Mitt Romney, Waivers, and the End of Welfare
Mitt Romney was at Acme Industries—maker of OEM parts, not boxes of cartoon TNT—in Elk Grove Village this week, dropping praise on Jimmy John's (official sandwich of the Romney press bus) and contrasting the sandwich king with a familiar refrain about ending a "culture of dependency":
“I hope you understand President Obama in just the last few days has tried to reverse that accomplishment [1996 welfare reforms] by taking the work requirement out of welfare,” Romney told a group of about 200 factory workers and supporters.
The new centerpiece of the Romney campaign, also starring in a new ad, is brought to you by a July memo from the Department of Health and Human Services. Far from "taking the work requirement out of welfare," it... well, it's complicated. The Tribune's op-ed is an okay start:
What launched all this talk was a July 12 directive from the Department of Health and Human Services that announced the states could apply for waivers to rules governing Temporary Assistance for Needy Families — welfare.
What we saw was an opening for the states to get some flexibility to promote new ways to get welfare recipients onto payrolls.
This touches on something important: what we saw. All this culture warfare stems from one thing: the future one sees in divining HHS's bureaucratese. What depths lurk in this directive?
Let's actually start with the memo. This is the controversial part:
Section 1115 [of the Social Security Act] authorizes waivers concerning section 402. Accordingly, other provisions of the TANF statute are not waivable. For example, the purposes of TANF are not waivable, because they are contained in section 401. The prohibitions on assistance are not waivable, because they are contained in section 408.
While the TANF work participation requirements are contained in section 407, section 402(a)(1)(A)(iii) requires that the state plan “[e]nsure that parents and caretakers receiving assistance under the program engage in work activities in accordance with section 407.” Thus, HHS has authority to waive compliance with this 402 requirement and authorize a state to test approaches and methods other than those set forth in section 407, including definitions of work activities and engagement, specified limitations, verification procedures, and the calculation of participation rates. As described below, however, HHS will only consider approving waivers relating to the work participation requirements that make changes intended to lead to more effective means of meeting the work goals of TANF.
It's actually not as complicated as it sounds, but it's critical to understanding how a perceived loophole in the jargon above has been turned into the central issue of the campaign, for a few days at least:
* Section 1115 allows the government to mess with demonstration projects for not just welfare, but Medicaid and CHIP and other stuff.
* Section 402 tells states how to submit their welfare plans to the federal government.
* Section 402 (a)(1)(A)(iii) basically says that a "family assistance program" contains the general provision that the state intends to "ensure that parents and caretakers receiving assistance under the program engage in work activities."
* Section 407 outlines those "work activities," which are either work or things meant to get people to work, like "vocational educational training (not to exceed 12 months with respect to any individual)," community service, and whatnot.
So the memo basically says, in part: since one thing lets you waive parts of the planning process, you can essentially wave the work activities for the purpose of demonstration programs. The day the memo was released, Robert Rector of the Heritage Foundation wrote a post arguing that it will kill off welfare-to-work forever, which set off a bunch of Republican legislators, and here we are.
But that's not all the memo says:
HHS will only consider approving waivers relating to the work participation requirements that make changes intended to lead to more effective means of meeting the work goals of TANF.... HHS is committed to ensuring that any demonstration projects approved under this authority will be focused on improving employment outcomes and contributing to the evidence base for effective programs; therefore, terms and conditions will require a federally-approved evaluation plan designed to build our knowledge base.
Take, for example, that vocational educational training limit; the memo suggests that's the sort of thing states could tinker with:
Projects that test systematically extending the period in which vocational educational training or job search/readiness programs count toward participation rates, either generally or for particular subgroups, such as an extended training period for those pursuing a credential. The purpose of such a waiver would be to determine through evaluation whether a program that allows for longer periods in certain activities improves employment outcomes.
Translated, that means "if you think 12 months of vocational training isn't enough, send us a plan for something else."
