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THE WHITE HOUSE
WASHINGTO.N
October 2, 1996
MEMORANDUM FOR THE PRESIDENT
FROM:
Carol H. Rasco CHR
Frank Raines For
SUBJECT: Update on Welfare Reform Implementation
We are continuing to work to coordinate the Administration's efforts to implement the new
welfare law. We will be providing periodic updates on key issues for you, as well as answers
to questions you raise.
PROCESS
Domestic Policy, OMB, Counsel's office, and Intergovernmental are working closely together
on all aspects of implementation. We have the following process in motion:
o
DPC chairs bi-weekly meetings of 11 federal agencies and all White House offices.
A subgroup of key agencies and offices meets more regularly on nuts-and-bolts
implementation issues.
o
We are meeting weekly with the National Governors' Association, the National
Conference of State Legislatures, and the American Public Welfare Association.
o
We met with the League of Cities, the Conference of Mayors, and the counties and
promised them ongoing input and consultation.
TANF BLOCK GRANT IMPLEMENTATION
The entitlement to AFDC ended on October 1. States can elect to take advantage of the new
TANF block grant as of that date, but they must enter the new program by July 1997. The
first states to send in state plans were Michigan and Wisconsin, and their plans were
approved by HHS on September 30. As of October 1, about 11 states had filed state plans
with HHS.
Determining "Completeness" of Plans HHS's role in state plans is merely to certify that
they are "complete" -- a far different role than they have had in the past. We have worked
with HHS to pare down their list of what is required for a plan to be complete. As a result,
they produced draft guidance for the states at the NGA conference last month that was quite
brief - and praised by the states as a result.
2
Regulations -- The law provides only limited authority to regulate the TANF block grant.
You asked in our last memo whether we can require states to use TANF funds as wage
subsidies. This is one of the permissible uses of the funds and one way states can provide
work. HHS will be working with states to promote this as a model, but it will not be able to
require that states adopt any particular approach to meeting the work requirement.
Grandfathering Waivers -- Counsel's office advises that the welfare law allows states to
continue to operate waiver programs that have time limits and work requirements that vary
from the terms of the new law (unless the waivers were granted after the new law passed).
We will, however, be making it clear in our guidance to states that the Administration
believes that all state programs should comply with the law's provisions regarding time limits,
work participation rates, and exemptions and extensions. We will also indicate that if states
do not bring their programs into line with the law, there will almost certainly be
Congressional action (which we would support) to limit the grandfathering provision.
Wisconsin Waiver -- We have resolved Wisconsin's welfare and Medicaid waiver request.
On September 30, in its letter approving Wisconsin's new TANF state plan, HHS informed
the state that it no longer needs waivers to implement the welfare reform portions of its "W-
2" program. Wisconsin still plans to impose a 60-day residency requirement before families
can begin to collect benefits, which HHS believes is unconstitutional. The law in this area is
unsettled, and the provision will definitely be brought to the courts. HHS simply took note of
this issue as part of the plan approval.
On Medicaid, HHS informed the state on September 30 that it will not grant that portion of
the state's waiver request because it would have eliminated the Medicaid entitlement and run
counter to our commitment to the federal Medicaid guarantee. HHS offered to work with the
state on an alternative Medicaid proposal.
Performance Bonus Fund and Contingency Fund -- The new law requires the Secretary of
HHS to work with NGA and APWA to set up the Performance Bonus Fund, and gives her a
year to develop the formula and process. We are setting up a process with these state groups
to work out such a proposal in cooperation. We will keep you apprised as these plans
develop. The Contingency Fund to protect states from economic downturns is being
established by Treasury in consultation with HHS.
New Mexico --- New Mexico is one of the few states that is disadvantaged by the conversion
to a block grant, because its caseload is increasing. The state announced it may have to cut
welfare benefits by 12% to live within the new law. However, Senator Domenici may secure
a legislative fix that would allow the state to tap into the Contingency Fund for this purpose.
IMMIGRANTS
The immigration issues raised by the law are clearly the thorniest and most difficult to
implement.
3
Means-tested Benefits -- Non-citizens who arrive after the law's enactment are barred from
receiving "means-tested benefits" for five years. We have some latitude to define that term,
and Counsel's office, OMB, and DOJ are working together to do so.
Food Stamps for Legal Immigrants -- As part of the CR, we were able to persuade Congress
to delay cutting off food stamp benefits for legal immigrants now on the rolls until at least
April 1, 1997. (Under welfare reform, that change was to have been effective at the
recipient's next recertification for benefits.) This change will particularly help California,
which did not benefit from our earlier effort to delay the impact through USDA waivers, and
sought our help as a result. Over 30 states opted for a delay through the waiver option.
However, legal immigrants who are applying for food stamps are not helped by the change in
the CR. States are beginning to deny food stamps to these new applicants, although the
interpretation of USDA's guidance on when they must comply varies from state to state.
USDA instructed states to start denying new applications on September 22; for the next 120
days, states that have implemented this change are not subject to sanctions if they make
errors.
Verification -- Administrators of many government programs such as food stamps have an
important new role to play in verifying the legal status of non-citizens, and whether they fall
into any of the categories exempted from the full impact of this law. One particularly
difficult exemption to administer is the "40 quarters" exemption, whereby legal immigrants
who have worked at least 40 quarters in this country (in combination with their spouse or
parents) can still get benefits. SSA is working on a new system to give other agencies access
to this information on an overnight basis, beginning in January 1997.
However, some earnings may never have been reported to SSA, particularly for farmworkers
and domestic workers whose employers did not pay the taxes on their behalf. We plan to get
instructions to food stamp offices next week on how to address this problem and avoid
denying benefits inappropriately.
Reporting of Illegal Aliens -- The law requires states, SSA, and HUD to report quarterly to
the INS on any illegal aliens they become aware of. The INS is determining how to
implement this provision.
Below are answers to three questions you raised in the last update memo:
o
Legal immigrants who get SSI will get notices early next year that SSA will
reexamine their eligibility, and benefits will be ended by August 1997. The INS will
send them information on naturalization later this fall to ensure that as many as
possible who meet the requirements for citizenship are able to naturalize before their
benefits end next August.
4
o
We are working with INS and disability and immigration groups to ensure that the
regulation waiving certain testing requirements for immigrants with disabilities is
finalized as soon as possible. The comment period ends within the next two weeks,
and the rule will be finalized by December.
o
You had noted the statistic that the INS naturalized 1.2 million immigrants this fiscal
year, and asked how big an increase it represented over the prior year. Approximately
500,000 people were naturalized last year, so it is a very significant increase.
FOOD STAMPS WORK REQUIREMENT
As you may recall, the new law imposes work requirements on food stamp applicants who
are childless and 18-50 years old, but it allows states to apply for a waiver of this
requirement in areas of high unemployment. USDA will be issuing guidance shortly on how
states can designate such areas.
SSI FOR DISABLED CHILDREN
As you know, the law tightened the eligibility standard for SSI for children with disabilities.
The law was effective upon enactment for new applicants. As many as 190,000 children now
on the rolls will lose eligibility between March and August 1997 because their impairments
are not severe enough to qualify under the new law. Two major issues have emerged:
Cut-off Date for Families Who Appeal -- SSA will determine whom to drop from the rolls
by August 1997, but families can appeal SSA's decision. If they do so in a timely manner,
they are guaranteed continued benefits while they appeal. Legally, SSA had determined that
we are able to keep children on the rolls up to a later point in the appeals process than we
had expected, and SSA will take advantage of this option. As a result, most children who
appeal will lose benefits in 1999, rather than late 1997 or 1998. SSA has not yet announced
this decision because they want to announce the decision on the second issue at the same
time.
Definition of Childhood Disability -- The law includes a new definition of childhood
disability. During the lengthy debate on this issue, everyone assumed the new definition
would cut 190,000 children from the rolls, and we included savings of $7.6 billion from
1997-2002 in our budget reflecting that estimate. However, from a legal perspective it
appears SSA has more flexibility to define childhood disability than we expected. Advocates
have united around an interpretation that would drop from the rolls only 20% of the 190,000
children, with a loss of $5.9 billion of the savings, but Congress would undoubtedly view this
option as subverting their intent. SSA is seeking a proposal that strikes the right balance.
5
MEDICAID
In the coming week, HHS will lay out for us an initial position on key Medicaid issues,
including how states can reconfigure their systems to accommodate the separate eligibility
systems required for Medicaid and TANF; what happens to the Medicaid coverage of those
individuals who lose SSI coverage; and the impact on existing waivers.
