24-271
2005
109TH CONGRESS 1ST SESSION
HOUSE OF REPRESENTATIVES
Report
A BILL TO PROVIDE FOR RECONCILIATION PURSUANT TO SECTION 201(a) OF THE CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL YEAR 2006
[Graphic image not available]
NOVEMBER 7, 2005- Committed to the Committee of the Whole House on the State of the Union and ordered to be printed
24-271
2005
109TH CONGRESS 1ST SESSION
HOUSE OF REPRESENTATIVES
Report
A BILL TO PROVIDE FOR RECONCILIATION PURSUANT TO SECTION 201(a) OF THE CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL YEAR 2006
[Graphic image not available]
NOVEMBER 7, 2005- Committed to the Committee of the Whole House on the State of the Union and ordered to be printed
| COMMITTEE ON THE BUDGET | |
| JIM NUSSLE, Iowa, Chairman | |
| JIM RYUN, Kansas ANDER CRENSHAW, Florida ADAM H. PUTNAM, Florida ROGER F. WICKER, Mississippi KENNY C. HULSHOF, Missouri JO BONNER, Alabama SCOTT GARRETT, New Jersey J. GRESHAM BARRETT, South Carolina THADDEUS G. MCCOTTER, Michigan MARIO DIAZ-BALART, Florida JEB HENSARLING, Texas ILEANA ROS-LEHTINEN, Florida DANIEL E. LUNGREN, California PETE SESSIONS, Texas PAUL RYAN, Wisconsin MICHAEL K. SIMPSON, Idaho JEB BRADLEY, New Hampshire PATRICK T. MCHENRY, North Carolina CONNIE MACK, Florida K. MICHAEL CONAWAY, Texas CHRIS CHOCOLA, Indiana |
JOHN M. SPRATT, JR., South Carolina, Ranking Minority Member DENNIS MOORE, Kansas RICHARD E. NEAL, Massachusetts ROSA L. DELAURO, Connecticut CHET EDWARDS, Texas HAROLD E. FORD, JR., Tennessee LOIS CAPPS, California BRIAN BAIRD, Washington JIM COOPER, Tennessee ARTUR DAVIS, Alabama WILLIAM J. JEFFERSON, Louisiana THOMAS H. ALLEN, Maine ED CASE, Hawaii CYNTHIA MCKINNEY, Georgia HENRY CUELLAR, Texas ALLYSON Y. SCHWARTZ, Pennsylvania RON KIND, Wisconsin |
| Professional Staff | |
| JAMES T. BATES, CHIEF OF STAFF | |
| THOMAS S. KAHN, MINORITY STAFF DIRECTOR AND CHIEF COUNSEL |
| C O N T E N T S | Page | |
| Introduction | 1 | |
| Title I--Committee on Agriculture | 7 | |
| Title II--Committee on Education and the Workforce | 57 | |
| Title III--Committee on Energy and Commerce | 366 | |
| Title IV--Committee on Financial Services | 586 | |
| Title V--Committee on the Judiciary | 708 | |
| Title VI--Committee on Resources | 779 | |
| Title VII--Committee on Transportation and Infrastructure | 910 | |
| Title VIII--Committee on Ways and Means | 917 | |
| Miscellaneous House Report Requirements | 1081 | |
| Legislative Text | 1117 |
1st Session
109-276
--PROVIDING FOR RECONCILIATION PURSUANT TO SECTION 201(a) OF THE CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL YEAR 2006
[To accompany H.R. 4241]
[Including cost estimate of the Congressional Budget Office]
- The Committee on the Budget, to whom reconciliation recommendations were submitted pursuant to section 201(a) of the House Concurrent Resolution 95, the concurrent resolution on the budget for fiscal year 2006, having considered the same, report the bill without recommendation.
BUDGET COMMITTEE INTRODUCTION
OVERVIEW
Four months before Katrina, Congress had already committed to addressing the growing crisis of Federal spending: The budget resolution adopted in April (the conference report on H. Con. Res. 95) included the first effort in nearly a decade to restrain the government's unsustainable entitlement spending. The worst natural disaster in the Nation's history--and the substantial Federal resources needed to help its victims--simply brought the fiscal challenge into a sharper and more immediate focus.
These are the main factors driving the reconciliation bill reported by the Committee on the Budget on 3 November 2005. The discussion below describes the economic, historical, and fiscal context more fully, and offers a sketch of the overall reconciliation plan.
PRE-KATRINA
To fully appreciate the significance of this measure, it is helpful to reflect on the situation before Hurricane Katrina struck--by about mid-August of this year. Both the U.S. economy and the Federal budget seemed to have caught a lucky streak:
--The economy had hit its stride. Real growth in gross domestic product [GDP] had averaged 3.7 percent for the previous eight quarters, and most analysts were projecting a sustained expansion.
--Jobs were growing at an average of about 194,000 a month.
--More than 4 million new payroll jobs had been added in just more than 2 years.
--The always-important manufacturing sector had been expanding for 27 consecutive months.
--Even the oil and gasoline price spikes of mid-summer, though serious, were not throwing the economy off track.
--Federal tax revenue for the current year had risen 15 percent--an increase that was both unprecedented and unpredicted--and the estimated budget deficit had declined by $94 billion in just 6 months.
But `luck is the residue of design,' the great Branch Rickey famously said; and that was true of these fiscal and economic fortunes as well: They were the product of a plan. In the middle of 2001, when the economy was slowing, Congress and the President lowered tax burdens (by $1.35 trillion over 11 years) to cushion the fall, and to provide a better foundation for growth. As it turned out, the recession that year was one of the mildest on record; and even with the tax cuts--and the ample spending that budget surpluses at the time allowed--the congressional budget could project $2.4 trillion in debt reduction by 2011.
Then the World Trade Center fell--and the U.S. was forced to meet global terrorism head-on. The ensuing war--which continues today--and the need to enhance security at home added extraordinary burdens to the budget, driving it into deficit.
With sizable deficits came constant reminders of the need for spending control, and Congress responded. The fiscal year 2005 budget level-funded total non-security discretionary spending. The fiscal year 2006 budget actually reduced this spending--marking the first non-security cut since President Reagan. The resolution also budgeted for the Global War on Terror.
In addition, this year's budget committed Congress to the first budget `reconciliation' legislation since 1997, embodied herein.
THE NEED FOR RECONCILIATION
The problem of government entitlement spending has long been known. Mounting medical costs, the forthcoming retirement of the baby-boom generation, and a permanent shift in the Nation's demographics--one that reduces the number of workers for each retiree even after the baby-boomers are gone--will place unanswerable demands on Federal resources. They will crowd out other priorities and strain not only the Federal budget, but the Nation's economy as a whole.
Just 10 years ago, this spending (excluding interest) represented about 49 percent of the budget; today it is 54 percent; in just 10 years, it will exceed 62 percent. Further, overall mandatory spending is growing at a rate of about 6 percent per year. This relentless upward trend typically outpaces both the economy's growth and the long-term average increase in Federal revenue. Hence the problem: this spending growth cannot be sustained without continuous cuts in other programs, ever-increasing taxes, or more debt financing--none of which is acceptable.
Reconciliation is the budgetary process designed to address entitlements. Generally speaking, it works as follows:
--In any given year, the budget resolution may give `instructions' to select authorizing committees to achieve savings in entitlement programs in their respective jurisdictions. The committees involved may be any deemed suitable by the budget resolution, and the amounts of savings are whatever the resolution considers necessary.
--The authorizing committees involved then develop revisions in programs under their jurisdictions pursuant to these instructions. In short, these program revisions `reconcile' projected spending to the savings amounts required. The policy decisions are entirely up to the authorizing committees: The budget resolution instructions involve only the required savings amounts; they do not prescribe the programs affected or the policies to be developed.
--The authorizing committees then submit their policy changes to the Budget Committee, which binds them, without amendment, into a single bill, and reports it to the floor.
--Once passed, the measure goes into a conference with a corresponding bill from the Senate--where reconciliation is exempt from filibuster--and the two bodies develop a final conference report.
Reconciliation not only controls spending, but also tends, in the process, to drive much-needed reform of entitlement programs--some of which have not been revised or updated in decades.
THE EFFECT OF KATRINA
Although the growing demands of entitlement spending are well known, and reform long overdue, they develop and worsen gradually, and hence often fail to command the urgent and continuing attention they deserve. Katrina changed that: It forced Congress to recognize that overall spending had to be restrained starting now. It also caused Congress to raise the ante: committees were asked to increase their savings targets, relative to those set forth in the budget resolution, to begin offsetting the tens of billions of dollars that have been, and will be, spent for hurricane recovery.
Thus this reconciliation bill has two broad policy goals, one long-term, and one near: It starts the reform of government entitlements in ways that will make them more effective, more efficient, and less costly; and it recognizes that hurricane recovery is important enough to warrant diverting resources to it that otherwise would have been spent elsewhere. Both apply to the definition of `setting priorities and making choices'--more simply called `budgeting.'
COMPONENTS OF THE MEASURE
The bill reported by the Budget Committee provides $53.9 billion of savings over 5 years. As noted, these savings have three principal goals:
--To provide a down-payment toward hurricane recovery and reconstruction costs. Congress already has provided nearly $65 billion in recovery funding, and more funding is expected in the near future.
--To begin a longer-term effort at slowing the growth of entitlement spending.
--To stimulate reform of entitlement programs.
Eight House authorizing committees have hereby contributed to the savings effort, by modifying the authorizing laws for programs in their respective jurisdictions. Those committees, and their savings amounts, are as follows:
DEFICIT REDUCTION ACT SAVINGS BY COMMITTEE
[Outlays in millions of dollars]
--------------------------------------------------
Committee Savings 2006-10
--------------------------------------------------
Agriculture -3,649
Education and the Workforce -20,422
Energy and Commerce -17,066
Financial Services -470
Judiciary -428
Resources -3,678
Transportation and Infrastructure -156
Ways and Means -8,047
Total savings -53,916
--------------------------------------------------
The specific provisions that achieve these savings are described hereinafter, in the reports submitted by the respective authorizing committees.
CONCLUSION
It is sometimes said that budgeting is intrinsic to governing. After all, a budget is the one legislative vehicle through which Congress looks at the whole picture, weighs priorities against one another, and sets its agenda. Congress has many priorities, one of which--since August--has been recovering from the devastation of Katrina; and Congress will fulfill its obligations. But the term `priorities' is meaningless without limits--in this case, limits on the growth of Federal entitlement spending. If it is true that to govern is to choose, then Congress has chosen--through this reconciliation bill--to govern.
Hon. JIM NUSSLE,
Chairman, Committee on the Budget,
Cannon Office Building, Washington, DC.
DEAR MR. CHAIRMAN: I am transmitting herewith the recommendations of the Committee on Agriculture with respect to the reconciliation bill for fiscal year 2006, provided for under House Concurrent Resolution 95, the Concurrent Resolution on the Budget for Fiscal Year 2006.
The enclosed recommendations were adopted by this Committee in a business meeting on October 28, 2005, in the presence of a quorum. Enclosed please find a hard copy of the Committee's recommendations on Title I--Agriculture; Section-by-Section Analysis; Purpose and Need; Committee Consideration; and the remainder of the contents of the report filed pursuant to Rule XI of the Rules of the House, including a set of Minority Views.
With best wishes, I am
Sincerely,
Bob Goodlatte,
Chairman.
TITLE I--AGRICULTURAL PROGRAMS
PURPOSE AND NEED
The Concurrent Resolution on the Budget for Fiscal Year 2006, H. Con. Res. 95, directs the Committee on Agriculture to report changes in laws within its jurisdiction to reduce the level of direct spending for the Committee by $173,000,000 in outlays for fiscal year 2006 and $3,000,000,000 in outlays for the period of fiscal years 2006 through 2010.
The nation is facing significant budget pressures and the House is working hard to address them. It is unrealistic to think that we can meet the pressing challenges without reducing federal spending. Mandatory spending today takes up almost 55% of the total federal budget; if left on its current path, in a decade it will consume 60% of the federal budget. $3 billion represents only 1% of mandatory spending within the jurisdiction of this Committee.
While all federal safety net programs, including agriculture, need to be sustainable, the burden of addressing the nation's budget pressures needs to be equitably shared in order to be effective. The provisions passed by the House Committee on Agriculture represent a broad and very balanced response to this Committee's reconciliation instructions. Commodity, conservation, rural development, and research programs, and the food stamp program, all bear some burden but none take a disproportionate cut.
With respect to agricultural commodity programs, the provisions passed by this Committee primarily impact only the direct payments producers receive under Title I of the Farm Security and Rural Investment Act of 2002. The total amount of direct payments to each eligible producer is reduced by 1 percent per year in 2006 through 2009, and the percentage of advance direct payments for which producers are eligible in fiscal years 2006 and 2007 is reduced from 50% to 40%. In addition, $282 million worth of savings is achieved by repealing the special marketing loan provisions for cotton known as `Step-2.' Step-2 payments were designed to keep U.S. upland cotton competitive on the world market. However, Brazil successfully argued to a WTO panel that the program is inconsistent with U.S. WTO obligations regarding export subsidies as specified under the Subsidies and Countervailing Measures Agreement.
In several areas, such as conservation, rural development, research and energy, the Committee eliminates funding for programs that were authorized under the Farm Security and Rural Investment Act (the 2002 Farm Bill) but have since been subject to limits and rescissions. These Congressional diversions of mandatory funds have essentially nullified the programs.
In fiscal year 2005 alone, nearly $1.3 billion of mandatory funding for programs that were authorized by the Farm Security and Rural Investment Act of 2002 was eliminated. And since the 2002 Farm Bill, for example, funding for the rural strategic investment grants program was rescinded in each of fiscal years 2003 through 2006. As a result, $100 million was diverted from the program. The rural strategic investment grants program was supposed to provide rural communities with resources to develop strategic planning processes and implement innovative community development strategies.
Likewise, mandatory funding for the agricultural management assistance program, the broadband access program, the value-added agricultural product grants program, the rural business investment program, the rural firefighters and emergency personnel grants, and the renewable energy program has been diverted. So it is by eliminating funding for the rural strategic investment grants program and similarly affected programs that this Committee can avoid making destructive cuts to programs that are both operating and important to producers and rural communities. We are, in effect, reclaiming these funds to help meet the Committee's priorities.
Next, this Committee achieved reductions in food stamp program spending by making slight adjustments to the food stamp eligibility requirements. The Committee enhanced the categorical eligibility provision related to eligibility for the Temporary Assistance for Needy Families (TANF) program in the Food Stamp Act. Under section 1601, persons who are eligible for cash benefit assistance under TANF will be eligible, categorically, for food stamp benefits. Current law provides that individuals receiving TANF assistance of any kind are categorically eligible for food stamp benefits. Recipients who no longer have categorical eligibility status under the amended provision would have the opportunity to be reviewed for food stamp program eligibility independent of their status as a TANF beneficiary. By refining the eligibility requirements, this proposal ensures that this nation's most needy will continue to receive the food stamp assistance.
Another adjustment this Committee passed relates to the eligibility of non-citizens for food stamp benefits. Under current law, permanent, non-citizen residents of the U.S. are eligible for food stamps after five years of residency. Thus, the current rule represents a drastic deviation from the previous requirement--a record of 40 quarters of work in order to become eligible. This Committee strikes a balance between these disparate historical eligibility requirements by revising the law to require 7 years of residency instead, and notes that a non-citizen may apply for U.S. citizenship status after 5 years of residency and as such would not be further restricted from food stamp eligibility.
The reductions in the food stamp program account for about one-half of one percent of the total food stamp budget: $844 million over five years. Put another way, this accounts for a reduction of about half a penny for every dollar spent on the food stamp program. And while the food stamp program comprises nearly 60 percent of this Committee's mandatory spending, it receives less than 25 percent of the total savings under the package.
Finally, the marginal reductions in the remainder of the provisions keep in tact the safety net for the beneficiaries for which the programs were intended. This holds firm the promise we made to our producers in 2002 and ensures that the nation's most needy will continue to receive federal assistance.
In total, the reductions in commodity programs constitute $1.007 billion worth of savings in the total proposal. Conservation programs account for $760 million in savings. Reductions in research programs contribute $620 million, and rural development program reductions contribute $446 million. Lastly, changes in food stamp program eligibility save an additional $844 million over five years. Together, these reductions produce a savings of $3.7 billion over 5 years.
Putting together a reconciliation package, like writing a farm bill, requires weighing the diverse interests of production agriculture, conservation, research, rural development and nutrition interests. Because this Committee took a broad and balanced approach, we were able to achieve more than the $3 billion the budget resolution requires of us and continue the long standing tradition that agriculture has always been willing to do its part to ensure the fiscal well-being of our nation.
SECTION-BY-SECTION ANALYSIS
SEC. 1001. SHORT TITLE; TABLE OF CONTENTS
(a) Provides that this title will be known as the `Agricultural Reconciliation Act of 2005.'
(b) Provides a table of contents for this title.
SUBTITLE A--COMMODITY PROGRAMS
SEC. 1101. PERCENTAGE REDUCTION IN AMOUNT OF DIRECT PAYMENTS FOR COVERED COMMODITIES AND PEANUTS
(a) Reduces the total amount of the direct payment to be paid to producers of covered commodities by 1% for each of fiscal years 2006 through 2009.
(b) Reduces the total amount of the direct payment to be paid to producers of peanuts by 1% for each of fiscal years 2006 through 2009.
SEC. 1102. REDUCTION IN PERCENTAGE OF DIRECT PAYMENT AMOUNT AUTHORIZED TO BE PAID IN ADVANCE
(a) Reduces the percentage of advance direct payments for which producers of covered commodities are eligible in fiscal years 2006 and 2007 from 50% to 40%.
(b) Reduces the percentage of advance direct payments for which producers of peanuts are eligible in fiscal years 2006 and 2007 from 50% to 40%.
SEC. 1103. COTTON COMPETITIVENESS PROVISIONS
(a) Repeals the special marketing loan provisions for upland cotton known as `Step 2.'
(b) Makes a conforming amendment to Federal Agriculture Improvement and Reform Act of 1996.
(c) Designates that the amendments made by this section will become effective on August 1, 2006.
SUBTITLE B--CONSERVATION
SEC. 1201. LIMITATIONS ON USE OF COMMODITY CREDIT CORPORATION FUNDS TO CARRY OUT WATERSHED REHABILITATION PROGRAM
(a) Reduces funding for the watershed rehabilitation program by $15 million.
(b) Removes the requirement that funds for the watershed rehabilitation program remain available to the Secretary until such funds are expended.
(c) Rescinds funds that are previously made available and that are unobligated as of September 30, 2006.
SEC. 1202. CONSERVATION SECURITY PROGRAM
(a) Limits the funding for the conservation security program to $2,213,000,000 for fiscal years 2006 through 2010. Increases the funding for the conservation security program to $5,729,000,000 for the period of fiscal years 2006 through 2015.
(b) Extends the authorization for the conservation security program through 2011.
SEC. 1203. LIMITATIONS ON USE OF COMMODITY CREDIT CORPORATION FUNDS TO CARRY OUT AGRICULTURAL MANAGEMENT ASSISTANCE PROGRAM
Eliminates funding for agricultural management assistance program in 2007.
SUBTITLE C--ENERGY
SEC. 1301. TERMINATION OF USE OF COMMODITY CREDIT CORPORATION FUNDS TO CARRY OUT RENEWABLE ENERGY SYSTEMS AND ENERGY EFFICIENCY IMPROVEMENTS PROGRAM
Eliminates funding for loans and grants under the renewable energy systems and energy efficiency improvements program.
SUBTITLE D--RURAL DEVELOPMENT
SEC. 1401. ENHANCED ACCESS TO BROADBAND TELECOMMUNICATIONS SERVICES IN RURAL AREAS
(a) Eliminates funding for enhanced broadband access in fiscal year 2007.
(b) Prohibits funding for this program from remaining available until expended.
(c) Rescinds all funding that is available and unobligated as of September 30, 2006.
SEC. 1402. VALUE-ADDED AGRICULTURAL PRODUCT MARKET DEVELOPMENT PROGRAM GRANTS
(a) Eliminates funding for value-added agricultural product grants in fiscal year 2007.
(b) Prohibits funding for this program from remaining available until expended.
(c) Rescinds all funding that is available and unobligated as of September 30, 2006.
SEC. 1403. RURAL BUSINESS INVESTMENT PROGRAM
(a) Eliminates funding for the rural business investment program in fiscal year 2007.
(b) Prohibits funding for this program from remaining available until expended.
(c) Rescinds all funding that is available and unobligated as of September 30, 2006.
SEC. 1404. RURAL BUSINESS STRATEGIC INVESTMENT GRANTS
(a) Eliminates funding for rural business strategic investment grants in fiscal year 2007.
(b) Rescinds all funding that is available and unobligated as of September 30, 2006.
SEC. 1405. RURAL FIREFIGHTERS AND EMERGENCY PERSONNEL GRANTS
(a) Eliminates funding for rural firefighter and emergency personnel grants in fiscal year 2007.
(b) Prohibits funding for this program from remaining available until expended.
(c) Rescinds all funding that is available and unobligated as of September 30, 2006.
SUBTITLE E--RESEARCH
SEC. 1501. INITIATIVE FOR FUTURE FOOD AND AGRICULTURE SYSTEMS
(a) Eliminates funding for the Initiative for Future Agriculture and Food Systems in fiscal years 2007, 2008, and 2009. Provides $200,000,000 of funding in 2010 and in subsequent fiscal years.
(b) Limits availability of fiscal year 2006 funds to the one year period beginning on October 1, 2005, while maintaining the two-year period of availability for funds made available in other fiscal years.
SUBTITLE F--NUTRITION
SEC. 1601. ELIGIBLE HOUSEHOLDS
(a) Amends the Food Stamp Act to restrict categorical eligibility status. Provides that only persons who are recipients of cash benefits from the Temporary Assistance for Needy Families (TANF) program will be categorically eligible for food stamp program benefits.
(b) Reauthorizations most provisions in the Food Stamp Act through 2011.
SEC. 1602. AVAILABILITY OF COMMODITIES FOR THE EMERGENCY FOOD ASSISTANCE PROGRAM
(1) Authorizes the purchase of $140,000,000 worth of commodities per year through 2011.
(2) Authorizes the purchase of an additional $12,000,000 worth of commodities 2006.
(3) Designates that the additional commodities for 2006 are to be distributed to States affected by Hurricanes Katrina and Rita.
SEC. 1603. RESIDENCY REQUIREMENT
Amends the `Welfare Reform' law to require that noncitizens reside in the U.S. for 7 years before becoming eligible for food stamp benefits.
SEC. 1604. DISASTER FOOD STAMP PROGRAM
Authorizes the Secretary of Agriculture to pay to State agencies 100% of the administrative costs incurred in the delivery of food stamp benefits to households under the disaster food stamp program initiated in response to Hurricanes Katrina and Rita.
COMMITTEE CONSIDERATION
II. Full Committee Consideration
The Committee on Agriculture met, pursuant to notice, with a quorum present, on October 28, 2005, to consider its recommendations to the Budget Committee as provided in the Budget Resolution Instructions contained in the H. Con. Res. 95, the Concurrent Resolution on the Budget for Fiscal Year 2006.
Chairman Goodlatte called the meeting to order and made an opening statement as did Ranking Member Peterson. Without objection, the Chairman's Mark to the Budget Committee for Title I--Agriculture, with respect to the Reconciliation Bill for Fiscal Year 2006 was placed before the Committee and open for amendment at any point. Counsel and staff were then recognized to give a brief summary of the recommendations.
Mr. Holden was then recognized to offer and explain an amendment to eliminate FY 2006 limitations on funding or operation of certain agriculture programs and activities. Discussion occurred and by a roll call vote of 19 yeas, 25 nays, and 2 not voting, the amendment failed. See Roll Call Vote #1.
Mr. Melancon was recognized to offer and explain an amendment to provide assistance to citrus, nursery, vegetable, and fruit crops impacted by Hurricane Katrina or Hurricane Rita. Chairman Goodlatte voiced opposition to the amendment and after a brief discussion by a roll call vote of 19 yeas, 25 nays, and 2 not voting, the amendment failed. See Roll Call Vote #2.
Mr. Peterson was then recognized to offer and explain an amendment to provide emergency food and farm disaster assistance. The Chairman voiced opposition to the amendment and after a brief discussion by a roll call vote of 19 yeas, 25 nays, and 2 not voting, the amendment failed. See Roll Call Vote #3.
There being no further amendments, Mr. Pombo moved to favorably report the Chairman's Mark for Title I--Agriculture, to the Committee on the Budget for insertion in the Reconciliation Bill. Discussion occurred and by a roll call vote of 24 yeas, 20 nays, and 2 not voting, the recommendations were adopted. See Roll Call #4.
Chairman Goodlatte then advised Members that pursuant to the rules of the House of Representatives that Members have 2 calendar days to file such views with the Committee. Ranking Member Peterson indicated that he intended to submit additional views.
Without objection, staff was given permission to make any necessary clerical, technical or conforming changes to reflect the intent of the Committee.
Chairman Goodlatte thanked all the Members and adjourned the meeting subject to the call of the chair.
REPORTING THE BILL--ROLLCALL VOTES
In compliance with clause 3(b) of rule XIII of the House of Representatives, the Committee sets forth the record of the following rollcall votes taken with respect to consideration of the recommendations regarding the Reconciliation Bill for Fiscal Year 2006:
ROLLCALL NO. 1
Summary: Amendment to eliminate FY 2006 limitations on funding or operation of certain agriculture programs and activities.
Offered by: Mr. Holden.
Results: Failed by a vote of 19 yeas/25 nays/2 not voting.
YEAS
11. Cuellar
12. Melancon
13. Costa
14. Salazar
15. Barrow
16. Pomeroy
17. Larsen
18. Davis
19. Chandler
NAYS
19. Boustany
20. Schwarz
21. Kuhl
22. Foxx
23. Conaway
24. Fortenberry
25. Schmidt
NOT VOTING
ROLLCALL NO. 2
Summary: Amendment to provide assistance to citrus, nursery, vegetable, and fruit crops impacted by Hurricane Katrina or Hurricane Rita.
Offered by: Mr. Melancon.
Results: Failed by a vote of 19 yeas/25 nays/2 not voting.
YEAS
11. Cuellar
12. Melancon
13. Costa
14. Salazar
15. Barrow
16. Pomeroy
17. Larsen
18. Davis
19. Chandler
NAYS
18. Neugebauer
19. Boustany
20. Schwarz
21. Kuhl
22. Foxx
23. Conaway
24. Fortenberry
25. Schmidt
NOT VOTING
ROLLCALL NO. 3
Summary: Amendment to provide emergency food and farm disaster assistance.
Offered by: Mr. Peterson.
Results: Failed by a vote of 19 yeas/25 nays/2 not voting.
YEAS
11. Cuellar
12. Melancon
13. Costa
14. Salazar
15. Barrow
16. Pomeroy
17. Larsen
18. Davis
19. Chandler
NAYS
19. Boustany
20. Schwarz
21. Kuhl
22. Foxx
23. Conaway
24. Fortenberry
25. Schmidt
NOT VOTING
ROLLCALL NO. 4
Summary: Motion to favorably report the Chairman's Mark for Title I--Agriculture, to the Budget Committee for insertion in the Reconciliation Bill.
Offered by: Mr. Pombo.
Results: Adopted by a vote 24 yeas/20 nays/2 not voting.
YEAS
13. Bonner
14. Rogers
15. King
16. Musgrave
17. Neugebauer
18. Boustany
19. Schwarz
20. Kuhl
21. Foxx
22. Conaway
23. Fortenberry
24. Schmidt
NAYS
11. Cuellar
12. Melancon
13. Costa
14. Salazar
15. Barrow
16. Pomeroy
17. Larsen
18. Davis
19. Chandler
20. Johnson
NOT VOTING
COMMITTEE OVERSIGHT FINDINGS
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House of Representatives, the Committee on Agriculture's oversight findings and recommendations are reflected in the body of this report.
PERFORMANCE GOALS AND OBJECTIVES
With respect to the requirement of clause 3(c)(4) of rule XIII of the Rules of the House of Representatives, the performance goals and objectives of this legislation are to reduce the level of direct spending by the Committee on Agriculture for the period fiscal year 2006 thru 2010.
CONSTITUTIONAL AUTHORITY STATEMENT
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House of Representatives, the Committee finds the Constitutional authority for this legislation in Article I, clause 8, section 18, that grants Congress the power to make all laws necessary and proper for carrying out the powers vested by Congress in the Constitution of the United States or in any department or officer thereof.
BUDGET ACT COMPLIANCE (SECTIONS 308, 402, AND 423)
The provisions of clause 3(c)(2) of rule XIII of the Rules of the House of Representatives and section 308(a)(1) of the Congressional Budget Act of 1974 (relating to estimates of new budget authority, new spending authority, new credit authority, or increased or decreased revenues or tax expenditures) are not considered applicable. The estimate and comparison required to be prepared by the Director of the Congressional Budget Office under clause 3(c)(3) of rule XIII of the Rules of the House of Representatives and sections 402 and 423 of the Congressional Budget Act of 1974 submitted to the Committee prior to the filing of this report are as follows:
Hon. BOB GOODLATTE,
Chairman, Committee on Agriculture,
House of Representatives, Washington, DC.
DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for the Agricultural Reconciliation Act of 2005.
CBO understands that the Committee on the Budget will be responsible for interpreting how these proposals compare with the reconciliation instructions in the budget resolution.
If you wish further details on this estimate, we will be pleased to provide them. The CBO staff contacts are Jim Langley (for farm programs) and Kathleen FitzGerald (for Food Stamps).
Sincerely,
Donald B. Marron
(For Douglas Holtz-Eakin, Director).
Enclosure.
Agricultural Reconciliation Act of 2005
Summary: The Agricultural Reconciliation Act of 2005 would amend laws governing commodity, conservation, energy, rural development, research, and nutrition programs over the 2006-2010 period. CBO estimates that enacting this legislation would reduce direct spending by $567 million in fiscal year 2006, by about $3.1 billion over the 2006-2010 period, and by about $4.3 billion over the 2006-2015 period, relative to CBO's March 2005 baseline projections (see Table 1). Enacting the legislation would not affect federal revenues.
The estimated savings from this legislation would be affected by provisions in the conference agreement on the agriculture appropriation bill for fiscal year 2006 (H.R. 2744). Upon enactment of that conference agreement (which passed the House on October 28), the savings from this legislation would increase by $528 million--to $3.7 billion over the 2006-2010 period and $4.8 billion over the 2006-2015 period (see Memorandum at the bottom of Table 1). These additional savings are associated with the Initiative for Future Agriculture and Food Systems and several rural development programs, which are discussed in more detail later in this estimate.
This reconciliation legislation would reduce direct payments made by the Commodity Credit Corporation's (CCC's) price and income support program. It also contains a provision that would end that reduction if legislation were enacted to extend direct payments beyond crop year 2009. Because that limitation would take effect only upon enactment of other legislation, it is not reflected in CBO's cost estimate, which assumes that the reduction in direct payments continues indefinitely. The House Budget Committee has directed CBO to consider this limitation to be effective, thus terminating the reduction after crop year 2009. That assumption reduces estimated savings from the legislation, starting in fiscal year 2010. Under that assumption, and assuming enactment of the conference agreement on the agriculture appropriation bill, enacting this reconciliation legislation would reduce direct spending by $567 million in fiscal year 2006, by $3.65 billion over the 2006-2010 period, and by $4.6 billion over the 2006-2015 period (see Table 2).
The legislation contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA). Some of its provisions would reduce federal funding for assistance to state and local governments.
