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Just the Facts: Obama's Welfare-to-Work Plan

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Does it make sense for states to try new approaches to help poor parents find jobs? The Obama Administration thought so. Temporary Assistance for Needy Families (TANF), which provides very little assistance to very poor families with children, has not been especially effective at placing single moms in jobs. Even in good times, nearly half the families leaving TANF did not leave because a parent found work. Many lost assistance without other sources of income, contributing to record levels of families with children in extreme poverty. There certainly is room for improvement.

So the Administration sent states a memo saying it would entertain proposals to test new ways "...designed to improve employment outcomes for needy families." It would consider departures from existing TANF work participation rules, but only if those changes "... were intended to lead to more effective means of meeting the work goals of TANF."

The Romney campaign and some members of Congress have seized upon this initiative as a plan to "gut welfare reform by dropping work requirements." Say what?

Most notably, a Romney television ad makes blatantly false claims about the Administration's memo. When multiple independent fact-checkers pointed out the untruths, one might have thought the ad would have been pulled. But since it continues to be run prominently, it's important to set the record straight.

The voice-over in the ad says "Under Obama's plan, you wouldn't have to work and wouldn't have to train for a job. They just send you your welfare check." The Administration's memo expressly states that states must focus on "improving employment outcomes." The memo says the Administration will not approve an initiative that appears "... substantially likely to reduce access to assistance or employment for needy families." In a letter accompanying the memo, Acting Assistant HHS Secretary George Sheldon, says that "... the Secretary is only interested..." if the state can show its new approach will be a more "... effective means to promote employment entry, retention, advancement, or access to jobs that offer opportunities for earnings and advancement that will allow participants to avoid dependence on government benefits."

The Administration gives examples of the kinds of projects that could be approved, while emphasizing that states may come up with different approaches. For example, now states get credit if parents perform approved work-related activities (such as job search or unpaid work experience). Instead, states could negotiate to be held accountable for increasing the number of people who get jobs. Or, states could propose to test whether a multi-year program combining learning and work will produce better employment outcomes.

How is it that such projects would need special approval by the Department of Health and Human Services? States are now required to engage a certain proportion of their TANF caseload in specific work-related activities. They do not get credit for helping parents into jobs that pay well enough so that the families no longer qualify for TANF assistance. States do get credit when people leave TANF, whether they go on to jobs or not. All too often, this has led to states lowering their caseloads by imposing difficult job search or other requirements that do not cost the states much money, do not really prepare anyone for a job, and hound the family off the rolls. When caseloads go down, under the current rules, those results ensure that states continue to get federal dollars even if they are not helping families out of poverty. But if states could get credit for the outcome we all want -- more parents working in stable jobs with decent pay -- some might experiment with approaches likely to work.

Similarly, the amount of education and training parents can get in compliance with the current TANF work requirements is very limited. But there has been some demonstrated success with post-secondary programs that combine training and work experience. A state could seek permission to test such a model without losing federal dollars.

The memo and letters by Acting Assistant Secretary Sheldon and Secretary Sebelius make it repeatedly clear that state proposals will be rejected if they would diminish good work results. Secretary Sebelius explicitly states that governors' proposals must move "at least 20% more people from welfare to work compared to the state's past performance." That conclusively answers the charge that the Administration's initiative will "gut" the work requirement. As for getting rid of the "training" requirement - well, it is clear HHS will consider allowing more training, especially if combined with work experience. Over the years, there have been occasional efforts to loosen the restrictions on training in TANF, because it is so clear that post-secondary education leads to higher pay. These have generally been opposed by Republicans. In fact, in Massachusetts, Governor Romney sought to restrict education and training opportunities for parents receiving TANF.

The Obama Administration invited states to develop new ways to promote work at least in part because a number of states asked for that flexibility. Just last month, the Governor of Utah sought a waiver of current TANF rules so they can "customize work-focused solutions;" they also welcome "complete accountability for employment-related outcomes." Then Governor Romney was one of 22 Republican governors signing a letter in 2005 to the Senate leadership that asked for greater waiver authority and other changes related to work activities in hoped-for TANF legislation.

Poor parents need jobs. The proportion of all single mothers who are employed has been going down for about a decade. If states can design plans that lead to steady work at decent pay, that sounds like a good thing. Doesn't it?

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