The “Homeless Creation Bill” Passes Congress

by Chris Staniscewski

 The new welfare legislation called the Temporary Assistance for Needy Families (TANF) that Congress passed on August 1 and that the President signed into law on August 22, advocates claim may well contribute to poverty and homelessness through reforms so massive they have not been seen since the 1960s. Mary Ann Gleason of the National Coalition for the Homeless called the bill the “Homeless Creation Bill.”

Basically, the reform sets a federal lifetime limit of five years of welfare for each family and requires adults who are able-bodied to work after two years, though there are some exceptions.

 The emphasis of reform is the movement away from federal to state control, yet states do lose block grant money if they do not implement the provisions of the law accurately. Major effects on homelessness may come in three areas of the reform:

  1. States moving people off welfare rolls in order to maintain federal contributions to new welfare block grants
  2. Changes in food stamp eligibility that could reduce benefits to thousands, and
  3. Changes in SSI eligibility for disabled children and legal immigrants

The new legislation places few limits on the eligibility of states to design programs and set eligibility requirements, thus allowing them to set many rules (to provide fewer years of assistance, for example).

States will not be able to use block grant funds to provide assistance to adults for more than 5 years, although 20% of each state’s caseload can be exempted.

Adults will cease to receive benefits if they do not begin to work within 2 years of joining the welfare rolls. Gleason characterized welfare reform as “the most significant attack on poor people to come out of Congress was the repeal of the federal guarantee of income support.”

Adults who do not cooperate with child support enforcement agencies seeking to establish paternity will have their family benefit reduced by at least 25%, although states may choose to eliminate the benefit entirely.

Individuals convicted of a drug-related felon will be denied welfare benefits and food stamps. States may choose to opt out of this provision; however, Jodie Levin Epstein of the Center on Law and Social Policy said that it is hard to imagine how legislation designed to provide benefits for “convicted drug pushers and addicts” would survive most state legislatures.

States may deny additional assistance to children born to mothers already receiving welfare.

States may require that minor, unmarried parents live with an adult and attend school in order to receive benefits.

People who move to a new state may be provided benefits at the level of the state in which they previously resided, rather than at the level of their new state of residence.

    Block Grants and Work Requirements

 H.R. 3734 (welfare reform) is designed to encourage states to reduce their welfare rolls without necessarily investing in a serious or effective jobs program. Incentives to move people into work and reduce welfare rolls include the following:

In order to receive their full TANF, states will be required to have 25% of their caseload engaged in work at least 20 hours/week by 1997 and 50% by 2002 working at least 30 hours/week. All families receiving assistance are counted in these percentages, although states may exclude those with children under 1 year of age.

States that fail to meet the work targets will have their block grants reduced by 5% initially and 2% each subsequent year, for a total of 21% by 2002.

 Child Care

 Gleason said that the new welfare bill does not provide enough resources for child care to enable poor parents to work. She claims that the goal is to eliminate entitlements and restructure federal funding, not to reduce poverty or enable people to rise above poverty.

H.R. 3734 eliminates the entitlement to child care assistance for families on welfare who are working or in school.

H.R. 3734 also eliminates the guarantee of one year of transitional child care assistance for families who leave welfare.

The child care entitlement programs are replaced by a modified Child Care and Development Block Grant (CDBG), which will be funded through a combination of a capped block grant to the states of close to $14 billion over 7 years and an annual appropriation that may vary from year to year (initially authorized at $1 billion per year).

 Food and Nutrition

 While H.R. 3734 makes significant changes to welfare, it achieves most of its savings through the food stamp program (expected to be half the $54 billion in savings over the next 6 years).

Over the next 6 years, the bill cuts $27.7 billion from the program, including $3.8 billion cut from benefits for immigrants. While food stamps will remain an entitlement (except for immigrants), individual allotments will be reduced.

The shelter deduction cap will increase from $247 in 1997 to $300 in 2000 and remain frozen at that level thereafter. Under current law, families that pay more than 50% of their income for housing have their excess shelter costs taken into account when determining the value of their food stamp benefit. The cap limits the amount of the excess costs that can be taken into account—freezing the cap will gradually erode the value of the deduction. Thus, low-income families with “worst-case housing needs” (those that pay more than 50% of their income for housing, which HUD estimates included 5.3 million households in 1993) will be more likely to be required to choose between food and housing.

Welfare recipients will face additional work requirements in order to continue to receive food stamps. Able-bodied adults between the ages of 18 and 50 will be required to work at least 20 hours/week or they will be limited to 3 months of food stamps in any 36-month period. Congressional Budget Office estimates that one million unemployed individuals who would work, if work slots were available, will be denied food stamps in an average month under this provision.

 Disabled Children

 Congress has also achieved significant savings by reducing SSI benefits for disabled children and by eliminating eligibility for most programs for legal immigrants. Families with disabled children will be at greater risk of homelessness as they struggle to pay for care along with housing. Elderly and disabled immigrants will be cut off a vital source of income and, lacking any other safety net, may find themselves on the street.

The children’s SSI program will be cut by $8.2 billion over the next 6 years and, according to the Bazelon Center for Mental Health Law, 315,000 low-income children with disabilities will lose or be denied access to benefits. In addition, CBO calculates that 15% of those who no longer benefit from SSI will also lose eligibility for Medicaid. These savings will be achieved through a substantially narrower definition of disability, eliminating, for instance, many children who are disabled by tuberculosis, arthritis, mental retardation, schizophrenia, and mood disorders.

 Legal Immigrants

 Under this new legislation, legal immigrants are ineligible for most welfare, food stamp, and SSI benefits unless they become citizens. The bill will cut benefits available for legal immigrants by more than $22 billion. This will result in savings for the federal government, but it will also result in substantial difficulties for poor, elderly, and disabled immigrants and their families. CBO estimates that nearly 500,000 elderly and disabled legal immigrants will find their SSI benefits terminated under this change. Furthermore, 260,000 elderly immigrants, 65,000 disabled people, 175,000 other adults, and 140,000 children will lose Medicaid coverage as a result of this bill.

The first phase of the complex H.R. 3734 went into effect Monday, September 23, 1996. This provision required states to begin denying food stamps to non-U.S. citizens. On October 1, 1996, entitlements ended to cash assistance for low-income families.

Making the welfare system acceptable to all Americans may make it inaccessible to those who rely upon it for their most basic needs.

Gleason and other activists claimed that ending welfare as we know it seems headed in the direction of poverty in the U.S. as we have not seen in recent history. Gleason wrote with the passage of welfare reform, “Look to increased instability of families as they become homeless, the rising costs of emergency rooms, more children inadequately fed, housed, and educated, portending multi-generational chaos.” The question is will Americans accept this new reform in the face of increases in poverty?

 Copyright NEOCH and the Homeless Grapevine, Issue #18, November-December 1996