HHS Announced It Will Consider States' Request For Greater Flexibility In Welfare Program

HHS Announced “Secretary's Willingness To Exercise Her Waiver Authority” On Welfare Program. In a July 12 memo, the Department of Health and Human Services announced that it would be changing the process by which states could apply for waivers from certain parts of the Temporary Assistance for Needy Families program, stating:

HHS is encouraging states to consider new, more effective ways to meet the goals of TANF, particularly helping parents successfully prepare for, find, and retain employment. Therefore, HHS is issuing this information memorandum to notify states of the Secretary's willingness to exercise her waiver authority under section 1115 of the Social Security Act to allow states to test alternative and innovative strategies, policies, and procedures that are designed to improve employment outcomes for needy families. [HHS.gov, 7/12/12]

Fox Blasted Decision As “Illegal,” Accused Obama Of Using “Executive Fiat”

Charles Krauthammer: Obama Administration Is Acting “Illegally” By Announcing Waiver Provision. On Fox News' Special Report, contributor Charles Krauthammer claimed the Obama administration is “acting, what is essentially illegally, in granting waivers in a bill that does not allow the granting of waivers”:

KRAUTHAMMER: [Welfare reform] is a great social success. Liberals have always hated it. And here's the administration acting, what is essentially illegally, in granting waivers in a bill that does not allow the granting of waivers under these circumstances. [Fox News, Special Report with Bret Baier, 8/7/12]

Monica Crowley: This Is An “Executive Fiat Move” By Obama. Discussing a Mitt Romney campaign ad that highlighted the waiver provision, Fox News contributor Monica Crowley claimed the waivers were an “executive fiat move” by Obama:

CROWLEY: What President Obama has done yet again in another executive fiat move is to give these waivers -- and there's some question about the legality of actually having the HHS secretary do this. There is a question about, in the original law, whether or not these kinds of waivers with regard to the work requirement, can even be waived. So that might have to be settled in the courts.

But what Romney is saying, is, look, you have an executive who's once again gone around the Congress, gone around the legislative process to give these waivers -- again, questionable legality on the work requirement. [Fox News, America Live, 8/8/12]

Dick Morris: Obama Welfare Waiver Provision Is “Clearly Illegal.” On Fox & Friends, contributor Dick Morris stated:

MORRIS: The people who drafted it worked morning, noon, and night to stop any future administration from doing just what this administration has done. It's clearly illegal. It'll clearly be reversed by the courts, but in the meantime, Obama can indulge his left-wing constituency and they can have a wonderful time celebrating the end of the most successful program over the last 40 years. [Fox News, Fox & Friends, 8/8/12]

HHS: Law Allows Waiver Authority Under Program

HHS: Law “Permits The Secretary To Waive The Requirements” When Waiver Would “Promote” Program's Objectives. In a letter to Sen. Orrin Hatch (R-UT) explaining HHS' authority to grant waivers for program requirements, Secretary Kathleen Sebelius wrote:

The exercise of waiver authority contemplated in the July 12 Information Memorandum is clearly authorized by section 1115(a)(1) of the Social Security Act. Section 1115(a)(1) allows the Secretary to “waive compliance with any of the requirements of section ... 402 [of the Act] ... to the extent and for the period [s]he finds necessary to enable [a] State ... to carry out” an approved experimental, pilot, or demonstration project that will assist in promoting the objectives of the TANF program. 42 U.S.C. § 1315(a)(1).