Estimated Cost to the Federal Government: CBO's estimate of the budgetary impact of this legislation is shown in Table 1. Table 2 reflects the scorekeeping direction from the House Budget Committee. It differs from Table 1 with regard to projected savings from the commodity program in 2010 and subsequent years, and assumes that the conference agreement on H.R. 2744 is enacted. The costs of this legislation fall within budget functions 300 (natural resources), 350 (agriculture), 450 (community and regional development), and 600 (nutrition).
Basis of estimate: This estimate assumes that the bill will be enacted in December 2005.
Commodity Program
Subtitle A would reduce the Department of Agriculture's direct payments to agricultural producers by 1 percent for the 2006 and 2007 crops, reduce advance direct payments by 10 percent in 2006 and 2007, and eliminate the upland cotton Step 2 payments.
CBO's estimate of the budgetary impact of these amendments to the agricultural commodity program is detailed in Table 3.
TABLE 1- SUMMARY OF CBO'S ESTIMATE OF THE BUDGETARY IMPACT OF THE AGRICULTURAL RECONCILIATION ACT OF 2005
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By fiscal year, in millions of dollars--
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2006-2010 2006-2015
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CHANGES IN DIRECT SPENDING
Commodity Program:
Estimated Budget Authority -553 -164 -108 -105 -103 -105 -102 -104 -104 -104 -1,033 -1,552
Estimated Outlays -553 -164 -108 -105 -103 -105 -102 -104 -104 -104 -1,033 -1,552
Conservation Programs:
Estimated Budget Authority -85 -135 -105 -138 -191 -135 -80 -49 -56 -56 -654 -1,030
Estimated Outlays 0 -162 -126 -150 -197 -143 -84 -52 -58 -57 -635 -1,029
Energy Program:
Estimated Budget Authority 0 -23 0 0 0 0 0 0 0 0 -23 -23
Estimated Outlays 0 -9 -9 -5 0 0 0 0 0 0 -23 -23
Rural Development Programs:
Estimated Budget Authority -185 -60 0 0 0 0 0 0 0 0 -245 -245
Estimated Outlays 0 -58 -84 -52 -10 -6 -5 0 0 0 -204 -215
Research, Extension, and Education Grants:
Estimated Budget Authority 0 -200 -200 -200 0 0 0 0 0 0 -600 -600
Estimated Outlays 0 -30 -100 -160 -170 -100 -40 0 0 0 -460 -600
Food Stamp Program:
Estimated Budget Authority -14 -186 -191 -199 -202 -103 0 0 0 0 -794 -896
Estimated Outlays -14 -186 -191 -199 -202 -103 0 0 0 0 -794 -896
Total Changes:
Estimated Budget Authority -837 -768 -604 -642 -497 -343 -182 -153 -160 -160 -3,350 -4,346
Estimated Outlays -567 -609 -618 -671 -682 -457 -231 -156 -162 -161 -3,149 -4,314
Memorandum:
Total Changes Assuming Enactment of H.R. 2744:
Estimated Budget Authority -1,206 -928 -604 -642 -497 -343 -182 -153 -160 -160 -3,877 -4,875
Estimated Outlays -567 -776 -798 -797 -736 -464 -226 -156 -162 -161 -3,677 -4,843
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TABLE 2- SUMMARY OF THE BUDGETARY IMPACT OF THE AGRICULTURAL RECONCILIATION ACT OF 2005 REFLECTING SCOREKEEPING DIRECTION FROM THE HOUSE BUDGET COMMITTEE AND ENACTMENT OF THE CONFERENCE AGREEMENT ON AGRICULTURE APPROPRIATIONS
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By fiscal year, in millions of dollars
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2006-2010 2006-2015
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CHANGES IN DIRECT SPENDING
Commodity Program 1 :
Estimated Budget Authority -553 -164 -108 -105 -76 -52 -49 -51 -51 -51 -1,006 -1,260
Estimated Outlays -553 -164 -108 -105 -76 -52 -49 -51 -51 -51 -1,006 -1,260
Conservation Programs:
Estimated Budget Authority -210 -135 -105 -138 -191 -135 -80 -49 -56 -56 -779 -1,155
Estimated Outlays 0 -237 -151 -166 -206 -143 -84 -52 -58 -57 -760 -1,154
Energy Program:
Estimated Budget Authority 0 -23 0 0 0 0 0 0 0 0 -23 -23
Estimated Outlays 0 -9 -9 -5 0 0 0 0 0 0 -23 -23
Rural Development Programs:
Estimated Budget Authority -429 -60 0 0 0 0 0 0 0 0 -489 -489
Estimated Outlays 0 -126 -183 -114 -23 -13 0 0 0 0 -446 -459
Research, Extension, and Education Grants:
Estimated Budget Authority 0 -360 -200 -200 0 0 0 0 0 0 -760 -760
Estimated Outlays 0 -54 -156 -208 -202 -100 -40 0 0 0 -620 -760
Food Stamp Programs:
Estimated Budget Authority -14 -186 -191 -199 -204 -103 0 0 0 0 -794 -896
Estimated Outlays -14 -186 -191 -199 -204 -103 0 0 0 0 -794 -896
Total Changes:
Estimated Budget Authority -1,206 -928 -604 -642 -470 -290 -129 -100 -107 -107 -3,852 -4,585
Estimated Outlays -567 -776 -798 -797 -710 -411 -173 -103 -109 -108 -3,650 -4,554
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TABLE 3- IMPACT OF THE AGRICULTURAL RECONCILIATION ACT OF 2005 ON SPENDING FOR THE COMMODITY PROGRAM
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By fiscal year, in millions of dollars
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
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CHANGES IN DIRECT SPENDING
Reduction of Direct Payments 1 :
Estimated Budget Authority -26 -53 -53 -53 -53 -53 -53 -53 -53 -53
Estimated Outlays -26 -53 -53 -53 -53 -53 -53 -53 -53 -53
Limit on Advance Direct Payments:
Estimated Budget Authority -513 0 0 0 0 0 0 0 0 0
Estimated Outlays -513 0 0 0 0 0 0 0 0 0
Cotton Competitiveness Provisions:
Estimated Budget Authority -14 -111 -55 -52 -50 -52 -49 -51 -51 -51
Estimated Outlays -14 -111 -55 -52 -50 -52 -49 -51 -51 -51
Total Changes:
Estimated Budget Authority -553 -164 -108 -105 -103 -105 -102 -104 -104 -104
Estimated Outlays -553 -164 -108 -105 -103 -105 -102 -104 -104 -104
Memorandum:
Commodity Program Outlays Under CBO's March 2005 Baseline 19,289 16,669 14,687 14,962 14,662 14,339 13,962 13,862 13,840 12,865
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Section 1101--Reduction of Direct Payments. Section 1101 would require a 1 percent reduction in direct payments for the 2006 and 2007 crops of feed grains, oilseeds, wheat, cotton, rice, and peanuts. The legislation also specifies that no reduction occur for the 2010 and subsequent crop years, if future legislation were to authorize direct payments for those crop years. Current law authorizes the CCC price and income support program, including direct payments to applicable crops, through 2007. The Balanced Budget and Emergency Deficit Control Act of 1985 specifies that such expiring programs should be assumed to continue to operate as they exist upon scheduled expiration. Therefore, the CBO baseline assumes that the price and income support program continues indefinitely beyond its expiration date of 2007. Hence, our estimate assumes the 1 percent reduction would apply to the 2010 and subsequent crops.
Relative to CBO's baseline projections, enacting this section would reduce direct spending for the CCC price and income support program by $26 million in 2006, $238 million over the 2006-2010 period, and $503 million over the 2006-2015 period, CBO estimates. The House Budget Committee has directed CBO to assume that the 1 percent reduction in direct payments would end with the 2009 crop, reflecting a provision in the legislation that would be contingent on enactment of legislation to extend direct payments beyond that year. (CBO's cost estimates do not ordinarily incorporate contingencies that depend on enactment of future legislation.). Under the House Budget Committee's assumptions, this section would reduce direct spending by $26 million in 2006, $211 million over the 2006-2010 period, and $211 million over the 2006-2015 period.
Section 1102--Advance Direct Payments. The 2002 farm act (Public Law 107-171) authorizes the Secretary of Agriculture to offer eligible producers up to a 50 percent advance payment on their annual direct payment for feed grains, oilseeds, wheat, cotton, rice, and peanuts. Producers may request advance payments beginning on December 1 of the calendar year before the crop is harvested until the final payment is made in October of the calendar year in which the crop is harvested. Section 1102 would limit those annual advance payments to no more than 40 percent of the direct payments for the 2006 and 2007 crop years.
This section would not affect the total value of direct payments that producers are eligible to receive for each crop year, only the timing of the payment. By shifting payments from each year to the following year, this provision would have the effect of reducing outlays in 2006 and shifting some outlays beyond 2015. CBO estimates that limiting advance direct payments would reduce spending by $513 million in 2006, with no change in total payments in each subsequent fiscal year through 2015.
Section 1103--Cotton Competitiveness Provisions. Section 1103 would eliminate cotton user marketing certificates, more commonly known as the Step 2 payments, effective beginning on August 1, 2006. First authorized in 1990, Step 2 is a provision of the marketing assistance loan program unique to upland cotton. It provides for cash or in-kind payments to eligible domestic users and exporters of U.S.-grown upland cotton whenever U.S. cotton prices are higher than world market cotton prices.
CBO estimates that eliminating Step 2, effective August 1, 2006, would reduce CCC spending for the cotton program by $14 million in 2006, $282 million over the 2006-2010 period, and $536 million over the 2006-2015 period. Those savings are less than CBO's baseline estimates for Step 2 payments over the 2006-2015 period ($1.2 billion) because Step 2 payments also affect the demand for and price of upland cotton.
CBO estimates that eliminating Step 2 would reduce U.S. cotton exports by about 2.5 percent and domestic mill use by a smaller amount (because mill use is a smaller component of total use). We estimate that such a decrease in demand would reduce domestic cotton prices by $0.0075 to $0.0200 per pound, which is 50 percent to 60 percent of the estimated forgone Step 2 payment rate. The payment rate for countercyclical payments is determined, in part, by average U.S. cotton prices; the lower the prices, the higher the countercyclical payments. CBO estimates that lower U.S. prices due to elimination of Step 2 would lead to an increase in countercyclical payments of $484 million over the 2006-2015 period. Eliminating Step 2 would also slightly increase world cotton prices. The world price is used to determine repayment rates for upland cotton marketing loans and loan deficiency payments. We estimate that higher world prices would reduce the cost of cotton marketing loans by $17 million over the 2006-2015 period.
Conservation
Subtitle B would amend the Watershed Rehabilitation Program, the Conservation Security Program (CSP), and the Agricultural Management Assistance Program (AMAP). Authority for CSP would be extended through 2011 but total spending authority would be reduced. Under the assumptions underlying CBO's March 2005 baseline projections, we estimate that extending CSP through 2011 would result in outlays of $1.6 billion over the 2008-2015 period. Pursuant to the Balanced Budget and Emergency Deficit Control Act of 1985, such extensions are assumed in the baseline projections and have no cost relative to those projections. CBO's estimates of the budgetary effects of the amendments to conservation programs are detailed in Table 4.
Section 1201--Watershed Rehabilitation Program. The Watershed Rehabilitation Program provides assistance to communities to rehabilitate aging local dams. The Natural Resources Conservation Service (NRCS) provides technical and financial assistance for the planning, design, and implementation of rehabilitation projects that may include upgrading or removing the dams. Section 1201 would limit the availability of CCC funds for 2007 to $50 million, and would rescind all balances from prior years unobligated as of September 30, 2006. CBO estimates that these provisions would reduce spending for watershed rehabilitation by $100 million over the 2006-2010 period.
TABLE 4- IMPACT OF THE AGRICULTURAL RECONCILIATION ACT OF 2005 ON SPENDING FOR CONSERVATION PROGRAMS
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By fiscal year, in millions of dollars--
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
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CHANGES IN DIRECT SPENDING
Watershed Rehabilitation Program:
Estimated Budget Authority 1 -85 -15 0 0 0 0 0 0 0 0
Estimated Outlays 0 -60 -20 -13 -7 0 0 0 0 0
Conservation Security Program:
Estimated Budget Authority 0 -100 -95 -128 -181 -135 -80 -49 -56 -56
Estimated Outlays 0 -100 -95 -128 -181 -135 -80 -49 -56 -56
Agricultural Management Assistance Program:
Estimated Budget Authority 0 -20 -10 -10 -10 0 0 0 0 0
Estimated Outlays 0 -2 -11 -9 -9 -8 -4 -3 -2 -1
Total Changes:
Estimated Budget Authority -85 -135 -105 -138 -191 -135 -80 -49 -56 -56
Estimated Outlays 0 -162 -126 -150 -197 -143 -84 -52 -58 -57
Memorandum:
Outlays for Conservation Programs
Under CBO's March 2005 Baseline 3,652 4,006 4,224 4,894 4,829 4,771 4,817 4,779 4,748 4,781
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Section 1202--Conservation Security Program. The CSP, first authorized in the 2002 farm act, provides financial and technical assistance to promote conservation and improvement of soil, water, air, plant and animal life, and land currently used for agricultural production. Producers enroll in 5- to-15-year contracts in exchange for cost-share assistance and annual payments. Under current law, total spending on CSP contracts is limited to $6.037 billion over the 2005-2014 period. Fiscal year 2015 is not covered by that limit; CBO's baseline includes $835 million in outlays for 2015.
Section 1202 would restrict CSP spending to $2.213 billion over the 2006-2010 period and $5.729 billion over the 2006-2015 period. CBO estimates that imposing those spending caps would reduce spending on the CSP program by $504 million over the 2006-2010 period and $880 million over the 2006-2015 period.
Section 1203--Agricultural Management Assistance Program (AMAP). This program, authorized by the Agriculture Risk Protection Act of 2000, provides $20 million in 2007 and $10 million each subsequent year for financial assistance to producers in 15 states where participation in the federal crop insurance program has historically been low. Section 1203 would prohibit obligations for AMAP over the 2007-2010 period. CBO estimates that this provision would reduce conservation spending by $31 million over the 2006-2010 period and by $49 million over the 2006-2015 period.
Energy
The renewable energy systems and energy efficiency improvements program provides a combination of loans and grants to farmers to purchase renewable energy systems or to make energy-efficiency improvements. Section 1301 would eliminate funding for the program in 2007. CBO estimates that action would reduce direct spending by $23 million over the 2006-2010 period (see Table 5).
TABLE 5- IMPACT OF THE AGRICULTURAL RECONCILIATION ACT OF 2005 ON SPENDING FOR ENERGY PROGRAMS
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By fiscal year, in millions of dollars
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
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CHANGES IN DIRECT SPENDING
Renewable Energy Systems and Energy-Efficiency Improvements Program:
Estimated Budget Authority 0 -23 0 0 0 0 0 0 0 0
Estimated Outlays 0 -9 -9 -5 0 0 0 0 0 0
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Rural Development
The legislation would eliminate fiscal year 2007 funding and rescind unobligated balances for the Rural Community Grants (firefighter assistance) program, the broadband loans component of the Distance Learning, Telemedicine, and the Broadband program, and the Value-Added Marketing program. In addition, the bill would rescind the unobligated balances of both the Rural Strategic Investment and the Rural Business Investment programs. (The rescissions would take effect on September 30, 2006, and would apply to balances available on that date.) In sum, CBO estimates the provisions would reduce direct spending by $204 million over the 2006-2010 period and by $215 million over the 2006-2015 period (see Table 6).
TABLE 6- IMPACT OF THE AGRICULTURAL RECONCILIATION ACT OF 2005 ON SPENDING FOR RURAL DEVELOPMENT PROGRAMS
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By fiscal year, in millions of dollars
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
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CHANGES IN DIRECT SPENDING
Rural Firefighers and Emergency Personnel Grants:
Estimated Budget Authority 0 -10 0 0 0 0 0 0 0 0
Estimated Outlays: 0 -1 -4 -5 0 0 0 0 0 0
Enhanced Access to Broadband:
Estimated Budget Authority -60 -10 0 0 0 0 0 0 0 0
Estimated Outlays 0 -1 -7 -11 -10 -6 -5 0 0 0
Value-Added Marketing Program:
Estimated Budget Authority -30 -40 0 0 0 0 0 0 0 0
Estimated Outlays 0 -28 -35 -7 0 0 0 0 0 0
Rural Business Investment Program:
Estimated Budget Authority -45 0 0 0 0 0 0 0 0 0
Estimated Outlays 0 -23 -18 -4 0 0 0 0 0 0
Rural Business Strategic Investment Grants:
Estimated Budget Authority -50 0 0 0 0 0 0 0 0 0
Estimated Outlays 0 -5 -20 -25 0 0 0 0 0 0
Total Changes 1 :
Estimated Budget Authority -185 -60 0 0 0 0 0 0 0 0
Estimated Outlays 0 -58 -84 -52 -10 -6 -5 0 0 0
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Research
The Initiative for Future Agriculture and Food Systems is a competitive grant program designed to support research, extension and education activities for U.S. agriculture. The Agricultural Research, Extension, and Education Reform Act of 1998 created the initiative and provided mandatory funding for it. The program was reauthorized in the Farm Security and Rural Investment Act of 2002 with mandatory funding of $160 million in 2006 and $200 million in subsequent years. The bill would eliminate funding available to the program over the 2007-2009 period. Funding would remain at $200 million in 2010 and subsequent years. CBO estimates that this provision would reduce mandatory spending by $460 million over the 2006-2010 period and $600 million over the 2006-2015 period (see Table 7).
TABLE 7- IMPACT OF THE AGRICULTURAL RECONCILIATION ACT OF 2005 ON SPENDING FOR THE INITIATIVE FOR FUTURE AGRICULTURE AND FOOD SYSTEMS
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By fiscal year, in millions of dollars--
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
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CHANGES IN DIRECT SPENDING
Initiative for Future Agriculture and Food Systems:
Estimated Budget Authority 1 0 -200 -200 -200 0 0 0 0 0 0
Estimated Outlays 0 -30 -100 -160 -170 -100 -40 0 0 0
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Nutrition
Subtitle F would extend and modify the Food Stamp program. The 2002 farm act authorized the Food Stamp program through 2007. This legislation would extend that authority through 2011. Under the assumptions underlying CBO's March 2005 baseline projections, we estimate that extending the program through 2011 would result in additional outlays of $137 billion over the 2008-2011 period. Pursuant to the Balanced Budget and Emergency Deficit Control Act of 1985, this extension is assumed in the baseline projection and has no cost relative to that projection. Other provisions in the subtitle would reduce spending for the Food Stamp program and would increase spending for the Emergency Food Assistance program (see Table 8).
TABLE 8- IMPACT OF THE AGRICULTURAL RECONCILIATION ACT OF 2005 ON SPENDING FOR NUTRITION PROGRAMS
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By fiscal year, in millions of dollars--
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
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CHANGES IN DIRECT SPENDING
Eligible Households:
Estimated Budget Authority -40 -127 -132 -136 -139 -71 0 0 0 0
Estimated Outlays -40 -127 -132 -136 -139 -71 0 0 0 0
Residency Requirement:
Estimated Budget Authority -25 -60 -60 -65 -65 -33 0 0 0 0
Estimated Outlays -25 -60 -60 -65 -65 -33 0 0 0 0
Food Stamp Interaction Effects:
Estimated Budget Authority 1 1 1 1 1 1 0 0 0 0
Estimated Outlays 1 1 1 1 1 1 0 0 0 0
Emergency Food Assistance Program:
Estimated Budget Authority 12 0 0 0 0 0 0 0 0 0
Estimated Outlays 12 0 0 0 0 0 0 0 0 0
Disaster Food Stamp Program:
Estimated Budget Authority 38 0 0 0 0 0 0 0 0 0
Estimated Outlays 38 0 0 0 0 0 0 0 0 0
Total:
Estimated Budget Authority -14 -186 -191 -199 -202 -103 0 0 0 0
Estimated Outlays -14 -186 -191 -199 -202 -103 0 0 0 0
Memorandum:
Spending for Food Stamp Program Under CBO's March 2005 Baseline 33,445 33,054 33,275 33,882 34,638 35,542 36,474 37,301 38,273 39,277
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Food Stamp Eligibility. Subtitle F would change eligibility for the Food Stamp program in two ways: by restricting categorical eligibility; and by extending the residency requirement for legal permanent residents.
Section 1601--Eligible Households. Under current law, households that receive or are eligible to receive any type of benefit from the TANF program are among those considered categorically eligible for food stamps. This includes non-cash benefits such as job placement services. Categorically eligible households are not subject to the same income and asset tests as other participants. This provision would restrict categorical eligibility to only those households receiving cash assistance. Based on information from the Food Stamp Quality Control (QC) Data, CBO estimates that about 225,000 people who are categorically eligible based on non-cash benefits would not be able to meet the income and asset tests for the program. On average, those individuals would lose about $45 a month in food stamp benefits in 2007.
In addition, school-age children in these households would no longer be automatically eligible for free school meals. (All children in Food Stamp households are categorically eligible for free school lunches and breakfasts.) Based on income information from the QC data, we expect that most of these children would nevertheless be eligible for reduced-price meals based on their family income; about 40,000 children would lose their eligibility. On average, benefits for these students would decline by about $185 a year.
This provision would be in effect upon enactment in 2006 and expire on September 30, 2010. CBO assumes that, in 2011, newly eligible individuals would gradually join the program over the course of the year.
Section 1603--Residency Requirement. The 2002 farm act made legal permanent residents who have resided in the United States for at least five years eligible for food stamps. (Legal permanent residents under the age of 18 or who are disabled are eligible without a waiting period.) This provision would extend the residency requirement to seven years during the 2006-2010 period. CBO estimates that about 70,000 people would no longer be eligible for benefits, based on fiscal year 1996 QC data adjusted for changes in Food Stamp rules and recent immigration statistics. Food Stamp outlays would be lowered by $275 million over the 2006-2010 period and by $308 million over the 2006-2015 period. In 2011, when the waiting period would drop back to five years, CBO expects that newly eligible participants would come back onto the program over the course of the year.
Interaction effects. Taken alone, CBO estimates that restricting categorical eligibility would reduce Food Stamp outlays by $546 million and child nutrition outlays by $28 million over the 2006-2010 period. These estimated savings would decline slightly after taking into account the proposal to extend the waiting period for legal permanent residents. (CBO estimates that a small share of categorically eligible participants are legal permanent residents who would lose benefits under the new waiting-period requirements.) As a result, the gross savings cited above would be reduced by an estimated $1 million per year over the 2006-2010 period.
Section 1602--Availability of Commodities for the Emergency Food Assistance Program. Section 1602 would reauthorize $140 million for the purchase of commodities for the Emergency Food Assistance Program through 2011. This provision does not have an estimated budget impact because the extension is already assumed in the baseline. But the legislation would provide an additional $12 million in fiscal year 2006 for commodities to be distributed to states that were under a major disaster declaration as a result of Hurricanes Katrina and Rita, and to states adjacent to those states. CBO estimates that this provision would increase outlays by $12 million in 2006.
Section 1604--Disaster Food Stamp Program. States pay 50 percent of the administrative costs associated with the Food Stamp program. Under the legislation, states would be reimbursed for the full cost of certain administrative expenses for disaster food stamp benefits issued after Hurricanes Katrina and Rita. Data from the Food and Nutrition Service show that 1.1 million households were certified for disaster benefits, including supplements for current food stamp recipients, after the hurricanes. CBO estimates that the increase in the federal share of administrative costs would be $38 million in fiscal year 2006.
Intergovernmental and private-sector impact: The legislation contains no intergovernmental or private-sector mandates as defined in UMRA. Some of its provisions would reduce federal funding for assistance to state and local governments.
Estimate prepared by: Federal Costs: Jim Langley, David Hull, and Greg Hitz (Commodity Program and Research); Gregory Waring (Rural Development); and Kathleen FitzGerald (Nutrition). Impact on State, Local, and Tribal Governments: Marjorie Miller and Leo Lex. Impact on the Private Sector: Craig Cammarata.
Estimate approved by: Robert A. Sunshine, Assistant Director for Budget Analysis.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
- In compliance with clause 3(e) of rule XIII of the Rules of the House of Representatives, changes in existing law made by the bill, as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, existing law in which no change is proposed is shown in roman):
FARM SECURITY AND RURAL INVESTMENT ACT OF 2002
* * * * * * *
TITLE I--COMMODITY PROGRAMS
Subtitle A--Direct Payments and Counter-Cyclical Payments
* * * * * * *
SEC. 1103. AVAILABILITY OF DIRECT PAYMENTS.
- (a) * * *
* * * * * * *
- (c) PAYMENT AMOUNT- [Struck out->]
[ The amount ][<-Struck out] Except as provided in subsection (e), the amount of the direct payment to be paid to the producers on a farm for a covered commodity for a crop year shall be equal to the product of the following:- (1) * * *
* * * * * * *
- (d) TIME FOR PAYMENT-
- (1) * * *
- (2) ADVANCE PAYMENTS- At the option of the producers on a farm, up to 50 percent of the direct payment for a covered commodity for any of the 2003 through [Struck out->]
[ 2007 crop years ][<-Struck out] 2005 crop years and up to 40 percent of the direct payment for a covered commodity for each of the 2006 and 2007 crop years shall be paid to the producers in advance. The producers shall select the month within which the advance payment for a crop year will be made. The month selected may be any month during the period beginning on December 1 of the calendar year before the calendar year in which the crop of the covered commodity is harvested through the month within which the direct payment would otherwise be made. The producers may change the selected month for a subsequent advance payment by providing advance notice to the Secretary.* * * * * * *
- (e) Direct Payment Amount Reduction- Notwithstanding subsection (c), for the 2006 and 2007 crop years (and the 2008 and 2009 crop years if direct payments are provided under this section for those crop years), the Secretary shall reduce the total amount of the direct payment to be paid to the producers on a farm for a covered commodity for the crop year concerned by an amount equal to 1 percent of the direct payment amount otherwise determined for that farm for that covered commodity for that crop year. No reduction shall be made under the authority of this subsection if direct payments are made for the 2010 or any subsequent crop year of a covered commodity.
* * * * * * *
Subtitle B--Marketing Assistance Loans and Loan Deficiency Payments
* * * * * * *
SEC. 1207. [Struck out->][ SPECIAL MARKETING LOAN PROVISIONS FOR UPLAND COTTON. ][<-Struck out] UPLAND COTTON IMPORT QUOTAS.
- [Struck out->]
[ (a) COTTON USER MARKETING CERTIFICATES- ][<-Struck out]- [Struck out->]
[ (1) ISSUANCE- During the period beginning on the date of the enactment of this Act through July 31, 2008, the Secretary shall issue marketing certificates or cash payments, at the option of the recipient, to domestic users and exporters for documented purchases by domestic users and sales for export by exporters made in the week following a consecutive 4-week period in which-- ][<-Struck out]- [Struck out->]
[ (A) the Friday through Thursday average price quotation for the lowest-priced United States growth, as quoted for Middling (M) 1 3/32 -inch cotton, delivered C.I.F. Northern Europe exceeds the Northern Europe price by more than 1.25 cents per pound; and ][<-Struck out]- [Struck out->]
[ (B) the prevailing world market price for upland cotton (adjusted to United States quality and location) does not exceed 134 percent of the loan rate for upland cotton established under section 1202. ][<-Struck out]- [Struck out->]
[ (2) VALUE OF CERTIFICATES OR PAYMENTS- The value of the marketing certificates or cash payments shall be based on the amount of the difference (reduced by 1.25 cents per pound) in the prices during the fourth week of the consecutive 4-week period multiplied by the quantity of upland cotton included in the documented sales. ][<-Struck out]- [Struck out->]
[ (3) ADMINISTRATION OF MARKETING CERTIFICATES- ][<-Struck out]- [Struck out->]
[ (A) REDEMPTION, MARKETING, OR EXCHANGE- The Secretary shall establish procedures for redeeming marketing certificates for cash or marketing or exchange of the certificates for agricultural commodities owned by the Commodity Credit Corporation or pledged to the Commodity Credit Corporation as collateral for a loan in such manner, and at such price levels, as the Secretary determines will best effectuate the purposes of cotton user marketing certificates, including enhancing the competitiveness and marketability of United States cotton. Any price restrictions that would otherwise apply to the disposition of agricultural commodities by the Commodity Credit Corporation shall not apply to the redemption of certificates under this subsection. ][<-Struck out]- [Struck out->]
[ (B) DESIGNATION OF COMMODITIES AND PRODUCTS- To the extent practicable, the Secretary shall permit owners of certificates to designate the commodities and products, including storage sites, the owners would prefer to receive in exchange for certificates ][<-Struck out]- [Struck out->]
[ (C) TRANSFERS- Marketing certificates issued to domestic users and exporters of upland cotton may be transferred to other persons in accordance with regulations issued by the Secretary. ][<-Struck out]- [Struck out->]
[ (4) DELAYED APPLICATION OF THRESHOLD- Through July 31, 2006, the Secretary shall make the calculations under paragraphs (1)(A) and (2) without regard to the 1.25 cent threshold provided under those paragraphs. ][<-Struck out]- [Struck out->]
[ (b) ][<-Struck out] (a) SPECIAL IMPORT QUOTA-- (1) ESTABLISHMENT-
- (A) * * *
- (B) PROGRAM REQUIREMENTS- Except as provided in subparagraph (C), whenever the Secretary determines and announces that for any consecutive 4-week period, the Friday through Thursday average price quotation for the lowest-priced United States growth, as quoted for Middling (M) 1 3/32 -inch cotton, delivered C.I.F. Northern Europe [Struck out->]
[ , adjusted for the value of any certificate issued under subsection (a), ][<-Struck out] exceeds the Northern Europe price by more than 1.25 cents per pound, there shall immediately be in effect a special import quota.- (C) TIGHT DOMESTIC SUPPLY- During any month for which the Secretary estimates the season-ending United States upland cotton stocks-to-use ratio, as determined under subparagraph (D), to be below 16 percent, the Secretary, in making the determination under subparagraph (B), shall not adjust the Friday through Thursday average price quotation for the lowest-priced United States growth, as quoted for Middling (M) 1 3/32 -inch cotton, delivered C.I.F. Northern Europe [Struck out->]
[ , for the value of any certificates issued under subsection (a) ][<-Struck out] .* * * * * * *
- (4) OVERLAP- A special quota period may be established that overlaps any existing quota period if required by paragraph (1), except that a special quota period may not be established under this subsection if a quota period has been established under [Struck out->]
[ subsection (c) ][<-Struck out] subsection (b).- [Struck out->]
[ (c) ][<-Struck out] (b) LIMITED GLOBAL IMPORT QUOTA FOR UPLAND COTTON-- (1) * * *
- (2) NO OVERLAP- Notwithstanding paragraph (1), a quota period may not be established that overlaps an existing quota period or a special quota period established under [Struck out->]
[ subsection (b) ][<-Struck out] subsection (a).* * * * * * *
Subtitle C--Peanuts
* * * * * * *
SEC. 1303. AVAILABILITY OF DIRECT PAYMENTS FOR PEANUTS.
