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A Cf& , ~ .~T'-18 ~~~~~~~~~~~~~~~~ Time or A Change Remaking the Nation's Welfare System E L1BRARY ReptJrlol the anti Coordination Alfisory Commiffee June 1993 Table of Contents Acknowledgments Executive Summary iii I Introduction 1 II Committee History and Activities 3 III The Programs: Administration 5 and Interaction IV Previous Attempts at Coordination 25 and Simplification v Simplification and Coordination 33 Efforts Currently in Effect VI Disincentives in Welfare Programs: 43 The Debate Surrounding Self-Sufficiency VII Barriers 49 VIII Recommendations and Their Effects 63 IX Appendixes A. Biographies of 77 Committee Members B. Background on the 79 Four Programs c. "The Cliffs of Self-Sufficiency" 91 IYy the Jefferson County Self-Sufficiency Council D. ''Public Assistance and the Working Poor: 105 How Simplification Could Support Efforts to Make Work Pay" 1Yy Mark Greenberg, Center for Law and Social Policy E. Bibliography of Materials 115 Used lly Committee F. Congressional Committees 123 and Subcommittees G. APWA Task Force on Program Coordination: 125 List of Differences Between the Food Stamp and AFDC Programs H. Section 1778 of the Mickey Leland Memorial 151 Domestic Hunger Relief Act (Public Law 101-624) Acknowledgments The Committee would like to thank many individuals for their help. Without their assistance this report would not have been possible. First, we would like to thank the staff of the four programs who provided much of the input for the report. Specifically, we acknowledge Bonny O'Neil, Art Foley, Ellen Henigan, Nancy Theodore, Amy Black, Phyllis Twyman, Steven Carlson, Boyd Kowal, Barbara Murphy, and Gary Batko of USDA's Food and Nutrition Service; Diann Dawson, Mack Storrs, and Larry Carnes ofHHS' Office of Family Assistance; Paula Blunt ofHUD's Office of Public and Indian Housing; and Richard Chambers ofHHS' Health Care Financing Administration. The Committee would also like to thank the many individuals who attended the four meetings held throughout the country. We are grateful to all those who provided valuable input by making presentations or providing personal testimony. Special thanks go to Congressman Bill Emerson, for his inspiration and guidance; Barbara Earman of the House Select Committee on Hunger; Kathi Way of the White House Domestic Policy Council; Jane McNeil, Executive Assistant to USDA Secretary Mike Espy; Rick Ferreira and Larry Goolsby of the American Public Welfare Association; Mary Robertson of the Los Angeles County Department of Public and Social Services; Neal Zank of the National Commission on Employment Policy; Mickey Allman of the Maryland Department of Human Resources; Barbara Flaherty of the Washington State Family Independence Program; Shirley Ramsey of the Cape Girardeau, Missouri, Community Caring Council; and Harrison Shannon and Sharon Waters of the Charlotte Housing Authority. Finally, we give a special thank you to Committee member Mary K. Deyampert, Kay Fields of the North Carolina Department of Human Resources, and Merlene Wall of the Mecklenburg County Department of Social Services for hosting our meeting in Charlotte, North Carolina; and Committee member Thomas Eichler and Barbara Evans, Elaine Arch angelo, and Phyllis Hazel of the Delaware Department of Health and Social Services for their hospitality at our meeting in Wilmington, Delaware. "One central conclusion emerges from our work to date: The welter of programs that are collected under the rubric of the 'welfare system' must be scrapped. Ma;or structural reform of our income assistance programs for the poor is necessary if we are to encourage work wherever possible, provide basic income protection for those who are unable to pro-vide for themselves, provide incentives for keeping the family together, and simplify and make more efficient the basic administra-five structure. " Joseph Califano Former Secretary of Health, Education and Welfare, 1977 Executive Summary HELP! Delivery of services to the needy ofthis Nation has reached a crisis stage. Unless dramatic steps are taken immediately to end the administrative quagmire in local human service offices the entire system stands in danger of collapse. The conglomeration of separate programs that supposedly comprise our "welfare system" do not form a system at all. Instead, each operates in its own separate orbit, assisting a specific population, without regard to the multiple needs of the families it serves. Just as "tinkering" with health care programs is insufficient to resolve the Nation's health care crisis, according to First Lady Hilary Rodham Clinton, so is tinkering with welfare programs. The current programs should be scrapped, in lieu of one comprehensive program with the goal of moving participants toward self-sufficiency. Now Is the Time lor Change! These are the findings and recommendations of the Welfare Simplification and Coordination Advisory Committee-authorized by Congress in 1990 to examine four major assistance programs-food stamps, Aid to Families with Dependent Children (AFDC), Medicaid, and housing assistance programs. The Committee was mandated to identify barriers to participation in one or more assistance programs and the reasons for those barriers. It also examined reasons why it is difficult for administrators to provide timely benefits efficiently to all qualified to receive them. The Committee's work culminates in this report to Congress and the cognizant Federal agencies. It recommends actions that could improve the delivery of services among the programs and simplify their rules and procedures. The bi-partisan Committee met four times during 1992 and 1993, examining the interactions of the current assistance programs from the perspective of program administrators as well as the needy. Members heard from public witnesses, including public assistance recipients, and read statements from many more, attesting to the lack of coordination and simplicity. The Committee shares the view of many previous workgroups that the Nation's current public assistance system desperately needs to be overhauled. Most of the existing programs do a good job of fulfilling their own missions. However, when viewed together, the "system" is an antiquated and costly conglomeration of programs with separate goals, inconsistent policies, and rules that are so complex that neither clients nor their caseworkers should be expected to understand them. The Committee concurs with the panel of experts working on the Ford Foundation Project on Social Welfare and the American Future that "the best welfare policy offers individuals both an economic opportunity and social protection in a way that minimizes the waste of taxpayers' resources."' I Project on Social We lfare and the American Future, The Common Good: Social Welfm~ and the Ameriran Future, Policy Recommendations, (New York: The Ford Foundation, May 1989) , p. 4. Ill iv Although the recommendations put forth by this Committee follow a long list of similar ones advocated by equally earnest groups, the Committee believes that there is cause for optimism now. This report, the only one prepared in response to congressional concern, will be presented in the first year of a new Presidential administration. "Ending welfare as we know it," is a prime goal espoused by President Clinton. The recommendations herein comport with that goal. We submit this report to a Congress with an unprecedented number of freshmen Members. We believe these new Members were elected by people who are fed up with the status quo-who recognize that the current system of aid evolved not by design, but through crisis. The release of this report also comes at a time when Members are looking to make Congress more efficient by streamlining its structure. The temporary Joint Committee on Organization, which is chaired by Senator David Boren and cochaired by Congressman Lee Hamilton, is reviewing the committee and subcommittee structure with the goal of consolidating oversight responsibility and eliminating overlap. We will try to impress upon this joint committee the urgency of addressing the fragmented jurisdiction over assistance programs. During this time of extreme fiscal distress, both the Federal Government and the States are showing an unprecedented willingness to do things differently. The number of States applying for welfare reform waivers in recent years is evidence of the dissatisfaction with the current system, and the receptivity to change. The time for change is long overdue, and the time for change is clearly NOW! Barriers Members read material on the subject of coordination compiled from work completed over the past 2 decades. A myriad of working groups, task forces, and committees have attempted to tackle the problem of welfare complexity, but with little success. That problems exist is well documented. It was not difficult for the "In the nearly fifty years of its exis-fence, welfare has changed to the point that no one likes this system and a lot of people act as though they don't like those who receive welfare. Change is long overdue!" -Kay Barker Gaston County, NC Testimony before the Welfare Simplification and Coordination Advisory Committee January 8, 1993 Committee to meet its first mandated objective: compiling a list of barriers to effective client service and to participation. Both "systems barriers" pertaining to administration of the programs, and "client service barriers" at the delivery level, are identified in chapter VII of this report. The systems barriers stem from the different laws that created each program and the administrative structures that evolved from those laws. The different mission of each program results in differing policies and procedures that hamper coordinated services. While some barriers to efficient operation are as broad in scope as lack of coordinated oversight by the Congress and the Executive Branch, others, such as insufficient use of automation, are more specific. Client services barriers affect applicants and recipients directly, inhibiting access to program benefits. While lengthy forms and complex rules are the most commonly perceived obstacles to program participation, more subtle barriers, such as the stigma attached to participation, also deter applications. Many people, especially the elderly, view receipt of almost any form of assistance as humiliating. Only 59 percent of persons eligible for food stamps actually received them in 1989. Previous Efforts With such obvious and well-documented problems, one might wonder why the barriers were not eliminated years ago. Solutions are not simple and consensus is not easily reached. Chapter IV describes previous attempts at reform and why most have failed. The cost of program change is paramount among the obstacles to reform. Any change in eligibility requirements or benefit levels affects program costs. Given the amount of funds disbursed by the programs, the fiscal magnitude of program changes can be tremendous. For example, raising the AFDC asset limit from the current $1,000 to the $2,000 limit of the Food Stamp Program would allow more people to receive AFDC. Such a change would have increased AFDC costs by $135 million in fiscal year 1992. In addition, since the new AFDC recipients would be categorically eligible for Medicaid, costs for that program would increase dramatically. Other reasons for inertia in achieving program conformance include tension between State and Federal responsibilities, congressional and Executive Branch inattention to the administrative aspect of coordination, and competing constituencies. An example of an unsuccessful attempt at simplification is President Nixon's proposed Family Assistance Plan ofthe early 1970's. The plan would have created a national cash welfare system with uniform eligibility and minimum benefit levels that States could supplement. The benefit levels under the proposal would have exceeded the AFDC grants in some States and been lower than the grants in others. The changes were opposed by client advocates from States with high AFDC grants who did not want to see people get less aid, as well as those from States with low grants, who did not want to see more people added to the public assistance rolls. The proposal failed. v "We want people to get work ... we want them not to lose anything by getting the work ... " vi - Senator Daniel Patrick Moynihan Congressional Record June 16, 1988 Guiding Principles Principles were developed to guide the Committee's deliberations. They were adhered to when recommendations for change were formulated. The shared philosophy of treating persons with respect was an overriding influence. The 10 principles are: 1. Treat Persons with Dignity and Respect 2. 3. Strengthen F amities Direct Programs to Address the Entire Spectrum of a Family's Needs, Not Just the Discrete Needs of Individuals 4. Promote Individual Responsibility 5. Empower Persons to Move Off Assistance and Toward Independence 6. Make Work More Rewarding Than Assistance 7. Allow Flexibility In Programs to Accommodate State, Local, and Individual Differences 8. Focus Success Measures On Persons, Not On Processes 9. Use Public Funds Efficiently 10. Build Partnerships with the Private Sector Recommendations In considering the actions it would recommend to the Congress and the Executive Branch, the Committee discussed a wide range of options. The Committee chose not to ignore issues peripheral to simplification and coordination of the four programs. Broad issues including adequacy of benefits, work incentives, and the dynamics of program interactions were studied as were detailed technical proposals to coordinate policies and procedures. In considering just how specific it wanted to be, the Committee deliberated over an impressive document recently produced by the American Public Welfare Association (APWA) in conjunction with the Food and Nutrition Service of the Department of Agriculture (USDA) and the Administration for Children and Families of the Department of Health and Human Services (HHS). The document, compiled over the past year and a half by program administrators, identifies 57 differences between the Food Stamp and AFDC Programs. Some of the differences are rooted in statute and only congressional action can eliminate them. Others are disparities in regulations and can be addressed by the Federal agencies. The Advisory Committee recommends that the Clinton Administration immediately review the disparities that are rooted in regulation, not statute, and provide a timely and full response to the Task Force recommendations. This Committee further recommends that the appropriate congressional committees analyze the program differences based in statute, and that the House and Senate subcommittees with jurisdiction over the programs hold joint hearings to develop a legislative reform package to conform the two programs. The Committee was also impressed by the work of the National Commission for Employment Policy (NCEP) in its October 1991 Special Report entitled Coordinating Federal Assistance Programs for the Economically Disadvantaged: Recommendations and Background Materials. The recommendations in this report parallel many of NCEP's recommendations. The Committee heartily recommends that the White House Domestic Policy Council and Congress review the recommendations contained in the NCEP report for implementation in conjunction with APWA's recommendations and those put forth by this Committee. • Primary Recommendation The primary recommendation of the Committee is to replace the numerous programs that currently serve the needy with one, family-focused, client-oriented, comprehensive program. The three key criteria for the program would be 1) simplicity of design; 2) service tailored to need-three broad, time-based categories of assistance (short-term, extended, and long-term) with a single case manager for each family; and 3) benefits contingent upon progress toward selfsufficiency. This program would provide a consistent, coordinated, and simplified approach to meeting the interrelated needs of low-income individuals and families while they are working toward self-sufficiency. Service would be tailored to the client through the use of a self-sufficiency plan designed to match the needs of each family member, and the family as a whole, to appropriate services. Although actual service delivery may be provided by separate State and local agencies and private sector organizations, the program would be administered by one agency at the State level. Administration at the Federal level would also be centralized in one agency and legislation would evolve from a single committee in each Chamber of Congress. Given the complexity of the task, this Committee did not have sufficient time or resources to design the comprehensive program it envisions. This must fall to Congress and the Federal agencies, or a special task force given this single charge. However, the Committee feels strongly that the design concepts must reflect the principles laid out in this report. Integral elements of the program include: • a single point of entry with one application form; • common definitions and rules on income, deductions, resources, and nonfinancial eligibility criteria; • a single eligibility standard (means test) for determining eligibility; and • partnerships between public and private sector programs to provide coordinated services. A comprehensive program addressing the multitude of human needs would be simpler to administer than the jumble of programs that currently exist. Common definitions, eligibility requirements, and benefit payments add to the desirability of a comprehensive program. Eliminating duplicative bureaucracies will reduce administrative costs, saving money that can be used, instead, for client services. If Congress and the Executive Branch seriously wish to bring simplicity and coordination to the public assistance network, the Committee believes this recommendation is inescapable. Vll "It's time to honor and reward peo-pie who work hard and play by the rules. That means ending welfare as we know it- not by punishing the poor or preaching to them, but by empowering Americans to take care of their children and improve their lives. No one who works full-time and has children at home should be poor anymore." viii - Governor Bill Clinton and Senator AI Gore Putting People First: How We CanAl/ Change America, 1992 • Interim Recommendations The Committee recognizes that its recommendation for one comprehensive program will not come about overnight. In the interim, other steps can and should be taken to improve the current state of public assistance and provide immediate relief to program administrators and the needy. Therefore, the Committee recommends that Congress review the interim recommendations below and take immediate action to implement those recommendations requiring legislative action. Once legislative action has been completed and for those recommendations that do not require legislative action, the Committee recommends that the President direct the White House Domestic Policy Council to take the lead in coordinating implementation among the Federal and agencies. The interim recommendations are categorized as either "Systems" or "Client Services." Systems recommendations are: 1. Form a work group of the chairs of the relevant congressional committees to ensure that all legislative and oversight activities involving public assistance programs are coordinated. 2. Ensure that all low-income Americans have access to quality health care. 3. Establish uniform rules and definitions to be used by all needs-based programs in making their eligibility determinations, including: a. common definitions of countable income, allowable deductions, resources, and household composition; b. conversion of food stamp benefits to a flat allowance for AFDC families; and c. establishment of a standard shelter and medical deduction under the Food Stamp Program for non-AFDC households. 4. Expand the demonstration project authority for all programs to allow for the waiver of both statute and regulation. Cost neutrality should not be an overriding criterion for Federal approval of demonstrations or welfare reform initiatives. 5. Allow States to make effective demonstration projects permanent and/or adopt successful systems tested in other States. 6. Modify audit and evaluation procedures to focus primarily on the success of individuals and families in reaching self-sufficiency as the standard for accountability to determine the success of the programs. 7. Establish a uniform implementation timeframe for all regulatory changes and a common date for implementing these changes, including cost-of-living adjustments. Coordination with non-needs-based programs, such as Social Security Administration Programs and Veterans benefits, should be stressed. 8. Encourage States to form public/private partnerships to meet client needs. 9. Combine employment and training programs for the economically disadvantaged into one program. Client Services recommendations are: 1. Streamline the verification process. 2. Use a single case manager for all public assistance programs and services. 3. Permit the sharing of client information among agencies. 4. Make information on eligibility available in more public places, e.g., libraries and post offices. 5. Develop tables to be used by clients to determine how benefits may be impacted as a result of anticipated changes in household circumstances, such as changes in income and household size. The Committee's recommendations are discussed in detail in chapter VIII of the report. The time to act is now. If these issues are once again ignored because of their cost or complexity, we can look forward to years of legislative gridlock, high turnover rates among disgruntled assistance workers and worst of all, lost potential of many, many Americans. • ix X "We must understand when a family unit is in need of help, their need often crosses pro-gram lines. Need for income assistance often means need for food, for housing help, and for some help in finding and keeping a job." - Representative Bill Emerson, MO Hearing before the Select Committee on Hunger U.S. House of Representatives April23, 1991 Introduction By authorizing the Welfare Simplification and Coordination Advisory Committee through Public Law 101-624, Congress, for the first time, actively sought to address the need to reform the way the Nation's human services programs work together as a system. It was an outgrowth of longstanding dissatisfaction with the complexity of the tangle of programs designed to help the poor. Although there have been many attempts to make these programs more efficient and effective, the Committee 's creation marks a new milestone in the effort. Creation of the Advisory Committee is a strong indication that Congress viewed the fragmentation of human investment programs as "one of the major unmet challenges to domestic policy in America .... "1 The Committee is charged with examining the policies and procedures of the Food Stamp, AFDC, medical assistance, and housing assistance programs. It must identify barriers to multiple program participation, and elements of the system that make it difficult for administrators to provide timely benefits in an efficient manner to all those qualified to receive them. Since passage of the Social Security Act in 1935, a multitude of programs to help the economically disadvantaged have been enacted. Authorized by different congressional committees at different times, the programs deal with the interconnected symptoms of poverty. Each program was born of good intentions. They are all evidence of the Government's aggressive response to pressing societal needs. As each need was addressed, however, no single body was taking a deliberative look at how the individual programs would meld together. That the programs would actually function as a system was never a motivating factor in their creation. This is the genesis of the complexity and coordination problems we are dealing with today. The governmental processes that created the assistance programs remain intact. No mechanism is in place to prevent conflicting program policies from being enacted in the future, nor to remedy the ones that already exist. In fact, just the opposite is true. Achieving real compatibility among the programs will require major structural reforms in the way welfare laws are promulgated. This has far-reaching consequences for the poor, who are hesitant even to apply for programs benefits because of the complexity involved. It has similar consequences for State agencies, which are struggling to deliver services efficiently and to attract, train, and retain caseworkers. Services and benefits for families are divided into rigid and distinct categories that fail to reflect their interrelated causes and solutions. The fragmentation of social services at the Federal level is mirrored at the State and local levels. Caseworkers share "pieces" of the same family, with no institutional capability to address the interrelated family needs. Consequently, services designed to correspond to discrete problems are administered by "dozens of agencies, each with its own particular focus, source of funding, guidelines, and accountability requirements." 2 These fragmented systems result in costly and duplicative administration and less effective services. Social service delivery is close to unmanageable today. Program administrators have to navigate through the muddy waters of program requirements handed to them from agencies which speak different "languages." Even a seemingly simple determination such as, "What is income?" is greeted with different responses from different programs. Placing even more pressure on caseworkers, the complexities of the individual programs and their differences contribute to high quality control error rates. From the viewpoint of the person who needs assistance, the system can 1. Marion Pines, Investing in SelfSufficiency for Poor Families: Putting It All Together, (New York, NY: Ford Foundation , 1991) , p. 93. 2. Ate lia l Me Iaville with Martin]. Blank, What It Takes: Structuring Partnerships to Connect Children and Families with ComprehensiveSeovices, (Washington , DC: Education and Human Services Consortium,January 1991) , p. 7. 1 "You go into [the welfare office and] you're surrendering sovereignty. You're surrendering control of your life and making yourself dependent." - Public assistance recipient Final Report of Findings of Focus Group Research Conducted on Behalf of the National Association of Neighborhoods, Prism Corp., Washington, DC, Falll986 be a nightmare. Most communities have no central location for people to find out what programs are available and those for which they might be eligible. Applicants face lengthy, complicated forms and different types of verification for each program. Comprehensive, holistic services tailored to individual or family needs are not generally available. Eligibility workers do their best just to determine program eligibility for the sheer volume of faces that appear at their doors day in and day out. This Committee has examined the problems faced when a family needs service from more than one program. It has identified barriers to efficient operations and to participation by all those eligible. It has examined previous attempts by the Federal Government to create a cohesive and accessible system and explored why these efforts were unsuccessful. The Committee is recommending ways to simplify the system and coordinate the major social service programs. It believes that coordination problems can be addressed in a way that will enhance service delivery while maintaining a reasonable degree of program accountability. The findings of the Committee, as well as its recommendations, illustrate why it's time for a change. • Chapter Committee History and Activities Committee Selection When Congress established the Welfare Simplification and Coordination Advisory Committee, it mandated that the Secretary of Agriculture appoint members with different perspectives on public assistance, including State and local administrators and client advocates. The members of the Committee brought together a broad base of expertise in the field of public assistance. Membership was diverse, representing large and small States, rural and urban areas, and various backgrounds. Sammie Lynn Puett, a former Commissioner of the Tennessee Department of Human Services, chaired the 11-member Committee. Members included a Colorado State Senator, a county legislator from Westchester County, New York, public assistance program administrators from Delaware and North Carolina, a county administrator from Los Angeles County, a scholar in health policy from the American Enterprise Institute, an eligibility worker from New Mexico, the Chief Executive Officer of the Dallas Housing Authority, and client advocates from Kansas and California. Biographies of the Committee members can be found at appendix A. Committee Activities All four of the Committee's meetings were open to the public, and comments from the public were welcomed. At each meeting, public comment was provided by recipients, advocacy groups, administrators and caseworkers. The first meeting of the Committee was in Arlington, Virginia, on April 30 and May 1, 1992. Subsequent meetings were held in Seattle, Washington, August 20, 21, and 22, 1992; Charlotte, North Carolina,January 7, 8, and 9, 1993; and Wilmington, Delaware, March 11 and 12, 1993. In Arlington, the Committee discussed the direction it would take in fulfilling its mission. Sites for the future meetings were selected based upon innovative programs and demonstration projects and geographic diversity. Committee members also received comments on the Federal perspective on coordination and simplification from representatives of USDA's Food and Nutrition Service, HHS' Administration for Children and Families and Health Care Financing Administration, and the Department of Housing and Urban Development's (HUD), Office of Public and Indian Housing. Missouri Congressman Bill Emerson, sponsor of the authorizing legislation and ranking minority member of the House Agriculture Subcommittee on Domestic Marketing, Consumer Relations, and Nutrition, addressed the Committee. In Seattle, the Committee formulated an initial set of basic principles to guide its work and identified barriers to program administration and receipt ofbenefits. There, the Committee visited with participants and program administrators from the Washington State Family Independence Program, an innovative demonstration that utilizes a case-management approach to give special attention to the needs of individuals. One caseworker is responsible for the overall needs of the family unit. In addition, food assistance is provided in the form of cash rather than food stamps. Education and training activities are emphasized and the program offers incentives for participation by providing for child care reimbursements to help families move off public assistance and become selfsufficient. Shirley Ramsey, president of the Community Caring Council in Cape Girardeau, Missouri, spoke to the Committee on the Council's work. The Council is a nonprofit corporation that promotes coordination and cooperation between social service providers, churches, the business community, and the educational system to empower families and individuals to become more self-sufficient. The Council was founded 4 years ago by Mary Katsen, a 3 "Self-sufficiency translates into a good job and stable home life for - One Child in Four -Investing in Poor Families and Their Children: ------......... A Motter of Commitment ". The American Public Welfare Association and The Notional Council of State Human Service / istr.otors, 198 4 State Representative, in response to the frustrations expressed to her by constituents in trying to decipher the maze of social services. In Charlotte, the Committee focused on the recommendations to be made in its final report to Congress and heard comments from administrators of innovative simplification projects in the State. The Committee visited several transitional housing sites that offer lower income families opportunities for home ownership through the use of escrow accounts. Sponsored by the Charlotte Housing Authority, the innovative programs encourage families to make the transition from public assistance to self-sufficiency. The fourth and final meeting was held in Wilmington, Delaware, on March 11 and 12, 1993. The Committee visited the State's innovative onestop service delivery system-a ent-centered, results-oriented nett:&- of-p~ms that supports personal and fami~elf-sufficiency. Delaware has been a recent innovator in the development of one-stop services through a system of single entry, multiservice facilities that house human service programs, as well as selected private sector programs in local community locations. Two key goals guide the one-stop services system: 1) services are provided with an emphasis on working with individuals and their families to maximize independence; and 2) the system itself must be self-correcting-constantly working to retool to keep pace with changing client needs and a changing service delivery environment. Congressman Mike Castle spoke to the Committee on the urgent need for simplification and coordination in the current public assistance system, and Delaware Governor Thomas Carper discussed welfare reform and the innovative initiatives that are currently underway in the State. The Committee also heard from Congressman Bill Emerson. Problems with the assistance programs that extend beyond coordination were raised in every city the Committee visited. Public commenters described the unintended consequences of program rules that discourage entry into employment and promote continued dependence. It was m de clear to Committee members th t there is intense interest in improv ng the current system and that the tim for change is NOW. • The Programs: Administration and Interaction At least 75 Federal programs provide assistance to the economically disadvantaged in the form of cash, medical care, food, housing and energy assistance, education and training activities, and other services. 