DCA

Temporary Assistance for Needy Families (TANF) & Workforce Investment Act (WIA) Summary Update & Analysis October 2003¹

Access and availability of education and training opportunities for long term economic sustainability and viability is critical for the low-wage workforce, as well as the local community in which they live and work. In particular, the direct-care worker receives low wages and few benefits, leaving many full-time employees eligible for public assistance, minimal on the job support, training opportunities for advancement, and unbalanced workloads. These conditions contribute to the high vacancies and ultimately, the direct care workers' inability to achieve and maintain long-term self-sufficiency.

Federal programs, like TANF and WIA have been created and implemented in the states, in part to support low-wage workers, like direct care workers, with access to basic skills building and training opportunities. Improvements, such as coordination of TANF and WIA programs, long term training (post-secondary) for skilled positions and adequate funding to meet training demands, are needed to enhance the direct care workers' (like other low-wage workers) opportunity for self-sufficiency. Essentially, TANF and WIA were designed, though separately, to move individuals off of public assistance and into work and access training opportunities to advance in the workforce. To follow is a brief overview and update of the TANF and WIA legislative bills, along with The Workforce Alliance (TWA)² position on both bills.

Temporary Assistance for Needy Families (TANF) Overview:
The goal of TANF is to move more individuals off of public assistance and into work. TANF mandates that states engage recipients in work activities and sets a minimum percentage of clients which must involve in those activities to avoid a penalty. TANF also mandates, for those clients, a minimum number of hours/ week that they must be involved in a qualifying work activity in order to count toward the state's "participation" numbers. This has translated into a "work first" approach to moving TANF recipients into the workforce, predicated on the idea that welfare recipients' employment prospects are better if they are forced to take the first job they can find, rather than allowing them to first enroll in an occupational training course, even short-term training like CNA certification, so they can access a skilled position. Furthermore, the recipients are limited to five years of federal cash assistance within their lifetimes. However, the 1999 Final Rule on TANF clarified that individuals can receive other non-cash services through TANF that will not count against their clock. Such services, as allowed by law, include education and training, childcare and transportation subsidies for working individuals, individual development account contributions and wage subsidies.

Legislative Update:
On September 10th the Senate Finance Committee passed TANF reauthorization legislation, the Personal Responsibility and Individual Development for Everyone Act (PRIDE). The vote fell along party lines with only Republican members voting in the affirmative.

Work Hours: Increased weekly work requirements for TANF recipients to 24 hours for a single parent with children under six; 34 hours for a single parent with children age six and older; and 39 hours for a two parent family (55 hours for a two parent family that receives a child care subsidy).
State Work Participation Rates: Increased from the current rate of 50% to 55% in FY 2005 and, by 5% increments to 70% in FY 2008.
Work Activities: Maintains the current list of "direct work" activities, including vocational education and training for 12 months. Allows states to include certain education and training-related barrier removal activities as direct work activities for six months in a two-year period.
Post-Secondary and Vocational Education: In addition to the above, allows states the option of counting post-secondary and vocational education (beyond 12 months) as an approved work activity, thus counting towards the state work participation rates. Participation is capped at 10% of a state's TANF caseload.
Employment Credit: Replaces the current caseload reduction credit with an employment credit granted to states when TANF leavers exit the system with a job. Extra credit is given when TANF leavers exit with earnings of at least 33% of the state's average wage.

In late September, Congress extended TANF legislation for another six months until the end of March 2004. The current TANF law was set to expire on September 30th.