Another major question is how many states will accept the option to continue Medicaid for
current legal immigrants. They must decide by January 1.
CHILD CARE
The new provisions of the law relating to child care went into effect October 1, 1996. This is
a very positive story, as HHS worked quickly and effectively to help states understand the
new law, develop interim plans to access the new funding, and ensure that states will get their
increased money on time. We will be working with Communications to ensure that the
opportunity to highlight some good news on this front is not missed.
TECHNICAL CORRECTIONS
The Secretary of HHS is required to report to Congress within 90 days (November 22, 1996)
on technical amendments and corrections that are necessary. The other departments as well
as many of the groups with which we are working have concerns in this area as well. We
will be working closely with HHS as the date for this report draws closer.
cc:
Leon Panetta
DFortunA
THE WHITE HOUSE
washington
October 2, 1996
MEMORANDUM FOR THE PRESIDENT
FROM:
Carol H. Rasco CHR
Frank Raines For
SUBJECT: Update on Welfare Reform Implementation
We are continuing to work to coordinate the Administration's efforts to implement the new
welfare law. We will be providing periodic updates on key issues for you, as well as answers
to questions you raise.
PROCESS
Domestic Policy, OMB, Counsel's office, and Intergovernmental are working closely together
on all aspects of implementation. We have the following process in motion:
o
DPC chairs bi-weekly meetings of 11 federal agencies and all White House offices.
o
A subgroup of key agencies and offices meets more regularly on nuts-and-bolts
implementation issues.
o
We are meeting weekly with the National Governors' Association, the National
Conference of State Legislatures, and the American Public Welfare Association.
o
We met with the League of Cities, the Conference of Mayors, and the counties and
promised them ongoing input and consultation.
TANF BLOCK GRANT IMPLEMENTATION
The entitlement to AFDC ended on October 1. States can elect to take advantage of the new
TANF block grant as of that date, but they must enter the new program by July 1997. The
first states to send in state plans were Michigan and Wisconsin, and their plans were
approved by HHS on September 30. As of October 1, about 11 states had filed state plans
with HHS.
Determining "Completeness" of Plans -- HHS's role in state plans is merely to certify that
they are "complete" -- a far different role than they have had in the past. We have worked
with HHS to pare down their list of what is required for a plan to be complete. As a result,
they produced draft guidance for the states at the NGA conference last month that was quite
brief and praised by the states as a result.
2
Regulations -- The law provides only limited authority to regulate the TANF block grant.
You asked in our last memo whether we can require states to use TANF funds as wage
subsidies. This is one of the permissible uses of the funds and one way states can provide
work. HHS will be working with states to promote this as a model, but it will not be able to
require that states adopt any particular approach to meeting the work requirement.
Grandfathering Waivers Counsel's office advises that the welfare law allows states to
continue to operate waiver programs that have time limits and work requirements that vary
from the terms of the new law (unless the waivers were granted after the new law passed).
We will, however, be making it clear in our guidance to states that the Administration
believes that all state programs should comply with the law's provisions regarding time limits,
work participation rates, and exemptions and extensions. We will also indicate that if states
do not bring their programs into line with the law, there will almost certainly be
Congressional action (which we would support) to limit the grandfathering provision.
Wisconsin Waiver We have resolved Wisconsin's welfare and Medicaid waiver request.
On September 30, in its letter approving Wisconsin's new TANF state plan, HHS informed
the state that it no longer needs waivers to implement the welfare reform portions of its "W-
2" program. Wisconsin still plans to impose a 60-day residency requirement before families
can begin to collect benefits, which HHS believes is unconstitutional. The law in this area is
unsettled, and the provision will definitely be brought to the courts. HHS simply took note of
this issue as part of the plan approval.
On Medicaid, HHS informed the state on September 30 that it will not grant that portion of
the state's waiver request because it would have eliminated the Medicaid entitlement and run
counter to our commitment to the federal Medicaid guarantee. HHS offered to work with the
state on an alternative Medicaid proposal.
Performance Bonus Fund and Contingency Fund -- The new law requires the Secretary of
HHS to work with NGA and APWA to set up the Performance Bonus Fund, and gives her a
year to develop the formula and process. We are setting up a process with these state groups
to work out such a proposal in cooperation. We will keep you apprised as these plans
develop. The Contingency Fund to protect states from economic downturns is being
established by Treasury in consultation with HHS.
New Mexico -- New Mexico is one of the few states that is disadvantaged by the conversion
to a block grant, because its caseload is increasing. The state announced it may have to cut
welfare benefits by 12% to live within the new law. However, Senator Domenici may secure
a legislative fix that would allow the state to tap into the Contingency Fund for this purpose.
IMMIGRANTS
The immigration issues raised by the law are clearly the thorniest and most difficult to
implement.
3
Means-tested Benefits -- Non-citizens who arrive after the law's enactment are barred from
receiving "means-tested benefits" for five years. We have some latitude to define that term,
and Counsel's office, OMB, and DOJ are working together to do so.
Food Stamps for Legal Immigrants -- As part of the CR, we were able to persuade Congress
to delay cutting off food stamp benefits for legal immigrants now on the rolls until at least
April 1, 1997. (Under welfare reform, that change was to have been effective at the
recipient's next recertification for benefits.) This change will particularly help California,
which did not benefit from our earlier effort to delay the impact through USDA waivers, and
sought our help as a result. Over 30 states opted for a delay through the waiver option.
However, legal immigrants who are applying for food stamps are not helped by the change in
the CR. States are beginning to deny food stamps to these new applicants, although the
interpretation of USDA's guidance on when they must comply varies from state to state.
USDA instructed states to start denying new applications on September 22; for the next 120
days, states that have implemented this change are not subject to sanctions if they make
errors.
Verification -- Administrators of many government programs such as food stamps have an
important new role to play in verifying the legal status of non-citizens, and whether they fall
into any of the categories exempted from the full impact of this law. One particularly
difficult exemption to administer is the "40 quarters" exemption, whereby legal immigrants
who have worked at least 40 quarters in this country (in combination with their spouse or
parents) can still get benefits. SSA is working on a new system to give other agencies access
to this information on an overnight basis, beginning in January 1997.
However, some earnings may never have been reported to SSA, particularly for farmworkers
and domestic workers whose employers did not pay the taxes on their behalf. We plan to get
instructions to food stamp offices next week on how to address this problem and avoid
denying benefits inappropriately.
Reporting of Illegal Aliens The law requires states, SSA, and HUD to report quarterly to
the INS on any illegal aliens they become aware of. The INS is determining how to
implement this provision.
Below are answers to three questions you raised in the last update memo:
o
Legal immigrants who get SSI will get notices early next year that SSA will
reexamine their eligibility, and benefits will be ended by August 1997. The INS will
send them information on naturalization later this fall to ensure that as many as
possible who meet the requirements for citizenship are able to naturalize before their
benefits end next August.
4
o
We are working with INS and disability and immigration groups to ensure that the
regulation waiving certain testing requirements for immigrants with disabilities is
finalized as soon as possible. The comment period ends within the next two weeks,
and the rule will be finalized by December.
o
You had noted the statistic that the INS naturalized 1.2 million immigrants this fiscal
year, and asked how big an increase it represented over the prior year. Approximately
500,000 people were naturalized last year, so it is a very significant increase.
FOOD STAMPS WORK REQUIREMENT
As you may recall, the new law imposes work requirements on food stamp applicants who
are childless and 18-50 years old, but it allows states to apply for a waiver of this
requirement in areas of high unemployment. USDA will be issuing guidance shortly on how
states can designate such areas.
SSI FOR DISABLED CHILDREN
As you know, the law tightened the eligibility standard for SSI for children with disabilities.
The law was effective upon enactment for new applicants. As many as 190,000 children now
on the rolls will lose eligibility between March and August 1997 because their impairments
are not severe enough to qualify under the new law. Two major issues have emerged:
Cut-off Date for Families Who Appeal -- SSA will determine whom to drop from the rolls
by August 1997, but families can appeal SSA's decision. If they do so in a timely manner,
they are guaranteed continued benefits while they appeal. Legally, SSA had determined that
we are able to keep children on the rolls up to a later point in the appeals process than we
had expected, and SSA will take advantage of this option. As a result, most children who
appeal will lose benefits in 1999, rather than late 1997 or 1998. SSA has not yet announced
this decision because they want to announce the decision on the second issue at the same
time.