1 Congress directed the Advisory Committee to focus on the policies of four of these programs-the Food Stamp Program, AFDC, Medicaid, and housing assistance programs-to determine the difficulties faced by individuals when applying for and obtaining benefits. This chapter provides a brief overview of the four programs, discusses administrative costs and looks at multiple program participation. Appendix B contains a detailed description of the four programs, including their policies, population characteristics, and participation and expenditure patterns. The Programs • AFDC Program The AFDC Program began in 1935 under Title IV of the Social Security Act as a way to assist orphans and widows with small children. Today, operating under broad guidelines from the HHS' Administration for Children and Families (ACF), the program provides cash assistance to families with dependent children. It also offers employment and training activities to help parents in these families become selfsufficient. During the first 25 years of the AFDC Program, families suffering deprivation due to unemployment were ineligible for benefits. In 1961 Congress allowed States to provide AFDC to the children of unemployed fathers who were still living at home through the Unemployed Parent Pro-gram (AFDC-UP). The Family Support Act of 1988 took this a step further, requiring all States to operate an AFDC-UP program as of October I, 1990. Although this change makes the program more accessible to needy twoparent families, one-parent families will continue to receive the most benefits. To receive AFDC benefits, a family must pass certain tests based on family structure, income and resources, and willingness to fulfill work requirements. Exhibit 10 illustrates AFDC income and resource requirements in more detail. The AFDC Program is funded jointly by the Federal and State Governments through a matching formula that varies according to the State's per capita income. In fiscal year 1992, program expenditures reached almost $22 billion, an increase of more than 70 percent from 1982. Exhibit 1 provides information on AFDC program expenditures for fiscal years 1983 through 1992. Each State determines its own need standard and grant payment levels. The need standard is the amount of money a State deems necessary to meet a minimal standard of living in that State for a family of a specified size. Many States pay less than the full standard of need. Since no Federally prescribed minimum benefit exists for the program, AFDC benefit levels vary from State to State. For example, an assistance unit composed of one adult and two dependent children with no income would receive an AFDC grant of$120 in Mississippi, whereas the same assistance unit would receive $658 in Vermont.2 Exhibit 2 illustrates the range of AFDC assistance payments for a family of one adult and two children for fiscal year 1993. I National Commission on Employment Policy, Coordinating Federal Assistance Programs for the Economically Disadvantaged: Recommendations and Background Materials, (Washington, DC: National Commission for Employment Policy, 1991), p. 3. 2 U.S. Department of Health and Human Resources, Administration for Children and Families, Office of Family Assistance, Characteristics of State Plans for the AFDC Program, 1990-91 Edition, (Washington, DC: Government Printing Office, 1991) , pp. 29, 322. 5 15 10 0 BOO 600 400 200 6 EXHIBIT 1 AFDC PROGRAM FEDERAL AND STATE MAINTENANCE ASSISTANCE EXPENDITURES 83 84 85 86 87 88 FISCAL YEARS 1983 - 1992 EXHIBIT 2 89 RANGE OF AFDC MONTHLY PAYMENT AMOUNTS FOR SELECTED STATES ONE ADULT AND TWO CHILDREN FISCAL YEAR 1993 AK HI GU VT CA CT LA TN TX STATE AGENCIES 90 91 92 PR AL MS What are your frustrations with the welfare system? "So much paper work and so little staff to do it. High caseworker turnover, never the same caseworker two times in a row. There is also an unreasonable demand placed on the caseworker due to the high numbers in the caseload. " - A Public Assistance Recipient Kansas City, KS in response to a survey about welfare 14 12 10 4 EXHIBIT 3 AFDC PROGRAM TOTAl RECIPIENT PARTICIPATION 13.7 82 83 84 85 86 87 88 89 90 91 92 FISCAl YEARS 1982- 1992 In fiscal year 1992, more than 13.6 million people participated in the AFDC program-almost 25 percent more than in 1989. Exhibit 3 depicts AFDC participation patterns for fiscal years 1982 through 1992. Appendix B describes in detail eligibility requirements, population characteristics, expenditure and participation trends and work requirements for the AFDC Program. • Food Stamp Program When the Food Stamp Program replaced the Commodity Distribution Program during the 1960's, its emphasis was as much to utilize the Government's surplus food as to raise the nutritional level of low-income households. The program exists as it does today to ensure that Americans have the means to purchase nutritionally sound diets. The program is administered by the Food and Nutrition Service (FNS) of USDA. FNS gives direction to State agencies through regulations that define eligibility requirements, benefit levels, and administrative rules. Clients receive coupons which are redeemed in authorized stores for eligible food items. Coupon allotments vary according to the size of the household and income level, but eligibility and benefit rules are the same nationwide. While the average household benefit in 1991 was $162, approximately 5 percent of households collected $10 or less while 11 percent received more than $300." The program has financial, workrelated, and categorical tests for eligibility. Exhibit 10 contains more details on the program's eligibility requirements. The Federal Government provides full funding for food stamp benefits and the cost of administering the program is shared equally between the States and the Federal Government. Since 1982, Federal expenditures for the Food Stamp Program have 3. Nancy Heiser and Suzanne Smolkin, Characteristics of Food Stamp Households, Summer 1991 , (Washington, DC: Mathematica Policy Research, In c., 1992). 7 10 25 20 15 10 8 EXHIBIT 4 FOOD STAMP PROGRAM TOTAL FEDERAL EXPENDITURES* 83 84 85 86 87 88 89 90 91 FISCAL YEARS 1983 - 1992 *EXCLUDES NATIONAL LEVEL ANNUAL COSTS FOR PRINTING COUPONS, STUDIES, AND SURVEY COSTS. EXHIBIT 5 FOOD STAMP PROGRAM PROGRAM PARTICIPATION 82 83 84 85 86 87 88 89 90 91 FISCAL YEARS 1982· 1992 92 92 "We are dying out there. Our work-ers are being crushed by caseloads, delivery is slipping, timeliness is going by the waysides. I've added 40, 000 people to the Medicaid rolls just in the last year in my state, because of the mandates, and with-out new workers, because of the recession, we are in real trouble out there." - Gary Stangler, Director Missouri Department of Social Services, Hearing before the Select Committee on Hunger U.S. House of Representatives April23, 1991 60 40 20 0 increased by more than 100 percentfrom $10.2 billion in 1982 to over $22 billion in 1992. Exhibit 4 illustrates annual Federal expenditures for the program, beginning with fiscal year 1982. Since 1989, participation in the program has grown by an average of 2.2 million individuals annually and in fiscal year 1992 USDA distributed benefits to more than 25 million individuals. Exhibit S displays Food Stamp Program participation patterns since fiscal year 1982. Appendix B describes in detail eligibility requirements, population characteristics, expenditure and participation trends and work requirements for the Food Stamp Program. • Medicaid Program Medicaid is the Nation's key provider of medical assistance and long-term care for low-income families, lowincome elderly, and the disabled. The program was enacted as a companion to Medicare in 1965 and was designed to pay for health care for recipients of AFDC and certain other needy people. Establishment of the EXHIBIT 6 MEDICAID PROGRAM TOTAl PROGRAM EXPENDITURES 82 83 84 85 86 87 Medicaid program was an enormous leap forward in financing and providing health care to the poor. Today, the program's goals are to ensure that eligible individuals receive adequate care and to reduce the financial burden of medical care for those with limited resources. Federal oversight of the Medicaid program is the responsibility of the Health Care Financing Administration ofHHS. Medicaid essentially serves four populations: low-income families that lack health insurance, elderly people who need help with medical care, disabled elderly individuals who need long-term care, and nonelderly disabled individuals who need critical and long-term care. Benefits and coverage are different in each State. Exhibit 10 contains a more detailed description of Medicaid eligibility criteria. Since 1982 Medicaid expenditures have grown nearly four-fold to total an estimated $120 billion in 1992. Exhibit 6 provides annual Medicaid expenditure information beginning in fiscal year 1982. 88 89 90 91 92* FISCAl YEARS 1982· 1992 *ESTIMATE 9 What are your frustrations with the welfare system? "When a client receives a raise in food stamps, the welfare check is reduced. When a client finds employ-ment their food stamps, housing, etc. are cut. Never a chance to get ahead just a little." 10 - A Public Assistance Recipient Kansas City, KS in response to a survey about welfare 25 20 15 10 0 Participation in the Medicaid Program has grown by over 40 percent since 1982 to reach 30 million recipients in fiscal year 1992. Exhibit 7 illustrates Medicaid participation levels for fiscal years 1982 through 1992. Appendix B describes in detail e ligibility requirements, population characteristics, and expenditure and participation trends for the Medicaid Program. • Federal Housing Assistance Programs The two major forms of Federal housing assistance are the Public Housing Program and the Section 8 Program. Similar to other assistance programs, public housing and Section 8 housing assistance are available only to people with low income. However, unlike other assistance programs, housing is not available to everyone who needs it and is qualified to receive it. Generally, housing authorities maintain waiting lists of eligible applicants and in some of the larger urban areas, the waits can be 4 to 6 years long. Exhib· it 10 contains a more detailed description of eligibility criteria for housing assistance programs. EXHIBIT 7 MEDICAID PROGRAM TOTAl PROGRAM PARTICIPATION 82 83 84 85 86 87 More than 5 million families participated in housing assistance programs during fiscal year 1992. Exhibit 8 provides participation information for housing assistance programs for fiscal years 1982 through 1992. Housing assistance programs are financed by the Federal Government through HUD, and administered by local Public Housing Authorities. In fiscal year 1992 more than $18 billion was spent on Federal housing assistance programs. Exhibit 9 illustrates expenditure patterns for housing assistance since fiscal1982. • The Public Housing Program The Public Housing Program was created under the U.S. Housing Act of 1937 to provide adequate "temporary shelter" in a decent environment to families who could not afford housing on the private market. For many families, however, the transition from public to private housing is met with a myriad of difficulties and therefore it is not uncommon to find third- and fourth-generation families residing in public housing. Over its 56-year history, the Public 88 89 90 91 92 FISCAl YEARS 1982· 1992 4 Housing Program has been the Nation's largest assisted housing program. As ofjanuary 1993, more than 1 million families lived in public housing EXHIBIT 8 HOUSING ASSISTANCE PROGRAMS TOTAL PROGRAM PARTICIPATION HOUSEHOLDS IN MILLIONS 82 83 84 85 86 87 around the country. Eligibility is based on income and family composition. More detail on eligibility criteria is located at Exhibit 10. 5.5 5.5 88 89 90 91 92 FISCAL YEARS 1982· 1992 EXHIBIT 9 HOUSING ASSISTANCE PROGRAMS TOTAL PROGRAM EXPENDITURES* 82 83 84 85 86 87 88 89 90 FISCAL YEARS 1982· 1992 *INCLUDES HUD PROGRAMS AND FARMERS HOME ADMINISTRATION PROGRAM FOR RENTERS. 91 92 11 AFDC • Eligibility is determined on the basis of the family's circum· stances in the current month. • Needy children to age 18 deprived of parental support or care because their father or mother is absent from the home continuously, is incapacitated, is deceased or is unemployed (AFDC-UP). Eligibility for AFDC·UP is limited to families who are needy because of the unemployment of the principal earner who has a work history. • Certain other family members in the household of such a child and, at state option, others who are deemed essential to the child's well being. • The State may opt to provide benefits to age 19 if the child is a full-time student in a secondary or technical school and can be reasonably expected to complete the program before reaching age 19. • Strikers are ineligible for any month if they are striking on the last day of that month. If the striker is a relative-caretaker, the whole family is ineligible. • Eligible aliens are specifically defined. SAVE procedures are used to determine alien eligibility. • Women with no children who are medically verified as preg· nant may receive benefits beginning in the sixth month of their pregnancy. • SSI recipients are excluded from the AFDC unit. • As a condition of AFDC eligibility, a child's right to support payments from an absent parent is assigned to the State child support agency, which uses such payments to reimburse the State AFDC Program. If the monthly child support payment exceeds the AFDC benefit, eligibility for AFDC is lost and the right to support payments reverts back to the child. • AFDC recipients are automatically eligible for Medicaid and free school meals. • Individuals who lose AFDC eligibility due to increased earn· ings, increased hours of work, or loss of income disregard are eligible for up to 12 months of transitional child care and medical assistance. Coverage may be extended for an additional 6 months. • AFDC recipients are required to participate in a State JOBS program, subject to specific exemptions. 12 FOOD STAMPS • Households that meet financial, employment/training-related, and categorical tests for eligibility; and • College students, if they are supporting dependents under the age of six, receiving AFDC, elderly or disabled, or working at least 20 hours per week {or under a Federal work-study pro· gram). • Most AFDC, SSI and general assistance recipients are auto· matically eligible. • SSI recipients in California are ineligible. Their SSI grants include an additional amount designated as food stamp benefit. • Persons on strike are eligible only if they were eligible before the strike. Benefits cannot be increased based on a reduction in income caused by the strike. • Eligible aliens are specifically defined . SAVE procedures are used to determine alien eligibility. • Individuals living in institutional settings are ineligible. • AFDC families with a 1 00% overlap between the family unit and the food stamp household unit are categorically eligible for food stamps. HUD-SPONSORED HOUSING • All lower income households. • The number of families that may be assisted at any one time is limited by appropriation . Therefore, families are served on a first-come, first-served basis, after Federal and local preferences are taken into account. • Participation by single persons who are not elderly, handicapped or disabled requires HUD approval and is limited to 15% of the units within the jurisdiction of the local PHA. MEDICAID Categorically Needy • AFDC and SSI recipients, as well as other AFDC-related groups who do not actually receive cash payments, are automatically eligible in most States. • 209(b) States limit their Medicaid coverage of SSI recipients by requiring that they meet certain more restrictive criteria that was in place before SSI was implemented in 1972. Also: • Pregnant women and children up to age 6 with family income below 133% of Federal poverty level; • All children under age 19 who were born after September 30, 1983 in families with incomes at or below 100% of Federal poverty level. This phases in coverage for all eligible children up to age 19 by the year 2002; Infants born to Medicaid-eligible pregnant women; • Additional groups of aged, blind, or disabled persons if they meet requisite criteria for SSI; • Certain Medicare beneficiaries; and • Protected groups (individuals who lose cash assistance because of program rules, but may keep Medicaid for a period of time). Optional Categorically Needy Medicaid coverage is optional for other categorically needy groups who share characteristics of mandatory groups, but have more liberally defined eligibility criteria. They include: • Pregnant women and infants under age 1 with incomes above 133% of Federal poverty level but below State-established maximum; • "Ribicoff Children" -children younger than age 21 who meet AFDC income and resource requirements but not the definition of dependent child; and • Those not receiving SSI but are receiving State-only supplementary cash payments. Medically needy {Optional for States) • Persons who do not meet income or resource standards. This must include children younger than 18 and pregnant women not categorically needy, and may include others {e.g., aged, blind, disabled persons). • As of 10/91, 41 States have medically needy programs. Two States exclude aged, blind, disabled. • The medically needy are subject to means testing. 13 AFDC • $1 ,000 equity value limitation per family (or lower amount determined by the State). • The resources and income of an alien's sponsor are deemed available to the household for 3 years following alien's entry into the U.S. Excludable Resources • Home owned and occupied by the AFDC family; • One automobile if the family member's ownership interest doesn't exceed $1,500 (or a lower amount set by the State); • One burial plot per family member and funeral agreements with maximum equity value of $1,500 for family members; • Basic items essential to daily living; and • For 6 months (9 months at State option) real property which the family is making good-faith effort to sell, under specific conditions. Other Resources Excluded by Federal Statute • Resources that are jointly owned and inaccessible, as determined by State law. 14 FOOD STAMPS • Resource limit for a household with an elderly member is $3,000. Otherwise the limit is $2,000. • Counted liquid assets include cash on hand, checking and savings accounts, savings certificates, stocks and bonds, IRAs, funds in Keogh plans, and non-recurring lump-sum payments such as insurance settlements. Also counted is the fair market value in excess of $4,500 for vehicles and the equity value of property not producing income consistent with its value (recreational property). • The resources and income of an alien's sponsor are deemed available to the household for 3 years following alien's entry into the U.S. Excludable Resources • Household's home and surrounding property; • Household goods; • Property, work related equipment, or installment contracts that produce income or is the essential employment of household members; • Government disaster payments designated for the restoration of a home; • Cash value of life insurance policies; • Resources, such as trust funds or security deposits, that are not accessible to household; • Personal effects, including one burial space per household member; and • Other resources expressly excluded by Federal statute. • The value of a vehicle is excluded if it is used to produce income, is necessary for employment, is used to transport a disabled household member or if its fair market value is less than $4,500. If the equity value of any vehicle (other than the household's only vehicle and any vehicle used for getting to work) is greater than the fair market value in excess of $4,500, the equity value is counted towards the $2,000 (or $3,000) overall resource limit. Resources Prorated as Income • Indian lands held jointly with the tribe; .• Certain energy assistance payments; • Property related to the maintenance of a vehicle; and • Resources of any household member receiving AFDC or SSI. HUD-SPONSORED HOUSING There is no explicit limit on resources. If net family assets exceed $5,000, the greater of the actual income from assets or an amount equal to the value of the assets multiplied by the passbook savings rate is counted as income. MEDICAID • Resource limits are the same as SSI in non-209(b) States. • 209(b) States use selected more restrictive criteria that were in effect before SSI was implemented. • Resource standards for the medically needy are set by the State. • A State's definition of countable resources must be: - reasonable; - based on family size; and - uniform for all individuals in a group. • States may be more liberal with Medicaid than with SSI. Resource Limit for 551 and Medicaid • $2,000 for individual, $3,000 for couple. {No annual inflation adjustment). Levels may be the same or higher in States providing supplemental payments. • Qualified Medicare Beneficiaries (QMB's) resource limits are twice SSI's $4,000 for individuals, $6,000 for couples. Excludable Resources • Individual's home, if he/ she is living in it or intends to return to it; • Household goods and personal items up to $2,000; • A car; • Burial account up to $1 ,500; • Burial space. 15 AFDC • All income is counted except when specifically excluded by statute or regulation. • Income of certain persons who are not in the assistance unit must be deemed to the assistance unit. Income of a stepparent must be counted in determining eligibility and payment amounts. • 'The AFDC assistance unit also includes the parent(s} of a dependent child and any dependent siblings who are in the home (SSI recipients and children receiving foster care payments or adoption assistance are not included in this requirement}. • If a minor who is living in the same home as his/her parents applies for aid as the parent of a needy child, a portion of the income of the minor's parents is to be counted as available to the filing unit. • Total income cannot exceed 185% of the State's need standard for the relevant family size. • Countable income must not exceed 1 00% of the State need standard. Approximately 37 States pay less than the amount of their need standard - and use several methods to limit the amount of the payment. An AFDC payment cannot be less than $10. Families that do not meet the minimum payment rule are treated as AFDC recipients and receive Medicaid benefits. • The State may disregard need-based assistance received through other programs (most States do}. • Earned income in-kind is counted . • Unearned in-kind income may be disregarded at State option. Earned Income Exclusions • Income of an AFDC dependent child who is a full-time student, or a part-time student but not employed full-time is excluded. • States may, for up to 6 months, disregard all or part of income of a child applying for AFDC, if earnings are excluded for the month in determining the family's total income pursuant to the 185% gross income eligibility test. Income from JTPA programs by a dependent child applying for AFDC may also be disregarded. • Earned income disregards are applied to earnings of individual, not the family. 16 FOOD STAMPS • Except for households composed entirely of SSI, AFDC, or general assistance, monthly cash income is the primary eligibility determinant. • Household, rather than individual, income is considered . • Households without elderly or disabled members must have monthly gross income of less than or equal to 130% of the Federal poverty income guidelines. • Only net income is considered for households with an elderly or disabled member. An elderly or disabled member is one who is 60 years old or older or receives one of several disability payments including SSI, Social Security, Railroad Retirement, government disability retirement benefits, and certain Veteran's Administration payments. • All households must have a monthly net income of less than or equal to 100% of the Federal poverty guidelines. • Income limits vary by household size and are adjusted each October to reflect changes in the cost of living. Gross income includes all of a household's cash income, except the following: Excludable Income • In -kind benefits; • Unanticipated or irregular income (not greater than $30 per quarter}; • Scholarships, grants, loans, non-recurring lump-sum payments (counted instead as liquid assets}; • Loans (except student loans}on which payment is deferred; • Earned income of students under age 18; • Cost of producing self-employment income; • Certain energy assistance payments; • Federal Earned Income Tax Credits; • "On-the-job" training earnings of dependent children under age 19 in JTPA, as well as JTPA monthly allowances and all unearned JTPA payments; • Income received from the care of someone outside the household; • Reimbursements for certain expenses; • Most payments made to third parties (rather than directly to the household; HUD-SPONSORED HOUSING • Housing is targeted to "lower income" families- with anticipated annual family incomes of not greater than 80% of median income in an area and "very low income" families- with incomes not greater than 50% of median area income. • Income eligibility is based upon family size and area median income guidelines as determined by HUD. • Where decent, safe and sanitary housing is not provided in Indian land areas, the Indian Housing Authority may request HUD to increase income limits for Indian families and individuals. • Eligibility and rental charges are based on countable family income expected in the 12 months following admission or reexamination . Reexamination is required annually Countable income includes cash income from all sources, including income from assets. Excludable Income • Payments under the Domestic Volunteer Service Act; • Irregular gifts; • Reimbursements for medical expenses; • Lump-sum additions to family assets; • Scholarships; • Earnings of children; • Payments for care of foster children; • Relocation payments; • Low-income Home Energy Assistance; • JTPA benefits; • Interest in Indian trust lands; • Earned income tax credit; and • Hazardous-duty pay. Deductions • $400/year for elderly families plus medical expenses in excess of 3% of income; • $480/year for each household member younger than 18, 18 or older and disabled, or a full -time student; • Child care expenses up to the amount of the resulting earned income; and • The higher of child care and travel expenses up to $25 per family per week (for Indian Housing only). MEDICAID • Includes earned (cash or in-kind) and unearned income (SS or VA benefits). • Medically needy income limits cannot exceed 1331 /3% of the maximum State AFDC payment made to a family of the same size with no income. • If income is above the limit, the individual or family may still be eligible through a spend-down provision - where they may deduct any medical expenses incurred over a period of 1 to 6 months from income. When net income falls below the income limit after medical expenses are deducted, the family or individual becomes eligible. • Income limit for nursing home and waiver populations can be increased up to 300% of maximum SSI payment level. • For Qualified Medicaid Beneficiaries (QMB), 1991 eligibility set at 1 00% of Federal poverty level. Countable Income • Is the same as countable income under AFDC for individuals under age 21 who are not disabled or blind and caretaker relatives; • Is the same as countable income under SSI for aged, blind, or disabled individuals in States covering all SSI recipients; • 209(b) States can use more restrictive income criteria but are required to have a spend down provision; • The State may be more liberal than the above descriptions. Countable Income Under SSI (and Medicaid) • Includes cash, other liquid assets, and non-liquid assets; and • Eligible spouse's resources, except when couple is separated. Excludable lncome!SSI • $20/month; • First $65 of earned income; • 1/2 of remaining income; • $1,500 of life insurance proceeds; • Cash payments for medical or other social services; • Housing assistance under most HUD-assisted programs; 17 AFDC • Standard $90 for work-related expenses; • $30 and 1/3 of remaining earned income during the first 4 consecutive months of earnings - $30 deduction available for 8 more consecutive months; • $175/month per child for dependent care expenses ($200 under age 2) or incapacitated adult; Excluded Unearned Income • First $50 of monthly child support payments; • Educational grants and loans; • Value of Child Nutrition and Dept of Agriculture benefits; • Payments to VISTA workers and some Indian tribes; • Payments made to AFDC children from State-only funds under a State program in effect since before January 1, 1979; • Reimbursements for expenses made to volunteer foster grand-parents, senior health aides, or senior companions; and • Agent Orange settlement payments; • Earned Income Tax Credit payments; • Income tax refunds; • LIHEAP payments; • Small non-recurring gifts not to exceed $30 per individual in any quarter (at State option); • Governmental housing subsidies {at State option); • Bona fide loans at State option; • Major disaster assistance; and • All other payments that are required by Federal statute to be excluded under Federal or Federally assisted means tested programs. 