- (a) * * *
* * * * * * *
- (d) PAYMENT AMOUNT FOR SUBSEQUENT CROP YEARS- [Struck out->]
[ The amount ][<-Struck out] Except as provided in subsection (f), the amount of the direct payment to be paid to the producers on a farm for the 2003 through 2007 crops of peanuts shall be equal to the product of the following:- (1) * * *
* * * * * * *
- (e) TIME FOR PAYMENT-
- (1) * * *
- (2) ADVANCE PAYMENTS- At the option of the producers on a farm, up to 50 percent of the direct payment for any of the 2003 through [Struck out->]
[ 2007 crop years ][<-Struck out] 2005 crop years and up to 40 percent of the direct payment for each of the 2006 and 2007 crop years shall be paid to the producers in advance. The producers shall select the month within which the advance payment for a crop year will be made. The month selected may be any month during the period beginning on December 1 of the calendar year before the calendar year in which the crop is harvested through the month within which the direct payment would otherwise be made. The producers may change the selected month for a subsequent advance payment by providing advance notice to the Secretary.- (f) Direct Payment Amount Reduction- Notwithstanding subsection (d), for the 2006 and 2007 crops of peanuts (and the 2008 and 2009 crops of peanuts if direct payments are provided under this section for those crops), the Secretary shall reduce the total amount of the direct payment to be paid to the producers on a farm for that crop of peanuts by an amount equal to 1 percent of the direct payment amount otherwise determined for that farm for that crop of peanuts. No reduction shall be made under the authority of this subsection if direct payments are made for the 2010 or any subsequent crop of peanuts.
* * * * * * *
TITLE VI--RURAL DEVELOPMENT
* * * * * * *
SUBTITLE E--MISCELLANEOUS
* * * * * * *
SEC. 6405. RURAL FIREFIGHTERS AND EMERGENCY PERSONNEL GRANT PROGRAM.
- (a) * * *
* * * * * * *
- (c) FUNDING- Of the funds of the Commodity Credit Corporation, the Secretary shall make available to carry out this section $10,000,000 for each of fiscal years 2003 through [Struck out->]
[ 2007, to remain available until expended ][<-Struck out] 2006.* * * * * * *
TITLE IX--ENERGY
* * * * * * *
SEC. 9006. RENEWABLE ENERGY SYSTEMS AND ENERGY EFFICIENCY IMPROVEMENTS.
- (a) * * *
* * * * * * *
- (f) FUNDING- Of the funds of the Commodity Credit Corporation, the Secretary shall make available to carry out this section $23,000,000 for each of fiscal years 2003 through [Struck out->]
[ 2007 ][<-Struck out] 2006.* * * * * * *
-
SECTION 136 OF THE FEDERAL AGRICULTURE IMPROVEMENT AND REFORM ACT OF 1996
[Struck out->][ SEC. 136. SPECIAL MARKETING LOAN PROVISIONS FOR UPLAND COTTON. ][<-Struck out]
- [Struck out->]
[ (a) COTTON USER MARKETING CERTIFICATES- ][<-Struck out]- [Struck out->]
[ (1) ISSUANCE- During the period ending July 31, 2003, the Secretary shall issue marketing certificates or cash payments, at the option of the recipient, to domestic users and exporters for documented purchases by domestic users and sales for export by exporters made in the week following a consecutive 4-week period in which-- ][<-Struck out]- [Struck out->]
[ (A) the Friday through Thursday average price quotation for the lowest-priced United States growth, as quoted for Middling (M) 1 3/32 -inch cotton, delivered C.I.F. Northern Europe exceeds the Northern Europe price by more than 1.25 cents per pound; and ][<-Struck out]- [Struck out->]
[ (B) the prevailing world market price for upland cotton (adjusted to United States quality and location) does not exceed 134 percent of the loan rate for upland cotton established under section 132. ][<-Struck out]- [Struck out->]
[ (2) VALUE OF CERTIFICATES OR PAYMENTS- The value of the marketing certificates or cash payments shall be based on the amount of the difference (reduced by 1.25 cents per pound) in the prices during the 4th week of the consecutive 4-week period multiplied by the quantity of upland cotton included in the documented sales. ][<-Struck out]- [Struck out->]
[ (3) ADMINISTRATION OF MARKETING CERTIFICATES- ][<-Struck out]- [Struck out->]
[ (A) REDEMPTION, MARKETING, OR EXCHANGE- The Secretary shall establish procedures for redeeming marketing certificates for cash or marketing or exchange of the certificates for agricultural commodities owned by the Commodity Credit Corporation or pledged to the Commodity Credit Corporation as collateral for a loan in such manner, and at such price levels, as the Secretary determines will best effectuate the purposes of cotton user marketing certificates, including enhancing the competitiveness and marketability of United States cotton. Any price restrictions that would otherwise apply to the disposition of agricultural commodities by the Commodity Credit Corporation shall not apply to the redemption of certificates under this subsection. ][<-Struck out]- [Struck out->]
[ (B) DESIGNATION OF COMMODITIES AND PRODUCTS- To the extent practicable, the Secretary shall permit owners of certificates to designate the commodities and products, including storage sites, the owners would prefer to receive in exchange for certificates. ][<-Struck out]- [Struck out->]
[ (C) TRANSFERS- Marketing certificates issued to domestic users and exporters of upland cotton may be transferred to other persons in accordance with regulations issued by the Secretary. ][<-Struck out]- [Struck out->]
[ (b) SPECIAL IMPORT QUOTA- ][<-Struck out]- [Struck out->]
[ (1) ESTABLISHMENT- ][<-Struck out]- [Struck out->]
[ (A) IN GENERAL- The President shall carry out an import quota program during the period ending July 31, 2003, as provided in this subsection. ][<-Struck out]- [Struck out->]
[ (B) PROGRAM REQUIREMENTS- Except as provided in subparagraph (C), whenever the Secretary determines and announces that for any consecutive 4-week period, the Friday through Thursday average price quotation for the lowest-priced United States growth, as quoted for Middling (M) 1 3/32 -inch cotton, delivered C.I.F. Northern Europe, adjusted for the value of any certificate issued under subsection (a), exceeds the Northern Europe price by more than 1.25 cents per pound, there shall immediately be in effect a special import quota. ][<-Struck out]- [Struck out->]
[ (C) TIGHT DOMESTIC SUPPLY- During any month for which the Secretary estimates the season-ending United States upland cotton stocks-to-use ratio, as determined under subparagraph (D), to be below 16 percent, the Secretary, in making the determination under subparagraph (B), shall not adjust the Friday through Thursday average price quotation for the lowest-priced United States growth, as quoted for Middling (M) 1 3/32 -inch cotton, delivered C.I.F. Northern Europe, for the value of any certificates issued under subsection (a). ][<-Struck out]- [Struck out->]
[ (D) SEASON-ENDING UNITED STATES STOCKS-TO-USE RATIO- For the purposes of making estimates under subparagraph (C), the Secretary shall, on a monthly basis, estimate and report the season-ending United States upland cotton stocks-to-use ratio, excluding projected raw cotton imports but including the quantity of raw cotton that has been imported into the United States during the marketing year. ][<-Struck out]- [Struck out->]
[ (2) QUANTITY- The quota shall be equal to 1 week's consumption of upland cotton by domestic mills at the seasonally adjusted average rate of the most recent 3 months for which data are available. ][<-Struck out]- [Struck out->]
[ (3) APPLICATION- The quota shall apply to upland cotton purchased not later than 90 days after the date of the Secretary's announcement under paragraph (1) and entered into the United States not later than 180 days after the date. ][<-Struck out]- [Struck out->]
[ (4) OVERLAP- A special quota period may be established that overlaps any existing quota period if required by paragraph (1), except that a special quota period may not be established under this subsection if a quota period has been established under subsection (c). ][<-Struck out]- [Struck out->]
[ (5) PREFERENTIAL TARIFF TREATMENT- The quantity under a special import quota shall be considered to be an in-quota quantity for purposes of-- ][<-Struck out]- [Struck out->]
[ (A) section 213(d) of the Caribbean Basin Economic Recovery Act (19 U.S.C. 2703(d)); ][<-Struck out]- [Struck out->]
[ (B) section 204 of the Andean Trade Preference Act (19 U.S.C. 3203); ][<-Struck out]- [Struck out->]
[ (C) section 503(d) of the Trade Act of 1974 (19 U.S.C. 2463(d)); and ][<-Struck out]- [Struck out->]
[ (D) General Note 3(a)(iv) to the Harmonized Tariff Schedule. ][<-Struck out]- [Struck out->]
[ (6) DEFINITION- In this subsection, the term `special import quota' means a quantity of imports that is not subject to the over-quota tariff rate of a tariff-rate quota. ][<-Struck out]- [Struck out->]
[ (7) LIMITATION- The quantity of cotton entered into the United States during any marketing year under the special import quota established under this subsection may not exceed the equivalent of 5 week's consumption of upland cotton by domestic mills at the seasonally adjusted average rate of the 3 months immediately preceding the first special import quota established in any marketing year. ][<-Struck out]- [Struck out->]
[ (c) LIMITED GLOBAL IMPORT QUOTA FOR UPLAND COTTON- ][<-Struck out]- [Struck out->]
[ (1) IN GENERAL- The President shall carry out an import quota program that provides that whenever the Secretary determines and announces that the average price of the base quality of upland cotton, as determined by the Secretary, in the designated spot markets for a month exceeded 130 percent of the average price of such quality of cotton in the markets for the preceding 36 months, notwithstanding any other provision of law, there shall immediately be in effect a limited global import quota subject to the following conditions: ][<-Struck out]- [Struck out->]
[ (A) QUANTITY- The quantity of the quota shall be equal to 21 days of domestic mill consumption of upland cotton at the seasonally adjusted average rate of the most recent 3 months for which data are available. ][<-Struck out]- [Struck out->]
[ (B) QUANTITY IF PRIOR QUOTA- If a quota has been established under this subsection during the preceding 12 months, the quantity of the quota next established under this subsection shall be the smaller of 21 days of domestic mill consumption calculated under subparagraph (A) or the quantity required to increase the supply to 130 percent of the demand. ][<-Struck out]- [Struck out->]
[ (C) PREFERENTIAL TARIFF TREATMENT- The quantity under a limited global import quota shall be considered to be an in-quota quantity for purposes of-- ][<-Struck out]- [Struck out->]
[ (i) section 213(d) of the Caribbean Basin Economic Recovery Act (19 U.S.C. 2703(d)); ][<-Struck out]- [Struck out->]
[ (ii) section 204 of the Andean Trade Preference Act (19 U.S.C. 3203); ][<-Struck out]- [Struck out->]
[ (iii) section 503(d) of the Trade Act of 1974 (19 U.S.C. 2463(d)); and ][<-Struck out]- [Struck out->]
[ (iv) General Note 3(a)(iv) to the Harmonized Tariff Schedule. ][<-Struck out]- [Struck out->]
[ (D) DEFINITIONS- In this subsection: ][<-Struck out]- [Struck out->]
[ (i) SUPPLY- The term `supply' means, using the latest official data of the Bureau of the Census, the Department of Agriculture, and the Department of the Treasury-- ][<-Struck out]- [Struck out->]
[ (I) the carry-over of upland cotton at the beginning of the marketing year (adjusted to 480-pound bales) in which the quota is established; ][<-Struck out]- [Struck out->]
[ (II) production of the current crop; and ][<-Struck out]- [Struck out->]
[ (III) imports to the latest date available during the marketing year. ][<-Struck out]- [Struck out->]
[ (ii) DEMAND- The term `demand' means-- ][<-Struck out]- [Struck out->]
[ (I) the average seasonally adjusted annual rate of domestic mill consumption during the most recent 3 months for which data are available; and ][<-Struck out]- [Struck out->]
[ (II) the larger of-- ][<-Struck out] [Struck out->][ (aa) average exports of upland cotton during the preceding 6 marketing years; or ][<-Struck out]
[Struck out->][ (bb) cumulative exports of upland cotton plus outstanding export sales for the marketing year in which the quota is established. ][<-Struck out]
- [Struck out->]
[ (iii) LIMITED GLOBAL IMPORT QUOTA- The term `limited global import quota' means a quantity of imports that is not subject to the over-quota tariff rate of a tariff-rate quota. ][<-Struck out]- [Struck out->]
[ (E) QUOTA ENTRY PERIOD- When a quota is established under this subsection, cotton may be entered under the quota during the 90-day period beginning on the date the quota is established by the Secretary. ][<-Struck out]- [Struck out->]
[ (2) NO OVERLAP- Notwithstanding paragraph (1), a quota period may not be established that overlaps an existing quota period or a special quota period established under subsection (b). ][<-Struck out]-
SECTION 14 OF THE WATERSHED PROTECTION AND FLOOD PREVENTION ACT
SEC. 14. REHABILITATION OF STRUCTURAL MEASURES NEAR, AT, OR PAST THEIR EVALUATED LIFE EXPECTANCY.
- (a) * * *
* * * * * * *
- (h) FUNDING-
- (1) FUNDS OF COMMODITY CREDIT CORPORATION- In carrying out this section, of the funds of the Commodity Credit Corporation, the Secretary shall make available [Struck out->]
[ , to remain available until expended ][<-Struck out] --- (A) * * *
* * * * * * *
- (E) [Struck out->]
[ $65,000,000 ][<-Struck out] $50,000,000 for fiscal year 2007; and* * * * * * *
-
FOOD SECURITY ACT OF 1985
* * * * * * *
TITLE XII--CONSERVATION
* * * * * * *
SUBTITLE D--AGRICULTURAL RESOURCES CONSERVATION PROGRAM
* * * * * * *
CHAPTER 2--CONSERVATION SECURITY AND FARMLAND PROTECTION
SUBCHAPTER A--CONSERVATION SECURITY PROGRAM
* * * * * * *
SEC. 1238A. CONSERVATION SECURITY PROGRAM.
- (a) IN GENERAL- The Secretary shall establish and, for each of fiscal years 2003 through [Struck out->]
[ 2007 ][<-Struck out] 2011, carry out a conservation security program to assist producers of agricultural operations in promoting, as is applicable with respect to land to be enrolled in the program, conservation and improvement of the quality of soil, water, air, energy, plant and animal life, and any other conservation purposes, as determined by the Secretary.* * * * * * *
Subtitle E--Funding and Administration
SEC. 1241. COMMODITY CREDIT CORPORATION.
- (a) IN GENERAL- [Struck out->]
[ For ][<-Struck out] Except as otherwise provided in this subsection, for each of fiscal years 2002 through 2007, the Secretary shall use the funds, facilities, and authorities of the Commodity Credit Corporation to carry out the following programs under subtitle D (including the provision of technical assistance):- (1) * * *
* * * * * * *
- (3) The conservation security program under subchapter A of chapter 2, using [Struck out->]
[ not more than $6,037,000,000 for the period of fiscal years 2005 through 2014. ][<-Struck out] not more than--- (A) $2,213,000,000 for the period of fiscal years 2006 through 2010; and
- (B) $5,729,000,000 for the period of fiscal years 2006 through 2015.
* * * * * * *
-
SECTION 524 OF THE FEDERAL CROP INSURANCE ACT
SEC. 524. EDUCATION AND RISK MANAGEMENT ASSISTANCE.
- (a) * * *
- (b) AGRICULTURAL MANAGEMENT ASSISTANCE-
- (1) * * *
* * * * * * *
- (4) COMMODITY CREDIT CORPORATION-
- (A) * * *
- (B) FUNDING-
- (i) IN GENERAL- Except as provided in clauses (ii) and (iii), the Commodity Credit Corporation shall make available to carry out this subsection not less than $10,000,000 for each fiscal year, except fiscal years 2007 through 2010.
- (ii) EXCEPTION- For each of fiscal years 2003 through [Struck out->]
[ 2007 ][<-Struck out] 2006, the Commodity Credit Corporation shall make available to carry out this subsection $20,000,000.- (iii) CERTAIN USES- Of the amounts made available to carry out this subsection for each of fiscal years 2004 through [Struck out->]
[ 2007 ][<-Struck out] 2006 the Commodity Credit Corporation shall use not less than--- (I) * * *
* * * * * * *
-
SECTION 601 OF THE RURAL ELECTRIFICATION ACT OF 1936
SEC. 601. ACCESS TO BROADBAND TELECOMMUNICATIONS SERVICES IN RURAL AREAS.
- (a) * * *
* * * * * * *
- (j) FUNDING-
- (1) IN GENERAL- Notwithstanding any other provision of law, of the funds of the Commodity Credit Corporation, the Secretary shall make available to carry out this section--
- (A) $20,000,000 for each of fiscal years 2002 through 2005 [Struck out->]
[ , to remain available until expended ][<-Struck out] ; and- (B) $10,000,000 [Struck out->]
[ for each of fiscal years 2006 and 2007, to remain available until expended ][<-Struck out] for fiscal year 2006.* * * * * * *
-
SECTION 231 OF THE AGRICULTURAL RISK PROTECTION ACT OF 2000
SEC. 231. VALUE-ADDED AGRICULTURAL PRODUCT MARKET DEVELOPMENT GRANTS.
- (a) * * *
- (b) GRANT PROGRAM-
- (1) * * *
* * * * * * *
- (4) FUNDING- Not later than 30 days after the date of enactment of this paragraph, on October 1, 2002, and on each October 1 thereafter through [Struck out->]
[ October 1, 2006 ][<-Struck out] October 1, 2005, of the funds of the Commodity Credit Corporation, the Secretary shall make available to carry out this subsection $40,000,000 [Struck out->][ , to remain available until expended ][<-Struck out] .* * * * * * *
-
CONSOLIDATED FARM AND RURAL DEVELOPMENT ACT
* * * * * * *
TITLE III--AGRICULTURAL CREDIT
* * * * * * *
Subtitle H--Rural Business Investment Program
* * * * * * *
SEC. 384S. FUNDING.
- [Struck out->]
[ (a) IN GENERAL- ][<-Struck out] Notwithstanding any other provision of law, of the funds of the Commodity Credit Corporation, the Secretary shall make available--- (1) such sums as may be necessary through fiscal year 2006 for the cost of guaranteeing $280,000,000 of debentures under this subtitle; and
- (2) $44,000,000 to make grants under this subtitle.
- [Struck out->]
[ (b) AVAILABILITY OF FUNDS- Funds transferred under subsection (a) shall remain available until expended. ][<-Struck out]* * * * * * *
Subtitle I--Rural Strategic Investment Program
* * * * * * *
SEC. 385E. RURAL STRATEGIC INVESTMENT PROGRAM.
- (a) IN GENERAL- If the Secretary approves a national strategic investment plan submitted by the National Board, of the funds of the Commodity Credit Corporation, the Secretary shall transfer to the National Board $100,000,000 [Struck out->]
[ , to remain available until expended, ][<-Struck out] for the Board to use to make planning grants and innovation grants to Regional Boards and to otherwise carry out this subtitle.* * * * * * *
-
SECTION 401 OF THE AGRICULTURAL RESEARCH, EXTENSION, AND EDUCATION REFORM ACT OF 1998
SEC. 401. INITIATIVE FOR FUTURE AGRICULTURE AND FOOD SYSTEMS.
* * * * * * *
- (b) FUNDING-
- (1) * * *
* * * * * * *
- (3) OTHER FUNDING- Out of funds in the Commodity Credit Corporation, the Secretary shall transfer to the Account--
- (A) * * *
* * * * * * *
- (D) on October 1, [Struck out->]
[ 2006 ][<-Struck out] 2009, and each October 1 thereafter, $200,000,000.* * * * * * *
- (f) ADMINISTRATION-
- (1) * * *
* * * * * * *
- [Struck out->]
[ (6) AVAILABILITY OF FUNDS- Funds for grants under this section shall be available to the Secretary for obligation for a 2-year period. ][<-Struck out]- (6) AVAILABILITY OF FUNDS-
- (A) TWO-YEAR AVAILABILITY- Except as provided in subparagraph (B), funds for grants under this section shall be available to the Secretary for obligation for a 2-year period beginning on the date of the transfer of the funds under subsection (b).
- (B) EXCEPTION FOR FISCAL YEAR 2006 TRANSFER- In the case of the funds required to be transferred by subsection (b)(3)(C), the funds shall be available to the Secretary for obligation for the 1-year period beginning on October 1, 2005.
* * * * * * *
-
FOOD STAMP ACT OF 1977
* * * * * * *
ELIGIBLE HOUSEHOLDS
- SEC. 5. (a) Participation in the food stamp program shall be limited to those households whose incomes and other financial resources, held singly or in joint ownership, are determined to be a substantial limiting factor in permitting them to obtain a more nutritious diet. Notwithstanding any other provisions of this Act except sections 6(b), 6(d)(2), and 6(g) and section 3(i)(4), households in which each member [Struck out->]
[ receives benefits ][<-Struck out] in fiscal years 2006 through 2010 receives cash assistance, and in any other fiscal year receives benefits, under a State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.), supplemental security income benefits under title XVI of the Social Security Act, or aid to the aged, blind, or disabled under title I, X, XIV, or XVI of the Social Security Act, shall be eligible to participate in the food stamp program. Except for sections 6, 16(e)(1), and section 3(i)(4), households in which each member receives benefits under a State or local general assistance program that complies with standards established by the Secretary for ensuring that the program is based on income criteria comparable to or more restrictive than those under subsection (c)(2), and not limited to one-time emergency payments that cannot be provided for more than one consecutive month, shall be eligible to participate in the food stamp program. Assistance under this program shall be furnished to all eligible households who make application for such participation.* * * * * * *
- (j) Notwithstanding subsections (a) through (i), a State agency shall consider a household member who receives supplemental security income benefits under title XVI of the Social Security Act (42 U.S.C. 1382 et seq.), aid to the aged, blind, or disabled under title I, II, X, XIV, or XVI of such Act (42 U.S.C. 301 et seq.), or who [Struck out->]
[ receives benefits ][<-Struck out] in fiscal years 2006 through 2010 receives cash assistance, and in any other fiscal year receives benefits, under a State program funded under part A of title IV of the Act (42 U.S.C. 601 et seq.) to have satisfied the resource limitations prescribed under subsection (g).* * * * * * *
ADMINISTRATION
- SEC. 11. (a) * * *
* * * * * * *
- (t) GRANTS FOR SIMPLE APPLICATION AND ELIGIBILITY DETERMINATION SYSTEMS AND IMPROVED ACCESS TO BENEFITS-
- (1) IN GENERAL- For each of fiscal years 2003 through [Struck out->]
[ 2007 ][<-Struck out] 2011, the Secretary shall use not more than $5,000,000 of funds made available under section 18(a)(1) to make grants to pay 100 percent of the costs of eligible entities approved by the Secretary to carry out projects to develop and implement--- (A) * * *
* * * * * * *
ADMINISTRATIVE COST-SHARING AND QUALITY CONTROL
- SEC. 16. (a) * * *
* * * * * * *
- (h) FUNDING OF EMPLOYMENT AND TRAINING PROGRAMS-
- (1) IN GENERAL-
- (A) AMOUNTS- To carry out employment and training programs, the Secretary shall reserve for allocation to State agencies, to remain available until expended, from funds made available for each fiscal year under section 18(a)(1) the amount of--
- (i) * * *
* * * * * * *
- (vii) for each of fiscal years 2002 through [Struck out->]
[ 2007 ][<-Struck out] 2011, $90,000,000.* * * * * * *
- (E) ADDITIONAL ALLOCATIONS FOR STATES THAT ENSURE AVAILABILITY OF WORK OPPORTUNITIES-
- (i) IN GENERAL- In addition to the allocations under subparagraph (A), from funds made available under section 18(a)(1), the Secretary shall allocate not more than $20,000,000 for each of fiscal years 2002 through [Struck out->]
[ 2007 ][<-Struck out] 2011 to reimburse a State agency that is eligible under clause (ii) for the costs incurred in serving food stamp recipients who--- (I) * * *
* * * * * * *
- (k) REDUCTIONS IN PAYMENTS FOR ADMINISTRATIVE COSTS-
- (1) * * *
* * * * * * *
- (3) REDUCTION IN PAYMENT-
- (A) IN GENERAL- Notwithstanding any other provision of this section, effective for each of fiscal years 1999 through [Struck out->]
[ 2007 ][<-Struck out] 2011, the Secretary shall reduce, for each fiscal year, the amount paid under subsection (a) to each State by an amount equal to the amount determined for the food stamp program under paragraph (2)(B). The Secretary shall, to the extent practicable, make the reductions required by this paragraph on a quarterly basis.- (B) APPLICATION- If the Secretary of Health and Human Services does not make the determinations required by paragraph (2) by September 30, 1999--
- (i) * * *
- (ii) for each subsequent fiscal year through fiscal year [Struck out->]
[ 2007 ][<-Struck out] 2011, subparagraph (A) applies.* * * * * * *
RESEARCH, DEMONSTRATION, AND EVALUATIONS
- SEC. 17. (a) * * *
- (b)(1)(A) * * *
- (B) PROJECT REQUIREMENTS-
- (i) * * *
* * * * * * *
- (vi) CASH PAYMENT PILOT PROJECTS- Any pilot or experimental project implemented under this paragraph and operating as of October 1, 1981, involving the payment of the value of allotments in the form of cash to eligible households all of whose members are either age sixty-five or over or entitled to supplemental security income benefits under title XVI of the Social Security Act shall be continued through October 1, [Struck out->]
[ 2007 ][<-Struck out] 2011, if the State so requests.* * * * * * *
AUTHORIZATION FOR APPROPRIATIONS
- SEC. 18. (a)(1) To carry out this Act, there are authorized to be appropriated such sums as are necessary for each of the fiscal years 2003 through [Struck out->]
[ 2007 ][<-Struck out] 2011. Not to exceed one-fourth of 1 per centum of the previous year's appropriation is authorized in each such fiscal year to carry out the provisions of section 17 of this Act, subject to paragraph (3).* * * * * * *
SEC. 19. CONSOLIDATED BLOCK GRANTS FOR PUERTO RICO AND AMERICAN SAMOA.
- (a) PAYMENTS TO GOVERNMENTAL ENTITIES-
- (1) * * *
- (2) BLOCK GRANTS-
- (A) AMOUNT OF BLOCK GRANTS- From the sums appropriated under this Act, the Secretary shall, subject to this section, pay to governmental entities to pay the expenditures for nutrition assistance programs for needy persons as described in subparagraphs (B) and (C)--
- (i) for fiscal year 2003, $1,401,000,000; and
- (ii) for each of fiscal years 2004 through [Struck out->]
[ 2007 ][<-Struck out] 2011, the amount specified in clause (i), as adjusted by the percentage by which the thrifty food plan has been adjusted under section 3(o)(4) between June 30, 2002, and June 30 of the immediately preceding fiscal year.* * * * * * *
SEC. 27. AVAILABILITY OF COMMODITIES FOR THE EMERGENCY FOOD ASSISTANCE PROGRAM.
- (a) PURCHASE OF COMMODITIES- From amounts made available to carry out this Act, for each of fiscal years 2002 through [Struck out->]
[ 2007, ][<-Struck out] 2005 and for each of the fiscal years 2007 through 2011 the Secretary shall purchase $140,000,000, and for fiscal year 2006 the Secretary shall purchase $152,000,000, of a variety of nutritious and useful commodities of the types that the Secretary has the authority to acquire through the Commodity Credit Corporation or under section 32 of the Act entitled `An Act to amend the Agricultural Adjustment Act, and for other purposes', approved August 24, 1935 (7 U.S.C. 612c), and distribute the commodities to States for distribution in accordance with section 214 of the Emergency Food Assistance Act of 1983 (Public Law 98-8; 7 U.S.C. 612c note). Of the funds used to purchase commodities in accordance with this subsection for fiscal year 2006, $12,000,000 shall be used to purchase commodities for distribution to States that received a Presidential designation of a major disaster under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121-5206) as a result of Hurricane Katrina or Hurricane Rita and States contiguous to those States.* * * * * * *
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SECTION 402 OF THE PERSONAL RESPONSIBILITY AND WORK OPPORTUNITY RECONCILIATION ACT OF 1996
SEC. 402. LIMITED ELIGIBILITY OF QUALIFIED ALIENS FOR CERTAIN FEDERAL PROGRAMS.
- (a) LIMITED ELIGIBILITY FOR SPECIFIED FEDERAL PROGRAMS-
- (1) * * *
- (2) EXCEPTIONS-
- (A) * * *
* * * * * * *
- (L) FOOD STAMP EXCEPTION FOR CERTAIN QUALIFIED ALIENS- With respect to eligibility for benefits for the specified Federal program described in paragraph (3)(B), paragraph (1) shall not apply to any qualified alien who has resided in the United States with a status within the meaning of the term `qualified alien' for a period of [Struck out->]
[ 5 years or more ][<-Struck out] 7 years or more effective until September 30, 2010, and for a period of 5 years or more effective beginning on October 1, 2010, beginning on the date of the alien's entry into the United States.* * * * * * *
MINORITY VIEWS
The budget process this year has been a disaster from the start. We recognize the importance of having our fiscal house in order and the pressing need for balanced federal budgets. If the current budget process actually moved us in the direction of balanced budgets, perhaps this bill's intent would be better understood. Instead, the budget resolution actually increases the national debt more than if Congress did nothing. The Committee is being forced to amend the 2002 Farm Bill that has been fiscally responsible, saving $11 billion since 2002, and that those living in rural and agricultural communities believe is working well.
Despite the savings achieved by this popular law, we were directed to reduce Farm Bill funding at the worst possible time. Farm income is suffering as commodity prices have declined rapidly. Skyrocketing energy costs have squeezed profit margins into losses on the farm. Weather-related disasters including hurricanes, droughts and floods have shrunk harvests and dampened futures. Many farmers have told us that given the rising price of fuel and other inputs and the low prices for their products, they probably won't be able to plant in the coming year.
This budget bill suffers from missed opportunities and misplaced priorities. The premise that agricultural programs should suffer in this budget process that increases the deficit is flawed, and the approach taken to make these cuts in this bill is unacceptable. Below, we have listed many of the major objections to the bill, which passed with no Democratic support.
DISASTER ASSISTANCE
This Committee has shirked its responsibility to provide emergency food and farm disaster assistance to areas ravaged by hurricane, flood, drought and other damaging natural conditions across the nation. It defeated, on a party line vote, an amendment that would have provided nationwide relief that is similar to what we have provided in previous years when disasters have affected our communities. Farmers and ranchers nationwide must now wait until Congress considers a separate proposal to provide assistance. This hesitation by the Committee, when presented with the opportunity to act quickly, underscores the need for a permanent disaster program so that producers and their lenders will have assurances that their needs will be met if disaster strikes.
RURAL DEVELOPMENT
Out-migration has weakened the rural fabric and has left our communities and their hospitals, churches and schools more dependent on farmers' and ranchers' economic prospects. Rural areas are turning to USDA's rural development programs to support essential public facilities and services, provide economic development resources, and offer technical assistance and information in rural communities. However, this budget measure reduces funding for many of these programs. For example, it eliminates all funding for first responder training for rural firefighter emergency personnel on critical topics, such as how to respond to hazardous materials and bioagents in rural areas. The changes in this budget proposal will limit these programs and hurt rural communities that are already struggling to maintain their local infrastructure, protect its citizens, and provide jobs to keep young people living in their communities.
ENERGY
This budget will cut baseline funding for energy programs, as producers and small businesses are facing some of the highest energy prices that have ever been experienced. Fuel costs have jumped 21%, while the price of other inputs such as fertilizer have risen 15%. High prices at the gasoline pump are particularly painful for Americans living in rural communities because they often must drive long distances every day to get to work, drop their kids off at school, access healthcare and pick up essentials such as prescription drugs. Americans in rural communities should not have to hold their breath as they fill up their gas tanks, wondering if they can afford a trip to the grocery store after facing higher prices at the pump.
CONSERVATION
Right now, the USDA has to turn away three-fourths of farmers who want to participate in conservation programs, and now is not the time to limit these programs further. When Congress passed the 2002 Farm Bill, compromises were made, and a balance between our responsibilities to commodity, rural development, nutrition, energy and conservation programs was reached. The proposed changes to conservation programs are disproportionately high, which will make it harder to negotiate a good faith agreement in the next farm bill.
