The Personal Responsibility Act (Welfare Reform) Highlights: The Personal Responsibility Act overhauls the American welfare system to reduce government dependency, attack illegitimacy, require welfare recipients to enter work programs and cap total welfare spending. The bill's main thrust is to give states greater control over the benefits programs, work programs, and Aid to Families with Dependent Children (AFDC) payments and requirements. Under the bill, the structure for AFDC payments will drastically change. Mothers under the age of 18 may no longer receive AFDC payments for children born out of wedlock and mothers who are ages 18, 19 and 20 can be prohibited by the states from receiving AFDC payments and housing benefits. Mothers must also establish paternity to as a condition for receiving AFDC payments, except in cases of rape and incest. Also, in order to reduce the amount of time families are on welfare, states must begin moving welfare recipients into work programs if they have received welfare for two years. States are given the option to drop families from receiving AFDC benefits after they have received welfare for two years if at least one year has been spent in a work program. To further limit the length of time on AFDC, states must drop families from the program after they have received a total of five years of AFDC benefits. The bill allows states to design their own work programs and determine who will be required to participate. Welfare recipients must work an average of 35 hours a week or enroll in work training programs. By the year 2001, 1.5 million AFDC recipients will be required to work. The bill caps the spending growth of several major welfare programs (AFDC, Supplemental Security Income (SSI) and public housing) and consolidates 10 nutrition programs, including food stamps, WIC and the school lunch program, into one discretionary block grant to states. Finally, the bill grants greater flexibility to states allowing them to design their own work programs and determine who participates in them and can choose to opt out of the current AFDC program by converting their share of AFDC payments into fixed annual block grants. Background: In the mid-1960s President Lyndon Johnson launched a war on poverty with the hope of creating a "Great Society." The federal government was mobilized to fight poverty by creating a slew of new federal programs and expanding existing ones, such as AFDC. Established in 1935 under the Social Security Act, AFDC was created to help widows care for their children. It now serves divorced, deserted and never-married individuals and their children. AFDC continues to be the major cash welfare program for families. Federal funds pay at least 50 percent of each state's benefits and administrative costs. In June 1994, enrollment reached 5,028,000 families, just below the record of 5,083,000 set in March 1994. Individual recipients numbered 14.2 million and unemployed two-parent families totaled 362,000. Also, food stamp enrollment in June 1994 was 27.4 million persons -- a record high. Although almost half of the mothers who enter AFDC can be expected to leave within 2 years, most return. Long- term users often are young, never-married, and high school dropouts; and most AFDC families begin with a birth to a teenager.. In the past few years, the federal governments and state governments have tried to change and improve the welfare system. The Clinton Administration campaigned to "end welfare as we know it," though, to date, Congress has not held a vote on its proposal. The administration proposal limits AFDC benefits to two years, during which employment services would be provided to recipients. Nearly 20 welfare reform bills have been introduced in the 103d Congress, including three major proposals offered by Republican members: The GOP Leadership Welfare Reform Bill (H.R. 3500) - After two years on AFDC (or less at a state's option), welfare recipients must work 35 hours per week in a private or public sector job. It also requires mothers to establish paternity before receiving AFDC benefits, denies AFDC benefits to parents under age 18, and denies increased AFDC benefits for having additional children while on welfare -- unless a state enact laws to exempt itself from any of these requirements. The Real Welfare Reform Act (H.R. 4566) - This measure prohibits AFDC, food stamps, and public housing to unmarried mothers under age 21 (the age limit is raised to 25 in 1998); requires paternity to be established as a condition for receiving AFDC, food stamps and public housing; provides a $1,000 pro-marriage tax credit, requires 50 percent of AFDC recipients to work by 1996; requires single able-bodied food stamp recipients to work for benefits; and freezes the rate of growth in several welfare programs at 3.5 percent per year. The Welfare and Teenage Pregnancy Reduction Act (H.R. 1293) - This measure freezes AFDC at current funding levels and returns the program to the states in the form of block grants, giving states maximum discretion to design their own welfare-to-work programs. The bill also prohibits AFDC benefits to parents under age 18 and requires that paternity be established in order to receive AFDC benefits. Provisions: Reducing Illegitimacy The bill is designed to diminish the number of teenage pregnancies and illegitimate births. It prohibits AFDC payments and housing benefits to mothers under age 18 who give birth to out-of-wedlock children. The state has the option of extending this prohibition to mothers ages 18, 19, and 20. The savings generated from this provision to deny AFDC to minor mothers (and to mothers age 18 to 20 if the state elects that option) is returned to the states in the form of block grants to provide services -- but not cash payments -- to help these young mothers with illegitimate children. The state will use the