II

104TH CONGRESS

1ST SESSION S. 209

To replace the Aid to Families with Dependent Children Program under

title IV of the Social Security Act and a portion of the food stamp

program under the Food Stamp Act of 1977 with a block grant to

give the States the flexibility to create innovative welfare-to-work programs, to reduce the rate of out-of-wedlock births, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JANUARY 12 (legislative day, JANUARY 10), 1995

Mr. GRASSLEY (for himself and Mr. THURMOND) introduced the following bill;

which was read twice and referred to the Committee on Finance

A BILL

To replace the Aid to Families with Dependent Children

Program under title IV of the Social Security Act and

a portion of the food stamp program under the Food

Stamp Act of 1977 with a block grant to give the States

the flexibility to create innovative welfare-to-work programs, to reduce the rate of out-of-wedlock births, and

for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

2 (a) SHORT TITLE.—This Act may be cited as the

3 ‘‘Welfare-to-Work and Strong Families Act of 1995’’.

4 (b) TABLE OF CONTENTS.—The table of contents of

5 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Findings.

Sec. 3. Purpose.

Sec. 4. Definition of State.

Sec. 5. Applications by States.

Sec. 6. State welfare-to-work and stronger families program described.

Sec. 7. State grants.

Sec. 8. Termination of certain Federal welfare programs.

Sec. 9. Secretarial submission of legislative proposal for amendments to medicaid eligibility criteria and technical and conforming amendments.

Sec. 10. Savings.

6 SEC. 2. FINDINGS.

7 The Congress finds the following:

8 (1) The current welfare system is broken and

9 requires replacement.

10 (2) ‘‘Work’’ is what works best for American

11 families.

12 (3) Since State and local governments know the

13 best methods of connecting welfare recipients to

14 work and since each community faces different cir15 cumstances, Federal assistance to the States should

16 be flexible.

17 (4) Government has the responsibility to pro18 vide a helping hand to assist individuals but individ19 uals have the responsibility to use the assistance to

20 help themselves.
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1 (5) Between 1970 and 1991, the total number

2 of all out-of-wedlock births in the United States has

3 increased from 10 to 30 percent and, if that rate of

4 increase continues, by 2015, 50 percent of all births

5 in the United States will be out-of-wedlock.

6 (6) The negative consequences of out-of-wedlock

7 births on the child, mother, and society are well-doc8 umented as follows:

9 (A) Children born into families receiving

10 welfare assistance are 3 times more likely to re11 ceive welfare assistance when they reach adult12 hood than children born into families that do

13 not receive welfare.

14 (B) Young women who have children be15 fore finishing high school are more likely to re16 ceive welfare assistance for a substantial period

17 of time.

18 (C) A single parent family is 6 times more

19 likely to live in poverty than a two-parent fam20 ily.

21 (7) Due to the crisis caused by the growing rate

22 of out-of-wedlock births in the United States, the

23 Congress deems the reduction of out-of-wedlock

24 births to be an important governmental interest.
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1 SEC. 3. PURPOSE.

2 The purpose of this Act is to create a block grant

3 program to replace the aid to families with dependent chil4 dren program under title IV of the Social Security Act

5 and a portion of the food stamp program under the Food

6 Stamp Act of 1977 and give the States the flexibility to

7 create innovative welfare-to-work programs and programs

8 designed to reduce the increasing rate of children born

9 out-of-wedlock.

10 SEC. 4. DEFINITION OF STATE.

11 For purposes of this Act, the term ‘‘State’’ means

12 each of the several States of the United States, the Dis13 trict of Columbia, the Commonwealth of Puerto Rico, the

14 Virgin Islands, Guam, and American Samoa.

15 SEC. 5. APPLICATIONS BY STATES.

16 (a) IN GENERAL.—Each State desiring to receive a

17 grant to operate a State welfare-to-work and stronger

18 families program described in section 6 shall annually sub19 mit an application to the Secretary of Health and Human

20 Services (hereafter in this Act referred to as the ‘‘Sec21 retary’’) containing the matter described in subsection (b)

22 in such manner as the Secretary may require.

23 (b) CONTENTS.—

24 (1) FISCAL YEAR 1996.—An application for a

25 grant to operate a State welfare-to-work and strong26 er families program during fiscal year 1996 shall
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1 contain a description of the program in accordance

2 with section 6.