Definition of Childhood Disability -- The law includes a new definition of childhood
disability. During the lengthy debate on this issue, everyone assumed the new definition
would cut 190,000 children from the rolls, and we included savings of $7.6 billion from
1997-2002 in our budget reflecting that estimate. However, from a legal perspective it
appears SSA has more flexibility to define childhood disability than we expected. Advocates
have united around an interpretation that would drop from the rolls only 20% of the 190,000
children, with a loss of $5.9 billion of the savings, but Congress would undoubtedly view this
option as subverting their intent. SSA is seeking a proposal that strikes the right balance.
5
MEDICAID
In the coming week, HHS will lay out for us an initial position on key Medicaid issues,
including how states can reconfigure their systems to accommodate the separate eligibility
systems required for Medicaid and TANF; what happens to the Medicaid coverage of those
individuals who lose SSI coverage; and the impact on existing waivers.
Another major question is how many states will accept the option to continue Medicaid for
current legal immigrants. They must decide by January 1.
CHILD CARE
The new provisions of the law relating to child care went into effect October 1, 1996. This is
a very positive story, as HHS worked quickly and effectively to help states understand the
new law, develop interim plans to access the new funding, and ensure that states will get their
increased money on time. We will be working with Communications to ensure that the
opportunity to highlight some good news on this front is not missed.
TECHNICAL CORRECTIONS
The Secretary of HHS is required to report to Congress within 90 days (November 22, 1996)
on technical amendments and corrections that are necessary. The other departments as well
as many of the groups with which we are working have concerns in this area as well. We
will be working closely with HHS as the date for this report draws closer.
cc:
Leon Panetta
EXECUTIVE OFFICE OF THE PRESIDENT
30-Sep-1996 12:20pm
TO:
Diana M. Fortuna
FROM:
Carol H. Rasco
Domestic Policy Council
CC:
Jeremy D. Benami
CC:
Elizabeth E. Drye
SUBJECT:
Welfare REform memo for POTUS
COmments on draft memo:
a.
Food stamps update to reflect work in the budget agreed to
over the weekend.
b. Wisconsin: add a line stating the way(s) the Wis. plans goes
against our principles for sure that they wanted to undo the
entitlement (isn't that what they wanted to do?).
C. New Mexico: The way it is written I feel like POTUS will ask
if HHS can take a new look at their interpretation
does our
Gen. Counsel agree with HHS interpretation?
answer
d.
Medicaid: I would drop last sentence in first paragraph about
states being anxious to hear
POTUS will simply then write What is
holding us up? We ARE pushing, are we not?
e. Performance Bonus Fund: Gives whom a year to develop and
answer
implement? The part on Contingency Fund being much simpler sounds
like there are problems in putting the first one together
is
that true? No
Thanks for this excellent draft. I think it would be good if the
memo went in after tomorrow's summit if that indeed comes
off
in the meantime, OMB I assume at least needs to see it. I'm
not concerned that they co-sign if they don't ask about it but I
do want them to be consulted understanding that we need to get it
in late tomorrow, early Wednesday.
Ken
Bruce
DRAFT
Teremy edits ym, The vijleh
De th
September 2. 2 1996
some goes to
MEMORANDUM FOR THE PRESIDENT
I've whire the
iruaned
FROM:
Carol Rasco
Bruce Reed
SUBJECT:
Update on Welfare Reform Implementation
places nomo nee Elena ds up-
dating
We are continuing to work to coordinate the Administration's efforts to implement the new
welfare law. We will be providing periodic updates on key issues for you, as well as answers
to questions you raise.
PROCESS
The DPC,
are working closely tog.
We are working closely with OMB, Counsel's office, and Intergovernmental on all aspects of
implementation. We have the following process in motion:
0
We chair bi-weekly meetings of 11 federal agencies and all White House offices.
o
A subgroup of key agencies and offices meets more regularly on nuts-and-bolts
implementation issues.
0
We are meeting weekly with the National Governors' Association, the National
Conference of State Legislatures, and the American Public Welfare Association.
0
We met with the League of Cities, the Conference of Mayors, and the counties and
promised them ongoing input and consultation.
TANF BLOCK GRANT IMPLEMENTATION
The entitlement to jasof AFDC ends on October 1. States can elect to take advantage of the new
TANF block grant that date, but they must enter the new program by July 1997 The first
states to send in state plans were Michigan and Wisconsin. HHS expects to approvertheir
plans by September 30. Approximately 10 states are expected to filestate plans on or about
October 1.
11
on
PHOTOCOPY
MISC. HANDWRITING
Determining "Completeness" of Plans HHS's role in state plans is merely to certify that
they are "complete" a far different role than they have had in the past. We have worked
with HHS to pare down their list of what is required for a plan to be complete. As a result,
they produced draft guidance for the states at the NGA conference that was quite brief -
and praised by the states as a result.
Regulations The laws provide only limited authority to regulate the TANF block grant.
You asked in our last memo whether we can require states to use TANF funds as wage
subsidies. This is one of the permissible uses of the funds and one way states can provide
work. HHS will be working with states to promote this as a model, but it will not be able to
require that states adopt any particular approach to meeting the work requirement.
Conselisoffe (unless the waivers were granted after the new law passed).
Grandfathering Waivers Legal counsel advises that the welfare law allows states to
continue to operate waiver programs that have time limits and work requirements that vary
from the terms of the new law. We will, however, be making it clear in our guidance to
states that the administration believes that all state programs should comply with the law's
provisions regarding time limits, participation rates, and exemptions and extensions. We will
also indicate that if states do not bring their programs into line with the law, there will
almost certainly be Congressional action (which we would support) to limit the
grandfathering provision.
Wisconsin Waiver - We believe we have resolved the Wisconsin situation. On Monday, HHS
plans to inform the state that it does not need waivers to implement its welfare reform plan,
and that HHS will not grant the state's request for a Medicaid waiver on the grounds that it
goes against our principles on health care. HHS will offer to work with the state on an
alternative Medicaid proposal.
Redo
Wisconsin's state plan includes a 60-day residency requirement before families can begin to
collect benefits. HHS believes this is unconstitutional, though the law in this area is
unsettled. The provision will definitely be brought to the courts.
Performance Bonus Fund -APWA and Contingency Fund The new law requires the Administration
Secretary TH#S
to work with NGA and the states to set up the Performance Bonus Fund and gives them a
5.
year to develop the formula and process. We are setting up a process with ate groups
mentioned above to work out such a proposal in cooperation. We will keep you apprised as
these plans develop. The Contingency Fund that protects protect states from economic downturns
will be much simpler to establish. Treasury is taking the necessary steps and is working
closely with HHS.
is
being established by Treasury.
my- Do you to want include to The
was That This HHS is nonetheless plan?
2
PHOTOCOPY
print approv inj The wiscensin
MISC. HANDWRITING
New Mexico New Mexico is one of the few states that is disadvantaged by the conversion
to a block grant, because its caseload is increasing. The state has said it may have to cut
welfare benefits by 12% to live within the new law. Senator Domenici is endeavoring to
intercede on the state's behalf with either a legislative or administrative fix. He has
proposed that the state get access to the Contingency Fund, but HHS responds that the state
is not eligible until it converts from AFDC to TANF. New Mexico has threatened to sue HHS
over its position that the law does not allow the state to draw down more in Federal funds
e-do
than the block grant amount in FY1997.
IMMIGRANTS
The immigration issues raised by the law are clearly the thorniest and most difficult to
implement.
for five years.
Means-tested Benefits Non-citizens who arrive after the law's enactment are barred
from receiving "means-tested benefits We have considerable latitude to define that term,
and Counsel's office, OMB, and DOJ are working together to do SO.
Interim Verification - Many government programs such as food stamps have a New important role to
Administratives of
play in verifying the legal status of non-citizens and whether they fall into any of the
calegories exempted from the full impact of this law. One particularly difficult exemption to
administer is the "40 quarters" exemption, whereby legal immigrants who have worked at
least 10 years in this country can still get benefits. SSA is working on a new system to give
other agencies access to this information on an overnight basis.
However, SSA's records are likely to be incomplete for many people, such as farmworkers
and domestic workers whose employers did not pay the taxes on their behalf. We plan to get
instructions to food stamp offices next week on how to address this problem and avoid
denying benefits inappropriately.
change
in
the
Not
made
' R
and
Food Stamps Implementation As you know, states are beginning to deny food stamps to
new non-citizen applicants although the interpretation of USDA's guidance on when they
9/22
must comply varies from state to state. States are also beginning to process tifications
of current recipients, which triggers the benefit cut off for those legal immigrants.
