Updated 12-2-97



The New Law


S. Carolina


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State Caseloads
Block Grants

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Related Sites

The Department of Health and Human Services Welfare Reform Page

Health and Human Services Welfare Reform Fact Sheet



Should Congress restore welfare funds for legal immigrants?



The New Law

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 replaced Aid To Families With Dependent Children, formerly the principal federal welfare law that operated as an open-ended entitlement from the federal government to qualifying mothers with children. With a stroke of the president's pen, AFDC ceased to exist.

Major Points Of The Legislation

  • Block Grants Instead of AFDC, states now receive fixed, lump-sum payments known as "block grants." These levels are set on a state-by-state basis, corresponding with prior funding for AFDC and related programs for fiscal 1995, fiscal 1994 or the average of fiscal 1992-94, or whichever is greatest. (What each state gets).

    State Autonomy After their plans receive cursory certification by the federal Department of Health and Human Services, states have broad authority over their own programs regarding eligibility and payments. States that have received approval for so-called welfare reform "waivers" before July 1, 1997, can operate cash assistance programs under those provisions. (Complete list of waivers from HHS site.)

  • State Spending States must maintain at least 80 percent of 1994 levels of welfare spending. Those that maintain 100 percent qualify for contingency funds.

  • Work Requirements After two years on aid, welfare recipients are required to work, with few exceptions, 20 hours per week or to participate in a state-approved work program, though no more than 20 percent of states' caseloads can be in vocational programs and count toward work requirements. Twenty-five percent of families in all states must be working or off the rolls by fiscal year 1997, 50 percent by fiscal year 2002.

    States are permitted to use welfare funds to create community service jobs or to provide incentives to potential employers. States are required to make initial assessments of recipients' work aptitudes. $1 billion in bonuses is available through fiscal year 2003 to reward states for moving recipients to work.

  • Child Care $14 billion is provided for child care funding over six years, an increase of $3.5 billion. Women are guaranteed at least one year of transitional Medicaid when leaving welfare for work.

  • Lifetime Limits A lifetime limit of five years is set for families receiving benefits, and able-bodied recipients aged 18-50 and without dependents are required to go to work after two years. States are permitted to exempt 20 percent of their caseloads, however.

  • No Aid To Immigrants While lawmakers will likely rescind these provisions, under the current law neither illegal nor legal immigrants are eligible to receive benefits, which saves some $24 billion over six years. The majority of savings was slated to come from denying many legal immigrants Supplemental Security Income (SSI), which provides cash to the low-income aged, blind and disabled.

  • Minors Single minors with children are required to live in an adult-supervised environment and to receive education and training in order to qualify for benefits.

  • Dead-beat Parents States are required to set up child support enforcement programs to crack down on delinquent parents. The new law provides uniform rules to pursue so-called "dead-beat" parents across state lines, and streamlined procedures for establishing paternity.

  • Food Stamps The food stamp program is reduced 13 percent, saving $23 billion over six years.

Related Link: Health and Human Services Welfare Reform Fact Sheet

Clinton's Proposed Changes

"After I sign my name to this bill, welfare will no longer be a political issue," the president said last August. In the next breath, however, he promised to "change what is wrong" with the new law, foreshadowing continued political wrangling over the implementation of welfare reform.

Indeed, congressional Republicans may be on the brink of caving to Clinton's primary objection to the welfare law: the ban on aid to legal immigrants and what Clinton viewed as excessive cutbacks in food stamps. As part of the balanced budget deal agreed to May 2, congressional budget negotiators to restore some $13 billion for those areas. That, of course, must be approved by the full Congress.

During the fall campaign, Clinton proposed two funds to help the states offset the work requirement in the new law. The first fund would allot $3 billion over three years to spur job creation or to provide private job agencies incentives to help out.

The other fund of about $400 million over four years would provide tax credits to employers of up to $10,000 for wages, training or education for long-term welfare recipients.

These and other initiatives are likely to be fought out as lawmakers begin the work of turning the May 2 budget deal into concrete legislative proposals.


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