18 FOOD STAMPS • Cash donations not to exceed $300 from private nonprofit charities; • Employment and training-related payments; and • Certain foster care payments. • At State option and cost, the amount of child support payments excluded under AFDC may also be excluded for food stamps. • Counted {or net) monthly income is computed by subtracting certain deductions from household's gross income. It recognizes that not all of a household's income is equally available for food purchases by disregarding a standard portion of income, plus amounts which represent work expenses or excessively high non-food living expenses. Deductions lrom Income • An inflation-indexed standard deduction of $122/month (in 1992), regardless of household size; • 20% of any earned income; • Up to $160/month for dependent care; • Medical deduction for households with elderly or disabled members equal to monthly medical expenses above $35; and • Shelter costs exceeding 50% of counted household income after all other deductions, up to a ceiling of $194/month in 1992 {no limit for elderly or disabled households. Households without elderly or disabled members have a ceiling). HUD-SPONSORED HOUSING MEDICAID • LIHEAP payments; • Infrequent or irregular earned or unearned income (less than $1 0 or $20/month, respectively); and • Receipts from reverse mortgages if spent in month received. 19 What are your frustrations with the welfare system? "It seems that clients who try to work and make it, get punished by losing their food stamps, Medicaid, etc." 20 - A Public Assistance Recipient Kansas City, KS in response to a survey about welfare 15 10 • The Section 8 Housing Program The Section 8 Housing Program is made up of the rental certificate and rental voucher programs. The rental certificate program was enacted by Congress in the Housing and Community Development Act of 1974. It represented a shift in Federal housing policy from direct Federal financing for Public Housing Authority-owned public housing and placed emphasis on the private rental market to supply decent, safe, and sanitary housing. The rental voucher program was authorized as a demonstration program under the Housing and UrbanRural Recovery Act of 1983. It was viewed as an improvement over the rental certificate program to more closely reflect actual private rental market operation. In 1988, legislation was enacted to make rental vouchers a permanent part of the Nation's hous-. ing policy. As of january 1993, approximately 1 million families participated in the Section 8 Program. EXHIBIT 11 The Cost of Administering the Programs The Committee believes that the costs incurred in administering public assistance programs cou"Id be lowered dramatically by consolidating or coordinating program requirements. When a person in need has to be interviewed by the eligibility workers of different programs, at different times, providing much the same information to each, it wastes the time of both the caseworker and the client. • AFDC Program The Federal Government matches most State expenditures for operating the AFDC Program at a rate of 50 percent, regardless of the amount the States spend. Since fiscal year 1983, annual operating expenditures for AFDC have averaged $2.1 billion. In 1992, States and the Federal Government spent $2.6 billion (12 percent of total expenditures) to administer $21.9 billion in AFDC grant payments. Exhibit 11 TOTAL MAINTENANCE ASSISTANCE PAYMENTS AND TOTAL ADMINISTRATIVE COSTS FISCAL YEARS 1983 · 1992 • ADM. COSTS • MAIN. ASSIST. PAYMENTS 20 15 10 depicts annual operating expenditures as compared to overall expenditures for fiscal years 1982 through 1992. • Food Stamp Program States (and counties in 10 States) and the Federal Government share equally in the cost of administering the Food Stamp Program. Administrative expenditures for the Food Stamp Program have averaged around $1 billion annually since fiscal year 1983, approximately 7.5 percent of total program expenditures. Exhibit 12 illustrates annual program administrative expenditures in contrast to total annual expenditures. The Federal Government spent approximately $1.4 billion (7 percent of total expenditures) in 1992 to administer $20.9 billion in food stamp benefits. • Medicaid Program States and the Federal Government share in the cost of administering the Medicaid Program. EXHIBIT 12 FOOD STAMP PROGRAM FEDERAL SHARE ADMINISTRATIVE AND TOTAL EXPENDITURES 83 84 85 86 87 In 1992, States and the Federal Government spent $4.28 billion (3.5 percent of total outlays) of the program's total $120 billion on program administration. Annual administrative expenditures for the Medicaid Program have grown by more than $2.4 billion since fiscal year 1984 to an average of $309 million a year. Since 1984, Federal contributions to administrative costs have averaged $1.6 billion; State contributions averaged $1.2 billion. Exhibit 13 illustrates total annual State- and Federalshare administrative expenditures for the Medicaid Program. Exhibit 14 compares total program expenditures for each of the 4 programs for fiscal years 1982-1992. Exhibit 15 depicts participation trends for each program from fiscal years 1982-1992. 88 89 90 91 92 FISCAL YEARS 1983 - 1992 • ADM. COSTS • TOTAL COSTS *INCLUDES FEDERAL SHARE ONLY. STATES MATCH ADMINISTRATIVE COSTS AT 50%. 21 EXHIBIT 13 MEDICAID ADMINISTRATIVE EXPENDITURES 4 0 84 85 86 87 88 89 90 91 92 FISCAl YEARS 1984 - 1992 • STATE SHARE • FEDERAl SHARE EXHIBIT 14 TOTAL PROGRAM EXPENDITURES 82 83 84 85 86 87 88 89 90 91 92 FISCAl YEARS 1982- 1992 HOUSING PROGRAMS • FOOD STAMPS* • AFDC *EXClUDES NATIONAl lEVEl ANNUAl COSTS FOR PRINTING OF COUPONS, STUDIES, AND SURVEY COSTS 22 "The hurdles which families have to scale in applying for help are iust immense. They often must travel to different agencies, meet different eligibility standards, and abide by different rules and regulations." - Representative Bill Emerson, MO Hearing before the Select Committee on Hunger U.S. House of Representatives April 23, 1991 25 20 15 10 0 EXHIBIT 15 TOTAL PROGRAM PARTICIPATION 82 83 84 85 86 87 88 89 90 91 92 FISCAL YEARS 1982- 1992 HOUSING PROGRAMS** • AFDC* • FOOD STAMPS* • MEDICAID* Multiple Program Participation * RECIPIENTS Most people who receive needs-based benefits receive assistance from more than one program. The chart below shows the percentage of persons in each of the four major assistance programs that receive benefits from multiple programs. Participation in AFDC, Medicaid, and the Food Stamp Program is clustered tightly: • Everyone who receives AFDC is eligible for Medicaid; • Nine out of 10 AFDC recipients receive food stamps; • Two out of three Medicaid recipients receive food stamps; • Three out of four food stamp recipients receive Medicaid; and • One-fourth of those receiving AFDC also receive housing assistance. ** HOUSEHOLDS The relationship between housing assistance and the other programs is not as apparent. About half of all households that receive housing assistance also receive Medicaid; about half receive food stamps and one-third receive AFDC. Mathematica Policy Research• examined the participation of low-income households in 17 different programs using the 1984 Survey of Income and ~rogram Participation. Among the findmgs were: • Households of different types varied in their receipt of multiple benefits. While most low-income households (those with gross incomes below 130 percent of the poverty line) participated in at least one program, about one in four households did not participate in any program. These households tended to be intact families with children. 4. Spha 1 ronRLong, Multiple Program Participation Among Food Stamp Recipients, (Washington DC: Mathematica o 1cy esearch, February 1988). ' 23 24 MULTIPLE PROGRAM PARTICIPATION JANUARY 1991 PERCENT OF INDIVIDUALS WHO RECEIVE: AND THOSE WHO RECEIVE: ASSISTED FOOD STAMPS AFDC MEDICAID HOUSING FOOD STAMPS 100 90 65 51 AFDC 50 100 49 35 MEDICAID 74 100 100 53 ASSISTED 30 24 27 100 HOUSING TOTAL PERSONS 18,143 10,018 20,481 (IN THOUSANDS) 10,505 Source: Survey of Income and Program Participation (SIPP), Wave 4 of the 1990 Panel. Notes: SIPP is a household survey that re lies on self-reported participation in programs. As such, benefit receipt is underreported. Percents do not sum to 100 percent due to multiple program receipt by individuals. • Multiple program participation is much more frequent among food stamp households than among the general low-income population. • Non-food stamp nutrition programs were among the most frequently used benefit programs for both food stamp households and the general low-income population. • The three multiple benefit combinations most frequently used by food stamp recipient households all include AFDC and Medicaid. Female-headed families with children are the typical recipients of this package. • Multiple benefit receipt by food stamp households is very effective in reducing the poverty gap for those households. • The extent to which the needs of different types of households are met by the available assistance programs varies substantially. • Previous Attempts at Coordination and Simplification The need for program coordination and simplification was recognized decades ago. Numerous attempts have been made since the late 1960's to overhaul or repair a system that seemed to be rapidly careening out of control. From our perspective in 1993, we can look back and see that the system, or collage of programs serving the needy, has become an unwieldy monster. More significantly, we can see that without dramatic change it is almost certain that reports such as this one will continue to be presented to Congress long into the future. Since the early cries of alarm some progress has been made in bringing assistance programs into closer conformance with one another and in improving access to them (see chapter V). To a far greater extent, however, differences, both large and small, have thrust the programs into their own individual orbits-connecting, at the Federal level, only when there was a specific legislative mandate to do so. Twenty-two years ago, Elliot Richardson, former Secretary of what was then the Department of Health, Education, and Welfare (HEW) recognized that most programs were suffering from a "hardening of the categories." In 1977 former HEW Secretary Joseph Califano made a similar observation: "Given the vast resources this Nation spends on income assistance, it is appalling that our programs are so poorly coordinated, that these programs unfairly exclude millions from adequate aid ... and that they are an administrative jungle, incomprehensible to legislators, administrators, and the American people alike." It is clear that ample attention has been devoted to analyzing the dynamics of program interactions. Inconsistencies, duplication, barriers to participation, and other problems have been identified over and over again. This Committee does not intend to repeat this process but, rather, has chosen to review the studies and reports, and learn from them. As a precursor to its work, the Committee felt it imperative to review these efforts and their fates. • One of the earlier attempts to reform the system was the Family Assistance Plan (FAP). Initially introduced in 1969 and again in 1971, this legislation included universal coverage and a significant work component. This measure was proposed by the Administration of President Richard Nixon, who believed that, "Hard work is what made America great" and that any work was preferable to public assistance. A report released by the House Ways and Means Committee explained the motivation of the bill's supporters in the Congress. The Committee reported it believed "that the American people do not want a system which results in promoting welfare as a way of life." As a result, it "developed a program which is in the interest of the taxpayer as well as the needy." Under FAP, a minimum income ($2,400 for a family offour in 1970) would have been established. It included a provision for assistance to the working poor with the proviso that employable parents, including mothers, work. Families exempt from work and the training provision would get the same amount under FAP, except that persons considered eligible for rehabilitation would be referred to State vocational rehabilitation agencies and receive $30 per month as an incentive allowance and for expenses. Benefits would be reduced if they failed to comply. Drafters of the bill recognized the lack of child care would be an obstacle for mothers to work. Therefore, funding was included for child care facilities and services. The bill increased funding to enforce child support collections and called for Federal family planning services. It included no provision for cost-ofliving increases and there was no requirement that States pay supplementary assistance. Also, States would not have to pay more for Medicaid than they paid in 1971. Consequently, some recipients of aid would stand to lose under FAP. 25 "We have tinkered on the edges of this nonsystem-we've tried to deal with individual parts of it over the past 1 0 or 15 years-and it has only gotten worse. If you only take on one piece of it at a time without creating the environment for sys-fernie change, you're likely to have unintended consequences that make the problem even worse." 26 - Hillary Radham Clinton on health care reform • In December of 1973 the staff of the Joint Economic Committee, chaired by Congresswoman Martha Griffiths, undertook an extensive study of the public assistance system. It resulted in 20 volumes addressing a variety of aspects of the system, including coordination issues. • The Allied Services Act was a proposal put forth as legislation in 197 4 and again in 1975, but never enacted. The bill would have authorized demonstration grants to States and through States to localities, to develop "allied services plans" providing for the coordinated delivery of human services. Special implementation grants would have been available to assist in covering the initial costs of consolidating administrative support services and management functions. The Act would have permitted States to transfer funds from one program to another for similar uses. Administrative and technical barriers between programs could have been waived by the Secretary of HEW when they impeded coordinated delivery of services. • Former President jimmy Carter was so impressed with the need for a more efficient, effective public assistance system he made it a key theme of his 1976 campaign: We should have a simpler national public welfare program, with one fairly uniform standard of payment, adjusted to the extent feasible for cost-ofliving differences by areas and with strong work incentives built in .... On january 25, 1977, at one of his first press conferences, the new President announced that joseph Califano, his selection for Secretary of HEW, would present him with a comprehensive plan to reform the public assistance system by May 1 of that year. With this extremely tight timeframe Secretary Califano launched a major effort to identify problems with the Nation's income assistance programs and recommend solutions. A 32-member consulting group consisting of representatives of the Congress, executive branch agencies, State and local government officials, public assistance recipients, and public interest organizations was appointed. The group conducted weekly public meetings to consider the public assistance system. Attendance ranged between 100 and 200 each week. Opinions were solicited from every governor and Member of Congress and more than 200 State and local government officials and experts in social welfare. More than 10,000 newspapers, radio and television stations, journals, and magazines were contacted. One hundred forty-five meetings were held, including 70 open town meetings. More than 15,000 individuals or organizations offered input. The findings? In his report to the President, Secretary Califano wrote that: One central conclusion emerges from our work to date: The welter of programs that are collected under the rubric of the 'welfare system' must be scrapped. Major structural reform of our income assistance programs for the poor is necessary if we are to encourage work wherever possible, provide basic income protection for those who are unable to provide for themselves, provide incentives for keeping the family together, and simplify and make more efficient the basic administrative structure. In his recommendations the Secretary wrote, My basic recommendation ... is that tinkering with the present system-trying to make incremental changes in the existing hodgepodge of income assistance programs-is not the proper course to follow. We must, instead, view the income assistance system as a whole and we must completely restructure the system so that it is comprehensive, fair, and efficient. Given the inequities and administrative chaos caused by a welter of inconsistent and confusing programs, nothing less than a total effort at welfare reform will do. Guidelines for a legislative proposal included a consolidated cash assistance component that would encompass AFDC, Supplemental Security Income (SSI) benefits, and food stamps. "Such a consolidated cash assistance program would reduce leakage, simplify existing administrative structures, and make income assistance more understandable to officials and recipients alike." • In December 1978, President Carter called for an interagency effort to analyze and recommend improvements in the eligibility requirements and administrative procedures of Federal public assistance programs. The programs under review included AFDC, SSI, food stamps, Medicaid, Title XX, Section 8 Housing, and the Comprehensive Employment and Training Administration. President Carter's hope was that the review would "produce recommendations which will lead to more consistent and less burdensome government-wide practices to make the eligibility determination process simple, understandable, and efficient.. .. " The Eligibility Simplification Project Steering Group was comprised of assistant secretaries directed by the Secretary of HEW and the Director of the Office of Management and Budget. The scope of the project was limited in two ways. First, the team analyzed only the factors in each program that affected financial eligibility requirements and procedures, not those related to the amount of benefits or services the programs would provide. Second, analyses were limited to Federal requirements, not those imposed by State or local governments. The project involved an exhaustive study of all eligibility requirements and procedures governing eligibility determination in the seven programs. Requirements were broken down to the smallest possible units of analysis to facilitate cross-program reviews. For example, 130 discrete elements of income were identified. Options to standardize or eliminate requirements were evaluated against this set of criteria: • impact on program purpose; • program and administrative costs; • responsiveness to clients; and • potential for reducing waste, lowering error rates, and improving understanding. In October 1980 a final version of the report was published, including recommendations for specific changes which would "reduce the conflicting and unnecessarily burdensome and duplicative eligibility requirements .... " Because of the change in Administrations the next year, the recommendations were not championed and most were never adopted. • State and local human service commissioners, brought together by APWA completed work on their Matter of Commitment Project in 1986. The commissioners conducted a comprehensive review of public assistance programs to find ways to transform that system into a means of achieving self-sufficiency. Recommendations in the project's report, One Child in Four, emphasized the need to change assistance programs into vehicles for selfsufficiency for as many recipients as possible. The report called for a set of mutual obligations between public assistance agencies and clients, opportunities and incentives for education and job training, and a realistic base of income support. Many of the principles in the report were reflected in the Family Support Act of 1988, sponsored by Senator Daniel Patrick Moynihan. The Commissioners also recommended establishing a Family Living Standard (FLS)-a nationally mandated, State-specific cash grant that would take the place of AFDC, food stamps, and Low-Income Home Energy Assistance Program payments. While the Family Support Act did not include the FLS, it did require a study of this and alternative benefit formulas by the National Academy of Sciences. This study is now in progress. • In his 1986 State of the Union Address, President Ronald Reagan directed the White House Domestic Policy Council to study the public assis- 27 28 tance system and to propose a strategy to change the system so that it would better serve the poor. In response to this charge, the Council's Low Income Opportunity Working Group made an extensive year-long study of public assistance and poverty in the Nation. The Working Group, comprised of officials from Federal agencies that manage public assistance programs and led by the White House Office of Policy Development, consulted current and former public assistance recipients, eligibility workers, local political leaders, and many of the Nation's governors. The result of its work was a series of reports entitled Up From Dependency: A New National Public Assistance Strategy. The group looked at public assistance as a recipient would, as a system rather than as a series of unconnected programs. It felt that the weaknesses that characterize a centralized system-rulemaking from the top down, failure to develop individual potential, and failure to utilize local resources-contribute to the persistence of poverty. The group held that national solutions to dealing with poverty have failed and that the only answer is to find solutions in our neighborhoods, communities, and States. It recommended using the States as laborato-ries to experiment with reforms on a small scale, before proposing systemic change at the national level. The cornerstone of the Up From Dependency recommendations is longterm experimentation through demonstrations that are both community-based and State-sponsored. The Federal Government would articulate policy goals and define parameters for any reform experiment and maintain current levels of financing. Recognizing the extensive amount of experimentation already proceeding in States and communities, the group cautioned against proposing "national" welfare reforms unless they had been locally tested. The Interagency Low Income Opportunity Advisory Board was formed by the White House in 1986 to enhance coordination of public assistance programs and policies across Departmental lines and create a focal point for intergovernmental coordination of public assistance initiatives. • When the National Commission on Employment Policy undertook a "coordination project" to review the interaction of public employment programs, it discovered that interaction was hampered by the lack of coordination of public assistance programs in general. The target of review was broadened, to encompass all needs-based programs. "Administrative convenience must no longer govern service delivery. Health, social service and education providers must modify 'business as usual' to collaboratively meet the needs of individual adolescents and their families. " - National Commission on the Role of the School and the Community in Improving Adolescent Health, Code Blue: Uniting for Healthier Youth National Association of State Boards of Education, 1990 At a series of seminars during the spring and summer of 1991, the Commission heard from almost 200 people involved at all levels of the public assistance system. The Commission also engaged in extensive information collection and analysis. In October 1991 the Commission sent its recommendations to the President and Congress. Recommendations to the President included: • expand authority of the Economic Empowerment Task Force to resolve problems affecting design and implementation of Federal assistance programs; • direct the agencies that administer public assistance programs to develop a common framework for streamlining eligibility requirements, formulating standard definitions, and easing administrative and documentation requirements; and • combine the many programs that provide employment and training services to the economically disadvantaged into one agency. The Commission recommended that Congress: • assign responsibility for legislation and oversight over public assistance programs to a single Committee on Public Assistance in each Chamber; • work with Executive Branch agencies to develop a common framework for streamlining eligibility requirements, formulating standard definitions and poverty measures, and easing administrative and documt;: ntation requirements; • enact legislation to establish human resource councils at the State level to foster coordinated program approaches; and • require that an economic, fiscal, and institutional analysis be conducted for each congressionally authored institutional reform or adjustment in Federal assistance programs. Why Have Previous Efforts Failed? All of the attempts to simplifY and coordinate the programs have encountered obstacles. Chief among these have been differences in the goals of reform efforts, the cost of program changes, a reluctance to lower benefits in one area (even if benefits may increase in other areas), support for program differences, and the relatively low priority given to simplification issues by the Congress. • 1. Different Reform Goals Reform efforts in public assistance have run the gamut from attempts to overhaul the entire structure for assisting low-income persons to endeavors to conform and simplifY program rules. A consensus has never been reached on whether the existing set of programs should be replaced or retained and improved by making their rules more consistent and straightforward. This lack of consensus has resulted in a diffusion of effort and attention. • 2. Budget Impacts Any change in program eligibility requirements or benefit levels affects program costs and the benefit amounts of individuals. In fiscal year 1991 AFDC and Food Stamp Program benefit payments totaled $37.3 billion. Given the fiscal magnitude of these programs, a change in program parameters can. beget significant budgetary consequences. For example, raising the AFDC asset limit from the current $1,000 to the $2,000 Food Stamp Program limit would allow more people to get AFDC. In fiscal year 1992 such a move would have increased AFDC costs by $135 million (Food Stamp Program costs would have fallen by $4_9 million because these people would have had higher incomes for the purpose of food stamp benefit determinations). In addition, since the new AFDC recipients would be categorically eligible for Medicaid, costs for that program would increase. Lowering the Food Stamp 29 "Private values must be at the heart of public policies." 