3 (2) SUBSEQUENT FISCAL YEARS.—

4 (A) CONTENTS.—

5 (i) IN GENERAL.—Except as provided

6 in clause (ii), an application for a grant to

7 operate a State welfare-to-work and

8 stronger families program during fiscal

9 year 1997 and each subsequent fiscal year

10 shall contain—

11 (I) a description of the program

12 in accordance with section 6;

13 (II) the State work percentage

14 (as determined under subparagraph

15 (B)) for each of the 2 preceding fiscal

16 years;

17 (III) a statement of the number

18 of participants who became ineligible

19 for participation in the program due

20 to increased income for each of the 2

21 preceding fiscal years;

22 (IV) the State out-of-wedlock

23 birth rate percentage (as determined

24 under subparagraph (D)) for each of

25 the 2 preceding fiscal years; and
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1 (V) a statement of the amount of

2 non-Federal resources that the State

3 invested in the program in the preced4 ing fiscal year.

5 (ii) SPECIAL RULE FOR FISCAL YEAR

6 1997.—An application for fiscal year 1997

7 need only contain the information de8 scribed in subclauses (II), (III), and (IV)

9 of clause (i) for fiscal year 1996.

10 (B) STATE WORK PERCENTAGE.—For pur11 poses of subparagraph (A)(i)(II), the State

12 work percentage (prior to any adjustment under

13 subparagraph (C)) for a fiscal year is equal

14 to—

15 (i) the average weekly number of par16 ticipants in the State welfare-to-work and

17 stronger families program who were em18 ployed in private sector or public sector

19 jobs for at least 20 hours per week, divided

20 by

21 (ii) the average weekly number of par22 ticipants in the State welfare-to-work and

23 stronger families program.

24 (C) ADJUSTMENT.—
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1 (i) IN GENERAL.—The State work

2 percentage determined under subparagraph

3 (B) for a fiscal year shall be adjusted by

4 subtracting 1 percentage point from such

5 State work percentage for each 5 percent6 age points by which the percentage of indi7 viduals described in subparagraph (B)(i)

8 who are also described in clause (ii) of this

9 subparagraph participating in the program

10 in such fiscal year falls below 75 percent of

11 the number of individuals described in sub12 paragraph (B)(i) in such fiscal year.

13 (ii) INDIVIDUAL DESCRIBED.—An in14 dividual described in this clause is a custo15 dial parent or other individual who is pri16 marily responsible for the care of a child

17 under the age of 18.

18 (D) STATE OUT-OF-WEDLOCK BIRTH RATE

19 PERCENTAGE.—For purposes of subparagraph

20 (A)(i)(IV), the State out-of-wedlock birth rate

21 percentage for a fiscal year is equal to—

22 (i) the total number of children in the

23 State who were born out-of-wedlock during

24 the fiscal year, divided by
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1 (ii) the total number of children in the

2 State who were born during the fiscal year.

3 (E) MONITORING OF DATA.—The Sec4 retary shall ensure the validity of the data pro5 vided by a State under this paragraph.

6 (c) APPROVAL.—

7 (1) FISCAL YEARS 1996 AND 1997.—The Sec8 retary shall approve each application for a grant to

9 operate a State welfare-to-work and stronger fami10 lies program—

11 (A) during fiscal year 1996, if the applica12 tion contains the information described in sub13 section (b)(1); and

14 (B) during fiscal year 1997, if the applica15 tion contains the information described in sub16 section (b)(2).

17 (2) AUTOMATIC APPROVAL IN SUBSEQUENT FIS18 CAL YEARS.—The Secretary shall approve any appli19 cation for a grant to operate a State welfare-to-work

20 and stronger families program during fiscal year

21 1998 and each succeeding fiscal year if—

22 (A) the State’s application reports that—

23 (i) the State work percentage for the

24 preceding fiscal year is greater than the
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1 State work percentage for the second pre2 ceding fiscal year; or

3 (ii) more participants became ineli4 gible for participation in the State welfare5 to-work and stronger families program

6 during the preceding fiscal year due to in7 creased income than became ineligible for

8 participation in the program in the second

9 preceding fiscal year as a result of in10 creased income;

11 (B) the State’s application reports that the

12 State out-of-wedlock birth rate percentage for

13 the preceding fiscal year is less than the State

14 out-of-wedlock birth rate percentage for the sec15 ond preceding fiscal year; and

16 (C) the State’s application reports that the

17 number of participants in the State welfare-to18 work and stronger families program for the pre19 ceding fiscal year is less than the number of

20 participants in the State welfare-to-work and

21 stronger families program for the second pre22 ceding fiscal year.

