with minor children. A minor child is an 
individual under 18 years old or, if a full-time student, under 
19 years old and who resides with the individual's custodial 
parent or other caretaker relative.
    States are to determine standards of need, eligibility 
criteria, and types and levels of assistance under the State's 
program funded under the Temporary Family Assistance grant, 
subject to work requirements and limitations on assistance 
under Title IV-A and IV-F. States may reduce or deny assistance 
to families that refuse to comply with work requirements. 
States may apply the rules of another State to families who 
move from the other State for up to 12 months. States are 
authorized to deny assistance to noncitizens, if they so 
choose, and must ``deem'' the income and resources of a sponsor 
to the noncitizen for five years after lawfully entering the 
United States (longer if required in the affidavit of support).
    A family cannot receive assistance under a State's program 
funded under the Temporary Family Assistance grant for more 
than 60 months (whether or not consecutive) after September 30, 
1995, unless the State exempts the family by reason of 
hardship. States determine what constitutes a hardship for this 
purpose and are limited to granting hardship for a maximum of 
15 percent of the average monthly caseload for the fiscal year. 
The 60-month period begins for an individual who was previously 
a minor child in a needy family when that individual becomes 
the head of household of a needy family with a minor child.
    Individuals receiving other Federal assistance payments, 
such as Social Security benefits, Supplemental Security Income 
payments, or foster care payments, are not eligible for 
assistance under a State program funded under the Temporary 
Family Assistance grant.
    An individual who is convicted in a Federal or State court 
of having made a fraudulent statement or representation with 
respect to the place of such individual's residence in order to 
receive assistance or benefits simultaneously from two or more 
States under programs in Titles IV, XVI, or XIX, or the Food 
Stamp Act of 1977 is not eligible to receive assistance under a 
State program funded under the Temporary Family Assistance 
grant for 10 years beginning with the date of conviction. An 
individual who is a fugitive felon or who is violating 
probation or parole is not eligible to receive assistance under 
a State program funded under the Temporary Family Assistance 
grant.
            e. Payments to States and uses of funds
    The total amount of the Temporary Family Assistance grant 
is $16,779,000,000 for each of the fiscal years 1996 through 
2000. Each eligible State is entitled to receive a State Family 
Assistance Grant equal to the actual Federal AFDC and related 
program expenditures paid to the State for fiscal year 1994. 
Payments to States are made quarterly. States are allowed to 
carry forward unused grant funds to future years. Federal grant 
funds may be subject to appropriation by a State legislature, 
consistent with the terms and conditions of the Temporary 
Family Assistance grant. Indian tribes and Alaska Native 
organizations currently operating a JOBS program will continue 
to receive Federal funds directly at the same level paid to 
them for fiscal year 1994.
    States may use Temporary Family Assistance funds in any 
manner reasonably calculated to accomplish the purposes of 
Title IV-A, including assistance to families who left welfare 
for employment (for a transition period) and families at risk 
of going on welfare. The Committee intends that the types of 
expenditures which were authorized by Title IV-A before the 
effective date of the Committee bill will continue to be an 
authorized use of funds. For example, authorized expenditures 
under present Title IV-A include cash benefits; JOBS program 
services for recipients and noncustodial parents; work 
supplementation payments; child care services for recipients, 
families who left welfare for employment (for a transition 
period) and families at risk of going on welfare; 
transportation and other work-related expenses for recipients 
and families who left welfare for employment (for a transition 
period); pregnancy prevention education, medical and 
counselling services; emergency assistance to avoid destitution 
of a child or to provide temporary shelter; reasonable 
administration costs, including quality control systems; and 
welfare fraud detection. The Committee intends that Temporary 
Family Assistance funds not be used to pay expenses related to 
other federally funded programs, such as medical services 
covered by Medicaid, or to supplant State funding of such other 
programs.
            f. Supplemental assistance for needy families Federal loan 
                    fund
    The Federal Government is authorized to establish a 
revolving loan fund of $1.7 billion to be administered by the 
Secretary of HHS for supplemental funding needs for State 
programs funded under the Temporary Family Assistance grant. 
Loan funds may be used to provide assistance under such State 
programs and welfare anti-fraud activities. Eligible States may 
borrow from the revolving fund if the State has not been found 
to misuse funds under the Temporary Family Assistance grant. A 
State's outstanding loan balance may not exceed 10 percent of 
the State Family Assistance grant at any time. States must 
repay their loans, with interest based on short-term Treasury 
rates, within three years. In the event of default, the State's 
grant for the quarter after the default is reduced by the 
amount of the loan in default.
            g. Penalties against States
    The Secretary of HHS is authorized to collect the following 
penalties from States for noncompliance with Temporary Family 
Assistant grant requirements:
          (1) Any amount found by audit to be in violation of 
        this program, plus 5 percent of such amount as a 
        penalty (unless reasonable cause is shown), will be 
        withheld from the next quarterly payment;
          (2) 5 percent of the amount otherwise payable for a 
        fiscal year will be withheld if the State fails to 
        submit an annual report regarding the use of funds 
        within 6 months after the end of the fiscal year unless 
        the Secretary of HHS determines the State has 
        reasonable cause for such failure (the penalty is 
        rescinded if the report is submitted within 12 months);
          (3) Up to 5 percent (within discretion of the 
        Secretary of HHS) of the amount otherwise payable for 
        the next fiscal year will be withheld if the State 
        fails to meet the JOBS participation rates for a fiscal 
        year;
          (4) Up to 5 percent (within discretion of the 
        Secretary of HHS) of the amount otherwise payable for 
        the next fiscal year will be withheld if the State 
        fails to participate in the Income and Eligibility 
        Verification System designed to reduce welfare fraud;
          (5) Up to 5 percent if the Secretary of HHS 
        determines a State fails to ensure that families are 
        cooperating with the child support enforcement agency 
        in establishing paternity or assigning child support 
        rights to the State; and
          (6) Any amount borrowed from the revolving loan fund 
        which is not repaid within 3 years, plus interest, will 
        be withheld from the next quarterly payment.
    The Secretary of HHS may not reduce any quarterly payment 
to the States by more than 25 percent. Any remaining penalty 
(above 25 percent) will be withheld from the State's payments 
during succeeding payment periods.
    States must provide State funds to replace reductions in 
State Family Assistance grants for the above penalties.
            h. Mandatory work requirements
    [See discussion at Title II--Modifications to JOBS 
program.]
            i. Religious character and freedom
    The Committee bill provides that any religious organization 
participating in a State's program funded under the Temporary 
Family Assistance grant shall retain its independence from 
Federal, State, and local government, including such an 
organization's control over all aspects of its religious 
beliefs, and must not deny needy families and children 
assistance on the basis of religion, religious beliefs, or 
refusal to participate in a religious practice.
            j. Data collection and reporting
    Each State receiving Temporary Family Assistance grant 
funds is required, not later than six months after the end of 
each fiscal year, to transmit to the Secretary of HHS an annual 
report describing the use of Federal funds and any State funds 
and providing aggregate information on needy families receiving 
assistance under the State's program funded under the Temporary 
Family Assistance grant during the fiscal year. States are to 
include the percentage of funds used for cash assistance, the 
JOBS program, child care, transitional services, administrative 
costs and overhead; child support received by the States for 
needy families receiving assistance; the number non-custodial 
parents participating in the JOBS program; and aggregate 
information on needy families receiving assistance during the 
fiscal year.
            k. Research, evaluations, and national studies
    The Secretary of HHS may conduct research on the effects, 
costs, and benefits of State programs funded under the 
Temporary Family Assistance grant. The Secretary of HHS may 
assist States in developing innovative approaches to helping 
welfare recipients attain self-sufficiency through employment 
and shall evaluate the effectiveness of such approaches.
    The Secretary of HHS is required annually to rank the 
States in order of their success in moving individuals 
receiving assistance into long-term private sector jobs. In 
addition, the Secretary is to undertake an annual review and 
evaluation of the three States most recently ranked highest and 
the three States ranked lowest.
    The Secretary of HHS is required to conduct a study of 
outcomes measures for evaluating the success of a State in 
moving individuals receiving assistance off of welfare through 
employment and report to the Committee on Finance of the Senate 
and the Committee on Ways and Means of the House of 
Representatives not later than September 30, 1998.
            l. Study by the Census Bureau
    The Bureau of the Census is directed to expand the Survey 
of Income and Program Participation as necessary to obtain 
information to enable interested persons to evaluate the impact 
of State programs funded under the Temporary Family Assistance 
grant, with particular attention to the issues of out-of-
wedlock births, welfare dependency, the beginning and ending of 
welfare spells, and the cause of repeat welfare spells.
            m. Assistant Secretary for Family Support
    The Assistant Secretary for Family Support within the 
Department of Health and Human Services will administer the 
programs under Title IV-A, IV-D, and IV-F.
            n. State demonstration programs
    The Committee bill is not intended to limit in any way the 
ability of a State to conduct demonstration projects in one or 
more political subdivisions directed at identifying innovative 
or effective programs.
            o. No individual entitlement
    The Committee bill ends the individual entitlement to 
assistance under the AFDC programs under Title IV-A and IV-F.

2. Section 102.--Report on data processing

    Not later than 6 months after the date of enactment, the 
Secretary of HHS is required to submit to the Congress a report 
on the status of State automated data processing systems to 
assist in managing the State's program funded under Temporary 
Family Assistance grant, tracking program participants, and 
checking for individuals participating in more than one State 
program.

3. Section 103.--Continued application of current standards under 
        Medicaid program

    The Committee does not intend the changes to Title IV-A, 
made in the Committee bill, to change Medicaid eligibility. 
Therefore, the Committee bill requires States to continue 
Medicaid eligibility based on AFDC eligibility rules in effect 
on June 1, 1995. That is, families who could have qualified 
under a State's June 1, 1995, AFDC eligibility requirements 
will continue to qualify for Medicaid in the future, even 
though such families may not qualify for assistance under a 
State program funded under the Temporary Family Assistance 
grant. Similarly, families receiving adoption assistance and 
foster care maintenance payments under Title IV-E will continue 
to qualify for Medicaid in the future based on eligibility 
requirements in effect on June 1, 1995.

4. Section 104.--Waivers
    States that have a waiver under section 1115 or otherwise 
relating to AFDC programs under Title IV-A in effect on October 
1, 1995, may continue to operate a program under the terms of 
the waiver notwithstanding any other provision of the Committee 
bill. The State is not, however, entitled to any Federal 
payments under the waiver.
    A State may terminate a waiver, if it so chooses, and must 
submit a report to the Secretary of HHS on the result or effect 
of such waiver. A State is relieved of any accrued cost 
neutrality liabilities under the waiver if the State terminates 
the waiver by the later of January 1, 1996, or 90 days 
following the adjournment of the first regular session of the 
State legislature that begins after the date of enactment of 
the Committee bill.

5. Section 105.--Deemed income requirement for Federal and federally 
        funded programs under the Social Security Act

    The present law-deeming rules for determining the 
eligibility of noncitizens for selected programs under the 
Social Security Act are replaced with a uniform deeming rule 
that applies to all means-tested programs under the Social 
Security Act. The uniform deeming rule requires that the income 
and resources of a sponsor and the sponsor's spouse be deemed 
to a noncitizen for the later of 5 years beginning on the date 
the noncitizen lawfully entered the United States or the period 
specified in an affidavit of support.
    The uniform deeming rule applies to State means-tested 
programs that are funded under the Social Security Act, 
including programs funded under the Temporary Family Assistance 
grant, Medicaid, and Supplemental Security Income. However, 
noncitizens will continue to be eligible for emergency medical 
services.

6. Section 106.--Conforming amendments to the Social Security Act

    The Committee bill contains a series of technical 
amendments to conform the provisions of the Committee bill to 
other provisions of the Social Security Act.

7. Section 107.--Conforming amendments to the Food Stamp Act of 1977 
        and related provisions

    The Committee bill contain a series of technical amendments 
to conform the provisions of the Committee bill to the Food 
Stamp Act of 1977 and related provisions.

8. Section 108.--Conforming amendments to other laws

    The Committee bill contains a series of technical 
amendments to conform the provisions of the Committee bill to 
other laws.

9. Section 109.--Secretarial submission of legislative proposal for 
        technical and conforming amendments

    Not later than 90 days after the date of enactment of the 
Committee bill, the Secretary of HHS, in consultation with the 
heads of appropriate other Federal agencies, must submit to the 
appropriate committees of the Congress, a legislative proposal 
providing for such technical conforming amendments to the law 
as are required to fully implement the provisions of the 
Committee bill.

10. Section 110.--Effective date; transition rule

    The provisions and amendments made by Title I of the 
Committee bill are generally effective on October 1, 1995. 
States may elect to continue their present law AFDC programs 
until March 31, 1996, and the State Family Assistance Grant for 
fiscal year 1996 will be reduced by the amount of Federal 
payments made before April 1, 1996.

    Title II--Modifications to the Jobs Program (and Title I--Work 
                             Requirements)

                              Present law

    The Family Support Act of 1988 established a new program, 
the Job Opportunities and Basic Skill Training Program (JOBS), 
to help needy families with children obtain the education, 
training and employment needed to avoid long-term welfare 
dependence. A JOBS program is currently operated in all 50 
States, the District of Columbia, and three territories (Guam, 
Puerto Rico, and the U.S. Virgin Islands). In addition, Indian 
tribes and Alaska Native organizations can operate a JOBS 
program and receive funds directly from the Federal Government.
    States must make available a range of services and 
activities under the JOBS program. States are required to 
offer:
          (1) Educational activities (as appropriate), 
        including high school or equivalent education (combined 
        with training as needed), basic and remedial education 
        to achieve a basic literacy level, and education for 
        individuals with limited English proficiency;
          (2) Job skills training;
          (3) Job readiness activities to help prepare 
        participants for work; and
          (4) Job development and job placement.
    States are also required to offer at least two of the 
following:
          (1) Group and individual job search;
          (2) On-the-job training;
          (3) Work supplementation programs; and
          (4) Community work experience programs (CWEP) or 
        other approved work experience programs.
    States may offer postsecondary education in appropriate 
cases and such other education, training, and employment 
activities.
    A work assignment under the JOBS program must not result in 
the:
          (1) Displacement of any currently employed worker or 
        position;
          (2) Impairment of contracts for services or 
        collectively bargained agreements;
          (3) Filling of a position when an employee has been 
        laid off from an equivalent position or when an 
        employer has reduced its work force to create a vacancy 
        for a subsidized worker; and
          (4) Filling of any established position vacancy.
    To the extent resources are available, a State must require 
non-exempt AFDC recipients to participate in the JOBS program. 
States must guarantee child care for AFDC recipients who need 
care for children under age 6 in order to engage in JOBS 
activities.
    Recipients exempt from participation in the JOBS program 
are those who are:
          (1) A parent or other relative caring for a child 
        under age 3 (younger at State option);
          (2) A parent or other relative caring for a child 
        under age 6 if the State does not guarantee child care;
          (3) Employed 30 hours or more a week;
          (4) Under age 16 attending school full time;
          (5) Pregnant women past their first trimester;
          (6) Living in areas where the program is not 
        available;
          (7) Ill, incapacitated, or of advanced age; and
          (8) Needed in the home because of the illness or 
        incapacity of another household member.
    The Congressional Budget Office estimates that 60 percent 
of the AFDC caseload is exempt from participating in the JOBS 
program.
    Beginning with FY 1990, a State must meet specified 
participation rates--i.e., a specified percentage of all non-
exempt recipients must participate in the JOBS program for at 
least 20 hours weekly. Job search activities do not count as 
participation after the first 4 months of receiving benefits. 
The participation rate was set at 7 percent in FY 1990 and has 
risen to 20 percent by FY 1995. This participation requirement 
expires at the end of FY 1995.
    In addition, a State must meet specified participation 
rates for two-parent families. At least one parent in a two-
parent family must participate at least 16 hours weekly in a 
work experience program, a work supplementation program, on-
the-job training, or a State-designed work program (or 
educational activities for a parent under age 25 without a high 
school diploma). The participation rate for two-parent families 
is 50 percent for FY 1995; 60 percent for FY 1996; and 75 
percent for FY 1997 and 1998. This participation requirement 
expires at the end of FY 1998.
    Five States are allowed to offer JOBS activities to non-
custodial parents.

                           Reasons for change

    The Committee believes that the most effective way to 
escape welfare and become self-sufficient is through 
employment. Able-bodied adults should not be allowed to stay on 
welfare year after year without working. However, because of 
exemptions and weak participation standards, less than 10 
percent of welfare recipients now participate in some type of 
job readiness or work activity under the JOBS program. The 
Committee bill addresses this problem by strengthening 
participation requirements and modifying the JOBS program to 
give States more flexibility in offering employment activities 
to welfare recipients.

                    Summary of principal provisions

    States must continue to have a JOBS program to be eligible 
to receive funds under the Temporary Family Assistance grant. 
Federal funding for the JOBS program is included in the State 
Family Assistance Grant. Indian tribes and Alaska Native 
organizations currently operating a JOBS program may continue 
to receive Federal funding (at FY 1994 levels) directly for 
that purpose.
    The JOBS program is modified to give States more 
flexibility in offering JOBS activities. States may offer any 
combination of present law JOBS activities (instead of the six 
mandatory activities). Requirements for job search and work 
supplementation are streamlined. New JOBS activities are 
authorized for community service programs approved by the State 
and job placement voucher programs. All States are allowed to 
open their JOBS program to non-custodial parents. A work 
assignment under the JOBS program may fill an established 
unfilled position vacancy.
    States must guarantee child care for recipients who need 
care for children under age 6 in order to participate in JOBS 
activities.
    States must meet new minimum participation requirements 
based on the entire caseload:

Fiscal year:                                                     Percent
    1996..........................................................    25
    1997..........................................................    30
    1998..........................................................    35
    1999..........................................................    40
    2000..........................................................    45
    2001 and thereafter...........................................    50

    Participation rates are measured by averaging monthly 
participation rates for a year. The monthly participation rate 
is equal to the number of recipient families in which at least 
one parent is engaged in JOBS program activities (job search is 
limited to the first 4 weeks) for at least 20 hours per week in 
a month divided by the total number of recipient families that 
received cash benefit for the month. For FY 1996, 1997 and 
1998, States have the option to compute these participation 
rates using present law exemptions. After FY 1998, no 
exemptions will be allowed in computing participation rates.
    Beginning with FY 1996, participation for two-parent 
families means that one parent in a two-parent family must 
participate in work activities for at least 30 hours a week. In 
addition, the participation rate for two-parent families will 
be increased to 90 percent for FY 1999 and thereafter.
    States may reduce or terminate assistance for families who 
refuse to participate in JOBS program activities.
    States not meeting the required participation rates in a 
fiscal year will have their grant reduced by up to 5 percent 
the succeeding fiscal year.
    The Secretary of HHS is to conduct research on the cost/
benefit of the JOBS program and to evaluate promising State 
approaches to employing welfare recipients. The Secretary of 
HHS must also rank the States in order of their success in 
moving recipients into long-term private sector jobs, and 
review the three most and three least successful programs. The 
Department of Health and Human Services will develop these 
rankings based on data collected under the bill.
                Title III--Supplemental Security Income

                          General description

    The Supplemental Security Income (SSI) program was 
established by the 1972 amendments to the Social Security Act 
to provide cash assistance to needy aged (age 65 and over), 
blind, and disabled individuals. Disabled individuals are those 
unable to engage in any substantial gainful activity by reason 
of a medically determined physical or mental impairment 
expected to result in death or last at least 12 months. The SSI 
program is entirely funded by the Federal Government (States 
may provide supplemental payments).

                  SUBTITLE A--ELIGIBILITY RESTRICTIONS

1. Section 301.--Denial of SSI benefits by reason of disability to drug 
        addicts and alcoholics.

                              Present law

    Individuals whose drug addiction or alcoholism is a 
contributing factor material to their disability are eligible 
to receive SSI cash benefits for up to 3 years if they meet SSI 
income and resource requirements. These recipients must have a 
representative payee, must participate in an approved treatment 
program when available and appropriate, and must allow their 
participation in a treatment program to be monitored. Medicaid 
benefits continue beyond the 3-year limit unless the individual 
was expelled from SSI for failure to participate in a treatment 
program.

                           Reasons for change

    The number of SSI recipients whose alcoholism or drug 
addiction is a contributing factor material to their disability 
has grown from 5,000 in 1985 to 101,000 in 1994. Costs have 
risen from $14 million in 1985 to $433 million in 1994. The 
Committee believes this trend is inappropriately diverting 
scarce Federal resources from severely disabled individuals and 
is providing a perverse incentive, contrary to the long-term 
interests of alcoholics and addicts, by providing them with 
cash payments so long as they do not work.

                    Summary of principal provisions

    An individual will no longer be considered disabled for the 
SSI program if alcoholism or drug addiction is a contributing 
factor material to the individual's disability.

2. Section 302.--Limited eligibility of noncitizens for SSI benefits

                              Present law

    Aged, blind, and disabled noncitizens can qualify for SSI 
cash benefits if they meet SSI income and resource 
requirements. In determining a noncitizen's income and 
resources, the income and resources of a sponsor is deemed to 
be those of the noncitizen for 5 years after the noncitizen 
lawfully entered the United States.