30 - Former President Ronald Reagan State of the Union Address February 4, 1986 Program asset limit to the $1,000 AFDC threshold would save $250 million because fewer people would be eligible. If AFDC were to adopt the more liberal Food Stamp Program rules on counting the value of vehicles in determining asset eligibility, AFDC costs would increase by $700 million because more people would qualify for assistance (Food Stamp Program costs would decrease by $200 million, based on fiscal year 1992 estimates by FNS). Medicaid costs would also rise with the increase in the AFDC numbers. Proposals to consolidate programs or streamline eligibility determinations are sometimes crafted to be budgetneutral by balancing costs and savings. While this leaves average benefit levels unchanged, it creates groups of winners and losers. In the early 1970's, welfare reform efforts such as President Nixon's proposed Family Assistance Plan focused on creating a national cash welfare system with uniform eligibility and benefit levels. Such proposals would have established benefit levels higher than some State AFDC grants and lower than others. These benefit levels were opposed by client advocates from high-grantAFDC States who did not want to see people get less aid and also by interest groups from low-grant AFDC States who did not want to see more people added to the public assistance rolls. The proposals failed. In the Food Stamp Act of 1977, the Congress attempted to simplify the benefit determination process by reducing the number of separate income deductions that eligibility workers must establish and compute. A proposal to simplify the process by replacing the individualized excess shelter expense deduction with a larger standard deduction for all households was tabled by legislators from States with higher housing costs (and constituents who benefit from the individualized computation). A similar proposal submitted by the USDA in 1983 failed, again because a higher standard deduction-while not changing average benefitS-would create winners and losers and there was reluc-tance to lower benefits for households with higher shelter cost burdens. • 3. Financial Choices Financial resources for these programs are limited and subject to many competing demands. Congress has not chosen to invest in changes to better align the programs. While in recent years Congress has increased food stamp benefits, the additional monies have been targeted at raising allotment levels rather than achieving program conformity. Similarly, Congress provided for more resources in the AFDC program in the Family Support Act of 1988. Again, monies were targeted toward priorities such as establishing the Jobs Opportunities and Basic Skills Training Program QOBS), providing for more transitional support for people leaving the AFDC rolls, and extending the AFDC-UP component rather than at changes aimed at enhancing conformity. In Medicaid, Congress recently provided for expanding the case load by mandating coverage of all young children from poor families. Again, Congress chose to increase funding for the program but did so in an area that does not conform or simplify the program. • 4. Congressional Inattention The lack of funding to support program conformity is symptomatic of a larger problem: conformity issues have not received legislative attention. Part of the problem is the split jurisdiction within the Congress on public assistance issues. No committee is responsible for aligning programs. Committees focus on the programs within their jurisdiction with little awareness of the collective impact of the individual pieces of legislation that emerge. It is much easier to modify existing programs than to create new ones. For example, increasing the housing cost deduction in the Food Stamp Program has broad support; getting any sort of entitlement directly as part of a housing program, however, is very difficult. Legislative action is often reactive, depending upon the priorities established by new administrations as well as public opinion. Thus, congressional I priorities have shifted back and forth from increasing client benefits, to program accountability, to budget cutbacks, and once more to program coordination and simplification. Another factor contributing to the lack of attention has been a lack of vigorous advocacy for conformity issues. • 5. Executive Branch Inattention As in Congress, each major program is overseen by its own agency and no one below the Office of the President is responsible for central oversight. Although coordination has increased in recent years, no formal structure exists for interagency cooperation. Each agency has its own agenda and at the top levels of Government there are higher priorities vying for attention. • 6. Competing Constituencies Another factor inhibiting change is that some different program requirements may enjoy strong support from important constituencies. For example, the Food Stamp Program requires that highly needy applicants get benefits within 5 days and that all applications be acted on within 30 days. The AFDC program provides for 45 days for application approval, with some exceptions (e.g., a State invoking presumptive eligibility provisions for special circumstances). The Food Stamp Program timeframes enjoy strong support because quick access to food assistance is seen by many as a fundamental program goal. The longer timeframe allowed for AFDC is supported by State agencies and their front line workers because it allows more time to process the application. • 7. State/Federal/Local Balance Programs may differ substantially in terms of their balance of Federal and State responsibility. Since 1971 the Food Stamp Program has emphasized uniform national standards which have strong support in many quarters; the AFDC Program has emphasized more State latitude. The food stamp benefit is entirely federally financed and the expectation is that the Federal Govern-ment should exert strong control over its distribution. This control takes two basic forms: 1) control over the details of benefit determination; and 2) control over operations to ensure accountability. The AFDC benefit is funded by both the Federal and State Governments, and there has been greater support for allowing State Governments more control over the program. The Food Stamp Program has detailed Federal requirements for State application processing. The AFDC program allows more State agency flexibility. The 1985 regulatory proposal to extend similar flexibility to State agencies in processing food stamp applications was vehemently opposed by client advocacy groups and Members of Congress who saw the proposal as a dilution of important procedural protections designed to safeguard access to food assistance. Housing aid is 100-percent federally funded and administered through local public housing authorities. The Housing Authorities have some flexibility in how they administer their programs, but the Federal Government establishes parameters. • 8. Timing The timing of conformity recommendations may affect their impact. For example, the interagency task force established in late 1978 reported in 1980. Shortly thereafter, a new Administration with a much different perspective on public assistance took over and had no interest in advancing the recommendations of its predecessors. Interest in program integration has been expressed periodically by Members of Congress, Federal agencies, and State agencies but these interests have never come together at the same time. The time for change is NOW. Coordination and simplification of assistance programs has the attention of the President, the Congress, and the American people. A new economic plan and a new system of health care should go hand-in-hand with a streamlined process to aid the needy. • 31 32 "The paperwork is so overwhelming, it precludes a focus on clients. If ever there was a system of the 'tail wagging the dog,' this is it." - Virginia Mustain, National Eligibility Workers, Testimony before the House Agriculture Subcommittee on Domestic Marketing, Consumer Relations ond Nutrition June 23, 1992 Chapter Simplification and Coordination Efforts Currently· in Effect As discussed in chapter IV, many efforts to simplifY and coordinate Federal public assistance programs have been attempted over the years. Some progress has been made to bring the programs into closer conformity. For example, automatic eligibility forMedicaid for all AFDC clients eliminates a second application and the associated processing activities for intake in the Medicaid program. Efforts by the four programs reviewed in this report have resulted in demonstrations and policies designed to ease the burden on clients and administrators alike. Some examples are highlighted in this chapter. State and Local Efforts at Simplification and Coordination State, county, and city governments have initiated innumerable projects aimed at simplifYing and coordinating the administration of public assistance programs. Local efforts have often been the catalyst for simplification and coordination changes at the Federal level. State and local administrators have been vocal in urging Federal legislators and administrators to adopt reforms. Many local efforts can be adapted and serve as models for Federal use. • One-Stop Shopping In Delaware and Maryland One example of coordination at the State and local level is the concept of one-stop services. At its meeting in Wilmington, Delaware, the Committee had the opportunity to learn more about this concept. The concept of one-stop services for public assistance has been around for a long time. Delaware has been a recent innovator in the development of one-stop services through a system of single entry, multiservice facilities that house public and private human service programs in community locations. Two key goals guide the onestop services system: 1) service is client-cent~red and results-oriented, with an emphasis on working with individuals and their families to maximize independence; and 2) the system itself must be self-correcting-constantly retooling to keep pace with changing client needs and a changing service delivery environment. Accessibility and client convenience are integral features of the one-stop services concept. Twelve State Service Centers are located strategically throughout Delaware. Most clients need to travel fewer than 5 miles to get to a center. An 800 number provides telephone assistance in getting information about services. The services provided at each center are geared to the population of the surrounding community. Collocation or consolidation of service providers is maximized. The major services available include certification for public assistance, public health, child support enforcement, mental health, and help with alcohol and drug abuse. To the extent possible other related agencies, such as Vocational Rehabilitation, Adult Corrections, Child Protective Services, Youth Rehabilitative Services, and Department of Public Instruction may be housed in the Service Centers. Numerous nongovernment agencies are also collocated within the Service Centers, including Head Start, Senior Centers, and Alcohol and Drug Counseling programs. When a particular center does not offer a service onsite, staffwill make referrals to those organizations above and such organizations as Social Security Administration, Meals on Wheels, Visiting Nurse Association, Alcoholics Anonymous, Family Court, and the Special Olympics. Elsewhere, the City of Baltimore is combining housing and human services through the Family Development Center located in the Lafayette Courts public housing development. The Development Center was inaugurated in 1987. With 85 percent of the families in Lafayette Courts receiving some form of public assistance, many of the families are trapped in the cycle of poverty with little hope of breaking into the mainstream. The Develop- 33 34 ment Center offers residents one-stop shopping for programs from five government agencies. The center occupies nine adjacent apartment units on the first floor of a high-rise. The apartments have been converted to a health center, day care facility, preschool classroom, literacy lab, education and employment training center, computer lab, and counseling offices. The Development Center is working to provide the comprehensive resources necessary to boost selfesteem, improve skills, enhance the ability to deal with setbacks and obstacles, and provide a structured plan to help guide families away from dependence on public housing and public assistance and toward self-sufficiency. Federal Efforts at Simplification and Coordination Federal efforts at simplification and coordination often have their roots in State and local initiatives. Many of the initiatives discussed in this section were the result of input and pressure from States, counties, and others, such as recipient advocates. • Joint Processing and Categorical Eligibility Joint processing and categorical eligibility save time and money, and reduce the "hassle" factor for both clients and caseworkers. Under joint processing, applicants have the benefit of "onestop shopping", i.e., they can apply for more than one program at a time using one application form, with a single interview at initial application. Joint processing may not work, however, if membership of the assistance group varies between programs. Categorical eligibility, which often goes hand-in-hand with joint processing, is a policy whereby an applicant for a particular program is presumed eligible based on his or her eligibility for another program that has comparable or stricter needs tests. This policy saves time and effort for both the applicant and the caseworker since normal verification requirements are waived under presumptive eligibility. A major drawback, however, is that in some instances benefit levels are very low or nonexistent due to the differences in the treatment of income between programs and the definition of eligible members. Many of the programs have developed joint processing and categorical eligibility policies. For example, a family seeking assistance from a social services office will find that procedures for processing the application and determining eligibility for AFDC, general assistance, and food stamps are integrated to a large extent. The family will have only one interview for AFDC and food stamps and will not have to provide the same information to both the food stamp and AFDC eligibility workers. If everyone in the household is eligible for AFDC or general assistance programs, the household group is automatically eligible for food stamps. Even though the household is categorically eligible for both programs, separate rules still apply for counting income and establishing benefit levels. Computation of benefit levels for each program must be done separately as well. If the household does not qualify for AFDC, its case is handled as a nonpublic assistance food stamp household, and it does not have to provide additional information. Similarly, individuals applying for SSI benefits may apply for food stamps at the same time. The State may arrange to have Social Security Administration (SSA) staff complete and forward food stamp applications to the local social services office, or it may outstation food stamp eligibility workers at the SSA offices. Through these procedures, SSI applicants are able to apply for food stamps without having to make a separate trip to the food stamp office. Households in which all members receive SSI are categorically eligible for food stamps. AFDC and SSI clients living in "mixed" households with nonAFDC/ SSI beneficiaries are deemed to have satisfied the food stamp asset "Interrelated problems and programs represent a compelling case for transforming the current fragmented array of services into local integrated service delivery systems organized holistically around at-risk families to produce measurable improvements in their lives and their prospects. " - Services Integration: A Twenty Year Retrospective Department of Health and Human Services, Office of the Inspector General, 1991 eligibility test because they have passed the AFDC or SSI test. The AFDC or SSI client is categorically asset-eligible, and his or her assets are not counted in judging the household's eligibility for food stamp purposes. In 32 States, AFDC and SSI clients are automatically eligible for Medicaid (79 percent of all SSI recipients are represented). A State may limit its Medicaid to SSI recipients by requiring a separate Medicaid application or by using criteria no more restrictive than were used in the approved State Medicaid plan injanuary 1972. Twelve States, representing 18 percent of SSI recipients, use this option. In most States, other AFDC-related groups who do not actually receive cash payments are automatically eligible for Medicaid. • Demonstration Projects, Welfare Reform Initiatives and Regulatory Waivers Through demonstration projects, welfare reform initiatives, and waivers of program regulations, States are better able to coordinate policies among programs to enhance service to clients and improve administrative efficiency. Demonstration projects and welfare reform initiatives permit a broader expression of waiver authority than is normally allowed under the general administrative waiver authority, especially for certain programs, such as AFDC and the housing assistance programs under HUD, that do not have waiver authority. Section 1115 of the Social Security Act permits statutory and regulatory waivers for the AFDC Program under the auspices of demonstration projects. Unlike the general administrative waiver authority, the expanded demonstration authority includes a requirement for evaluation; each demonstration and welfare reform initiative must be evaluated to determine its effectiveness. Demonstration Projects The idea for legislation authorizing demonstration projects often originates with States or other sources out-side the Federal government. But, demonstrations are also initiated at the Federal level and States are solicited to participate. Some examples of ongoing demonstrations follow. • Food Stamp Employment and Training Program/JOBS Demonstration In March 1992, USDA offered to allow selected States to test conformance between the Food Stamp Employment and Training (E&T) Program and the JOBS Program of the AFDC Program. Under this demonstration, Food Stamp Program regulations are waived to allow for conformity with JOBS. The five participating State agencies will evaluate the results of their efforts and report them to USDA. • Economic Empowerment Partnerships HHS and the U.S. Department of Housing and Urban Development (HUD) are jointly funding 13 economic empowerment partnerships to promote self-sufficiency among AFDC clients residing in public housing developments. This demonstration began in October 1991. The two Departments are allowing creative waivers designed to reduce the disincentives to employment. HUD is permitting the sites to use public housing units for nonresidential activities (e.g., training centers, micro-businesses, and supportive services activities). HHS is allowing waivers of certain AFDC rules which are disincentives to business ownership (e.g., restrictions on personal or business asset accumulation) and permitting clients to keep a greater portion of increased income from work. In addition, HHS is allowing sites to require that AFDC payments be contingent upon successful participation in work or other activities. Finally, HHS is extending eligibility for the JOBS program to a larger population than would ordinarily be covered. 35 "There are great people in public housing. Although folks will tell you it's full of lazy people, drug-pushing thieves looking for a place to stay, I found out that wasn't true. I found there were young people so talented, they should be anywhere from Holly-wood to the White House. But they don't have the opportunity. With the resources, the support systems and training, they can be iust like people in any other community. " - AnnWilson Milwaukee Housing Authority 36 • Transitional Housing The Housing Act of 1987 created the Transitional Families Demonstration Program which required waivers from programs within HHS, USDA, and HUD. This 7-year demonstration project, called the GATEWAY Program, is being carried out by the Charlotte Housing Authority. The purpose of the program is to demonstrate the effectiveness of providing a comprehensive program of services to participating public housing residents to ensure the successful transition of such residents to private housing. During its Charlotte, North Carolina, meeting in January 1993, the Committee visited the GATEWAY Program. The program assists families with annual incomes under $12,500 living in assisted housing to become self-sufficient by offering both a safety-net and a means to accumulate the capital necessary to make the transition to private housing. GATEWAY offers educational and job training assistance along with other supportive services to prepare participants for employment. Upon entry into the GATEWAY Program, a participant's rent and any AFDC, Medicaid, and food stamp benefits are frozen while he or she receives educational and occupational training necessary to compete on the private market, along with an array of other services to help the participant become self-sufficient. This "remedial stage" may last up to 2 years. This period allows families to pay off their debts and repair their credit rating prior to pursuing homeownership. Once the major barriers have been overcome, the family enters the second part of the GATEWAYProgram, the "transitional stage," which can last up to 5 years. During this part of the program, the family 's rent will rise as it normally would for residents of public housing in relationship to their income (30 percent). Also during this phase, the families will receive assistance in upgrading their job skills and training on home ownership. At the end of the program, the family agrees to leave assisted housing to seek housing on the private market. One of the unique features of the GATEWAYProgram, in addition to the freezing of benefits, is that an escrow savings account is established for the family to be used at the end of the program either as a downpayment on a home or other private market housing when the family is ready to leave public housing. During the transitional stage, a portion of the family 's rent is placed in this savings account. • Washington Family Independence Program At its August 1992 meeting in Seattle, Washington, the Committee visited with staff and participants of the Washington Family Independence Program (FIP). FIP is a 5-year demonstration project aimed at illustrating how enhanced employment and training services and incentives for entering training or work helps families get off public assistance and move towards self-sufficiency. The FIP program is unique in that it emphasizes individualized assessment and training services. Under FIP, participants receive a guaranteed level of cash assistance equal to what they would have received under the AFDC and Food Stamp Programs, and may receive cash incentives for participating in training or employment activities. In addition, the program offers help with child care costs and offers 1 year of transitional benefits in the form of medical care assistance when participants are earning enough to make them ineligible for cash assistance. FIP has been applauded by administrators, staff, and clients because it emphasizes education and training for individuals and gives special attention to the needs of pregnant and parenting teens. Its case management approach, the positive attitude of staff, and regular monitoring of participants gives the participants the emotional and physical support they need to be successful. Despite its success and popularity among clients and administrators alike, the State will be unable to continue FIP at the end of the demonstration. The authority for the demonstration will expire and the State would have to seek legislative relief to be able to continue. Moreover, the State reports that it cannot afford to continue FIP. A requirement of the demonstration is that it be costneutral, i.e., the total cost of operating the demonstration shall not exceed the base-line cost to individually operate the Food Stamp, AFDC and Medicaid Programs in absence of the demonstration. FIP is more expensive than the cost to operate the three programs. The State is currently paying the difference in cost, but will be unable to con-tinue this practice beyond the end of the demonstration. • Utah Single Parent Employment Demonstration The Utah Single Parent Demonstration is an attempt to change AFDC in that State from an incomemaintenance program to an employment program. The key components of the demonstration are: required self-sufficiency planning for AFDC applicants, greater coordination of AFDC and JOBS with child support enforcement, stricter JOBS participation requirements, greater coordination between AFDC and services for public housing residents, and greater financial incentives to encourage work. The latter provision will include raising the resource limit to $2,000 and the automobile limit to $8,000, replacing the current earned income disregards with a single disregard of $100 (for applicants and recipients) plus 45 percent, and expanding eligibility for transitional Medicaid and child care services. The evaluation of this 5-year demonstration will measure the project's impacts on employment, income, child support collections, and exit and recidivism rates for AFDC and food stamps. Along with AFDC and food stamp payments and receipt of Medicaid services, the evaluation will also determine the project's effect on JOBS and Food Stamp E&T Program participation rates and paternities and child support orders established. It should be noted that projects like Washington FIP and the Utah Single Parent Employment Demonstration are limited in scope since they reach relatively small populations for short periods of time. Consequently, despite their successful outcomes they do not eliminate dependency for longer-term recipients. Welfare Reform Initiatives Welfare reform initiatives are launched at the State and county level. Waivers are granted in concert by USDA, HHS, 37 "The dirty little secret is that, far from being forced to work, welfare mothers are for practical purposes prevented from working. " 38 - Senator Daniel Patrick Moynihan Congressional Record April 21, 1988 and other Federal agencies, as appropriate, for the projects proposed by States. • Alabama's Avenues to Self-Sufficiency through Employment and Training Services Known as ASSETS, this is one of the earliest welfare reform initiatives. It combines food stamp and AFDC benefits to provide clients a single monthly cash grant. Case management is an integral part of ASSETS. Among other things, the approved waivers permit the State to require food stamp clients to cooperate with child support collection efforts. Nationally this is required only of AFDC clients. Administrators also established a vehicle disregard, authorizing one licensed driver per household to own a car without affecting the family's benefits. ASSETS has been praised by workers and administrators because it is simpler and easier to understand than existing rules. Implemented in three counties-Clarke, Limestone, and Madison-ASSETS began onjuly 1, 1990, and will continue until june 30, 1994. The project will be evaluated by an independent contractor using a longitudinal study to compare the three test counties with three matched non treatment counties in terms of net impact and cost-benefit. • To Strengthen Michigan Families Program Another welfare reform initiative is the To Strengthen Michigan Families Program, which began in 1992. A broad family support program, this project consists of a wide variety of AFDC,JOBS, child support, and Medicaid provisions. This 5-year project changes current AFDC procedures through expansion of the AFDCUnemployed Parent Program by eliminating the 100-hour work limitation and the attachment to the labor force requirement, replacing the current AFDC earned income disregards with a single disregard of $200 plus 20 percent of the remainder with no time limit, and excluding all income earned by dependent children who are students. JOBS-related provisions include allowing noncustodial parents to participate inJOBS, removing the JOBS requirement that gives first consideration to voluntary clients, and lengthening the job search period before assessment from 3 weeks to 8 weeks. As for Medicaid eligibility, the project establishes a $5,000 maximum limit (except for SSI recipients) for exclusion of funeral goods and services, and it requires medically-needy Medicaid clients to meet their spenddown requirement by paying their excess income to the State. A wide variety of improvements in child support enforcement, which did not require waivers, are included in the project: requiring child support agencies to establish mechanisms to identify persons with access to health insurance coverage, requiring noncustodial parents to disclose their child support obligations to employers for mandatory withholding, and requiring hospitals to accept and record paternity acknowledgements as part of birth registration. The evaluation will measure the project's impacts on employment, earnings, marital status, AFDC and food stamp receipt, and exit and recidivism rates for AFDC. The evaluation will also include a nonexperimental study to determine whether the demonstration leads to increased collection of court-ordered child support and increased paternity establishment. General Administrative Waiver Authority The programs also have varying degrees of authority to waive legislative and regulatory provisions. The Food Stamp Program has administrative authority to grant waivers that would result in a more effective and efficient administration of the program. Often, waivers are sought by States in an effort to coordinate food stamps with other programs, such as AFDC. Waivers may be granted if they are not inconsistent with the provisions of the Food Stamp Act of 1977 or they will not result in the impairment of any statutory or regulatory rights of clients or potential clients. The AFDC program does not have broad administrative waiver authority like the Food Stamp Program; however, the Social Security Act permits waivers beyond those afforded under demonstration authority, to promote compatibility with the Food Stamp Program on monthly reporting and retrospective budgeting. Also, HUD does not have waiver authority for the administration of its housing assistance programs. • Cash-Out In California, individuals receiving SSI benefits and/or State supplementary payments are ineligible to receive food stamps. Instead, they receive a Statefinanced adjustment to their SSI payment each month. These individuals are not considered food stamp clients; however, the SSI payments are increased to include a flat allowance in lieu of a food stamp benefit. There is no individualized computation of food stamp benefits for an SSI case. This policy benefits clients in several ways. Many SSI participants have severe disabilities. Providing food stamp benefits in cash rather than coupons (cash-out) relieves them of the inconvenience of traveling to issuance centers to obtain their coupons. It also allows them more flexibility if they are unable to travel to a store and someone else must make their food purchases for them. Receiving cash instead of coupons removes the stigma of being "on public assistance" and may encourage eligible households not currently participating to apply for benefits. Demonstrations were conducted by the USDA's FNS in Alabama and San Diego, California, on the feasibility of cashing out food stamp benefits for the general food stamp population. The San Diego demonstration began in july 1989 and is scheduled to last 54 months. The project began with 20 percent of the county's case load and expanded to the entire county in September 1990. The Alabama demon-stration was a short-term project that ran from May to December 1990. The project was implemented in 12 counties and involved approximately 2,000 households. Findings from the Alabama and San Diego demonstrations, as well as results from two other demonstrations, the Washington State Family Independence Program and the Alabama ASSETS Program, have allowed FNS officials to draw some tentative conclusions about the effect of cash-out on food stamp