23 (3) SECRETARIAL REVIEW.—

24 (A) IN GENERAL.—If a State application

25 for a grant under this Act is not automatically
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1 approved under paragraph (2), the Secretary

2 shall approve the application upon a finding

3 that the application—

4 (i) provides an adequate explanation

5 of why the application was not automati6 cally approved; and

7 (ii) provides a plan of remedial action

8 which is satisfactory to the Secretary.

9 (B) ADEQUATE EXPLANATIONS.—An ade10 quate explanation under subparagraph (A) may

11 include an explanation of economic conditions

12 in the State, failed program innovations, or

13 other relevant circumstances.

14 (4) RESUBMISSION.—A State may resubmit an

15 application for a grant under this Act until the Sec16 retary finds that the application meets the require17 ments of paragraph (3)(A).

18 SEC. 6. STATE WELFARE-TO-WORK AND STRONGER FAMI19 LIES PROGRAM DESCRIBED.

20 (a) IN GENERAL.—A State welfare-to-work and

21 stronger families program described in this section shall—

22 (1) provide that during fiscal year 1996, the

23 State shall designate individuals who are eligible for

24 participation in the program and such individuals

25 may include those individuals who received benefits
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1 under the State plan approved under part A of title

2 IV of the Social Security Act during fiscal year

3 1995;

4 (2) provide that during fiscal year 1997 and

5 each subsequent fiscal year, the State shall designate

6 individuals who are eligible for participation in the

7 program (as determined by the State), with priority

8 given to those individuals most in need of such serv9 ices;

10 (3) with respect to increasing the State work

11 percentage, be designed to move individuals from

12 welfare to self-sufficiency and may include—

13 (A) job placement and training;

14 (B) supplementation of earned income;

15 (C) nutrition assistance and education;

16 (D) education;

17 (E) vouchers to be used for rental of pri18 vately owned housing;

19 (F) child care;

20 (G) State tax credits;

21 (H) health care;

22 (I) supportive services;

23 (J) community service employment;

24 (K) asset building programs; or
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1 (L) any other assistance designed to move

2 such individuals from welfare to self-sufficiency;

3 and

4 (4) with respect to reducing the State out-of5 wedlock birth rate percentage, be designed to

6 strengthen two-parent families and may include—

7 (A) education;

8 (B) family planning services (except abor9 tion-related services);

10 (C) a cap of benefits under the program

11 with respect to additional children conceived

12 out-of-wedlock after a participant has entered

13 the program;

14 (D) the denial of benefits under the pro15 gram to a potential participant in the program

16 if that potential participant has a child born

17 out-of-wedlock after a date established by the

18 State;

19 (E) State tax credits for marriage; or

20 (F) any other assistance designed to re21 duce out-of-wedlock births and encourage mar22 riage.

23 (b) NO ENTITLEMENT.—Notwithstanding any cri24 teria a State may establish for participation in a State

25 welfare-to-work and stronger families program created in
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1 accordance with this Act, no individual shall be considered

2 to be entitled to participate in that program.

3 SEC. 7. STATE GRANTS.

4 (a) IN GENERAL.—The Secretary shall annually

5 award to each State with an application approved under

6 section 5(c) an amount equal to—

7 (1) in fiscal year 1996, 100 percent of the

8 State’s base amount;

9 (2) in fiscal year 1997, the sum of 80 percent

10 of the State’s base amount, 20 percent of the State’s

11 share of the national grant amount, and any applica12 ble bonus payment;

13 (3) in fiscal year 1998, the sum of 60 percent

14 of the State’s base amount, 40 percent of the State’s

15 share of the national grant amount, and any applica16 ble bonus payment;

17 (4) in fiscal year 1999, the sum of 40 percent

18 of the State’s base amount, 60 percent of the State’s

19 share of the national grant amount, and any applica20 ble bonus payment;

21 (5) in fiscal year 2000, the sum of 20 percent

22 of the State’s base amount, 80 percent of the State’s

23 share of the national grant amount, and any applica24 ble bonus payment; and
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1 (6) in fiscal year 2001 and each subsequent fis2 cal year, the sum of 100 percent of the State’s share

3 of the national grant amount and any applicable

4 bonus payment.