                           Reasons for change

    Except for asylees and refugees, noncitizens granted entry 
into the United States stipulate that they will be self-
sufficient while living in the United States and will not 
become a public charge. Notwithstanding this stipulation, the 
number of noncitizens receiving SSI cash benefits have grown 
dramatically in the last decade from 240,000 in 1986 to 740,000 
in 1994. Costs have risen from $684 million in 1986 to $2.9 
billion in 1994. The Committee believes that noncitizens should 
abide to the condition of self-sufficiency under which they 
gained entry into the United States. Limiting SSI eligibility 
for noncitizens who have not worked in the United States for 
significant time periods will ensure that scarce Federal 
resources will continue to be available to needy citizens.

                    Summary of principal provisions

    Noncitizens will no longer be eligible to qualify for SSI 
cash benefits unless they have worked in the United States for 
a sufficient period to qualify for Social Security disability 
income (20 quarters of work) or old age benefits (40 quarters 
of work). Noncitizens who entered the United States as an 
asylee or refugee will be eligible for SSI cash benefits for up 
to 5 years after entering the United States (if they otherwise 
meet the SSI program requirements). Noncitizens who served in 
the United States Armed Forces and their spouses and dependent 
children will also be eligible for SSI cash benefits.
3. Section 303.--Denial of SSI benefits for 10 years to individuals 
        found to have fraudulently misrepresented residence in order to 
        obtain benefits simultaneously in two or more States

    An individual who is convicted in a Federal or State court 
of having made a fraudulent statement or representation with 
respect to the place of such individual's residence in order to 
receive assistance or benefits simultaneously from two or more 
States under programs under Titles IV, XVI, or XIX, or the Food 
Stamp Act of 1977 is not eligible to receive SSI benefits for 
10 years beginning with the date of conviction.

4. Section 304.--Denial of SSI benefits for fugitive felons and 
        probation and parole violators

    An individual who is a fugitive felon or who is violating 
probation or parole is not eligible to receive SSI benefits

5. Section 305.--Effective dates; application to current recipients

    The eligibility changes to the SSI program are generally 
effective for months beginning on or after the date of 
enactment of the Committee bill.
    Individuals receiving SSI cash benefits on the date of 
enactment who will no longer qualify for SSI because of 
alcoholism or drug addiction or because of noncitizen status 
will continue to receive SSI cash benefits until January 1, 
1997 (if the individual otherwise continues to be eligible). 
The Social Security Administration must notify such individuals 
of the change in law within 90 days after the date of 
enactment. An individual so notified who wishes to reapply for 
SSI benefits on another basis must reapply to the Commissioner 
of Social Security within 4 months after the date of enactment 
and the Commissioner must make a determination of such 
individual's eligibility within 1 year after the date of 
enactment.

               SUBTITLE B--BENEFITS FOR DISABLED CHILDREN

                              Present law

    There is no definition of childhood disability in statute. 
Instead, a needy individual under age 18 is determined eligible 
for SSI ``if he suffers from any medically determinable 
physical or mental impairment of comparable severity'' with 
that of an adult considered disabled and eligible for SSI 
benefits.
    Under current disability evaluation procedures, the Social 
Security Administration begins by collecting information about 
an individual's impairments(s) and ability to function from 
many sources, including, as appropriate, parents, physicians, 
psychologists, other health professionals, and teachers. With 
this information, the Social Security Administration first 
decides if the impairment(s) of an individual under age 18 
``meets or equals'' an impairment in the ``Listing of 
Impairments''--over 100 specific physical or mental conditions 
relating to individuals under age 18 described in regulations. 
If an individual does not have a listed impairment, the Social 
Security Administration next determines if the individual's 
impairment is of sufficient severity to equal a listing. If 
indicated, the Social Security Administration may also consider 
whether the combined effect of all impairments are of 
sufficient severity to be disabling (regardless of whether any 
single impairment is severe enough to meet a listing), or 
whether an individual's overall functional limitations 
resulting from his or her impairment(s) are of sufficient 
severity to be disabling.
    If the Social Security Administration finds that the 
impairment(s) of an individual under age 18 cannot meet or 
equal the Listing as described above, it applies another set of 
disability evaluation rules, an ``individualized functional 
assessment'' (IFA).
    Current law provides for continuing disability reviews of 
current recipients to ensure that such individuals remain 
disabled. Under the Social Security Independence and Program 
Improvements Act of 1994 (P.L. 103-296), beginning on October 
1, 1995, the Commissioner of Social Security is required to 
conduct at least 100,000 continuing disability reviews each 
year of disabled SSI recipients. The provision expires on 
October 1, 1998.

                           Reasons for change
    The Committee believes the provisions of the Committee bill 
are the minimum changes needed to restore Congressional and 
public confidence in the children's SSI program and to preserve 
the program for families with children with severe 
disabilities.
    The Committee is concerned about significant program growth 
experienced in recent years. Over the last 5 years the SSI 
rolls have grown from 300,000 to over 900,000 children, and 
costs have increased from $1.5 billion to $4.5 billion. 
Although a significant amount of this growth followed from 
Congressional mandates to the Social Security Administration, 
e.g., to conduct outreach programs to locate children eligible 
for the program and to improve the Listing for mental 
impairments, other growth resulted from regulations issued in 
1991 establishing the IFA that liberalized the eligibility 
regulations beyond Congressional intent. Substantial further 
growth in this program is projected.
    The lack of a childhood disability definition is a 
fundamental defect in the current statute, and has led to 
substantial confusion over program eligibility. The Social 
Security Administration has been required to translate what are 
essentially two definitions of adult work disability in statute 
into a childhood disability definition.
    The Committee bill establishes a statutory definition of 
childhood disability. By this definition, the Committee intends 
that only needy children with severe disabilities be eligible 
for children's SSI. The Committee believes that the Listing and 
the other disability determination regulations as modified by 
the Committee bill properly reflect the severity of disability 
contemplated by the statutory definition. In those areas of the 
Listing that involve domains of functioning, the Committee 
expects no less than two marked impairments as the standard for 
qualification. The Committee suggests the Social Security 
Administration revisit the Listing, as appropriate, to ensure 
that it meets this standard.
    However, the Committee does not intend to suggest by its 
definition of childhood disability that every child need be 
especially evaluated for functional limitations, or that this 
definition creates a supposition for any such examination. The 
Committee notes that under the current procedure for writing 
individual listings, level of functioning is an explicit 
consideration in deciding which impairments, with what medical 
or other findings, are of sufficient severity to be included in 
the Listing. Nonetheless, the Committee does not intend to 
limit the use of functional assessments and functional 
information, if reflecting sufficient severity and are 
otherwise appropriate.
    The Committee bill includes a technical change to the 
Listing for mental disorders. The Committee has eliminated 
references to maladaptive behavior in the domain of personal/
behavioral function. Under the Listing for childhood mental 
disorders, maladaptive behavior may be counted twice in 
determining disability; once in the domain of personal/
behavioral function, and again in the domain of social 
function. Under the Committee bill, such behavior may continue 
to be scored, but only once, and within the domain of social 
function. This change has been endorsed by various expert 
groups.
    The Committee bill repeals the regulations establishing the 
IFA, and IFAs are no longer grounds for disability 
determinations. In the Committee's view, the IFA is a misnomer. 
Although the term conjures up images of a special kind of 
evaluation of a child's ability to function, such as a unique 
medical examination or clinical assessment by a psychologist, 
or perhaps special consideration of the disabling effects of 
multiple impairments, in reality the IFA is a set of 
regulations that permits individuals with modest conditions or 
impairments to be eligible for this program. The Committee is 
also aware that there is considerable confusion about the use 
of functional information in making disability determinations. 
The Committee notes that findings from functional assessments 
are substantially considered in the current Listing, and will 
continue to be. For example, a substantially improved Listing 
for childhood mental disorders was promulgated by the Social 
Security Administration in 1990, which emphasized functional 
assessment criteria and added new listings for certain specific 
conditions, such as Attention Deficit Hyperactivity Disorder 
(ADHD). As a disability determination methodology, the 
Committee also notes that the General Accounting Office in a 
March 1995 report sharply criticized the IFA, citing a number 
of fundamental flaws.
    The Committee urges those who seek changes in eligibility 
standards or other program features to resolve such matters 
directly with Congress. As a general matter, it is impossible 
for Congress to properly oversee any program, especially an 
entitlement program, when rules are reinterpreted by a court 
and unilaterally implemented by an agency. The Committee is 
also deeply concerned about the false hopes such behavior 
creates for individuals who then expect to benefit from a 
program.
    This circumstance certainly applies to children's SSI. As 
noted above, in 1991 the Social Security Administration 
substantially liberalized program eligibility regulations. This 
action was prompted by its reading of the Supreme Court 
decision in Sullivan v. Zebley. The Zebley decision was based 
on limited legislative history and obscure statutory language 
regarding the children's SSI program, which the Committee is 
now correcting. But the Committee notes that several relevant 
bills were before the Congress at the time of the Zebley 
decision, but that the Congress had not yet determined to act 
on any of those measures. In the future, the Committee invites 
the Social Security Administration to consult with it on any 
substantive matter to avoid such misunderstandings.
    The Committee believes that the children's SSI program 
requires further examination. The Committee bill requires both 
a study of the disability determination process and a National 
Commission on the Future of Disability. The National Commission 
also has the larger purpose of examining dramatic projected 
growth in SSI, generally, and SSDI and the concerns of 
individuals with disabilities about barriers to independence 
and employment created by these programs.
    For example, there is an ongoing controversy over the 
purpose of the children's SSI program. According to history of 
the original SSI legislation, the House Ways and Means 
Committee included children with disabilities in the SSI 
program to assist families with the extra expenses associated 
with their child's disability (see H. Rpt. 92-231 at 147-148). 
The Senate Finance Committee did not agree, believing the needs 
of children with disabilities were generally only greater for 
health care, and that most children would qualify for Medicaid 
(see S. Rpt. 92-1230 at 385). The Senate receded in conference.
    The Committee believes this is an important issue that 
needs to be revisited. It is easy to imagine extra expenses for 
a child with a disability, and helping families with such 
expenses is an appropriate rationale for this program. However, 
the best data available indicate that for many children 
receiving SSI their families do not incur extra disability-
related expenses on their behalf, and that SSI is often used 
for general household expenses. Moreover, there is a small 
percentage of children who incur huge disability-related 
expenses barely touched by the SSI payment. These data raise 
fundamental questions of fairness and equity.
    The Committee also believes there are many unmet needs for 
children with disabilities, and is aware of the controversy 
over whether some children would be better served by services, 
such as mental health treatment or purchase of items of 
assistive technology, rather than by cash payments. In the 23 
years since the SSI program was created, substantial new 
programs have been created to assist children with 
disabilities, including Federal funding for special education 
and expansion of Medicaid. The impact of these programs on cash 
needs of children with disabilities merits careful evaluation 
as well.
    The Committee is determined to treat fairly those current 
recipients affected by the rules changes, and has included 
explicit protection for appeal and due process procedures and a 
partial grandfathering (until January 1, 1997), with a hold 
harmless provision for any overpayments. The Committee expects 
the Social Security Administration to be mindful of its 
experience with the hazards of large scale continuing 
disability reviews and urges it to conduct these reviews in an 
orderly fashion.

                    Summary of principal provisions

1. Section 311.--Benefits for disabled children

    Section 311 repeals the ``comparable severity'' test in 
statute for determining disability of individuals under age 18, 
and adds a definition of childhood disability to the statute:

          An individual under the age of 18 shall be considered 
        disabled for the purposes of this Title if that 
        individual has a medically determinable physical or 
        mental impairment, which results in marked, pervasive, 
        and severe functional limitations, and which can be 
        expected to result in death or which has lasted or can 
        be expected to last for a continuous period of not less 
        than 12 months.

    Under the Listing that relates to mental disorders, the 
Social Security Administration is directed to eliminate 
references to maladaptive behavior in the domain of personal/
behavior functioning.
    For children whose eligibility for SSI may be affected by 
provisions of this bill, the Commissioner shall conduct a 
continuing disability review within 1 year after enactment. 
However, no individual shall be removed until such review is 
completed, and an individual's right to appeal and other due 
process procedures are preserved. Notwithstanding such review, 
no individual shall be removed from the rolls until January 1, 
1997. A recipient shall be held harmless for any payments made 
until removed from the rolls.
2. Section 312.--Continuing disability reviews

    The Commissioner is required to conduct a continuing 
disability review every 3 years for every individual under age 
18 except for those individuals whose condition is not expected 
to improve. The Commissioner is required to redetermine 
eligibility for SSI for an individual whose low birth weight is 
a contributing factor to that individual's disability 
determination no later than 12 months after birth. The 
Commissioner is required to redetermine eligibility for SSI for 
an individual who has reached 18 years of age.

3. Section 313.--Treatment requirements for disabled individuals under 
        age 18

    Each representative payee of an individual under age 18 
shall ensure that a treatment plan prepared by a physician for 
such individual is followed, and shall file a copy of the 
treatment plan with the State agency that makes disability 
determinations.

         SUBTITLE C--STUDY OF DISABILITY DETERMINATION PROCESS

1. Section 321.--Study of Disability Determination Process

    The Commissioner is directed to contract with the National 
Academy of Sciences, or other independent entity, for a study 
of the disability determination procedure, of both individuals 
under age 18 and adults.

      SUBTITLE D--NATIONAL COMMISSION ON THE FUTURE OF DISABILITY

1. Section 331.--National Commission on the Future of Disability

    A National Commission on the Future of Disability is 
established to examine growth in the SSDI and SSI and reported 
barriers to employment and independence of individuals with 
disabilities created by these programs; and to make appropriate 
recommendations.

                  Title IV--Child Support Enforcement

                              Present law

    The Child Support Enforcement (CSE) program was enacted in 
1975 to address the problem of nonsupport of children. The 1975 
legislation added a new part D to Title IV of the Social 
Security Act. This legislation authorized Federal matching 
funds to be used for locating absent parents, establishing 
paternity, establishing support obligation owed by the 
noncustodial parent, and obtaining child and spousal support. 
The basic responsibility for administering the program is left 
to the States, but the Federal Government plays a major role in 
funding, monitoring and evaluating State programs, providing 
technical assistance, and in certain instances, in giving 
direct assistance to the State in locating absent parents and 
obtaining support payments from them.
    The current CSE program requires States to offer child 
support enforcement services for both welfare and nonwelfare 
families. For welfare families, services are automatic. Once an 
individual applies for AFDC or Medicaid the individual is 
required to cooperate with the State in establishing paternity 
and locating the father unless she is found to have good cause 
for refusing to cooperate. If an individual does not have a 
good cause for noncooperation, the family's AFDC benefit is 
reduced.
    Applicants or recipients of AFDC must assign their rights 
to child or spousal support to the State. If the State collects 
child support from the noncustodial parent, the State and 
Federal government get to keep the amount of money needed to 
offset the costs the State and Federal government incurred 
because the family was on welfare. If any money is leftover, it 
is paid to the family. In an attempt to get individuals to 
cooperate, the first $50 of any amount collected goes to the 
family.
    States that do not comply with their State child support 
plan face a reduction of their AFDC matching funds by 1 to 5 
percent, depending on the severity of noncompliance. Penalties 
are suspended if the State submits a corrective action plan 
that is approved by the Secretary.

                           Reasons for change
    The current child support system can be strengthened and 
improved to increase paternity establishment and collections of 
child support. An important part of child support enforcement 
is the ability to track a nonpaying, noncustodial parent. 
Because individuals can frequently change jobs to avoid paying 
support, a new system will be established to require employers 
to send to State registries information on all new hires within 
a specified time period. These new hire registries will match 
information with outstanding support orders so support orders 
can be enforced more quickly.
    Because most of the problems in the current system stem 
from interstate cases, the current Federal Parent Locator 
Service is expanded to include information from the State 
registries so that support orders can be more easily matched 
with workers. In addition, all States are required to adopt the 
Uniform Interstate Family Support Act (UIFSA) so that all 
States have uniform laws and procedures governing child 
support.

                    Summary of principal provisions

    The Committee bill strengthens child support enforcement by 
increasing paternity acknowledgement, establishing more support 
orders, and increasing child support collections through 
additional enforcement techniques. In addition, a new system 
will be established that will better track the noncustodial 
parent.

     SUBTITLE A--ELIGIBILITY FOR SERVICES; DISTRIBUTION OF PAYMENTS

1. Section 401.--State obligation to provide child support enforcement 
        services

    States must provide child support services to recipients of 
programs under the Temporary Family Assistance grant, Medicaid, 
and Title IV-E. In addition, child support services must be 
provided to individuals who apply for services.

2. Section 402.--Distribution of child support collections

    The $50 passthrough to families is ended. Instead, States 
are given the option of passing the entire child support 
payment through to the family. If a State elects this option, 
the State must still pay the Federal share of the collection to 
the Federal Government. For arrearages that accrued before the 
custodial parent went on welfare, the money is first paid to 
the family if the family leaves welfare. Only after all 
arrearages owed to the custodial parent have been repaid, any 
arrearages owed to the State and Federal Government are repaid.

3. Section 403.--Rights to notification and hearings

    All individuals involved in the process of establishing or 
modifying child support orders must be notified and have access 
to a fair hearing or other formal complaint procedure.

4. Section 404.--Privacy safeguards

    States must implement safeguards against unauthorized use 
or disclosure of information relating to proceedings to 
establish paternity or to enforce child support. These 
safeguards must include prohibitions on release of information 
where there is a protective order or where the State has reason 
to believe a party is at risk of physical or emotional harm 
from the other party. This provision is effective October 1, 
1997.

                  SUBTITLE B--LOCATE AND CASE TRACKING

1. Section 411.--State case registry

    States are required to collect information using automatic 
data processing systems. These systems must include:
          (1) Each case in which an order has been entered or 
        modified on or after October 1, 1998, and must use 
        standard data elements such as name, Social Security 
        number, and other uniform identification numbers;
          (2) Payment records for cases being enforced by the 
        State agency, including amount of current and past due 
        support owed, amounts collected and distributed, birth 
        date of the child to whom the obligation is owed, and 
        the amount of any lien imposed by the State;
          (3) Updates on case records in the State registry 
        being enforced by the State on the basis of information 
        received from judicial and administration actions, from 
        proceedings, from orders relating to paternity and 
        support, from data matches, and from other sources; and
          (4) Extracts for purposes of sharing and matching 
        with Federal and State data bases and locator services, 
        including the Federal Parent Locator Service, and with 
        the child support enforcement programs in other States.

2. Section 412.--Collection and disbursement of support payments

    State child support agencies are required, beginning 
October 1, 1998, to operate a centralized, automated unit for 
collection and disbursement of child support under orders 
enforced by the child support agency. The purpose of the 
Disbursement Unit is to collect and disburse support payments, 
to generate orders and notices of withholding to employers, to 
keep an accurate identification of payments, to promptly 
distribute money to custodial parents or other States, and to 
furnish parents with a record of the current status of support 
payments. The Disbursement Unit must distribute all amounts 
payable within 2 business days after receiving the money and 
identifying information from the employer. The State 
Disbursement Unit may be established by linking local 
disbursement units through an automated information network.

3. Section 413.--State directory of new hires

    States are required to establish, by October 1, 1997, a 
State Directory of New Hires to which employers and labor 
organizations in the State must furnish a W-4 form for each 
newly hired employee. Employers must submit the W-4 form within 
15 days after the date of hire or the first business day of the 
week following the date the employee is first paid. The 
employer or labor organization may submit the report 
magnetically, electronically, or by first class mail. 
Government agencies are considered employers for purposes of 
New Hire reporting.
    An employer failing to make a timely report is subject to a 
$25 fine for each unreported employee. There is also a $500 
penalty on employers for every employee for whom they do not 
transmit a W-4 form if, under the laws of the State, there is 
shown to be a conspiracy between the employer and the employee 
to prevent the proper information from being filed.
    By October 1, 1997, each State Directory of New Hires must 
conduct automated matches of the Social Security numbers of 
reported employees against the Social Security numbers of 
records in the State Case Registry being enforced by the State 
agency and must report the information on matches to the State 
child support agency. Then, within 2 business days, the State 
must issue a withholding order directing the employer to 
withhold wages in accordance with the child support order.
    In addition, within 2 working days of receiving the W-4 
information from employers, the State Directory of New Hires 
must furnish the information to the National Directory of New 
Hires for matching with the records of other State case 
registries. The State Directory of New Hires must also report 
quarterly to the National Directory of New Hires information on 
wages and unemployment compensation (this information is taken 
directly from a report that States are currently required to 
submit to the Secretary of Labor).
    The State child support agency must use the new hire 
information for purposes of establishing paternity as well as 
establishing, modifying, and enforcing child support 
obligations.
    New hire information must also be disclosed to the 
Temporary Family Assistance, Medicaid, Unemployment 
Compensation, Food Stamp, and territorial cash assistance 
programs for income eligibility verification; to the Social 
Security Administration for use in determining the accuracy of 
Supplemental Security Income payments under Title XVI and in 
connection with benefits under Title II of the Social Security 
Act; to the Secretary of the Treasury for administration of the 
Earned Income Tax Credit program and for verification of claims 
concerning employment on tax returns; to State agencies 
administering unemployment and workers' compensation programs 
to assist determinations of the allowability of claims; and to 
researchers (but without individual identifiers) conducting 
studies that serve the purposes of the child support 
enforcement program.