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Full-text | A Cf& , ~ .~T'-18 ~~~~~~~~~~~~~~~~ Time or A Change Remaking the Nation's Welfare System E L1BRARY ReptJrlol the anti Coordination Alfisory Commiffee June 1993 Table of Contents Acknowledgments Executive Summary iii I Introduction 1 II Committee History and Activities 3 III The Programs: Administration 5 and Interaction IV Previous Attempts at Coordination 25 and Simplification v Simplification and Coordination 33 Efforts Currently in Effect VI Disincentives in Welfare Programs: 43 The Debate Surrounding Self-Sufficiency VII Barriers 49 VIII Recommendations and Their Effects 63 IX Appendixes A. Biographies of 77 Committee Members B. Background on the 79 Four Programs c. "The Cliffs of Self-Sufficiency" 91 IYy the Jefferson County Self-Sufficiency Council D. ''Public Assistance and the Working Poor: 105 How Simplification Could Support Efforts to Make Work Pay" 1Yy Mark Greenberg, Center for Law and Social Policy E. Bibliography of Materials 115 Used lly Committee F. Congressional Committees 123 and Subcommittees G. APWA Task Force on Program Coordination: 125 List of Differences Between the Food Stamp and AFDC Programs H. Section 1778 of the Mickey Leland Memorial 151 Domestic Hunger Relief Act (Public Law 101-624) Acknowledgments The Committee would like to thank many individuals for their help. Without their assistance this report would not have been possible. First, we would like to thank the staff of the four programs who provided much of the input for the report. Specifically, we acknowledge Bonny O'Neil, Art Foley, Ellen Henigan, Nancy Theodore, Amy Black, Phyllis Twyman, Steven Carlson, Boyd Kowal, Barbara Murphy, and Gary Batko of USDA's Food and Nutrition Service; Diann Dawson, Mack Storrs, and Larry Carnes ofHHS' Office of Family Assistance; Paula Blunt ofHUD's Office of Public and Indian Housing; and Richard Chambers ofHHS' Health Care Financing Administration. The Committee would also like to thank the many individuals who attended the four meetings held throughout the country. We are grateful to all those who provided valuable input by making presentations or providing personal testimony. Special thanks go to Congressman Bill Emerson, for his inspiration and guidance; Barbara Earman of the House Select Committee on Hunger; Kathi Way of the White House Domestic Policy Council; Jane McNeil, Executive Assistant to USDA Secretary Mike Espy; Rick Ferreira and Larry Goolsby of the American Public Welfare Association; Mary Robertson of the Los Angeles County Department of Public and Social Services; Neal Zank of the National Commission on Employment Policy; Mickey Allman of the Maryland Department of Human Resources; Barbara Flaherty of the Washington State Family Independence Program; Shirley Ramsey of the Cape Girardeau, Missouri, Community Caring Council; and Harrison Shannon and Sharon Waters of the Charlotte Housing Authority. Finally, we give a special thank you to Committee member Mary K. Deyampert, Kay Fields of the North Carolina Department of Human Resources, and Merlene Wall of the Mecklenburg County Department of Social Services for hosting our meeting in Charlotte, North Carolina; and Committee member Thomas Eichler and Barbara Evans, Elaine Arch angelo, and Phyllis Hazel of the Delaware Department of Health and Social Services for their hospitality at our meeting in Wilmington, Delaware. "One central conclusion emerges from our work to date: The welter of programs that are collected under the rubric of the 'welfare system' must be scrapped. Ma;or structural reform of our income assistance programs for the poor is necessary if we are to encourage work wherever possible, provide basic income protection for those who are unable to pro-vide for themselves, provide incentives for keeping the family together, and simplify and make more efficient the basic administra-five structure. " Joseph Califano Former Secretary of Health, Education and Welfare, 1977 Executive Summary HELP! Delivery of services to the needy ofthis Nation has reached a crisis stage. Unless dramatic steps are taken immediately to end the administrative quagmire in local human service offices the entire system stands in danger of collapse. The conglomeration of separate programs that supposedly comprise our "welfare system" do not form a system at all. Instead, each operates in its own separate orbit, assisting a specific population, without regard to the multiple needs of the families it serves. Just as "tinkering" with health care programs is insufficient to resolve the Nation's health care crisis, according to First Lady Hilary Rodham Clinton, so is tinkering with welfare programs. The current programs should be scrapped, in lieu of one comprehensive program with the goal of moving participants toward self-sufficiency. Now Is the Time lor Change! These are the findings and recommendations of the Welfare Simplification and Coordination Advisory Committee-authorized by Congress in 1990 to examine four major assistance programs-food stamps, Aid to Families with Dependent Children (AFDC), Medicaid, and housing assistance programs. The Committee was mandated to identify barriers to participation in one or more assistance programs and the reasons for those barriers. It also examined reasons why it is difficult for administrators to provide timely benefits efficiently to all qualified to receive them. The Committee's work culminates in this report to Congress and the cognizant Federal agencies. It recommends actions that could improve the delivery of services among the programs and simplify their rules and procedures. The bi-partisan Committee met four times during 1992 and 1993, examining the interactions of the current assistance programs from the perspective of program administrators as well as the needy. Members heard from public witnesses, including public assistance recipients, and read statements from many more, attesting to the lack of coordination and simplicity. The Committee shares the view of many previous workgroups that the Nation's current public assistance system desperately needs to be overhauled. Most of the existing programs do a good job of fulfilling their own missions. However, when viewed together, the "system" is an antiquated and costly conglomeration of programs with separate goals, inconsistent policies, and rules that are so complex that neither clients nor their caseworkers should be expected to understand them. The Committee concurs with the panel of experts working on the Ford Foundation Project on Social Welfare and the American Future that "the best welfare policy offers individuals both an economic opportunity and social protection in a way that minimizes the waste of taxpayers' resources."' I Project on Social We lfare and the American Future, The Common Good: Social Welfm~ and the Ameriran Future, Policy Recommendations, (New York: The Ford Foundation, May 1989) , p. 4. Ill iv Although the recommendations put forth by this Committee follow a long list of similar ones advocated by equally earnest groups, the Committee believes that there is cause for optimism now. This report, the only one prepared in response to congressional concern, will be presented in the first year of a new Presidential administration. "Ending welfare as we know it," is a prime goal espoused by President Clinton. The recommendations herein comport with that goal. We submit this report to a Congress with an unprecedented number of freshmen Members. We believe these new Members were elected by people who are fed up with the status quo-who recognize that the current system of aid evolved not by design, but through crisis. The release of this report also comes at a time when Members are looking to make Congress more efficient by streamlining its structure. The temporary Joint Committee on Organization, which is chaired by Senator David Boren and cochaired by Congressman Lee Hamilton, is reviewing the committee and subcommittee structure with the goal of consolidating oversight responsibility and eliminating overlap. We will try to impress upon this joint committee the urgency of addressing the fragmented jurisdiction over assistance programs. During this time of extreme fiscal distress, both the Federal Government and the States are showing an unprecedented willingness to do things differently. The number of States applying for welfare reform waivers in recent years is evidence of the dissatisfaction with the current system, and the receptivity to change. The time for change is long overdue, and the time for change is clearly NOW! Barriers Members read material on the subject of coordination compiled from work completed over the past 2 decades. A myriad of working groups, task forces, and committees have attempted to tackle the problem of welfare complexity, but with little success. That problems exist is well documented. It was not difficult for the "In the nearly fifty years of its exis-fence, welfare has changed to the point that no one likes this system and a lot of people act as though they don't like those who receive welfare. Change is long overdue!" -Kay Barker Gaston County, NC Testimony before the Welfare Simplification and Coordination Advisory Committee January 8, 1993 Committee to meet its first mandated objective: compiling a list of barriers to effective client service and to participation. Both "systems barriers" pertaining to administration of the programs, and "client service barriers" at the delivery level, are identified in chapter VII of this report. The systems barriers stem from the different laws that created each program and the administrative structures that evolved from those laws. The different mission of each program results in differing policies and procedures that hamper coordinated services. While some barriers to efficient operation are as broad in scope as lack of coordinated oversight by the Congress and the Executive Branch, others, such as insufficient use of automation, are more specific. Client services barriers affect applicants and recipients directly, inhibiting access to program benefits. While lengthy forms and complex rules are the most commonly perceived obstacles to program participation, more subtle barriers, such as the stigma attached to participation, also deter applications. Many people, especially the elderly, view receipt of almost any form of assistance as humiliating. Only 59 percent of persons eligible for food stamps actually received them in 1989. Previous Efforts With such obvious and well-documented problems, one might wonder why the barriers were not eliminated years ago. Solutions are not simple and consensus is not easily reached. Chapter IV describes previous attempts at reform and why most have failed. The cost of program change is paramount among the obstacles to reform. Any change in eligibility requirements or benefit levels affects program costs. Given the amount of funds disbursed by the programs, the fiscal magnitude of program changes can be tremendous. For example, raising the AFDC asset limit from the current $1,000 to the $2,000 limit of the Food Stamp Program would allow more people to receive AFDC. Such a change would have increased AFDC costs by $135 million in fiscal year 1992. In addition, since the new AFDC recipients would be categorically eligible for Medicaid, costs for that program would increase dramatically. Other reasons for inertia in achieving program conformance include tension between State and Federal responsibilities, congressional and Executive Branch inattention to the administrative aspect of coordination, and competing constituencies. An example of an unsuccessful attempt at simplification is President Nixon's proposed Family Assistance Plan ofthe early 1970's. The plan would have created a national cash welfare system with uniform eligibility and minimum benefit levels that States could supplement. The benefit levels under the proposal would have exceeded the AFDC grants in some States and been lower than the grants in others. The changes were opposed by client advocates from States with high AFDC grants who did not want to see people get less aid, as well as those from States with low grants, who did not want to see more people added to the public assistance rolls. The proposal failed. v "We want people to get work ... we want them not to lose anything by getting the work ... " vi - Senator Daniel Patrick Moynihan Congressional Record June 16, 1988 Guiding Principles Principles were developed to guide the Committee's deliberations. They were adhered to when recommendations for change were formulated. The shared philosophy of treating persons with respect was an overriding influence. The 10 principles are: 1. Treat Persons with Dignity and Respect 2. 3. Strengthen F amities Direct Programs to Address the Entire Spectrum of a Family's Needs, Not Just the Discrete Needs of Individuals 4. Promote Individual Responsibility 5. Empower Persons to Move Off Assistance and Toward Independence 6. Make Work More Rewarding Than Assistance 7. Allow Flexibility In Programs to Accommodate State, Local, and Individual Differences 8. Focus Success Measures On Persons, Not On Processes 9. Use Public Funds Efficiently 10. Build Partnerships with the Private Sector Recommendations In considering the actions it would recommend to the Congress and the Executive Branch, the Committee discussed a wide range of options. The Committee chose not to ignore issues peripheral to simplification and coordination of the four programs. Broad issues including adequacy of benefits, work incentives, and the dynamics of program interactions were studied as were detailed technical proposals to coordinate policies and procedures. In considering just how specific it wanted to be, the Committee deliberated over an impressive document recently produced by the American Public Welfare Association (APWA) in conjunction with the Food and Nutrition Service of the Department of Agriculture (USDA) and the Administration for Children and Families of the Department of Health and Human Services (HHS). The document, compiled over the past year and a half by program administrators, identifies 57 differences between the Food Stamp and AFDC Programs. Some of the differences are rooted in statute and only congressional action can eliminate them. Others are disparities in regulations and can be addressed by the Federal agencies. The Advisory Committee recommends that the Clinton Administration immediately review the disparities that are rooted in regulation, not statute, and provide a timely and full response to the Task Force recommendations. This Committee further recommends that the appropriate congressional committees analyze the program differences based in statute, and that the House and Senate subcommittees with jurisdiction over the programs hold joint hearings to develop a legislative reform package to conform the two programs. The Committee was also impressed by the work of the National Commission for Employment Policy (NCEP) in its October 1991 Special Report entitled Coordinating Federal Assistance Programs for the Economically Disadvantaged: Recommendations and Background Materials. The recommendations in this report parallel many of NCEP's recommendations. The Committee heartily recommends that the White House Domestic Policy Council and Congress review the recommendations contained in the NCEP report for implementation in conjunction with APWA's recommendations and those put forth by this Committee. • Primary Recommendation The primary recommendation of the Committee is to replace the numerous programs that currently serve the needy with one, family-focused, client-oriented, comprehensive program. The three key criteria for the program would be 1) simplicity of design; 2) service tailored to need-three broad, time-based categories of assistance (short-term, extended, and long-term) with a single case manager for each family; and 3) benefits contingent upon progress toward selfsufficiency. This program would provide a consistent, coordinated, and simplified approach to meeting the interrelated needs of low-income individuals and families while they are working toward self-sufficiency. Service would be tailored to the client through the use of a self-sufficiency plan designed to match the needs of each family member, and the family as a whole, to appropriate services. Although actual service delivery may be provided by separate State and local agencies and private sector organizations, the program would be administered by one agency at the State level. Administration at the Federal level would also be centralized in one agency and legislation would evolve from a single committee in each Chamber of Congress. Given the complexity of the task, this Committee did not have sufficient time or resources to design the comprehensive program it envisions. This must fall to Congress and the Federal agencies, or a special task force given this single charge. However, the Committee feels strongly that the design concepts must reflect the principles laid out in this report. Integral elements of the program include: • a single point of entry with one application form; • common definitions and rules on income, deductions, resources, and nonfinancial eligibility criteria; • a single eligibility standard (means test) for determining eligibility; and • partnerships between public and private sector programs to provide coordinated services. A comprehensive program addressing the multitude of human needs would be simpler to administer than the jumble of programs that currently exist. Common definitions, eligibility requirements, and benefit payments add to the desirability of a comprehensive program. Eliminating duplicative bureaucracies will reduce administrative costs, saving money that can be used, instead, for client services. If Congress and the Executive Branch seriously wish to bring simplicity and coordination to the public assistance network, the Committee believes this recommendation is inescapable. Vll "It's time to honor and reward peo-pie who work hard and play by the rules. That means ending welfare as we know it- not by punishing the poor or preaching to them, but by empowering Americans to take care of their children and improve their lives. No one who works full-time and has children at home should be poor anymore." viii - Governor Bill Clinton and Senator AI Gore Putting People First: How We CanAl/ Change America, 1992 • Interim Recommendations The Committee recognizes that its recommendation for one comprehensive program will not come about overnight. In the interim, other steps can and should be taken to improve the current state of public assistance and provide immediate relief to program administrators and the needy. Therefore, the Committee recommends that Congress review the interim recommendations below and take immediate action to implement those recommendations requiring legislative action. Once legislative action has been completed and for those recommendations that do not require legislative action, the Committee recommends that the President direct the White House Domestic Policy Council to take the lead in coordinating implementation among the Federal and agencies. The interim recommendations are categorized as either "Systems" or "Client Services." Systems recommendations are: 1. Form a work group of the chairs of the relevant congressional committees to ensure that all legislative and oversight activities involving public assistance programs are coordinated. 2. Ensure that all low-income Americans have access to quality health care. 3. Establish uniform rules and definitions to be used by all needs-based programs in making their eligibility determinations, including: a. common definitions of countable income, allowable deductions, resources, and household composition; b. conversion of food stamp benefits to a flat allowance for AFDC families; and c. establishment of a standard shelter and medical deduction under the Food Stamp Program for non-AFDC households. 4. Expand the demonstration project authority for all programs to allow for the waiver of both statute and regulation. Cost neutrality should not be an overriding criterion for Federal approval of demonstrations or welfare reform initiatives. 5. Allow States to make effective demonstration projects permanent and/or adopt successful systems tested in other States. 6. Modify audit and evaluation procedures to focus primarily on the success of individuals and families in reaching self-sufficiency as the standard for accountability to determine the success of the programs. 7. Establish a uniform implementation timeframe for all regulatory changes and a common date for implementing these changes, including cost-of-living adjustments. Coordination with non-needs-based programs, such as Social Security Administration Programs and Veterans benefits, should be stressed. 8. Encourage States to form public/private partnerships to meet client needs. 9. Combine employment and training programs for the economically disadvantaged into one program. Client Services recommendations are: 1. Streamline the verification process. 2. Use a single case manager for all public assistance programs and services. 3. Permit the sharing of client information among agencies. 4. Make information on eligibility available in more public places, e.g., libraries and post offices. 5. Develop tables to be used by clients to determine how benefits may be impacted as a result of anticipated changes in household circumstances, such as changes in income and household size. The Committee's recommendations are discussed in detail in chapter VIII of the report. The time to act is now. If these issues are once again ignored because of their cost or complexity, we can look forward to years of legislative gridlock, high turnover rates among disgruntled assistance workers and worst of all, lost potential of many, many Americans. • ix X "We must understand when a family unit is in need of help, their need often crosses pro-gram lines. Need for income assistance often means need for food, for housing help, and for some help in finding and keeping a job." - Representative Bill Emerson, MO Hearing before the Select Committee on Hunger U.S. House of Representatives April23, 1991 Introduction By authorizing the Welfare Simplification and Coordination Advisory Committee through Public Law 101-624, Congress, for the first time, actively sought to address the need to reform the way the Nation's human services programs work together as a system. It was an outgrowth of longstanding dissatisfaction with the complexity of the tangle of programs designed to help the poor. Although there have been many attempts to make these programs more efficient and effective, the Committee 's creation marks a new milestone in the effort. Creation of the Advisory Committee is a strong indication that Congress viewed the fragmentation of human investment programs as "one of the major unmet challenges to domestic policy in America .... "1 The Committee is charged with examining the policies and procedures of the Food Stamp, AFDC, medical assistance, and housing assistance programs. It must identify barriers to multiple program participation, and elements of the system that make it difficult for administrators to provide timely benefits in an efficient manner to all those qualified to receive them. Since passage of the Social Security Act in 1935, a multitude of programs to help the economically disadvantaged have been enacted. Authorized by different congressional committees at different times, the programs deal with the interconnected symptoms of poverty. Each program was born of good intentions. They are all evidence of the Government's aggressive response to pressing societal needs. As each need was addressed, however, no single body was taking a deliberative look at how the individual programs would meld together. That the programs would actually function as a system was never a motivating factor in their creation. This is the genesis of the complexity and coordination problems we are dealing with today. The governmental processes that created the assistance programs remain intact. No mechanism is in place to prevent conflicting program policies from being enacted in the future, nor to remedy the ones that already exist. In fact, just the opposite is true. Achieving real compatibility among the programs will require major structural reforms in the way welfare laws are promulgated. This has far-reaching consequences for the poor, who are hesitant even to apply for programs benefits because of the complexity involved. It has similar consequences for State agencies, which are struggling to deliver services efficiently and to attract, train, and retain caseworkers. Services and benefits for families are divided into rigid and distinct categories that fail to reflect their interrelated causes and solutions. The fragmentation of social services at the Federal level is mirrored at the State and local levels. Caseworkers share "pieces" of the same family, with no institutional capability to address the interrelated family needs. Consequently, services designed to correspond to discrete problems are administered by "dozens of agencies, each with its own particular focus, source of funding, guidelines, and accountability requirements." 2 These fragmented systems result in costly and duplicative administration and less effective services. Social service delivery is close to unmanageable today. Program administrators have to navigate through the muddy waters of program requirements handed to them from agencies which speak different "languages." Even a seemingly simple determination such as, "What is income?" is greeted with different responses from different programs. Placing even more pressure on caseworkers, the complexities of the individual programs and their differences contribute to high quality control error rates. From the viewpoint of the person who needs assistance, the system can 1. Marion Pines, Investing in SelfSufficiency for Poor Families: Putting It All Together, (New York, NY: Ford Foundation , 1991) , p. 93. 2. Ate lia l Me Iaville with Martin]. Blank, What It Takes: Structuring Partnerships to Connect Children and Families with ComprehensiveSeovices, (Washington , DC: Education and Human Services Consortium,January 1991) , p. 7. 1 "You go into [the welfare office and] you're surrendering sovereignty. You're surrendering control of your life and making yourself dependent." - Public assistance recipient Final Report of Findings of Focus Group Research Conducted on Behalf of the National Association of Neighborhoods, Prism Corp., Washington, DC, Falll986 be a nightmare. Most communities have no central location for people to find out what programs are available and those for which they might be eligible. Applicants face lengthy, complicated forms and different types of verification for each program. Comprehensive, holistic services tailored to individual or family needs are not generally available. Eligibility workers do their best just to determine program eligibility for the sheer volume of faces that appear at their doors day in and day out. This Committee has examined the problems faced when a family needs service from more than one program. It has identified barriers to efficient operations and to participation by all those eligible. It has examined previous attempts by the Federal Government to create a cohesive and accessible system and explored why these efforts were unsuccessful. The Committee is recommending ways to simplify the system and coordinate the major social service programs. It believes that coordination problems can be addressed in a way that will enhance service delivery while maintaining a reasonable degree of program accountability. The findings of the Committee, as well as its recommendations, illustrate why it's time for a change. • Chapter Committee History and Activities Committee Selection When Congress established the Welfare Simplification and Coordination Advisory Committee, it mandated that the Secretary of Agriculture appoint members with different perspectives on public assistance, including State and local administrators and client advocates. The members of the Committee brought together a broad base of expertise in the field of public assistance. Membership was diverse, representing large and small States, rural and urban areas, and various backgrounds. Sammie Lynn Puett, a former Commissioner of the Tennessee Department of Human Services, chaired the 11-member Committee. Members included a Colorado State Senator, a county legislator from Westchester County, New York, public assistance program administrators from Delaware and North Carolina, a county administrator from Los Angeles County, a scholar in health policy from the American Enterprise Institute, an eligibility worker from New Mexico, the Chief Executive Officer of the Dallas Housing Authority, and client advocates from Kansas and California. Biographies of the Committee members can be found at appendix A. Committee Activities All four of the Committee's meetings were open to the public, and comments from the public were welcomed. At each meeting, public comment was provided by recipients, advocacy groups, administrators and caseworkers. The first meeting of the Committee was in Arlington, Virginia, on April 30 and May 1, 1992. Subsequent meetings were held in Seattle, Washington, August 20, 21, and 22, 1992; Charlotte, North Carolina,January 7, 8, and 9, 1993; and Wilmington, Delaware, March 11 and 12, 1993. In Arlington, the Committee discussed the direction it would take in fulfilling its mission. Sites for the future meetings were selected based upon innovative programs and demonstration projects and geographic diversity. Committee members also received comments on the Federal perspective on coordination and simplification from representatives of USDA's Food and Nutrition Service, HHS' Administration for Children and Families and Health Care Financing Administration, and the Department of Housing and Urban Development's (HUD), Office of Public and Indian Housing. Missouri Congressman Bill Emerson, sponsor of the authorizing legislation and ranking minority member of the House Agriculture Subcommittee on Domestic Marketing, Consumer Relations, and Nutrition, addressed the Committee. In Seattle, the Committee formulated an initial set of basic principles to guide its work and identified barriers to program administration and receipt ofbenefits. There, the Committee visited with participants and program administrators from the Washington State Family Independence Program, an innovative demonstration that utilizes a case-management approach to give special attention to the needs of individuals. One caseworker is responsible for the overall needs of the family unit. In addition, food assistance is provided in the form of cash rather than food stamps. Education and training activities are emphasized and the program offers incentives for participation by providing for child care reimbursements to help families move off public assistance and become selfsufficient. Shirley Ramsey, president of the Community Caring Council in Cape Girardeau, Missouri, spoke to the Committee on the Council's work. The Council is a nonprofit corporation that promotes coordination and cooperation between social service providers, churches, the business community, and the educational system to empower families and individuals to become more self-sufficient. The Council was founded 4 years ago by Mary Katsen, a 3 "Self-sufficiency translates into a good job and stable home life for - One Child in Four -Investing in Poor Families and Their Children: ------......... A Motter of Commitment ". The American Public Welfare Association and The Notional Council of State Human Service / istr.otors, 198 4 State Representative, in response to the frustrations expressed to her by constituents in trying to decipher the maze of social services. In Charlotte, the Committee focused on the recommendations to be made in its final report to Congress and heard comments from administrators of innovative simplification projects in the State. The Committee visited several transitional housing sites that offer lower income families opportunities for home ownership through the use of escrow accounts. Sponsored by the Charlotte Housing Authority, the innovative programs encourage families to make the transition from public assistance to self-sufficiency. The fourth and final meeting was held in Wilmington, Delaware, on March 11 and 12, 1993. The Committee visited the State's innovative onestop service delivery system-a ent-centered, results-oriented nett:&- of-p~ms that supports personal and fami~elf-sufficiency. Delaware has been a recent innovator in the development of one-stop services through a system of single entry, multiservice facilities that house human service programs, as well as selected private sector programs in local community locations. Two key goals guide the one-stop services system: 1) services are provided with an emphasis on working with individuals and their families to maximize independence; and 2) the system itself must be self-correcting-constantly working to retool to keep pace with changing client needs and a changing service delivery environment. Congressman Mike Castle spoke to the Committee on the urgent need for simplification and coordination in the current public assistance system, and Delaware Governor Thomas Carper discussed welfare reform and the innovative initiatives that are currently underway in the State. The Committee also heard from Congressman Bill Emerson. Problems with the assistance programs that extend beyond coordination were raised in every city the Committee visited. Public commenters described the unintended consequences of program rules that discourage entry into employment and promote continued dependence. It was m de clear to Committee members th t there is intense interest in improv ng the current system and that the tim for change is NOW. • The Programs: Administration and Interaction At least 75 Federal programs provide assistance to the economically disadvantaged in the form of cash, medical care, food, housing and energy assistance, education and training activities, and other services. 