Over time, the Congress has established about 80 separate programs to provide cash and noncash assistance to low-income individuals and families. Means-tested programs are restricted to families or individuals who meet specified financial requirements and certain other eligibility criteria established for each program. The financial requirements restrict eligibility to families and individuals whose income falls below defined levels, and in some cases, whose assets—such as bank accounts and the value of automobiles—also fall below defined levels. Nonfinancial requirements restrict eligibility to specified categories of beneficiaries, such as pregnant women, children, or individuals with disabilities. Federal, state, and local governments expended a combined total of nearly $400 billion on the approximately 80 means-tested programs in fiscal year 1998. Medicaid accounted for 45 percent of the expenditures. Twenty- seven of the 80 programs, representing 97 percent of the total expenditures, had expenditures of over a billion dollars each (see table 1). Means-tested programs provide assistance in eight areas of need: (1) cash assistance; (2) medical benefits; (3) food and nutrition; (4) housing; (5) education; (6) other services, such as child care; (7) jobs and training; and (8) energy aid. Ten of the 11 programs on which our review focuses accounted for 74 percent of the total expenditures for means-tested federal programs in fiscal year 1998 (see table 2). Table 3 provides an overview of the populations targeted by these programs and the types of assistance that they provide. The 11 means-tested programs that we included in our review were enacted over time to serve various populations and achieve various objectives. For example, in 1937, the Public Housing program was created to provide adequate temporary shelter to families who could not afford housing; Medicaid, in 1965, to provide medical assistance for low-income families with children and aged, blind, and disabled individuals; and SCHIP, in 1997, to provide health insurance coverage to uninsured low- income children from families who do not qualify for Medicaid. In some cases, the unique financial rules that apply to a particular program may be related to the purpose of that program and reflect its goals or objectives. For other programs, this may not be the case and the differences in eligibility standards across programs may stem from decisions made at different times by different congressional committees or federal agencies. In addition to offering a wide variety of benefits and services, means- tested programs vary in the extent to which they guarantee that funds for services will be available. For some programs such as Food Stamps and SSI, federal funds are available to provide benefits to all eligible applicants. Other programs such as TANF and SCHIP have a fixed amount of federal funds available. Moreover, some of the programs require state and other nonfederal matching money (e.g., Medicaid and SCHIP), while others are fully funded with federal dollars (e.g., LIHEAP and WIC). An individual low-income family is likely to be eligible for and participate in several means-tested programs. For example, as shown in figure 1, families receiving TANF generally also receive Medicaid, food stamps, and school meals. Smaller percentages of these families receive assisted housing, WIC, and LIHEAP. The need for welfare simplification has been voiced recurrently over a period of many years. While this concept covers a broad range of potential objectives, a key aspect has been the need to simplify financial eligibility rules. Means-tested programs have been established over time to meet the needs of various target populations. However, policy experts and researchers have concluded that the complexity and variations in programs’ financial eligibility rules have had unanticipated but detrimental consequences for both program administration and family access to assistance. On the administrative side, they have argued that the financial eligibility rules have increased substantially the staff resources needed to determine eligibility and benefit levels, and thereby increased the costs of administering programs. With regard to families’ access to programs, they maintained that the rules have often resulted in confusing families about their eligibility for programs and contributed to the creation of a service delivery system with many separate entry points that is often difficult and burdensome for families to navigate. Numerous studies and reports since the late 1960s have called for the overhaul or repair of the nation’s assistance programs that serve low- income families and individuals. For example, a Presidential committee recommended in 1977 that a total effort to reform welfare was needed because of the inequities and administrative “chaos” created by a plethora of inconsistent and confusing programs. During the1980s, we issued several reports on welfare simplification. One of these reports surveyed the states to identify what they viewed as the major obstacles to their efforts to achieve service integration. Of the 25 obstacles identified, the one cited most frequently (42 states) was that different programs use different financial eligibility requirements. In 1991, the National Commission for Employment Policy recommended that agencies administering public assistance programs should develop a common framework for streamlining eligibility requirements, formulating standard definitions, and easing administrative and documentation requirements. In 1990, the Congress authorized the creation of the Welfare