4. Section 414.--Amendments concerning income withholding

    Since January 1, 1994, States are required to use immediate 
wage withholding for all new support orders, regardless of 
whether a parent has applied for child support enforcement 
services. There are two times when this rule does not apply:
          (1) One of the parents demonstrates and the court or 
        administrative agency finds that there is good cause 
        not to do so; or
          (2) A written agreement is reached between both 
        parents which provides for an alternative arrangement.
    States must have laws providing that all child support 
orders issued or modified before October 1, 1996, which are not 
otherwise subject to income withholding, will become subject to 
income withholding immediately if arrearage occurs.

5. Section 415.--Locator information from interstate networks

    All State and Federal child support enforcement agencies 
must have access to the motor vehicle and law enforcement 
locator systems in all States.

6. Section 416.--Expansion of the Federal Parent Locator Service

    FPLS is already a central component of the Federal child 
support effort, and is especially useful in interstate cases. 
The FPLS would be expanded to include new sources of timely 
information that is to be used for the purposes of establishing 
parentage and establishing, modifying, or enforcing child 
support obligations and locating the custodial parent so that 
visitation orders can be enforced. Within the FPLS, an 
automated registry known as the Federal Case Registry of Child 
Support Orders would be established. The Federal Case Registry 
contains abstracts of child support orders and other 
information specified by the Secretary (such as names, Social 
Security numbers or other uniform identification numbers, State 
case identification numbers, wages or other income, and rights 
to health care coverage) to identify individuals who owe or are 
owed support, and the State which has jurisdiction over the 
case.
    In addition to the Federal Case Registry, the provision 
establishes within the FPLS a National Directory of New Hires 
containing information supplied by State Directories of New 
Hires. When fully implemented, the Federal Directory of New 
Hires will contain identifying information on virtually every 
person who is hired in the United States. In addition, the 
Federal Case Registry will contain quarterly data supplied by 
the State Directory of New Hires on wages and unemployment 
compensation paid. Provisions are included in the bill to 
ensure accuracy and to safeguard information in the FPLS from 
inappropriate disclosure or use.
    The Secretary is required to match data in the National 
Directory of New Hires against the child support order 
abstracts in the Federal Case Registry of Child Support Orders 
and to report information obtained from matches to the State 
child support agency responsible for the case within 2 days. 
The information is to be used for purposes of locating 
individuals to establish paternity, and to establish, modify, 
or enforce child support.

7. Section 417.--Collection and use of Social Security numbers for use 
        in child support enforcement

    States must have laws requiring that Social Security 
numbers be placed on applications and in the files for 
professional licenses, commercial drivers licenses, 
occupational licenses, marriage licenses, divorce decrees, 
death certificates, child support orders, and paternity 
determination or acknowledgement orders.

         SUBTITLE C--STREAMLINING AND UNIFORMITY OF PROCEDURES

1. Section 421.--Adoption of uniform State laws

    By January 1, 1997, all States must have UIFSA and the 
procedures required for its implementation in effect.

2. Section 422.--Improvements to full faith and credit for child 
        support orders

    The provision changes and expands the recently enacted 
Federal law governing full faith and credit for child support 
orders by adding several provisions. One provision clarifies 
the definition of a child's home State; another makes several 
revisions to ensure that full faith and credit laws can be 
applied consistently with UIFSA; another clarifies the rules 
about which child support order States must honor when there is 
more than one order.
3. Section 423.--Administrative enforcement in interstate cases

    States are required to have laws that facilitate the 
enforcement of child support orders across State lines. States 
are required to have laws that permit them to send and receive, 
without registering the underlying order unless the enforcement 
action is contested by the obligor on the grounds of mistake of 
fact or invalid order. The transmission of the order itself 
serves as certification to the responding State of the arrears 
amount and of the fact that the initiating State met all 
procedural due process requirements. No court action is 
required or permitted by the responding State. In addition, 
each responding State must match the case against its data 
bases, take appropriate action if a match occurs, and send the 
collections, if any, to the initiating State. States must keep 
records of the number of requests they receive, the number of 
cases that result in a collection, and the amount collected. 
States must respond to interstate requests within 5 days.

4. Section 424.--Use of forms in interstate enforcement

    The Secretary must issue standardized forms that all States 
must use for income withholding, for imposing liens in 
interstate cases, and for issuing administrative subpoenas in 
interstate cases. The forms must be issued by June 30, 1996, 
and States must begin using the forms by October 1, 1996.

5. Section 425.--State laws providing expedited procedures

    States must adopt procedures to expedite both the 
establishment of paternity and the establishment, enforcement, 
and modification of support:
          (1) Ordering genetic testing;
          (2) Entering a default order;
          (3) Issuing subpoenas to obtain information necessary 
        to establish, modify, or enforce an order;
          (4) Obtaining access to records from State and local 
        government agencies, law enforcement records, and 
        corrections records;
          (5) Directing parties to pay support to the 
        appropriate government entity;
          (6) Ordering income withholding;
          (7) Securing assets to satisfy arrearages by 
        intercepting or seizing periodic or lump-sum payment 
        from States or local agencies; these payments include 
        unemployment compensation, workers' compensation, 
        judgments, settlements, lottery winnings, assets held 
        by financial institutions, and public and private 
        retirement funds; and
          (8) Increasing automatically the monthly support due 
        to include amounts to offset arrears.

                  SUBTITLE D--PATERNITY ESTABLISHMENT

1. Section 431.--State laws concerning paternity establishment

    States must strengthen their paternity establishment laws 
by requiring that paternity may be established until the child 
reaches age 21 and by requiring the child and all other parties 
to undergo genetic testing upon the request of a party, where 
the request is supported by a sworn statement establishing a 
reasonable possibility of parentage or nonparentage. When the 
tests are ordered by the State agency, States must pay for the 
costs, subject to recoupment at State option from the father if 
paternity is established.
    States must have procedures that: create a simple civil 
process for establishing paternity under which benefits, rights 
and responsibilities of acknowledgement are explained to unwed 
parents; establish a paternity acknowledgement program through 
hospitals and birth record agencies (and other agencies as 
designated by the Secretary) and that require the agencies to 
use a uniform affidavit developed by the Secretary that is 
entitled to full faith and credit in any other State; create a 
signed acknowledgement of paternity that is considered a legal 
finding of paternity, unless rescinded within 60 days, and 
thereafter may be challenged in court only on the basis of 
fraud, duress, or material mistake of fact; allow minors who 
sign a voluntary acknowledgement to rescind it until age 18 or 
the date of the first proceeding to establish a support order, 
visitation, or custody rights; and provide that no judicial or 
administrative proceedings are required or permitted to ratify 
an acknowledgement which is not challenged by the parents.
    States must also have procedures for admitting into 
evidence accredited genetic tests, unless any objection is made 
within a specified number of days, and if no objection is made, 
clarifying that test results are admissible without the need 
for foundation or other testimony; creating a rebuttable or, at 
State option, conclusive presumption of paternity upon genetic 
testing results indicating a threshold probability that the 
alleged father is the father of the child; requiring a default 
order to be entered in a paternity case upon a showing of 
service of process on the defendant and any additional showing 
required by the State law; providing that parties in a 
contested paternity action are not entitled to a jury trial; 
requiring issuance of an order for temporary support, upon 
motion of a party, pending an administrative or judicial 
determination of parentage, where paternity is indicated by 
genetic testing or other clear and convincing evidence; 
providing that bills for pregnancy, childbirth, and genetic 
testing are admissible without foundation testimony; ensuring 
that putative fathers have a reasonable opportunity to initiate 
paternity action; and providing for voluntary acknowledgements 
and adjudications of paternity to be filed with the State 
registry of birth records for data matches with the central 
registry established by the State.
    The Secretary is required to develop an affidavit to be 
used for voluntary acknowledgement of paternity which includes 
the Social Security number of each parent.

2. Section 432.--Outreach for voluntary paternity establishment

    States will publicize the availability and encourage the 
use of procedures for voluntary establishment of paternity and 
child support by means the State deems appropriate.

3. Section 433.--Cooperation by applicants for and recipients of 
        temporary family assistance

    Individuals who apply for or receive public assistance 
under the Temporary Family Assistance Program must cooperate 
with child support enforcement efforts by providing specific 
identifying information about the other parent, unless the 
applicant or recipient is found to have good cause for refusing 
to cooperate. ``Good cause'' is defined by States. States may 
also require the applicant and child to submit to genetic 
testing. Responsibility for determining failure to cooperate is 
shifted from the agency that administers the Temporary Family 
Assistance Program to the agency that administers the child 
support program.

             SUBTITLE E--PROGRAM ADMINISTRATION AND FUNDING

1. Section 441.--Federal matching payments

    The Committee bill maintains the Federal matching payment 
for child support activities at 66 percent.

2. Section 442.--Performance-based incentives and penalties

    Beginning in 1999, a new incentive system will be put in 
place. This system will reward good State performance by 
increasing the State's basic matching rate of 66 percent by 
adding up to 12 percentage points for outstanding performance 
in establishing paternity and by adding up to an additional 12 
percentage points for overall performance. The Secretary will 
design the specific features of the system and, in doing so, 
will maintain overall Federal reimbursement of State programs 
through the combined matching rate and incentives at the level 
projected for the current combined matching and incentive 
payments to States.
    The minimum paternity establishment ratio is either 90 
percent or:
          (a) If the State paternity establishment ratio is 
        between 50 percent and 90 percent for the fiscal year, 
        the paternity establishment ratio of the State for the 
        immediately preceding fiscal year plus 6 percentage 
        points; or
          (b) If the State ratio is less than 50 percent for a 
        fiscal year, the paternity establishment ratio for the 
        immediately preceding fiscal year plus 10 percentage 
        points.
    States are required to recycle incentive payments back into 
the child support program.

3. Section 443.--Federal and State reviews and audits
    The Committee provision shifts the focus of child support 
audits from process to performance outcomes. This goal is 
accomplished by adding a new State plan provision that requires 
States to annually review and report to the Secretary, using 
data from their automatic data processing system, both 
information adequate to determine the State's compliance with 
Federal requirements for expedited procedures and timely case 
processing as well as the information necessary to calculate 
their levels of accomplishment and rates of improvement on the 
new performance indicators established by the Committee bill 
(percentage of cases in which an order was established, 
percentage of cases in which support is being paid, ratio of 
child support collected to child support due, and cost-
effectiveness of the program). The Secretary is required to 
determine the amount (if any) of incentives or penalties; the 
Secretary must also review State reports on compliance with 
Federal requirements and provide States with recommendations 
for corrective action. Audits must be conducted at least once 
every 3 years, or more often in the case of States that fail to 
meet Federal requirements. The purpose of the audits is to 
assess the completeness, reliability, accuracy, and security of 
data reported for use in calculating the performance indicators 
and to assess the adequacy of financial management of the State 
program.
    These provisions take effect beginning with the calendar 
quarter that begins 12 months after enactment.

4. Section 444.--Required reporting procedures

    The Secretary is required to establish procedures and 
uniform definitions for State collection and reporting of 
required information necessary to measure State compliance with 
expedited processes and timely case processing as well as the 
data necessary to perform the incentive calculations.

5. Section 445.--Automated data processing requirements

    States are required to have a single statewide automated 
data processing and information retrieval system which has the 
capacity to perform the following functions: to account for 
Federal, State, and local funds; to maintain data for Federal 
reporting; to calculate the State's performance for purposes of 
the incentive and penalty provisions; and to safeguard the 
integrity, accuracy, and completeness of, and access to, data 
in the automated systems (including policies restricting access 
to data).
    The statutory provisions for State implementation of 
Federal automatic data processing requirements are revised to 
provide that, first, all requirements enacted in or before the 
Family Support Act of 1988 are to be met by October 1, 1997, 
and second, that the requirements enacted in the Family Self-
Sufficiency Act of 1995 are met by October 1, 1999. The October 
1, 1999 deadline will be extended by 1 day for each day by 
which the Secretary fails to meet the deadline for regulations.

6. Section 446.--Technical assistance

    The Secretary can use 1 percent of the Federal share of 
child support collections on behalf of families in the 
Temporary Family Assistance program from the preceding year to 
provide technical assistance to the States. Technical 
assistance can include training of State and Federal staff, 
research and demonstration programs, and special projects of 
regional or national significance.
    The Secretary must use 2 percent of the Federal share of 
collections on behalf of Temporary Family Assistance recipients 
for operation of the Federal Parent Locator Service to the 
extent that costs of the Parent Locator Service are not 
recovered by user fees.

7. Section 447.--Reports and data collection by the Secretary

    The Committee provision amends current data collection and 
reporting requirements to conform the requirements to changes 
made by this bill and to eliminate unnecessary and duplicative 
information. More specifically, States are required to report 
the following data each fiscal year: the total amount of child 
support payments collected, the cost to the State and Federal 
governments of furnishing child support services, the number of 
cases involving families that became ineligible for aid under 
part A with respect to whom a child support payment was 
received, the total amount of current support collected and 
distributed, the total amount of past-due support collected and 
distributed, and the total amount of support due and unpaid for 
all fiscal years.

      SUBTITLE F--ESTABLISHMENT AND MODIFICATION OF SUPPORT ORDERS

1. Section 451.--National Child Support Guidelines Commission
    A national child support guidelines commission is 
established to consider the adequacy of State child support 
guidelines, feasibility of adopting uniform terms in all child 
support orders, how to define income and under what 
circumstances income should be imputed, and the tax treatment 
of child support payments. In addition, they would recommend 
procedures to automatically adjust child support orders 
periodically and to help noncustodial parents address 
grievances regarding visitation and custody orders.

2. Section 452.--Simplified process for review and adjustment of child 
        support orders

    As under present law, States must review and, if 
appropriate, adjust child support orders enforced by the State 
child support agency every 3 years. However, States are given 
two simplified means by which they can use automated means to 
accomplish the review. First, States may adjust the order by 
applying the State guidelines and updating the reward amount. 
Second, States may apply a cost-of-living increase to the 
order. In either case, both parties must be given an 
opportunity to contest the adjustment.
    States must also review and, upon a showing of a change in 
circumstances, adjust orders pursuant to the child support 
guidelines upon request of a party. States are required to give 
parties one notice of their right to request review and 
adjustment, which may be included in the order establishing the 
support amount.

3. Section 453.--Furnishing consumer reports for purposes relating to 
        child support

    Authorized individuals seeking to establish or modify a 
child support order will be given access to the consumer report 
agency to determine the appropriate levels of payment.

4. Section 454.--Nonliability for depository institutions providing 
        financial records to State child support enforcement agencies 
        in child support cases

    A depository institution shall not be liable under any 
Federal or State law to any person for disclosing any financial 
record of an individual to a State child support enforcement 
agency attempting to establish, modify, or enforce a child 
support obligation. An individual can only be sued for 
disclosing information if they knowingly, or by reason of 
negligence, disclosed a financial record of an individual for 
purposes other than those listed above.

               SUBTITLE G--ENFORCEMENT OF SUPPORT ORDERS

1. Section 461.--Federal income tax refund offset

    The offsets of child support arrears owed to individuals 
take priority over most debts owed to Federal agencies. It also 
eliminates disparate treatment of families not receiving public 
assistance by repealing provisions applicable only to support 
arrears not assigned to the State.

2. Section 462.--Internal Revenue Service collection of arrearages.

    No additional fee may be assessed for adjustments to an 
amount previously certified with respect to the same obligor.

3. Section 463.--Authority to collect support from Federal employees

    The rules governing wage withholding for Federal employees 
are clarified and simplified by:
          (1) Establishing that Federal employees are subject 
        to wage withholding and other legal processes to 
        collect child support;
          (2) Establishing rules that Federal agencies must 
        respond to wage withholding or other legal processes to 
        collect support;
          (3) Deleting existing laws governing designation of 
        agents to receive and respond to process and replace 
        with streamlined provisions that require Federal 
        agencies to designate agents and publish their name, 
        title, address, and telephone number in the Federal 
        registry annually;
          (4) Requiring agents, upon receipt of process, to 
        send written notice to the individual involved as soon 
        as possible;
          (5) Amending existing law governing allocation of 
        monies owed by an individual to give priority to child 
        support; and
          (6) Broadening the definition of income to include 
        funds such as insurance benefits, retirement and 
        pension pay, survivor's benefits, compensation for 
        death and black lung disease, veteran's benefits, and 
        workers' compensation.
4. Section 464.--Enforcement of child support obligations of members of 
        the Armed Forces

    The Secretary of Defense must establish a central personnel 
locator service that contains residential or, in specified 
instances, duty addresses of every member of the Armed Services 
(including retirees, the National Guard, and the Reserves). The 
locator service must be updated within 30 days of the 
individual member establishing a new address. Information from 
the locator service must be made available to the Federal 
Parent Locator Service. The Secretary of Defense must issue 
regulations to facilitate granting of leave for members of the 
Armed Services to attend hearings to establish paternity or to 
establish child support orders.
    The Secretary of each branch of the Armed Forces (including 
retirees, the Coast Guard, the National Guard, and the 
Reserves) is required to make child support payments directly 
to any State to which a custodial parent has assigned support 
rights as a condition of receiving public assistance. The 
Secretary of Defense must also ensure that payments to satisfy 
current support or child support arrears are made from 
disposable retirement pay. The Secretary of Defense must begin 
payroll deduction within 30 days or the first pay period after 
30 days of receiving a wage withholding order.

5. Section 465.--Voiding of fraudulent transfers

    States must have in effect the Uniform Fraudulent 
Conveyance Act of 1981, the Uniform Fraudulent Transfer Act of 
1984, or an equivalent law providing for voiding transfers of 
income or property in order to avoid payment of child support.

6. Section 466.--Work requirement for persons owing child support

    States must have laws that direct courts to order 
individuals owing past-due support with respect to a child 
receiving assistance under the Temporary Family Assistance 
program either to pay support due or participate in work 
activities.

7. Section 467.--Definition of support order

    A support order is defined as an order issued by a court or 
an administrative process that requires support of a child or 
of a child and the parent with whom the child lives.

8. Section 468.--Reporting arrearages to credit bureaus

    States must establish procedures where the State must 
report periodically to consumer reporting agencies the name of 
any parent who is delinquent in the payment of support, and the 
amount of overdue support owed by such parent. The parent who 
is delinquent in payment of support must be afforded all due 
process required under State law, including notice and 
reasonable opportunity to contest the accuracy of such 
information.

9. Section 469.--Liens

    States must establish procedures under which liens are 
imposed against real and personal property for amounts of 
overdue support owed by an absent parent who resides or owns 
property. States must accord full faith and credit to liens 
established in another State, without registration of the 
underlying order.

10. Section 470.--State law authorizing suspension of licenses

    Each State must have in effect laws under which the State 
has (and uses in appropriate cases) authority to withhold, 
suspend, or restrict the use of driver's licenses, professional 
and occupational licenses, and recreational licenses of 
individuals owing overdue support or failing, after receiving 
appropriate notice, to comply with subpoenas or warrants 
relating to paternity or child support proceedings.

11. Section 471.--Denial of passports for nonpayment of child support

    If an individual owes arrearages of child support in an 
amount exceeding $5,000 or in an amount exceeding 24 months of 
child support, the Secretary shall transmit a certification to 
the Secretary of State to deny, revoke, or limit a passport.
                      SUBTITLE H--MEDICAL SUPPORT

1. Section 475.--Technical correction to ERISA definition of medical 
        child support order

    This provision expands the definition of medical child 
support order in ERISA to clarify that any judgment, decree, or 
order that is issued by a court of competent jurisdiction or by 
an administrative adjudication has the force and effect of law.

2. Section 476.--Enforcement of orders for health care coverage

    Establishes procedures so that when a noncustodial parent 
provides health care coverage for a child, and the parent 
changes employment, the State agency shall transfer coverage to 
the new employer, unless the noncustodial parent contests the 
notice.

SUBTITLE I--ENHANCING RESPONSIBILITY AND OPPORTUNITY FOR NONRESIDENTIAL 
                                PARENTS

1. Section 481.--Grants to States for access and visitation programs

    The Committee bill authorizes grants to States for access 
and visitation programs including mediation, counseling, 
education, development of parenting plans, and visitation 
enforcement. Visitation enforcement can include monitoring, 
supervision, neutral drop-off and pick-up, and development of 
guidelines for visitation and alternative custody agreements.
    The Administration for Children and Families at HHS will 
administer the program. States are required to monitor and 
evaluate their programs and are given the authority to 
subcontract the program to courts, local public agencies, or 
private non-profit agencies. Programs operating under the grant 
will not have to be Statewide. Funding is authorized as capped 
spending under section IV-D of the Social Security Act. 
Projects are required to supplement rather than supplant State 
funds.
    The amount of the grant to a State is equal to 90 percent 
of the State expenditures during the year for access and 
visitation programs or the allotment for the State for the 
fiscal year. The allotment to the State bears the same ratio to 
the amount appropriated for the fiscal year as the number of 
children living in the State with one biological parent divided 
by the national number of children living with one biological 
parent. The Administration for Children and Families will 
adjust allotments to ensure that no State is allotted less than 
$50,000 for fiscal year 1996 or 1997 or less than $100,000 for 
any year after 1997.

