Welfare: what now?

• Author: Tweedie, Jack
• Position: State governments and the Temporary Assistance for Needy Families

States face tremendous challenges creating the "new welfare," mandated by the federal Temporary Assistance for Needy Families (TANF) law. But it's a task most states already have started. Thirty-five states passed major reforms before the federal legislation was enacted and it echoes their emphasis on work and family responsibility.

Ambitious state reforms were the first stage in the transformation of welfare. States now turn to the second generation of welfare reform issues - creating jobs, preparing recipients for work, finding child care slots, constructing safety nets for children and families who lose benefits and devising funding schemes for economic cycles. Although they have made some progress, current efforts will be expanded and new ideas developed. States must transform the culture and vision of welfare, particularly the attitudes and actions of caseworkers and the people on welfare.

NEW FLEXIBILITY, NEW FINANCING, NEW MANDATES

Federal TANF legislation establishes a new structure for welfare programs that gives the states considerable flexibility. Gone is AFDC and most of the federal rules that structured family assistance programs. Gone is the cumbersome waiver process.

Federal financing for family assistance has been restructured. The new block grant system shifts the financial risk to the states. Increases in family assistance will be funded almost completely from state funds. This raises the stakes as states plan reforms. They have to anticipate economic cycles that increase or decrease assistance caseloads and spending. They have to search for programs that put recipients in jobs and enable them to support their families. It is state money that will be spent or saved, not a mix of state and federal money.

The federal legislation imposes ambitious new mandates. First, states must put more adult recipients to work, starting with 25 percent in FY 1997 and increasing to 50 percent in FY 2002. If a state fails, its block grant will be reduced. Second, states can use federal money to pay benefits to families for more than two years only if the adult is working or is excused from working for good cause. Third, states can use federal money to pay benefits to families for more than five years only if that family receives an exemption. And states can only give exemptions to 20 percent of their caseloads.

States have already begun to transform welfare into a work-based program where most recipients participate in some form of work activity. The scope of a state's reforms is limited only by the need to spend block grant money and associated state funds to support needy families. The next several years promise to be ones of widespread experimentation as states develop refinements and alternatives to the existing cash assistance system.

FINDING JOBS

One of the most difficult problems facing states is the limited number of jobs suitable for welfare recipients. They will have to expand programs to find and create jobs. States already know that job creation requires investment. In the JOBS program, administrative costs for each subsidized job or community service assignment averaged $2,000 to $4,000 per year.

The initial work participation rate requirement (for FY 1997) involves more than 1 million jobs, substantially more than the number of AFDC recipients who currently are in activities that would qualify under TANF provisions. In five years, more than 2 million placements will be needed.

It may not be too difficult in the beginning. Recent reductions in case-loads and the ability to count educational activities temporarily as work make it...