5 (b) STATE BASE AMOUNT.—

6 (1) IN GENERAL.—For purposes of subsection

7 (a), a State’s base amount is equal to—

8 (A) for fiscal year 1996, 100 percent of

9 the amount determined under paragraph (2);

10 and

11 (B) for fiscal year 1997 and succeeding

12 fiscal years, 96 percent of the amount deter13 mined under paragraph (2).

14 (2) AMOUNT DETERMINED.—The amount de15 termined under this paragraph for a State is an

16 amount equal to the sum of—

17 (A) the amount of Federal financial par18 ticipation received by the State under section

19 403 of the Social Security Act (42 U.S.C. 603)

20 during fiscal year 1995; and

21 (B) an amount equal to the sum of—

22 (i) the benefits under the food stamp

23 program under the Food Stamp Act of

24 1977 (7 U.S.C. 2011 et seq.), including

25 benefits provided under section 19 of such
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1 Act (7 U.S.C. 2028), during fiscal year

2 1995 other than benefits provided to elder3 ly or disabled individuals in the State (as

4 determined under section 3(r)) of such Act

5 (7 U.S.C. 2012); and

6 (ii) the amount paid to the State

7 under section 16 of the Food Stamp Act of

8 1977 (7 U.S.C. 2025) during fiscal year

9 1995 for administrative expenses for pro10 viding benefits to nonelderly and non11 disabled individuals.

12 (c) STATE SHARE OF THE NATIONAL GRANT

13 AMOUNT.—

14 (1) IN GENERAL.—For purposes of subsection

15 (a), the State’s share of the national grant amount

16 for a fiscal year is equal to the sum of the amounts

17 determined under paragraph (2) (relating to eco18 nomic need) and paragraph (3) (relating to State ef19 fort) for the State.

20 (2) ECONOMIC NEED.—The amount determined

21 under this paragraph is equal to the sum of the fol22 lowing amounts:

23 (A) STATE PER CAPITA INCOME MEAS24 URE.—The amount which bears the same ratio
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1 to one-quarter of the national grant amount as

2 the product of—

3 (i) the population of the State; and

4 (ii) the allotment percentage of the

5 State (as determined under paragraph

6 (4)),

7 bears to the sum of the corresponding products

8 for all States.

9 (B) STATE UNEMPLOYMENT MEASURE.—

10 The amount which bears the same ratio to one11 quarter of the national grant amount as the

12 number of individuals in the State who are esti13 mated as being unemployed (determined in ac14 cordance with the Department of Labor’s an15 nual estimates) bears to the number of individ16 uals in all States who are estimated as being

17 unemployed (as so determined).

18 (3) STATE EFFORT.—The amount determined

19 under this paragraph is the amount which bears the

20 same ratio to one-half of the national grant amount

21 as the product of—

22 (A) the dollar amount the State invested in

23 the State welfare-to-work and stronger families

24 program in the previous fiscal year, as reported

25 in section 5(b)(2)(A)(i)(V); and
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1 (B) the allotment percentage of the State

2 (as determined under paragraph (4)),

3 bears to the sum of the corresponding products for

4 all States.

5 (4) ALLOTMENT PERCENTAGE.—

6 (A) IN GENERAL.—Except as provided in

7 subparagraph (C), the allotment percentage for

8 any State shall be 100 percent, less the State

9 percentage.

10 (B) STATE PERCENTAGE.—The State per11 centage shall be the percentage which bears the

12 same ratio to 50 percent as the per capita in13 come of such State bears to the per capita in14 come of all States.