                    SUBTITLE J--EFFECT OF ENACTMENT

1. Section 491.--Effective dates

    Except as noted in the text of the bill for specific 
provisions, the general effective date for provisions in the 
bill is October 1, 1996. However, given that many of the 
changes required by this bill must be approved by State 
Legislatures, the bill contains a grace period tied to the 
meeting schedule of State Legislatures. More specifically, in 
any given State, the bill becomes effective either on October 
1, 1996 or on the first day of the first calendar quarter after 
the close of the first regular session of the State Legislature 
that begins after the date of enactment of this bill. In the 
case of States that require a constitutional amendment to 
comply with the requirements of the bill, the grace period is 
extended either 1 year after the effective date of the 
necessary State constitutional amendment or 5 years after the 
date of enactment of this bill.

                   III. REGULATORY IMPACT OF THE BILL

    In Compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the following evaluation is made 
concerning the regulatory impact of carrying out the changes 
proposed in the bill:
    Individuals and businesses affected.--Because States will 
have the flexibility to determine the assistance to be provided 
and who will receive assistance under a State program for needy 
families with minor children funded under the Temporary Family 
Assistance grant, the Committee is unable to estimate the 
numbers of individuals affected by this legislation. The 
Committee expects that the restrictions on eligibility for the 
SSI program will disqualify certain individuals from receiving 
SSI cash benefits. The Committee expects the child support 
provisions of the bill to have some impact on businesses as a 
result of the requirement to report new hires. Because 
businesses already report such information to other agencies, 
the impact will be minimal.
    Economic impact of regulations on individuals, consumers, 
and businesses.--The Committee understands that there would be 
an economic impact on individuals who fail to move off welfare 
within the 5-year time limit. However, as shown in the 
unemployment compensation program, it is expected that many of 
these individuals will find work shortly after being dropped 
from the roles. Because the Committee expects increased 
collections due to reforms in child support enforcement, there 
will be an economic impact for individuals who are owed or owe 
child support.
    Impact on personal privacy.--The Committee bill will have a 
minimal impact on personal privacy due to the child support 
provisions which authorize increased access to credit reports 
and require Social Security numbers on applications for a 
variety of licenses.
    Amount of additional paperwork.--The Committee bill will 
greatly reduce the amount of Federal restrictions placed on 
State programs that assist needy families with minor children. 
States will receive a fixed sum of money to provide assistance 
to needy families with minor children in the manner that the 
State feels is most likely to help the family avoid long-term 
welfare dependence. States are required to provide data to show 
how the money is spent and who it is spent on. The Committee 
expects a temporary increase in processing SSI determinations 
for one year after the date of enactment.
                       IV. VOTES OF THE COMMITTEE

    In compliance with paragraph 7 of rule XXVI of the Standing 
Rules of the Senate, the following statements are made 
concerning the votes of the Committee in its consideration of 
the Committee bill.

                      A. MOTION TO REPORT THE BILL

    The Committee bill was ordered favorably reported by 
recorded vote (12 yeas and 8 nays) on May 26, 1995, with a 
quorum present. The following rollcall vote was as follows:
        YEAS                          NAYS
Mr. Packwood                        Mr. Moynihan
Mr. Dole                            Mr. Bradley
Mr. Roth                            Mr. Pryor
Mr. Chafee                          Mr. Rockefeller
Mr. Grassley                        Mr. Breaux
Mr. Hatch                           Mr. Conrad
Mr. Simpson                         Mr. Graham
Mr. Pressler                        Ms. Moseley-Braun
Mr. D'Amato
Mr. Murkowski
Mr. Nickles
Mr. Baucus
                         B. VOTES ON AMENDMENTS

    The Committee defeated an amendment in the nature of a 
substitute (8 yeas and 12 nays) offered by Mr. Moynihan to 
enhance the JOBS program, reform SSI for children, and improve 
child support. The rollcall vote was as follows:
        YEAS                          NAYS
Mr. Moynihan                        Mr. Packwood
Mr. Bradley                         Mr. Dole
Mr. Pryor                           Mr. Roth
Mr. Rockefeller                     Mr. Chafee
Mr. Breaux                          Mr. Grassley
Mr. Conrad                          Mr. Hatch
Mr. Graham                          Mr. Simpson
Ms. Moseley-Braun                   Mr. Pressler
                                    Mr. D'Amato
                                    Mr. Murkowski
                                    Mr. Nickles
                                    Mr. Baucus
    The Committee defeated an amendment in the nature of a 
substitute (8 yeas and 12 nays) offered by Mr. Conrad to block 
grant JOBS, JOBS child care, AFDC administration, and emergency 
assistance, and require teen mothers to live at home. The 
rollcall vote was as follows:
        YEAS                          NAYS
Mr. Moynihan                        Mr. Packwood
Mr. Bradley                         Mr. Dole
Mr. Pryor                           Mr. Roth
Mr. Rockefeller                     Mr. Chafee
Mr. Breaux                          Mr. Grassley
Mr. Conrad                          Mr. Hatch
Mr. Graham                          Mr. Simpson
Ms. Moseley-Braun                   Mr. Pressler
                                    Mr. D'Amato
                                    Mr. Murkowski
                                    Mr. Nickles
                                    Mr. Baucus
    The Committee defeated an amendment in the nature of a 
substitute (8 yeas and 12 nays) offered by Ms. Moseley-Braun to 
emphasize job creation, provide State flexibility, and improve 
child support. The rollcall vote was as follows:
        YEAS                          NAYS
Mr. Moynihan                        Mr. Packwood
Mr. Bradley                         Mr. Dole
Mr. Pryor                           Mr. Roth
Mr. Rockefeller                     Mr. Chafee
Mr. Breaux                          Mr. Grassley
Mr. Conrad                          Mr. Hatch
Mr. Graham                          Mr. Simpson
Ms. Moseley-Braun                   Mr. Pressler
                                    Mr. D'Amato
                                    Mr. Murkowski
                                    Mr. Nickles
                                    Mr. Baucus

    The Committee accepted a modification offered by the 
Chairman, Mr. Packwood, to make various adjustments to the 
Committee bill.
    The Committee defeated an amendment (9 yeas and 11 nays) 
offered by Mr. Breaux to require a State maintenance of effort. 
The rollcall vote was as follows:
        YEAS                          NAYS
Mr. Moynihan                        Mr. Packwood
Mr. Baucus                          Mr. Dole
Mr. Bradley                         Mr. Roth
Mr. Pryor                           Mr. Chafee
Mr. Rockefeller                     Mr. Grassley
Mr. Breaux                          Mr. Hatch
Mr. Conrad                          Mr. Simpson
Mr. Graham                          Mr. Pressler
Ms. Moseley-Braun                   Mr. D'Amato
                                    Mr. Murkowski
                                    Mr. Nickles
    The Committee defeated an amendment (8 yeas and 12 nays) 
offered by Mr. Graham to change the way block grant funds are 
distributed to States from FY 1994 expenditures for AFDC and 
related programs to a poverty based formula. The rollcall vote 
was as follows:
        YEAS                          NAYS
Mr. Baucus                          Mr. Packwood
Mr. Pryor                           Mr. Dole
Mr. Rockefeller                     Mr. Roth
Mr. Breaux                          Mr. Chafee
Mr. Conrad                          Mr. Grassley
Mr. Graham                          Mr. Hatch
Ms. Moseley-Braun                   Mr. Simpson
Mr. Nickles                         Mr. Pressler
                                    Mr. D'Amato
                                    Mr. Murkowski
                                    Mr. Moynihan
                                    Mr. Bradley

    The Committee accepted an amendment (by voice vote) offered 
by Mr. D'Amato to clarify that funds from the supplemental 
assistance loan fund could be used for welfare anti-fraud 
activities.
    The Committee defeated an amendment (10 yeas and 10 nays) 
offered by Mr. Conrad to tighten the eligibility for the 
children's SSI program. The rollcall vote was as follows:
        YEAS                          NAYS
Mr. Moynihan                        Mr. Packwood
Mr. Baucus                          Mr. Dole
Mr. Bradley                         Mr. Roth
Mr. Pryor                           Mr. Grassley
Mr. Rockefeller                     Mr. Hatch
Mr. Breaux                          Mr. Simpson
Mr. Conrad                          Mr. Pressler
Mr. Graham                          Mr. D'Amato
Ms. Moseley-Braun                   Mr. Murkowski
Mr. Chafee                          Mr. Nickles

    The Committee accepted a provision (without objection) 
offered by Mr. Moynihan to require that a representative payee 
of an individuals under age 18 ensure that a treatment plan 
prepared by a physician is followed and that the treatment plan 
is filed with the State agency that makes disability 
determinations.
    The Committee defeated an amendment (8 yeas and 11 nays) 
offered by Mr. Nickles to require States to take action to 
reduce the incidence of out-of-wedlock pregnancies without 
increasing the number of pregnancy terminations. The rollcall 
vote was as follows:
        YEAS                          NAYS
Mr. Dole                            Mr. Packwood
Mr. Roth                            Mr. Chafee
Mr. Grassley                        Mr. Simpson
Mr. Hatch                           Mr. Moynihan
Mr. Pressler                        Mr. Bradley
Mr. D'Amato                         Mr. Pryor
Mr. Murkowski                       Mr. Rockefeller
Mr. Nickles                         Ms. Breaux
                                    Mr. Conrad
                                    Mr. Graham
                                    Ms. Moseley-Braun

    The Committee defeated an amendment (9 yeas and 11 nays) 
offered by Mr. Rockefeller to provide a hardship waiver based 
on good cause. The roll call vote was as follows:
        YEAS                          NAYS
Mr. Moynihan                        Mr. Packwood
Mr. baucus                          Mr. Dole
Mr. Bradley                         Mr. Roth
Mr. Pryor                           Mr. Chafee
Mr. Rockefeller                     Mr. Grassley
Mr. Breaux                          Mr. Hatch
Mr. Conrad                          Mr. Simpson
Mr. Graham                          Mr. Pressler
Ms. Moseley-Braun                   Mr. D'Amato
                                    Mr. Murkowski
                                    Mr. Nickles

    The Committee accepted an amendment (without objection) 
offered by. Mr. Baucus to increase the hardship waiver from 10 
percent to 15 percent.
    The Committee defeated an amendment (6 yeas and 13 nays) 
offered by Mr. Graham to remove the option for States to 
prohibit assistance to certain noncitizens. The roll call vote 
\1\ was as follows:
        YEAS                          NAYS
Mr. Moynihan                        Mr. Packwood
Mr. Bradley                         Mr. Dole
Mr. Breaux                          Mr. Roth
Mr. Conrad                          Mr. Chafee
Mr. Graham                          Mr. Grassley
Ms. Moseley-Braun                   Mr. Hatch
                                    Mr. Simpson
                                    Mr. Pressler
                                    Mr. D'Amato
                                    Mr. Murkowski
                                    Mr. Nickles
                                    Mr. Baucus
                                    Mr. Rockefeller

    \1\ Mr. Pryor did not vote.

    The Committee defeated an amendment (10 yeas and 10 nays) 
offered by Mr. Conrad to require teenage mothers to live with 
their parents or in a foster home and to establish a new capped 
entitlement program to provide funding for supervised living 
arrangements. The roll call vote was as follows:
        YEAS                          NAYS
Mr. Moynihan                        Mr. Packwood
Mr. Baucus                          Mr. Dole
Mr. Bradley                         Mr. Roth
Mr. Pryor                           Mr. Chafee
Mr. Rockefeller                     Mr. Grassley
Mr. Breaux                          Mr. Hatch
Mr. Conrad                          Mr. Simpson
Mr. Graham                          Mr. Pressler
Ms. Moseley-Braun                   Mr. D'Amato
Mr. Nickles                         Mr. Murkowski
    The Committee defeated an amendment (9 yeas and 11 nays) 
offered by Mr. Rockefeller to exempt individuals in high 
unemployment areas from the time limits under the Committee 
bill. The roll call vote was as follows:
        YEAS                          NAYS
Mr. Moynihan                        Mr. Packwood
Mr. Baucus                          Mr. Dole
Mr. Bradley                         Mr. Roth
Mr. Pryor                           Mr. Chafee
Mr. Rockefeller                     Mr. Grassley
Mr. Breaux                          Mr. Hatch
Mr. Conrad                          Mr. Simpson
Mr. Graham                          Mr. Pressler
Ms. Moseley-Braun                   Mr. D'Amato
                                    Mr. Murkowski
                                    Mr. Nickles
    The Committee defeated an amendment (9 yeas and 11 nays) 
offered by Ms. Moseley-Braun to provide that no child is denied 
assistance. The roll call vote was as follows:
        YEAS                          NAYS
Mr. Moynihan                        Mr. Packwood
Mr. Baucus                          Mr. Dole
Mr. Bradley                         Mr. Roth
Mr. Pryor                           Mr. Chafee
Mr. Rockefeller                     Mr. Grassley
Mr. Breaux                          Mr. Hatch
Mr. Conrad                          Mr. Simpson
Mr. Graham                          Mr. Pressler
Ms. Moseley-Braun                   Mr. D'Amato
                                    Mr. Murkowski
                                    Mr. Nickles

    The Committee defeated an amendment (4 yeas and 16 nays) 
offered by Ms. Moseley-Braun to provide any child who is denied 
assistance the right to bring an action in court. The roll call 
vote was as follows:
        YEAS                          NAYS
Mr. Moynihan                        Mr. Packwood
Mr. Baucus                          Mr. Dole
Mr. Bradley                         Mr. Roth
Ms. Moseley-Braun                   Mr. Chafee
                                    Mr. Grassley
                                    Mr. Hatch
                                    Mr. Simpson
                                    Mr. Pressler
                                    Mr. D'Amato
                                    Mr. Murkowski
                                    Mr. Nickles
                                    Mr. Pryor
                                    Mr. Rockefeller
                                    Mr. Breaux
                                    Mr. Conrad
                                    Mr. Graham

                  C. AMENDMENTS OFFERED AND WITHDRAWN

    Mr. Conrad offered an amendment to limit educational 
activities to not more than 50 percent of a State's work 
participation rates in 1996 and 1997.
    Mr. Grassley offered an amendment to provide that a State 
operate a jobs program in accordance with Part F of the Social 
Security Act or another work program to be defined by the 
State.

                    V. BUDGETARY IMPACT OF THE BILL

    In compliance with sections 308 and 403 of the 
Congressional Budget Act of 1974, and paragraph 11(a) of rule 
XXVI of the Standing Rules of the Senate, the following letter 
has been received from the Congressional Budget Office 
regarding the budgetary impact of the bill:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, June 9, 1995.
Hon. Bob Packwood,
Chairman, Committee on Finance,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed estimate of H.R. 4, the Family Self-
Sufficiency Act of 1995, as ordered reported by the Senate 
Committee on Finance on May 26, 1995.
    Enactment of H.R. 4 would effect direct spending and thus 
would be subject to pay-as-you-go procedures under section 252 
of the Balanced Budget and Emergency Deficit Control Act of 
1985.
    If you wish further details on this estimate, we will be 
pleased to provide them.
            Sincerely,
                                         June E. O'Neill, Director.

               congressional budget office--cost estimate

    1. Bill number: H.R. 4.
    2. Bill title: Family Self-Sufficiency Act of 1995.
    3. Bill status: As ordered reported by the Committee on 
Finance on May 26, 1995.
    4. Bill purpose: To enhance support and work opportunities 
for families with children, reduce welfare dependence, and 
control welfare spending.
    5. Estimated cost to the Federal Government:

Direct spending

    The bill would effect federal outlays in the following 
mandatory programs: Family Support Payments, Food Stamps, 
Supplemental Security Income, Medicaid, and Foster Care. The 
following table shows projected outlays for these programs 
under current law, the changes that would stem from the bill, 
and the projected outlays for each program if the bill were 
enacted.

----------------------------------------------------------------------------------------------------------------
                                    1995      1996      1997      1998      1999      2000      2001      1002  
----------------------------------------------------------------------------------------------------------------
Projected spending under current                                                                                
 law:                                                                                                           
    Family Support Payments.....    18,223    18,544    19,048    19,534    20,132    20,793    21,477    22,184
    Food Stamp Program..........    25,120    25,930    27,400    28,900    30,390    32,030    33,600    35,100
    Supplemental Security Income    24,322    24,497    29,894    32,967    36,109    42,749    39,481    46,807
    Medicaid....................    89,216    99,292   110,021   122,060   134,830   148,116   162,600   177,800
    Foster Care.................     3,540     4,146     4,508     4,930     5,356     5,809     6,290     6,798
                                 -------------------------------------------------------------------------------
      Total.....................   160,421   172,409   190,871   208,391   226,817   249,497   263,448   288,689
                                 -------------------------------------------------------------------------------
Proposed changes:                                                                                               
    Family Support Payments \1\.         0      -729    -1,192    -1,603    -2,207    -2,559    -3,234    -3,842
    Food Stamps.................         0       238       745       993     1,274     1,511     1,818     2,155
    Supplemental Security Income         0      -441    -3,554    -4,482    -4,674    -5,218    -4,646    -5,441
    Medicaid....................         0       -22      -375      -545      -606      -662      -771      -777
    Foster Care.................         0         0         0         0        10        25        35        45
                                 -------------------------------------------------------------------------------
      Total.....................         0      -954    -4,376    -5,637    -6,203    -6,903    -6,738    -7,750
                                 ===============================================================================
Projected spending under H.R. 4:                                                                                
    Family Support Payments.....    18,223    17,815    17,856    17,931    17,925    18,234    18,243    18,342
    Food Stamps.................    25,120    26,168    28,145    29,893    31,664    33,541    35,418    37,255
    Supplemental Security Income    24,322    24,056    26,340    28,485    31,435    37,531    34,835    41,476
    Medicaid....................    89,216    99,270   109,646   121,515   134,224   147,454   161,889   177,023
    Foster Care.................     3,540     4,146     4,508     4,930     5,366     5,834     6,325     6,843
                                 -------------------------------------------------------------------------------
      Total.....................   160,421   171,455   186,495   202,754   220,614   242,594   256,710   280,939
----------------------------------------------------------------------------------------------------------------
\1\ Under current law, Family Support Payments includes spending on Aid to Families with Dependent Children     
  (AFDC), AFDC-related child care, administrative costs for child support enforcement, net federal savings from 
  child support collections, and the Job Opportunities and Basic Skills Training program (JOBS). Under proposed 
  law, Family Support Payments would include spending on the Temporary Assistance for Needy Families Block      
  Grant, administrative costs for child support enforcement, and net federal savings from child support         
  collections.                                                                                                  
H.R. 4 would create a new Temporary Assistance for Needy Families block grant and specifies funding levels      
  through fiscal year 2000. CBO's estimates for 2001 and 2002 assume that the level of the block grant will     
  remain the same as in 2000.                                                                                   
Note.--Details may not add to totals because of rounding.                                                       

    The direct spending costs of this bill fall within budget 
functions 500, 550, and 600.