120days
bloto
Asarlify USDAvmade a waiver available to states that allows some of them to delay the impact on
to
jet Reck in
current had recipients. Over 30 states have accepted this waiver option to date. California was
not helped by that waiver because of the vagaries of their certification process, and has
requested an alternative waiver. We are working on potential legislative and administrative
options that might work for them.
Reporting of Illegal Aliens The law requires states to report quarterly to the INS on any
delay
illegal aliens they become aware of. The INS is trying to determine mg how to implement this
provision.
PHOTOCOPY
MISC. HANDWRITING
the withingt
3
state W option
that VSPA hes
made avail
jthe food stamp cuts for legal be immigrants assportity who currently recv bens They
will assist states. offectic esp Calif which was not helped
Below are answers to three questions you raised in the last update memo:
0
Legal immigrants who get SSI will get notices early next year that SSA will reexamine
their eligibility, and benefits will be ended in August 1997. The INS will send them
information on naturalization this November to ensure that as many as possible who
meet the requirements for citizenship are able to naturalize before their benefits end
next August.
o
We are working closely with INS and disability and immigration groups to ensure that
the regulation waiving certain testing requirements for immigrants with disabilities is
finalized as soon as possible. The comment period ends within the next two weeks,
and the rule will be finalized in December.
by
o
You had noted the statistic that the INS naturalized 1.2 million immigrants this fiscal
year, and asked how big an increase it represented over the prior year.
Approximately 500,000 people were naturalized last year, SO it is a very significant
increase.
FOOD STAMPS WORK REQUIREMENT
As you may recall, the new law imposes work requirements on food stamp applicants who are
18-50 years old, but it allows states to apply for a waiver of this requirement in areas of
high unemployment. USDA will be issuing guidance very shortly on how states can designate
such areas.
SSI FOR DISABLED CHILDREN
As you know, the law tightened the eligibility standard for SSI for children with disabilities.
The law was effective upon enactment for new applicants. As many as 190,000 children now
on the rolls will lose eligibility between March and August 1997 because their impairments
are not severe enough to qualify under the new law. Two major issues have emerged:
Cut-off Date for Families Who Appeal SSA will determine whom to drop from the rolls by
August 1997, but families can appeal SSA's decision. and are guaranteed continued benefits
while they appeal. Legally. we have learned that we are able to keep children on the rolls up
to a later point in the appeals process than we had expected, and we believe we should take
advantage of this option. As a result, children who appeal will lose benefits in 1999, rather
than late 1997 or 1998. We have not yet announced this decision because we want to
announce our decision on the second issue at the same time.
4
Definition of Childhood Disability -- The law includes a new definition of childhood disability.
During the lengthy debate on this issue, everyone assumed the new definition would cut
190,000 children from the rolls, and we included savings in our budget reflecting that
estimate. However, from a legal perspective it appears we have significantly more flexibility
to define childhood disability than we expected. Advocates have united around an
interpretation that would drop from the rolls only 20% of the 190,000 children, but Congress
would undoubtedly view this option as subverting their intent. We are seeking a proposal
that strikes the right balance.
MEDICAID
In the coming week, HHS will lay out for us an initial position on key Medicaid issues,
including how states can reconfigure their systems to accommodate the separate eligibility
systems required for Medicaid and TANF; what happens to the Medicaid coverage of those
individuals who lose SSI coverage; and the impact on existing waivers States are very
anxious to hear more from the Administration on these questions.
CR
Another major question is how many states will accept the option to continue Medicaid for
current legal immigrants. They must decide by January 1.
CHILD CARE
went
The new provisions of the law relating to child care go into effect October 1, 1996. This is a
very positive story as HHS worked quickly and effectively to help states understand the new
law, develop interim plans to access the new funding, and ensure that states will get their
increased money on time. We will be working with Communications to ensure that the
opportunity to highlight some good news on this front is not missed.
TECHNICAL CORRECTIONS
The Secretary of HHS is required to report to Congress within 90 days (November 22, 1996)
on technical amendments and corrections that are necessary. The other departments as
well as many of the groups with which we are working have concerns in this area as well. We
will be working closely with HHS as the date for this report draws closer.
CC: Leon Panetta
Frank Raines
5
( wripot.926/
October 2, 1996
MEMORANDUM FOR THE PRESIDENT
FROM:
Carol H. Rasco
Bruce Reed
Raines
SUBJECT:
Update on Welfare Reform Implementation
We are continuing to work to coordinate the Administration's efforts to implement the new
welfare law. We will be providing periodic updates on key issues for you, as well as answers
to questions you raise.
PROCESS
Domestic Policy, OMB, Counsel's office, and Intergovernmental are working closely together
on all aspects of implementation. We have the following process in motion:
We chair bi-weekly meetings of 11 federal agencies and all White House offices.
A subgroup of key agencies and offices meets more regularly on nuts-and-bolts
implementation issues.
We are meeting weekly with the National Governors' Association, the National
Conference of State Legislatures, and the American Public Welfare Association.
We met with the League of Cities, the Conference of Mayors, and the counties and
promised them ongoing input and consultation.
TANF BLOCK GRANT IMPLEMENTATION
The entitlement to AFDC ended on October 1. States can elect to take advantage of the new
TANF block grant as of that date, but they must enter the new program by July 1997. The
first states to send in state plans were Michigan and Wisconsin, and their plans were
approved by HHS on September 30. As of October 1, about 11 states had filed state plans
with HHS.
Determining "Completeness" of Plans -- HHS's role in state plans is merely to certify that
they are "complete" -- a far different role than they have had in the past. We have worked
with HHS to pare down their list of what is required for a plan to be complete. As a result,
they produced draft guidance for the states at the NGA conference last month that was quite
brief -- and praised by the states as a result.
2
Regulations -- The law provides only limited authority to regulate the TANF block grant.
You asked in our last memo whether we can require states to use TANF funds as wage
subsidies. This is one of the permissible uses of the funds and one way states can provide
work. HHS will be working with states to promote this as a model, but it will not be able to
require that states adopt any particular approach to meeting the work requirement.
Grandfathering Waivers -- Counsel's office advises that the welfare law allows states to
continue to operate waiver programs that have time limits and work requirements that vary
from the terms of the new law (unless the waivers were granted after the new law passed).
We will, however, be making it clear in our guidance to states that the Administration
believes that all state programs should comply with the law's provisions regarding time limits,
work participation rates, and exemptions and extensions. We will also indicate that if states
do not bring their programs into line with the law, there will almost certainly be
Congressional action (which we would support) to limit the grandfathering provision.
AFDC
Wisconsin Waiver -- We have resolved the Wisconsin waiver request. On September 30, in
its letter approving Wisconsin's new TANF state plan, HHS informed the state that it no
longer needs waivers to implement the welfare reform portions of its "W-2" program.
Wisconsin still plans to impose a 60-day residency requirement before families can begin to
collect benefits, which HHS believes is unconstitutional. The law in this area is unsettled,
and the provision will definitely be brought to the courts. HHS simply took note of this issue
as part of the plan approval.
On Medicaid, HHS informed the state on September 30 that it will not grant that portion of
the state's waiver request because it would have eliminated the Medicaid entitlement and run
counter to our commitment to the federal Medicaid guarantee. HHS offered to work with the
state on an alternative Medicaid proposal.
Performance Bonus Fund and Contingency Fund -- The new law requires the Secretary of
HHS to work with NGA and APWA to set up the Performance Bonus Fund, and gives her a
year to develop the formula and process. We are setting up a process with these state groups
to work out such a proposal in cooperation. We will keep you apprised as these plans
develop. The Contingency Fund to protect states from economic downturns is being
established by Treasury in consultation with HHS.
New Mexico -- New Mexico is one of the few states that is disadvantaged by the conversion
to a block grant, because its caseload is increasing. The state has said it may have to cut
welfare benefits by 12% to live within the new law. Senator Domenici is endeavoring to
?
intercede on the state's behalf with either a legislative or administrative fix. He has proposed
that the state get access to the Contingency Fund, but HHS responds that the state is not
eligible until it converts from AFDC to TANF. New Mexico has threatened to sue HHS over
its position that the law does not allow the state to draw down more in Federal funds than the
block grant amount in FY1997. Counsel's office is examining HHS's interpretation.