15 (C) EXCEPTION.—The allotment percent16 age shall be 70 percent in the case of Puerto

17 Rico, the Virgin Islands, Guam, and American

18 Samoa.

19 (5) DETERMINATION OF GRANT AMOUNTS.—

20 Each State’s share of the national grant amount

21 shall be determined under this subsection on the

22 basis of the average per capita income of each State

23 and all States for the most recent fiscal year for

24 which satisfactory data are available from the De-
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1 partment of Commerce and the Department of

2 Labor.

3 (6) NATIONAL GRANT AMOUNT.—The term

4 ‘‘national grant amount’’ means an amount equal to

5 96 percent of the sum of the amounts determined

6 under subsection (b)(2) for all States.

7 (d) BONUS PAYMENTS.—

8 (1) CRITERIA.—Beginning with fiscal year

9 1997, the Secretary may use 4 percent of the sum

10 of the amounts determined under subsection (b)(2)

11 for all States to award additional bonus payments

12 under this section to those States which have the

13 highest or most improved State work percentages as

14 determined under section 5(b)(2)(B) and the lowest

15 or most improved State out-of-wedlock birth rate

16 percentages as determined under section 5(b)(2)(D).

17 (2) LEADING JOB PLACEMENT AND LEADING

18 OUT-OF-WEDLOCK BIRTH RATE REDUCTION

19 STATES.—The Secretary shall designate one State as

20 the leading job placement State and one State

21 (which may be the same State as the designated

22 leading job placement State) as the leading out-of23 wedlock birth rate reduction State and such State or

24 States shall receive the highest bonus payments

25 under paragraph (1).
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1 (3) PRESIDENTIAL AWARD.—The President is

2 authorized and requested to acknowledge a State

3 designated under paragraph (2) with a special Presi4 dential award.

5 (e) USE OF FUNDS FOR ADMINISTRATIVE PUR6 POSES.—A State shall not use more than 10 percent of

7 the amount it receives under this section for the adminis8 tration of the State welfare-to-work and stronger families

9 program.

10 (f) CAPPED ENTITLEMENT.—This section constitutes

11 budget authority in advance of appropriations Acts, and

12 represents the obligation of the Federal Government to

13 provide the payments described in subsection (a) (in an

14 amount not to exceed the sum of the amounts determined

15 under subsection (b)(2) for all States).

16 SEC. 8. TERMINATION OF CERTAIN FEDERAL WELFARE

17 PROGRAMS.

18 (a) TERMINATION OF AFDC AND JOBS PRO19 GRAMS.—

20 (1) AFDC.—Part A of title IV of the Social Se21 curity Act (42 U.S.C. 601 et seq.) is amended by

22 adding at the end the following new section:

23 ‘‘TERMINATION OF AUTHORITY

24 ‘‘SEC. 418. The authority provided by this part shall

25 terminate on October 1, 1995.’’.
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1 (2) JOBS.—Part F of title IV of the Social Se2 curity Act (42 U.S.C. 681 et seq.) is amended by

3 adding at the end the following new section:

4 ‘‘TERMINATION OF AUTHORITY

5 ‘‘SEC. 488. The authority provided by this part shall

6 terminate on October 1, 1995.’’.

7 (b) FOOD STAMP PROGRAM TO SERVE ONLY ELDER8 LY AND DISABLED INDIVIDUALS.—

9 (1) DEFINITIONS.—Section 3 of the Food

10 Stamp Act of 1977 (7 U.S.C. 2012) is amended—

11 (A) in subsection (g)—

12 (i) in paragraph (4), by striking ‘‘(and

13 their spouses)’’;

14 (ii) in paragraph (5)—

15 (I) by striking ‘‘in the case of’’

16 and inserting ‘‘in the case of elderly

17 or disabled’’; and

18 (II) by inserting ‘‘disabled’’ be19 fore ‘‘children’’; and

20 (iii) in paragraph (8), by inserting

21 ‘‘elderly or disabled’’ before ‘‘women and

22 children temporarily’’;

23 (B) in subsection (i)—

24 (i) in the first sentence—
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1 (I) in paragraph (1), by inserting

2 ‘‘elderly or disabled’’ before ‘‘individ3 ual’’; and

4 (II) in paragraph (2), by insert5 ing ‘‘, each of whom is elderly or dis6 abled,’’ after ‘‘individuals’’;

7 (ii) in the second sentence, by insert8 ing before the period at the end the follow9 ing: ‘‘, if each of the individuals is elderly

10 or disabled’’;