1 Congress directed the Advisory Committee to focus on the policies of four of these programs-the Food Stamp Program, AFDC, Medicaid, and housing assistance programs-to determine the difficulties faced by individuals when applying for and obtaining benefits. This chapter provides a brief overview of the four programs, discusses administrative costs and looks at multiple program participation. Appendix B contains a detailed description of the four programs, including their policies, population characteristics, and participation and expenditure patterns. The Programs • AFDC Program The AFDC Program began in 1935 under Title IV of the Social Security Act as a way to assist orphans and widows with small children. Today, operating under broad guidelines from the HHS' Administration for Children and Families (ACF), the program provides cash assistance to families with dependent children. It also offers employment and training activities to help parents in these families become selfsufficient. During the first 25 years of the AFDC Program, families suffering deprivation due to unemployment were ineligible for benefits. In 1961 Congress allowed States to provide AFDC to the children of unemployed fathers who were still living at home through the Unemployed Parent Pro-gram (AFDC-UP). The Family Support Act of 1988 took this a step further, requiring all States to operate an AFDC-UP program as of October I, 1990. Although this change makes the program more accessible to needy twoparent families, one-parent families will continue to receive the most benefits. To receive AFDC benefits, a family must pass certain tests based on family structure, income and resources, and willingness to fulfill work requirements. Exhibit 10 illustrates AFDC income and resource requirements in more detail. The AFDC Program is funded jointly by the Federal and State Governments through a matching formula that varies according to the State's per capita income. In fiscal year 1992, program expenditures reached almost $22 billion, an increase of more than 70 percent from 1982. Exhibit 1 provides information on AFDC program expenditures for fiscal years 1983 through 1992. Each State determines its own need standard and grant payment levels. The need standard is the amount of money a State deems necessary to meet a minimal standard of living in that State for a family of a specified size. Many States pay less than the full standard of need. Since no Federally prescribed minimum benefit exists for the program, AFDC benefit levels vary from State to State. For example, an assistance unit composed of one adult and two dependent children with no income would receive an AFDC grant of$120 in Mississippi, whereas the same assistance unit would receive $658 in Vermont.2 Exhibit 2 illustrates the range of AFDC assistance payments for a family of one adult and two children for fiscal year 1993. I National Commission on Employment Policy, Coordinating Federal Assistance Programs for the Economically Disadvantaged: Recommendations and Background Materials, (Washington, DC: National Commission for Employment Policy, 1991), p. 3. 2 U.S. Department of Health and Human Resources, Administration for Children and Families, Office of Family Assistance, Characteristics of State Plans for the AFDC Program, 1990-91 Edition, (Washington, DC: Government Printing Office, 1991) , pp. 29, 322. 5 15 10 0 BOO 600 400 200 6 EXHIBIT 1 AFDC PROGRAM FEDERAL AND STATE MAINTENANCE ASSISTANCE EXPENDITURES 83 84 85 86 87 88 FISCAL YEARS 1983 - 1992 EXHIBIT 2 89 RANGE OF AFDC MONTHLY PAYMENT AMOUNTS FOR SELECTED STATES ONE ADULT AND TWO CHILDREN FISCAL YEAR 1993 AK HI GU VT CA CT LA TN TX STATE AGENCIES 90 91 92 PR AL MS What are your frustrations with the welfare system? "So much paper work and so little staff to do it. High caseworker turnover, never the same caseworker two times in a row. There is also an unreasonable demand placed on the caseworker due to the high numbers in the caseload. " - A Public Assistance Recipient Kansas City, KS in response to a survey about welfare 14 12 10 4 EXHIBIT 3 AFDC PROGRAM TOTAl RECIPIENT PARTICIPATION 13.7 82 83 84 85 86 87 88 89 90 91 92 FISCAl YEARS 1982- 1992 In fiscal year 1992, more than 13.6 million people participated in the AFDC program-almost 25 percent more than in 1989. Exhibit 3 depicts AFDC participation patterns for fiscal years 1982 through 1992. Appendix B describes in detail eligibility requirements, population characteristics, expenditure and participation trends and work requirements for the AFDC Program. • Food Stamp Program When the Food Stamp Program replaced the Commodity Distribution Program during the 1960's, its emphasis was as much to utilize the Government's surplus food as to raise the nutritional level of low-income households. The program exists as it does today to ensure that Americans have the means to purchase nutritionally sound diets. The program is administered by the Food and Nutrition Service (FNS) of USDA. FNS gives direction to State agencies through regulations that define eligibility requirements, benefit levels, and administrative rules. Clients receive coupons which are redeemed in authorized stores for eligible food items. Coupon allotments vary according to the size of the household and income level, but eligibility and benefit rules are the same nationwide. While the average household benefit in 1991 was $162, approximately 5 percent of households collected $10 or less while 11 percent received more than $300." The program has financial, workrelated, and categorical tests for eligibility. Exhibit 10 contains more details on the program's eligibility requirements. The Federal Government provides full funding for food stamp benefits and the cost of administering the program is shared equally between the States and the Federal Government. Since 1982, Federal expenditures for the Food Stamp Program have 3. Nancy Heiser and Suzanne Smolkin, Characteristics of Food Stamp Households, Summer 1991 , (Washington, DC: Mathematica Policy Research, In c., 1992). 7 10 25 20 15 10 8 EXHIBIT 4 FOOD STAMP PROGRAM TOTAL FEDERAL EXPENDITURES* 83 84 85 86 87 88 89 90 91 FISCAL YEARS 1983 - 1992 *EXCLUDES NATIONAL LEVEL ANNUAL COSTS FOR PRINTING COUPONS, STUDIES, AND SURVEY COSTS. EXHIBIT 5 FOOD STAMP PROGRAM PROGRAM PARTICIPATION 82 83 84 85 86 87 88 89 90 91 FISCAL YEARS 1982· 1992 92 92 "We are dying out there. Our work-ers are being crushed by caseloads, delivery is slipping, timeliness is going by the waysides. I've added 40, 000 people to the Medicaid rolls just in the last year in my state, because of the mandates, and with-out new workers, because of the recession, we are in real trouble out there." - Gary Stangler, Director Missouri Department of Social Services, Hearing before the Select Committee on Hunger U.S. House of Representatives April23, 1991 60 40 20 0 increased by more than 100 percentfrom $10.2 billion in 1982 to over $22 billion in 1992. Exhibit 4 illustrates annual Federal expenditures for the program, beginning with fiscal year 1982. Since 1989, participation in the program has grown by an average of 2.2 million individuals annually and in fiscal year 1992 USDA distributed benefits to more than 25 million individuals. Exhibit S displays Food Stamp Program participation patterns since fiscal year 1982. Appendix B describes in detail eligibility requirements, population characteristics, expenditure and participation trends and work requirements for the Food Stamp Program. • Medicaid Program Medicaid is the Nation's key provider of medical assistance and long-term care for low-income families, lowincome elderly, and the disabled. The program was enacted as a companion to Medicare in 1965 and was designed to pay for health care for recipients of AFDC and certain other needy people. Establishment of the EXHIBIT 6 MEDICAID PROGRAM TOTAl PROGRAM EXPENDITURES 82 83 84 85 86 87 Medicaid program was an enormous leap forward in financing and providing health care to the poor. Today, the program's goals are to ensure that eligible individuals receive adequate care and to reduce the financial burden of medical care for those with limited resources. Federal oversight of the Medicaid program is the responsibility of the Health Care Financing Administration ofHHS. Medicaid essentially serves four populations: low-income families that lack health insurance, elderly people who need help with medical care, disabled elderly individuals who need long-term care, and nonelderly disabled individuals who need critical and long-term care. Benefits and coverage are different in each State. Exhibit 10 contains a more detailed description of Medicaid eligibility criteria. Since 1982 Medicaid expenditures have grown nearly four-fold to total an estimated $120 billion in 1992. Exhibit 6 provides annual Medicaid expenditure information beginning in fiscal year 1982. 88 89 90 91 92* FISCAl YEARS 1982· 1992 *ESTIMATE 9 What are your frustrations with the welfare system? "When a client receives a raise in food stamps, the welfare check is reduced. When a client finds employ-ment their food stamps, housing, etc. are cut. Never a chance to get ahead just a little." 10 - A Public Assistance Recipient Kansas City, KS in response to a survey about welfare 25 20 15 10 0 Participation in the Medicaid Program has grown by over 40 percent since 1982 to reach 30 million recipients in fiscal year 1992. Exhibit 7 illustrates Medicaid participation levels for fiscal years 1982 through 1992. Appendix B describes in detail e ligibility requirements, population characteristics, and expenditure and participation trends for the Medicaid Program. • Federal Housing Assistance Programs The two major forms of Federal housing assistance are the Public Housing Program and the Section 8 Program. Similar to other assistance programs, public housing and Section 8 housing assistance are available only to people with low income. However, unlike other assistance programs, housing is not available to everyone who needs it and is qualified to receive it. Generally, housing authorities maintain waiting lists of eligible applicants and in some of the larger urban areas, the waits can be 4 to 6 years long. Exhib· it 10 contains a more detailed description of eligibility criteria for housing assistance programs. EXHIBIT 7 MEDICAID PROGRAM TOTAl PROGRAM PARTICIPATION 82 83 84 85 86 87 More than 5 million families participated in housing assistance programs during fiscal year 1992. Exhibit 8 provides participation information for housing assistance programs for fiscal years 1982 through 1992. Housing assistance programs are financed by the Federal Government through HUD, and administered by local Public Housing Authorities. In fiscal year 1992 more than $18 billion was spent on Federal housing assistance programs. Exhibit 9 illustrates expenditure patterns for housing assistance since fiscal1982. • The Public Housing Program The Public Housing Program was created under the U.S. Housing Act of 1937 to provide adequate "temporary shelter" in a decent environment to families who could not afford housing on the private market. For many families, however, the transition from public to private housing is met with a myriad of difficulties and therefore it is not uncommon to find third- and fourth-generation families residing in public housing. Over its 56-year history, the Public 88 89 90 91 92 FISCAl YEARS 1982· 1992 4 Housing Program has been the Nation's largest assisted housing program. As ofjanuary 1993, more than 1 million families lived in public housing EXHIBIT 8 HOUSING ASSISTANCE PROGRAMS TOTAL PROGRAM PARTICIPATION HOUSEHOLDS IN MILLIONS 82 83 84 85 86 87 around the country. Eligibility is based on income and family composition. More detail on eligibility criteria is located at Exhibit 10. 5.5 5.5 88 89 90 91 92 FISCAL YEARS 1982· 1992 EXHIBIT 9 HOUSING ASSISTANCE PROGRAMS TOTAL PROGRAM EXPENDITURES* 82 83 84 85 86 87 88 89 90 FISCAL YEARS 1982· 1992 *INCLUDES HUD PROGRAMS AND FARMERS HOME ADMINISTRATION PROGRAM FOR RENTERS. 91 92 11 AFDC • Eligibility is determined on the basis of the family's circum· stances in the current month. • Needy children to age 18 deprived of parental support or care because their father or mother is absent from the home continuously, is incapacitated, is deceased or is unemployed (AFDC-UP). Eligibility for AFDC·UP is limited to families who are needy because of the unemployment of the principal earner who has a work history. • Certain other family members in the household of such a child and, at state option, others who are deemed essential to the child's well being. • The State may opt to provide benefits to age 19 if the child is a full-time student in a secondary or technical school and can be reasonably expected to complete the program before reaching age 19. • Strikers are ineligible for any month if they are striking on the last day of that month. If the striker is a relative-caretaker, the whole family is ineligible. • Eligible aliens are specifically defined. SAVE procedures are used to determine alien eligibility. • Women with no children who are medically verified as preg· nant may receive benefits beginning in the sixth month of their pregnancy. • SSI recipients are excluded from the AFDC unit. • As a condition of AFDC eligibility, a child's right to support payments from an absent parent is assigned to the State child support agency, which uses such payments to reimburse the State AFDC Program. If the monthly child support payment exceeds the AFDC benefit, eligibility for AFDC is lost and the right to support payments reverts back to the child. • AFDC recipients are automatically eligible for Medicaid and free school meals. • Individuals who lose AFDC eligibility due to increased earn· ings, increased hours of work, or loss of income disregard are eligible for up to 12 months of transitional child care and medical assistance. Coverage may be extended for an additional 6 months. • AFDC recipients are required to participate in a State JOBS program, subject to specific exemptions. 12 FOOD STAMPS • Households that meet financial, employment/training-related, and categorical tests for eligibility; and • College students, if they are supporting dependents under the age of six, receiving AFDC, elderly or disabled, or working at least 20 hours per week {or under a Federal work-study pro· gram). • Most AFDC, SSI and general assistance recipients are auto· matically eligible. • SSI recipients in California are ineligible. Their SSI grants include an additional amount designated as food stamp benefit. • Persons on strike are eligible only if they were eligible before the strike. Benefits cannot be increased based on a reduction in income caused by the strike. • Eligible aliens are specifically defined . SAVE procedures are used to determine alien eligibility. • Individuals living in institutional settings are ineligible. • AFDC families with a 1 00% overlap between the family unit and the food stamp household unit are categorically eligible for food stamps. HUD-SPONSORED HOUSING • All lower income households. • The number of families that may be assisted at any one time is limited by appropriation . Therefore, families are served on a first-come, first-served basis, after Federal and local preferences are taken into account. • Participation by single persons who are not elderly, handicapped or disabled requires HUD approval and is limited to 15% of the units within the jurisdiction of the local PHA. MEDICAID Categorically Needy • AFDC and SSI recipients, as well as other AFDC-related groups who do not actually receive cash payments, are automatically eligible in most States. • 209(b) States limit their Medicaid coverage of SSI recipients by requiring that they meet certain more restrictive criteria that was in place before SSI was implemented in 1972. Also: • Pregnant women and children up to age 6 with family income below 133% of Federal poverty level; • All children under age 19 who were born after September 30, 1983 in families with incomes at or below 100% of Federal poverty level. This phases in coverage for all eligible children up to age 19 by the year 2002; Infants born to Medicaid-eligible pregnant women; • Additional groups of aged, blind, or disabled persons if they meet requisite criteria for SSI; • Certain Medicare beneficiaries; and • Protected groups (individuals who lose cash assistance because of program rules, but may keep Medicaid for a period of time). Optional Categorically Needy Medicaid coverage is optional for other categorically needy groups who share characteristics of mandatory groups, but have more liberally defined eligibility criteria. They include: • Pregnant women and infants under age 1 with incomes above 133% of Federal poverty level but below State-established maximum; • "Ribicoff Children" -children younger than age 21 who meet AFDC income and resource requirements but not the definition of dependent child; and • Those not receiving SSI but are receiving State-only supplementary cash payments. Medically needy {Optional for States) • Persons who do not meet income or resource standards. This must include children younger than 18 and pregnant women not categorically needy, and may include others {e.g., aged, blind, disabled persons). • As of 10/91, 41 States have medically needy programs. Two States exclude aged, blind, disabled. • The medically needy are subject to means testing. 13 AFDC • $1 ,000 equity value limitation per family (or lower amount determined by the State). • The resources and income of an alien's sponsor are deemed available to the household for 3 years following alien's entry into the U.S. Excludable Resources • Home owned and occupied by the AFDC family; • One automobile if the family member's ownership interest doesn't exceed $1,500 (or a lower amount set by the State); • One burial plot per family member and funeral agreements with maximum equity value of $1,500 for family members; • Basic items essential to daily living; and • For 6 months (9 months at State option) real property which the family is making good-faith effort to sell, under specific conditions. Other Resources Excluded by Federal Statute • Resources that are jointly owned and inaccessible, as determined by State law. 14 FOOD STAMPS • Resource limit for a household with an elderly member is $3,000. Otherwise the limit is $2,000. • Counted liquid assets include cash on hand, checking and savings accounts, savings certificates, stocks and bonds, IRAs, funds in Keogh plans, and non-recurring lump-sum payments such as insurance settlements. Also counted is the fair market value in excess of $4,500 for vehicles and the equity value of property not producing income consistent with its value (recreational property). • The resources and income of an alien's sponsor are deemed available to the household for 3 years following alien's entry into the U.S. Excludable Resources • Household's home and surrounding property; • Household goods; • Property, work related equipment, or installment contracts that produce income or is the essential employment of household members; • Government disaster payments designated for the restoration of a home; • Cash value of life insurance policies; • Resources, such as trust funds or security deposits, that are not accessible to household; • Personal effects, including one burial space per household member; and • Other resources expressly excluded by Federal statute. • The value of a vehicle is excluded if it is used to produce income, is necessary for employment, is used to transport a disabled household member or if its fair market value is less than $4,500. If the equity value of any vehicle (other than the household's only vehicle and any vehicle used for getting to work) is greater than the fair market value in excess of $4,500, the equity value is counted towards the $2,000 (or $3,000) overall resource limit. Resources Prorated as Income • Indian lands held jointly with the tribe; .• Certain energy assistance payments; • Property related to the maintenance of a vehicle; and • Resources of any household member receiving AFDC or SSI. HUD-SPONSORED HOUSING There is no explicit limit on resources. If net family assets exceed $5,000, the greater of the actual income from assets or an amount equal to the value of the assets multiplied by the passbook savings rate is counted as income. MEDICAID • Resource limits are the same as SSI in non-209(b) States. • 209(b) States use selected more restrictive criteria that were in effect before SSI was implemented. • Resource standards for the medically needy are set by the State. • A State's definition of countable resources must be: - reasonable; - based on family size; and - uniform for all individuals in a group. • States may be more liberal with Medicaid than with SSI. Resource Limit for 551 and Medicaid • $2,000 for individual, $3,000 for couple. {No annual inflation adjustment). Levels may be the same or higher in States providing supplemental payments. • Qualified Medicare Beneficiaries (QMB's) resource limits are twice SSI's $4,000 for individuals, $6,000 for couples. Excludable Resources • Individual's home, if he/ she is living in it or intends to return to it; • Household goods and personal items up to $2,000; • A car; • Burial account up to $1 ,500; • Burial space. 15 AFDC • All income is counted except when specifically excluded by statute or regulation. • Income of certain persons who are not in the assistance unit must be deemed to the assistance unit. Income of a stepparent must be counted in determining eligibility and payment amounts. • 'The AFDC assistance unit also includes the parent(s} of a dependent child and any dependent siblings who are in the home (SSI recipients and children receiving foster care payments or adoption assistance are not included in this requirement}. • If a minor who is living in the same home as his/her parents applies for aid as the parent of a needy child, a portion of the income of the minor's parents is to be counted as available to the filing unit. • Total income cannot exceed 185% of the State's need standard for the relevant family size. • Countable income must not exceed 1 00% of the State need standard. Approximately 37 States pay less than the amount of their need standard - and use several methods to limit the amount of the payment. An AFDC payment cannot be less than $10. Families that do not meet the minimum payment rule are treated as AFDC recipients and receive Medicaid benefits. • The State may disregard need-based assistance received through other programs (most States do}. • Earned income in-kind is counted . • Unearned in-kind income may be disregarded at State option. Earned Income Exclusions • Income of an AFDC dependent child who is a full-time student, or a part-time student but not employed full-time is excluded. • States may, for up to 6 months, disregard all or part of income of a child applying for AFDC, if earnings are excluded for the month in determining the family's total income pursuant to the 185% gross income eligibility test. Income from JTPA programs by a dependent child applying for AFDC may also be disregarded. • Earned income disregards are applied to earnings of individual, not the family. 16 FOOD STAMPS • Except for households composed entirely of SSI, AFDC, or general assistance, monthly cash income is the primary eligibility determinant. • Household, rather than individual, income is considered . • Households without elderly or disabled members must have monthly gross income of less than or equal to 130% of the Federal poverty income guidelines. • Only net income is considered for households with an elderly or disabled member. An elderly or disabled member is one who is 60 years old or older or receives one of several disability payments including SSI, Social Security, Railroad Retirement, government disability retirement benefits, and certain Veteran's Administration payments. • All households must have a monthly net income of less than or equal to 100% of the Federal poverty guidelines. • Income limits vary by household size and are adjusted each October to reflect changes in the cost of living. Gross income includes all of a household's cash income, except the following: Excludable Income • In -kind benefits; • Unanticipated or irregular income (not greater than $30 per quarter}; • Scholarships, grants, loans, non-recurring lump-sum payments (counted instead as liquid assets}; • Loans (except student loans}on which payment is deferred; • Earned income of students under age 18; • Cost of producing self-employment income; • Certain energy assistance payments; • Federal Earned Income Tax Credits; • "On-the-job" training earnings of dependent children under age 19 in JTPA, as well as JTPA monthly allowances and all unearned JTPA payments; • Income received from the care of someone outside the household; • Reimbursements for certain expenses; • Most payments made to third parties (rather than directly to the household; HUD-SPONSORED HOUSING • Housing is targeted to "lower income" families- with anticipated annual family incomes of not greater than 80% of median income in an area and "very low income" families- with incomes not greater than 50% of median area income. • Income eligibility is based upon family size and area median income guidelines as determined by HUD. • Where decent, safe and sanitary housing is not provided in Indian land areas, the Indian Housing Authority may request HUD to increase income limits for Indian families and individuals. • Eligibility and rental charges are based on countable family income expected in the 12 months following admission or reexamination . Reexamination is required annually Countable income includes cash income from all sources, including income from assets. Excludable Income • Payments under the Domestic Volunteer Service Act; • Irregular gifts; • Reimbursements for medical expenses; • Lump-sum additions to family assets; • Scholarships; • Earnings of children; • Payments for care of foster children; • Relocation payments; • Low-income Home Energy Assistance; • JTPA benefits; • Interest in Indian trust lands; • Earned income tax credit; and • Hazardous-duty pay. Deductions • $400/year for elderly families plus medical expenses in excess of 3% of income; • $480/year for each household member younger than 18, 18 or older and disabled, or a full -time student; • Child care expenses up to the amount of the resulting earned income; and • The higher of child care and travel expenses up to $25 per family per week (for Indian Housing only). MEDICAID • Includes earned (cash or in-kind) and unearned income (SS or VA benefits). • Medically needy income limits cannot exceed 1331 /3% of the maximum State AFDC payment made to a family of the same size with no income. • If income is above the limit, the individual or family may still be eligible through a spend-down provision - where they may deduct any medical expenses incurred over a period of 1 to 6 months from income. When net income falls below the income limit after medical expenses are deducted, the family or individual becomes eligible. • Income limit for nursing home and waiver populations can be increased up to 300% of maximum SSI payment level. • For Qualified Medicaid Beneficiaries (QMB), 1991 eligibility set at 1 00% of Federal poverty level. Countable Income • Is the same as countable income under AFDC for individuals under age 21 who are not disabled or blind and caretaker relatives; • Is the same as countable income under SSI for aged, blind, or disabled individuals in States covering all SSI recipients; • 209(b) States can use more restrictive income criteria but are required to have a spend down provision; • The State may be more liberal than the above descriptions. Countable Income Under SSI (and Medicaid) • Includes cash, other liquid assets, and non-liquid assets; and • Eligible spouse's resources, except when couple is separated. Excludable lncome!SSI • $20/month; • First $65 of earned income; • 1/2 of remaining income; • $1,500 of life insurance proceeds; • Cash payments for medical or other social services; • Housing assistance under most HUD-assisted programs; 17 AFDC • Standard $90 for work-related expenses; • $30 and 1/3 of remaining earned income during the first 4 consecutive months of earnings - $30 deduction available for 8 more consecutive months; • $175/month per child for dependent care expenses ($200 under age 2) or incapacitated adult; Excluded Unearned Income • First $50 of monthly child support payments; • Educational grants and loans; • Value of Child Nutrition and Dept of Agriculture benefits; • Payments to VISTA workers and some Indian tribes; • Payments made to AFDC children from State-only funds under a State program in effect since before January 1, 1979; • Reimbursements for expenses made to volunteer foster grand-parents, senior health aides, or senior companions; and • Agent Orange settlement payments; • Earned Income Tax Credit payments; • Income tax refunds; • LIHEAP payments; • Small non-recurring gifts not to exceed $30 per individual in any quarter (at State option); • Governmental housing subsidies {at State option); • Bona fide loans at State option; • Major disaster assistance; and • All other payments that are required by Federal statute to be excluded under Federal or Federally assisted means tested programs. 