NUTRITION PROGRAMS
As we have seen in the aftermath of this year's hurricanes, the most immediate and pressing needs of those who have lost everything are for food and shelter. It is the wrong message at the wrong time to change the Food Stamp program, especially when that program was the one example of excellence in the federal government's response to the Gulf region hurricanes.
Recognizing this, the Committee did include reimbursement to states for the full cost of certain administrative expenses for disaster Food Stamp benefits issued after Hurricanes Katrina and Rita. Since the hurricanes, about 1.1 million households have received disaster-related nutrition benefits. The legislation also provides an additional $12 million in fiscal year 2006 for food to be distributed to states that were under a major disaster declaration as a result of Hurricanes Katrina and Rita and to adjacent states.
However, despite the critical needs that those disaster provisions addressed, the bill also makes significant reductions to other parts of the Food Stamp program. One provision would eliminate the eligibility of about 225,000 people who would otherwise qualify for Food Stamps because they are eligible for non-cash benefits, such as job placement services, under the Temporary Assistance for Needy Families (TANF) program. In addition, about 40,000 school-age children in these affected households may lose their eligibility for free school meals.
Another provision in the bill would increase the waiting period for legal permanent residents to receive Food Stamps from five years to seven years. This change would go into effect next year, making about 70,000 people ineligible to receive more benefits.
The budget process is not the place for a debate about Food Stamps. For now, the fact remains--that demand for nutrition programs in our nation has never been greater. On the day of the Committee's markup, USDA's Economic Research Service released a timely report, Household Food Security in the United States, 2004. It noted, `The prevalence of food insecurity rose from 11.2 percent of households in 2003 to 11.9 percent in 2004 and the prevalence of food insecurity with hunger rose from 3.5 percent to 3.9 percent.' As the need for nutrition programs continues to grow, it is not right to shortchange these programs through the budget process.
IMPACT ON BASELINE
As a practical matter, several provisions of this reconciliation proposal will create problems when the Committee seeks the budget resources necessary to fund the next farm bill.
The Congressional Budget Office (CBO) has provided two cost estimates for the section of the legislation that reduces direct payments to producers, one is according to CBO's normal scorekeeping methodology and the other is directed scorekeeping by the House Committee on the Budget.
Specifically, the provision that reduces direct payments is applied to the 2006 through 2009 crop years, but not to the 2010 crop year. The CBO estimate of the budget effect of this provision extends through fiscal year 2015, which would reduce the long-term baseline for the program. So, the Budget Committee's directed scoring instructs CBO to assume that the one percent reduction in direct payments ends with the 2009 crop year, resulting in a reduction of $211 million over the FY2006-10 and the FY2006-15 periods.
The net effect of this budget scorekeeping gimmickry is that the Agriculture Committee is now beholden to the Budget Committee and its non-binding `promise' to restore nearly $300 million in funding for agriculture for the next farm bill.
Similarly, we are concerned that the effect of the language passed by the Committee is to eliminate $734 million of funding that is available for the following sections of the 2002 Farm Bill: Section 2501 (Ag Management Assistance), Section 6029 (Rural Business Investment), Section 6030 (Rural Strategic Investment Grants), Section 6103 (Broadband Loans), Section 6401 (Value-Added Grants), Section 6405 (Rural Firefighters), and Section 2505 (Small Watershed Rehabilitation Program). The bill's provisions will eliminate budget resources for these programs in the next farm bill.
The action by the Committee has left us shortchanged in funding for the commodity, conservation, rural development and energy titles of the next farm bill by more than $1 billion, and it has also taken away the Committee's flexibility to use these funds for other farm bill priorities.
OTHER CUTS TO AGRICULTURE PROGRAMS
The 2002 Farm Bill has been under attack ever since its passage. Due to the flawed budget scheme enacted by the majority, the Appropriations Committee has been forced to cut mandatory spending from the 2002 Farm Bill by $3.5 billion over the FY2004-2006 period. This action has been necessary to hide the fact that they have shortchanged the needs of American agriculture and the rural areas we represent. This comes at a time when we face nearly a $4 billion backlog in conservation programs alone and all of the rural development and energy title programs are also oversubscribed.
An amendment that would have restored a portion of the $1.5 billion in cuts that the appropriators made to farm bill programs in fiscal year 2006 was defeated on a party-line vote, so the promises that we made in the 2002 Farm Bill were once again ignored.
OTHER CONSIDERATIONS
Agriculture Committee Members need to remember that any changes that we make to the Farm Bill now may hurt us later. The Farm Bureau pointed this out, saying, `If we take cuts in agricultural programs now, we're going to decrease the leverage that our (trade) negotiators have to make sure that we're playing in a fairer trading world.'
Despite this, Agriculture Secretary Johanns has suggested that agriculture programs must accept this budget process, as he has told farmers across the country that we must tighten our belts and make sacrifices. He noted that farmers want to do their part to help the deficit.
While the Secretary's remarks are misleading, since this budget process doesn't help the deficit, farmers have always done their part in deficit reduction. And, if a balanced budget and deficit reduction are the goals, we should put aside this entire budget. In fact, according to the Congressional Budget Office's 2005 Baseline Projections, the deficit should decline by more than 50 percent from 2004 to 2009 if we do nothing at all. Instead, this budget process will increase the deficit by $167 billion over five years.
This budget process suffers from bad timing and bad priorities. It will have devastating impacts on rural Americans, underfunding a wide range of programs that are critical to sustaining rural communities. This bill doesn't just reopen the Farm Bill--it dismantles the promise that Congress and the President made with farmers and rural Americans. We strongly oppose this budget process and will continue to fight to protect the promise made to rural America in the 2002 Farm Bill.
Note: The attached tables, provided by Congressional Research Service, show the provided and actual mandatory funding under the Farm Security and Rural Investment Act of 2002 for conservation, rural development and energy programs as modified by appropriations acts.
Collin C. Peterson.
Dennis Cardoza.
Jim Marshall.
G.K. Butterfield.
Charlie Melancon.
John T. Salazar.
Earl Pomeroy.
Rick Larsen.
Ben Chandler.
Tim Holden.
Bob Etheridge.
Ed Case.
David Scott.
Stephanie Herseth.
Henry Cuellar.
Jim Costa.
Leonard L. Boswell.
Lincoln Davis.
Mike McIntyre.
Hon. JIM NUSSLE,
Chairman, Committee on the Budget,
House of Representatives, Washington, DC.
DEAR CHAIRMAN NUSSLE: The House Education & the Workforce Committee has met its instruction to achieve net savings of $18.1 billion as part of the budget reconciliation process, generating savings on behalf of taxpayers and making funds available for critical education assistance. We've done so while achieving our policy goals of expanding college access for low- and middle-income students and strengthening our worker pension system.
I'm proud that our Committee put forward a fiscally responsible package of reforms that reduce program waste and inefficiency and place higher education and pension systems on more stable financial foundations to ensure their long-term viability for students, workers, retirees, and taxpayers. The Committee's reconciliation package also includes funds targeted to provide education relief to the victims of Hurricanes Katrina and Rita.
Pursuant to the reconciliation directives contained in the Conference Report on House Concurrent Resolution 95, the budget resolution for fiscal year 2006, I am pleased to transmit reconciliation recommendations for programs within the jurisdiction of the Committee. The recommendations contained in the first part of this transmission regarding welfare programs were considered and approved in Full Committee markup on October 19 and 20, 2005. The recommendations contained in the second part amending ERISA regarding pension protection were considered and approved on October 26, 2005. The recommendations for the third part amending the Higher Education Act were considered and approved on October 26, 2005.
I am also including the `Family Education Reimbursement Act of 2005' which was considered by the Committee on October 27, 2005, and not reported to the Committee on the Budget. Although the bill was not reported, our Committee has been instructed to provide education hurricane relief, and I strongly believe this is the best policy for providing educational services on behalf of schools and families in response to Hurricanes Katrina and Rita. Enclosed please also find additional material on this proposal including summary information and an editorial, `Education End-Run' (Wall Street Journal, October 27, 2005), submitted for the record during Committee proceedings on the measure.
Pursuant to your letter of June 24, 2005 and subsequent letter of September 14, 2005, a copy of the legislation, report, including the Committee Views together with Summary, Section by Section Analysis and other items necessary to comply with House Rules, and Minority Views are enclosed. An estimate prepared by the Congressional Budget Office and documents prepared by the Office of Legislative Counsel, including the Ramseyer, will be forthcoming. I hope these proposals will be of assistance to your committee in meeting the budget reconciliation targets. If you have questions or comments, please do not hesitate to call me.
Sincerely,
John A. Boehner,
Chairman.
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Hon. JIM NUSSLE,
Chairman, Committee on the Budget,
House of Representatives, Washington, DC.
DEAR CHAIRMAN NUSSLE: Pursuant to the reconciliation directives contained in the Conference Report on House Concurrent Resolution 95, enclosed is a letter from the Director of the Congressional Budget Office regarding this Committee's reconciliation recommendations for fiscal year 2006. You will also find enclosed Minority Views of the same on each of the three parts reported from the Committee to the Committee on the Budget. Finally, enclosed is a letter to you from Reps. Tom Osborne, Judy Biggert, and Todd Platts regarding the Family Education Reimbursement Act.
Thank you for your attention to this matter.
Sincerely,
John A. Boehner,
Chairman.
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INTRODUCTION
In the 109th Congress, the Education & the Workforce Committee has focused on an ambitious agenda aimed at enhancing security, freedom, and prosperity for American families in a changing economy. The issues addressed by the Committee this year are those that touch the daily lives of every American, from preschool to retirement. From expanding college access for low- and middle-income students to reforming outdated pension laws to protect taxpayers and workers, the Committee has worked with Republicans and Democrats, as well as the Bush Administration, to address issues critical for the future of the nation.
Just as important, the Committee has focused on examining very closely how taxpayers' money is spent. Congress has a responsibility to ensure that taxpayers' money is spent wisely and to cut wasteful spending on programs that have outlived their usefulness or failed to fulfill their promise. Indeed, out-of-control federal spending is a threat to all Americans, from students and families to workers and retirees.
In early 2005, the House and Senate reached a budget agreement to help curb the runaway cost of government. Making fiscal discipline a top priority has taken on an even greater importance this year because of the devastation caused by Hurricanes Katrina and Rita in the Gulf Coast. Congress should cut federal spending to help offset the ongoing hurricane recovery and rebuilding effort, and the Committee has worked to help put forward a responsible budget that demonstrates Congress's resolve to stop out-of-control spending.
As part of that effort, Education & the Workforce Committee Chairman John Boehner (R-OH), along with other Committee Republicans, on October 7 introduced the Setting Priorities in Spending Act (H.R. 4018) to repeal and eliminate 14 federal programs that have proven inefficient, duplicative, or simply unnecessary--an important first step in this process. These programs cost taxpayers approximately $247 million last year alone.
The bill supports the efforts of House Republicans and appropriators to cut discretionary spending as part of the Labor/HHS/Education appropriations bill. The House passed its version of the appropriations bill on June 10, 2005, and it eliminated funding for each of the 14 programs targeted for repeal in the Setting Priorities in Spending Act.
Despite their dubious merits, Congress has continued to fund these programs year after year, and it's time to eliminate them once and for all. Too many other federal programs are funded year after year regardless of whether they're fulfilling their purpose. President Bush was right when he said Congress should cut spending to help pay for hurricane relief, and the House and Senate must show their resolve and make the difficult choices that are in the best interest of not just Gulf Coast residents, but the American taxpayers as well.
As part of the budget process, the Education & the Workforce Committee has been tasked with finding $18.1 billion in savings from the mandatory spending programs within the Committee's jurisdiction. Chairman Boehner has consistently said the Committee intends to be part of the solution, not part of the problem, and that it would act to help put forward a responsible budget that cuts wasteful spending and makes federal programs more efficient and effective.
As part of the reconciliation process, the Education & the Workforce Committee has developed proposals on both higher education and on pensions that will generate savings to the federal government and provide the Pension Benefit Guaranty Corporation with additional resources. Both of these proposals will make federal programs more efficient and more effective on behalf of students, families, workers, retirees, and American taxpayers.
REFORMING AND STRENGTHENING THE HIGHER EDUCATION ACT
Since 1965, the federal government has invested hundreds of billions of dollars in higher education on the premise that all students, regardless of financial circumstance, should have the opportunity to pursue postsecondary education. Four decades later, taxpayers are spending more than ever before on higher education, yet the goal of higher education access remains elusive to far too many American students.
There is no question that an investment in higher education pays dividends for the future. An educated workforce drives economic growth. Scientific breakthroughs keep America on the cutting edge of technological advancement. Children whose parents are college educated are more likely to pursue postsecondary education themselves, continuing the cycle of success and prosperity. Yet despite the clear imperative for an effective and efficient investment in higher education, billions of taxpayer dollars are being wasted through inefficiency and unwise public policy.
After more than a decade of tuition increases that have far outpaced the rate of inflation and growth in family incomes, it has become clear that blindly increasing federal student aid is doing nothing to solve the challenge of skyrocketing college costs.
Indeed, the vast increases in federal student aid have coincided with these tuition increases, calling into question whether the current federal investments in higher education may actually be a contributing factor to the college cost explosion that is squeezing the budgets of hard working low-and middle-income American families.
Taxpayers are carrying a tremendous higher education cost burden on many fronts. In addition to the more than $70 billion in direct student aid paid for by taxpayers in FY 2005, American families are subsidizing aid to institutions, research, and numerous federal programs outside the Higher Education Act that award funding to colleges and universities. Moreover, higher education consumes a significant portion of the taxes paid at the state level, and even after all of this, families with children enrolled in college are paying more than ever before for their own tuition bills. The Committee believes the federal investment in higher education will continue to be a critical component of the future success of our nation only so long as it is made wisely and in the best interests of students, families, and taxpayers.
To that end, the Committee has developed comprehensive reforms that will expand college access for low- and middle-income students while simultaneously generating savings for taxpayers by eliminating program waste and inefficiency, trimming excess subsidies paid to lenders, and placing the aid programs on a more stable financial foundation to ensure their long-term viability and success for future generations of American students.
Specifically, the proposal includes a number of reforms to generate savings, including putting an end to the practices that have allowed some lenders to profit from excess subsidies on government-backed student loans, providing student loan borrowers a choice between a variable and a fixed interest rate when borrowers consolidate multiple loans into a single monthly payment, strengthening risk-sharing within the loan programs on behalf of taxpayers, implementing a financially sound interest rate structure, and encouraging more efficient and effective default prevention and protection systems.
These reforms are accompanied by proposals to strengthen student aid programs and expand student benefits. The proposal would reduce student loan fees, expand student loan borrowing opportunities, protect borrowers' credit, ease the financial aid process, and provide greater flexibility within the loan programs.
The Congressional Budget Office estimates these reforms would save $14.5 billion over five years, eliminating waste on behalf of taxpayers while strengthening and expanding student benefits. Taken together, these reforms will help place the federal student aid programs on a strong financial foundation to ensure their stability now and into the future, protecting both students and taxpayers.
RESPONSIBLE PBGC PREMIUMS
After nearly a dozen hearings over two years on the future of the defined benefit pension system, it became clear to the Committee that a piecemeal approach to reform would not improve the overall health of the defined benefit pension system. Rather, a broader effort that addresses all outdated federal pension rules in a comprehensive package is the most responsible and effective way to ensure workers and retirees can count on their pension benefits and help put the Pension Benefit Guaranty Corporation (PBGC) on more sound financial footing.
On June 30, 2005, the Committee passed the Pension Protection Act (H.R. 2830), comprehensive reform legislation that would strengthen the defined benefit pension system and protect the interests of workers, retirees, and taxpayers. Not only would the Pension Protection Act put in place new funding requirements to ensure employers properly fund their plans and provide workers with meaningful disclosure about the financial status of their pension plans, but it also would help to protect taxpayers from a possible multi-billion dollar bailout of the PBGC.
When worker pension plans are terminated and the financial burden is placed on the federal government, workers, retirees, and taxpayers all stand to lose. And as more companies file for bankruptcy and increase the chance of additional employee pension plans being turned over to the PBGC, it has never been more apparent that the health of the nation's worker pension system is a bottom line concern for American taxpayers.
Because of more and more pension plan terminations, the PBGC now has an operating deficit that exceeds $23 billion, making the prospect of a taxpayer bailout of the PBGC loom larger with each plan it takes over. This fact has been taken into serious consideration as the Committee works to meet its budget reconciliation instruction.
Two important steps are essential to improving the financial condition of the PBGC and ensuring its long-term solvency: (1) reforming the funding rules to ensure pensions are more adequately and consistently funded; and (2) increasing premiums paid by employers to the PBGC in a responsible fashion.
It is important to note that ensuring employers fund their plans properly will prove more helpful to the overall defined benefit system than additional premiums paid to the PBGC. Quite simply, raising premiums alone will not solve the problem. However, Congress has not raised premiums since 1991, so a reasonable increase is both prudent and necessary. These premiums are the chief source of funding for the agency. No tax dollars are used to keep the PBGC afloat. Increasing premiums would help strengthen the PBGC's financial condition in the short-term.
The Committee's proposal to put the PBGC on a more secure financial foundation is two-pronged. First, it would phase in responsible increases in the flat-rate premiums paid to the agency each year. Second, it would establish employer-paid termination premiums.
If Congress passes comprehensive pension reform that is signed into law by President Bush before the end of the year, those comprehensive reforms would take precedence. It is the strong view of the Committee that the benefits of comprehensive reform, which include proposals to strengthen the PBGC, far outweigh the benefits of increases in premiums alone.
The reconciliation proposal would increase premiums from $19 to $30 annually beginning in 2006 and give the PBGC the discretion to increase these premiums up to 20 percent per year thereafter. Should the PBGC prove it is necessary to raise premiums and exercise this discretion, the proposal reserves for Congress the right to disapprove the increase in a straight up-or-down vote each year. The Congressional Budget Office estimates this plan would provide the PBGC an additional $5.2 billion in additional financial resources over five years.
Next, the Committee proposes to establish a $1,250 per participant premium on companies that have gone through bankruptcy and terminated their pension plans. These termination premiums would be paid for three consecutive years once a company emerges from bankruptcy. The Congressional Budget Office estimates this plan would provide the PBGC an additional $1 billion in financial resources over five years.
Although the PBGC has enough resources to make benefit payments for the near future, the long-term outlook for the agency is anything but certain. With some $450 billion in pension plan underfunding among financially weak companies looming on the horizon, the PBGC's debt could deepen even further. The Committee's action on employer premiums is only a small part of the larger effort to place the traditional pension system on more solid ground--but it is nonetheless an important one, for workers, retirees, and taxpayers alike.
Hon. JOHN A. BOEHNER,
Chairman, Committee on Education and the Workforce,
House of Representatives, Washington, DC.
DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for the reconciliation recommendations of the House Committee on Education and the Workforce.
CBO understands that the Committee on the Budget will be responsible for interpreting how these proposals compare with the reconciliation instructions in the budget resolution.
If you wish further details on this estimate, we will be pleased to provide them. The CBO staff contacts are Sheila Dacey (for TANF and Child Care), Deborah Kalcevic (for education), and Geoffrey Gerhardt (for pensions).
Sincerely,
DOUGLAS HOLTZ-EAKIN, DIRECTOR.
Enclosure.
Reconciliation recommendations of the House Committee on Education and the Workforce
Summary: The legislation would make numerous changes to the Temporary Assistance for Needy Families (TANF) program, a child care grant program, and federal higher education programs, as well as changes to the premiums charged by the Pension Benefit Guaranty Corporation (PBGC). CBO estimates that enacting the legislation would reduce federal outlays by $7.7 billion in 2006, $20.4 billion over the 2006-2010 period, and $43.7 billion over the 2006-2015 period.
Changes in higher education programs would account for the largest portion of the savings ($14.3 billion over the first five years and $20.5 billion over the 10-year period, mostly as the result of diminished subsidy costs for the student loan programs). CBO estimates that the net savings from the changes in PBGC premiums and reimbursements, which are recorded as offsets to spending, would be $6.2 billion over the 2006-2010 period and $23.3 billion over 2006-2015 period.
The legislation also would authorize appropriations for child care, a new fatherhood grant program, administrative activities related to student aid, and loan forgiveness for certain types of workers. Subject to appropriation of the specified amounts, CBO estimates that spending for the first three activities would total $14.7 billion over the 2006-2010 period. CBO has not completed an estimate of the costs of expanding the loan-forgiveness program.
The legislation contains no intergovernmental mandates as defined by the Unfunded Mandates Reform Act (UMRA); any costs to state, local, or tribal governments would result from complying with conditions of federal assistance. The legislation would significantly affect the way states administer the TANF program, but because of the flexibility in the program as a whole, the new requirements would not be intergovernmental mandates as defined in UMRA.
Subtitle C contains private-sector mandates on single-employer sponsors of defined-benefit pension plans. CBO estimates that the direct cost of those new requirements would exceed the annual threshold specified in UMRA ($123 million in 2005, adjusted annually for inflation) in each of the first five years the mandates would be effective. Subtitles A and B do not contain any private-sector mandates as defined in UMRA.
Major provisions: Subtitle A would establish new standards for the participation of TANF recipients in work activities and reauthorize funding for a child care grant program.
Provisions addressing the higher education programs (in subtitle B, part 1) that have significant budgetary effects include:
- Changing the formulas for calculating borrower interest rates and lender yields;
- Eliminating the separate formula for lender yields for loans supported with certain tax-exempt funding;
- Changing the insurance provided to lenders and the fees charged by lenders;
- Reducing borrower origination fees and requiring guaranty agencies to pay the government a 1 percent insurance premium that is often not required under current law;
- Eliminating mandatory funding for federal administrative costs for financial assistance programs;
- Increasing the loan limits for first-year, second-year, and graduate students;
- Cancelling the repayment of student loans for certain types of teachers; and
- Reducing the share of collections on defaulted loans that guaranty agencies would retain.
Part 2 of subtitle B would extend certain forms of relief to students and schools affected by Hurricanes Katrina and Rita.
The major provisions affecting the PBGC (subtitle C) would increase premiums paid by sponsors of defined-benefit, single-employer pension plans, and would impose a new charge on former plan sponsors if the PBGC takes over their pension plans as a result of bankruptcy or forced termination.
Estimated cost to the Federal Government: The estimated impact of the legislation on direct spending is shown in Table 1. The costs and savings from this legislation would fall within budget functions 500 (education, training, and social services) and 600 (income security).
TABLE 1- DIRECT SPENDING EFFECTS OF THE RECONCILIATION RECOMMENDATIONS OF THE HOUSE COMMITTEE ON EDUCATION AND THE WORKFORCE
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By fiscal year, in millions of dollars--
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2006-2010 2006-2015
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Subtitle B: Higher Education:
Part 1--Amendments to Higher Education Act of 1965:
Estimated Budget Authority -8,230 -2,580 -1,980 -1,600 -1,245 -1,115 -1,175 -1,240 -1,305 -1,330 -15,635 -21,800
Estimated Outlays -7,525 -2,100 -1,910 -1,605 -1,330 -1,155 -1,165 -1,230 -1,290 -1,355 -14,470 -20,665
Part 2--Higher Education Relief:
Estimated Budget Authority 210 0 0 0 0 0 0 0 0 0 210 210
Estimated Outlays 210 0 0 0 0 0 0 0 0 0 210 210
Subtotal, Subtitle B:
Estimated Budget Authority -8,020 -2,580 -1,980 -1,600 -1,245 -1,115 -1,175 -1,240 -1,305 -1,330 -15,425 -21,590
Estimated Outlays -7,315 -2,100 -1,910 -1,605 -1,330 -1,155 -1,165 -1,230 -1,290 -1,355 -14,260 -20,455
Subtitle C: Pension Benefit Guaranty Corporation Premiums:
Estimated Budget Authority 0 0 0 0 0 0 0 0 0 0 0 0
Estimated Outlays -363 -729 -1,186 -1,678 -2,206 -2,837 -3,641 -3,585 -2,814 -4,214 -6,162 -23,252
Total Changes:
Estimated Budget Authority -8,020 -2,580 -1,980 -1,600 -1,245 -1,115 -1,175 -1,240 -1,305 -1,330 -15,425 -21,590
Estimated Outlays -7,678 -2,829 -3,096 -3,283 -3,536 -3,992 -4,806 -4,815 -4,104 -5,569 -20,422 -43,707
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Basis of estimate: For this estimate, CBO assumes the legislation will be enacted in December 2005.
Subtitle A: TANF and child care (direct spending effects)
Section 102 would require states to have an increasing percentage of TANF recipients participate in work activities while receiving cash assistance. It would maintain current penalties for the failure to meet those requirements. Those penalties can total up to 5 percent of the TANF block grant amount for the first failure to meet work requirements and increase with each subsequent failure. Under current law, funding for TANF block grants expires on December 31, 2005; those grants are assumed to be extended in the baseline, pursuant to the Balanced Budget and Emergency Deficit Control Act.) CBO expects that states would generally be able to either meet the requirements or avoid them by moving families to separate state programs or by some other means. Therefore, we estimate that any penalties for failing to meet the new requirements would total less than $500,000 annually. (The effects of this subtitle on discretionary spending are discussed later in this estimate.)
Subtitle B: Higher education (direct spending effects)
Subtitle B contains some provisions that would reduce direct spending and others that would increase costs. On net, these changes would reduce outlays by $7.3 billion in 2006, $14.3 billion during the 2006-2010 period, and $20.5 billion over the 2006-2015 period. Most of those savings represent estimated changes in the subsidy costs of student loans, calculated on a present value basis. (Subtitle B would also affect discretionary spending, but CBO has not completed an estimate of the potential discretionary costs of implementing this subtitle.)
Major Provisions Reducing Spending. Subtitle B would make changes to the government's student loan programs, affecting payments to lenders and guaranty agencies, fees paid by lenders, and mandatory funding for administrative costs, that would reduce spending significantly. These reductions would total $7.9 billion in 2006, $18.4 billion over the 2006-2010 period, and $33.6 billion over the 2006-2015 period (see Table 2).
TABLE 2- DIRECT SPENDING EFFECTS OF SUBTITLE B, PART 1: AMENDMENTS TO THE HIGHER EDUCATION ACT
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By fiscal year, in millions of dollars--
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2006-2010 2006-2015
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Major Provisions Reducing Spending:
Changes in Borrower Interest Rates and Lender Yields:
Estimated Budget Authority -6,490 -1,580 -1,495 -1,460 -1,485 -1,510 -1,555 -1,600 -1,635 -1,675 -12,510 -20,485
Estimated Outlays -5,925 -1,330 -1,340 -1,290 -1,295 -1,320 -1,355 -1,390 -1,425 -1,470 -11,180 -18,140
Changes to Certain Loans Financed with Tax-Exempt Bonds:
Estimated Budget Authority -980 -265 -265 -270 -270 -275 -280 -290 -290 -290 -2,050 -3,475
Estimated Outlays -850 -235 -235 -235 -240 -245 -245 -250 -255 -265 -1,795 -3,055
Changes in Lender Fees:
Estimated Budget Authority -610 -355 -375 -395 -410 -430 -445 -465 -485 -495 -2,145 -4,465
Estimated Outlays -520 -275 -325 -345 -360 -375 -390 -405 -425 -445 -1,825 -3,865
Changes in Lender Insurance:
Estimated Budget Authority -425 -145 -150 -160 -165 -170 -180 -185 -195 -200 -1,045 -1,975
Estimated Outlays -385 -115 -130 -140 -145 -150 -155 -160 -170 -175 -915 -1,725
Changes in Mandatory Administrative Costs:
Estimated Budget Authority -13 -646 -665 -684 -705 -724 -744 -766 -789 -812 -2,713 -6,548
Estimated Outlays 17 -345 -549 -640 -689 -709 -730 -750 -773 -795 -2,206 -5,963
Changes in Guaranty Agencies' Share of Collections:
Estimated Budget Authority -300 -60 -65 -65 -70 -70 -75 -80 -80 -80 -560 -945
Estimated Outlays -270 -50 -55 -60 -60 -60 -65 -70 -70 -70 -495 -830
Subtotal:
Estimated Budget Authority -8,818 -3,051 -3,015 -3034 -3,105 -3,179 -3,279 -3,386 -3,474 -3,552 -21,023 -37,893
Estimated Outlays -7,933 -2,350 -2,634 -2,710 -2,789 -2,859 -2,940 -3,025 -3,118 -3,220 -18,416 -33,578
Major Provisions Increasing Spending:
Changes in Borrower Origination Fees and Insurance Premiums:
Estimated Budget Authority -10 265 685 1,045 1,420 1,590 1,610 1,625 1,635 1,660 3,425 11,545
Estimated Outlays -90 70 450 750 1,070 1,275 1,335 1,345 1,350 1,360 2,250 8,915
Increased Loan Limits:
Estimated Budget Authority 0 315 540 555 580 600 620 640 660 685 1,990 5,795
Estimated Outlays 0 185 410 485 505 525 540 560 580 595 1,585 4,385
Subtotal:
Estimated Budget Authority 10 580 1,225 1,600 2,000 2,190 2,230 2,265 2,295 2,345 5,415 16,740
Estimated Outlays -90 255 860 1,235 1,575 1,800 1,875 1,905 1,930 1,955 3,835 13,300
Other Provisions With Measurable Effects:
Estimated Budget Authority 245 74 31 36 51 64 66 71 66 71 437 775
Estimated Outlays 192 79 56 31 51 64 69 69 69 74 409 754
Interaction Effects:
Estimated Budget Authority 333 -183 -221 -202 -191 -190 -192 -190 -192 -194 -464 -1,422
Estimated Outlays 306 -84 -192 -161 -167 -160 -169 -179 -171 -164 -298 -1,141
Total Changes:
Estimated Budget Authority -8,230 -2,580 -1,980 -1,600 -1,245 -1,115 -1,175 -1,240 -1,305 -1,330 -15,635 -21,800
Estimated Outlays -7,525 -2,100 -1,910 -1,605 -1,330 -1,155 -1,165 -1,230 -1,296 -1,355 -14,470 -20,665
Memorandum: Baseline Spending for Student Loans:
Estimated Budget Authority 8,713 8,937 3,965 9,268 9,467 9,703 9,932 10,149 10,360 10,613 45,350 96,107
Estimated Outlays 6,482 7,297 7,443 7,760 7,991 8,484 8,740 8,979 9,169 9,363 36,973 81,708
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Borrower Interest Rate and Lender-Yield Formulas. The legislation would change many of the formulas used to compute what borrowers owe to lenders and what lenders receive from or pay the government under the guaranteed loan program. (The following table summarizes the current-law formulas and the proposed changes.) Borrower rates on new student and parent loans are scheduled to switch from a variable-rate formula to a fixed rate (6.8 percent for students and 7.9 percent for parents) in July 2006; the legislation would eliminate that change and continue the current variable-rate formulas. The rates on consolidated loans would change from a fixed rate based on the weighted average of the loans being consolidated, rounded up to the nearest one-eighth percent. Instead, the borrower would be able to choose between a variable rate (91-day Treasury bill rate plus 2.3 percentage points for students, or plus 3.1 percentage points for parents) and a fixed rate (set at the 91-day Treasury bill rate plus 3.3 percentage points for students, or plus 4.1 percentage points for parents). The borrowers of consolidated loans also would be charged a new origination fee of 1.0 percent. The rates on all student and parent loans would be capped at 8.25 percent and 9.0 percent, respectively.
The lender-yield formulas for student and parent loans would continue to be based on a variable-rate formula, but the legislation would no longer allow the borrowers' rates to serve as the minimum for the lenders' yield. Under current law, lenders receive the higher of the lender-yield formula or the rate paid by borrowers, but the legislation would require lenders to rebate the difference between the two rates to the government when the borrower rate is higher.
