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Statement |
Committee on Ways and Means
Subcommittee on Human Resources
For Immediate Release
Contact: Press Office 202-225-8933
July 11, 2002
Senate Finance Bill Undermines
Successful 1996 Welfare Reforms
WASHINGTON - Despite the unprecedented success of the 1996 welfare
reform law, the Senate Finance Committee on June 26, 2002 adopted
legislation that would undermine the basic tenets of the law - work
requirements and time limits - while costing tens of billions of
dollars in higher welfare spending. The following is a comparison of
key provisions of the 1996 law and the 2002 Senate Finance Committee
bill.
| Item |
1996 Welfare Reform Law |
2002 Senate Finance Bill |
| Focus on Work |
Promoted work or work in combination with
education through “work first” reforms, leading to record gains
in work, earnings, poverty, and dependence. |
Undermines “work first” by:
- Increasing from 1 to 5 years the length of
vocational education that can count as work; and
- Allowing up to 5 years of college to count as
work. |
| Time Limits |
Set a 5-year lifetime limit on cash welfare
benefits. |
Undermines time limit by allowing TANF funds to
be used for housing benefits forever. |
| Caseload Incentives |
Rewarded States that help parents leave or stay
off welfare for work and other reasons through caseload reduction
credit. Caseload declined more than 50 percent following
reform. |
Encourages larger caseloads by:
- Repealing caseload reduction credit;
- Encouraging long-term education instead
of work;
- Providing many exceptions to work
requirements; and
- Encouraging an unlimited number of teen parents
to go on welfare without working. |
| Savings/Costs |
Projected to save:
- $54 billion over 5 years
- $110 billion over 10 years.
Actual savings greater due to smaller caseloads. |
Projected to cost an additional:
- $12 billion over 5 years
- $30 billion over 10 years.
Actual costs may be larger due to larger
caseloads. |
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