18 FOOD STAMPS • Cash donations not to exceed $300 from private nonprofit charities; • Employment and training-related payments; and • Certain foster care payments. • At State option and cost, the amount of child support payments excluded under AFDC may also be excluded for food stamps. • Counted {or net) monthly income is computed by subtracting certain deductions from household's gross income. It recognizes that not all of a household's income is equally available for food purchases by disregarding a standard portion of income, plus amounts which represent work expenses or excessively high non-food living expenses. Deductions lrom Income • An inflation-indexed standard deduction of $122/month (in 1992), regardless of household size; • 20% of any earned income; • Up to $160/month for dependent care; • Medical deduction for households with elderly or disabled members equal to monthly medical expenses above $35; and • Shelter costs exceeding 50% of counted household income after all other deductions, up to a ceiling of $194/month in 1992 {no limit for elderly or disabled households. Households without elderly or disabled members have a ceiling). HUD-SPONSORED HOUSING MEDICAID • LIHEAP payments; • Infrequent or irregular earned or unearned income (less than $1 0 or $20/month, respectively); and • Receipts from reverse mortgages if spent in month received. 19 What are your frustrations with the welfare system? "It seems that clients who try to work and make it, get punished by losing their food stamps, Medicaid, etc." 20 - A Public Assistance Recipient Kansas City, KS in response to a survey about welfare 15 10 • The Section 8 Housing Program The Section 8 Housing Program is made up of the rental certificate and rental voucher programs. The rental certificate program was enacted by Congress in the Housing and Community Development Act of 1974. It represented a shift in Federal housing policy from direct Federal financing for Public Housing Authority-owned public housing and placed emphasis on the private rental market to supply decent, safe, and sanitary housing. The rental voucher program was authorized as a demonstration program under the Housing and UrbanRural Recovery Act of 1983. It was viewed as an improvement over the rental certificate program to more closely reflect actual private rental market operation. In 1988, legislation was enacted to make rental vouchers a permanent part of the Nation's hous-. ing policy. As of january 1993, approximately 1 million families participated in the Section 8 Program. EXHIBIT 11 The Cost of Administering the Programs The Committee believes that the costs incurred in administering public assistance programs cou"Id be lowered dramatically by consolidating or coordinating program requirements. When a person in need has to be interviewed by the eligibility workers of different programs, at different times, providing much the same information to each, it wastes the time of both the caseworker and the client. • AFDC Program The Federal Government matches most State expenditures for operating the AFDC Program at a rate of 50 percent, regardless of the amount the States spend. Since fiscal year 1983, annual operating expenditures for AFDC have averaged $2.1 billion. In 1992, States and the Federal Government spent $2.6 billion (12 percent of total expenditures) to administer $21.9 billion in AFDC grant payments. Exhibit 11 TOTAL MAINTENANCE ASSISTANCE PAYMENTS AND TOTAL ADMINISTRATIVE COSTS FISCAL YEARS 1983 · 1992 • ADM. COSTS • MAIN. ASSIST. PAYMENTS 20 15 10 depicts annual operating expenditures as compared to overall expenditures for fiscal years 1982 through 1992. • Food Stamp Program States (and counties in 10 States) and the Federal Government share equally in the cost of administering the Food Stamp Program. Administrative expenditures for the Food Stamp Program have averaged around $1 billion annually since fiscal year 1983, approximately 7.5 percent of total program expenditures. Exhibit 12 illustrates annual program administrative expenditures in contrast to total annual expenditures. The Federal Government spent approximately $1.4 billion (7 percent of total expenditures) in 1992 to administer $20.9 billion in food stamp benefits. • Medicaid Program States and the Federal Government share in the cost of administering the Medicaid Program. EXHIBIT 12 FOOD STAMP PROGRAM FEDERAL SHARE ADMINISTRATIVE AND TOTAL EXPENDITURES 83 84 85 86 87 In 1992, States and the Federal Government spent $4.28 billion (3.5 percent of total outlays) of the program's total $120 billion on program administration. Annual administrative expenditures for the Medicaid Program have grown by more than $2.4 billion since fiscal year 1984 to an average of $309 million a year. Since 1984, Federal contributions to administrative costs have averaged $1.6 billion; State contributions averaged $1.2 billion. Exhibit 13 illustrates total annual State- and Federalshare administrative expenditures for the Medicaid Program. Exhibit 14 compares total program expenditures for each of the 4 programs for fiscal years 1982-1992. Exhibit 15 depicts participation trends for each program from fiscal years 1982-1992. 88 89 90 91 92 FISCAL YEARS 1983 - 1992 • ADM. COSTS • TOTAL COSTS *INCLUDES FEDERAL SHARE ONLY. STATES MATCH ADMINISTRATIVE COSTS AT 50%. 21 EXHIBIT 13 MEDICAID ADMINISTRATIVE EXPENDITURES 4 0 84 85 86 87 88 89 90 91 92 FISCAl YEARS 1984 - 1992 • STATE SHARE • FEDERAl SHARE EXHIBIT 14 TOTAL PROGRAM EXPENDITURES 82 83 84 85 86 87 88 89 90 91 92 FISCAl YEARS 1982- 1992 HOUSING PROGRAMS • FOOD STAMPS* • AFDC *EXClUDES NATIONAl lEVEl ANNUAl COSTS FOR PRINTING OF COUPONS, STUDIES, AND SURVEY COSTS 22 "The hurdles which families have to scale in applying for help are iust immense. They often must travel to different agencies, meet different eligibility standards, and abide by different rules and regulations." - Representative Bill Emerson, MO Hearing before the Select Committee on Hunger U.S. House of Representatives April 23, 1991 25 20 15 10 0 EXHIBIT 15 TOTAL PROGRAM PARTICIPATION 82 83 84 85 86 87 88 89 90 91 92 FISCAL YEARS 1982- 1992 HOUSING PROGRAMS** • AFDC* • FOOD STAMPS* • MEDICAID* Multiple Program Participation * RECIPIENTS Most people who receive needs-based benefits receive assistance from more than one program. The chart below shows the percentage of persons in each of the four major assistance programs that receive benefits from multiple programs. Participation in AFDC, Medicaid, and the Food Stamp Program is clustered tightly: • Everyone who receives AFDC is eligible for Medicaid; • Nine out of 10 AFDC recipients receive food stamps; • Two out of three Medicaid recipients receive food stamps; • Three out of four food stamp recipients receive Medicaid; and • One-fourth of those receiving AFDC also receive housing assistance. ** HOUSEHOLDS The relationship between housing assistance and the other programs is not as apparent. About half of all households that receive housing assistance also receive Medicaid; about half receive food stamps and one-third receive AFDC. Mathematica Policy Research• examined the participation of low-income households in 17 different programs using the 1984 Survey of Income and ~rogram Participation. Among the findmgs were: • Households of different types varied in their receipt of multiple benefits. While most low-income households (those with gross incomes below 130 percent of the poverty line) participated in at least one program, about one in four households did not participate in any program. These households tended to be intact families with children. 4. Spha 1 ronRLong, Multiple Program Participation Among Food Stamp Recipients, (Washington DC: Mathematica o 1cy esearch, February 1988). ' 23 24 MULTIPLE PROGRAM PARTICIPATION JANUARY 1991 PERCENT OF INDIVIDUALS WHO RECEIVE: AND THOSE WHO RECEIVE: ASSISTED FOOD STAMPS AFDC MEDICAID HOUSING FOOD STAMPS 100 90 65 51 AFDC 50 100 49 35 MEDICAID 74 100 100 53 ASSISTED 30 24 27 100 HOUSING TOTAL PERSONS 18,143 10,018 20,481 (IN THOUSANDS) 10,505 Source: Survey of Income and Program Participation (SIPP), Wave 4 of the 1990 Panel. Notes: SIPP is a household survey that re lies on self-reported participation in programs. As such, benefit receipt is underreported. Percents do not sum to 100 percent due to multiple program receipt by individuals. • Multiple program participation is much more frequent among food stamp households than among the general low-income population. • Non-food stamp nutrition programs were among the most frequently used benefit programs for both food stamp households and the general low-income population. • The three multiple benefit combinations most frequently used by food stamp recipient households all include AFDC and Medicaid. Female-headed families with children are the typical recipients of this package. • Multiple benefit receipt by food stamp households is very effective in reducing the poverty gap for those households. • The extent to which the needs of different types of households are met by the available assistance programs varies substantially. • Previous Attempts at Coordination and Simplification The need for program coordination and simplification was recognized decades ago. Numerous attempts have been made since the late 1960's to overhaul or repair a system that seemed to be rapidly careening out of control. From our perspective in 1993, we can look back and see that the system, or collage of programs serving the needy, has become an unwieldy monster. More significantly, we can see that without dramatic change it is almost certain that reports such as this one will continue to be presented to Congress long into the future. Since the early cries of alarm some progress has been made in bringing assistance programs into closer conformance with one another and in improving access to them (see chapter V). To a far greater extent, however, differences, both large and small, have thrust the programs into their own individual orbits-connecting, at the Federal level, only when there was a specific legislative mandate to do so. Twenty-two years ago, Elliot Richardson, former Secretary of what was then the Department of Health, Education, and Welfare (HEW) recognized that most programs were suffering from a "hardening of the categories." In 1977 former HEW Secretary Joseph Califano made a similar observation: "Given the vast resources this Nation spends on income assistance, it is appalling that our programs are so poorly coordinated, that these programs unfairly exclude millions from adequate aid ... and that they are an administrative jungle, incomprehensible to legislators, administrators, and the American people alike." It is clear that ample attention has been devoted to analyzing the dynamics of program interactions. Inconsistencies, duplication, barriers to participation, and other problems have been identified over and over again. This Committee does not intend to repeat this process but, rather, has chosen to review the studies and reports, and learn from them. As a precursor to its work, the Committee felt it imperative to review these efforts and their fates. • One of the earlier attempts to reform the system was the Family Assistance Plan (FAP). Initially introduced in 1969 and again in 1971, this legislation included universal coverage and a significant work component. This measure was proposed by the Administration of President Richard Nixon, who believed that, "Hard work is what made America great" and that any work was preferable to public assistance. A report released by the House Ways and Means Committee explained the motivation of the bill's supporters in the Congress. The Committee reported it believed "that the American people do not want a system which results in promoting welfare as a way of life." As a result, it "developed a program which is in the interest of the taxpayer as well as the needy." Under FAP, a minimum income ($2,400 for a family offour in 1970) would have been established. It included a provision for assistance to the working poor with the proviso that employable parents, including mothers, work. Families exempt from work and the training provision would get the same amount under FAP, except that persons considered eligible for rehabilitation would be referred to State vocational rehabilitation agencies and receive $30 per month as an incentive allowance and for expenses. Benefits would be reduced if they failed to comply. Drafters of the bill recognized the lack of child care would be an obstacle for mothers to work. Therefore, funding was included for child care facilities and services. The bill increased funding to enforce child support collections and called for Federal family planning services. It included no provision for cost-ofliving increases and there was no requirement that States pay supplementary assistance. Also, States would not have to pay more for Medicaid than they paid in 1971. Consequently, some recipients of aid would stand to lose under FAP. 25 "We have tinkered on the edges of this nonsystem-we've tried to deal with individual parts of it over the past 1 0 or 15 years-and it has only gotten worse. If you only take on one piece of it at a time without creating the environment for sys-fernie change, you're likely to have unintended consequences that make the problem even worse." 26 - Hillary Radham Clinton on health care reform • In December of 1973 the staff of the Joint Economic Committee, chaired by Congresswoman Martha Griffiths, undertook an extensive study of the public assistance system. It resulted in 20 volumes addressing a variety of aspects of the system, including coordination issues. • The Allied Services Act was a proposal put forth as legislation in 197 4 and again in 1975, but never enacted. The bill would have authorized demonstration grants to States and through States to localities, to develop "allied services plans" providing for the coordinated delivery of human services. Special implementation grants would have been available to assist in covering the initial costs of consolidating administrative support services and management functions. The Act would have permitted States to transfer funds from one program to another for similar uses. Administrative and technical barriers between programs could have been waived by the Secretary of HEW when they impeded coordinated delivery of services. • Former President jimmy Carter was so impressed with the need for a more efficient, effective public assistance system he made it a key theme of his 1976 campaign: We should have a simpler national public welfare program, with one fairly uniform standard of payment, adjusted to the extent feasible for cost-ofliving differences by areas and with strong work incentives built in .... On january 25, 1977, at one of his first press conferences, the new President announced that joseph Califano, his selection for Secretary of HEW, would present him with a comprehensive plan to reform the public assistance system by May 1 of that year. With this extremely tight timeframe Secretary Califano launched a major effort to identify problems with the Nation's income assistance programs and recommend solutions. A 32-member consulting group consisting of representatives of the Congress, executive branch agencies, State and local government officials, public assistance recipients, and public interest organizations was appointed. The group conducted weekly public meetings to consider the public assistance system. Attendance ranged between 100 and 200 each week. Opinions were solicited from every governor and Member of Congress and more than 200 State and local government officials and experts in social welfare. More than 10,000 newspapers, radio and television stations, journals, and magazines were contacted. One hundred forty-five meetings were held, including 70 open town meetings. More than 15,000 individuals or organizations offered input. The findings? In his report to the President, Secretary Califano wrote that: One central conclusion emerges from our work to date: The welter of programs that are collected under the rubric of the 'welfare system' must be scrapped. Major structural reform of our income assistance programs for the poor is necessary if we are to encourage work wherever possible, provide basic income protection for those who are unable to provide for themselves, provide incentives for keeping the family together, and simplify and make more efficient the basic administrative structure. In his recommendations the Secretary wrote, My basic recommendation ... is that tinkering with the present system-trying to make incremental changes in the existing hodgepodge of income assistance programs-is not the proper course to follow. We must, instead, view the income assistance system as a whole and we must completely restructure the system so that it is comprehensive, fair, and efficient. Given the inequities and administrative chaos caused by a welter of inconsistent and confusing programs, nothing less than a total effort at welfare reform will do. Guidelines for a legislative proposal included a consolidated cash assistance component that would encompass AFDC, Supplemental Security Income (SSI) benefits, and food stamps. "Such a consolidated cash assistance program would reduce leakage, simplify existing administrative structures, and make income assistance more understandable to officials and recipients alike." • In December 1978, President Carter called for an interagency effort to analyze and recommend improvements in the eligibility requirements and administrative procedures of Federal public assistance programs. The programs under review included AFDC, SSI, food stamps, Medicaid, Title XX, Section 8 Housing, and the Comprehensive Employment and Training Administration. President Carter's hope was that the review would "produce recommendations which will lead to more consistent and less burdensome government-wide practices to make the eligibility determination process simple, understandable, and efficient.. .. " The Eligibility Simplification Project Steering Group was comprised of assistant secretaries directed by the Secretary of HEW and the Director of the Office of Management and Budget. The scope of the project was limited in two ways. First, the team analyzed only the factors in each program that affected financial eligibility requirements and procedures, not those related to the amount of benefits or services the programs would provide. Second, analyses were limited to Federal requirements, not those imposed by State or local governments. The project involved an exhaustive study of all eligibility requirements and procedures governing eligibility determination in the seven programs. Requirements were broken down to the smallest possible units of analysis to facilitate cross-program reviews. For example, 130 discrete elements of income were identified. Options to standardize or eliminate requirements were evaluated against this set of criteria: • impact on program purpose; • program and administrative costs; • responsiveness to clients; and • potential for reducing waste, lowering error rates, and improving understanding. In October 1980 a final version of the report was published, including recommendations for specific changes which would "reduce the conflicting and unnecessarily burdensome and duplicative eligibility requirements .... " Because of the change in Administrations the next year, the recommendations were not championed and most were never adopted. • State and local human service commissioners, brought together by APWA completed work on their Matter of Commitment Project in 1986. The commissioners conducted a comprehensive review of public assistance programs to find ways to transform that system into a means of achieving self-sufficiency. Recommendations in the project's report, One Child in Four, emphasized the need to change assistance programs into vehicles for selfsufficiency for as many recipients as possible. The report called for a set of mutual obligations between public assistance agencies and clients, opportunities and incentives for education and job training, and a realistic base of income support. Many of the principles in the report were reflected in the Family Support Act of 1988, sponsored by Senator Daniel Patrick Moynihan. The Commissioners also recommended establishing a Family Living Standard (FLS)-a nationally mandated, State-specific cash grant that would take the place of AFDC, food stamps, and Low-Income Home Energy Assistance Program payments. While the Family Support Act did not include the FLS, it did require a study of this and alternative benefit formulas by the National Academy of Sciences. This study is now in progress. • In his 1986 State of the Union Address, President Ronald Reagan directed the White House Domestic Policy Council to study the public assis- 27 28 tance system and to propose a strategy to change the system so that it would better serve the poor. In response to this charge, the Council's Low Income Opportunity Working Group made an extensive year-long study of public assistance and poverty in the Nation. The Working Group, comprised of officials from Federal agencies that manage public assistance programs and led by the White House Office of Policy Development, consulted current and former public assistance recipients, eligibility workers, local political leaders, and many of the Nation's governors. The result of its work was a series of reports entitled Up From Dependency: A New National Public Assistance Strategy. The group looked at public assistance as a recipient would, as a system rather than as a series of unconnected programs. It felt that the weaknesses that characterize a centralized system-rulemaking from the top down, failure to develop individual potential, and failure to utilize local resources-contribute to the persistence of poverty. The group held that national solutions to dealing with poverty have failed and that the only answer is to find solutions in our neighborhoods, communities, and States. It recommended using the States as laborato-ries to experiment with reforms on a small scale, before proposing systemic change at the national level. The cornerstone of the Up From Dependency recommendations is longterm experimentation through demonstrations that are both community-based and State-sponsored. The Federal Government would articulate policy goals and define parameters for any reform experiment and maintain current levels of financing. Recognizing the extensive amount of experimentation already proceeding in States and communities, the group cautioned against proposing "national" welfare reforms unless they had been locally tested. The Interagency Low Income Opportunity Advisory Board was formed by the White House in 1986 to enhance coordination of public assistance programs and policies across Departmental lines and create a focal point for intergovernmental coordination of public assistance initiatives. • When the National Commission on Employment Policy undertook a "coordination project" to review the interaction of public employment programs, it discovered that interaction was hampered by the lack of coordination of public assistance programs in general. The target of review was broadened, to encompass all needs-based programs. "Administrative convenience must no longer govern service delivery. Health, social service and education providers must modify 'business as usual' to collaboratively meet the needs of individual adolescents and their families. " - National Commission on the Role of the School and the Community in Improving Adolescent Health, Code Blue: Uniting for Healthier Youth National Association of State Boards of Education, 1990 At a series of seminars during the spring and summer of 1991, the Commission heard from almost 200 people involved at all levels of the public assistance system. The Commission also engaged in extensive information collection and analysis. In October 1991 the Commission sent its recommendations to the President and Congress. Recommendations to the President included: • expand authority of the Economic Empowerment Task Force to resolve problems affecting design and implementation of Federal assistance programs; • direct the agencies that administer public assistance programs to develop a common framework for streamlining eligibility requirements, formulating standard definitions, and easing administrative and documentation requirements; and • combine the many programs that provide employment and training services to the economically disadvantaged into one agency. The Commission recommended that Congress: • assign responsibility for legislation and oversight over public assistance programs to a single Committee on Public Assistance in each Chamber; • work with Executive Branch agencies to develop a common framework for streamlining eligibility requirements, formulating standard definitions and poverty measures, and easing administrative and documt;: ntation requirements; • enact legislation to establish human resource councils at the State level to foster coordinated program approaches; and • require that an economic, fiscal, and institutional analysis be conducted for each congressionally authored institutional reform or adjustment in Federal assistance programs. Why Have Previous Efforts Failed? All of the attempts to simplifY and coordinate the programs have encountered obstacles. Chief among these have been differences in the goals of reform efforts, the cost of program changes, a reluctance to lower benefits in one area (even if benefits may increase in other areas), support for program differences, and the relatively low priority given to simplification issues by the Congress. • 1. Different Reform Goals Reform efforts in public assistance have run the gamut from attempts to overhaul the entire structure for assisting low-income persons to endeavors to conform and simplifY program rules. A consensus has never been reached on whether the existing set of programs should be replaced or retained and improved by making their rules more consistent and straightforward. This lack of consensus has resulted in a diffusion of effort and attention. • 2. Budget Impacts Any change in program eligibility requirements or benefit levels affects program costs and the benefit amounts of individuals. In fiscal year 1991 AFDC and Food Stamp Program benefit payments totaled $37.3 billion. Given the fiscal magnitude of these programs, a change in program parameters can. beget significant budgetary consequences. For example, raising the AFDC asset limit from the current $1,000 to the $2,000 Food Stamp Program limit would allow more people to get AFDC. In fiscal year 1992 such a move would have increased AFDC costs by $135 million (Food Stamp Program costs would have fallen by $4_9 million because these people would have had higher incomes for the purpose of food stamp benefit determinations). In addition, since the new AFDC recipients would be categorically eligible for Medicaid, costs for that program would increase. Lowering the Food Stamp 29 "Private values must be at the heart of public policies." 