Simplification and Coordination Advisory Committee to examine four major assistance programs: Food Stamps, Aid to Families with Dependent Children, Medicaid, and housing assistance programs. The Congress mandated the committee to identify barriers to participation in assistance programs and the reasons for those barriers. In June 1993, the committee recommended that the numerous programs that currently serve needy families be replaced with a single family-focused, client-oriented, comprehensive program. Recognizing that it would take time to implement its primary recommendation, the Commission made 14 interim recommendations to the Congress, including the following: Form a work group of the chairs of the relevant congressional committees to ensure that all legislative and oversight activities involving public assistance programs are coordinated. Establish uniform rules and definitions to be used by all needs-based programs in making their eligibility determinations. Streamline the verification process. Permit the sharing of client information among agencies to streamline eligibility determination processes and reduce duplication of related activities. In 1995, the Institute for Educational Leadership, based on its examination of the executive and legislative structures that federal means-tested programs are built upon, urged the administration to create a Family Council. One of the stated goals of such a council was to have been proposing changes to eligibility requirements, definitions, financing and administrative requirements, data collection and reporting requirements, and performance standards that were inconsistent, incoherent, and confusing. Moreover, in a 1995 report to the Congress, we concluded, in part, that the inefficient welfare system is increasingly cumbersome for program administrators to manage and difficult for eligible clients to access. Just as the need for simplification of financial eligibility rules has been acknowledged, there has also been a general recognition that achieving substantial improvements in this area is exceptionally difficult. For example, implementing systematic changes to the federal rules for human service programs can be challenging because jurisdiction for these programs is spread among numerous congressional committees and federal agencies. Substantial variations exist in the financial eligibility rules across selected means-tested federal programs. The primary sources of these variations are generally at the federal level, although for several programs such as TANF and Medicaid states and localities have some flexibility in setting financial eligibility rules. Variations exist among the programs in the financial rules regarding the types and amounts of income limits. Differences also exist among these programs with regard to whose income is counted, what income is counted or excluded, and whether certain expenses—such as child care costs—are deducted in calculating income. In addition to income tests, programs impose different limits on the assets that an individual or family may hold in order to receive benefits. Asset tests are further complicated because of the differences in how the equity in vehicles is treated when determining assets. The first and most basic difference among programs is the variation in type of income limits used for determining program eligibility. Income limits for most of the 11 programs reviewed used a percentage of the federal poverty guideline or an area’s median income. For example, the School Meals program uses a percentage of the poverty guideline to set benefit eligibility while the housing programs use percentage of area median income to determine eligibility. The programs not only differed in the type of income limit but also in the actual level of income. For example, the maximum allowable gross monthly income for food stamps for a family of three is $1,585 nationwide, whereas, the maximum allowable gross monthly income for subsidized child care—which is based on state median income—is $4,494 in the state of Connecticut (the state with the highest median income). For all 11 programs except TANF, federal laws and regulations have set some income limit. The most common type of income limit used among these programs is some percentage multiple of the federal poverty guideline, updated annually in the Federal Register by the Department of Health and Human Services (HHS). However, the percentage of the guideline used varies among programs. (See table 4 for a comparison of the type of limits used among the 11 programs.) Programs also vary in setting the income limits that are used to determine eligibility. While some of the programs provide states with options in setting income limits others do not. For example, LIHEAP and WIC provide states the option of choosing between two types of income limits. In the case of TANF, states are given full discretion in how they establish eligibility, including choosing both the type and level for their income limit. For Medicaid, while the federal government requires that states provide Medicaid to individuals who fall into certain categories and whose income and resources fall below certain limits, states may, in some circumstances, set more generous income limits and create different categories so that additional individuals may receive coverage. In addition, in some instances, states are given options to set income limits by the federal statute or regulation. For example, while the law sets the maximum income limit for child care funds at 85 percent of a state’s median income, several states have set their limits far below the allowable federal limit.