3
IMMIGRANTS
The immigration issues raised by the law are clearly the thorniest and most difficult to
implement.
some
Means-tested Benefits Non-citizens who arrive after the law's enactment are barred from
receiving "means-tested benefits" for five years. We have considerable latitude to define that
term, and Counsel's office, OMB, and DOJ are working together to do so.
at least
Food Stamps for Legal Immigrants -- As part of the CR, we were able to persuade Congress
to delay cutting off food stamp benefits for legal immigrants now on the rolls until April
1
1997. (Under welfare reform, that change was to have been effective at the recipient's next
recertification for benefits.) This change will particularly help California, which did not
benefit from our earlier effort to delay the impact through USDA waivers, and sought our
help as a result. Over 30 states opted for a delay through the waiver option.
However, legal immigrants who are applying for food stamps new are not helped by the change in
the CR. States are beginning to deny food stamps to these applicants, although the
interpretation of USDA's guidance on when they must comply varies from state to state.
USDA instructed states to start denying new applications on September 22; for the next 120
days, states that have implemented this change are not subject to sanctions if they make
errors.
or add 18 mo.
Interim Verification Administrators of many government programs such as food stamps
have an important new role to play in verifying the legal status of non-citizens, and whether
they fall into any of the categories exempted from the full impact of this law. One
particularly difficult exemption to administer is the "40 quarters" exemption, whereby legal
immigrants who have worked at least 10 years in this country can still get benefits. SSA is
working on a new system to give other agencies access to this information on an overnight
basis. beg in Jan 1997.
1404
- fincomb w/their spouse agarents)
However, SSA's records are likely to be incomplete for many people, such as farmworkers
and domestic workers whose employers did not pay the taxes on their behalf. We plan to get
instructions to food stamp offices next week on how to address this problem and avoid
denying benefits inappropriately.
some earnings mayover he 0. nptd to SSA, part for
Reporting of Illegal Aliens The law requires statesyto report quarterly to the INS on any
illegal aliens they become aware of. The INS is determining how to implement this
provision.
4
Below are answers to three questions you raised in the last update memo:
o
Legal immigrants who get SSI will get notices early next -by year that SSA will
reexamine their eligibility, and benefits will be ended An August 1997. The INS will
send them information on naturalization this November to ensure that as many as
possible who meet the requirements for citizenship are able to naturalize before their
benefits end next August.
later this fall
o
We are working closely with INS and disability and immigration groups to ensure that
the regulation waiving certain testing requirements for immigrants with disabilities is
finalized as soon as possible. The comment period ends within the next two weeks,
and the rule will be finalized by December.
OTRA wants should!
You had noted the statistic that the INS naturalized 1.2 million immigrants this fiscal
year, and asked how big an increase it represented over the prior year. Approximately
500,000 people were naturalized last year, so it is a very significant increase.
FOOD STAMPS WORK REQUIREMENT
As you may recall, the new law imposes work requirements on food stamp applicants who are
childless and 18-50 years old, but it allows states to apply for a waiver of this requirement in
areas of high unemployment. USDA will be issuing guidance shortly on how states can
designate such areas.
SSI FOR DISABLED CHILDREN
As you know, the law tightened the eligibility standard for SSI for children with disabilities.
The law was effective upon enactment for new applicants. As many as 190,000 children now
on the rolls will lose eligibility between March and August 1997 because their impairments
are not severe enough to qualify under the new law. Two major issues have emerged:
Cut-off Date for Families Who Appeal -- SSA will determine whom to drop from the rolls
by August 1997, but families can appeal SSA's decision, and are guaranteed continued
benefits while they appeal. Legally, we have learned that we are able to keep children on the
rolls up to a later point in the appeals process than we had expected, and we believe we
will
should take advantage of this option. As SSAhas a result, (nost) children who appeal will lose benefits in
1999, rather than late 1997 or 1998. We have not yet announced this decision because we they
want to announce our decision on the second issue at the same time.
SSA has clas that threpp proc cludes
SSA
anacj heaving
desides
camage
du
56
in a timely mannor,
of $7.66 from 1997-2002
5
Definition of Childhood Disability -- The law includes a new definition of childhood
disability. During the lengthy debate on this issue, everyone assumed the new definition
would cut 190,000 children from the rolls, and we included savings in our budget reflecting
that estimate. However, from a legal perspective it appears we have significantly more
flexibility to define childhood disability than we expected. Advocates have united around an
interpretation that would drop from the rolls only 20% of the 190,000 children, but Congress
would undoubtedly view this option as subverting their intent. (We are seeking a proposal that
strikes the right balance.)
55A
has
MEDICAID
with a loss of $5.96
of the savings,
In the coming week, HHS will lay out for us an initial position on key Medicaid issues,
including how states can reconfigure their systems to accommodate the separate eligibility
systems required for Medicaid and TANF; what happens to the Medicaid coverage of those
individuals who lose SSI coverage; and the impact on existing waivers.
Another major question is how many states will accept the option to continue Medicaid for
current legal immigrants. They must decide by January 1.
CHILD CARE
The new provisions of the law relating to child care went into effect October 1, 1996. This is
a very positive story, as HHS worked quickly and effectively to help states understand the
new law, develop interim plans to access the new funding, and ensure that states will get their
increased money on time. We will be working with Communications to ensure that the
opportunity to highlight some good news on this front is not missed.
TECHNICAL CORRECTIONS
The Secretary of HHS is required to report to Congress within 90 days (November 22, 1996)
on technical amendments and corrections that are necessary. The other departments as well
as many of the groups with which we are working have concerns in this area as well. We
will be working closely with HHS as the date for this report draws closer.
cc:
Leon Panetta
Frank Raines
SSA is finalizing
other options, in
consultation Yes.
proprodnate
6512 this def
ID:
OCT 02'96
2:13 No. 002 P.01
FAX COVER
Date/Time:
Income Maintenance Branch
Executive Office of the President
Office of Management and Budget
Washington, DC 20503
TO: DIANA
FROM: RichArD
Fax Destination
Organization:
Fax Number:
Number of Attached Pages: Cover +
6
Notes:
Income Maintenance Fax Number.
202/395-0851
Voice Confirmation:
202/395-4686
ID:
OCT 02'96
2:13 No.002 P.02
Keith J. Fontenot
10/02/96 09:51:50 AM
Record Type: Record
To:
Richard E. Green/OMB/EOP
cc:
Jeffrey A. Farkas/OMB/EOP, Lester D. Cash/OMB/EOP, Matthew McKearn/OMB/EOP, Jack A.
Smalligan/OMB/EOP
Subject: welfare reform memo to the President
I need some comments pronto
Forwarded by Keith J. Fontenor/OMB/EOP on 10/02/96 09:39 AM
From:
Kennoth S. Apfol on 10/02/96 09:38:48 AM
Record Type:
Record
To:
Keith J. Fontenot/OMB/EOP, Cynthia M. Smith/OMB/EOP
cc:
Subject: welfare reform memo to the President
Forwarded by Konneth S. Apfel/OMB/EOP on 10/02/96 09:24 AM
FORTUNA_D @ A1
10/01/96 11:31:00 PM
Record Type:
Record
To:
Kenneth S. Apfel
cc:
BENAMI_J@A1@CD@LNGTWY
Subject: welfare reform memo to the President
Attached is a slightly rovised/updated version of the memo to the
President. Do you guys want to co-sign? Frank or Jack? Do you
have any comments?
Carol's plan has been to send this out Wednesday morning, so
please get back to me or Jeremy asap.
October 2, 1996
MEMORANDUM FOR THE PRESIDENT
FROM:
Carol H. Rasco
Bruce Reed
Frink Rains
ID:
OCT 02'96
2:13 No. 002 P.03
SUBJECT: Update on Welfare Reform Implementation
We are continuing to work to coordinate the Administration's
efforts to implement the new welfare law. We will be providing
periodic updates on key issues for you, as well as answers to
questions you raise.
PROCESS
Domestic Policy, OMB, Counsel's office, and Intergovernmental are
working closely together on all aspects of implementation. We
have the following process in motion:
We chair bi-weekly meetings of 11 federal agencies and all
White House offices.
o
A subgroup of key agencies and offices meets more regularly
on nuts-and-bolts implementation issues.