TABLE 3- COMPARISON OF FORMULAS FOR INTEREST RATES AND LENDER YIELDS UNDER CURRENT LAW AND SUBTITLE B
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Type of Loan Current law: Loans originating after December 1999 and before July 2006 Loans originating after June 2006
Current Law Proposed
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BORROWER INTEREST RATES
Student loans:
In-school, grace, or deferment Variable rate set annually at 91-day Treasury bill plus 1.7 percentage points (8.25 percent cap) Fixed rate at 6.8 percent Variable rate set annually at 91-day Treasury bill plus 1.7 percentage points (8.25 percent cap)
In repayment Variable rate set annually at 91-day Treasury bill plus 2.3 percentage points (8.25 percent cap). Fixed rate at 6.8 percent Variable rate set annually at 91-day Treasury bill plus 2.3 percentage points (8.25 percent cap).
Parent loans: Variable rate set annually at the Treasury bill rate plus 3.1 percent (9.0 percent cap) Fixed rate at 7.9 percent Variable rate set annually at 91-day Treasury bill rate plus 3.1 percent (9.0 percent cap).
Consolidation loans:
Students Fixed rate set at the weighted average of loans consolidated rounded up to nearest 1/8 percent Fixed rate set at the weighted average of loans consolidated rounded up to nearest 1/8 percent Choice of variable rate set annually at 91-day Treasury bill rate plus 2.3 percent (8.25 percent cap) or fixed rate set at 91-day Treasury bill rate plus 3.3 percentage points.
Parents Fixed rate set at the weighted average of loans consolidated rounded up to nearest 1/8 percent Fixed rate set at the weighted average of loans consolidated rounded up to nearest 1/8 percent Choice of variable rate set annually at 91-day Treasury bill rate plus 3.1 percent (9.0 percent cap) or fixed rate set at 91-day Treasury bill rate plus 4.1 percentage points.
LENDER YIELDS
Student loans:
In-school, grace, and deferment Greater of the borrower rate or 3-month commercial paper rate plus 1.74 percentage points Greater of the borrower rate or 3-month commercial paper rate plus 1.74 percentage points 3-month commercial paper rate plus 1.74 percentage points.
In repayment Greater of the borrower rate or 3-month commercial paper rate plus 2.34 percentage points Greater of the borrower rate or 3-month commercial paper rate plus 2.34 percentage points 3-month commercial paper rate plus 2.34 percentage points.
Parent Loans: Greater of the borrower rate or 3-month commercial paper rate plus 2.64 percentage points (only when the borrower rate is capped at 9.0 percent) Greater of the borrower rate or 3-month commercial paper rate plus 2.64 percentage points (only when that formula exceeds 9.0 percent) 3-month commercial paper rate plus 2.64 percentage points.
Consolidation loans:
Student loans Regular formula less 1.05 percentage points Regular formula less 1.05 percentage points Regular formula less 1.05 percentage points.
Parent loans Regular formula less 1.05 percentage points Regular formula less 1.05 percentage points Regular formula less 1.05 percentage points.
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These changes in rates and yields would save an estimated $5.9 billion in 2006, $11.2 billion over the 2006-2010 period, and $18.1 billion through 2015.
Changes in `9.5 Percent' Loans. Another change in the payment formulas for lenders would affect loans that are funded with financing based on tax-exempt bonds issued between 1980 and 1993. Historically, these loans have had a different formula for determining payments to lenders. Specifically, the formula for the government's special allowance payments to the holders of these loans was 50 percent of the sum of the 91-day Treasury bill rate plus 3.5 percentage points or 9.5 percent, whichever was higher. In recent years, the 9.5 percent rate was higher. Consequently, these have come to be referred to as `9.5 percent loans.' Legislation enacted in 2004 modified this policy for most new loans from tax-exempt lenders during the October 2004 to December 2005 period, changing the lender formula to conform to the rates paid to other lenders. Under current law, the formula on new loans will revert back to the pre-October 2004 structure. The legislation would continue the practice currently in place (instead of allowing it to expire at the end of December 2005), but expand its scope to include all new loans supported with this type of financing. This policy would save an estimated $850 million in 2006, $1.8 billion over the 2006-2010 period, and $3.1 billion over the 2006-2015 period.
Lender Fees. The legislation would increase two fees currently charged to lenders. The first fee, which is charged on all loans disbursed, would rise from 0.5 percent to 1.0 percent. The second, which is a fee charged annually on outstanding consolidation loans, would be boosted from 1.05 percent to 1.30 percent, but only for those lenders for whom consolidated loans constitute more than 90 percent of their student and parent loan portfolios. CBO estimates that the changes in these fees would save $520 million in 2006, $1.8 billion over the 2006-2010 period, and $3.1 billion over the 2006-2015 period.
Federal Lender Insurance. The legislation would reduce the portion of defaulted loans for which lenders are reimbursed. Under current law, lenders are generally reimbursed for 98 percent of the outstanding balances on loans that go into default. Lenders that meet certain requirements are classified as exceptional lenders and receive 100 percent insurance.
The legislation would reduce the 98 percent insurance level to 96 percent, and would tighten eligibility for designation as an exceptional lender. For those lenders losing exceptional lender status, the insurance rate would drop from 100 percent to 96 percent. CBO estimates that these changes would reduce outlays by $385 million in 2006, $915 million over the 2006-2010 period, and $1.7 billion through 2015.
The legislation also would reduce the rate at which the federal government replenishes the student loan reserve funds held by the various guaranty agencies. However, because those funds are considered the property of the federal government, such transfers are intrabudgetary transactions and have no effect on total federal spending or revenues.
Funding for Mandatory Administrative Costs. Section 458 of the Higher Education Act of 1965 specifies a direct appropriation for the government's administrative costs associated with operating the financial assistance programs for post-secondary education students. The statute does not limit the amount provided for those activities after 2002; thus, this account is an uncapped direct spending program. CBO's baseline assumes that the portion of the account that funds the government's administrative activities would be equal to the actual amount used in 2004, adjusted for anticipated inflation. The other major component of this account is an account maintenance fee paid to guaranty agencies, which equals 0.10 percent of the original principal on outstanding guaranteed student loans.
The legislation would eliminate mandatory funding for the section 458 administrative activities beginning in 2007, but retain the mandatory funding for the account maintenance fees through 2011. Section 458 funding in 2006 would be limited to $820 million. CBO assumes that the entire amount of the fees would be paid, but that a portion would be paid out of the federal student loan reserve funds (the on-budget accounts held by guaranty agencies) instead of section 458 funds. These changes would increase direct spending outlays by $17 million in 2006, but reduce them by $2.2 billion over the 2006-2010 period and by $6.0 billion over the 2006-2015 period, CBO estimates. (The offsetting increases in discretionary spending for administrative costs are discussed in the section on spending subject to appropriation.)
Guaranty Agency Retention Allowance. The legislation would reduce the share of collections on defaulted loans that guaranty agencies are allowed to retain from 23 percent to 20 percent, and would increase the share retained by the government commensurately. CBO estimates that this change would reduce federal costs by $270 million in 2006, $495 million over the 2006-2010 period, and $830 million over the 2006-2015 period.
Major Provisions Increasing Spending. The provisions in the bill that would result in the largest increases in spending are the changes to origination fees and insurance premiums paid by borrowers and increases in loan limits. The estimated costs resulting from these portions of subtitle B total $3.8 billion over the 2006-2010 period and $13.3 billion over the 2006-2015 period.
Borrower Origination Fees and Premiums. The legislation would gradually reduce borrower origination fees for both subsidized and unsubsidized student loans, while at the same time requiring guaranty agencies to charge all borrowers of guaranteed student and parent loans the 1.0 percent insurance premium now authorized. Currently, the origination fee for guaranteed loans is 3.0 percent, and the insurance premium may be as much as 1.0 percent. In the direct loan program, the origination fee is 3.0 percent (although in practice, the Department of Education generally charges 1.5 percent up front and another 1.5 percent if the borrower fails to make timely payments) and there is no insurance fee. The changes in the bill would equalize the total fees charged to students in the guaranteed and direct loan programs.
Total fees on student borrowers would drop to 2.5 percent in July 2007, to 2.0 percent in July 2008, to 1.5 percent in July 2009, and to 1.0 percent in July 2010. (A new origination fee on consolidated loans of 1.0 percent would also be charged, as discussed earlier.) These changes would reduce outlays by $90 million in 2006 because the increased insurance premiums are recorded more quickly than the reduced origination fees (fees are tied to loan disbursements that often fall into a subsequent year). CBO estimates that these changes would increase outlays by $2.3 billion over the 2006-2010 period and by $8.9 billion over the 2006-2015 period.
Increased Loan Limits. Subtitle B would increase the maximum amount of subsidized loans for first- and second-year students from $2,625 and $3,500, respectively, to $3,500 and $4,500 beginning in 2007. In addition, the bill would increase the limit for unsubsidized loans for each year of graduate school from $10,000 to $12,000. To conform the aggregate borrowing limits to the latter changes, the limit on unsubsidized loans would be increased by $10,000. CBO estimates these increases would boost aggregate student loan borrowing from both the direct and guaranteed loan programs, and as a result would increase spending by $1.6 billion over the 2007-2010 period and by $4.4 billion over the 2007-2015 period.
Other Provisions With Measurable Effects. The legislation contains numerous provisions that would have much smaller budgetary effects than those described above. Among them are changes in loan cancellation programs, borrower repayment terms, and interest deferment eligibility. Other provisions with some estimated budget effects during the 2006-2010 period include changes in the income protection allowance for dependent students, the restriction on eligibility for students with certain drug-related convictions, the eligibility of schools to participate on the basis of distance learning programs, and the multiple disbursement requirements for certain loans for schools with low default rates. Taken together, CBO estimates that these provisions would cost $192 million in 2006, $409 million over the 2006-2010 period, and $754 million over the 2006-2015 period.
Interactions. The overall spending reductions that the legislation would yield are larger than the sum of the individual provisions because many provisions interact. For example, the lender-yield and borrower interest rate changes save even more when the increased loan volume flowing from the changes in loans limits is considered. However, those same loan limit increases boost the costs of the provisions that reduce borrower fees. As another example, the application of the proposed lender yields and borrower interest rates to the 9.5 percent loans increases the savings when compared to that provision alone. In total, the interactions among the various provisions would generate additional estimated savings of $298 million over the 2006-2010 period and $1.1 billion over the 2006-2015 period.
Higher Education Relief. The legislation would provide relief to certain student loan borrowers and educational institutions that were adversely affected by Hurricanes Katrina and Rita. CBO estimates that the total costs of this relief would be $210 million in fiscal year 2006 (with no effect after this year).
The largest portions of the costs are attributable to two policies: (1) the cancellation of repayment for all student loans that were disbursed for cancelled enrollment periods at post- secondary schools that were closed, and (2) the requirement that the federal government pay the interest for up to six months on student and parent loans for borrowers affected by the hurricanes. Based on data provided by the Department of Education, CBO estimates that the costs of cancelling repayments for the loans that had been disbursed for schools that closed as a result of the storm would be $70 million.
CBO estimates that the interest payments on the loans for borrowers affected by the hurricanes would amount to about $130 million. Data are not available to precisely estimate the number of borrowers and amount of outstanding principal that could be affected by this policy. CBO used demographic and economic data from the Census Bureau for the jurisdictions covered by the major disaster designation for Hurricanes Katrina and Rita to estimate the potential number of affected borrowers. CBO estimates that student loan indebtedness for affected borrowers in the affected areas is roughly $5 billion. The estimated gross costs were reduced to reflect the likely use of existing authority for deferment of payments for interest and principal for economic hardship.
The legislation would also waive the requirement for the return of federal student aid in cases when the storm resulted in a cancelled period of enrollment, and would exclude any disbursements for cancelled enrollment periods from the aggregate loan and grant aid limits for affected students. Together, these two provisions would cost an estimated $10 million in 2006.
Subtitle C: Premiums charged by the Pension Benefit Guaranty Corporation
The legislation would increase the per-participant premiums charged to sponsors of defined-benefit pension plans, as well as institute a termination premium, which would be charged to sponsors whose plans are taken over by the PBGC as a result of an involuntary or distress termination. These premium receipts, which are shown in the budget as offsets to direct spending, would total about $363 million in 2006, $6.2 billion over the 2006-2010 period, and $30.6 billion over the 2006-2015 period. The higher premium receipts would eliminate the need for the PBGC to increase the rate at which it reimburses itself from a nonbudgetary fund where it holds the reserves of the pension plans it has taken on. These reimbursements, that also show up as offsets to spending, would decline by $7.4 billion during the 2013-2015 period, thereby reducing the net 10-year savings to $23.3 billion. These estimated changes are displayed in Table 4 and discussed below.
Increase in Flat-Rate Premium for Single-Employer Plans. Under current law, sponsors of single-employer, defined-benefit pension plans insured by the PBGC are required to pay the agency a premium of $19 per participant per year. The legislation would increase the flat-rate premium to $30 per participant in 2006 and index it to wage growth starting in 2007. The PBGC also would have the authority to further increase those premiums by up to 20 percent each year if it determined that such an increase would be necessary to achieve an actuarially sound program. The PBGC has already incurred substantial losses in recent years, and CBO anticipates further losses in the future. (See CBO's recent report, The Risk Exposure of the Pension Benefit Guaranty Corporation, issued in September 2005.) Therefore, CBO believes that the PBGC would need to raise premiums each year by the full 20 percent. If so, the premium rate for single-employer plans would rise to approximately $73 per participant in 2010 and $223 in 2015.
About 35 million people currently participate in tax-qualified, single-employer pension plans. This figure includes active workers, former workers who are vested but have not started collecting retirement benefits, and annuitants. The number of participants in single-employer plans insured by the PBGC has remained nearly constant for the past decade, and CBO assumes it would remain steady for the next 10 years.
The current premium of $19 per participant generates about $650 million in premium income annually for the PBGC. CBO estimates changes to the flat-rate premiums made by the legislation would increase receipts by $5.2 billion over the 2006-2010 period and by $27.8 billion over the 2006-2015 period. Because the PBGC's premiums are recorded as offsetting collections to a mandatory spending account, an increase in premium collections is reflected in the budget as a decrease in direct spending.
Premiums for Certain Terminated Single-Employer Plans. The legislation would create a new premium for sponsors of plans that the PBGC takes over on an involuntary or distressed-termination basis. The required payments would be $1,250 per plan participant for three years after the termination. For sponsors whose plans were terminated while the program was being reorganized under chapter 11 of the bankruptcy code, the premium would be levied after the sponsor emerges from bankruptcy. The premium would not apply to firms that are liquidated by a bankruptcy court. CBO estimates that these new premiums would total about $1.0 billion over the 2006-2010 period and $2.9 billion over the 2006-2015 period.
TABLE 4- DIRECT SPENDING EFFECTS OF SUBTITLE B: PENSION BENEFIT GUARANTY CORPORATION PREMIUMS
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Outlays in millions of dollars, by fiscal year--
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2006-2010 2006-2015
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Increase in Flat-Rate Premiums for Single-Employer Plans -327 -621 -966 -1,380 -1,863 -2,484 -3,277 -4,278 -5,520 -7,038 -5,155 -27,750
Premiums for Certain Terminated Single-Employer Plans -36 -109 -220 -298 -342 -354 -364 -375 -386 -398 -1,007 -2,883
Subtotal, Premiums -363 -729 -1,186 -1,678 -2,206 -2,837 -3,641 -1,653 -5,906 -7,436 -6,162 30,635
Changes in Transfers from PBGC's Nonbudgetary Trust Fund 0 0 0 0 0 0 0 1,068 3,092 3,222 0 7,382
Total Changes -363 -729 -1,186 -1678 -2,206 -2,837 -3,641 -3,585 -2,814 -4,214 -6,162 -23,252
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Based on recent PBGC data on terminations, CBO estimates that underfunded plans that will be terminated over the next five years would contain about 120,000 participants per year, with three-quarters of these terminations relating to nonliquidation bankruptcy filings. CBO assumes that a year's bankruptcy cases will emerge from bankruptcy over several years following the filing date. The annual savings would grow rapidly during the first few years because of the likely timing of sponsors emerging from bankruptcy.
Transfers from PBGC's Nonbudgetary Trust Fund. The PBGC's assets are held in two separate funds: an on-budget revolving fund and a nonbudgetary trust fund. 1
[Footnote] In its on-budget fund, the PBGC receives premium payments and makes outlays for benefit payments and administrative costs. The nonbudgetary trust fund holds assets from terminated plans until they are needed to help pay for benefits and other expenses. The PBGC makes periodic transfers from the nonbudgetary fund to the on-budget fund, where they are used to cover about half of all benefit payments and most of the PBGC's administrative costs. As with premiums, these transfers are offsetting collections to a mandatory account, and so are reflected in the budget as offsets to outlays.
[Footnote 1: The PBGC has several different on-budget revolving funds and two nonbudgetary trust funds. For simplicity in budgetary presentation, CBO combines the various on-budget and nonbudgetary funds into just two funds.]
In CBO's current-law projections, PBGC's increasing liabilities and steady premium income will cause the agency's on-budget fund to be completely exhausted in about 2013. No precedent exists for how the PBGC would proceed if its on-budget fund is depleted. However, CBO assumes that the agency would cover its expenses by increasing the percentage of benefits and other expenses being paid through transfers from its nonbudgetary trust fund, thus increasing offsetting collections above what they would have been if the fund had remained solvent.
CBO estimates the increases in premium receipts would improve the finances of the on-budget fund and would enable it to remain solvent beyond 2015. As a result, the PBGC would not need to increase the amounts transferred from the nonbudgetary fund to help cover benefit payments and other expenses during the 10-year projection period. By allowing the on-budget fund to remain solvent through the next decade, the legislation would reduce those transfers by $7.4 billion over the 2013-2015 period. Because this change would reduce an offset to mandatory spending, it would result in a net increase in such spending.
Spending subject to appropriation
This legislation would amend and reauthorize the Child Care and Development Block Grant Act of 1990, and would make changes to the Temporary Assistance for Needy Families program, including increasing work participation rates and establishing a new program of grants to promote fatherhood. In addition, the legislation would authorize appropriations for the administrative costs of operating the student financial aid programs. It also would expand eligibility for the discretionary student loan forgiveness program to include early childhood educators, nurses, librarians, first responders, and others. CBO has not estimated how much this provision would increase the program's authorization.
Subtitle A. This subtitle would authorize appropriations totaling $2.3 billion in 2006 and increasing amounts in subsequent years. Authorizations would total $13.6 billion over the 2006-2010 period. CBO estimates that appropriation of these amounts would result in additional outlays of $12.5 billion over those five years.
Child Care. The legislation would amend and reauthorize the Child Care and Development Block Grant (CCDBG) program. The CCDBG program was authorized through 2002 by Child Care and Development Block Grant Act of 1990 and has been authorized in appropriation acts since then; it is currently authorized through November 18, 2005, by Public Law 109-77. This legislation would authorize appropriations of $2.3 billion in 2006, $2.5 billion in 2007, $2.7 billion in 2008, $2.9 billion in 2009, and $3.1 billion in 2010. (Funding in 2005 was $2.083 billion.) If these amounts are appropriated, outlays from those appropriations would total an estimated $12.4 billion over the 2006-2010 period.
The CCDBG program provides funding to states for child-care subsidies to low-income families, improvement in the quality of child care services, and other activities. It is one of the two federal programs for child-care subsidies within a program grouping often referred to as the Child Care and Development Fund. The other program is the Child Care Entitlement to States, a mandatory program that would not be affected by the legislation.
TABLE 5- DISCRETIONARY SPENDING EFFECTS OF SUBTITLES A AND B: TANF, CHILD CARE, AND HIGHER EDUCATION
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By fiscal year, in millions of dollars--
2005 2006 2007 2008 2009 2010
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SPENDING SUBJECT TO APPROPRIATION
Spending Under Current Law (from existing appropriations):
Budget Authority 2,083 0 0 0 0 0
Estimated Outlays 2,116 614 113 21 0 0
Proposed Changes:
Child Care and Development Block Grant Program:
Authorization Level 0 2,300 2,500 2,700 2,900 3,100
Estimated Outlays 0 1,633 2,327 2,609 2,830 3,030
Fatherhood Grant Program:
Authorization Level 0 20 20 20 20 20
Estimated Outlays 0 2 12 22 23 22
Student Aid Administrative Costs:
Estimated Authorization Level 0 0 646 665 684 705
Estimated Outlays 0 0 345 549 640 689
Total Proposed Changes:
Authorization Level 0 2,320 3,166 3,385 3,604 3,825
Estimated Outlays 0 1,635 2,684 3,180 3,493 3,741
Total Spending Under the Legislation:
Authorization Level 2,083 2,320 3,166 3,385 3,604 3,825
Estimated Outlays 2,116 2,249 2,797 3,201 3,493 3,741
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Fatherhood Grant Program. Section 105 would establish new grant programs to promote responsible fatherhood and would authorize appropriations of $20 million annually over the 2006-2010 period. At least 65 percent of the funds would be allotted for competitive grants to community entities and Indian tribes to test the effectiveness of various approaches to promoting responsible fatherhood. At least $5 million annually would be directed to national organizations to test the use of economic incentives to encourage noncustodial parents to enter the workforce. The remainder could be used for other demonstration projects or for program evaluations. CBO estimates implementing the programs would cost $81 million over the 2006-2010 period.
Subtitle B. This legislation would authorize funding over the 2007-2011 period for the administration of student financial aid programs, as well as for an expanded program of loan forgiveness. CBO estimates that appropriations for the administrative costs, which are authorized at such sums as may be necessary, would be $646 million in 2007 and $2.7 billion over the 2007-2010 period, based on the current mandatory costs for those activities. If these amounts are appropriated, discretionary outlays would total $2.2 billion over the period. CBO has not completed its estimate for the expansion of the loan forgiveness program.
Estimated impact on state, local, and tribal governments: The legislation contains no intergovernmental mandates as defined by UMRA. It would significantly affect the way states administer the TANF program, but because of the flexibility in the program as a whole, the new requirements would not be intergovernmental mandates as defined in UMRA.
In particular, this legislation would increase the work participation rates required in the TANF program, prohibit states from using funds from the TANF program to pay offshore contracting expenses, and increase the proportion of Child Care Development Block Grants that is used for earmarked purposes. It also would authorize funding for child care programs and fatherhood grants and would provide greater flexibility to states through demonstration programs.
The legislation would provide assistance to institutions of higher education affected by or serving students affected by the recent hurricanes. It also would authorize funding for student aid and higher education programs, much of which would go to public institutions of higher education. Any costs to those institutions or to state, local, or tribal governments would result from complying with conditions for receiving federal assistance.
Estimated impact on the private sector: Subtitle C would make changes to the Employee Retirement Income Security Act that would impose mandates on single-employer sponsors of defined-benefit pension plans. Those changes would increase the per-participant premium rates paid to the Pension Benefit Guaranty Corporation and would create a termination premium for sponsors whose plans are terminated by the PBGC on an involuntary or distressed-termination basis. CBO estimates that the cost of those mandates would total about $363 million in 2006 and $6.2 billion over the 2006-2010 period.
Subtitles A and B do not contain any private-sector mandates as defined in UMRA.
Previous CBO estimates: CBO has transmitted a number of cost estimates earlier this year for legislation that would affect the TANF, child care, and higher education programs, and the PBGC.
On March 16, 2005, CBO transmitted a cost estimate for S. 525, the Caring for Children Act of 2005, as ordered reported by the Senate Committee on Health, Education, Labor and Pensions. On March 25, 2005, CBO transmitted a cost estimate for S. 667, the Personal Responsibility and Individual Development for Everyone Act, as reported by the Senate Committee on Finance. Those bills would set up several grant programs and establish requirements for participation in work activities that are different from those in this legislation. S. 525 would authorize the same level of child care funding as this legislation, but S. 667 would authorize fatherhood grants at a slightly higher level.
For higher education programs, CBO has provided estimates for H.R. 609 (as ordered reported by the House Committee on Education and the Workforce) on September 16, 2005, and for the reconciliation recommendations of the Senate Committee on Health, Education, Labor, and Pensions on October 24, 2005. This legislation contains many of the provisions of H.R. 609, but adds changes to lender and borrower fees, mandatory administrative expenses, and payments to guaranty agencies. It differs from the Senate legislation (now embodied in S. 1932, the Deficit Reduction Omnibus Reconciliation Act of 2005) with regard to provisions governing borrower interest rates and loan limits, mandatory administrative expenses, and payments to and fees collected from guaranty agencies. This legislation also does not include two new mandatory grant programs contained in S. 1932.
CBO has provided the Congress with three cost estimates for legislation that would affect the PBGC and private pension plans. On September 26, 2005, CBO transmitted a cost estimate for H.R. 2830, the Pension Protection Act of 2005, as ordered reported by the House Committee on Education and the Workforce. On October 5, 2005, CBO transmitted a cost estimate for S. 1783, the Pension Security and Transparency Act of 2005, as introduced. Unlike the reconciliation recommendations of the House Committee on Education and the Workforce, those bills would require pension sponsors to meet stricter funding targets and rules and to adhere to more stringent accounting rules. The increase in PBGC premiums required by those bills would be substantially less than those specified in this legislation.
The reconciliation recommendations of the Senate Committee on Health, Education, Labor, and Pensions (which are included in S. 1932) also include pension provisions. That legislation would initially set the flat-rate premium at $46.75 in 2006 and increase it with wage inflation thereafter. This House legislation would set the 2006 rate at $30 and subsequently index it; it would also authorize the PBGC to raise those premiums by an additional 20 percent per year. In addition to the increase for sponsors of single-employer plans, the Senate legislation would increase the rate for multiemployer plans. Both sets of reconciliation recommendations would require sponsors who have terminated pension plans via distress or involuntary terminations to pay an additional $1,250 annual premium for three years.
Estimate prepared by: Federal Spending: TANF and Child Care: Sheila Dacey. Education: Deborah Kalcevic, Chad Chirico, and Justin Humphrey. Pensions: Geoffrey Gerhardt and Craig Meklir. Impact on State, Local, and Tribal Governments: Lisa Ramirez-Branum and Leo Lex. Impact on the Private Sector: Nabeel Alsalam and Peter Richmond.
Estimate approved by: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis.
COMMITTEE PRINT--THE PERSONAL RESPONSIBILITY, WORK AND FAMILY PROMOTION ACT OF 2005
COMMITTEE REPORT
PURPOSE
The Committee Print, passed on October 20, 2005 entitled the Personal Responsibility, Work, and Family Promotion Act of 2005, amends and improves the mandatory work requirements and other work-related provisions of the Temporary Assistance for Needy Families (TANF) block grant and reauthorizes the Child Care and Development Block Grant through 2010. This legislation enhances the opportunities of needy families to achieve self-sufficiency and access quality child care. In addition, the legislation creates new authority for States and localities to conduct demonstration projects coordinating multiple public assistance and workforce development programs to improve services to needy families and working individuals.
COMMITTEE ACTION
107TH CONGRESS
Subcommittee hearings
On Thursday, September 20, 2001, the Subcommittee on 21st Century Competitiveness held a hearing on Welfare Reform: an Examination of Effects. The hearing addressed the general effects of reform to date, with emphasis on efforts to assist families, reduce welfare dependence, and increase job preparation and work. Subcommittee Members heard views from leading experts and practitioners on the successes of the welfare reform law. The testifying witnesses were Dr. Ron Haskins, Senior Fellow, The Brookings Institute, Washington, DC; Mr. Joel Potts, Ohio Department of Job and Family Services, Columbus, Ohio; Dr. Sanford Schram, Professor of Social Work, Bryn Mawr College, Bryn Mawr, Pennsylvania; Mr. Robert Rector, Senior Research Fellow, The Heritage Foundation, Washington, DC; and Dr. Heather Boushey, Economist, Economic Policy Institute, Washington, DC.
On Tuesday, October 16, 2001, the Subcommittee on 21st Century Competitiveness held a second hearing, Welfare Reform: Success in Moving Toward Work. The hearing was held to explore the degree to which welfare reform's success has been the result of the reform's emphasis on work. A panel of researchers, business owners who have hired participants and local welfare reform implementers offered perspectives on the effects that the reform law's work requirements have had in moving welfare recipients into employment. The testifying witnesses were Dr. Lynn Karoly, Director of Labor and Population Program & Populations Research Center, RAND Institute, Santa Monica, California; Ms. Lashunda Hall, former Wisconsin Works Participant, Milwaukee, Wisconsin; Ms. Martha Davis, Legal Director of NOW-LDEF, New York, New York; Ms. Mona Garland, Director of Opportunities Industrialization Center of Greater Milwaukee, Wisconsin Works (W-2), Milwaukee, Wisconsin; Mr. Rodney Carroll, President and CEO, The Welfare to Work Partnership, Washington, DC; and Ms. Jennifer Brooks, Director, Self-Sufficiency Programs and Policy, Wider Opportunities for Women, Washington, DC.
On Wednesday, February 27, 2002, the Subcommittee on 21st Century Competitiveness held a hearing on Assessing the Child Care and Development Block Grant. The purpose of this hearing was to provide information on the general operation of the Child Care and Development Block Grant (CCDBG) in preparation for its reauthorization as part of the Committee's welfare package. Subcommittee Members heard from leading experts and practitioners about the importance of child care as a support allowing families to obtain and retain employment and the vital role that the block grant plays in meeting that need. The panel highlighted the importance of quality child care in promoting healthy childhood development and school readiness, and offered recommendations for improving access to child care for eligible families. The testifying witnesses were Ms. Janet K. Schalansky, Secretary, Kansas Department of Social and Rehabilitation Services, on behalf of the American Public Human Services Association, Topeka, Kansas; Ms. Helen C. Riley, Executive Director of St. Michael's School and Nursery, Wilmington, Delaware; Ms. Helen Blank, Director of Child Care and Development, Children's Defense Fund, Washington, DC; Mr. Douglas J. Besharov, Resident Scholar, American Enterprise Institute, Washington, DC; and Ms. Karen Ponder, Executive Director of the North Carolina Partnership for Children and Smart Start, Raleigh, North Carolina.
On Tuesday, March 12, 2002, the Subcommittee on 21st Century Competitiveness held a third hearing, Welfare to Work: Ties Between TANF and Workforce Development. The hearing focused upon the extent to which TANF work services are provided through the One-Stop delivery system for workforce development established through the Workforce Investment Act of 1998 (WIA) and how such linkages affect participants. The General Accounting Office testified on the results to date of a study the agency is conducting on this topic. In addition, the Subcommittee members heard from a State and a local area that successfully have integrated TANF work services into the One-Stop delivery system. The testifying witnesses were Dr. Sigurd Nilsen, Director, Health, Education and Human Services Division, General Accounting Office, Washington, DC; John B. O'Reilly, Jr., Executive Director, Southeast Michigan Community Alliance, Taylor, Michigan; and, Greg Gardner, Acting Director, Utah Department of Workforce Services, Salt Lake City, Utah.
Full committee hearing
On Tuesday, April 9, 2002, the Committee on Education and the Workforce held a hearing on Working Toward Independence: the Administration's Plan to Build upon the Successes of Welfare Reform. The Honorable Tommy Thompson, then-Secretary of the Department of Health and Human Services, testified on the first panel regarding the Administration's proposal to promote work and strengthen families. Jason Turner, Visiting Fellow, The Heritage Foundation, Washington, D.C. and Wendell Primus, Center on Budget and Policy Priorities, Washington, D.C. testified on the second panel.