As the Information Memorandum explains, section 402 sets forth state plan requirements for the TANF program, including the requirement that a plan "[e]nsure that parents and caretakers receiving assistance under the program engage in work activities in accordance with section 407." Id. § 602(a)(1)(A)(iii). By authorizing the Secretary to “waive compliance with any of the requirements of section ... 402,” therefore, section 1115 permits the Secretary to waive the requirements of section 407 when she determines that a waiver would promote the objectives of the TANF program and satisfy the other prerequisites for a waiver. [Letter to Senator Hatch, 7/18/12, via Media Matters]

HHS: Waiver Authority Has Been Applied To Other Programs In The Same Context. According to Sebelius' letter to Hatch:

Your letter maintains that the Secretary's section 1115 waiver authority does not extend to the requirements described in the Information Memorandum because those requirements are set forth in section 407 rather than section 402. But, as explained above, the plain text of section 402 incorporates the requirements of section 407 by reference. Moreover, the Department has long interpreted its authority to waive state plan requirements under section 1115 to extend to requirements set forth in other statutory provisions that are referenced in the provisions governing state plans.

This interpretation has been consistently applied throughout the history of section 1115, including in the context of the Medicaid, child support, and former Aid to Families with Dependent Children (AFDC) programs. [Letter to Senator Hatch, 7/18/12, via Media Matters]

Past Presidents, Including Reagan And Bush, Have Used Waiver Authority

Welfare Expert Evelyn Brodkin: “Presidents Use These Waivers All The Time.” An ABC News article quoted welfare expert and University of Chicago professor Evelyn Brodkin noting that there is nothing radical about using waivers and that “nobody used waivers more than Ronald Reagan. He used them to set up basically the first experiments with these kinds of work requirements”:

So it's not as if welfare “waiver authority” and changes to “allowable work activities” are facially radical. The memo/letter signify a loosening of work-activity requirements, the scope of which is yet to be determined. Those requirements were tightened under George W. Bush, according to Prof. Brodkin, who says welfare waivers have been used by Reagan, Clinton, and George W. Bush.

“Nobody used waivers more than Ronald Reagan. He used them to set up basically the first experiments with these kinds of work requirements,” Brodkin said, noting that Reagan allowed states to place more restrictions on recipients, not fewer. “Presidents use these waivers all the time.” [ABC News, 8/7/12]

HHS Will Only Grant Waivers To States That Show Increased Employment Of TANF Recipients

HHS Will Only Approve Waivers That “Improve Employment Outcomes” and “Lead To More Effective Means Of Meeting The Work Goals Of TANF.” The HHS memo made clear that the purpose of the waiver option is to give states more control over how to increase the employment of TANF beneficiaries. The department noted that waivers will only be granted to states that can demonstrate such an increase:

The Secretary is interested in using her authority to approve waiver demonstrations to challenge states to engage in a new round of innovation that seeks to find more effective mechanisms for helping families succeed in employment. In providing for these demonstrations, HHS will hold states accountable by requiring both a federally-approved evaluation and interim performance targets that ensure an immediate focus on measurable outcomes.

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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. [Department of Health and Human Services, 7/12/12]

Sebelius: “No Plan That Undercuts The Goal Of Moving People From Welfare To Work Will Be Considered Or Approved.” In her letter to Hatch, Sebelius wrote:

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. If they fail, their waiver will be rescinded. And if a Governor proposes a plan that undercuts the work requirements established in welfare reform, that plan will be rejected.

We will follow our initial guidance to states with further information detailing metrics and accountability measures. The policy we have outlined is designed to accelerate job placement rates for those on welfare, not address other aspects of their lives. No plan that undercuts the goal of moving people from welfare to work will be considered or approved. For example, the Department will not approve a waiver that changes the definition of work requirements to include any of the activities outlined in a 2005 GAO report on TANF such as personal care activities, massage, and journaling. We will continue to hold states accountable for moving people from welfare to work. [Letter to Senator Hatch, 7/18/12, via Media Matters]

New York Magazine's John Heilemann: States Must Move 20 Percent More People Into The Work Force To Qualify. On MSNBC's Morning Joe, journalist John Heilemann noted:

HEILEMANN: The HHS memo that got issued on this matter says specifically that waivers will only be granted if the governors of the states that are asking for them can show that they are moving 20 percent more people into work than they would be otherwise. [MSNBC, Morning Joe, 8/9/12]

CBS News: Waiver Provision “Is Not A Blanket Waiver.” A CBSNews.com article reported:

It's not a blanket waiver because states would have to apply one at time for exemptions from certain requirements of the welfare-to-work law. And states must show their plans would move at least 20 percent more people to work.