Authorizations of appropriations

    The bill would increase the administrative costs of the 
Supplemental Security Income (SSI) program, which are funded by 
an annual appropriation. Those extra costs stem from provisions 
of Title III that would require program administrators to 
verify the citizenship of all SSI recipients and conduct 
reviews of some disabled recipients.
    6. Basis of estimate: CBO estimates the enactment of H.R. 
4, as amended by the Committee on Finance, would reduce outlays 
for direct spending programs by $1.0 billion in 1996 and $7.8 
billion in 2002. The bill would also increase the 
administrative costs of the Supplemental Security Income (SSI) 
program, which are funded by an annual appropriation. These 
estimates incorporate the economic and technical assumptions 
from CBO's March 1995 baseline and assume an enactment date of 
October 1, 1995. The remainder of this section outlines the 
methodology used for the estimates. The attached tables detail 
the estimates for each title of the bill.
            Titles I and II: Temporary assistance for needy families 
                    block grant and JOBS modification
    Title I of H.R. 4 would alter the method by which the 
federal government shares in the cost of providing cash and 
training assistance to low-income families with children. It 
would combine current entitlement programs--Aid to Families 
with Dependent Children (AFDC), the Job Opportunities and Basic 
Skills Training program (JOBS), and related child care 
programs--into a single block grant with a fixed funding level. 
In addition, Title I would require that a sponsor's income be 
counted in determining an alien's eligibility for the Temporary 
Assistance for Needy Families Block Grant, Supplemental 
Security Income, and Medicaid for five years after arrival in 
the U.S. Title II would modify the definitions of activities 
authorized under the JOBS program. By itself, Title II would 
have no budgetary effects. The effects of Titles I and II are 
detailed in Table 1.
    Effect of the block grant on cash and training 
assistance.--The new Temporary Assistance for Needy Families 
Block Grant would replace federal participation for AFDC 
benefit payments, AFDC administrative costs, AFDC emergency 
assistance benefits, the JOBS program, and three related child 
care programs. The bill would fix the base level of the block 
grant at $16.8 billion annually through 2000. CBO assumes the 
block grant would continue at the same level in 2001 and 2002, 
although the levels are not specified in the bill. Each state 
would be entitled to a portion of the grant based on its recent 
spending in the AFDC, JOBS, and related child care programs. In 
addition, the bill would authorize a loan fund (called the 
Supplemental Assistance for Needy Families Federal Fund) with 
an initial balance of $1.7 billion from which states could 
borrow during economic downturns. States would repay borrowed 
amounts, with interest, within three years.\1\
    \1\ CBO estimates the creation of the Supplemental Assistance for 
Needy Families Federal Fund would not generate additional outlays. 
Although up to $1.7 billion would be made available to states for 
loans, CBO assumes that every state borrowing funds would repay its 
loans with interest. Therefore, the program would involve no long-run 
loss to the federal government, and under the credit reform provisions 
of the Congressional Budget Act, it would have no cost.
---------------------------------------------------------------------------
    CBO estimates federal savings in Title I by comparing 
current law projections of AFDC, JOBS, and child care spending 
with the block grant levels. In 1996, CBO projects that under 
current law the federal government would spend $17.2 billion on 
AFDC benefits, AFDC administration, AFDC emergency assistance, 
the JOBS program, and related child care, or $0.6 billion more 
than the federal government would spend under the block grant. 
By 2000, the gap between spending projected under current law 
($19.4 billion) and spending permitted under the block grant 
($16.8 billion) would grow to $2.6 billion.
    Criteria for state participation in the block grant.--To 
participate in the block grant program, states would present an 
assistance plan to the Department of Health and Human Services 
and would ensure that block grant funds would be spent only on 
needy families with minor children. States would not be 
required to spend any of their own resources to receive the 
block grant amounts. However, states would have to satisfy 
certain conditions. Notably, states would be prohibited from 
providing federal dollars to most families who have received 
cash assistance for more than 5 years since September 30, 1995. 
At their option, states could choose a shorter time limit and 
could grant hardship exemptions for up to 15 percent of all 
families. Although no family would encounter a 5-year time 
limit until October 1, 2000, the limit's effect on welfare 
participation could be noticed sooner if recipients shortened 
their stays on welfare or delayed childbearing in order to 
preserve access to the system in future years. CBO estimates 
that the full, potential effect of such a limit would not be 
realized until 2003 or later. Eventually, under current 
demographic assumptions, this provision could reduce cash 
assistance rolls by 30 percent to 40 percent. The actual effect 
of the time limit on families is uncertain however, because 
H.R. 4 would permit states and localities to provide cash 
assistance to such groups with their own resources. The 
inclusion of the time limit in the legislation does not affect 
the CBO estimate of federal costs because it would not directly 
change the amount of block grant funds disbursed to the states.
    Work and training requirements under the block grant.--
Other provisions in Title I would require states to provide 
work and training activities for an increasing percentage of 
block grant recipients or face penalties of up to 5 percent of 
the state's share of the block grant. States would face three 
separate requirements, with each becoming increasingly 
difficult to satisfy over time. CBO estimates that by 2000 most 
states would have difficulty satisfying the requirements. The 
following discussion outlines the challenge states would 
encounter in 2000.
    First, states would have to show on a monthly basis that 
individuals in 45 percent of all families are engaged in an 
education, work, or training activity. (This requirement would 
rise to 50 percent in 2001 and thereafter.\2\) By contrast, 
program data for 1994 indicate that, in an average month, only 
about 11 percent of all families were engaged in a JOBS 
activity or an unsubsidized job at 20 hours per work. Most 
states would be unlikely to satisfy this requirement for 
several reasons. The costs of administering such a large scale 
work and training program would be high and federal funding is 
frozen at 1994 levels. Because the pay-off for such programs 
has been shown to be low in terms of reductions in the welfare 
caseload, states may be reluctant to commit their own funds. 
Morever, although states may succeed in reducing their 
caseloads through other measures, which would in turn free up 
federal funds for training, the requirements would still be 
difficult to meet because the remaining caseload would likely 
consist of the most needy individuals (incapacitated adults and 
parents with very young children) who would be very difficult 
and expensive to train.
    \2\ The CBO estimate assumes the work participation requirements 
would apply to all families assisted under the state plan for needy 
families and would not be limited to those who receive federal dollars. 
Given the lack of a maintenance of effort requirement in this bill, 
however, it is unclear whether the federal government would have the 
authority to impose work requirements on individuals who receive 
benefits funded with state or local resources.
---------------------------------------------------------------------------
    Second, while tracking the work requirement for all 
families, states simultaneously would track a separate 
guideline for the smaller number of families with two parents 
participating in the AFDC-Unemployed Parent (AFDC-UP) program. 
By 2000, H.R. 4 would require that 90 percent of such families 
participate in a narrow set of work-related activities. States 
attempted to implement a similar requirement in 1994 for only 
40 percent of AFDC-UP families; although final participation 
figures have not been released by the Department of Health and 
Human Services, preliminary analyses indicate that roughly 40 
states failed the requirement. Given the states' records to 
date, CBO is not optimistic about their abilities to meet a 90 
percent participation requirement.
    Finally, states would also have to ensure that all parents 
who have received cash assistance for more than two years would 
engage in work activities. CBO estimates that approximately 70 
percent of all parents on the cash assistance rolls in 2000 
would have received such assistance for two years or more since 
the bill's effective date. The experience of the JOBS program 
to date suggests that such a requirement is well outside the 
states' abilities to implement.
    In short, each of three work requirement would represent a 
significant challenge to states. Given the costs and 
administrative complexities involved, CBO assumes that most 
states would simply accept penalties of up to 5 percent of 
their block grant amounts rather than implement the 
requirements. CBO further assumes--consistent with current 
practice--that the Secretary of Health and Human Services would 
impose small penalties (less than one-half of one percent of 
the block grant) on non-complying states.
    Effect of the block grant on the Food Stamp program.--The 
federal savings estimated from the block grant conversion was 
reduced to account for higher estimated spending in the Food 
Stamp program. CBO estimates that enactment of Title I would 
result in families receiving lower average cash payments 
relative to current law and consequently, higher food stamp 
benefits. Under current rules, each dollar lost in cash would 
increase a participating family's food stamp benefits by an 
estimated 33 cents. CBO estimates the incomes of AFDC families 
would decline relative to current projections by $2.2 billion 
in 2000, generating a food stamp cost in that year of $0.6 
billion. This estimate assumes that states--on average--would 
follow the federal example and freeze their spending on cash 
benefits at their 1994 levels. Should states decide to spend 
more or less than 1994 levels, the costs of the food stamp 
program would be smaller or greater than the estimate.
    Effect of the block grant on the Food Stamp Employment and 
Training program.--The fixed federal contribution under the 
block grant may inspire states to seek alternative means of 
financing their training and child care programs. One 
possibility for states would involve channeling AFDC families 
through the Food Stamp Employment and Training program, which 
is not altered by this bill and would remain an uncapped 
entitlement with the federal government matching 50 percent of 
state expenditures. With no maintenance-of-effort requirement 
to receive block grant funds, states could use their shares of 
JOBS and JOBS child care expenditures (approximately $1.0 
billion in 1994) to draw an equal amount of federal funding. 
CBO assumes it would take a number of years before states would 
turn to this alternative and estimates federal costs would rise 
from $100 million in 1999 to $400 million in 2002.
    Effect of Title I on the Medicaid Program.--CBO estimates 
no change in Medicaid spending associated with the conversion 
to a block grant, which reflects the bill's stated intention to 
preserve current standards for Medicaid. How states implement 
these new programs would determine the ultimate impact on the 
Medicaid program. The requirement that states continue to 
provide Medicaid benefits to all individuals who meet current 
eligibility criteria for AFDC may increase the administrative 
burden in state agencies.
    The creation of the block grant could affect Medicaid 
spending in a second way. Granting funds for cash assistance 
(with no requirement for state spending) while leaving Medicaid 
as a shared federal-state responsibility would provide states 
seeking to maximize federal assistance with an incentive to 
spend more money on Medicaid. Under the bill, a state dollar 
spent on cash assistance would no longer generate a federal 
matching payment while a state dollar spent on Medicaid would. 
Consequently, states could decide to expand Medicaid 
eligibility, financing the expansion with state dollars that 
otherwise would have been devoted to cash assistance. CBO has 
little basis upon which to predict such behavior and therefore 
has not estimated any change in Medicaid spending.
    Title I also includes a provision requiring counting a 
sponsor's income (termed deeming) for a period of five years 
after an alien's arrival in the U.S. to determine the alien's 
eligibility for any need-based program authorized under the 
Social Security Act. Programs potentially affected by such a 
provision include Aid to Families with Dependent Children, 
Medicaid, and Supplemental Security Income. Since other 
provisions of the bill would replace AFDC with a program of 
block grants to the states and would make most aliens 
ineligible for SSI, however, the new deeming rule would affect 
only the Medicaid program. CBO estimates that savings in 
Medicaid would be about $0.1 billion in 1997 and $0.2 billion a 
year thereafter. The population targeted by the provision 
comprises primarily those and aged aliens who, under current 
law, would seek SSI benefits within five years of arrival. Non-
aged aliens are less likely to have financial sponsors. CBO 
assumes that, in the absence of more specific instructions, 
deeming regulations like those currently used in SSI would 
apply to Medicaid. CBO also assumes that about 25 percent of 
the individuals that have financial sponsors would still be 
able to obtain Medicaid benefits because their medical 
expenditures are high enough that they could still apply for 
benefits as a medically needy recipient if their state has such 
a program.
    Effect of the block grant on the Foster Care program.--
Although H.R. 4 does not directly amend the foster care 
program, which would remain an open-ended entitlement with 
state expenditures matched by the federal government, the bill 
could affect foster care spending in two ways. First, 
eligibility for foster care is currently based on eligibility 
for AFDC payments in the home from which the child is removed. 
Because this bill would repeal the sections of the Social 
Security Act upon which AFDC eligibility is based, the effect 
of the bill on foster care payments is unclear. Should states 
adopt AFDC eligibility requirements that are more restrictive 
than current law, fewer children would be deemed eligible for 
foster care, and foster care payments could decline. Second, by 
retaining the foster care program as a matched entitlement, the 
bill would create an incentive for states to shift AFDC 
children who also are eligible for foster care benefit into the 
foster care program. AFDC administrative data for 1993 suggest 
that roughly 500,000 children (5 percent of all children on 
AFDC) fall into this category because they live in a household 
without a parent. CBO assumes a number of legal and financial 
barriers would prevent states from transferring a large share 
of such children and estimates states would collect an 
additional $10 million in foster care payments in 1996, rising 
to $45 million in 2002.
            Title III: Supplemental security income
    Title III of H.R. 4 would reduce spending in the 
Supplemental Security Income program for three distinct groups 
of participants: legal aliens, drug addicts and alcoholics, and 
disable children. Net savings are estimated to equal $5.1 
billion in 2002 (see Table 2).
    Legal aliens.--In general, legal aliens are now eligible 
for SSI and other benefits administered by the federal 
government. Most aliens, other than refugees, do not collect 
benefits during the first few years in the U.S., because 
administrators must deem a portion of a sponsor's income to the 
alien during the period when determining the alien's 
eligibility. H.R. 4 would eliminate SSI benefits altogether for 
most legal aliens. Exceptions would be made for groups that 
make up about one-fifth of aliens on the SSI rolls: refugees 
who have been in the country for less than five years, aliens 
who receive a Social Security benefit based on their own 
earnings, and veterans of the U.S. military. All other legal 
aliens now on SSI would be removed from the rolls on January 1, 
1997.
    CBO bases its estimate of savings on administrative records 
for the SSI program. Those data suggested that there were about 
700,000 non-citizen beneficiaries in 1994, or 12 percent of all 
recipients of federal SSI payments in that year, and that their 
numbers might be expected to continue to grow in the absence of 
a change in policy. The administrative records, though, are of 
uncertain quality. They are not likely to reflect changes in 
citizenship status (such as naturalization) that may have 
occurred since the recipient first began collecting benefits. 
It has not been important for agencies to keep citizenship 
status up-to-date so long as they have verified that the 
recipient is, in fact, legally eligible. That problem is 
thought to be particularly acute for SSI, where some 
beneficiaries identified as aliens have been on the program for 
many years. Recognizing this problem, CBO assumes that about 
one-fifth of SSI beneficiaries coded as aliens are in fact 
naturalized citizens.
    CBO estimates the number of noncitizen recipients who would 
be removed from the SSI rolls by projecting the future caseload 
in the absence of policy change and subtracting the three 
groups (certain refugees, Social Security recipients, and 
veterans) exempted under the bill. CBO also assumes that some 
of the remainder will be spurred to become naturalized. The 
rest, estimated by CBO at approximately one-half million legal 
aliens, would be cut from the SSI rolls. Multiplying by the 
average benefits paid to such aliens--assumed to equal 1994 
levels plus subsequent cost-of-living adjustments, or about 
$4,700 per alien in 1997--yields annual federal budgetary 
savings of between $2 billion and $3 billion a year.
    Removing these aliens from the SSI rolls has indirect 
effects on two other programs: Medicaid and food stamps. In 
most states, Medicaid is automatically available to anyone on 
SSI. Although H.R. 4 does not explicitly bar legal aliens from 
Medicaid, some aliens who lose SSI would thereby lose their 
only route onto the Medicaid program. CBO assumes that most 
aliens who lose SSI disability benefits could keep Medicaid 
eligibility under other terms of the program, only about half 
of those aliens who lose SSI old-age benefits, however, would 
be able to requalify as medically needy. Savings in Medicaid of 
$0.2 billion to $0.3 billion a year would result. H.R. 4 is 
silent about legal aliens' eligibility for food stamps, a 
program that is outside the jurisdiction of the Finance 
Committee. Under current law, legal aliens who lose cash income 
and who also get food stamps would automatically receive larger 
benefits under that program. CBO assumes that only a fraction 
of the SSI loss would be made up at the state and local level 
through general assistance programs. For aliens participating 
in food stamps, food stamp benefits are estimated to increase 
by about 33 cents for each dollar of cash income lost. Extra 
food stamp costs would be approximately $300 million a year.
    These estimates, and other CBO estimates concerning legal 
aliens, are rife with uncertainties. First, administrative data 
in all programs are of uncertain quality. Citizenship status is 
not recorded at all for about 8 percent of SSI recipients, 
and--as previously noted--some persons coded as aliens are 
certainly naturalized citizens by now. Second, it is hard to 
judge how many noncitizens would react to the legislation by 
becoming citizens. At least 80 percent of legal aliens now on 
the SSI rolls are eligible to become citizens; the fact that 
they have not been naturalized may be attributable, in part, to 
the lack of a strong financial incentive. Heretofore, all legal 
immigrants have not been barred from most jobs, from 
eligibility for benefits, or from most other privileges except 
voting. Because the naturalization process takes time and 
effort, CBO assumes that only about one-third of those whose 
benefits would otherwise be eliminated will become citizens by 
the year 2000.
    Drug addicts and alcoholics.--For many years, the Social 
Security Administration (SSA) has been required to identify 
certain drug addicts and alcoholics (DA&As) in the SSI program, 
when the substance abuse is a material contributing factor to 
the finding of disability. Special provisions apply to those 
recipients: they must comply with treatment if available, they 
must have representative payees, as (as a result of legislation 
enacted last year) they can receive a maximum of 36 months' 
benefits. About 100,000 recipients classified as drug addicts 
and alcoholics received benefits in December 1994.
    CBO assumes that, under current law, the DA&A caseload 
would grow to about 190,000 by 1997, fall in 1998 (as the first 
wave of terminations under last year's legislation occurs), 
then resume climbing gradually. Under H.R. 4, awards to DA&As 
would stop immediately, and those already receiving benefits 
would be removed from the rolls on January 1, 1997, unless they 
had another seriously disabling condition.
    Estimating the number of DA&As who already have or will 
soon develop another disabling condition is a thorny issue. A 
sample of 1994 awards with a primary diagnosis of substance 
abuse found that two-thirds identified a secondary disabling 
condition (predominantly mental rather than physical). That 
fact must be interpreted with caution. In order to be worth 
noting, the secondary condition must be quite severe--but not 
necessary disabling in its own right. On the other hand, there 
is no requirement to record secondary conditions; some of the 
one-third for whom none was recorded undoubtedly had them. And 
the health of many DA&A recipients certainly deteriorates over 
time, with or without continued substance abuse. Thus, CBO 
assumes that only about one-quarter of DA&A recipients would be 
permanently terminated from the program; the rest could 
requalify by documenting that they have another sufficiently 
disabling condition. Multiplying the number of recipients 
terminated times an average benefit yields savings of $200 
million to $300 million a year in SSI benefits.
    Besides saving on benefits, the Social Security 
Administration would also be freed from the requirement to 
maintain contracts with referral and monitoring agencies (RMAs) 
for its SSI recipients. Those agencies monitor addicts' and 
alcoholics' treatment status and often serve as representative 
payees. Savings are estimated at about $150 million to $200 
million a year in 1997 through 2002. Savings in 1996, however, 
are uncertain, as SSA will likely have to pay cancellation 
penalties on the contracts to be terminated.
    The legislation would also eliminate Medicaid coverage for 
DA&As terminated from the SSI program, resulting in another 
$100 million a year or so in savings. And because former SSI 
recipients would experience a reduction in their cash income, 
food stamp costs under correct law would increase slightly--by 
approximately $30 million a year.
    Disabled children.--H.R. 4 would restructure the SSI 
program for disabled children. Under current law, low-income 
children can qualify for the SSI program and its federal cash 
benefits of up to $458 a month in two ways. They may match one 
of the medical listings (a catalogue of specific impairments, 
with accompanying clinical findings), or they may be evaluated 
under an individualized functional assessment (IFA) that 
determines whether an unlisted impairment seriously limits a 
child from performing activities normal for his or her age. 
Both methods are spelled out in regulation. Until the Supreme 
Court's decision in the Zebley case in 1990, the medical 
listings were the sole path to eligibility for children. 
Adults, in contrast, could receive an assessment of their 
functional and vocational capacities even if they did not meet 
their own set of listings. The court ruled that sole reliance 
on the listings did not comport with the law's requirement to 
gauge whether children's disorders were of ``comparable 
severity'' to impairments that would disable adults.
    H.R. 4 would eliminate childhood IFAs and their statutory 
underpinning, the ``comparable severity'' rule, as a basis for 
receipt. Many children on the rolls as a result of an IFA 
(roughly a quarter of children now on SSI) would be terminated, 
and future awards based on an IFA would be barred. Thus, the 
program would be restricted to those who met or equaled the 
listings. The bill would also remove the reference to 
maladaptive behavior--behavior that is destructive to oneself, 
others, property, or animals--from the personal/behavioral 
domain of the medical listings, the only place where it appears 
as a basis for award.
    Even as it repealed the ``comparable severity'' language, 
the bill would create a new statutory definition of childhood 
disability. It states that a child would be considered disabled 
if he or she has ``a medically determinable physical or mental 
impairment which results in marked, pervasive and severe 
functional limitations [and can be expected to last 12 months 
or lead to death].'' That language appears to be intended to 
preserve SSI eligibility for some of the most severely impaired 
children who now qualify by way of an IFA. The exact 
implications of this language would remain to be clarified 
through regulation (and perhaps court interpretation) and are 
difficult for CBO to estimate definitively.
    CBO estimated the savings from these changes by judging how 
many present and future children would likely qualify under the 
new criteria. CBO relied extensively on SSA program data and on 
analyses conducted by the General Accounting Office and the 
Inspector General of the Department of Health and Human 
Services. Approximately 900,000 children now collect SSI 
benefits, and CBO projects that the number would reach 1.35 
million in 2002 if policies were unchanged. CBO assumed that 
more than half of children who qualify through an IFA would be 
rendered ineligible under the proposed criteria-specifically, 
those who fail to rate a ``marked'' or ``extreme'' impairment 
in at least two areas of functioning. CBO chose that assumption 
because the bill's key phrase--marked, pervasive and severe 
functional impairments--might reasonably be interpreted to mean 
limitations in several different areas of functioning, a 
tighter standard than the one that now allows some children 
with ``moderate'' limitations onto the program. CBO also 
assumes that the provisions on maladaptive behavior would bar a 
small percentage of children from eligibility for benefits. 
Overall, approximately 21 percent of children who would be 
eligible under current law would be rendered ineligible. 
Because of the room for regulatory interpretation, however, 
that figure is uncertain. A tight interpretation might bar up 
to 28 percent of children; a loose one might trim the rolls by 
about 10 percent or even less.
    CBO estimates the savings in cash benefits relative to 
current law by multiplying the number of children assumed to 
lose benefits by the average benefit. That average benefit was 
about $430 a month in December 1994 and would grow with 
inflation thereafter. Children already on the rolls would be 
reviewed under the new criteria but could keep their benefits 
through December 1996 even if found ineligible. CBO assumes 
that children who do not meet the new criteria could be removed 
from the rolls even if their medical condition has not improved 
since award--as is clearly intended by the bill--even though 
current law generally requires that SSA document such progress 
before it terminates a beneficiary. New awards would be 
affected immediately. Total savings in cash benefits would 
equal $0.2 billion in 1996 and $2.1 billion in 2002.
    H.R. 4 would make several other changes to the SSI program 
for disabled children, notably by stepping up requirements for 
continuing disability reviews (CDRs). Savings from that 
requirement are embedded in CBO's estimate. The bill also 
requires that representative payees (usually parents) develop a 
treatment plan for the child and demonstrate to SSA's 
satisfaction that they followed that plan. Noncompliance would 
lead to appointment of another representative payee, not to 
termination of benefits. The bill also mandates several studies 
of disability issues.
    The proposed cutbacks in children's SSI benefits would 
affect spending in other programs. Food stamp outlays would 
increase, under current law, to replace a portion of the cash 
income lost by the children's families. Effects on two other 
programs, however, are omitted from CBO's estimate. Under 
current law, approximately half of the disabled children losing 
SSI benefits would be likely to end up on the AFDC programs; 
but because that program would be abolished in Title I and 
replaced by a fixed block grant to the states, no extra 
spending would result. The cutback in children's SSI benefits 
would have only negligible effects on the Medicaid program. 
Most children removed from SSI would still qualify for 
Medicaid-either through their eligibility for the program of 
temporary assistance to needy families (the successor to the 
AFDC program) or their poverty status.
    Administrative costs.--Several provisions of Title III 
would affect the administrative costs of the SSI program. Those 
costs are funded out of an overall discretionary appropriation 
that limits administrative expenses of the Social Security 
Administration. The most significant burdens would be those 
involved in checking citizenship status and conducting 
continuing disability reviews (CDRs). Title III would 
presumably require SSA to check the citizenship status of all 
SSI beneficiaries--those coded as citizens as well as those 
identified as aliens--to verify their continued eligibility for 
benefits. CBO estimates the one-time cost of that effort at 
about $50 million; some savings would materialize in later 
years, though, as SSA would need to sift through fewer 
applications from legal aliens. The disability-related 
provisions would, in CBO's judgment, involve approximately $300 
million in nonrecurring costs (principally in 1996) as SSA 
reviews drug addicts and alcoholics and disabled children for 
continued eligibility, and about $100 million a year thereafter 
because of the permanent requirement for additional CDRs. SSA 
would save small amounts of money (less than $5 million a year) 
from processing fewer benefit checks. Extra administrative 
costs are expected to total $0.3 billion in 1996 and $0.1 
billion a year thereafter.
            Title IV: Child support enforcement
    Title IV would change many aspects of the operation and 
financing of the federal and state child support enforcement 
system. CBO estimates that the change in spending relative to 
current law would fluctuate between net costs or net savings of 
$100 million annually over the seven-year estimation period 
(see Table 3). The key provisions of Title IV would mandate the 
use of new enforcement techniques with a potential to increase 
collections, eliminate a current $50 payment to welfare 
recipients for whom child support is collected, allow former 
public assistance recipients to keep a greater share of their 
child support collections, and authorize new spending on 
automated systems. Similar to current law, the bill would 
require that states share with the federal government child 
support collected on behalf of families who receive cash 
assistance through the Temporary Assistance for Needy Families 
Block Grant.
    New enforcement techniques.--Using reports on the 
performance of various enforcement strategies at the state 
level, CBO estimates that child support collections received by 
families on cash assistance in 2000 would increase under the 
bill by roughly 12 percent over current projections (from $3.5 
billion to $3.9 billion). Most of the improvement would result 
from the creation of a new-hire registry (designed to speed the 
receipt of earnings information on noncustodial parents) and 
provisions that would expedite the process by which states 
seize the assets of noncustodial parents who are delinquent in 
their child support payments. Some states have already applied 
the proposed enforcement techniques, thereby reducing the 
potential of improving collections further. CBO projects that 
the additional collections would result in savings of roughly 
$0.2 billion in 2000 to the federal government through shared 
child support collections, as well as reduced spending in food 
stamps and Medicaid.
    Elimination of the $50 passthrough.--Additional federal 
savings would be generated by eliminating the current $50 
passthrough. Under current law, amounts up to the first $50 in 
monthly child support collected are paid to the family 
receiving cash assistance without affecting the level of the 
welfare benefit. Thus, families for whom noncustodial parents 
contribute child support get as much as $50 more a month than 
do otherwise identical families for whom such contributions are 
not made. Eliminating the $50 child support payment beginning 
in 1996 would save the federal government between $0.1 billion 
and $0.2 billion annually.
    Distributing additional child support to former AFDC 
recipients.--H.R. 4 would require states to share more child 
support collections with former recipients of public 
assistance, reducing federal and state recoupment of prior 
benefit payments. When someone ceases to receive public 
assistance, states continue to collect and enforce the family's 
child support order. All amounts of child support collected on 
time are sent directly to the family. If a state collects past-
due child support, however, it may either send the amount to 
the family or to use the collection to reimburse itself and the 
federal government for past AFDC payments. The proposal, which 
would take effect in fiscal year 2000, would require states to 
send a larger share of arrearage collections to families, which 
would reduce recoupment by federal and state governments. Based 
on a survey of child support directors, CBO estimates that this 
provision would cost the federal government $0.3 billion in 
2000 and $0.4 billion in 2001 and 2002.
    Additional provisions with budgetary implications.--A 
number of other provisions would increase federal outlays. 
First, H.R. 4 would fund further improvements in states' 
automated systems at an estimated annual cost of $0.1 billion. 
Second, the bill would provide about $50 million annually to 
provide about $50 million annually to provide technical 
assistance to states and to operate a computer system designed 
to locate non-custodial parents. Third, the bill would change 
federal cost sharing in enforcing child support. Although 
individual states would see their share of federal funds change 
relative to current law, CBO estimates that the new funding 
formula would be cost neutral from the federal standpoint.
    7. Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act of 1985 sets up pay-as-you-go 
procedures for legislation affecting direct spending or 
receipts through 1998. The pay-as-you-go effects of the bill 
are as follows.