Legislative action
On Tuesday, April 9, 2002, Representative Howard `Buck' McKeon (R-CA), along with Representatives Boehner (R-OH), Petri (R-WI), Hoekstra (R-MI), Greenwood (R-PA), Upton (R-MI), Tancredo (R-CO), DeMint (R-SC), Isakson (R-GA), Keller (R-FL), and Culberson (R-TX), introduced H.R. 4092, the Working Toward Independence Act of 2002, a bill to reauthorize the Temporary Assistance for Needy Families Block Grant (TANF) and the Child Care and Development Block Grant (CCDBG) through 2007.
On Thursday, April 18, 2002, the Subcommittee on 21st Century Competitiveness considered H.R. 4092 in legislative session and reported it favorably, as amended, to the Committee on Education and the Workforce. The roll call vote was 9-7. The Subcommittee adopted two amendments, including a substitute amendment offered by Representative McKeon.
On Wednesday, May 1, 2002 and Thursday, May 2, 2002 the Committee on Education and the Workforce considered H.R. 4092 in legislative session and reported it favorably, as amended, to the House of Representatives. The roll call vote was 25-20. The Committee adopted six amendments, including an amendment in the nature of a substitute offered by Chairman Boehner.
On May 15, 2002, Congresswoman Deborah Pryce (R-OH), along with Chairman John Boehner (R-OH) and Subcommittee Chairman Howard P. `Buck' McKeon (R-CA), introduced H.R. 4737, the Personal Responsibility, Work, and Family Promotion Act of 2002. The bill incorporated H.R. 4092, as reported by the Committee on Education and the Workforce, and H.R. 4090, as reported by the Committee on Ways and Means.
On May 16, 2002, the House of Representatives passed H.R. 4737 by a vote of 229-197.
108TH CONGRESS
Legislative action
On February 4, 2003, Congresswoman Deborah Pryce (R-OH), along with Chairman John Boehner (R-OH) and Subcommittee Chairman Howard P. `Buck' McKeon (R-CA), introduced H.R. 4, the Personal Responsibility, Work, and Family Promotion Act of 2003. The bill was substantially the same as H.R. 4737, which passed the House in the 107th Congress.
On February 13, 2003, the House of Representatives passed H.R. 4 by a vote of 230-192. Neither the Committee on Education and the Workforce nor the Committee on Ways and Means considered H.R. 4 in legislative session.
109TH CONGRESS
Subcommittee hearing
On Tuesday, March 15, 2005, the Committee on Education and the Workforce, Subcommittee on 21st Century Competitiveness, held a hearing in Washington, DC on `Welfare Reform: Reauthorization of Work and Child Care.' The purpose of the hearing was to review the Administration's proposal for reauthorization of welfare and child care and to examine successes and challenges in implementing the programs. The Honorable Wade Horn, Ph.D., Assistant Secretary for Children and Families, U.S. Department of Health and Human Services, Washington, DC testified on the first panel. Curtis Austin, President, Workforce Florida, Tallahassee, Florida; Larry Mead, Ph.D., Professor of Politics, New York University, New York, New York; Casandra Fallin, Executive Director, Baltimore City Child Care Resource Center, Baltimore, Maryland; and Mark Greenberg, Director of Policy, Center for Law and Social Policy, Washington, DC testified on the second panel.
Legislative action
On January 4, 2005, Congresswoman Deborah Pryce (R-OH), along with Chairman John Boehner (R-OH), Subcommittee Chairman Howard P. `Buck' McKeon (R-CA), Congressman Joe Wilson (R-SC), and Congressman John Kline (R-MN), introduced H.R. 240, the Personal Responsibility, Work, and Family Promotion Act of 2005. The bill is substantially similar to H.R. 4, which the House passed in the 108th Congress.
On Wednesday, October 19, 2005, and Thursday, October 20, 2005, the Committee on Education and the Workforce considered in legislative session a Committee Print containing the elements of H.R. 240 that are in the jurisdiction of the Committee on Education and the Workforce and ordered it favorably, as amended, to the Committee on the Budget by a vote of 23-20. The Committee considered 19 amendments and adopted the following four amendments:
1. The Committee adopted, by voice vote, an Amendment in the Nature of a Substitute offered by Chairman Boehner (R-OH). The amendment adds language from H.R. 3975, the Hurricane Regulatory Relief Act, to ease federal requirements for state administration of the CCDBG to give families affected by Hurricanes Katrina and Rita easier access to child care services. In addition, the amendment changes the effective date and makes technical changes.
2. The Committee adopted, by voice vote, an en bloc amendment offered by Congressman Luis Fortun.AE6o (R-PR). The amendment requires State CCDBG plans to specify how the State will coordinate child care services with services available for infants, toddlers, and pre-school children through the Individuals with Disabilities Education Act (IDEA) and to require states to demonstrate in their CCDBG state plans how they are addressing the needs of limited English proficient families.
3. The Committee adopted, by voice vote, an amendment offered by Congressman Rob Andrews (D-NJ). The amendment adds a new prohibition regarding the use of TANF grants for offshoring.
4. The Committee adopted, by voice vote, an amendment offered by Congressman Danny Davis (D-IL). The amendment creates economic incentive demonstration projects as part of the fatherhood program of the Print.
SUMMARY
The Committee Print makes substantial changes to the work requirements of the Temporary Assistance for Needy Families (TANF) block grant, increases the emphasis within the block grant on moving participants into employment, provides new flexibility to States, and encourages States to improve the quality of child care available to low-income families. The changes are consistent with the recommendations of President Bush and the Department of Health and Human Services (HHS).
TITLE I--TANF PROGRAM
Universal engagement
The legislation creates a policy of universal engagement so that all families must be in work or other activities leading to self-sufficiency. Each family will have a self-sufficiency plan, and each family's participation in activities will be monitored. States will be penalized for failure to establish self-sufficiency plans for families.
Work requirements
Work participation requirements will be increased from the current requirement of 50 percent to 70 percent by 2010. The current, higher participation requirement for two-parent families will be eliminated so as not to discriminate against marriage.
A modified caseload reduction credit continues so that States' work participation requirements are reduced as their caseloads decline, which encourages and rewards States for diverting individuals from enrolling in cash assistance and for moving families off the rolls into work. The current credit rewards states for reductions below their 1995 caseload levels. The updated credit phases-in a four-year look-back, so that by 2009 states get credit for reducing their caseload below 2005 levels.
All families will be required to be involved in activities averaging 40 hours per week in order to be counted toward the required participation rate, so that families are engaged in a full work week of activities. Currently, single and two-parent families must be engaged in work-related activities for 30 and 35 hours a week, respectively.
The Committee Print increases the number of hours that must be spent in actual work, including unsubsidized employment, subsidized private or pubic sector employment, on-the-job training, supervised work experience, and supervised community service, from 20 hours per week to 24 hours per week. States will obtain pro-rata credit for families engaged in activities less than full time as long as they meet the 24-hour direct work requirement.
States' work participation rates will be based on the total number of countable hours worked per month, rather than the number of families meeting the participation standard. Therefore, 160 hours of work per month will count as one family fulfilling the full 40-hour work requirement. This allows for easier calculation of the pro-rata credit for States.
States will define approved activities that will count toward the remaining 16 hours of the work requirement, as long as such activities help achieve a purpose of TANF. Such activities could include education and training, activities that promote child well-being, or activities that promote healthy marriages. The Print eliminates the current restrictions on the percent of the caseload that can participate in vocational education; however, individuals will be required to work part-time (averaging 24 hours per week) while obtaining education.
In addition, the Print allows three months within any 24 consecutive months in full-time substance abuse treatment, rehabilitative services, work-related education or training, and job search to count toward the work requirement. States may permit individuals to participate in four months of full-time education or training in order to complete a certificate program or obtain education necessary to fill a local job need.
The Committee Print maintains current law that gives states flexibility in determining sanctioning policies, except that States must continue assistance for single parents who have a child under age six but who cannot obtain child care. In addition, the Print requires recipients to engage in work activities at least once during a two-month consecutive period to remain eligible for TANF assistance, unless good cause is shown.
Teen parents will either attend school or participate in the full 40 hours of work and other activities, similar to current law. States may continue to exempt parents with a child under age one from the work requirements, but States still must engage such families in constructive activities.
State plan requirements
States will describe in their State plan how they will increase work and reduce dependence. In addition, each State will establish specific work-related performance objectives and measures. States will have complete flexibility to define their measurement methodology, as long as they describe it in their State plans.
States will describe in their State plan particular strategies and programs they may be employing to address important TANF challenges. Such challenges are employment retention and advancement, including placement into high demand jobs; services for clients with special needs; and program integration with the Workforce Investment Act of 1998 (WIA).
Report on integration
The Committee Print requires the Secretary of Health and Human Services and the Secretary of Labor to submit jointly a report to Congress, within six months of enactment, describing changes needed to the definitions, reporting requirements, and performance measures in WIA and TANF to allow greater integration between welfare and workforce development.
TITLE II--AMENDMENTS TO THE CHILD CARE AND DEVELOPMENT BLOCK GRANT OF 1990
Overview
The Committee Print reauthorizes the Child Care and Development Block Grant (CCDBG) through 2010 and creates a short title, the Caring for Children Act of 2005. The Committee Print increases the amount of discretionary funding authorized to $2.3 billion for fiscal year 2006, $2.5 billion for fiscal year 2007, $2.7 billion for fiscal year 2008, $2.9 billion for fiscal year 2009, and $3.1 billion for fiscal year 2010. The current authorization is $1 billion, but the fiscal year 2005 appropriation is $2.1 billion.
Program goals
The Committee Print amends the existing goals to emphasize that the block grant is intended to serve both low-income working families who receive cash assistance and also those who do not. This legislation also creates two new goals to encourage States to improve the quality of child care and to promote cognitive development and school readiness.
State plan requirements
The Committee Print modifies the State plan in several ways. The legislation asks States to collect and disseminate information to both parents of eligible children and child care providers about: the quality and availability of child care services; resources to assist families in obtaining child care; research and best practices on children's development; and, other programs and services for which families may be eligible, including the food stamp, WIC, Medicaid and SCHIP programs.
This legislation requires States to describe partnerships created with public and private entities to increase the supply and quality of child care services, and to demonstrate efforts to coordinate child care services provided by this Act with other child care and early childhood education programs, including Head Start, Early Reading First, Even Start, and state-sponsored pre-kindergarten.
Beginning in 2007, State plans will be required to contain an outline of the State's strategy to address the quality of child care available to children in that State. States will report on the use of quantifiable, objective measures for evaluating the quality of child care services and progress in improving child care quality.
Finally, States are asked to address factors that can make finding care difficult for some parents. States would report in their State plan how the State is working to meet the child care needs of parents eligible for assistance who have children with special needs, work non- traditional hours, or require infant and toddler care.
Quality set-aside
The Committee Print increases from four to six percent the amount of the total block grant that a State must spend on activities to improve the quality of child care provided to eligible families in that State, and establishes permissible uses for those funds. The quality set-aside may be used to support: programs that provide training, education, and other professional development activities to enhance the skills of the child care workforce, including informal caregivers; activities to enhance early learning and foster school readiness; initiatives to increase the retention and compensation of child care providers; and, other activities deemed by the States to improve the quality of child care services provided in the State.
Federal eligibility guidelines
The Committee Print eliminates the Federal income limit for eligibility, previously set at 85 percent of the State median income. States must continue to prioritize families based on need and serve both TANF and non-TANF families. Beginning in 2007 and biennially thereafter, the Secretary would provide to Congress aggregated statistics on the supply, demand, and quality of child care, early education, and non-school programs available within States.
Hurricane response
In response to Hurricanes Katrina and Rita, the Committee Print authorizes the Secretary to waive or modify certain federal CCDBG requirements through June 30, 2006. The waivers may be used to temporarily suspend income limitations on eligibility to receive services; work requirements applicable to eligibility to receive services; the application of the quality set-aside in states affected by the Gulf hurricanes; and any barrier to providing priority services to displaced children provided that enrolled children residing in such state do not lose eligibility as a result.
TITLE III--BROADENED WAIVER AUTHORITY
The Committee Print provides new authority for States to apply to conduct demonstration projects coordinating two or more public assistance, workforce development, and other programs to support working individuals and families, help families escape welfare dependency, promote child well-being, or help build stronger families.
The administering entity must seek the waiver. If the programs are administered by two different entities, such as one State entity and one local entity, each must join in the application to conduct the demonstration project. States and localities will be able to seek waivers for activities funded under the Wagner-Peyser Act (employment services), Title I of the Workforce Investment Act (except Job Corps), activities funded under the Adult Education and Family Literacy Act, the Job Opportunities for Low-Income Individuals grant program, and activities funded under the Child Care and Development Block Grant.
Each Federal Secretary who administers a program that is to be included in a demonstration project must approve the request. Secretaries cannot waive certain provisions, including civil rights, purposes or goals of any program, maintenance of effort requirements, health or safety provisions, labor standards under the Fair Labor Standards Act, or environmental protections. In addition, a Secretary may not waive any requirement that a State pass through to a sub-State entity all or part of the funds it receives. In addition, the Secretaries may not waive certain provisions of the Workforce Investment Act.
The demonstration projects will be limited to five years, and the State or local entities conducting the demonstration project must evaluate the results. Waivers must be cost neutral to the federal government. In addition, Federal Secretaries will report to Congress on the success of any demonstration projects awarded.
TITLE IV--EFFECTIVE DATE
The Committee Print makes changes effective on the date of enactment, unless the Secretary of Health and Human Services determines that State legislation is needed to change a State plan under Part A of the Social Security Act. In such a case, the effective dates shall be after the close of the first regular session of the State legislature that begins after enactment.
COMMITTEE VIEWS
The Committee Print reauthorizes and enhances the work-related provisions of the Temporary Assistance for Needy Families (TANF) block grant through 2010. Enacted in 1996, TANF revolutionized how States assist needy families by requiring, for the first time, that welfare participants work for benefits. The welfare reform law made the crucial difference in maximizing opportunities for welfare recipients to participate in the workforce.
Welfare reform has delivered unprecedented results and has brought a whole new culture to the federal aid program. Welfare caseloads reached their all-time high in March 1994 at 5.1 million families. Since then, caseloads have declined approximately 60 percent to 1.9 million families in June 2004. This represents a 55 percent decline since the enactment of TANF. The total number of families receiving assistance is now lower than at any time since 1970.
Employment among never-married mothers, who comprise the population most likely to go on welfare, rose by 28 percent between 1996 and 2003, from 49.3 percent to 63.2 percent. The percentage of working welfare recipients has more than doubled from 11.3 percent in 1996 to 25.3 percent in 2002.
In addition, according to U.S. Census figures, 1.6 million children have been lifted from poverty. Child poverty rates declined from 20.5 percent in 1996 to 17.9 percent in 2004. Decreases in poverty have been significant among African-American children, declining from 39.9 percent to 33.6 percent. According to HHS, this rate is lower than at any time before welfare reform was enacted, when child poverty rates for African American children were 40 percent or higher. The poverty rate among Hispanic children declined from 40.3 percent to 28.6 percent.
Many have argued that the economy should be credited with the caseload reduction and increase in work. However, that claim easily is disputed by examining welfare caseloads in previous times of economic growth. Not only did previous periods of economic growth not result in lower caseloads, but during two previous economic expansions (in the late 1960s and the 1980s) caseloads actually increased. And, during the recent recession of 2001, caseloads held steady and in some areas continued to decline.
The Committee believes that the challenge for Congress this year is to build on the unprecedented success of the 1996 welfare reform law--by putting even more Americans on the path to self-reliance.
The Committee has modeled the Print after President George W. Bush's welfare reauthorization and improvement plan, Working Toward Independence, unveiled February 26, 2002. In addition, the Print incorporates into the reauthorization of the CCDBG key elements of President Bush's Good Start, Grow Smart plan to improve early childhood education.
TITLE I--TANF PROGRAM
Given the great success of the 1996 welfare reform law, the Committee believes that the basic structure of TANF should remain intact, but the work rules should be strengthened to increase opportunities for families to move to self-sufficiency and make the program more responsive to disadvantaged families.
Universal engagement and family self-sufficiency plans
While TANF reforms significantly reduced welfare caseloads, we still have work to do. According to the Department of Health and Human Services' Temporary Assistance for Needy Families Program Sixth Annual Report to Congress (November 2004), 58 percent of TANF adult recipients are not participating in work activities as defined by federal law. Given the five year lifetime limit on assistance that exists in the broader TANF law, the Committee believes that it would be a disservice to families not to engage them immediately in activities that could assist them in achieving independence. Therefore, the Print creates a policy of universal engagement to ensure that all families are participating in work and other activities that will lead to self-sufficiency.
Under current law, State plans must require that a parent or caretaker engage in work (as defined by the State) after, at most, 24 months of assistance. However, this requirement is not enforced by a specific penalty. Currently, twelve States or territories do not require TANF recipients to engage in work during their first 24 months of receiving benefits.
States no longer will be permitted to wait 24 months before requiring individuals to engage in work. The Committee Print would repeal this allowance and replace it with a provision requiring parents in families receiving assistance to participate in work or other activities that lead to self-sufficiency. While States currently have the option to develop individual responsibility plans, the Print requires States to create a self-sufficiency plan for each family. The Committee Print requires the State to assess, in the manner deemed appropriate by the State, each work-eligible individual before preparing the plan.
The self-sufficiency plan must be established in consultation, as the State deems appropriate, with the work-eligible individual and specify appropriate direct work activities to assist the family in achieving their maximum degree of self-sufficiency. The State will monitor the participation of individuals in the activities specified in the plan, review the progress of the family toward self-sufficiency, and revise the plan as the State deems appropriate. The State will have sole discretion, consistent with the work requirements of the law, to design activities, monitor progress, and make modifications to the plans. Nothing in the plan shall preclude a State from requiring participation in work and other activities the State deems appropriate for helping families achieve self-sufficiency and improving child well-being. In addition, States may use job search or other appropriate job readiness or work activities to assess the employability of individuals and to determine future engagement activities. The Committee intends that States will have sole discretion to implement the self-sufficiency plans, as long as they are consistent with this section and the work requirements.
Plans must be developed within 60 days of opening a new TANF case, or within twelve months for families enrolled at the time of enactment. States face a penalty for failure to establish self-sufficiency plans as part of the current penalty for failure to satisfy state work
Work requirements
The Committee wants to ensure that all families are on the path to their greatest level of independence. TANF includes annual minimum work participation rate standards for families receiving assistance. Currently, 50 percent of all families receiving benefits are required to participate in federally-recognized work activities for a minimum number of hours per week, and 90 percent of two-parent families are expected to engage in federally-recognized activities. However, the national aggregate participation rate for FY 2000 was only 34 percent, according to HHS. Since then, participation in work activities has dropped. Only 31 percent of all families participated in the required hours of TANF work activities in FY 2003. In addition, States are required to have a much higher percentage of two-parent families participating in work--90 percent. Yet, for FY 2002, the national aggregate participation rate was only 49.9 percent for two-parent families.
Certain families are exempt from required hours of working, including, at a State's option, families with a child under age one. The majority of exempt participants are child-only cases, in which no adult is counted toward the family assistance group.
The Committee prioritizes increasing rates of work participation, since obtaining work experience has been shown to be the most critical factor in helping families break the cycle of dependency. Dr. Larry Mead summarized why work participation is critical when he testified before the Subcommittee on 21st Century Competitiveness on March 15, 2005 when he stated, `The ideal in welfare reform is to link benefits as tightly as possible to work. That requires a clear work test that employable recipients must meet as soon as they apply for aid, not sometime later.' Therefore, the Committee raises the rate of work participation. In FY 2006 the standard is 50 percent, and it rises by five percentage points annually so that 70 percent of a State's caseload must be meeting the federal work standard in FY 2010.
As noted, current law has higher participation rates for two-parent families. The Committee eliminates all separate, higher requirements for two-parent families so as not to discriminate against or discourage marriage. States will only need to meet one work standard.
The Committee recognizes that some families may not be able to meet the expected work standard. As noted, with this Print States will be required to have 70 percent of their caseload working by 2010. As a result, 30 percent of the caseloads will not have to be meeting the federal work participation standard (although States still must engage such families in activities leading toward self-sufficiency as specified in their self-sufficiency plans). People who care for disabled children or have other significant barriers to work are some of the populations the Committee expects States to classify into this 30 percent category. Therefore, the Committee does not carve-out from the work requirement any groups of individuals that may have barriers to work.
Current law reduces work standards by a caseload reduction credit. For each percent decline in a State's caseload from the fiscal year 1995 level, which is not attributable to policy changes, the State's work participation standard is reduced by one percentage point. This credit was given to encourage States to move families off assistance and into work and to give States credit for diverting cases from the rolls. States have an incentive not to enroll families that may need only one-time or short-term assistance to get back on their feet. However, policymakers did not anticipate in 1996 the success that States would have in reducing their caseloads. As a result of this success, the existing caseload reduction credit reduced States' annual work rates substantially. The average effective minimum work participation requirement in FY 2002 was only 4.5 percent for all families and 20.6 percent for two-parent families. In FY 2002, 21 States had sufficient caseload reduction credits to reduce their effective all-parent required rate to zero. Only twelve States faced an effective minimum standard greater than ten percent.
While reductions in caseloads were one of the intended effects of the law, the current caseload reduction leaves little incentive for States to continue to move individuals into work and off the welfare rolls. Therefore, the Committee has updated the credit to reward States for further reductions, which will reduce the effective state work participation rate target for States with falling caseloads while requiring more of the remaining caseload to participate in work. For FY 2006, the credit is based on the percent decline in the caseload from FY 1996; for FY 2007, the base year is 1998; for FY 2008, the base is FY 2001. Thereafter, the base year is the 4th preceding fiscal year. For example, the credit in FY 2010 is based on the caseload decline from FY 2006. So, if a State's welfare caseload declines by 20 percent between fiscal years 2006 and 2009, its effective work participation requirement for the remaining caseload in FY 2010 would be 50 percent, given the updated credit for net caseload reduction.
Members have stressed the importance of emphasizing the need not simply to cut people off the welfare rolls but to move TANF participants into work. Such case closures will be rewarded in this credit as long as they contribute to an overall net caseload reduction.
The Committee Print includes a new `superachiever' credit for States that have reduced their caseloads by more than 60 percent since 1995. The value of the credit would be equal to the number of percentage points above 60 percent in caseload reduction that occurred between 1995 and 2001. The superachiever credit may reduce a State's work participation rate only to 50 percent, although any future caseload reduction also may be applied to the work participation rate the State must achieve, after calculating the superachiever credit, in order to encourage further caseload reduction.
Seventeen States achieved caseload declines of more than 60 percent between fiscal years 1995 and 2001. These States would receive percentage reductions in future work requirements as follows: Colorado is eligible for a maximum 12 percent credit against future rates; Florida, 15 percent; Georgia, 4 percent; Idaho, 20 percent; Illinois, 14 percent; Louisiana, 9 percent; Maryland, 5 percent; Michigan, 4 percent; Mississippi, 10 percent; New Jersey, 2 percent; North Carolina, 6 percent; Ohio, 3 percent; Oklahoma, 9 percent; South Carolina, 5 percent; West Virginia, 2 percent; Wisconsin, 16 percent; and Wyoming, 20 percent. The credit recognizes the challenge that these States might have in further reducing caseloads, which would otherwise reduce the rising work requirements.
Under current law, adults generally are required to participate in 30 hours of work activities, of which 20 hours must be in priority work activities per week. For two-parent families the standard is 35 hours per week, with 30 hours in priority work activities. For a single parent of a child under age six, 20 hours of work participation satisfies the requirement. States may exempt the parent of a child under age one from work and exclude them from the calculation of work participation rates.
Current priority work activities include unsubsidized jobs, subsidized private sector employment, subsidized public sector employment, work experience, on-the-job training, job search for up to six weeks, community service, vocational education for up to twelve months, and providing child care for other TANF recipients. Three other activities can count under certain circumstances: job skills training directly related to employment, and, for high school dropouts or students, education directly related to work and completion of secondary school. Participation in education, including vocational education and students finishing high school, may account for no more than 30 percent of persons credited with work for purposes of satisfying the state work participation rate. Teen parents are deemed to meet the weekly hour participation standard by maintaining satisfactory attendance in secondary school.
The Committee Print revises the work requirement for participants. Under the 1996 reform, as stated, families were required to work only 30 hours a week in order to receive TANF benefits. In today's American workforce, employers almost always require at least 40 hours of work per week. In order to help individuals become prepared for the standard workweek, the Print increases the average weekly work requirement to 40 hours for work-eligible individuals. Work-eligible individuals are individuals who are married or are single heads of household and whose needs are included when determining the amount of assistance to be provided to the family.
In order for a work-eligible individual's hours of work to be able to count toward the participation rate calculation, the individual must participate in at least an average of 24 hours of direct work activities per week in a month. Direct work activities include unsubsidized employment, subsidized private sector employment, subsidized public sector employment, on-the-job training, supervised work experience, or supervised community experience. As noted above, participants now generally are required to work 20 hours in these direct work activities, so this is an increase of four hours of direct work per week.
As under current law, teen parents still will be able to comply with the work requirement by attending school.
The remaining 16 hours of the 40-hour workweek of activities can be in any constructive activity a State determines to be appropriate for the family. The Committee expects such activities to be consistent with the purposes of TANF. Such activities could include education and training, structured activities with a family's children that will promote child well-being, parenting education classes, basic adult education, classes to learn English as a second language, substance abuse treatment, and more.
The Head Start program provides comprehensive early childhood development, educational and other services to low-income preschool children and their families. The Committee recognizes that many TANF participants have children enrolled in the Head Start program. Head Start strongly emphasizes the involvement of families in the program to ensure that programs are responsive to the unique needs of the community and to help improve conditions necessary to prepare children to succeed in school. As part of the program, parents are strongly encouraged to participate in Head Start Centers as volunteers. Such interaction is beneficial for both the parent and the participants. The Committee encourages States to tailor their TANF work programs so that parents can participate in their children's Head Start experience while also engaging in activities that will lead to family self-sufficiency. The Committee believes that parents volunteering in Head Start Centers qualifies as supervised community service and therefore may count toward the 24 hours of direct work activities. In addition, a State may count participation in Head Start toward the 16 hours of other constructive activities, as such participation would be a structured activity that promotes child well-being.
In addition, the Committee believes that parents must be actively involved in their children's education to help their children succeed. Therefore, the Committee Print requires work-eligible individuals to visit the schools of their children at least twice per year, as long as the family continues to receive TANF assistance. States will be required to verify such visits through documentation of their choice. The Committee envisions that such visits should include parent-teacher conferences. If a school does not have such conferences twice a school year, other examples of parental involvement in schools could include volunteering in a child's classroom or on a class field trip. Such activities could count toward the required 16 hours of weekly constructive activities, as they promote child well-being. Not only will this provision allow parents to track their children's academic and social progress, but it also will give parents an opportunity to meet their children's teachers--and vice-versa. At a time when Congress and President Bush are placing such a premium on parental involvement in their children's education, this provision will help ensure that low-income children are not left behind in this respect.
The Committee has changed the methodology for calculating the work rates. Currently, to calculate monthly participation rates, the number of families receiving assistance who are meeting the work standard is divided by the number of countable families receiving assistance. Under the Print, the calculation of the monthly participation rates changes to the total number of hours worked during the month by work-eligible individuals in allowable activities divided by 160 times the number of families receiving assistance. In both circumstances, child-only cases are excluded. States also continue to have the option, on a case-by-case basis, to exclude work-eligible individuals who have children under one year old and certain sanctioned families. States also have the option to exclude from the work requirements families during their first month of assistance.
Basing the calculation on 160 hours of countable work activities assumes that the work-eligible individual will participate in an average of 40 hours of activities for four weeks per month. However, since most months are longer than four weeks, the calculation actually equates to an average of 37 hours per week. Therefore, the calculation includes some flexibility for States to ensure the families' work weeks match those of individuals not receiving assistance. This flexibility allows states to accommodate an individual that works in unsubsidized employment and whose business closes for national holidays or other occasions. The Committee does not expect States to find alternative placements for individuals if their place of work is closed for a day.
The new methodology for calculation of the work participation rates increases States' flexibility in how they can meet the participation rate. Under current law, in order to be counted toward the work rate, families must be participating at least 30 hours in federally countable activities. Now, States will receive credit for hours work-eligible individuals spend in work activities, as long as at least a minimum of 24 hours are spent in direct work activities.
For example, without considering the impact of the caseload reduction credit, a State could reach a 60 percent participation rate in a multitude of ways. Assuming a hypothetical caseload of 100 families, a State could reach a 60 percent participation rate if 60 families have a parent who works 40 hours per week, including 24 hours of direct work activities. Or, 80 families could have a work-eligible parent who works 30 hours per week, including 24 hours of direct work. A variety of combinations could be developed, as long as the work-eligible individuals participate in at least 24 hours of direct work. A State may count more than 40 hours worked by one family, as long as the additional hours are done by work-eligible individuals in direct work activities. For instance, both parents may be working in a married family. Unlike the flexibility in the new formula for calculation of work rates, under current law there is only one way to achieve a hypothetical 60 percent participation rate in a 100 family caseload (without counting the caseload reduction credit), which is for 60 families to have a parent who works at least 30 hours per week in allowable activities.
The appropriateness of emphasizing work first in the revised TANF program is supported by research of what has worked since TANF was enacted. Evaluations of welfare programs on work show that direct work activities are more successful and cost-effective in improving participants' financial well-being and child well-being. Dr. Lynn Karoly, of RAND, synthesized national literature on the effect of work requirements on welfare recipients. During testimony before the 21st Century Competitiveness Subcommittee on October 16, 2001, Dr. Karoly informed the Subcommittee that:
The LFA (labor force attachment) programs, which emphasize job search, result in larger average employment gains than the HCD (human capital development) programs, which emphasize skill-building and generally require the participant to participate in classroom activities. The average employment increase among the search-oriented programs was 9.2 percentage points, compared to 3 percentage points among the skills-oriented programs . . . Among the four work-first programs (included in the synthesis), earnings impacts averaged about $1,200. Among the human-capital programs, earnings impacts were smaller, averaging just under $400. . . . (T)here is evidence that the jobs-first model generated somewhat greater reductions in welfare use than the skills-oriented programs.
However, the Committee believes that to become truly independent of government assistance, families must have the opportunity to obtain education or training that will help them obtain higher paying jobs that are in demand in the local economy. The Committee believes that the Print offers more flexibility for individuals to obtain education than the current law does. Under current law, participants may spend no more than twelve months in vocational education. In addition, no more than 30 percent of a State's caseload may be either teens attending high school or participants in vocational education. Other educational opportunities are strictly limited and can account for no more than ten hours per week. Under the Print, all work-eligible individuals may spend up to 16 hours per week in any kind of education deemed appropriate by the State for up to five years of TANF eligibility, as long as the participant also works part time for an average of 24 hours per week.
The Committee strongly supports blended activities that combine work and education and training. For instance, it is the Committee's intent that vocational education and training programs could combine classroom training with direct work. An individual could spend as many as 16 hours per week in a classroom learning a trade, and could apply newly acquired skills in an actual workplace setting for an average of 24 hours per week. For instance, a nursing student may spend part of her week in a classroom, but also spend part of the week working in a hospital or nursing home to further her skills. These real work experiences should count as direct work.
Curtis Austin, President of Workforce Florida, outlined during his testimony before the Subcommittee on 21st Century Competitiveness on March 15, 2005 one such strategy operating successfully in his State called the Career Advancement and Retention Challenge (CARC). In the program, TANF recipients work and receive training. The Committee Print provides the flexibility for States to provide these activities for up to five years, as long as participants work at least 24 hours. According to Mr. Austin:
The CARC project is a program designed to train those who have obtained employment, but are not yet self-sufficient. . . . One of the keys to this approach is that it allows training for all qualified employees at a given worksite, rather than waiting for such workers to contact the one-stop individually. Such innovative approaches may include, but are not limited to creative, non-traditional training programs, support services and mentoring services. The Regional workforce board staff work with the employer and the employees to plan a training program that considers the employees' regular work schedules, the needs of the employer, opportunities for earnings gains and advancement upon completion of the program and what leveraged dollars or in-kind contributions will be made by the employer or training provider.