11 (iii) in the third sentence—

12 (I) by striking ‘‘, together’’ and

13 all that follows through ‘‘of such indi14 vidual,’’; and

15 (II) by striking ‘‘, excluding the

16 spouse,’’; and

17 (iv) in the fifth sentence—

18 (I) by striking ‘‘coupons, and’’

19 and inserting ‘‘coupons, and elderly or

20 disabled’’; and

21 (II) by inserting ‘‘disabled’’ after

22 ‘‘together with their’’; and

23 (C) in subsection (r), by striking ‘‘‘Elder24 ly’’ and all that follows through ‘‘who’’ and in25 serting the following: ‘‘‘Elderly or disabled’,
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1 with respect to a member of a household or

2 other individual, means a member or other indi3 vidual who’’.

4 (2) CONFORMING AMENDMENTS.—

5 (A) ELIGIBILITY.—Section 5 of the Food

6 Stamp Act of 1977 (7 U.S.C. 2014) is amend7 ed—

8 (i) in the first sentence of subsection

9 (c)—

10 (I) by striking ‘‘program if—’’

11 and all that follows through ‘‘house12 hold’s income’’ and inserting ‘‘pro13 gram if the income of the household’’;

14 (II) by striking ‘‘respectively;

15 and’’ and inserting ‘‘respectively.’’;

16 and

17 (III) by striking paragraph (2);

18 and

19 (ii) in subsection (e)—

20 (I) in the first sentence, by strik21 ing ‘‘containing an elderly or disabled

22 member and determining benefit levels

23 only for all other households’’;

24 (II) in the fifteenth sentence—
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1 (aa) by striking ‘‘containing

2 an elderly or disabled member’’;

3 and

4 (bb) in subparagraph (A),

5 by striking ‘‘elderly or disabled

6 members’’ and inserting ‘‘the

7 members’’;

8 (III) in the seventeenth sentence,

9 by striking ‘‘elderly and disabled’’;

10 and

11 (IV) by striking the fourth

12 through fourteenth sentences.

13 (B) PERIODIC REPORTING.—Section

14 6(c)(1)(A)(iii) of the Food Stamp Act of 1977

15 (7 U.S.C. 2015(c)(1)(A)(iii)) is amended by

16 striking ‘‘and in which all adult members are el17 derly or disabled’’.

18 (3) EFFECTIVE DATE.—The amendments made

19 by this subsection shall apply on and after October

20 1, 1995.

21 (c) REFERENCES IN OTHER LAWS.—

22 (1) IN GENERAL.—Any reference in any law,

23 regulation, document, paper, or other record of the

24 United States to any provision that has been termi25 nated by reason of the amendments made in sub-
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1 section (a) shall, unless the context otherwise re2 quires, be considered to be a reference to such provi3 sion, as in effect immediately before the date of the

4 enactment of this Act.

5 (2) STATE PLANS.—Any reference in any law,

6 regulation, document, paper, or other record of the

7 United States to a State plan that has been termi8 nated by reason of the amendments made in sub9 section (a), shall, unless the context otherwise re10 quires, be considered to be a reference to such plan

11 as in effect immediately before the date of the enact12 ment of this Act.

13 SEC. 9. SECRETARIAL SUBMISSION OF LEGISLATIVE PRO14 POSAL FOR AMENDMENTS TO MEDICAID ELI15 GIBILITY CRITERIA AND TECHNICAL AND

16 CONFORMING AMENDMENTS.

17 The Secretary shall, within 90 days after the date

18 of enactment of this Act, submit to the appropriate com19 mittees of the Congress, a legislative proposal providing

20 eligibility criteria for medical assistance under a State

21 plan under title XIX of the Social Security Act (42 U.S.C.

22 1396 et seq.) in lieu of the eligibility criteria under section

23 1902(a)(10)(A)(i) of such Act (42 U.S.C.

24 1396a(a)(10)(A)(i)) relating to the receipt of aid to fami25 lies with dependent children under a State plan under part
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1 A of title IV of the Social Security Act (42 U.S.C. 601

2 et seq.) and such technical and conforming amendments

3 in the law as are required by the provisions of this Act.

4 SEC. 10. SAVINGS.

5 Any savings resulting from the provisions of this Act

6 shall be dedicated to reduction of the Federal budget

7 deficit.

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