Does the memo mean that the government will just start mailing welfare checks to layabouts? It could, I guess, but it would require more steps:
1. A state decides that welfare recipients shouldn't work, and instead should just bang on a drum all day.
2. They draft a plan explaining how banging on a drum all day will meet the employment goals of TANF.
3. HHS reviews the plan and decides that leisure-to-work will increase the employment of welfare recipients.
4. HHS then gives the state a timeframe in which to demonstrate that drummers are moving into employment.
This assumes that both the HHS and states would have interest in just subsidizing unemployment. For its part, HHS head Kathleen Sebelius has said HHS's waiver plan is much more strict than the Heritage Foundation implied, in a letter to two of the Republican critics, Dave Camp and Orrin Hatch:
In 2005, 29 Republican Governors requested "increased waiver authority, allowable work activities, availability of partial work credit" so they might more "effectively serve low-income" Americans.... The Department is providing a very limited waiver opportunity for states that develop a plan to measurably increase the number of beneficiaries who find and hold down a job. Specifically, Governors must commit that their proposals will move at least 20% more people from welfare to work compared to the state's past performance. States must also demonstrate clear progress toward that goal no later than one year after their programs take effect.... And if a Governor proposes a plan that undercuts the work requirements established in welfare reform, that plan will be rejected.
So that's what the HHS says. What might states do? A memo from Washington State's Department of Social and Health Services outlines some possible proposals for how they could respond:
The work participation requirements for engaged in work would be one area to consider. This is the requirement which identifies those core activities that count for 30 hours per week and those optional activities that count for 10 hours per week for a single parent (5 hours per week for a two-parent family).
A waiver to permit the optional activities to count as full-time, core activities would permit us to focus on the educational needs of parents who have not completed high school or who are in need of additional education to retain or maintain employment.
"Core activities" means unsubsidized employment, "work experience," community service, and vocational training. "Optional" or "non-core" activities are "education directly related to employment" and "job skills training."
At this point you can start to see where this is going. There is a cynical interpretation: states are having trouble moving welfare recipients to work because of the economy, and this provides them more flexibility to not face penalties for reaching participation requirements. There's a non-cynical one: the distinction between, say, education and community service doesn't help people actually get employed.
Here are a couple more from the memo:
Another potential waiver would be to test extending the 12 month limit on vocational educational activities to 24 months. This would permit parents to extend the training period to pursue a credential needed for employment.
Finally, consider requesting a waiver to permit counting individuals who were in TANF-subsidized jobs but no longer receiving TANF toward the participation rate for a specified period such as 6 months or one year.
The latter means that states are using welfare money to subsidize jobs for employees who are not necessarily on welfare by picking up some of the wage costs; the recent TANF emergency fund created 30,000 $10/hour jobs in Illinois, many of which were youth summer jobs.
To conclude that this "takes the work requirement out of welfare" requires a belief that, in short, HHS is lying about the purpose of the waivers. It's a free country, and people can believe that. The person who's come the closest to the truth about the HHS memo and its evolution into Mitt Romney's line of attack is Newt Gingrich (!), in his role as a not-entirely-helpful Romney surrogate (emphasis mine):
"I think if the ad makers had asked me I would have said 'this makes it possible' would have been a good way to enter into what it said," the Republican replied. In other words, the Romney surrogate believes the Romney ad includes language the surrogate can't defend.
When the host pressed further, asking if Gingrich would concede the "wording of the ad is not actually accurate," the Romney surrogate ultimately conceded, "We have no proof today, but I would say to you under Obama's ideology it is absolutely true that he would be comfortable sending a lot of people checks for doing nothing."
And that's it: if you think Obama, and by extension Kathleen Sebelius, want to use HHS waivers to eliminate welfare-to-work (with, of course, the complicity of the states), then you could conclude that the argument outlined by the HHS memo is meant to provide legal cover to do so. Ron Haskins, who helped draft the original welfare-reform act, goes so far as to suggest the HHS memo violates the spirit of the law and was poorly handled by the department, but he's supportive of waivers generally and sees nothing nefarious in the memo. Not many people do, and as a result Romney is getting flayed about his ad and line of attack.
TANF waivers are not a minor piece of policy, but the bureaucratic snit over them could be, and would be, in anything other than an election year.
Photograph: Chicago Tribune