Moreover, with or without waivers, there's cap on the total amount of federal money available to states for welfare -- about $17 billion -- so it would not make much financial sense for a state to waste any of those dollars.

Such details seemed to have no place on the campaign trail. [CBSNews.com, 8/9/12]

Former GOP Aide Ron Haskins: “I Don't See How You Can Get To The Conclusion That The Waiver Provision Undermines Welfare Reform.” The CBSNews.com article quoted former GOP aide Ron Haskins, who reportedly helped write the original welfare-to-work legislation in the 1990s, saying that the Obama administration's waiver provision does not undermine welfare reform:

Former GOP aide Haskins said the Obama administration was wrong to roll out its waiver plan without first getting the advice and consent of congressional Republicans. But he added, “There is merit to what the administration is proposing, and I don't see how you can get to the conclusion that the waiver provision undermines welfare reform and it eliminates the work requirement.” [CBSNews.com, 8/9/12]

Republican-Led States Requested Waivers From TANF's Work Documentation Process

WSJ: Utah And Nevada -- Both Led By Republican Governors -- Requested Waivers From Documentation Requirements. The Wall Street Journal reported that Utah and Nevada, both of which have Republican governors, asked for waivers from documentation requirements:

States have said that such rules are preventing them from running more-effective welfare programs, and the Obama administration said that two states, Utah and Nevada, had specifically asked for waivers from the requirements. Both states have Republican governors.

On Thursday, the Department of Health and Human Services sent states a letter saying they could get a federal waiver to those rules if they proposed better ways to help recipients find permanent, well-paid jobs. [The Wall Street Journal, 7/13/12]

Utah: States Need The Flexibility To Report Employment Outcomes, Rather Than Process. In a letter to the federal government, the Utah Department of Workforce Services wrote that it is necessary for states to have the flexibility to report employment outcomes, rather than the process:

The activity of federal reporting highlights the misalignment of priorities among the various programs that purport to have the same purpose of employment and re-employment. Collecting data is one of the most administratively expensive activities the recipients of the federal grants must perform. Congress is often prescriptive in what is important and what it wishes to know about those using the funding. Federal regulation often makes the situation worse based on how the regulation expects the federal reporting to function. For example, TANF financial assistance measures and reports process, not outcomes. The lack of focus on outcomes makes the program less about the need to help parents find and retain work and more about the need to assure that parents are active in prescribed activities. Any of the data reported that is an actual positive outcome for a customer may matter to the State but it does not relate to how the data is reported and framed to Congress.

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Recommendation:

Allow waivers where the measurement of employment is the primary reportable data to the federal government and allow Utah to expand the definitions of priority activities from the current narrow definitions of countable hours and provide relief from the prescriptive verification processes. The expectation to participate fully in specific activities leading to employment is not the issue. Full engagement is a powerful process that can lead to work. It is the narrow definitions of what counts and the burdensome documentation and verification processes that are not helpful. [Utah Department of Workforce Services, 7/24/11, via The Huffington Post]

Nevada: State Asked For Waivers That Would Increase TANF's Accountability. In a letter to the federal government, the Nevada Department of Health and Human Services wrote that the state wanted waivers that would increase TANF's accountability:

Nevada is very interested in working with your staff to explore program waivers that have the potential to encourage more cooperative relationships among the state agencies engaged in economic stimulus through job creation, employment skill attainment and gainful employment activities. Nevada is also interested in exploring performance measures that ensure program accountability and also increase the probability of families becoming self-sufficient by providing meaningful data as to the services or combination of services with the best outcomes. [Nevada Department of Health and Human Services, 8/2/11, via The Huffington Post]