The Committee recognizes that short-term, intensive services may be necessary to help some participants become work-ready. As a result, the Print allows substance abuse counseling or treatment, rehabilitation treatment and services, work-related education or training directed effectively at enabling the family member to work, or job search or job readiness assistance to count as direct work activities, as long as the participant engages in the activity at least 24 hours per week, for three months in any 24 consecutive months.
E. Mona Garland, Wisconsin Works Director with the Opportunities Industrialization Center of Greater Milwaukee, who testified before the 21st Century Competitiveness Subcommittee in October 2001, showed the value of short-term training when she said, `We have assigned staff to develop short-term customized training opportunities driven by employment opportunities with higher earning potential in areas such as office skills, medical careers, light industrial, the food service industry and non traditional employment opportunities.'
In addition, under certain circumstances, full-time education longer than three months may be necessary. Therefore, the Print allows States, on a case-by-case basis, to allow full time education or training for four months in any 24 consecutive months if four months are needed to permit an individual to complete a certificate program or other education that will allow the person to fill a known job need in a local area. For purposes of obtaining financial aid, the Higher Education Act of 1965 generally defines an academic term as 15 weeks. Therefore, four months will allow individuals to complete a semester of coursework.
The Committee believes the Print also allows sufficient time for job search. In addition to allowing job search for three months in any 24 consecutive months, a State may choose to exclude a work-eligible individual from the work participation rate calculation for the first month the family is on the roll. Therefore, the work-eligible individual has another month during which she can search for a job, before being subject to other work activities.
The Committee Print maintains current law that allows a State discretion to determine the level of sanction a family will face for failure to participate in program requirements. As under current law, a state may not sanction a family with a child under age six but who cannot obtain child care. However, a State must terminate a family's assistance for at least one month or until the family is compliant with all requirements, whichever is longer, if the work-eligible individual's failure to engage in work is total and persists for at least two consecutive months. The Committee intends total failure to mean that the individual has not participated in direct work or other activities as determined appropriate by the State for even one hour during the two month period. States still are able to determine good cause exemptions for failure to comply. Currently, 15 States never reach a full-family sanction. States with a constitutional or statutory requirement to continue benefits will have a one-year transition in which to comply with this provision.
Although the evidence is not clear, studies suggest that a stricter sanction policy is effective in obtaining compliance with program requirements. A study by Robert Rector at the Heritage Foundation found that States with strong work requirements and full-family sanctions have experienced larger welfare caseload reductions than other States. One example is Wisconsin, which has seen its caseload decline 76 percent since enactment of welfare reform.
Work-related performance improvement
The Committee Print adds provisions to TANF to increase accountability and emphasize program outcomes.
Currently, each State must have a 27-month State plan that describes how the State will conduct a program providing cash assistance to needy families with children, provide parents with work and support services, and comply with other requirements of the law. The Committee Print adds State plan requirements that reflect the legislation's increased focus on engaging more recipients in work and other activities that will lead to self-sufficiency. In addition, the changes reflect Members' interest in helping parents move from a first job to a better job.
The Committee Print requires each State to submit, as part of their required State plans, a description of how the State will pursue ending dependence of needy parents on government benefits by promoting job preparation and work, including specific numerical and measurable performance objectives, and describe the methodology the State will use to measure its performance. Then, beginning in 2007, each State shall submit to the Secretary of HHS a report on achievement of and improvement during the preceding fiscal year regarding the performance measures set forth by the State. The Committee intends for States to have full flexibility to define their performance goals; they simply must describe the goals and the State's ability to obtain them.
In addition, the State shall describe, in its plan, any strategies and programs the State may be undertaking to address employment retention and advancement, including placement into high-demand jobs and whether the jobs are identified using labor market information. The Committee encourages States to help recipients obtain employment that can lead to a career. Using labor market information is one way to identify such available jobs. Operated by and available through the nation's One-Stop Career Center system created under the Workforce Investment Act of 1998 (WIA), labor market information assesses the local or regional economy, identifies labor shortages, and contains information on the type of preparation needed to obtain these jobs. Many labor market information resources are available through the internet, as well, as part of America's Labor Market Information System (ALMIS) operated by the U.S. Department of Labor. States are encouraged to avail these resources when preparing recipients for employment.
The Committee Print also requires States to describe any strategies and programs they may be undertaking to address services for struggling and noncompliant families, and for clients with special problems. The Committee wants to ensure that States consider the potentially unique needs and special circumstances of individual families.
States also are asked to describe program integration, including the extent to which TANF employment and training services are provided through the One-Stop delivery system and the extent to which former recipients of such assistance have access to additional core, intensive, or training services funded through WIA. The Committee urges States to integrate TANF work elements with the One-Stop Career Center system created under WIA.
Under current law, the Secretary is to rank States in order of success in moving recipients into long-term private jobs. The legislation deletes the `long-term' qualifier measure used in ranking State performance and adds an employment retention and advancement ranking factor. This change makes clear that Congress intends States to move recipients into jobs that offer opportunities for advancement rather than simply long-term employment in low-wage jobs.
Mandatory partners with one-stop employment training centers
The Committee Print also requires TANF to be a mandatory partner in the One-Stop delivery system for workforce development created in WIA. However, a Governor may opt-out of this requirement if the Governor notifies the Secretaries of Health and Human Services and Labor in writing of a determination by the Governor not to include the program as a required partner in WIA. The Committee strongly encourages States to include TANF in the One-Stop delivery system.
Under this Committee's leadership, Congress passed WIA to integrate the nation's job training system that formerly was fragmented, contained overlapping programs, and did not serve either job seekers or employers well. The system operates through One-Stop centers, at which numerous programs must make their services available. These programs include vocational education, veterans' employment and training, employment services, vocational rehabilitation and adult education, just to name a few. In addition, direct WIA services also are provided to dislocated workers, adults seeking better employment, and youth.
Currently, employment and training programs funded through the TANF block grant are optional partners in the One-Stop centers. In many States, the TANF system and the workforce development systems are overseen by different entities at the State and local levels. Yet, both operate work programs. The Committee believes that operating TANF in conjunction with the One-Stop delivery system could reduce the stigma associated with accessing welfare services and should increase TANF clients' exposure to employers who utilize the One-Stop Career Centers to find new workers. In addition, it will encourage a continuum of services for low- income families that may become unemployed after leaving welfare, or may need additional training to move up the career ladder. Creating a formal connection to the WIA system will ensure TANF clients have access to labor market information and job listings maintained at the One-Stops and should enhance connections to the business community. It also could eliminate some duplication at the State level.
The 21st Century Competitiveness Subcommittee examined the extent to which TANF employment and training services currently are provided through the One-Stop delivery system during a hearing on March 12, 2002. Dr. Sigurd Nilsen, Director of Education, Workforce and Income Security issues for the Government Accountability Office, formerly the General Accounting Office (GAO), testified that State and local efforts to coordinate their TANF and WIA programs increased in 2001. According to a survey conducted by the GAO, 44 States have informal linkages between the two systems, and 28 have formal linkages such as memoranda of understanding. Coordination occurred most often on the operation of work programs, and less frequently on support programs.
John B. O'Reilly Jr., Executive Director of the Southeast Michigan Community Alliance (SEMCA), which is one of 25 Michigan Works agencies, testified before the 21st Century Competitiveness Subcommittee at the hearing with Dr. Nilsen. During the hearing, Mr. O'Reilly provided first-hand evidence of what makes an integrated delivery system successful:
All of the workforce services are coordinated at the regional level by the Workforce Development Board. All customers are served in a collaborative system that best utilizes resources and existing community support. Employers have a single point of access to services that are specific to their needs. Employers don't know which government program brought our customers into the system, only that they are referred persons who are prescreened to suit the job order placed with the One-Stop.
Curtis Austin of Workforce Florida described the benefits for job-seekers, including TANF recipients, in the integrated system in Florida. In his testimony he stated, `The workforce one-stop system is no longer the welfare office, the unemployment office or the job training office--but rather the public employment center where all services that support employment, including labor market information, available job listings, relevant training opportunities, work supports, career counseling and assessment to identify and address barriers to employment are provided.'
However, real integration may not be possible as long as the programs have different performance standards, reporting requirements, and definitions. The GAO also identified such barriers during their examination of the two systems. Therefore, the Committee has included a requirement that the Secretary of HHS and the Secretary of Labor jointly submit a report to Congress no later than six months after enactment of this legislation to describe changes needed to the two systems to allow greater integration between the welfare and workforce development systems.
Fatherhood
The Committee Print amends Title I of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193) to create a new fatherhood program.
The Committee recognizes that fathers make unique and irreplaceable contributions to the lives of children. According to the National Fatherhood Initiative, in an analysis of nearly 100 studies on parent-child relationships, the love of a father was as important as a mother's love in predicting the social, emotional, and cognitive development and functioning of children and young adults. Children with involved, loving fathers are significantly more likely to do well in school, have healthy self-esteem, exhibit empathy, and avoid high-risk behaviors as compared to children who have uninvolved fathers.
Yet too many children do not have good relationships with their fathers. Twenty-four million children live absent their biological father. About 40 percent of children in homes absent a father have not seen their father at all during the past year. Unfortunately, we know that the absence of fathers produces negative outcomes for their children. According to the National Fatherhood Initiative, children who live absent their fathers are, on average, at least two to three times more likely to be poor; use drugs; experience educational, health, emotional and behavioral problems; to be victims of abuse; and engage in criminal behavior than their peers who live with married parents. Therefore, the Committee believes that it is important to reinforce the importance of responsible fatherhood to reduce the rates of father absence.
These fathers often are involved with a child at birth. Preliminary survey data from the Fragile Families and Child Wellbeing Study, which studied unmarried couples with children, suggest that most unwed fathers are highly involved shortly after the child's birth, and may even intend to marry the child's mother. The key is for fathers to stay involved in the lives of their children.
The Committee identifies three purposes for the program. The first of the three purposes is to provide for projects and activities by public entities and nonprofit community entities, including religious organizations, to test promising approaches to accomplishing the following four objectives: (1) promoting responsible, caring, and effective parenting and encouraging positive father involvement, including the positive involvement of non-resident fathers; (2) enhancing the abilities and commitment of unemployed or low-income fathers to provide support for their families and to avoid or leave welfare, including connecting fathers to employment services and the one-stop delivery system created through the Workforce Investment Act of 1998 (WIA).; (3) improving fathers' ability to effectively manage family business affairs; and (4) encouraging and supporting healthy marriages and married fatherhood.
The second purpose is to improve outcomes for children through the activities described in the first purpose, such as increased family income and economic security, improved school performance, better health, improved emotional and behavioral stability and social adjustment, and reduced risk of delinquency, crime, substance abuse, child abuse and neglect, teen sexual activity, and teen suicide.
The third purpose is to evaluate approaches and disseminate findings to encourage replication of effective approaches in accomplishing the objectives.
The Committee Print authorizes the Secretary of HHS to make grants for fiscal years 2006 through 2010 to public and nonprofit community entities, including religious organizations, and to Indian tribes and tribal organizations, for demonstration service projects and activities designed to test the effectiveness of various approaches to accomplish the four objectives.
Entities applying for a full services grant must submit an application to the Secretary. The application must contain: (1) a description of the project and how it will be carried out; (2) information about the applicant's ability to carry out the project; (3) a description of how the applicant will address child abuse and domestic violence, including how the applicant will coordinate with State and local child protective service and domestic violence programs; (4) a commitment to make available to each individual participating in the project education about alcohol, tobacco, and other drugs, and about the health risks associated with abusing such substances, and other behavioral risks; and (5) a description of how the project would coordinate, as appropriate, with State and local entities responsible for TANF, WIA (including the one-stop delivery system), and other social service programs as the Secretary may require. In addition, the application would include an agreement to maintain records, make reports, and cooperate with reviews or audits as required by the Secretary and an agreement to cooperate with the Secretary's evaluation of the project.
The Secretary also may award grants for limited purposes, which must address at least one of the program objectives. An application for a limited purpose grant of less than $25,000 per fiscal year must contain similar but more limited information and descriptions than those required for full service grants as provided above.
In awarding grants, the Secretary must seek to achieve a balance among entities of differing sizes, entities in differing geographic areas, entities in urban and in rural areas, and entities employing differing methods of achieving the four specified objectives. Also, the Secretary may give preference to projects in which a majority of the clients to be served are low- income fathers.
Federal grant funds may be used for up to 80 percent of the annual costs of full-service projects (or up to 90 percent if the entity demonstrates circumstances limiting the entity's ability to secure non-Federal resources), and for up to 100 percent of annual costs for limited-purpose projects. The non-Federal share may be in cash or in kind.
The Secretary also will award grants for fiscal year 2006 through fiscal year 2010 for two multi-city, multi-State fatherhood projects demonstrating approaches to achieving the four specified objectives. One of the projects is required to test the use of married couples to deliver program services. The Print specifies conditions for an entity to be eligible for such grants. The grants may be used for up to 80 percent of the annual costs of the demonstration projects. The non-Federal share may be in cash or in kind. The Committee believes that the program ought to support efforts by experienced fatherhood organizations to develop projects in major cities.
Further, the Secretary will make grants for fiscal year 2006 through 2010 to support economic incentive demonstration projects. An entity eligible for a grant must be a national, nonprofit fatherhood promotion organization that meets certain conditions. The grant application must specify how the grant would be used for a project that will address each of the fatherhood program's objectives and address employment barriers across programs (such as child support, criminal justice and workforce development programs), using both sanctions and monetary incentives for obtaining employment and earnings subsidies contingent upon work and payment of child support. The projects must direct a majority of its resources to low-income fathers, but does not need to be means-tested. The project will comply with evaluation requirements and coordinate with other specified programs, including TANF and WIA. These demonstration grants can make up no more than 80 percent of the cost of the project, and the non federal share may be cash or in kind.
The Secretary would evaluate the effectiveness of the selected competitive grants for service projects, selected multi-city, multi-State demonstration projects, and the economic incentive demonstration projects from the standpoint of the four specified objectives and other outcomes. The Secretary must publish an implementation evaluation report covering the first 24 months of the activities within 36 months of the initiation of such activities. A final report on the evaluation is to be completed by September 30, 2013. The Committee believes that evaluation is critical in assisting efforts of the Secretary and Congress to determine effectiveness.
The Secretary is also authorized to carry out projects and activities of national significance relating to fatherhood promotion. These projects and activities may include: collection and dissemination of information to interested parties regarding approaches to accomplishing the four specified objectives; development, promotion, and distribution of a media campaign that promotes and encourages involved, committed, and responsible fatherhood; technical assistance in the implementation of local fatherhood promotion programs, and conducting research related to the purposes of the fatherhood program.
The projects and activities assisted must be made available on the same basis to all fathers and expectant fathers able to benefit from such projects and activities, including married and unmarried fathers and custodial and non-custodial fathers, with particular attention to low-income fathers, and to mothers and expectant mothers.
The Committee authorizes $20 million for each of fiscal years 2006 through 2010 to carry out the fatherhood initiatives. Of the amount appropriated, no more than 35 percent shall be available for the costs of multicity, multicounty, or multistate demonstration projects; economic incentive demonstration projects; evaluations; and projects of national significance. At least $5 million would be spent on economic incentive demonstration projects.
Prohibition on Offshoring
The Committee Print prohibits states receiving grant money under TANF from using the grant to contract with a service provider or allow that provider to subcontract any TANF service or function outside of the United States. Further, it prohibits states from awarding a grant that would utilize 1 or more employees outside the United States. Concern was expressed about state grant recipients offshoring call center services. Evidence was offered of at least one state entering into contracts for other federal programs that allowed for the offshoring of call centers which later resulted in that state's legislature passing laws to prevent this action.
TITLE II--AMENDMENTS TO THE CHILD CARE AND DEVELOPMENT BLOCK GRANT OF 1990
Child care is an issue of significant public interest. The dramatic increase in the number of women participating in the labor force, and the number of these women who are the sole or primary financial supporters of their children are the most important factors affecting the demand for child care.
Increasingly, the affect of child care on children also has become a significant public issue. Research in the field of child development demonstrates that low-income children can benefit from child care with an early childhood development, the quality of child focus by narrowing the school readiness gap of low-income children at entry into kindergarten. Therefore care available is important so that all young children are developmentally prepared to enter and succeed in school.
Concerns about the supply, quality and affordability of child care for many low-income families led to a national debate over the nature and extent of the Nation's child care problems and what, if any, Federal intervention would be appropriate. Federal lawmakers recognized the need to address the accessibility and affordability of child care so that parents could participate in the workforce--a necessary precursor to achieve self sufficiency, reduce poverty, and improve child well-being. A stable supply of affordable child care is essential so that parents can work.
In response, Congress created the Child Care and Development Block Grant (CCDBG) in 1990. The CCDBG assists States in their efforts to subsidize the cost of child care for low-income families. In 1996, as part of the Personal Responsibility and Work Opportunities Reconciliation Act (PRWORA), the CCDBG was consolidated with other Federal child care programs and expanded to provide increased Federal funding to serve both low-income working families and families attempting to transition off welfare through work.
The Committee Print, the Personal Responsibility, Work, and Family Promotion Act of 2005, continues the main objectives of the Child Care and Development Block Grant Act of 1990 and the PRWORA of 1996, and makes improvements to the current law. The legislation maintains its primary focus to facilitate access to child care services for low-income families and strengthens the Federal commitment to foster quality environments and early learning experiences for young children.
Witnesses before the Subcommittee on 21st Century Competitiveness testified on March 15, 2005 on the growing importance of child care for success of welfare reform. Cassandra Fallin, Executive Director of the Baltimore City Child Care Resource Center told the Subcommittee:
Child care is a vital support for low-income working families. In 2003, over 1 million families and 1.75 million children were served by the Child Care and Development Block Grant. Almost 90 percent of the children receiving child care assistance were in care because their parents were working, in school, or in training (78 percent because their parents were working; 12 percent while their parents were in training or school) . . . Child care provides the stability needed to keep families working. Research has found that former welfare recipients are 82 percent more likely to keep a job after two years if they receive child care assistance.
Program goals
The Committee Print continues to provide States maximum flexibility in developing child care programs and policies and promotes parental choice so that parents can select the type of child care and setting that they prefer. This legislation amends the existing goals to emphasize that the block grant is intended to serve both low-income working families who receive cash assistance and those who are struggling to maintain independence from the welfare system.
Two new goals also are added to encourage States to improve the quality of child care and to promote cognitive development and school readiness. These goals are consistent with the President's early childhood education initiative, Good Start, Grow Smart, designed to address the cognitive and other developmental needs of young children so that they are prepared to enter and succeed in school.
A primary goal of the Child Care and Development Block Grant is to `promote parental choice to empower working parents to make their own decisions on the child care that best suits their family's needs.' Child care vouchers provided to parents using CCDBG funds promote informed parental choice. In most cases, States allow eligible parents to select their preferred type of care setting and provider, including faith-based providers. In addition to supporting parent choice, the voucher system supports increased child care quality since competition among providers improves the quality of care for all children in preschool settings.
Funding
The Committee Print provides funding for the discretionary portion of the CCDBG. This legislation authorizes $2.3 billion for fiscal year 2006, $2.5 billion for fiscal year 2007, $2.7 billion for fiscal year 2008, $2.9 billion for fiscal year 2009, and $3.1 billion for fiscal year 2010. Block grant funds authorized by this legislation are just one part of the total block grant funding picture. The discretionary authorization is combined with mandatory funds authorized by the Committee on Ways and Means and State matching funds required to receive a portion of the Federal mandatory money. Together these funding sources are commonly referred to as the Child Care and Development Fund (CCDF).
The Federal Government has made a significant financial commitment to providing access to affordable child care and early education opportunities for low-income families, and assistance to improve the quality of child care and early education. Current funding for child care has reached historic new levels.
Federal child care spending through the CCDF and Temporary Assistance to Needy Families (TANF) has increased 242 percent from $2.6 billion in 1997 to $9.9 billion in 2003. The current authorization is $1 billion, but the fiscal year 2005 appropriation is $2.1 billion. Discretionary funding for the Child Care and Development Block Grant has more than doubled in the last five years to $2.1 billion dollars in fiscal year 2005. Mandatory funding currently is set at $2.7 billion, for a total of $4.8 billion in fiscal year 2005.
In addition to Federal dollars provided through mandatory and discretionary funding, States currently may transfer up to 30 percent of their TANF block grant to the Child Care and Development Block Grant. In fiscal year 2003, States transferred nearly $1.9 billion to the block grant--representing 11 percent of the fiscal year 2003 TANF allotment. The Committee Print would allow States to transfer up to 50% of their TANF block grant into the Child Care and Development Fund. As more people transition from welfare into employment, States may have an increasing amount of TANF resources available to help low-income families pay for child care.
States also may spend additional TANF money directly on child care services outside of the CCDBG. In fiscal year 2003, HHS reports that States spent approximately 5% ($1.7 billion) of their TANF grant for child care, and $1.77 billion in state TANF and separate state program maintenance of effort (MOE) funds (some of which may also be reported as State CCDF spending).
In total, expenditure data show that in fiscal year 2003, States spent nearly $9.5 billion in Federal and State money from the Child Care and Development Block Grant (this amount includes spending from the TANF transfers to the CCDBG). In addition, States spent over $3 billion on child care within the TANF system. Therefore, in total, over $12 billion was spent on child care through the CCDBG and TANF in fiscal year 2003 (of which $8.9 billion were Federal funds). Furthermore, another federal block grant, the Social Services Block Grant, also may be used by States to provide child care services. In fiscal year 2002, States spent $205 million on child care through this block grant, which is currently funded at $1.7 billion.
In addition to the CCDBG, TANF and Social Services Block Grant, which states may use to support child care for low-income families, other Federal programs provide funds for child care and early childhood development. These include: Head Start (funded at $6.8 billion in fiscal year 2005), the Child and Adult Care Food Program ($2.1 billion), the Individuals with Disabilities Education Act preschool and infant/toddler grants ($826 million), Even Start ($225 million), Early Reading First ($104 million), Early Learning Fund ($36 million) and, for after- school and weekend activities for school age children, the 21st Century Community Learning Centers ($991 million). In total, combined annual funding for child care and early education programs by the Departments of Health and Human Services and Education is estimated to exceed $17.5 billion.
Application and state plan requirements
Under current law, each State that applies for a Federal block grant is required to submit a State plan to the Secretary of the Department of Health and Human Services. The State plan is designed to ensure that States are complying with minimal Federal guidelines before receiving their grant. States are asked to certify that parents have unlimited access to their children while in care and the ability to choose their child's care provider and setting. States also must assure compliance with State licensing, health and safety requirements, address the child care needs of certain population groups, and substantiate that payment rates for child care services are sufficient to ensure equal access to services available to children not eligible for subsidized care.
The Committee Print modifies the State plan in several ways to improve the quality of child care services provided to eligible families. The legislation asks States to collect and disseminate information to both parents of eligible children and child care providers about: the quality and availability of child care services; resources to assist families in obtaining child care; research and best practices on children's development; and, other programs and services for which families may be eligible, including the food stamp, WIC, Head Start programs, Early Head Start program, programs for infants, toddlers and pre-kindergarten age children available through the Individuals with Disabilities Education Act (IDEA), Medicaid and SCHIP programs.
The Committee Print suggests that States utilize State and local child care resource and referral organizations to collect and disseminate information to families eligible to receive child care assistance and to providers of child care to eligible families, however, States retain the flexibility to use other resources for this purpose. State and local child care resource and referral agencies (CCR&R) often are a community's vital link between parents and child care providers. Most States have in place a comprehensive child care resource and referral network that supports families in finding child care; compiles, analyzes and shares information with parents, providers and communities on the supply, cost, and quality of child care and the availability of child care subsidies; and, supports individuals and programs providing care for children. Child care resource and referral organizations most often are a cost-effective resource because they successfully leverage public dollars with contributions from private sources.
This legislation encourages States to create partnerships with public and private entities to increase the supply and quality of child care services, and to coordinate child care services provided by this Act with other child care and early childhood education programs, such as Head Start; Early Reading First; Even Start; programs for infants, toddlers and pre-kindergarten age children available through the Individuals with Disabilities Education Act (IDEA); and state-sponsored pre-kindergarten.
Beginning in 2007, State plans will contain the outline of the State's strategy to address the quality of child care available to children in that State. States will report on the use of quantifiable, objective measures for evaluating the quality of child care services and its progress in improving child care quality. The Committee does not intend or desire to create any federal standards for quality of child care and intends for States to have complete discretion in fulfilling these provisions.
Finally, States are asked to address factors that can make finding care difficult for some parents. The Committee requests that States report in their State plan how the State is working to meet the child care needs of parents eligible for assistance who have children with special needs, work non-traditional hours, are limited English proficient, or require infant and toddler care.
Limited English proficient (LEP) children account for a growing share of children eligible for child care assistance. According to the National Council of La Raza, 22 percent of children under age 5 who reside in the United States are Hispanic. The Committee recognizes that LEP parents and children have unique needs that must be addressed to ensure equal access to quality programs providing early education and care.
Language barriers are often cited as a main reason that access is impeded to programs and services for which an individual is eligible. An amendment offered by Reps. Fortun.AE6o and Hinojosa will ensure that parents, and their young children who are learning English, have equitable access to child care subsidies. The Committee Print requires that information provided to parents shall `be in plain language and, to the extent practicable, be in a language that such parents can understand'. The Print defines `limited English proficient' in a manner consistent with the definition included in the No Child Left Behind Act and the School Readiness Act.
Child care quality
The Committee Print places a greater emphasis on the importance of early childhood development and encourages States to improve the quality of child care. The quality of child care is critical to school readiness. Research demonstrates that the experiences of a young child greatly affect all aspects of his or her development, including social and cognitive development.
Knowledge about children's learning has expanded during the past two decades. Research in the neurobiological and behavioral sciences related to young children suggests the importance of the first years of life for healthy brain development. From birth through age five, children rapidly develop the capabilities on which subsequent development builds. In addition to linguistic and cognitive gains, children exhibit dramatic progress in their emotional and social capacities. According to child development expert Dr. T. Berry Brazelton:
A child's experiences in the first months and years of life determine whether he or she will enter school eager to learn or not. By school age, family and caregivers have already prepared the child for success or failure. The community has already helped or hindered the family's capacity to nurture the child's development.
Although some variation in development can be expected among all young children, early intervention has the ability to substantially reduce the significant racial, ethnic, and socioeconomic gaps that already exist by the time children begin elementary school. While gaps in school readiness can be attributable to many factors such as economic status, environmental stress, health, parenting, early child care experiences, birth weight, and genetics, researchers conclude that education-based interventions targeted at young children have the greatest impact on improving brain function and behavior. Because educational interventions at an early age have been shown to improve children's social and cognitive skills, the Committee supports States' efforts to enhance the quality and educational focus of child care available to children in all settings.
Under current law, States are required to spend a minimum of four percent of all mandatory, matching and discretionary block grant funds on activities to improve the quality and supply of child care. This print maintains the requirement that States spend a portion of their block grant on activities expected to improve the quality of child care. This is commonly referred to as the `quality set-aside.' The quality set-aside provides States important financial assistance to improve the quality of child care provided to families eligible for assistance under this Act.
The Committee Print increases the minimum quality set-aside from four to six percent. On average, States currently spend more (6 to 7 percent of CCDF dollars) than the minimum required by current law to support activities to improve the quality of child care. The Committee Print continues to provide States the flexibility to spend funds beyond the minimum 6 percent, and the Committee strongly supports States that demonstrate a greater commitment to improving the quality of child care. Overall, States reported spending $346 million on improving the quality of child care in fiscal year 2003, which amounts to over a $70 million increase over the amount States spent to improve child care quality in fiscal year 2000.
Some advocacy groups and legislators assert that that the quality set-aside should be significantly higher. It is the Committee's view that the Print appropriately balances funding for both quality and access to child care services. A Federal mandate to increase further the percentage of CCDBG dollars a State must spend on quality activities would significantly reduce the amount of money available to States to provide vouchers to low-income families in need of child care. This legislation does not create any Federal standards for child care; rather it provides guidance to States on how child care quality might be improved.
Permissible uses for the quality set-aside
Current law provides States broad authority to decide how to spend their quality dollars. The Committee received comments that some States could use these dollars more effectively to enhance child care quality. Research has identified indicators for child care quality. Low child to caregiver ratios, small class sizes, higher levels of caregiver education, low caregiver turnover rates, and adequate compensation each have been linked to better quality early learning environments. Based on this research, the Print stipulates permissible uses for the quality set- aside to help ensure that States spend their quality allocation on activities that have been proven to improve the quality of child care. Beginning in 2007, States are asked to report how these funds are used.
The permissible uses include:
Programs that provide training, education, and other professional development activities to enhance the skills of the child care workforce, including informal caregivers. According to the National Academy of Sciences report, Neurons to Neighborhoods, the ways that parents, families and other caregivers relate and respond to a young child directly affect cognitive development. Research suggests that the quality of child care and early education is ultimately dependent on the quality of the relationship between the caregiver and child. Studies indicate that children are more advanced in all realms of development when their parents, teachers or caregivers provide regular verbal and cognitive stimulation, are sensitive and responsive, and give generous amounts of attention and support.
Activities to enhance early learning and foster school readiness. The brain is affected by numerous environmental conditions, including the kind of nourishment, care, surroundings and stimulation an individual receives. The Committee included this permissible use to encourage States to invest in initiatives that will help foster children's literacy, pre-mathematics, and language skills. These skills provide the foundation for school readiness and are easily attainable when young children are exposed to language-rich environments with caregivers who engage them in interactive activities, promote curiosity and challenge children to develop self-confidence and problem-solving skills.
Children also have needs that must be met before learning can occur, for example the need for ongoing, stable, nurturing relationships, physical protection and safety. The research about children's learning and development provide a context for identifying basic characteristics of a quality child care environment.
Initiatives to increase the retention and compensation of child care providers. High staff turnover rate and low wages are barriers to maintaining or expanding the supply of high quality child care. Many caregivers earn low wages making it difficult to hire and retain well-qualified staff. States are encouraged to use a portion of their block grant quality funds to invest in the quality of the early childhood workforce. States might develop compensation and benefit initiatives that provide salary bonuses or other incentives to remain at a job for a certain length of time, or obtain education or training in early childhood development or related field. Early evidence suggests that these initiatives may slow turnover rates among caregivers.
Other activities deemed by the States to improve the quality of child care services. Any State may spend a portion of their quality set-aside on other activities if the State can demonstrate that the activity contributes to improvement of child care quality. It is the view of this Committee that the quality set-aside should not be used by States to enforce compliance with State licensing requirements and State and local health and safety regulations.
The Committee received recommendations to add other permissible uses to the list established in the Print, but decided to limit the permissible uses to those included in the Print. States maintain the flexibility to decide how to spend their quality dollars, provided that those dollars are spent to improve the quality of child care.
Finally, establishing requirements for quality, such as minimum Federal standards for caregiver credentials or mandated provider accreditation would reduce State flexibility and could jeopardize the integrity of the voucher program by restricting parental choice in selecting child care. For this reason, the Print does not create any Federal standards for child care quality.
Access to services
The CCDBG assists States in securing affordable care for the greatest number of eligible families who need child care services. Each day in the United States, over 12.5 million children under the age of five are in the care of someone other than their parents. According to a report released by the U.S. Department of Education in November 2004, 50 percent of children are in some form of non-parental child care by the age of 9 months. And, according to the National Research Council, children spend an average of 40 hours per week in child care.