We are meeting weekly with the National Governors'
Association, the National Conference of State Legislatures,
and the American Public Welfare Association.
o
We met with the League of Cities, the Conference of Mayors,
and the counties and promised them ongoing Input and
consultation.
TANF BLOCK GRANT IMPLEMENTATION
The entitlement to AFDC ended on October 1. States can elect to
take advantage of the new TANF block grant as of that date, but
they must enter the new program by July 1997. The first states
to send in state plans were Michigan and Wisconsin, and their
plans were approved by HHS on September 30. As of October 1,
about 11 states had filed state plans with HHS.
Determining "Completeness" of Plans - HHS's role in state plans
is merely to certify that they are "complete" -- a far different
role than they have had in the past. We have worked with HHS to
pare down their list of what is required for a plan to be
complete. As a result, they produced draft guidance for the
states at the NGA conference last month that was quite brief --
and praised by the states as a result.
Regulations - The law provides only limited authority to
regulate the TANF block grant. You asked in our last memo
whether we can require states to use TANF funds as wage
subsidies. This is one of the permissible uses of the funds and
one way states can provide work. HHS will be working with states
to promote this as a model, but it will not be able to require
2
ID:
OCT 02'96
2:14 No 002 P.04
that states adopt any particular approach to meeting the work
requirement.
Grandfathering Waivers Counsel's office advises that the
welfare law allows states to continue to operate waiver programs
that have time limits and work requirements that vary from the
terms of the new law (unless the waivers were granted after the
new law passed). We will, however, be making it clear in our
guidance to states that the Administration believes that all
state programs should comply with the law's provisions regarding
time limits, work participation rates, and exemptions and
extensions. We will also indicate that if states do not bring
their programs into line with the law, there will almost
certainly be Congressional action (which we would support) to
limit the grandfathering provision.
Orwell seek Mation
Wisconsin Waiver -- We have resolved the Wisconsin waiver
request. On September 30, in its letter approving Wisconsin's
new TANF state plan, HHS informed the state that it no longer
needs waivers to implement the welfare reform portions of its
Stat
medical
"W-2" program. Wisconsin still plans to impose a 60-day
residency requirement before families can begin to collect
benefits, which HHS believes is unconstitutional. The law in
this area is unsettled, and the provision will definitely be
brought to the courts. HHS simply took note of this issue as
part of the plan approval:
On Medicaid, HHS informed the state on September 30 that it will
not grant that portion of the state's waiver request because it
would have eliminated the Medicaid entitlement and run counter to
our commitment to the federal Medicaid guarantee. HHS offered to
work with the state on an alternative Medicaid proposal.
Performance Bonus Fund and Contingency Fund -- The new law
requires the Secretary of HHS to work with NGA and APWA to set up
the Performance Bonus Fund, and gives her a year to develop the
formula and process. We are setting up a process with these
state groups to work out such a proposal in cooperation. We will
keep you apprised as these plans develop. The Contingency Fund
to protect states from economic downturns is being established by
Treasury in consultation with HHS.
New Mexico -- New Mexico is one of the few states that is
disadvantaged by the conversion to a block grant because its
caseload is increasing. The state has said it may have to cut
welfare benefits by 12% to live within the new law. Senator
Domenici is endeavoring to intercede on the state's behalf with
either a legislative or administrative fix. He has proposed that
the state get access to the Contingency Fund, but HHS responds
that the state is not eligible until it converts from AFDC to
TANE New Mexico has threatened to sue HHS over Its position
that the law does not allow the state to draw down more in
3
ID:
OCT 02'96
2:14 No 002 P.05
Federal funds than the block grant amount in FY1997. Counsel's
office is examining HHS's interpretation.
IMMIGRANTS
The immigration issues raised by the law are clearly the
thorniest and most difficult to implement.
Some
Means-tested Benefits Non-citizens who arrive after the law's
enactment are barred from receiving means-tested benefits" for
five years. We have considerable latitude to define that term,
and Counsel's office, OMB, and DOJ are working together to do so.
Food Stamps for Legal Immigrants As part of the CR, we were
able to persuade Congress to delay cutting off food stamp
at
least
benefits for legal immigrants now on the rolls/until April 1997
!,
(Under welfare reform, that change was to have been effective at
the recipient's next recertification for benefits.) This change
will particularly help California, which did not benefit from our
earlier effort to delay the impact through USDA waivers, and
sought our help as a result. Over 30 states opted for a delay
through the waiver option.
However, legal immigrants who are applying for food stamps are
not helped by the change in the CR. States are beginning to deny
new
food stamps to these applicants, although the interpretation of
USDA's guidance on when they must comply varies from state to
state. USDA instructed states to start denying new applications
on September 22; for the next 120 days, states that have
implemented this change are not subject to sanctions if they make
errors.
COPLAIN
Insuran Verification Administrators of many government
programs such as food stamps have an important new role to play
in verifying the legal status of non-citizens, and whether they
fall into any of the categories exempted from the full impact of
this law. One particularly difficult exemption to administer is
the "40 quarters" exemption, whereby legal immigrants who have
40
worked at least 10 years in this country) can still get benefits.
(in combunstion
quarters
SSA is working on 8 new system to give other agencies access to
with their Spouse
this information on an overnight basis, available in January 1997.
Robe
and parents)
June earnings my never have been reported to Sin
However, SSA's records are likely to be incomplete for- many
people; such as farmworkers and domestic workers whose employers
did not pay the taxes on their behalf. We plan to get
instructions to food stamp offices next week on how to address
this problem and avoid denying benefits inappropriately.
1,55A and HU.D
Reporting of Illegal Aliens The law requires states to report
quarterly to the INS on any illegal aliens they become aware of.
The INS is détermining how to implement this provision.
partic-lary for
4
ID:
OCT 02'96
2:15 No 002 P.06
by
Below are answers to three questions you raised in the last
update memo:
Legal immigrants who get SSI will get notices early next
year that SSA will reexamine their eligibility, and benefits
Rid
will be ended if August 1997. The INS will send them
later this foll
come up
information on naturalization this November to onsure that
as many as possible who meet the requirements for
citizenship are able to naturalize before their benefits end
next August.
in LEP?
We are working closely with INS and disability and-
immigration groups to ensure that the regulation waiving
certain testing requirements for immigrants with
disabilities is finalized as soon as possible. The comment
GERA
Kencaucrite
period ends within the next two weeks, and the rule will be
finalized by December.
should
You had noted the statistic that the INS naturalized 1.2
(Jans)
million immigrants this fiscal year, and asked how big an
increase it represented over the prior year. Approximately
500,000 people were naturalized last year, so it is a very
significant increase.
FOOD STAMPS WORK REQUIREMENT
As you may recall, the new law imposes work requirements on food
stamp applicants who are childless and 18-50 years old, but it
allows states to apply for a waiver of this requirement in areas
of high unemployment. USDA will be issuing guidance shortly on
how states can designate such areas.
SSI FOR DISABLED CHILDREN
As you know, the law tightened the eligibility standard for SSI
for children with disabilities. The law was effective upon
enactment for new applicants. As many as 190,000 children now on
the rolls will lose eligibility between March and August 1997
because their impairments are not severe enough to qualify under
the new law. Two major issues have emerged:
if they do So in
Cut-off Date for Families Who Appeal SSA will determine whom
E timely monner,
to drop from the rolls by August 1997, but families can appeal
SSA's decision, and are guaranteed continued benefits while they
appeal. Legelly, we have learned that we are able to keep
children on the rolls up to a later point in the eppeals process
55A will 41, detaining
than we bad expected, and we believe we should take advantage of
this option As 8 result, children who appeal will lose benefits
most
in 1999, rather than late 1997 or 1998. We have not yet
announced this decision because we want to announce our decision
they
the
SSA has
SSA hrs clarified that
this appeil, process includes A 5
Administrative Low Judge hearing
ID:
OCT 02'96
2:15 No 002 P.07
on the second issue at the same time.
4.6 hillion
of from 1997-2022
Definition of Childhood Disability The law includes a new
definition of childhood disability. During the lengthy debate on
this issuo, everyone assumed the new definition would cut 190,000
OPTION
children from the rolls, and we included savingsrin our budget
THIS
reflecting that estimate. However, from a legal perspective it
3
SSA
appears we have significantly more flexibility to define
ADDICATE
has
childhood disability than we expected. Advocates have united
around an interpretation that would drop from the rolls only 20%
other
of the 190,000 children, but Congress would undoubtedly view this
option as subverting their intent We are seeking a proposit ute
finalizing
after,
loll
that strikes the right balance
in SIA consyl is opencing tothes with us. rule for
of
bill Jonniss
MEDICAID
propered
on
in the coming week, HHS will lay out for us an initial position
this
defenition
on key Medicaid issues, including how states can reconfigure
their systems to accommodate the separate oligibility systems
required for Medicaid and TANF; what happens to the Medicaid
coverage of those individuals who lose SSI coverage; and the
impact on existing waivers.