------------------------------------------------------------------------
                          1995         1996         1997         1998   
------------------------------------------------------------------------
Outlays.............            0         -954       -4,376       -5,637
Receipts............            0            0            0            0
------------------------------------------------------------------------

    8. Estimated cost to State and local governments: In 
general, H.R. 4 mandates no new or additional spending by state 
and local governments and gives those governments the freedom 
to cut back on some spending that they already incur. It is 
impossible that state and local government will opt to spend 
more on certain activities, but that choice would be up to 
them.
    Title I of H.R. 4 would change the structure of federal 
funding for cash assistance and job training for recipients of 
welfare benefits. THe bill would repeal the federal entitlement 
for these programs to individuals and would allow states to 
spend a specified amount of federal money provided in a block 
grant with a greater degree of flexibility. To the extent that 
demand or eligibility for these programs increases above the 
level of federal funding, states could choose to increase their 
own spending to keep pace or could reduce the amount of 
benefits or limit eligibility to maintain current levels of 
spending.
    Title III's provisions, which would affect the SSI program, 
likewise could increase or decrease state and local spending, 
depending on a variety of factors. State and local government 
spending for legal immigrants would automatically be reduced by 
limiting aliens' eligibility for two programs: SSI (which is 
typically supplemented by states) and Medicaid. Legal 
immigrants cut off from federal benefits, however, might turn 
to state- and locally-funded general assistance (GA) and 
general medical assistance (GMA) programs instead, raising the 
demand for such benefits. Elsewhere, the bill permits but does 
not require states to deny benefits under the new family 
assistance block grant to legal aliens.
    The proposed removal of drug addicts and alcoholics from 
the SSI and Medicaid rolls would probably boost demand for 
general assistance payments but trim states' costs for Medicaid 
and for SSI supplements, with uncertain overall effects. 
Cutbacks in cash SSI benefits to disabled children will 
probably increase demands on state and local welfare programs, 
but those are extensively restructured by Title I in a way that 
affords states great latitude.
    Title IV would increase child support collections and 
reduce the reliance on welfare for certain families. CBO 
estimates the provisions would reduce state and local spending 
by $0.3 billion in 2002.
    9. Estimate comparison: None.
    10. Previous CBO estimate: On March 31, 1995, CBO issued an 
estimate of H.R. 4 as passed by the House of Representatives. 
Comparisons between the House-passed version of H.R. 4 and this 
substitute are difficult to make because this bill amends only 
programs under the jurisdiction of the Committee on Finance 
(AFDC, Supplemental Security Income, Foster Care, Medicaid, and 
Child Support Enforcement). The House-passed bill also 
addressed the Food Stamp program, Child Nutrition programs, and 
the Child Care and Development Block Grant. The following 
outlines the key modifications to the House bill made by the 
Committee on Finance.

Titles I and II: Temporary assistance for needy families block grant 
        and JOBS modification

    The Temporary Assistance for Needy Families Block Grant is 
funded at a higher level in the Finance Committee substitute 
($16.8 billion rather than $15.4 billion a year). The 
difference stems from two sources. First, the Finance version 
includes $1.0 billion for three AFDC-related child care 
programs. The House provided for such funding in a separate, 
discretionary child care block grant. Second, the Finance 
Committee provides an additional $0.4 billion for the AFDC and 
JOBS programs.
    In addition, the Finance Committee amended the House-
proposed adjustments to the block grant, dropping the 
population adjustment and eliminating the adjustments based on 
the so-called illegitimacy ratio. The federal loan fund is 
increased from $1.0 billion to $1.7 billion.
    Finally, the Finance Committee struck a number of 
requirements in the House-passed version that would prohibit 
states from providing cash assistance to children born while 
their mothers were receiving welfare and to families headed by 
a mother who is under age 18 and who gave birth outside of 
marriage.

Title III: Supplemental Security Income

    Restricting benefits for aliens.--H.R. 4, as reported by 
the Committee on Finance, would save more money by restricting 
SSI benefits for aliens than would its counterpart passed by 
the House. That is chiefly because the House bill contains two 
significant exemptions--namely, for legal aliens who are 75 
years of age or older or who are developmentally disabled--that 
are absent in this version. In contrast, the Finance 
Committee's bill exempts another group (Social Security 
recipients who have paid enough in taxes to collect benefits on 
their own record) that would not be spared by the House. 
Although that is a large group, its average SSI benefit is much 
lower than that for other aliens, and thus the exemption is not 
particularly costly. CBO assumes that there would be a stronger 
incentive for aged aliens to become naturalized under the 
Finance Committee's version. Under the House-passed bill, many 
elderly aliens could simply wait until age 75 to claim SSI 
benefits. Since that possibility is blocked in the Senate bill, 
naturalization would be the only way to obtain benefits.
    H.R. 4, as passed by the House, would bar most legal aliens 
from the Medicaid and food stamp programs as well as from SSI. 
Those provisions are absent in the Finance Committee-reported 
bill.
    Restricting benefits for drug addicts and alcoholics.--This 
bill and the House-passed act have nearly identical 
restrictions on the eligibility of drug addicts and alcoholics 
for SSI. The House approved a provision adding $100 million a 
year in budget authority beginning in 1997 to drug treatment 
and research programs. This bill has no comparable provision.
    Restricting benefits for certain disabled children.--Both 
the House-passed and Finance Committee-reported bills would 
limit the provision of SSI benefits to disabled children by 
repealing IFAs and tightening eligibility. The greatest 
contrast lies in the two bills' emphasis on cash payments 
versus services. The House bill would steer most children 
seeking SSI in the future toward noncash benefits. It would set 
up a program of block grants to states enabling them to offer 
services (chosen from a list authorized by the Commissioner of 
Social Security) to disabled children. All qualified children 
would be entitled to an evaluation of their need for services, 
but no child would be entitled to a specific level or value of 
services. The total amount of the block grant would be set at 
just under 75 percent of the amount of cash benefits for which 
it would substitute. SSA could award cash benefits to future 
applicants only if it were convinced that the child would 
otherwise be institutionalized. In contrast, the Finance bill 
would retain cash benefits for disabled children.

Title IV: Child support enforcement

    The differences between this substitute and the House-
passed version are technical in nature and would have no effect 
on the federal budget. CBO's estimate of this substitute 
differs from that of the House bill because CBO has revised its 
estimate of the proposal to distribute additional child support 
to former AFDC recipients. Information from states that was 
available to CBO at the time of the House's action suggested 
that the policy would result in only modest federal and state 
costs. Subsequent analyses by states in early May indicate the 
proposal would be more costly than previously estimated.

Child protection

    The major difference between the Finance Committee 
substitute and the House-passed version is that the House bill 
would transform Foster Care, Adoption Assistance, and other 
child welfare programs into a block grant. The House-passed 
version saved between $0.3 billion and $0.8 billion in Child 
Protection programs annually. The finance Committee's bill does 
not amend Child Protection programs.
    11. Estimate prepared by: John Tapogna and Sheila Dacey 
(Titles I, II and IV), Kathy Ruffing (Title III), and Robin 
Rudowitz (Medicaid).
    12. Estimate approved by: Paul N. Van de Water, Assistant 
Director for Budget Analysis.

                SUMMARY TABLE.--FEDERAL BUDGET EFFECTS OF THE FAMILY SELF-SUFFICIENCY ACT, As reported by the Senate Committee on Finance               
                                                        [By fiscal year, in millions of dollars]                                                        
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   1996-2000   1996-2000
                                                        1996       1997       1998       1999       2000       2001       2002       total       total  
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                        
  Title I: Temporary Assistance for Needy Families                                                                                                      
                                                                                                                                                        
Direct spending:                                                                                                                                        
    Budget Authority...............................      (557)      (998)    (1,429)    (1,713)    (2,065)    (2,355)    (2,650)     (6,762)    (11,767)
    Outlays........................................      (473)      (943)    (1,384)    (1,678)    (2,030)    (2,312)    (2,615)     (6,508)    (11,435)
                                                                                                                                                        
               Title II: Jobs Program                                                                                                                   
                                                                                                                                                        
Direct spending:                                                                                                                                        
    Budget authority...............................         0          0          0          0          0          0          0           0           0 
    Outlays........................................         0          0          0          0          0          0          0           0           0 
                                                                                                                                                        
      Title III: Supplemental Security Income                                                                                                           
                                                                                                                                                        
Direct spending:                                                                                                                                        
    Budget authority...............................      (547)    (3,419)    (4,221)    (4,459)    (5,006)    (4,427)    (5,102)    (17,652)    (27,181)
    Outlays........................................      (405)    (3,375)    (4,241)    (4,432)    (4,985)    (4,406)    (5,082)    (17,438)    (26,926)
Authorizations of appropriations:                                                                                                                       
    Budget authority...............................       300        125        100        100        100        100        100          NA          NA 
    Outlays........................................       300        125        100        100        100        100        100          NA          NA 
                                                                                                                                                        
              Title IV: Child Support                                                                                                                   
                                                                                                                                                        
Direct spending:                                                                                                                                        
    Budget authority...............................       (76)       (58)       (12)       (93)       112        (20)       (53)       (127)       (200)
    Outlays........................................       (76)       (58)       (12)       (93)       112        (20)       (53)       (127)       (200)
                                                    ----------------------------------------------------------------------------------------------------
      Totals: Titles I-IV:                                                                                                                              
        Direct spending:                                                                                                                                
          Budget authority.........................    (1,180)    (4,475)    (5,662)    (6,265)    (6,959)    (6,802)    (7,805)    (24,541)    (39,148)
          Outlays..................................      (954)    (4,376)    (5,637)    (6,203)    (6,903)    (6,738)    (7,750)    (24,073)    (38,561)
        Authorizations of appropriations:                                                                                                               
          Budget authority.........................       300        125        100        100        100        100        100          NA          NA 
          Outlays..................................       300        125        100        100        100        100        100          NA          NA 
                                                                                                                                                        
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes.--Numbers in parentheses are negative numbers.                                                                                                    
Rows and columns may not add because of rounding.                                                                                                       
NA=not available.                                                                                                                                       
                                                                                                                                                        
Note.--H.R. 4 creates a new block grant of temporary assistance for needy families and specifies funding levels through fiscal year 2000. CBO's         
  estimates for 2001 and 2002 assume that the level of the block grant will remain the same as in 2000.                                                 


  TABLE 1.--FEDERAL BUDGET EFFECTS OF THE FAMILY SELF-SUFFICIENCY ACT, TITLES I AND II TEMPORARY ASSISTANCE FOR 
               NEEDY FAMILIES BLOCK GRANT AND JOBS, AS REPORTED BY THE SENATE COMMITTEE ON FINANCE              
                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                 1996        1997        1998        1999        2000        2001        2002   
----------------------------------------------------------------------------------------------------------------
   Repeal AFDC, Emergency                                                                                       
 Assistance, JOBS, and Child                                                                                    
        Care Programs                                                                                           
                                                                                                                
Family support payments:                                                                                        
    Budget authority........    (17,454)    (17,855)    (18,311)    (18,845)    (19,437)    (20,027)    (20,622)
    Outlays.................    (17,194)    (17,800)    (18,266)    (18,810)    (19,402)    (19,992)    (20,587)
Food Stamp Program: \1\                                                                                         
    Budget authority........         50         175         300         450         625         825       1,025 
    Outlays.................         50         175         300         450         625         825       1,025 
Medicaid:                                                                                                       
    Budget authority........       (\2\)       (\2\)       (\2\)       (\2\)       (\2\)       (\2\)       (\2\)
    Outlays.................       (\2\)       (\2\)       (\2\)       (\2\)       (\2\)       (\2\)       (\2\)
                                                                                                                
 Authorize Temporary Family                                                                                     
   Assistance Block Grant                                                                                       
                                                                                                                
Family support payments:                                                                                        
    Budget authority........     16,787      16,787      16,787      16,787      16,787      16,787      16,787 
    Outlays.................     16,619      16,787      16,787      16,787      16,787      16,787      16,787 
                                                                                                                
  Evaluation of Block Grant                                                                                     
                                                                                                                
Family support payments:                                                                                        
    Budget authority........         10          10          10          10          10           0           0 
    Outlays.................          2          10          10          10          10           8           0 
                                                                                                                
 Penalties for State Failure                                                                                    
  to Meet Work Requirements                                                                                     
                                                                                                                
Family support payments:                                                                                        
    Budget authority........          0           0           0           0         (50)        (50)        (50)
    Outlays.................          0           0           0           0         (50)        (50)        (50)
                                                                                                                
 Incentive for States to Pay                                                                                    
Foster Care rather than AFDC                                                                                    
          Benefits                                                                                              
                                                                                                                
Foster Care Program:                                                                                            
    Budget authority........          0           0           0          10          25          35          45 
    Outlays.................          0           0           0          10          25          35          45 
                                                                                                                
Incentive for States to Fund                                                                                    
  Training through the Food                                                                                     
    Stamp Employment and                                                                                        
      Training Program                                                                                          
                                                                                                                
Food Stamp Program: \1\                                                                                         
    Budget authority........          0           0           0         100         200         300         400 
    Outlays.................          0           0           0         100         200         300         400 
                                                                                                                
    Denial of Benefits to                                                                                       
  Persons who Misrepresent                                                                                      
          Residence                                                                                             
                                                                                                                
Food Stamp Program: \1\                                                                                         
    Budget authority........          0          (5)         (5)         (5)         (5)         (5)         (5)
    Outlays.................          0          (5)         (5)         (5)         (5)         (5)         (5)
                                                                                                                
  Hold States Harmless for                                                                                      
 Cost-Neutrality Liabilities                                                                                    
                                                                                                                
Family support payments:                                                                                        
    Budget authority........         50           0           0           0           0           0           0 
    Outlays.................         50           0           0           0           0           0           0 
                                                                                                                
 Impose Five-Year Deeming of                                                                                    
    Sponsors' Income and                                                                                        
          Resources                                                                                             
                                                                                                                
Medicaid:                                                                                                       
    Budget authority........          0        (110)       (210)       (220)       (220)       (220)       (230)
    Outlays.................          0        (110)       (210)       (220)       (220)       (220)       (230)
                             -----------------------------------------------------------------------------------
      Total Titles I and II,                                                                                    
       by account:                                                                                              
        Family Support                                                                                          
         Payments:                                                                                              
          Budget authority..       (607)     (1,058)     (1,514)     (2,048)     (2,690)     (3,290)     (3,885)
          Outlays...........       (523)     (1,003)     (1,469)     (2,013)     (2,655)     (3,247)     (3,850)
        Food Stamp Program:                                                                                     
          Budget authority..         50         170         295         545         820       1,120       1,420 
          Outlays...........         50         170         295         545         820       1,120       1,420 
        Medicaid: \2\                                                                                           
          Budget authority..          0        (110)       (210)       (220)       (220)       (220)       (230)
          Outlays...........          0        (110)       (210)       (220)       (220)       (220)       (230)
        Foster Care Program:                                                                                    
          Budget authority..          0           0           0          10          25          35          45 
          Outlays...........          0           0           0          10          25          35          45 
                             -----------------------------------------------------------------------------------
      Total, all accounts:                                                                                      
        Budget authority....       (557)       (998)     (1,429)     (1,713)     (2,065)     (2,355)     (2,650)
        Outlays.............       (473)       (943)     (1,384)     (1,678)     (2,030)     (2,312)     (2,615)
----------------------------------------------------------------------------------------------------------------
\1\ Estimate assumes the Food Stamp program is an open-ended entitlement.                                       
\2\ Medicaid savings shown for Title I reflect only the effect of imposing a 5-year sponsor-to-alien deeming    
  requirement. Other language in Title I, intended to hold Medicaid beneficiaries harmless from the switch to   
  temporary assistance for needy families, has unclear effects on the Medicaid program. States may implement    
  such provisions in a number of ways potentially resulting in small costs, small savings, or budget neutrality.
  The impact of the legislation would be largely determined by the implementing regulations.                    
                                                                                                                