30 - Former President Ronald Reagan State of the Union Address February 4, 1986 Program asset limit to the $1,000 AFDC threshold would save $250 million because fewer people would be eligible. If AFDC were to adopt the more liberal Food Stamp Program rules on counting the value of vehicles in determining asset eligibility, AFDC costs would increase by $700 million because more people would qualify for assistance (Food Stamp Program costs would decrease by $200 million, based on fiscal year 1992 estimates by FNS). Medicaid costs would also rise with the increase in the AFDC numbers. Proposals to consolidate programs or streamline eligibility determinations are sometimes crafted to be budgetneutral by balancing costs and savings. While this leaves average benefit levels unchanged, it creates groups of winners and losers. In the early 1970's, welfare reform efforts such as President Nixon's proposed Family Assistance Plan focused on creating a national cash welfare system with uniform eligibility and benefit levels. Such proposals would have established benefit levels higher than some State AFDC grants and lower than others. These benefit levels were opposed by client advocates from high-grantAFDC States who did not want to see people get less aid and also by interest groups from low-grant AFDC States who did not want to see more people added to the public assistance rolls. The proposals failed. In the Food Stamp Act of 1977, the Congress attempted to simplify the benefit determination process by reducing the number of separate income deductions that eligibility workers must establish and compute. A proposal to simplify the process by replacing the individualized excess shelter expense deduction with a larger standard deduction for all households was tabled by legislators from States with higher housing costs (and constituents who benefit from the individualized computation). A similar proposal submitted by the USDA in 1983 failed, again because a higher standard deduction-while not changing average benefitS-would create winners and losers and there was reluc-tance to lower benefits for households with higher shelter cost burdens. • 3. Financial Choices Financial resources for these programs are limited and subject to many competing demands. Congress has not chosen to invest in changes to better align the programs. While in recent years Congress has increased food stamp benefits, the additional monies have been targeted at raising allotment levels rather than achieving program conformity. Similarly, Congress provided for more resources in the AFDC program in the Family Support Act of 1988. Again, monies were targeted toward priorities such as establishing the Jobs Opportunities and Basic Skills Training Program QOBS), providing for more transitional support for people leaving the AFDC rolls, and extending the AFDC-UP component rather than at changes aimed at enhancing conformity. In Medicaid, Congress recently provided for expanding the case load by mandating coverage of all young children from poor families. Again, Congress chose to increase funding for the program but did so in an area that does not conform or simplify the program. • 4. Congressional Inattention The lack of funding to support program conformity is symptomatic of a larger problem: conformity issues have not received legislative attention. Part of the problem is the split jurisdiction within the Congress on public assistance issues. No committee is responsible for aligning programs. Committees focus on the programs within their jurisdiction with little awareness of the collective impact of the individual pieces of legislation that emerge. It is much easier to modify existing programs than to create new ones. For example, increasing the housing cost deduction in the Food Stamp Program has broad support; getting any sort of entitlement directly as part of a housing program, however, is very difficult. Legislative action is often reactive, depending upon the priorities established by new administrations as well as public opinion. Thus, congressional I priorities have shifted back and forth from increasing client benefits, to program accountability, to budget cutbacks, and once more to program coordination and simplification. Another factor contributing to the lack of attention has been a lack of vigorous advocacy for conformity issues. • 5. Executive Branch Inattention As in Congress, each major program is overseen by its own agency and no one below the Office of the President is responsible for central oversight. Although coordination has increased in recent years, no formal structure exists for interagency cooperation. Each agency has its own agenda and at the top levels of Government there are higher priorities vying for attention. • 6. Competing Constituencies Another factor inhibiting change is that some different program requirements may enjoy strong support from important constituencies. For example, the Food Stamp Program requires that highly needy applicants get benefits within 5 days and that all applications be acted on within 30 days. The AFDC program provides for 45 days for application approval, with some exceptions (e.g., a State invoking presumptive eligibility provisions for special circumstances). The Food Stamp Program timeframes enjoy strong support because quick access to food assistance is seen by many as a fundamental program goal. The longer timeframe allowed for AFDC is supported by State agencies and their front line workers because it allows more time to process the application. • 7. State/Federal/Local Balance Programs may differ substantially in terms of their balance of Federal and State responsibility. Since 1971 the Food Stamp Program has emphasized uniform national standards which have strong support in many quarters; the AFDC Program has emphasized more State latitude. The food stamp benefit is entirely federally financed and the expectation is that the Federal Govern-ment should exert strong control over its distribution. This control takes two basic forms: 1) control over the details of benefit determination; and 2) control over operations to ensure accountability. The AFDC benefit is funded by both the Federal and State Governments, and there has been greater support for allowing State Governments more control over the program. The Food Stamp Program has detailed Federal requirements for State application processing. The AFDC program allows more State agency flexibility. The 1985 regulatory proposal to extend similar flexibility to State agencies in processing food stamp applications was vehemently opposed by client advocacy groups and Members of Congress who saw the proposal as a dilution of important procedural protections designed to safeguard access to food assistance. Housing aid is 100-percent federally funded and administered through local public housing authorities. The Housing Authorities have some flexibility in how they administer their programs, but the Federal Government establishes parameters. • 8. Timing The timing of conformity recommendations may affect their impact. For example, the interagency task force established in late 1978 reported in 1980. Shortly thereafter, a new Administration with a much different perspective on public assistance took over and had no interest in advancing the recommendations of its predecessors. Interest in program integration has been expressed periodically by Members of Congress, Federal agencies, and State agencies but these interests have never come together at the same time. The time for change is NOW. Coordination and simplification of assistance programs has the attention of the President, the Congress, and the American people. A new economic plan and a new system of health care should go hand-in-hand with a streamlined process to aid the needy. • 31 32 "The paperwork is so overwhelming, it precludes a focus on clients. If ever there was a system of the 'tail wagging the dog,' this is it." - Virginia Mustain, National Eligibility Workers, Testimony before the House Agriculture Subcommittee on Domestic Marketing, Consumer Relations ond Nutrition June 23, 1992 Chapter Simplification and Coordination Efforts Currently· in Effect As discussed in chapter IV, many efforts to simplifY and coordinate Federal public assistance programs have been attempted over the years. Some progress has been made to bring the programs into closer conformity. For example, automatic eligibility forMedicaid for all AFDC clients eliminates a second application and the associated processing activities for intake in the Medicaid program. Efforts by the four programs reviewed in this report have resulted in demonstrations and policies designed to ease the burden on clients and administrators alike. Some examples are highlighted in this chapter. State and Local Efforts at Simplification and Coordination State, county, and city governments have initiated innumerable projects aimed at simplifYing and coordinating the administration of public assistance programs. Local efforts have often been the catalyst for simplification and coordination changes at the Federal level. State and local administrators have been vocal in urging Federal legislators and administrators to adopt reforms. Many local efforts can be adapted and serve as models for Federal use. • One-Stop Shopping In Delaware and Maryland One example of coordination at the State and local level is the concept of one-stop services. At its meeting in Wilmington, Delaware, the Committee had the opportunity to learn more about this concept. The concept of one-stop services for public assistance has been around for a long time. Delaware has been a recent innovator in the development of one-stop services through a system of single entry, multiservice facilities that house public and private human service programs in community locations. Two key goals guide the onestop services system: 1) service is client-cent~red and results-oriented, with an emphasis on working with individuals and their families to maximize independence; and 2) the system itself must be self-correcting-constantly retooling to keep pace with changing client needs and a changing service delivery environment. Accessibility and client convenience are integral features of the one-stop services concept. Twelve State Service Centers are located strategically throughout Delaware. Most clients need to travel fewer than 5 miles to get to a center. An 800 number provides telephone assistance in getting information about services. The services provided at each center are geared to the population of the surrounding community. Collocation or consolidation of service providers is maximized. The major services available include certification for public assistance, public health, child support enforcement, mental health, and help with alcohol and drug abuse. To the extent possible other related agencies, such as Vocational Rehabilitation, Adult Corrections, Child Protective Services, Youth Rehabilitative Services, and Department of Public Instruction may be housed in the Service Centers. Numerous nongovernment agencies are also collocated within the Service Centers, including Head Start, Senior Centers, and Alcohol and Drug Counseling programs. When a particular center does not offer a service onsite, staffwill make referrals to those organizations above and such organizations as Social Security Administration, Meals on Wheels, Visiting Nurse Association, Alcoholics Anonymous, Family Court, and the Special Olympics. Elsewhere, the City of Baltimore is combining housing and human services through the Family Development Center located in the Lafayette Courts public housing development. The Development Center was inaugurated in 1987. With 85 percent of the families in Lafayette Courts receiving some form of public assistance, many of the families are trapped in the cycle of poverty with little hope of breaking into the mainstream. The Develop- 33 34 ment Center offers residents one-stop shopping for programs from five government agencies. The center occupies nine adjacent apartment units on the first floor of a high-rise. The apartments have been converted to a health center, day care facility, preschool classroom, literacy lab, education and employment training center, computer lab, and counseling offices. The Development Center is working to provide the comprehensive resources necessary to boost selfesteem, improve skills, enhance the ability to deal with setbacks and obstacles, and provide a structured plan to help guide families away from dependence on public housing and public assistance and toward self-sufficiency. Federal Efforts at Simplification and Coordination Federal efforts at simplification and coordination often have their roots in State and local initiatives. Many of the initiatives discussed in this section were the result of input and pressure from States, counties, and others, such as recipient advocates. • Joint Processing and Categorical Eligibility Joint processing and categorical eligibility save time and money, and reduce the "hassle" factor for both clients and caseworkers. Under joint processing, applicants have the benefit of "onestop shopping", i.e., they can apply for more than one program at a time using one application form, with a single interview at initial application. Joint processing may not work, however, if membership of the assistance group varies between programs. Categorical eligibility, which often goes hand-in-hand with joint processing, is a policy whereby an applicant for a particular program is presumed eligible based on his or her eligibility for another program that has comparable or stricter needs tests. This policy saves time and effort for both the applicant and the caseworker since normal verification requirements are waived under presumptive eligibility. A major drawback, however, is that in some instances benefit levels are very low or nonexistent due to the differences in the treatment of income between programs and the definition of eligible members. Many of the programs have developed joint processing and categorical eligibility policies. For example, a family seeking assistance from a social services office will find that procedures for processing the application and determining eligibility for AFDC, general assistance, and food stamps are integrated to a large extent. The family will have only one interview for AFDC and food stamps and will not have to provide the same information to both the food stamp and AFDC eligibility workers. If everyone in the household is eligible for AFDC or general assistance programs, the household group is automatically eligible for food stamps. Even though the household is categorically eligible for both programs, separate rules still apply for counting income and establishing benefit levels. Computation of benefit levels for each program must be done separately as well. If the household does not qualify for AFDC, its case is handled as a nonpublic assistance food stamp household, and it does not have to provide additional information. Similarly, individuals applying for SSI benefits may apply for food stamps at the same time. The State may arrange to have Social Security Administration (SSA) staff complete and forward food stamp applications to the local social services office, or it may outstation food stamp eligibility workers at the SSA offices. Through these procedures, SSI applicants are able to apply for food stamps without having to make a separate trip to the food stamp office. Households in which all members receive SSI are categorically eligible for food stamps. AFDC and SSI clients living in "mixed" households with nonAFDC/ SSI beneficiaries are deemed to have satisfied the food stamp asset "Interrelated problems and programs represent a compelling case for transforming the current fragmented array of services into local integrated service delivery systems organized holistically around at-risk families to produce measurable improvements in their lives and their prospects. " - Services Integration: A Twenty Year Retrospective Department of Health and Human Services, Office of the Inspector General, 1991 eligibility test because they have passed the AFDC or SSI test. The AFDC or SSI client is categorically asset-eligible, and his or her assets are not counted in judging the household's eligibility for food stamp purposes. In 32 States, AFDC and SSI clients are automatically eligible for Medicaid (79 percent of all SSI recipients are represented). A State may limit its Medicaid to SSI recipients by requiring a separate Medicaid application or by using criteria no more restrictive than were used in the approved State Medicaid plan injanuary 1972. Twelve States, representing 18 percent of SSI recipients, use this option. In most States, other AFDC-related groups who do not actually receive cash payments are automatically eligible for Medicaid. • Demonstration Projects, Welfare Reform Initiatives and Regulatory Waivers Through demonstration projects, welfare reform initiatives, and waivers of program regulations, States are better able to coordinate policies among programs to enhance service to clients and improve administrative efficiency. Demonstration projects and welfare reform initiatives permit a broader expression of waiver authority than is normally allowed under the general administrative waiver authority, especially for certain programs, such as AFDC and the housing assistance programs under HUD, that do not have waiver authority. Section 1115 of the Social Security Act permits statutory and regulatory waivers for the AFDC Program under the auspices of demonstration projects. Unlike the general administrative waiver authority, the expanded demonstration authority includes a requirement for evaluation; each demonstration and welfare reform initiative must be evaluated to determine its effectiveness. Demonstration Projects The idea for legislation authorizing demonstration projects often originates with States or other sources out-side the Federal government. But, demonstrations are also initiated at the Federal level and States are solicited to participate. Some examples of ongoing demonstrations follow. • Food Stamp Employment and Training Program/JOBS Demonstration In March 1992, USDA offered to allow selected States to test conformance between the Food Stamp Employment and Training (E&T) Program and the JOBS Program of the AFDC Program. Under this demonstration, Food Stamp Program regulations are waived to allow for conformity with JOBS. The five participating State agencies will evaluate the results of their efforts and report them to USDA. • Economic Empowerment Partnerships HHS and the U.S. Department of Housing and Urban Development (HUD) are jointly funding 13 economic empowerment partnerships to promote self-sufficiency among AFDC clients residing in public housing developments. This demonstration began in October 1991. The two Departments are allowing creative waivers designed to reduce the disincentives to employment. HUD is permitting the sites to use public housing units for nonresidential activities (e.g., training centers, micro-businesses, and supportive services activities). HHS is allowing waivers of certain AFDC rules which are disincentives to business ownership (e.g., restrictions on personal or business asset accumulation) and permitting clients to keep a greater portion of increased income from work. In addition, HHS is allowing sites to require that AFDC payments be contingent upon successful participation in work or other activities. Finally, HHS is extending eligibility for the JOBS program to a larger population than would ordinarily be covered. 35 "There are great people in public housing. Although folks will tell you it's full of lazy people, drug-pushing thieves looking for a place to stay, I found out that wasn't true. I found there were young people so talented, they should be anywhere from Holly-wood to the White House. But they don't have the opportunity. With the resources, the support systems and training, they can be iust like people in any other community. " - AnnWilson Milwaukee Housing Authority 36 • Transitional Housing The Housing Act of 1987 created the Transitional Families Demonstration Program which required waivers from programs within HHS, USDA, and HUD. This 7-year demonstration project, called the GATEWAY Program, is being carried out by the Charlotte Housing Authority. The purpose of the program is to demonstrate the effectiveness of providing a comprehensive program of services to participating public housing residents to ensure the successful transition of such residents to private housing. During its Charlotte, North Carolina, meeting in January 1993, the Committee visited the GATEWAY Program. The program assists families with annual incomes under $12,500 living in assisted housing to become self-sufficient by offering both a safety-net and a means to accumulate the capital necessary to make the transition to private housing. GATEWAY offers educational and job training assistance along with other supportive services to prepare participants for employment. Upon entry into the GATEWAY Program, a participant's rent and any AFDC, Medicaid, and food stamp benefits are frozen while he or she receives educational and occupational training necessary to compete on the private market, along with an array of other services to help the participant become self-sufficient. This "remedial stage" may last up to 2 years. This period allows families to pay off their debts and repair their credit rating prior to pursuing homeownership. Once the major barriers have been overcome, the family enters the second part of the GATEWAYProgram, the "transitional stage," which can last up to 5 years. During this part of the program, the family 's rent will rise as it normally would for residents of public housing in relationship to their income (30 percent). Also during this phase, the families will receive assistance in upgrading their job skills and training on home ownership. At the end of the program, the family agrees to leave assisted housing to seek housing on the private market. One of the unique features of the GATEWAYProgram, in addition to the freezing of benefits, is that an escrow savings account is established for the family to be used at the end of the program either as a downpayment on a home or other private market housing when the family is ready to leave public housing. During the transitional stage, a portion of the family 's rent is placed in this savings account. • Washington Family Independence Program At its August 1992 meeting in Seattle, Washington, the Committee visited with staff and participants of the Washington Family Independence Program (FIP). FIP is a 5-year demonstration project aimed at illustrating how enhanced employment and training services and incentives for entering training or work helps families get off public assistance and move towards self-sufficiency. The FIP program is unique in that it emphasizes individualized assessment and training services. Under FIP, participants receive a guaranteed level of cash assistance equal to what they would have received under the AFDC and Food Stamp Programs, and may receive cash incentives for participating in training or employment activities. In addition, the program offers help with child care costs and offers 1 year of transitional benefits in the form of medical care assistance when participants are earning enough to make them ineligible for cash assistance. FIP has been applauded by administrators, staff, and clients because it emphasizes education and training for individuals and gives special attention to the needs of pregnant and parenting teens. Its case management approach, the positive attitude of staff, and regular monitoring of participants gives the participants the emotional and physical support they need to be successful. Despite its success and popularity among clients and administrators alike, the State will be unable to continue FIP at the end of the demonstration. The authority for the demonstration will expire and the State would have to seek legislative relief to be able to continue. Moreover, the State reports that it cannot afford to continue FIP. A requirement of the demonstration is that it be costneutral, i.e., the total cost of operating the demonstration shall not exceed the base-line cost to individually operate the Food Stamp, AFDC and Medicaid Programs in absence of the demonstration. FIP is more expensive than the cost to operate the three programs. The State is currently paying the difference in cost, but will be unable to con-tinue this practice beyond the end of the demonstration. • Utah Single Parent Employment Demonstration The Utah Single Parent Demonstration is an attempt to change AFDC in that State from an incomemaintenance program to an employment program. The key components of the demonstration are: required self-sufficiency planning for AFDC applicants, greater coordination of AFDC and JOBS with child support enforcement, stricter JOBS participation requirements, greater coordination between AFDC and services for public housing residents, and greater financial incentives to encourage work. The latter provision will include raising the resource limit to $2,000 and the automobile limit to $8,000, replacing the current earned income disregards with a single disregard of $100 (for applicants and recipients) plus 45 percent, and expanding eligibility for transitional Medicaid and child care services. The evaluation of this 5-year demonstration will measure the project's impacts on employment, income, child support collections, and exit and recidivism rates for AFDC and food stamps. Along with AFDC and food stamp payments and receipt of Medicaid services, the evaluation will also determine the project's effect on JOBS and Food Stamp E&T Program participation rates and paternities and child support orders established. It should be noted that projects like Washington FIP and the Utah Single Parent Employment Demonstration are limited in scope since they reach relatively small populations for short periods of time. Consequently, despite their successful outcomes they do not eliminate dependency for longer-term recipients. Welfare Reform Initiatives Welfare reform initiatives are launched at the State and county level. Waivers are granted in concert by USDA, HHS, 37 "The dirty little secret is that, far from being forced to work, welfare mothers are for practical purposes prevented from working. " 38 - Senator Daniel Patrick Moynihan Congressional Record April 21, 1988 and other Federal agencies, as appropriate, for the projects proposed by States. • Alabama's Avenues to Self-Sufficiency through Employment and Training Services Known as ASSETS, this is one of the earliest welfare reform initiatives. It combines food stamp and AFDC benefits to provide clients a single monthly cash grant. Case management is an integral part of ASSETS. Among other things, the approved waivers permit the State to require food stamp clients to cooperate with child support collection efforts. Nationally this is required only of AFDC clients. Administrators also established a vehicle disregard, authorizing one licensed driver per household to own a car without affecting the family's benefits. ASSETS has been praised by workers and administrators because it is simpler and easier to understand than existing rules. Implemented in three counties-Clarke, Limestone, and Madison-ASSETS began onjuly 1, 1990, and will continue until june 30, 1994. The project will be evaluated by an independent contractor using a longitudinal study to compare the three test counties with three matched non treatment counties in terms of net impact and cost-benefit. • To Strengthen Michigan Families Program Another welfare reform initiative is the To Strengthen Michigan Families Program, which began in 1992. A broad family support program, this project consists of a wide variety of AFDC,JOBS, child support, and Medicaid provisions. This 5-year project changes current AFDC procedures through expansion of the AFDCUnemployed Parent Program by eliminating the 100-hour work limitation and the attachment to the labor force requirement, replacing the current AFDC earned income disregards with a single disregard of $200 plus 20 percent of the remainder with no time limit, and excluding all income earned by dependent children who are students. JOBS-related provisions include allowing noncustodial parents to participate inJOBS, removing the JOBS requirement that gives first consideration to voluntary clients, and lengthening the job search period before assessment from 3 weeks to 8 weeks. As for Medicaid eligibility, the project establishes a $5,000 maximum limit (except for SSI recipients) for exclusion of funeral goods and services, and it requires medically-needy Medicaid clients to meet their spenddown requirement by paying their excess income to the State. A wide variety of improvements in child support enforcement, which did not require waivers, are included in the project: requiring child support agencies to establish mechanisms to identify persons with access to health insurance coverage, requiring noncustodial parents to disclose their child support obligations to employers for mandatory withholding, and requiring hospitals to accept and record paternity acknowledgements as part of birth registration. The evaluation will measure the project's impacts on employment, earnings, marital status, AFDC and food stamp receipt, and exit and recidivism rates for AFDC. The evaluation will also include a nonexperimental study to determine whether the demonstration leads to increased collection of court-ordered child support and increased paternity establishment. General Administrative Waiver Authority The programs also have varying degrees of authority to waive legislative and regulatory provisions. The Food Stamp Program has administrative authority to grant waivers that would result in a more effective and efficient administration of the program. Often, waivers are sought by States in an effort to coordinate food stamps with other programs, such as AFDC. Waivers may be granted if they are not inconsistent with the provisions of the Food Stamp Act of 1977 or they will not result in the impairment of any statutory or regulatory rights of clients or potential clients. The AFDC program does not have broad administrative waiver authority like the Food Stamp Program; however, the Social Security Act permits waivers beyond those afforded under demonstration authority, to promote compatibility with the Food Stamp Program on monthly reporting and retrospective budgeting. Also, HUD does not have waiver authority for the administration of its housing assistance programs. • Cash-Out In California, individuals receiving SSI benefits and/or State supplementary payments are ineligible to receive food stamps. Instead, they receive a Statefinanced adjustment to their SSI payment each month. These individuals are not considered food stamp clients; however, the SSI payments are increased to include a flat allowance in lieu of a food stamp benefit. There is no individualized computation of food stamp benefits for an SSI case. This policy benefits clients in several ways. Many SSI participants have severe disabilities. Providing food stamp benefits in cash rather than coupons (cash-out) relieves them of the inconvenience of traveling to issuance centers to obtain their coupons. It also allows them more flexibility if they are unable to travel to a store and someone else must make their food purchases for them. Receiving cash instead of coupons removes the stigma of being "on public assistance" and may encourage eligible households not currently participating to apply for benefits. Demonstrations were conducted by the USDA's FNS in Alabama and San Diego, California, on the feasibility of cashing out food stamp benefits for the general food stamp population. The San Diego demonstration began in july 1989 and is scheduled to last 54 months. The project began with 20 percent of the county's case load and expanded to the entire county in September 1990. The Alabama demon-stration was a short-term project that ran from May to December 1990. The project was implemented in 12 counties and involved approximately 2,000 households. Findings from the Alabama and San Diego demonstrations, as well as results from two other demonstrations, the Washington State Family Independence Program and the Alabama ASSETS Program, have allowed FNS officials to draw some tentative conclusions about the effect of cash-out on food stamp |