Another major question is how many states will accept the option
to continue Medicaid for current legal immigrants. They must
decide by January 1.
CHILD CARE
The new provisions of the law relating to child care went into
effect October 1, 1996. This is H very positive story, as HHS
worked quickly and effectively to help states understand the new
law, develop interim plans to access the new funding, and ensure
that states will get their increased money on time. We will be
working with Communications to ensure that the opportunity to
highlight some good nows on this front is not missed.
TECHNICAL CORRECTIONS
The Secrotary of HHS is required to report to Congress within 90
days (November 22, 1996) on technical amendments and corrections
that are necessary. The other departments as well as many of the
groups with which we are working have concerns in this area as
well. We will be working closely with HHS as the date for this
report draws closer.
cc: Leon Panetta
Frank Raines
6
EXECUTIVE OFFICE OF THE PRESIDENT
20-Sep-1996 08:46am
TO:
Jeremy D. Benami
TO:
Diana M. Fortuna
FROM:
Carol H. Rasco
Domestic Policy Council
CC:
Elizabeth E. Drye
SUBJECT: Welfare Reform memo for POTUS
Well, get ready I understand the Barbara Walters interview
tonight has POTUS saying he might assign Hillary to work on
welfare reform luckily he then caught himself and said he didn't
know
I understand she showed complete surprise at least he
didn't say Ira was in charge!
As to next memo that I mentioned earlier should be prepared for
POTUS on welfare reform, I believe in looking back over his last
memo the following things should be included among any other items
you all feel important:
Meeting set with cities and counties, right?
1
Early implementation by Michigan and Wisconsin
His question on section : Regulations
Status of how current waivers will work (realize on some of these
>
it will simply be an update that we are working on issue, not
resolved yet)
What we have agreed to do as to setting up the discussion on
contingency fund and bonus fund
process with NGA/APWA as
required by law
Food stamps status
SSI update
INS reg on immigrants with disabilities
Child care implementation/ all the good news here
maybe close
\
with this?
Status of prep of correcting legislation
How are we going to monitor and evaluate welfare reform?
Medicaid
Thanks.
EXECUTIVE OFFICE OF THE PRESIDENT
04-Sep-1996 05:26pm
TO:
(See Below)
FROM:
Carol H. Rasco
Domestic Policy Council
SUBJECT: Welfare Reform memo to POTUS
I was sure everyone would need an interpretive reading of the
remarks by POTUS and had tried to get this email off
earlier. here goes! I will put any comments I have as to follow
up in ( ) and we can then talk next week when I am back in
office, okay?
Page 1:
CRasco: looks good
but see notes-
BC
Also should stay in touch with counties and cities
(I had earlier today put on email to intergovernmental that we
need to talk about how to work with counties and mayors groups now
that we are working regularly with NGA/APWA/NCSL)
Page 2:
oRegulations
Q: Can we require states to offer, or allow local gov't to offer,
wage subsidies to private empllyers plus local govt's?
oApproved Waivers
Can we at least condition waivers on work participation rate to
I want to discuss time limits issue before a decision is made and
announced OR leaked.
oOther issues
Agree- I want to discuss before decision made.
Page 3
CHILD SUPPORT ENFORCEMENT
Regarding the FPLS he drew arrow and said:
Important
All agreed to this
On the $50 issue he wrote:
I didn't know this!
IMMIGRANTS
oFood Stamps
Can we slow walk this on reevaluation grounds- (this memo was read
before he got our follow up memo on issuing the directive to
Glickman
we don't need to do anything further here)
OSSI
Take the year and work with INS on these to get as many citizens
as possible.
Page 4
oNaturalization
Left side: Should do this ASAP
Right side: How big an increase over last year? (Isn't it nice he
will be so pleased with the huge increase over last year?)
SSI for Children:
We must use REAL care on this-
(I can assure you this hit him very seriously and that is why we
ALJ
must have careful, thorough memo to him that I have requested
previously I must review the memo before it is sent and co-sign
some kind of cover sheet or he will return it to me asking what I
think.)
Medicaid:
This one did not copy well on my copy of memo and I don't have the
full writing; however it appears he is saying we should discuss
what this does with Wisconsin
what this says to me is that we
need to make SURE POTUS is briefed on the proposed letters to
Wisconsin before HHS sends them.
Child Care:
Good-
do ASAP as we must show POSITIVE aspects of law
(Diana: This says to me we should definitely ask Child Care folks
to a meeting of the coordinating group in two to four weeks as we
discussed earlier)
Monitoring and Evaluation:
Agree
JOB OPPORTUNITIES
Should give discretion [he abbreviated the word] to cities (this
was taken care of in the formatting of his jobs initiative)
NEED FOR LEGISLATION
1st paragraph: YES
Second paragraph:
+What about Joe Califano's concern in Sat. 8/25 New York Times?
(Can someone look up that article and see what it is about
I
missed it)
NOTE: On any of these where he said he wants to
discuss, etc. it will mean more than likely we need to do a good
decision memo. AGain, I will be in on Monday, will be reading
email from the road on Thursday afternoon and sometime midday on
Friday.
Let's talk thanks.
Distribution:
TO: Jacob J. Lew
TO: Kenneth S. Apfel
CC: Bruce N. Reed
CC: Jeremy D. Benami
CC: Diana M. Fortuna
CC: Elizabeth E. Drye
CC: Deborah F. Kramer
September 2-, 1996
MEMORANDUM FOR THE PRESIDENT
FROM:
Carol Rasco
Bruce Reed
SUBJECT:
Update on Welfare Reform Implementation
We continue to work closely on implementation of the welfare bill. We will be providing
periodic updates on key issues for you as well as answers to questions you raise.
PROCESS
We are working closely with OMB, Counsel's office, and Integovernmental on all aspects of
implementation. We have the following pieces in motion:
process
We chair biweekly meetings of 11 federal agencies and all White House offices
A subgroup of key agencies and offices meets more regularly on nuts-and-bolts
implementation issues
We are meeting weekly with the NGA, APWA and NCSL.
We met once ce wit with the League of Cities, the Conference of Mayors, and the counties
and promised them ongoing input and consultation.
TANF BLOCK GRANT IMPLEMENTATION
The entitlement to AFDC ends on October 1. States can elect to take advantage of the new
TANF block grant on that date. They must enter the new program by July 1997. The first
states to send in state plans were Michigan and Wisconsin. HHS expects to approve their
plans by September 30. Approximately 10 states are expected to file state plans on or about
October 1.
Determining "Completeness" of Plans -- HHS's role in state plans is merely to certify that
they are "complete" -- a far different role than they have had in the past. We have worked
with HHS to pare down their list of what is required for a plan to be complete. As a result,
they produced draft guidance for the states at the NGA conference that was quite brief -- and
praised by the states as a result.
Regulations -- The laws provide only limited authority to regulate the TANF block grant.
You asked in our last memo whether we can require states to use TANF funds as wage
subsidies. This is one of the permissible uses of the funds and one way states can provide
work. HHS will be working with states to promote this as a model, but it will not be able to
require that states adopt any particular approach to meeting the work requirement.
Grandfathering Waivers Legal counsel advises that the welfare bill clearly allows states to
continue to operate waiver programs that have time limits and work requirements that vary
from the terms of the new law. We will, however, be making it clear in our guidance to
states that the administration believes that all state programs should comply with the law's
provisions regarding time limits, participation rates, and exemptions and extensions. We will
also indicate that if states do not bring their programs into line with the law, there will almost
certainly be Congressional action (which we would support) to limit the grandfathering
provision.
tpush?