Note.--H.R 4 creates a new block grant of temporary assistance for needy families and specifies funding levels  
  through fiscal year 2000. CBO's estimates for 2001 and 2002 assume that the level of the block grant will     
  remain the same as in 2000.                                                                                   


 TABLE 2.--FEDERAL BUDGET EFFECTS OF THE FAMILY SELF-SUFFICIENCY ACT, TITLE III SUPPLEMENTAL SECURITY INCOME, As
                                   reported by the Senate Committee on Finance                                  
                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                         1996      1997       1998       1999       2000       2001       2002  
----------------------------------------------------------------------------------------------------------------
                                                                                                                
Restricting Benefits for Legal Aliens                                                                           
                                                                                                                
Supplemental Security Income:                                                                                   
    Budget authority.................    (170)    (2,190)    (2,710)    (2,710)    (2,900)    (2,470)    (2,760)
    Outlays..........................    (170)    (2,190)    (2,710)    (2,710)    (2,900)    (2,470)    (2,760)
Medicaid: \1\                                                                                                   
    Budget authority.................     (10)      (180)      (230)      (240)      (260)      (270)      (290)
    Outlays..........................     (10)      (180)      (230)      (240)      (260)      (270)      (290)
Food Stamps: \2\                                                                                                
    Budget authority.................      20        270        335        335        330        335        340 
    Outlays..........................      20        270        335        335        330        335        340 
                                                                                                                
   Drug Addicts and Alcoholics \3\                                                                              
                                                                                                                
Supplemental Security Income-                                                                                   
 Benefits:                                                                                                      
    Budget authority.................     (29)      (200)      (215)      (249)      (260)      (230)      (280)
    Outlays..........................     (29)      (200)      (215)      (249)      (260)      (230)      (280)
Supplemental Security Income-Referral                                                                           
 and Monitoring Costs:                                                                                          
    Budget authority.................    (142)      (186)      (166)      (193)      (214)      (235)      (255)
    Outlays..........................       0       (142)      (186)      (166)      (193)      (214)      (235)
Medicaid:                                                                                                       
    Budget authority.................     (12)       (81)       (89)      (108)      (117)      (125)      (136)
    Outlays..........................     (12)       (81)       (89)      (108)      (117)      (125)      (136)
Food Stamps: \2\                                                                                                
    Budget authority.................       3         25         30         30         30         30         35 
    Outlays..........................       3         25         25         30         30         30         35 
                                                                                                                
        Disabled Children \2\                                                                                   
                                                                                                                
Supplemental Security Income                                                                                    
 Benefits:                                                                                                      
    Budget authority.................    (242)    (1,022)    (1,371)    (1,549)    (1,865)    (1,732)    (2,056)
    Outlays..........................    (242)    (1,022)    (1,371)    (1,549)    (1,865)    (1,732)    (2,056)
Food Stamps: \2\                                                                                                
    Budget authority.................      35        145        200        225        250        270        300 
    Outlays..........................      35        145        200        225        250        270        300 
                                                                                                                
   Additional administrative costs                                                                              
  (authorization of appropriations)                                                                             
                                                                                                                
Supplemental Security Income:                                                                                   
    Budget authority.................     300        125        100        100        100        100        100 
    Outlays..........................     300        125        100        100        100        100        100 
                                      --------------------------------------------------------------------------
      Total Title III, by account:                                                                              
        Supplemental security Income:                                                                           
          Budget authority...........    (583)    (3,598)    (4,462)    (4,701)    (5,239)    (4,667)    (5,351)
          Outlays....................    (441)    (3,554)    (4,482)    (4,674)    (5,218)    (4,646)    (5,331)
        Medicaid:                                                                                               
          Budget authority...........     (22)      (261)      (319)      (348)      (377)      (395)      (426)
          Outlays....................     (22)      (261)      (319)      (348)      (377)      (395)      (426)
        Food Stamps: \2\                                                                                        
          Budget authority...........      58        440        560        590        610        635        675 
          Outlays....................      58        440        560        590        610        635        675 
                                      --------------------------------------------------------------------------
      Total, all accounts (direct                                                                               
       spending):                                                                                               
          Budget authority...........    (547)    (3,419)    (4,221)    (4,459)    (5,006)    (4,427)    (5,102)
          Outlays....................    (405)    (3,375)    (4,241)    (4,432)    (4,985)    (4,406)    (5,082)
      Authorization of                                                                                          
       appropriations:                                                                                          
        Supplemental Security Income:                                                                           
    Budget authority.................     300        125        100       1000        100        100        100 
    Outlays..........................     300        125        100       1000        100        100        100 
----------------------------------------------------------------------------------------------------------------
\1\ The proposal would not bar aliens explicity from Medicaid. However, some aliens would lose Medicaid coverage
  by virtue of losing their SSI eligibility.                                                                    
\2\ Estimate assumes the Food Stamp program is an open-ended entitlement.                                       
\3\ Proposal could increase number of individuals participating in the Temporary Assistance for Needy Families  
  block grant; however, such an increase would not affect federal spending.                                     


  TABLE 3.--FEDERAL BUDGET EFFECTS OF THE FAMILY SELF-SUFFICIENCY ACT,  
 TITLE IV CHILD SUPPORT ENFORCEMENT--AS REPORTED BY THE SENATE COMMITTEE
                             ON FINANCE \1\                             
                [By fiscal year, in millions of dollars]                
------------------------------------------------------------------------
                   1996    1997    1998    1999    2000    2001    2002 
------------------------------------------------------------------------
 New Enforcement                                                        
   Techniques                                                           
                                                                        
State directory                                                         
 of new hires:                                                          
    Family                                                              
     support                                                            
     payments...      0       0      11      (9)    (13)    (18)    (19)
    Food Stamp                                                          
     Program....      0       0      (2)    (10)    (15)    (22)    (23)
    Medicaid....      0       0      (8)    (18)    (31)    (46)    (52)
                 -------------------------------------------------------
      Subtotal..      0       0       2     (37)    (59)    (86)    (93)
                 =======================================================
State laws                                                              
 providing                                                              
 expedited                                                              
 enforcement of                                                         
 child support:                                                         
    Family                                                              
     support                                                            
     payments...      0       0       0     (18)    (38)    (60)    (84)
    Food Stamp                                                          
     Program....      0       0       0      (6)    (14)    (22)    (30)
    Medicaid....      0       0       0      (6)    (14)    (24)    (37)
                 -------------------------------------------------------
      Subtotal..      0       0       0     (31)    (66)   (106)   (152)
                 =======================================================
State laws                                                              
 concerning                                                             
 paternity:                                                             
    Family                                                              
     support                                                            
     payments...      0     (17)    (18)    (20)    (22)    (24)    (26)
    Food Stamp                                                          
     Program....      0      (3)     (3)     (4)     (4)     (4)     (5)
    Medicaid....      0      (2)     (2)     (3)     (3)     (4)     (5)
                 -------------------------------------------------------
      Subtotal..      0     (22)    (24)    (26)    (29)    (32)    (36)
                 =======================================================
Suspend drivers'                                                        
 licenses:                                                              
    Family                                                              
     support                                                            
     payments...      0      (8)    (17)    (27)    (37)    (39)    (41)
    Food Stamp                                                          
     Program....      0      (2)     (5)     (8)    (12)    (12)    (13)
    Medicaid....      0      (2)     (4)     (6)    (10)    (11)    (12)
                 -------------------------------------------------------
      Subtotal..      0     (12)    (26)    (41)    (59)    (62)    (66)
                 =======================================================
Adoption of                                                             
 uniform State                                                          
 laws:                                                                  
    Family                                                              
     support                                                            
     payments...      0      10       2      (8)    (13)    (18)    (24)
    Food Stamp                                                          
     Program....      0       0      (1)     (3)     (5)     (7)     (9)
    Medicaid....      0       0      (2)     (4)     (7)    (11)    (16)
                 -------------------------------------------------------
      Subtotal..      0      10      (1)    (15)    (25)    (36)    (49)
                 =======================================================
        Subtotal                                                        
         , New                                                          
         Enforce                                                        
         ment...  ......    (23)    (49)   (151)   (239)   (323)   (396)
                 =======================================================
Eliminate $50                                                           
 passthrough:                                                           
    Family                                                              
     support                                                            
     payments...   (250)   (270)   (290)   (320)   (360)   (390)   (420)
    Food Stamp                                                          
     Program....    130     140     150     170     190     200     200 
    Medicaid....      0       0       0       0       0       0       0 
                 -------------------------------------------------------
      Subtotal..   (120)   (130)   (140)   (150)   (170)   (190)   (200)
                 =======================================================
Distribute chald                                                        
 support arrears                                                        
 to former AFDC                                                         
 families first:                                                        
    Family                                                              
     support                                                            
     payments...      0       0       0       0     360     420     470 
    Food Stamp                                                          
     Program....      0       0       0       0     (60)    (70)    (80)
    Medicaid....      0       0       0       0       0       0       0 
                 -------------------------------------------------------
      Subtotal..      0       0       0       0     300     350     390 
                 =======================================================
                                                                        
Other Provisions                                                        
 with budgetary                                                         
  implications                                                          
                                                                        
Automated data                                                          
 processing                                                             
 development:                                                           
    Family                                                              
     support                                                            
     payments...      0      28      59      84      84       5       0 
    Food Stamp                                                          
     Program....      0       0       0       0       0       0       0 
    Medicaid....      0       0       0       0       0       0       0 
                 -------------------------------------------------------
      Subtotal..      0      28      59      84      84       5       0 
                 =======================================================
Automated data                                                          
 processing                                                             
 operation and                                                          
 maintenance:                                                           
    Family                                                              
     support                                                            
     payments...      3      12      55      52      52      46      40 
    Food Stamp                                                          
     Program....      0       0       0       0       0       0       0 
    Medicaid....      0       0       0       0       0       0       0 
                 -------------------------------------------------------
      Subtotal..      3      12      55      52      52      46      40 
                 =======================================================
Technical                                                               
 assistance to                                                          
 State programs:                                                        
    Family                                                              
     support                                                            
     payments...     36      47      51      55      60      56      60 
    Food Stamp                                                          
     Program....      0       0       0       0       0       0       0 
    Medicaid....      0       0       0       0       0       0       0 
                 -------------------------------------------------------
      Subtotal..     36      47      51      55      60      56      60 
                 =======================================================
State obligation                                                        
 to provide                                                             
 services:                                                              
    Family                                                              
     support                                                            
     payments...      0       0       0       3      11      22      39 
    Food Stamp                                                          
     Program....      0       0       0       0       0       0       0 
    Medicaid....      0       0       0       0       0       0       0 
                 -------------------------------------------------------
      Subtotal..      0       0       0       3      11      22      39 
                 =======================================================
Federal and                                                             
 State reviews                                                          
 and audits:                                                            
    Family                                                              
     support                                                            
     payments...      0       3       3       3       3       3       3 
    Food Stamp                                                          
     Program....      0       0       0       0       0       0       0 
    Medicaid....      0       0       0       0       0       0       0 
                 -------------------------------------------------------
      Subtotal..      0       3       3       3       3       3       3 
                 =======================================================
Performance-                                                            
 based                                                                  
 incentives:                                                            
    Family                                                              
     support                                                            
     payments...      0       0       0       0       0       0       0 
    Food Stamp                                                          
     Program....      0       0       0       0       0       0       0 
    Medicaid....      0       0       0       0       0       0       0 
                 -------------------------------------------------------
      Subtotal..      0       0       0       0       0       0       0 
                 =======================================================
Grants to State                                                         
 for visitation:                                                        
    Family                                                              
     support                                                            
     payments...      5       5      10      10      10      10      10 
    Food Stamp                                                          
     Program....      0       0       0       0       0       0       0 
    Medicaid....      0       0       0       0       0       0       0 
                 -------------------------------------------------------
      Subtotal..      5       5      10      10      10      10      10 
                 =======================================================
        Subtotal                                                        
         , Other                                                        
         Provisi                                                        
         ons....     44      95     178     208     220     143     152 
                 =======================================================
                                                                        
 Total Title IV,                                                        
   by account                                                           
                                                                        
Family support                                                          
 payments.......   (206)   (189)   (134)   (194)     96      13       8 
Food Stamp                                                              
 Program........    130     135     138     139      81      63      60 
Medicaid........      0      (4)    (16)    (38)    (65)    (96)   (121)
                 -------------------------------------------------------
      Total                                                             
       title IV.    (76)    (58)    (12)    (93)    112     (20)    (53) 
------------------------------------------------------------------------
\1\ Based on discussions with Committee staff, this estimate assumes a  
  technical correction will be made to section 461 (Federal tax offset).
                                                                        
Note: Number in parentheses are negative numbers.                       

                          VI. ADDITIONAL VIEWS

                              ----------                              


   ADDITIONAL VIEWS OF SENATORS MOYNIHAN, BRADLEY, AND MOSELEY-BRAUN

    It is just seven years since the Committee on Finance 
reported out the Family Support Act of 1988. It seems almost 
unimaginable today, but there was then a vast bipartisan 
consensus on this great issue. The final vote in the Senate was 
96 to 1.
    At the Rose Garden ceremony were Senators Dole, Bentsen, 
and Brown, Speaker Foley, Mr. Michel, and Governors Clinton and 
Castle, representing the National Governors' Association. 
President Reagan, on signing the bill, told the assembled 
company that ``They and the members of the administration who 
worked so diligently on this bill will be remembered for 
accomplishing what many have attempted, but no one has achieved 
in several decades: a meaningful redirection of our welfare 
system.''
    In large measure, he was right. The Family Support Act has 
performed well where it was implemented seriously. Every day a 
State official reports on some new success, or there is an 
announcement of some new initiative funded under the Act. A 
week ago, George Allen, Republican governor of Virginia, 
announced such an effort. ``Virginia is again making history,'' 
he said. ``It is the most sweeping, and, I think, the most 
compassionate welfare reform plan anywhere in the nation.'' And 
it is taking place, he might have added, under the Family 
Support Act of 1988.
    Yet the bipartisan consensus on welfare matters is gone, 
and there is a newly coined view that there is simple solution 
to the problem of mothers and children on welfare. Cut them 
off.
    We have long called attention to the fact that a steadily 
growing percentage of children are being born into single 
parent homes. We know that these are the children who are most 
likely to become dependent on welfare. The problem of a high 
and growing percentage of births to single parents is one we 
share with other industrialized nations.\1\
    \1\ In 1992 the rate was 33 percent in France, and 31 percent in 
the United Kingdom.
---------------------------------------------------------------------------
    In the United States the proportion of births of children 
in single parent families has reached 33 percent. When the 
Social Security Act was enacted in 1935, it was around 4 
percent. The ratio has gone up every year since 1970. Year in, 
year out, it has risen at an annual rate of about .86 percent. 
Some have concluded that the answer is simply to repeal title 
IV-A of the Social Security Act, and eliminate welfare 
benefits. That will somehow induce women to stop having babies. 
The problem is, there is no evidence whatever to support that 
view.
    On March 9, Lawrence Mead, a professor at the Woodrow 
Wilson School at Princeton University, who would describe 
himself as a conservative, testified before the Finance 
Committee on this point:

          Can the forces behind growing welfare be stemmed? 
        Conservative analysts say that unwed pregnancy is the 
        greatest evil in welfare, the cause not only of 
        dependency but other social ills. On all sides, people 
        call for a family policy that would solve this problem.

    But it is not that easy, says Dr. Mead:

          The great fact is that neither policymakers nor 
        researchers have found any incentive, benefit or other 
        intervention that can do much to cut the unwed 
        pregnancy rate.

    ``We are told that ending AFDC will reduce illegitimacy,'' 
says James Q. Wilson, of the University of California at Los 
Angeles, ``but we don't know that. It is, at best an informed 
guess.''
    It seems inconceivable that anyone would propose ending the 
basic protection afforded poor children in the Social Security 
Act based on ``an informed guess'', yet apparently that is what 
we have come to. In the midst of the Depression of the 1930s, 
when our economic output was at one-eighth its present level, 
we could provide for dependent children as a Federal 
responsibility. In the 1990's, with a $7 trillion economy, we 
are about to eliminate the Federal guarantee.
    The bills passed by the House of Representatives and 
ordered reported by this Committee pose an enormous fiscal risk 
for State and local governments. The Federal law enacted in 
1935 provided the several States with a Federal guarantee that 
whatever amount they provide by way of support for dependent 
children will be matched, according to formula, by the Federal 
government. This is what we mean when we speak of welfare as an 
entitlement. It is an entitlement of the several States to 
support from the Federal government. (In the 1960s children who 
meets the qualifications became entitled to receive whatever 
benefits a State prescribes. This is the result of a series of 
Supreme Court decisions under the Equal Protection and 
Supremacy clauses of the Constitution.) The decision by the 
Finance Committee majority to deprive States of this 
entitlement is a formula for tumult, recrimination, regression 
in which no doubt any number of political reputations will be 
won, and only children lose.
    There is an elemental fact here. Under the Social Security 
Act arrangement, some States chose ``low'' benefits for 
children, with a high Federal ``match''. Others chose ``high'' 
benefits with a low ``match''. This pattern was compounded by 
the advent of food stamps as a uniform national benefit paid 
for entirely by the Federal government. The lower the AFDC 
benefit, the higher the food stamp benefit. Freezing this 
arrangement as a block grant invites Federal factionalism to a 
degree unknown to this century. Example. According to the 
Department of Health and Human Services, under the AFDC block 
grant as reported by the Senate Finance Committee, Mississippi 
will receive $87 million per year; California $3,706 million. 
Even before the Finance Committee acted on this legislation a 
group of ``30 mostly conservative senators from the South and 
Southwest'' as one editorial put it, complained to our 
distinguished chairman that the present welfare bill would 
shortchange their States because they are so fast growing. (Not 
all are; most are simply low benefit States. But it comes to 
the same thing.) The group was led by the distinguished junior 
Senator from Texas. Their demand can surely be met, and very 
likely will be. But at the expense of the ``high'' benefit 
States. (Which are typically States with relatively high costs 
of living, which eat up much of the nominal margin.) Thus Texas 
might benefit; but at the cost of California, which surely will 
lose. As the electoral votes of both States are thought crucial 
to victory in the next Presidential election, one can only 
await the high comedy of the various candidates explaining 
their various positions to the respective constituencies.
    It is indeed a constitutional moment. Of self-inflicted 
wounds, which may not heal as readily as the mindless might, 
well, ``think''.
    It would do no harm to give some thought also to the 
demographic facts which clearly indicate a rise in the number 
of child births, and correspondingly of births of children out 
of wedlock.
    Between 1980 and 1991, 15 to 19 year olds represented a 
decreasing share of women in childbearing ages, falling from 
about 20 percent to 14 percent. The downward trend ended in 
1991, and their share is projected to rise to 17 percent by 
2005. Women in this age group accounted for about 30 percent of 
all out-of-wedlock births but only 13 percent of all births in 
1992.
    There is a similar trend for the larger population of women 
aged 15-24. This population as a share of all women in 
childbearing ages is projected to rise from 29 percent in 1996 
to 33 percent in 2005. Women aged 15-24 accounted for 65 
percent of all births out-of-wedlock and 40 percent of all 
births in 1992.
    These are not the only problems with the bill approved on 
May 26 by the Finance Committee. Consider the work and training 
requirement. Everyone is for putting welfare parents to work, 
but paying for it is another matter. The Finance Committee bill 
says that 45 percent of the adult AFDC caseload must 
participate in the Job Opportunities and Basic Skills (JOBS) 
program by the year 2000, but it freezes welfare funding at the 
1994 level. To meet the target, says the Congressional Budget 
Office, States would have to devote 60 percent of their block 
grant dollars to work activities and child care. Rather than do 
that, the CBO speculates, nearly all the States will simply 
accept the 5 percent reduction in block grant funding for 
failing to meet the standard. The work and training requirement 
will be a fiction.
    The Family Support Act of 1995 (S. 828), has none of these 
fundamental flaws. It continues the entitlement and protects 
States and localities against unforeseen and unforeseeable 
financial hazards. It provides sufficient Federal matching 
funds to enable States to make participation in the JOBS 
program mandatory for welfare parents. The work requirement is 
real--a critical point if we are talking about making genuine 
change in the welfare system. It allows States to enroll absent 
parents who are unemployed and unable to pay child support in 
the JOBS program. S. 828 requires teen mothers to live at home 
and to go to school. It gives States new tools to enforce child 
support. It provides flexibility so that States can test new 
ways to administer their AFDC and JOBS programs. It is fully 
paid for. And it is all we know.
    The point is, welfare can be greatly changed without 
repealing essential guarantees. And no one should pretend that 
we know how to end welfare without at this point causing 
enormous hardships for children, as well as for State and local 
governments.
    The group that has spoken out most eloquently on the 
subject of welfare is the U.S. Catholic Conference. Almost 
alone, they have raised the moral issue confronting us:

          We cannot support ``reform'' that will make it more 
        difficult for poor children to grow into productive 
        individuals. We cannot support reform that destroys the 
        structures, ends entitlements, and eliminates resources 
        that have provided an essential safety net for 
        vulnerable children or permits states to reduce their 
        commitment in this area.

