Did Obama Change Work Law?

After weeks of fact-checking, the Government Accountability Office has settled the matter: Yes, the Obama Administration’s policy directive was an attempt to modify TANF work requirements passed in 1996. Only Congress can change the rules, not the Administration, and to be binding, Congress must act.

What Did HHS Actually Do?
The Information Memorandum issued July 12 by HHS said: “HHS is issuing this information memorandum to notify states of the Secretary’s willingness to exercise her waiver authority.” It reiterates: “HHS has authority to waive compliance with this 402 [work] requirement and authorize a state to test approaches and methods other than those set forth in section 407, including definitions of work activities and engagement, specified limitations, verification procedures, and the calculation of participation rates.”

What Did the GAO Rule?
The GAO review, released September 5, states that the Obama administration circumvented federal law by announcing its willingness to waive the welfare work requirement. According to the GAO, the Congressional Review Act (CRA) compels administrative changes to policy or regulation be submitted to Congress for approval.

“We find that the July 12 Information Memorandum issued by HHS is a statement of general applicability and future effect, designed to implement, interpret, or prescribe law or policy with regard to TANF [Temporary Assistance for Needy Families, the formal name for welfare],” GAO said in its Sept. 4 letter to Sen. Orrin Hatch and Rep. Dave Camp. “[T]he Information Memorandum is subject to the requirement that it be submitted to both Houses of Congress and the Comptroller General before it can take effect.”

Did the Obama Administration Have the Authority to Waive TANF Work Requirements?
Although the GAO did not opine on whether the Obama administration has the authority to waive the TANF work requirements, top policy experts who helped write the 1996 reforms believe HHS is illegally claiming such authority through a legal device called the section 1115 waiver authority under the Social Security law (42 U.S.C. 1315).

In crafting the work requirement, argues Robert Rector, who helped write the statute, Congress purposefully designed the work requirements to be mandatory and non-waiveable. The non-partisan Congressional Research Service in 2001 clarified that the limited authority to waive state reporting requirements and stated clearly that HHS does not have the authority to override work and other major requirements: “Technically, there is waiver authority for TANF state plan requirement; however, [the] major TANF requirements are not in state plans. Effectively, there are no TANF waivers.”

What Effect Would Waiving the Work Requirement Have?
According to HHS, the policy directive was designed to allow states to test new approaches to administering the TANF welfare program with the goal of putting more aid recipients back to work. In a letter to Sen. Orrin Hatch (R-Utah) and House Ways and Means Committee Chairman Dave Camp (R-Mich.), Health Secretary Kathleen Sebelius said the waivers states can apply for will not change TANF work requirements.

No state has submitted a waiver request. Nor have any been approved. The GAO report has effectively blocked all Sebelius-led changes to TANF work requirements, but what would have it have done?

The specific changes would vary from state to state, depending on whether a state requests a waiver and whether HHS approves the proposed new methods. But according to Sebelius, states that would have received waivers under Obama’s short-lived welfare plan would have designed and measured their own performance measures. According to HHS, all approved waivers would have included a provision requiring timely reporting to HHS: “States that fail to meet interim targets will be required to develop improvement plans. Repeated failure to meet performance benchmarks may lead to the termination of the waiver demonstration pilot.”

What has been the Effect of the TANF Work Requirement?
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 replaced the program known as Aid to Families with Dependent Children (AFDC) with a new program called Temporary Assistance to Needy Families (TANF). The law established work requirements for a percentage of the states’ welfare caseloads. Its goal was to combat both child poverty and welfare dependence.

At the time Congress was debating the reform, the Children’s Defense Fund warned that the reform would increase child poverty by 12 percent. In fact, the opposite has occurred.

Overall poverty levels dropped from 13.8 percent in 1995 to 11.7 percent in 2001, while child poverty during the same period fell from 20.8 percent to 16.3 percent. So while critics charged that the reform would cast 1 million American children into poverty, there are now some 2.9 million fewer children living in poverty today than in 1995, and, in 2001, despite the recession, the poverty rate for children in single mother families was at its lowest point in U.S. history. Most remarkably, these broad, positive improvements in the well-being of American children occurred while the number of welfare dependent families dropped from 4.3 million families in 1996 to 2.02 million in 2002 – a 50 percent decline in caseloads since work requirements were enacted.

The TANF work requirement is a true, bipartisan success story. Yet of the 80 federal welfare programs providing cash, food, housing, medical care, and social services to poor and low-income people, only three have work requirements. If we want to stem the tide of welfare dependency, resolve our unsustainable entitlement programs and get our economy working again, then the evidence would suggest we need more work requirements, not less.