Wisconsin Waiver We have essentially resolved the Wisconsin situation (update if
possible before sending). HHS will be approving the Wisconsin W-2 plan (either by granting
the waiver or certifying the TANF plan as complete). On September 30, we will be (____),
sending them their first TANF check for FY96, and simultaneously denying their Medicaid
waiver on the grounds that it would endanger health care coverage for large numbers of
people. On the welfare portions of the waiver, the only issue that remains contentious is the
state's intention to impose a 60 day residency requirement before families can begin to collect
benefits. HHS believes this is unconstitutional, though the law in this area is unsettled. The
provision will definitely be brought to the courts. HHS approval of the state (plan/waiver)
will indicate they may only operate the residency requirement if they provide a justification
that is constitutionally sufficient.
onlytrue if waiver
Performance Bonus Fund and Contingency Fund The new law requires the administration
to work with NGA and the states to set up the Performance Bonus Fund and gives them a
year to develop the formula and process. We are setting up a process with the state group
mentioned above to work out such a proposal in cooperation. We will keep you apprised as
these plans develop. The Contingency Fund that protects states from economic downturns
will be much simpler to establish. Treasury is taking the necessary steps and is working
closely with HHS.
that will termther bens.
FOOD
As you know, new applicants stamps are not being found-eligible, and
STAMPS state non-citizen are beg to down, for food fs ben, to S
states are beginning to process the recertifications of current recipients. USDA made a
waiver available to all states that made it possible for some to delay the impact on current
2
more?- rediferential state Geh?
to date
accepted
recipients, and over 30 states have taken the waiver California was not helped by that
particular waiver because they have a 12-month certification period, so we are working on
potential legislative and administrative options that might work for them.
Exemption for High Unemployment Areas -- As you may recall, the new law
allows provides an states to BeG
exemptionsfrom the work requirement for food stamps for 18-50 year olds for persons living
The
in areas of high unemployment. USDA will be issuing guidance very shortly on how states
should designate such areas.
amajo. 910
SUPPLEMENTAL SECURITY INCOME
The men) law atterpred tridial N/ aneed
cly that (he knows?)
SSI for Children -- Diana to write
-ALJ
IMMIGRANTS
yevelyouring
The issues raised by the bill related to immigration are clearly the thorniest and most difficult
to implement. We have convened interagency groups to address two issues in particular: (1)
medial?
the definition of "means tested benefits" for which non-citizens would be ineligible --
because of a Byrd rule motion in the Senate, the legislative definition of this term was
deleted, and we must now supply one administratively; and (2) how to implement an interim
system of verifying the legal status of non-citizens and whether they fall into any of the
categories exempted from the full impact of this law.
Add 40Q?
fThree quick answers to questions from your last memo:
SSI recipients who are going to be required to go through recertification to determine
their continued eligibility based on citizenship must be notified by March 1997.
Information on naturalization will be sent to them in November to ensure that as many
as possible who meet the requirements for citizenship are able to naturalize before
their benefits end next August.
We are working closely with INS and disability and immigration groups to ensure that
the regulation waiving certain testing requirements for immigrants with disabilities is
finalized as soon as possible. The comment period ends within the next two weeks,
and we-hope the rule will be finalized shortly thereafter.
Add natztn 'tats
Tr.
CHILD CARE
December
The new provisions of the law relating to child care go into effect October 1, 1996. This is a
very positive story as HHS worked quickly and effectively to help states understand the new
law, develop interim plans to access the new funding, and ensure that states will get their
increased money on time. We will be working with Communications to ensure that the
[medicaid ek Opt-in
3
4
Reporting I legal Aleus
opportunity to highlight some good news on this front is not missed.
TECHNICAL CORRECTIONS
The Secretary of HHS is required to report to Congress within 90 days (November 22, 1996)
on technical amendments and corrections that are necessary. The other departments as well
as many of the groups with which we are working have concerns in this area as well. We
will be working closely with HHS as the date for this report draws closer.
4
Diana
add anything on
Wilson E.O.?
Giuliani?
What to say on Medicaid?
What to say on monitoring and evaluation?
OTHER KEY PROVISIONS
5
Medicaid -- text from last time: The Medicaid program faces two major challenges in
implementation: (1) delinking eligibility for Medicaid from the welfare system, and (2)
assessing the impact on pending and existing waivers. The Health Care Financing
Administration is working closely with other parts of HHS and with SSA to meet these
challenges.
How are we going to monitor/evaluate welfare reform? CR wants
NOCSE OK ?
Robd
Califano??
5
470
65579
EXECUTIVE OFFICE OF THE PRESIDENT
04-Sep-1996 07:49pm
TO:
Dorothy K. Craft
FROM:
Diana M. Fortuna
Domestic Policy Council
CC:
Jeremy D. Benami
SUBJECT:
can you have an intern look up
an 8/25 op ed in the New York Times by Joe Califano?
check dates around then
Thanks.
check Post
News Analysis 150-151?
308 UEOB
Library
QUESTIONS TO RESOLVE ABOUT TANF GUIDANCE
o
Guidance document overall
o
format OK?
are we sure items with arrows really required?
draft vs. final: HHS prepared to go with draft (what does that mean?)
o
"Suggested state plan outline" section needed? (p.2)
o
45 day comment period (p.2)
o
legal basis?
o
does document punt on Wisconsin?
o
Waivers
- Dec memo
o
can we say anything given President's comment on time limits issue?
doesn't guidance draw a line that anything goes? (p.8)
o
Federal Register notice OK?
SENI BY AEROSPACE BLDG.
provine
J-
0-00
2n
SP.
Eligibility Determination
In Add: determining eligibility how will you consider
resources
unerined and in 'kind means will you
have disregards will there be deemmy. will
BENEFITS critema
time limits of less than 60 months. what the your exemptions
What benefits will be given to needy families? Will benefits be delivered through cash, in-
kind, vouchers, or electronic benefits transfer (EBT)? How will time limits and sanctions be
incorporated into the program? What supportive services will be available to clients? How
will you structure the provision of child care to allow parents to go to work?
CULTURE CHANGE
Benefit Administration
How
WILL
What measures will bc taken to change the culture of the welfare office to support work and
self-sufficiency? Are you planning to retrain eligibility workers?
PARENTAL RESPONSIBILITY
How will parental responsibility be encouraged? How will child support enforcement interact
with the TANF program? Are you planning to involve the non-custodial parent in any work
programs? What efforts will be made to reduce the incidence of out-of-wedlock births?
How will you address the problem of statutory rape?
TRIBES
How will you ensure equitable access for members of Indian tribes who are not eligible for
assistance under a Tribal family assistance plan? How will you assist tribe in implementing
their program?
ADMINISTRATION
What is the structure of the agency administering the program? What will be the role of
public or private contractors in the delivery of services? How will different elements of your
program be phased-in? If the implementation date is different from the plan submittal date.
when will you implement your program?
WAIVERS
Will your TANF plan basically mirror the welfare reform policies approved under 1115
waivers and the underlying AFDC and JOBS provisions that were not waived? What are the
name(s) of the 1115 demonstration(s)? If there are any policy differences between your
TANF plan and the approved demonstration(s), what are they? What is the basis for your
assessment of inconsistency? What are the beginning and ending dates of the
demonstration(s)? Is the demonstration(s) incorporated into your TANF plan applicable
statewide? If not, how will TANF operate in those areas of the State not covered by the
demonstration(s)?
work
S.ection III
p.b
work 'E. Participation Regurements
EXECUTIVE OFFICE OF THE PRESIDENT
05-Sep-1996 12:31pm
TO:
Elena Kagan
FROM:
Diana M. Fortuna
Domestic Policy Council
CC:
Bruce N. Reed
SUBJECT: 45 day comment period issue
FYI, on the 45 day comment period, the relevant section of the law
is in Title I, Section 402 (a) (4).
In sum, it says that a state must submit a plan that includes the
following:
"a certification ... which shall include assurances that local
governments and private sector organizations--
(A) have been consulted
(B) have had at least 45 days to submit comments on the
plan and the design of such services."
I am trying to reach Anna Durand, who did HHS's legal work on
this. I'll follow up with you.
EXECUTIVE OFFICE OF THE PRESIDENT
06-Sep-1996 10:35am
TO:
Diana M. Fortuna
TO:
Jeremy D. Benami
FROM:
Wendy A. Taylor
Office of Mgmt and Budget, OIRA
SUBJECT: State Plan Guidance
I'm here afterall. So much for a vacation.
I understand that ACF has signifiantly revised the guidance and
that we should have a new version to look at this morning. It's
also my understanding that they plan to hand it out as draft on
Monday. Please let me know if that's not consistent with what
you're hearing. ACF also sent their notice to the Federal
Register which should be published Tuesday.
Can we coordinate comments internally before we send them out?
I'll touch base with you when the revised version arrives.
Thanks.