    If the bishops do not persuade, consider Hippocrates. 
Primum non nocere. First do no harm.

                                   Daniel Patrick Moynihan.
                                   Bill Bradley.
                                   Carol Moseley-Braun.
                  ADDITIONAL VIEWS OF SENATOR BRADLEY

    This legislation comes before the Committee at a time of 
real opportunity to do something about the very serious 
problems with the welfare system. We can have no illusions that 
the status quo is acceptable. We have an opportunity to 
transform Aid to Families with Dependent Children into a short 
path to economic self-sufficiency. We can build on innovations 
such as microenterprise, job-placement vouchers, maternity 
homes, and the Riverside County, California, approach to 
employment. We can bring down the barriers to success in the 
current system, from the long waits for federal waivers faced 
by states that want to innovate, to the penalties on assets, 
income and marriage that make it almost impossible for poor 
people to escape dependency through their own initiative.
    In the weeks and months leading up to the Committee's brief 
deliberation on this bill, we held a series of hearings and 
heard scores of suggestions about how to improve work 
participation, discourage childbearing outside of marriage, 
reinforce parental responsibility, give states flexibility, and 
make welfare transitional. What did not emerge from these 
hearings, however, was any testimony in favor of doing what 
this bill proposes to do.
    Instead, at a moment of opportunity to do something about 
welfare, this committee has chosen to do nothing. Instead of 
any substantive reform, we have an open-ended, non-specific, 
grant of money from the federal government to state 
politicians, for the loosest of abstract purposes. It is 
neither compassionate nor tough. It does nothing to ensure that 
people move quickly from welfare to work, just as it does 
nothing to ensure that children in the neediest families are 
protected from hunger, illness, homelessness, and death. It 
doesn't send a clear message to individuals about their 
responsibilities or the limits of society's willingness to 
help. It neither encourages innovation nor preserves the safety 
net. It doesn't strengthen the partnership between the federal 
government and the states but neither does it clearly hand 
responsibility to one level of government or the other.
    There are two strongly positive features of this bill. The 
first is Title IV, the child support enforcement section. This 
section draws heavily on provisions of S. 456, which I 
introduced with a broad bipartisan coalition including members 
of this committee in February 1995. While I am disappointed by 
the substitution of some sections of H.R. 4 for sections of S. 
456, on balance it will be a positive step forward for parents, 
whether receiving welfare or not, who are owed child support. I 
am disappointed by the committee's decision to eliminate the 
$50 pass-through of child support payments to families 
receiving welfare. While states will be permitted to pass 
through any amount of child support to families on assistance, 
they will have to reimburse the federal government for its 
share of the amount passed through, making it unlikely that 
most states will pass through any amount. Thus, for a non-
custodial parent of a child on welfare, there will be no 
tangible benefit to the children for paying child support. I 
appreciate that there is no consensus among researchers as to 
whether the $50 passthrough has had the desired effect of 
encouraging payment of support, but I would prefer to continue 
it until we can find an alternative means of achieving the same 
goal.
    Further, with the elimination of the pass-through, the 
change in child support distribution rules in this bill becomes 
all the more important. Under this provision, included in every 
major child support bill introduced by members of either party 
in the House or Senate, when the state collects overdue child 
support arrearages for a family that had been on welfare, the 
family will first receive its share of arrearages accumulated 
before the family went on AFDC, as well as any overdue support 
from after the family left AFDC, before the state can take its 
share of child support to offset costs during the family's time 
on AFDC. Families leaving welfare will thus have some 
opportunity to become self-sufficient, and non-custodial 
parents will have some incentive to pay. I would urge the 
committee to resist any effort to reverse this change or to 
view it as merely technical or even accidental. It is a very 
deliberate policy choice and one that should remain inviolate.
    The second positive aspect of the bill is simply that it 
does not indulge in the gratuitous meanness--towards legal 
immigrants, children born to welfare recipients or teenagers, 
and disabled children--that characterizes the version of H.R. 4 
that passed the House of Representatives.
    While this bill avoids the vicious symbolic politics of the 
House bill, it offers nothing in their place. There is only one 
substantive requirement upon states for receipt of the funds 
under this block grant: they must meet a series of work 
requirements, ramping up to a requirement that 50% of 
recipients be engaged in work activity by the year 2000. Yet 
the Congressional Budget Office predicts that only six states 
will have the funds to meet these work requirements. The rest 
will simply absorb the five percent penalty and continue doing 
business as usual, or even doing much less than they are 
required to do under the current JOBS program. I appreciate the 
Chairman's willingness to consider the implications of this 
unbiased opinion from the CBO, yet I would warn that it is not 
a peripheral issue or an oversight, but a fatal flaw at the 
very heart of this bill.
    The driving idea behind this bill is state flexibility. Yet 
this is not enough of a foundation on which to build 
substantive welfare reform. The idea of state flexibility is 
compelling to anyone who has watched the contortions a state 
like New Jersey has had to go through to obtain waivers to try 
something new, usually something that involves spending a 
little more money now, or loosening restrictions on recipients, 
in expectation of savings in the future. But state flexibility 
is not an issue of controversy in this year's debate. All three 
alternatives offered by Democrats on this committee flatly 
eliminated or, in one case, scaled back this waiver process, 
and all three alternatives would have given states all the 
freedom that every governor ever asked for. This bill goes so 
much further beyond flexibility that it would gut the very 
basics of the system of assistance it seeks to reform.
    Under this bill, states could conceivably do as little as 
merely referring needy families to a facility where some 
surplus cheese might be available. This may sound absurd or 
extreme, and it is, but it would be in full compliance with the 
bill's requirement that the state have ``a plan to assist needy 
families''--any kind of plan. Under this bill states could do 
almost nothing without losing a penny of federal funds.
    While I think most states will make an effort to do 
something, it is quite easy to see what will happen when states 
are hard-pressed for funds. They may provide minimal assistance 
in one region of the state. The will probably put very needy 
applicants on a waiting list after the federal funds run out. 
They might let state bureaucrats choose who to assist in a 
completely arbitrary manner. There will be no clear rules, and 
without clear rules, there will be none of the positive impact 
on behavior that proponents of the bill expect.
    Further, without basic standards, work requirements would 
become even more meaningless that CBO says they are, because 
states would have no basic definition of who is eligible and 
therefore who should be in a work program. If a state has 
trouble meeting the work participation requirements under the 
bill, they can simply stop serving those who are having the 
most trouble funding work. States could thus artificially 
increase the percentage of those receiving assistance who are 
working, without increasing the number who are working.
    At the very least, states should be required to set for 
themselves basic eligibility standards, basic benefits, rules 
governing assets and outside income, just as they do under 
current law. States must also clearly define the groups they 
would make categorically ineligible for help, whether teen 
parents, additional children born to welfare recipients, legal 
immigrants, or other categories. Washington would not tell the 
states what those rules should be, but states must set those 
rules for themselves, and families must know what the rules 
are. Then, states must be required to serve everyone who 
qualifies under those rules, supplementing federal funds with 
state funds if necessary.
    Without such a minimal improvement, this bill will become a 
dangerous web of unintended consequences. Instead of states 
experimenting with time limits for those who have been on 
welfare for a long time, there will be waiting lists for those 
in need for the first time. Instead of work requirements, 
states may do less then they do under current law. Instead of 
clear rules that, over time, change individuals' attitudes 
about work and childbearing, we will have a muddle of ambiguity 
that will abandon some families that are doing their best to 
become self-sufficient, while allowing others who are more 
aggressive to continue exploiting the system. And instead of a 
clear funding mechanism that gives state full control of the 
program, we will have a structure that rewards states that 
choose to do the least, while leaving states that make a 
serious effort to reform welfare desperately strapped for 
funds.
    A much better solution to all these problems, however, is 
to base the funding in each state on the state's current level 
of need, as measured by the states' own eligibility and benefit 
levels, and to provide states with separate, flexible funding 
streams for jobs and training, and for child care. A number of 
alternatives offered in Committee, including Senator Conrad's 
and Senator Moynihan's, offer this funding structure along with 
all the flexibility states need to really change the culture of 
welfare. Although they were hastily rejected in Committee, they 
deserve full consideration on the Senate floor.

                                                      Bill Bradley.
           ADDITIONAL VIEWS OF SENATOR JOHN D. ROCKEFELLER IV

    I concur with the view expressed by the distinguished 
ranking member, Senator Daniel Patrick Moynihan.
    Also, I would like to briefly summarize my own guiding 
principles regarding the current effort to achieve welfare 
reform.
    As the vote on the Chairman's mark demonstrated, the 
members of the Committee disagreed on how to change the welfare 
system. I regret that the opportunity was not used to achieve 
consensus as a better route to making such important decisions 
affecting millions of children and families across America.
    My view is that welfare reform should be a strong effort to 
expect work and personal responsibility from parents. Welfare 
should not be a hiding-place or a resting-place, and taxpayers 
have every reason to expect real change. The current system 
fails on both fronts of work and responsibility, although 
success requires enormous commitment, focus, and honesty about 
the reasons so many families are so poor.
    But I do not believe welfare reform should be the route to 
abandoning this country's protection of children. The 
Chairman's legislation abdicates the federal responsibility for 
vulnerable children, which will punish and harm the innocent.
    The legislation's shift to a block grant approach will 
place an arbitrary limit on funds to each state, regardless of 
its future changes in population, regional economic downturns, 
or the unpredictable changes affecting poor children and 
families.
    State flexibility is important, but welfare reform 
legislation should ensure that federal tax dollars will truly 
be used to get AFDC parents into jobs with the necessary 
support of effective job placement and child care.
    These are my fundamental concerns and reflect issues that 
are especially important to my state of West Virginia.
    I do appreciate the Chairman's recognition and support of 
some basic provisions from the current JOBS programs designed 
to assure that existing workers are not displaced by community 
work programs established by states under new programs. The 
point is to move AFDC parents into work without displacing 
current workers and possibly pushing them into welfare. Such 
safeguards for hard working men and women are crucial and most 
be preserved. These provisions had bipartisan support over the 
years in a variety of federal programs, including the 1988 
Family Support Act.
    Also, I want to commend the Chairman's mark for supporting 
current law on child protective services, which includes a 
commitment to maintaining the entitlement status of foster care 
and adoption assistance. Services for abused and neglected 
children are basic protection for the most vulnerable members 
of our society, children who are unsafe in their own homes. 
Maintaining federal standards and support for child protective 
services is a fundamental and moral obligation.
    Welfare reform is an extremely challenging and essential 
endeavor. The goal should be to promote independence and 
discourage dependence, but the price should not be paid by 
children born into poverty through no fault of their own. For 
decades, this country has worked on promising opportunity and 
hope to every child, regardless of where they live. My hope is 
that the Senate will find a way to enact bipartisan legislation 
that keeps faith with both the principal of responsibility and 
a commitment to children.

                                            John D. Rockefeller IV.
               ADDITIONAL VIEWS OF SENATOR JOHN B. BREAUX

    This bill does not reform welfare. It simply puts the 
welfare problems in a box and ships it to the states. When the 
states open that box, they're going to find a whole lot of 
problems and less money to help solve them.
    The fact is, our nation's welfare problems are big enough 
for the federal and state governments, Democrats and 
Republicans, to solve together. That's why I think welfare 
reform should continue to be a state-federal partnership. Right 
now, the federal and state governments share the costs of 
supporting children and putting their parents to work. The 
Republican block grant plan would simply give states a check 
and require nothing in return. States could spend the money 
they now spend on poor families on roads or bridges. That is 
not fair. We all know that states are more careful spending 
money they have to raise themselves. I think both the federal 
and state governments should commit resources to reform 
welfare. That's why I offered an amendment in committee to 
encourage states to match federal welfare funds as they now do 
in most all federal state programs.
    We need to move beyond the argument over whether the 
federal or state governments should handle the welfare 
problems. The real debate should be over how to best move 
people from welfare to work. Today, we expect too little from 
those on welfare. Anyone who can work, should. Everyone should 
do something as a condition of receiving assistance. Today, we 
also expect too little from the welfare bureaucracy. Its 
mission should be to get people off of welfare and into jobs--
as soon as possible. Those who need help finding jobs should 
get it. But work, not welfare, should be the goal.
    While we transform welfare into a work-based system, we 
should continue to protect kids. Welfare is a safety net for 
millions of American children living in poor or near-poor 
families. Most never need it. But it's there just in case--in 
case their mother loses her job or their father abandons the 
family. We should keep it that way.
    I had hoped that the Committee would report a bill that is 
not just a budget cut disguised as welfare reform. A bill that 
doesn't just ship the welfare problem off to the states, but 
instead requires both levels of government to commit to solving 
the welfare problem. One that promotes work but protects kids. 
Since this bill does not, I had to oppose the measure. However, 
I remain hopeful that when this measure comes up for full 
Senate debate we will be able to produce a bipartisan product 
that will justify Presidential approval and be true reform for 
all Americans.

                                                    John B. Breaux.
            ADDITIONAL VIEWS OF SENATOR CAROL MOSELEY-BRAUN

    A week and half ago the Finance Committee reported out 
sweeping welfare reform legislation in the form of the 
Chairman's substitute to H.R. 4. It is likely that the full 
Senate will take up this bill later this month. The Chairman's 
substitute has serious and far reaching implications regarding 
this nation's commitment and obligation to poor children.
    The House moved through welfare reform hastily, and 
produced an unworkable and ill conceived piece of legislation. 
Unfortunately, the Senate bill is equally problematic. While 
the bills do ``reform welfare as we know it'', neither of them 
deal with the underlying problems that cause expanding welfare 
rolls nor provide viable solutions. What the House and Senate 
Finance Committee bills really offer is a wholesale 
capitulation to those who would abandon the war on poverty. 
These bills end the federal guarantee to income assistance to 
poor children and shift the problem of responding to poverty to 
the states.
    Welfare is a response to poverty. In 1993, 39.9 million 
Americans were poor. 22% or 14.9 million children live in 
poverty in this country--nearly one out of every four American 
children. This is a 40% increase since 1970. The U.S. rate is 
double that of Canada and Australia, and more than four times 
that of France, the Netherlands, Germany, and Sweden. Female 
headed households account for 23% of all families, and more 
than half of all female-headed households (53%) are poor.
    Since 1935 the federal government has sought to reduce 
poverty and its consequences partly through income support to 
poor families. Poverty has been considered a national problem 
that required federal involvement. Under the guise of state 
flexibility, the Senate Finance bill, in effect, eschews any 
federal programmatic responsibility. The bill translates the 
universal frustration with the current system into an 
abdication of federal responsibility.
    Welfare reform is clearly needed. Welfare policies should 
not encourage a lifetime of dependency. All recipients who can 
work should work. Reform will not work, however, if it does not 
attempt to resolve issues of poverty and offer poor families 
opportunity.
    The Finance Committee bill fails to address poverty or 
offer a realistic prescription for reform. The worst 
consequence is that it will rob 4 million of children of 
opportunity to reach their full potential because it eliminates 
any state or federal obligation to poor children.
    Several aspects of the bill are of particular concern to 
me:
    Block grants are proposed as a solution.--The bill turns 
the welfare problem over to the states using a block grant 
mechanism. The block grant mechanism in effect, eliminates the 
current federal and state obligation to care for poor children. 
The federal government thus transfers its current obligation to 
serve people and replaces it with a guarantee to provide 
funding to states.
    This route was taken even though past history has shown 
that many of the block grants established in the early 1980's 
failed to achieve their intended goals. The lack of federal 
reporting requirements created a situation where targeted 
populations were not well served, comparable data across states 
was unavailable, and the federal government could not account 
for how funds were spent. Over time, funding for many of the 
block grants was reduced while the number of targeted 
categorical programs increased.
    Funding is inadequate and inflexible.--The bill provides 
$16.8 billion dollars to states for each of the next five years 
to care for needy children. The funding is capped and cannot 
respond to changes in caseload or population. Fast-growing 
states would be penalized as would states experiencing a 
recession or economic downturn. Federal funds would quickly 
disappear but the responsibility for caring for needy children 
would not.
    The funding level is also inadequate. According to the 
Congressional Budget Office (CBO), in the year 2000 two-thirds 
of the funding will be necessary to meet the work and child 
care requirements alone. Only one-third of the funds would be 
available for cash assistance. CBO estimates that only 6 States 
could meet the work requirements of the bill. Therefore the 
majority of the states would be forced to incur penalties or 
reduce the amount of cash assistance available to families with 
dependent children.
    The bill does not require maintenance of effort.--The bill 
would set in stone the current funding allocations which are 
based on what states spend. Grant levels vary widely among 
states. Children would be treated differently due to the 
geography of their birth.
    It is one thing to allow such discrepancies when it is 
based on state decisions of how much to spend on poor families, 
as is the case of the current allotment. But, under the Senate 
bill, states would not have to spend state revenue to receive 
federal funds. Benefits to poor families could be comprised 
solely of federal funds If this is the case, federal dollars 
should be allocated more equitably based on need.
    Welfare reform should be done fairly. During the mark-up 
the decision to lock in the current funding distribution was 
defended as the only workable solution; rewriting the formula, 
it was said, would be too complicated. The current allocation 
system is faulty. If it does not work we should not be swayed 
from change because of the prospect of a formula fight.
    The bill will create a ``race to the bottom''.--There is a 
widely held belief that states which set high benefit levels 
will become a magnet for poor families living in low benefit 
states. If poor people move to states with generous benefits, 
state spending will have to increase due to the inflexibility 
of the federal grant. This creates either a hidden unfunded 
mandate or a powerful incentive to reduce benefits levels.
    States are already competing to reduce benefit levels, even 
through current benefits are lower than the poverty level in 
all 50 states. (In real dollar terms benefits levels have 
fallen 47% since 1970.)
    The bill assumes that states will ``do the right thing.''--
While there is merit in the notion that states are closer to 
the problems of their constituents and some states have 
demonstrated the capacity to innovate, the absolute absence of 
a national commitment to income assistance puts the poor at the 
mercy of geography and chance. State flexibility is important, 
but so fiscal and programmatic accountability. We must not 
disregard the lessons learned from the past.
    States have the principal responsibility for caring for 
abused and neglected children. 20 states, however, are under 
court orders to improve their systems. It was the imposition of 
federal mandates that are most often cited as the cause for 
many of the reforms of the past 20 years. If states can not 
adequately care for our abused and neglected children, we 
should not assume that states will do a better job with other 
poor children.
    The bill also ignores past welfare experience. We have 
learned from successful state experiments, such as those in 
Michigan and Wisconsin, that moving recipients into jobs can be 
done but it requires investment.
    Investing in people is more expensive in the short run, but 
will provide a greater return over time.
    The bill does not include provisions for job creation.--
Finally, the bill assumes that recipients will be able to find 
jobs after the five year time limit (which could be less at a 
state's opinion) but does not provide funding for job creation 
or provide adequate funding for support services that will aid 
recipients to obtain and keep private sector jobs. In many poor 
communities jobs simply do not exist and those that are 
available are not easily accessible. Transportation may be 
insufficient, unavailable and or expensive. This bill buys into 
the ``Field of Dreams'' theory: If you kick them off welfare 
they will work. It will be nearly impossible to move recipients 
into permanent private sector jobs if there are no jobs.
    For those who do find work, salaries are low and benefits 
are nonexistent. Many current recipients who work combine work 
and welfare benefits wages are not sufficient to support a 
family. This bill fails altogether to address the needs of the 
marginal poor.
    This nation has a 7 trillion dollar economy. It is 
unfathomable that the federal government is poised to turn its 
back on this nation's children. Less than 2% of the $1.5 
trillion federal budget is spent on AFDC, yet it is a target 
for billions in budget cuts.
    This bill will exacerbate poverty and all of its attendant 
problems. Thirty years ago Senator Moynihan accurately 
predicted a bleak future for poor communities with increasing 
numbers of one-parent families. I believe the future for poor 
communities will be even more dire if this legislation passes. 
This bill does not provide states with the tools to move 
recipients into permanent employment nor does it provide 
economic investment or opportunities for impoverished 
communities.
    The Senate should not rush through deliberations of welfare 
reform with inadequate concern for the consequences. I hope my 
colleagues will take the time to sort out the real issues that 
are involved here and consider meaningful, realistic reforms.
    I therefore will not support passage of the Senate Finance 
Committee mark.

                                               Carol Moseley-Braun.
               VII. CHANGES IN EXISTING LAW MADE BY BILL

    In the opinion of the Committee, it is necessary in order 
to expedite the business of the State, to dispense with the 
requirements of paragraph 12 of Rule XXVI of the Standing Rules 
of the Senate (relating to the showing of changes in existing 
law made by the provisions of H.R. 4, as reported by the 
Committee).