The Workforce Alliance (TWA) Position:
The Senate Finance bill is a slight improvement over the contentious TANF reauthorization legislation that the House passed by a narrow partisan vote in February of this year. However, in terms of TWA's interest in expanding resources and opportunities for education and training, the bill raises a number of concerns, which should be addressed before the legislation moves to the floor. For details see http://www.workforcealliance.org

Workforce Investment Act (WIA) Overview:
Separate from welfare reform, in 1998 Congress passed the Workforce Investment Act (WIA) in part to facilitate coordination among several federal programs intended to help a range of people, including TANF recipients, other low-income adults, as well as dislocated workers and youth, enter or re-enter and advance in the workforce. In many areas, TANF's work activity requirements and the work first emphasis have prevented TANF clients from accessing WIA sponsored training services. Were coordination between WIA and TANF agencies better facilitated at the federal level, it would make it easier for willing local areas to allow TANF recipients to access training services offered through WIA agencies.

A larger concern about WIA, is the reduction in training services available to low-income adults, particular when compared to preceding federal job training programs (i.e. the Job Training Partnership Act, JTPA). This has come about, in part, because a substantial amount of federal funds previously used for training under JTPA are now being spent on a number of newly mandated activities, including the creation of new One-Stop Careers Centers. There have also been concerns about the "sequential eligibility" provisions under WIA, which have been interpreted in many local areas as a "work first" directive similar to what has been used to limit training options under TANF.

Legislative Update:
On October 2nd, the Senate Health, Education, Labor and Pensions (HELP) committee passed its final version of WIA reauthorization legislation, entitled the "Workforce Investment Act Amendments of 2003 (S. 1627)."

No Block Grant: Maintenance of separate funding streams for Adult, Dislocated Worker and Wagner-Peyser programs;
Shared Infrastructure Funding: Mandated contributions, as specified by Governors, to One-Stop non-personnel costs from all WIA partner agencies, with some additional Senate language specifying caps and an option for local areas to opt out through an MOU process;
Changes in Workforce Investment Board (WIB) Composition and Authority: Including the removal of partner agencies from LWIBs, and new authority of SWIBs and Governors over funding and operating standards for statewide One-Stop system;
New Business Services Options: A range of new allowable activities to better engage local industries, including development of sectoral and career ladder strategies (albeit with no additional funding provided for this new range of activities); and
New Attention to Training and Advancement: Including requiring state and local WIBs to explicitly address those goals within their plans.

Workforce Alliance Position:
TWA feels S.1627 represents the best option among the several WIA proposals put forth by Congress and the Administration, and hopes that it will win passage by the full Senate. However, since there was no mark-up hearing on the bill, there are still some key issues that TWA feels should be changed before the bill heads to the Senate Floor. These include:

"Demand Occupation" Training Contracts: A new contracting option established by S. 1627 to train job-seekers for "high demand occupations" was changed in the final bill, at the request of the Administration, to limit eligible contractors to "institutes of higher education" (vs. the more general "training entity" language in earlier drafts.) TWA opposes this language as it would categorically exclude other quality education and training providers that may want to implement sectoral strategies or other targeted training programs.
Sequence of Services: While much improved over the eligibility language in the House bill, with attention to goals of "self-sufficiency" and "higher wages" for WIA clients, the Senate language still leaves open the possibility that a local One-Stop could deem a low-income adult ineligible to receive intensive or training services if s/he can get a job with wages "comparable" to his/her current low-wage employment. While the comparable wages language is appropriate for dislocated workers, low-income adults should be deemed eligible for training so long as they need such services to pursue higher paying jobs.
Public Review Opportunities: S. 1627 calls for State and Local WIBs to establish four-year plans with required interim reviews every two years to see if the plan is producing desired results. Unfortunately, the bill does not mandate a public role in that review process. TWA believes that a public review process needs to be mandated in order to promote stakeholder involvement and assessment of the WIA system.

¹This summary has been adapted from and developed in partnership with The Workforce Alliance (www.workforcealliance.org).
For more details, contact Patsy Harris at (202) 338-1209 x109 or patsy@directcarealliance.org
²TWA is a diverse coalition of leaders from the field of workforce development advocating for effective federal education and training policies that will help workers get the skills needed to advance and help more local businesses get the skilled workers they need to compete.