funds for programs to reduce out-of-wedlock pregnancies, to promote adoption, to establish and operate orphanages, to establish and operate residential group homes for unwed mothers, or for any purpose the state deems appropriate. None of the funds may be used for abortion services or abortion counseling. The bill also includes a number of other provisions to reduce illegitimacy. While AFDC is prohibited to mothers ages 17 and younger who have children out of wedlock, mothers age 18 who give birth to illegitimate children must live at home in order to receive aid -- unless the mother marries the biological father or marries an individual who legally adopts the child. Mothers already receiving AFDC will not receive an increase in benefits if additional children are born out of wedlock. Finally, the bill requires mothers to establish paternity as a condition for receiving AFDC. Exceptions are provided for cases of rape and incest and if the state determines that efforts to establish paternity would result in physical danger to the mother. The bill requires states to establish paternity in 90 percent of their cases. Also, states are encouraged to develop procedures in public hospitals and clinics to determine paternity and establish legal procedures that help pinpoint paternity in a reasonable time period. Requiring Work States are allowed to establish their own work training and education programs to help recipients move from the welfare program to paid employment as soon as possible. The training programs require recipients to work for an average of 35 hours a week or 30 hours per week plus five hours engaged in job search activities. One parent in a two-parent family is required to work 32 hours a week plus eight hours of job searching. States may not provide the work programs for more than two years to any individual or family which receives welfare benefits. States have the option of ending AFDC to families that have been on the welfare rolls for two years, if at least one year was spent in a work program. All states must terminate AFDC payments to families who have received a total of five years of welfare benefits -- regardless of whether or not the AFDC recipient has participated in a jobs program. As long as states meet the participation requirements, the federal government will not advise other parts of the program. States will design their own work programs and determine who will be required to participate in them. Part of the participation requirement is requiring a certain number of recipients to participate in the job program. Starting in 1996, 100,000 AFDC recipients will be required to work; in 1997, 200,000 recipients will be required; in 1998, 400,000 will be required; in 1999, 600,000 recipients will be required; in 2000, 900,000 will be required; and by 2001, 1.5 million recipients will be required to work. Identified non-parents, usually men, who receive food stamp benefits are required to work -- eight hours per week for those benefits. Capping the Growth of Welfare Spending The bill caps the spending growth of AFDC, SSI and numerous public housing programs, and the mandatory work program established under the bill. The cap equals the amount spent the preceding year for these programs with an adjustment for inflation plus growth in poverty population. The entitlement status of these programs is ended. The bill also consolidates a number of nutrition programs into a block grant to states, funded in the first year at 95 percent of the aggregate amount of the individual programs. Programs consolidated into the block grant include food stamps, the supplemental feeding program for women, infants, and children (WIC), and the school lunch and breakfast programs, among others. Under the block grant, states will distribute food assistance to economically disadvantaged individuals more freely. To further reduce welfare spending, welfare assistance (AFDC, SSI, food stamps, housing and host of other public assistance) is denied to non-citizens, except refugees over 75 years of age, those lawfully admitted to the U.S., or those who have resided in the U.S. for at least five years. Emergency medical assistance will continue to be provided to non-citizens. State Flexibility The bill allows states to create their own work programs and determine who participates in them. States can also opt out of the AFDC program and convert their AFDC payments into a fixed annual block grant and have the option to provide new residents AFDC benefits comparable to the level provided in the state in which they previously resided. To help combat illiteracy, states may reduce AFDC payments by up to $75 per month to mothers under the age of 21 who have not completed high school or earned their high school "equivalency". Payments may also be reduced if a dependent child does not maintain minimum school attendance. Other Provisions State adoption agencies are encouraged to decrease the amount of time a child must wait to be adopted (today, the average child waits approximately 2.8 years). Specifically, the bill prohibits states from discriminating on the basis of race, color or national origin when placing children for adoption. Also, AFDC beneficiaries who the state identifies as addicted to drugs or alcohol must enroll in an addiction treatment program and participate in random drug testing in order to continue receiving welfare benefits. Estimated Savings The bill is estimated to result in net savings of approximately $40 billion over five years. The denial of welfare to non- citizens saves about $22 billion, the cap on welfare spending saves about $18 billion, the nutrition block grant saves about $11 billion, and the requirement for paternity establishment saves about $2 billion. The costs included in the bill are $9.9 billion for the work program and approximately $2 billion for miscellaneous state options.