The number of children receiving block grant subsidies has sharply increased at the same time as this historic increase in the number of low-income and single parents working. Between 1996 and 1999, there was an 80 percent increase in the number of children receiving a monthly child care subsidy. Some advocates and lawmakers contend that many potentially eligible children do not receive subsidies due to limited resources. However, the demand for child care services and the number of eligible families in need of subsidies may be overestimated because not all low-income parents need subsidized child care. In fact, not all parents who receive welfare or are transitioning off welfare are working, and many parents make in-home or other informal care arrangements with friends or relatives instead of applying for child care assistance through the block grant. The Committee acknowledges the paucity of reliable data on child care use and availability. For this reason, the Print would require that aggregated statistics on child care supply, demand, and quality be compiled and reported annually to Congress.
Estimates of subsidies needed by children through the Child Care and Development Block Grant and TANF might be reduced further by taking into account the availability of other programs and funding sources serving children, including State-funded pre-kindergarten programs and Head Start. The Congressional Research Services estimates that 44 percent of all 3 and 4 year olds eligible for Head Start are enrolled, and about 62,000 toddlers are served under the Early Head Start program. The Committee strongly encourages States to maximize each public dollar spent on early care and education by coordinating Federal and local funding streams and services available to young children.
The Committee Print eliminates the Federal income limit for eligibility, previously set at 85 percent of the State median income. States must continue to prioritize families based on need and serve both TANF and non-TANF families. Eight-five percent of the State median income may be too high for some States, yet not high enough for others. For example, 85 percent of the State median income for a family of three in Connecticut is $58,920 a year, yet in Mississippi it is $30,156 for a family of the same size.
The Committee received comments that States might interpret the elimination of a Federal eligibility limit as a suggestion that assistance provided through the block grant should be targeted to TANF families only. This is not the intent of the Committee. The Committee Print states clearly that States must use block grant funds to provide child care assistance to both TANF and non-TANF families. The legislation amends the CCDBG goals to clarify the Congressional intent to provide assistance to low-income families, not exclusively those on or transitioning off TANF. States and territories must spend 70 percent of their mandatory child care money to subsidize child care for TANF families, families transitioning off TANF, and families at risk of becoming dependent on public assistance. States also must ensure that `a substantial portion' of the State grant that is not reserved for TANF families and families transitioning off TANF is used to provide assistance to low-income working families not receiving cash assistance.
Finally, the Print requests that States address factors that can make finding child care difficult for some parents. As part of the State plan, States must describe actions within the State, planned or in progress, to meet the child care needs of parents eligible for assistance, particularly those who have children with special needs, work non-traditional hours, or require infant and toddler care.
Gulf coast hurricanes
In August 2005, Hurricane Katrina caused catastrophic damage and forced nearly a million individuals to flee the Gulf coast region of the United States. In terms of physical devastation to property and loss of life, Hurricane Katrina was one of the worst natural disasters in the Nation's history. It was followed by Hurricane Rita, which hit the Gulf coast in September 2005. In the aftermath of Hurricanes Katrina and Rita, communities across the country accepted displaced families seeking temporary evacuation or a new permanent residence. Both displaced families and the communities to which they fled, have unique and urgent needs for family support services such as child care.
In response to these needs, language is included in the Committee Print that grants the Secretary limited authority to waive or ease federal requirements for the State administration of the Child Care and Development Block Grant. This measure will assist the efforts of the Department to provide regulatory relief to States affected by the recent Gulf hurricanes. As a result, States and local providers can better assist displaced families in accessing child care and easing burdens on facilities that have accepted these children. Similar language also is included in H.R. 3975, the Hurricane Regulatory Relief Act as introduced by Rep. Jindal.
Specifically, the Committee Print authorizes the Secretary to waive or modify certain federal CCDBG requirements through June 30, 2006. The waivers may be used to temporarily suspend income limitations on eligibility to receive services; work requirements applicable to eligibility to receive services; the application of the quality set-aside in states affected by Hurricane Katrina; and any barrier to providing priority services to displaced children provided that enrolled children residing in such state do not lose eligibility as a result.
In addition, the Secretary of HHS has issued guidance regarding ways in which State child care administrators may use their block grant funds to address needs resulting from the Gulf hurricanes. States may amend their state CCDBG plans to redefine eligibility conditions or broaden priority rules to be more inclusive of displaced families.
TITLE III--STATE AND LOCAL FLEXIBILITY
States have used the flexibility of TANF to transform their public assistance programs into innovative and comprehensive systems. However, welfare reform really began at the State level as States obtained waivers from the Federal government. In addition, the nation's comprehensive workforce development system created through WIA was preceded by waivers that permitted every State to establish One-Stop Career Centers.
Building upon this history of successful implementation of waivers, the Print permits States or local entities to coordinate certain public assistance and workforce development programs. Offering States and localities the opportunity to innovate and experiment will strengthen social services and make them more efficient.
Programs to aid low-income and working families are not as effective as they could be because of the differences in administrative practices and program rules that govern them. The Committee Print will allow the next generation of innovation at the State and local level, permitting what former Secretary of the Department of Health and Human Services Tommy Thompson did as Governor of Wisconsin, and other Governors have done, but for a broader array of programs.
The authority granted under this Title will allow States and local entities to seek program waivers from the Federal agency responsible for administering the program to develop comprehensive strategies to support working individuals and families, help families escape welfare dependency, promote child well-being, or help build stronger families. The heads of the State or sub-State entities that administer the qualified programs to be included in a demonstration project will submit an application to the Secretaries that administer the programs at the federal level. A State cannot seek to waive activities administered locally unless the local administering entities join in the applications. The Committee intends that this provision gives local administering entities a veto over State initiatives that would impact their programs.
Programs for which waivers may be sought include the Workforce Investment Act (excluding Job Corps), the Job Opportunities for Low-Income Individuals grants, activities funded under the Wagner-Peyser Act, activities funded under the Adult Education and Family Literacy Act, activities funded under the Child Care and Development Block Grant, TANF, housing programs, and food stamps. The entities applying to conduct the demonstration project will need to describe how the purposes of the underlying programs to be coordinated will be achieved, the populations to be served, a description of how the project is to improve or enhance achievement of the purposes of the programs, and a description of performance objectives and outcomes for the proposed demonstration project. They also will be required to evaluate the project.
A demonstration project must receive approval of each relevant Secretary in order to move forward, and the Secretaries only may approve a project if the proposed project is likely to improve the quality or effectiveness of the programs involved. The waiver terms and conditions are subject to cost neutrality requirements.
Secretaries will not be permitted to waive certain critical protections, including the purposes and goals of the underlying programs, civil rights and prohibitions of discrimination, labor market standards under the Fair Labor Standards Act, environmental protections, health and safety provisions, and matters of maintenance of effort. The Secretaries also cannot waive any requirement that a State pass through to a local entity all or part of an amount paid to the State. In addition, the Secretaries cannot waive any provision of WIA if the waiver would violate section 189(i)(4)(A)(i) of WIA, which will ensure the allocation of funds to local workforce investment areas and the establishment and functions of local areas and local boards will continue as specified in current law.
Each federal department that has approved waivers will be required to report annually on the number and scope of waivers, the success of each project in achieving the goals of the demonstration project, and any recommendations to Congress for the modification of current programs based on findings from the States' evaluations.
TITLE IV--EFFECTIVE DATE
The Committee Print makes changes effective on the date of enactment, unless the Secretary of Health and Human Services determines that State legislation is needed to change a State plan under Part A of the Social Security Act. In such a case, the effective dates shall be after the close of the first regular session of the State legislature that begins after enactment.
SECTION-BY-SECTION ANALYSIS
Section 2000. Lists of the Table of Contents for the title.
SUBTITLE A--WELFARE REFORM
Part 1--Short Title; References
Section 2001. Establishes the short title of the subtitle to be `Personal Responsibility and Family Protection Act of 2005.'
Section 2002. Explanation of References.
Part 2--TANF
Section 2011. Universal engagement and family self-sufficiency plan requirements
Amends Section 402(a)(1)(A) of the Social Security Act to modify State plan requirements to ensure States require parents or caretakers to engage in work and self-sufficiency activities, in accordance with family self-sufficiency plans; amends Section 408(b) of the Act to require States to establish family self-sufficiency plans and require States to monitor and review the participation of work eligible members of the family; amends Section 409(a)(3) of the Act to create a penalty against States for failure to establish such plans.
Section 2012. Work participation requirements
Amends Section 407 of the Act to increase States' rates of required work participation from 50 percent in 2006 to 70 percent in 2010, revise the caseload reduction credit, establish minimum hours of countable work and other activities, define work activities, clarify penalties against individuals for failure to engage in work activities, and make conforming amendments.
Section 2013. Work-related performance improvement
Amends Section 402(a)(1) of the Act to modify State plan requirements to address work- related performance objectives and strategies to address certain issues; amends Section 411 of the Act to require a report on performance goals; amends Section 413 of the Act to require the development of performance measures.
Section 2014. Report on coordination
Requires the Secretary of Health and Human Services and the Secretary of Labor to jointly submit a report to Congress on program simplifications needed to allow greater integration between the welfare and workforce development systems.
Section 2015. Fatherhood program
Amends Title I of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 to recognize the need to promote responsible fatherhood; allow the Secretary to make grants for fiscal years 2006 through 2010 to public and nonprofit community entities for demonstration service projects and activities designed to test the effectiveness of various approaches to accomplish the objectives of the section; allow the Secretary to make grants for fiscal years 2006 through 2010 for two multicity, multistate projects demonstrating approaches to achieve the objectives of the section and for economic incentive demonstration projects; direct the Secretary to evaluate the effectiveness of the funded projects under this section from the standpoint of specified purposes; authorize the Secretary to carry out projects of national significance relating to fatherhood promotion; and to authorize appropriations of $20,000,000 for each of fiscal years 2006 through 2010 to carry out the provisions of this section.
Section 2016. State option to make TANF programs mandatory partners with one-stop employment training centers
Requires TANF programs to be mandatory partners with One-Stop Employment Training Centers created under the Workforce Investment Act of 1998.
Section 2017. Sense of the Congress
Specifies that it is the sense of the Congress that a welfare-to-work program should include a mentoring program.
Section 2018. Prohibition on Offshoring
Amends Section 408(a) by adding language to prohibit a State to which a grant is made under section 403 from using TANF funds for offshoring.
Part 3--Child Care
Section 2021. Short title
Specifies that the title of this part may be cited as the `Caring for Children Act of 2005.'
Section 2022. Goals
Amends Section 658A(b) of the Child Care and Development Block Grant Act of 1990 to assist States to provide child care to low-income families, to encourage States to improve the quality of child care, and to promote school readiness.
Section 2023. Authorization of appropriations
Amends Section 658B of the Child Care and Development Block Grant Act of 1990 to authorize appropriations through 2010.
Section 2024. Application and plan
Amends Section 658E(c)(2) of the Child Care and Development Block Grant Act of 1990 to modify and add State plan requirements in the areas of consumer and provider education information, coordination, public-private partnerships, child care service quality, and access for certain populations; requires States to develop a strategy to address the quality of child care services and report on that strategy.
Section 2025. Activities to improve the quality of child care
Amends Section 658G of the Child Care and Development Block Grant Act of 1990 to establish permissible uses of funds set-aside for quality activities by specifying that no less than six percent of funds a State receives shall be used for activities that provide training and professional development of the child care workforce, enhance early learning for young children, increase the retention and compensation of child care providers, or are deemed by the State to improve the quality of child care services.
Section 2026. Reports and Audits
Amends Section 658K(a)(1)(B)(iii) of the Child Care and Development Block Grant Act of 1990 by inserting `ethnicity, primary language,' after race.
Section 2027. Report by Secretary
Requires the Secretary to report to Congress no later than October 1, 2007 and biennially thereafter.
Section 2028. Definitions
Amends Section 658P(4)(B) of the Child Care and Development Block Grant Act of 1990 to provide States more flexibility in establishing who is an eligible child. This section also is amended by redesignating paragraph (9) as paragraph (10) and inserting after paragraph (8) a definition of Limited English Proficiency with respect to an individual.
Section 2029. Waiver Authority to Expand the Availability of Services Under Child Care and Development Block Grant Act of 1990
Specifies that for a period up to June 30, 2006, and to an extent which the Secretary of Health and Human Services considers to be appropriate, the Secretary may waive or modify for an affected State, and any State serving significant numbers of individuals adversely affected by a Gulf hurricane disaster, certain provisions of the Child Care and Development Block Grant of 1990.
Part 4--State and Local Flexibility
Section 2041. Program Coordination Demonstration Projects
Authorizes State demonstration projects to coordinate two or more specified programs in order to support working individuals and families, help families escape welfare dependency, promote child well-being, or help build stronger families, subject to specified conditions and protections.
Part 5--Effective Date
Section 2051. Effective Date
Establishes the effective date of the amendments made by this subtitle.
APPLICATION OF LAW TO THE LEGISLATIVE BRANCH
Section 102(b)(3) of Public Law 104-1 requires a description of the application of this bill to the legislative branch. The Committee Print amends and improves the mandatory work requirements and other work-related provisions of the Temporary Assistance for Needy Families (TANF) block grant and reauthorizes the Child Care and Development Block Grant. The bill does not prevent legislative branch employees from receiving services provided under this legislation.
UNFUNDED MANDATE STATEMENT
Section 423 of the Congressional Budget and Impoundment Control Act (as amended by Section 101(a)(2) of the Unfunded Mandates Reform Act, P.L. 104-4) requires a statement of whether the provisions of the reported bill include unfunded mandates. The Committee Print reauthorizes spending programs under amends the Temporary Assistance for Needy Families (TANF) block grant and the Child Care and Development Block Grant. As such, the bill does not contain any unfunded mandates.
ROLLCALL VOTES
Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee Report to include for each record vote on a motion to report the measure or matter and on any amendments offered to the measure or matter the total number of votes for and against and the names of the Members voting for and against.
STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES
In accordance with clause (3)(c) of House Rule XIII, the goal of the Committee Print is to improve the mandatory work requirements and other work-related provisions of the Temporary Assistance for Needy Families (TANF) block grant, improve the Child Care and Development Block Grant, and increase flexibility for certain federal welfare programs. The Committee expects the Departments of Health and Human Services, Education, and Labor to comply with these provisions and implement the changes to the law in accordance with these stated goals.
CONSTITUTIONAL AUTHORITY STATEMENT
Under clause 3(d)(1) of rule XIII of the Rules of the House of Representatives, the Committee must include a statement citing the specific powers granted to Congress in the Constitution to enact the law proposed by the Committee Print. The Committee believes that the amendments, made by this bill to the Social Security Act, are within Congress' authority under Article I, section 8, clause 1 of the Constitution.
STATEMENT OF OVERSIGHT FINDINGS AND RECOMMENDATIONS OF THE COMMITTEE
In compliance with clause 3(c)(1) of rule XIII and clause (2)(b)(1) of rule X of the Rules of the House of Representatives, the Committee's oversight findings and recommendations are reflected in the body of this report.
NEW BUDGET AUTHORITY AND CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
With respect to the requirements of clause 3(c)(2) of rule XIII of the House of Representatives and section 308(a) of the Congressional Budget Act of 1974 and with respect to requirements of 3(c)(3) of rule XIII of the House of Representatives and section 402 of the Congressional Budget Act of 1974, the Committee will receive a cost estimate for the Committee Print from the Director of the Congressional Budget Office, which will be transmitted.
COMMITTEE ESTIMATE
Clauses 3(d)(2) of rule XIII of the Rules of the House of Representatives requires an estimate and a comparison by the Committee of the costs that would be incurred in carrying out the Committee Print. However, clause 3(d)(3)(B) of that rule provides that this requirement does not apply when the Committee has included in its report a timely submitted cost estimate of the bill prepared by the Director of the Congressional Budget Office under section 402 of the Congressional Budget Act.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
In compliance with clause 3(e) of rule XIII of the Rules of the House of Representatives, changes in existing law made by the bill, as reported, are shown as follows (new matter is printed in italic and existing law in which no change is proposed is shown in roman):
SOCIAL SECURITY ACT
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TITLE IV--GRANTS TO STATES FOR AID AND SERVICES TO NEEDY FAMILIES WITH CHILDREN AND FOR CHILD-WELFARE SERVICES
PART A--BLOCK GRANTS TO STATES FOR TEMPORARY ASSISTANCE FOR NEEDY FAMILIES
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SEC. 402. ELIGIBLE STATES; STATE PLAN.
- (a) IN GENERAL- As used in this part, the term `eligible State' means, with respect to a fiscal year, a State that, during the 27-month period ending with the close of the 1st quarter of the fiscal year, has submitted to the Secretary a plan that the Secretary has found includes the following:
- (1) OUTLINE OF FAMILY ASSISTANCE PROGRAM-
- (A) GENERAL PROVISIONS- A written document that outlines how the State intends to do the following:
- (i) * * *
- [Struck out->]
[ (ii) Require a parent or caretaker receiving assistance under the program to engage in work (as defined by the State) once the State determines the parent or caretaker is ready to engage in work, or once the parent or caretaker has received assistance under the program for 24 months (whether or not consecutive), whichever is earlier, consistent with section 407(e)(2). ][<-Struck out]- [Struck out->]
[ (iii) Ensure that parents and caretakers receiving assistance under the program engage in work activities in accordance with section 407. ][<-Struck out]- (ii) Require a parent or caretaker receiving assistance under the program to engage in work or alternative self-sufficiency activities (as defined by the State), consistent with section 407(e)(2).
- (iii) Require families receiving assistance under the program to engage in activities in accordance with family self-sufficiency plans developed pursuant to section 408(b).
* * * * * * *
- (vii) The document shall--
- (I) describe how the State will pursue ending dependence of needy families on government benefits and reducing poverty by promoting job preparation and work;
- (II) include specific, numerical, and measurable performance objectives for accomplishing subclause (I); and
- (III) describe the methodology that the State will use to measure State performance in relation to each such objective.
- (viii) Describe any strategies and programs the State may be undertaking to address--
- (I) employment retention and advancement for recipients of assistance under the program, including placement into high-demand jobs, and whether the jobs are identified using labor market information;
- (II) services for struggling and noncompliant families, and for clients with special problems; and
- (III) program integration, including the extent to which employment and training services under the program are provided through the One-Stop delivery system created under the Workforce Investment Act of 1998, and the extent to which former recipients of such assistance have access to additional core, intensive, or training services funded through such Act.
- (B) SPECIAL PROVISIONS-
- (i) * * *
* * * * * * *
- [Struck out->]
[ (iv) Not later than 1 year after the date of enactment of this section, unless the chief executive officer of the State opts out of this provision by notifying the Secretary, a State shall, consistent with the exception provided in section 407(e)(2), require a parent or caretaker receiving assistance under the program who, after receiving such assistance for 2 months is not exempt from work requirements and is not engaged in work, as determined under section 407(c), to participate in community service employment, with minimum hours per week and tasks to be determined by the State. ][<-Struck out]* * * * * * *
[Struck out->][ SEC. 407. MANDATORY WORK REQUIREMENTS. ][<-Struck out]
- [Struck out->]
[ (a) PARTICIPATION RATE REQUIREMENTS- ][<-Struck out]- [Struck out->]
[ (1) ALL FAMILIES- A State to which a grant is made under section 403 for a fiscal year shall achieve the minimum participation rate specified in the following table for the fiscal year with respect to all families receiving assistance under the State program funded under this part: ][<-Struck out]| The minimum | |
| participation | |
[Struck out->][ If the fiscal year is: ][<-Struck out] |
rate is: |
| 1997 | 25 |
| 1998 | 30 |
| 1999 | 35 |
| 2000 | 40 |
| 2001 | 45 |
| 2002 or thereafter | 50. |
- [Struck out->]
[ (2) 2-PARENT FAMILIES- A State to which a grant is made under section 403 for a fiscal year shall achieve the minimum participation rate specified in the following table for the fiscal year with respect to 2-parent families receiving assistance under the State program funded under this part: ][<-Struck out]| The minimum | |
| participation | |
[Struck out->][ If the fiscal year is: ][<-Struck out] |
rate is: |
| 1997 | 75 |
| 1998 | 75 |
| 1999 or thereafter | 90. |
- [Struck out->]
[ (b) CALCULATION OF PARTICIPATION RATES- ][<-Struck out]- [Struck out->]
[ (1) ALL FAMILIES- ][<-Struck out]- [Struck out->]
[ (A) AVERAGE MONTHLY RATE- For purposes of subsection (a)(1), the participation rate for all families of a State for a fiscal year is the average of the participation rates for all families of the State for each month in the fiscal year. ][<-Struck out]- [Struck out->]
[ (B) MONTHLY PARTICIPATION RATES- The participation rate of a State for all families of the State for a month, expressed as a percentage, is-- ][<-Struck out]- [Struck out->]
[ (i) the number of families receiving assistance under the State program funded under this part that include an adult or a minor child head of household who is engaged in work for the month; divided by ][<-Struck out]- [Struck out->]
[ (ii) the amount by which-- ][<-Struck out]- [Struck out->]
[ (I) the number of families receiving such assistance during the month that include an adult or a minor child head of household receiving such assistance; exceeds ][<-Struck out]- [Struck out->]
[ (II) the number of families receiving such assistance that are subject in such month to a penalty described in subsection (e)(1) but have not been subject to such penalty for more than 3 months within the preceding 12-month period (whether or not consecutive). ][<-Struck out]- [Struck out->]
[ (2) 2-PARENT FAMILIES- ][<-Struck out]- [Struck out->]
[ (A) AVERAGE MONTHLY RATE- For purposes of subsection (a)(2), the participation rate for 2-parent families of a State for a fiscal year is the average of the participation rates for 2-parent families of the State for each month in the fiscal year. ][<-Struck out]- [Struck out->]
[ (B) MONTHLY PARTICIPATION RATES- The participation rate of a State for 2-parent families of the State for a month shall be calculated by use of the formula set forth in paragraph (1)(B), except that in the formula the term `number of 2-parent families' shall be substituted for the term `number of families' each place such latter term appears. ][<-Struck out]- [Struck out->]
[ (C) FAMILY WITH A DISABLED PARENT NOT TREATED AS A 2-PARENT FAMILY- A family that includes a disabled parent shall not be considered a 2-parent family for purposes of subsections (a) and (b) of this section. ][<-Struck out]SEC. 407. WORK PARTICIPATION REQUIREMENTS.
- (a) Participation Rate Requirements- A State to which a grant is made under section 403 for a fiscal year shall achieve a minimum participation rate equal to not less than--
- (1) 50 percent for fiscal year 2006;
- (2) 55 percent for fiscal year 2007;
- (3) 60 percent for fiscal year 2008;
- (4) 65 percent for fiscal year 2009; and
- (5) 70 percent for fiscal year 2010 and each succeeding fiscal year.
- (b) Calculation of Participation Rates-
- (1) AVERAGE MONTHLY RATE- For purposes of subsection (a), the participation rate of a State for a fiscal year is the average of the participation rates of the State for each month in the fiscal year.
- (2) MONTHLY PARTICIPATION RATES; INCORPORATION OF 40-HOUR WORK WEEK STANDARD-
- (A) IN GENERAL- For purposes of paragraph (1), the participation rate of a State for a month is--
- (i) the total number of countable hours (as defined in subsection (c)) with respect to the counted families for the State for the month; divided by
- (ii) 160 multiplied by the number of counted families for the State for the month.
- (B) COUNTED FAMILIES DEFINED-
- (i) IN GENERAL- In subparagraph (A), the term `counted family' means, with respect to a State and a month, a family that includes a work-eligible individual and that receives assistance in the month under the State program funded under this part, subject to clause (ii).
- (ii) STATE OPTION TO EXCLUDE CERTAIN FAMILIES- At the option of a State, the term `counted family' shall not include--
- (I) a family in the first month for which the family receives assistance from a State program funded under this part on the basis of the most recent application for such assistance;
- (II) on a case-by-case basis, a family in which the youngest child has not attained 12 months of age; or
- (III) a family that is subject to a sanction under this part or part D, but that has not been subject to such a sanction for more than 3 months (whether or not consecutive) in the preceding 12-month period.
- (iii) STATE OPTION TO INCLUDE INDIVIDUALS RECEIVING ASSISTANCE UNDER A TRIBAL FAMILY ASSISTANCE PLAN OR TRIBAL WORK PROGRAM- At the option of a State, the term `counted family' may include families in the State that are receiving assistance under a tribal family assistance plan approved under section 412 or under a tribal work program to which funds are provided under this part.
- (C) WORK-ELIGIBLE INDIVIDUAL DEFINED- In this section, the term `work-eligible individual' means an individual--
- (i) who is married or a single head of household; and
- (ii) whose needs are (or, but for sanctions under this part or part D, would be) included in determining the amount of cash assistance to be provided to the family under the State program funded under this part.
- (3) PRO RATA REDUCTION OF PARTICIPATION RATE DUE TO CASELOAD REDUCTIONS NOT REQUIRED BY FEDERAL LAW AND NOT RESULTING FROM CHANGES IN STATE ELIGIBILITY CRITERIA-
- (A) IN GENERAL- The Secretary shall prescribe regulations for reducing the minimum participation rate otherwise required by this section for a fiscal year by the number of percentage points equal to the number of percentage points (if any) by which--
- (i) * * *
- [Struck out->]
[ (ii) the average monthly number of families that received aid under the State plan approved under part A (as in effect on September 30, 1995) during fiscal year 1995. ][<-Struck out]- (ii) the average monthly number of families that received assistance under the State program funded under this part during the base year.
- The minimum participation rate shall not be reduced to the extent that the Secretary determines that the reduction in the number of families receiving such assistance is required by Federal law.
- (B) ELIGIBILITY CHANGES NOT COUNTED- The regulations required by subparagraph (A) shall not take into account families that are diverted from a State program funded under this part as a result of differences in eligibility criteria under a State program funded under this part [Struck out->]
[ and eligibility criteria under the State program operated under the State plan approved under part A (as such plan and such part were in effect on September 30, 1995) ][<-Struck out] and the eligibility criteria in effect during the then applicable base year. Such regulations shall place the burden on the Secretary to prove that such families were diverted as a direct result of differences in such eligibility criteria.- (C) BASE YEAR DEFINED- In this paragraph, the term `base year' means, with respect to a fiscal year--
- (i) if the fiscal year is fiscal year 2006, fiscal year 1996;
- (ii) if the fiscal year is fiscal year 2007, fiscal year 1998;
- (iii) if the fiscal year is fiscal year 2008, fiscal year 2001; or
- (iv) if the fiscal year is fiscal year 2009 or any succeeding fiscal year, the then 4th preceding fiscal year.
- [Struck out->]
[ (4) STATE OPTION TO INCLUDE INDIVIDUALS RECEIVING ASSISTANCE UNDER A TRIBAL FAMILY ASSISTANCE PLAN OR TRIBAL WORK PROGRAM- For purposes of paragraphs (1)(B) and (2)(B), a State may, at its option, include families in the State that are receiving assistance under a tribal family assistance plan approved under section 412 or under a tribal work program to which funds are provided under this part. ][<-Struck out]- [Struck out->]
[ (5) STATE OPTION FOR PARTICIPATION REQUIREMENT EXEMPTIONS- For any fiscal year, a State may, at its option, not require an individual who is a single custodial parent caring for a child who has not attained 12 months of age to engage in work, and may disregard such an individual in determining the participation rates under subsection (a) for not more than 12 months. ][<-Struck out]- (4) SUPERACHIEVER CREDIT-
- (A) IN GENERAL- The participation rate, determined under paragraphs (1) and (2) of this subsection, of a superachiever State for a fiscal year shall be increased by the lesser of--
- (i) the amount (if any) of the superachiever credit applicable to the State; or
- (ii) the number of percentage points (if any) by which the minimum participation rate required by subsection (a) for the fiscal year exceeds 50 percent.
- (B) SUPERACHIEVER STATE- For purposes of subparagraph (A), a State is a superachiever State if the State caseload for fiscal year 2001 has declined by at least 60 percent from the State caseload for fiscal year 1995.
- (C) AMOUNT OF CREDIT- The superachiever credit applicable to a State is the number of percentage points (if any) by which the decline referred to in subparagraph (B) exceeds 60 percent.
- (D) DEFINITIONS- In this paragraph:
- (i) STATE CASELOAD FOR FISCAL YEAR 2001- The term `State caseload for fiscal year 2001' means the average monthly number of families that received assistance during fiscal year 2001 under the State program funded under this part.
- (ii) STATE CASELOAD FOR FISCAL YEAR 1995- The term `State caseload for fiscal year 1995' means the average monthly number of families that received aid under the State plan approved under part A (as in effect on September 30, 1995) during fiscal year 1995.
- [Struck out->]
[ (c) ENGAGED IN WORK- ][<-Struck out]- [Struck out->]
[ (1) GENERAL RULES- ][<-Struck out]- [Struck out->]
[ (A) ALL FAMILIES- For purposes of subsection (b)(1)(B)(i), a recipient is engaged in work for a month in a fiscal year if the recipient is participating in work activities for at least the minimum average number of hours per week specified in the following table during the month, not fewer than 20 hours per week of which are attributable to an activity described in paragraph (1), (2), (3), (4), (5), (6), (7), (8), or (12) of subsection (d), subject to this subsection: ][<-Struck out]| The minimum | |
[Struck out->][ If the month is ][<-Struck out] |
average number of |
| in fiscal year: | hours per week is: |
| 1997 | 20 |
| 1998 | 20 |
| 1999 | 25 |
| 2000 or thereafter | 30. |
- [Struck out->]
[ (B) 2-PARENT FAMILIES- For purposes of subsection (b)(2)(B), an individual is engaged in work for a month in a fiscal year if-- ][<-Struck out]- [Struck out->]
[ (i) the individual and the other parent in the family are participating in work activities for a total of at least 35 hours per week during the month, not fewer than 30 hours per week of which are attributable to an activity described in paragraph (1), (2), (3), (4), (5), (6), (7), (8), or (12) of subsection (d), subject to this subsection; and ][<-Struck out]- [Struck out->]
[ (ii) if the family of the individual receives federally-funded child care assistance and an adult in the family is not disabled or caring for a severely disabled child, the individual and the other parent in the family are participating in work activities for a total of at least 55 hours per week during the month, not fewer than 50 hours per week of which are attributable to an activity described in paragraph (1), (2), (3), (4), (5), (6), (7), (8), or (12) of subsection (d). ][<-Struck out]- [Struck out->]
[ (2) LIMITATIONS AND SPECIAL RULES- ][<-Struck out]- [Struck out->]
[ (A) NUMBER OF WEEKS FOR WHICH JOB SEARCH COUNTS AS WORK- ][<-Struck out]- [Struck out->]
[ (i) LIMITATION- Notwithstanding paragraph (1) of this subsection, an individual shall not be considered to be engaged in work by virtue of participation in an activity described in subsection (d)(6) of a State program funded under this part, after the individual has participated in such an activity for 6 weeks (or, if the unemployment rate of the State is at least 50 percent greater than the unemployment rate of the United States or the State is a needy State (within the meaning of section 403(b)(6)), 12 weeks), or if the participation is for a week that immediately follows 4 consecutive weeks of such participation. ][<-Struck out]- [Struck out->]
[ (ii) LIMITED AUTHORITY TO COUNT LESS THAN FULL WEEK OF PARTICIPATION- For purposes of clause (i) of this subparagraph, on not more than 1 occasion per individual, the State shall consider participation of the individual in an activity described in subsection (d)(6) for 3 or 4 days during a week as a week of participation in the activity by the individual. ][<-Struck out]- [Struck out->]
[ (B) SINGLE PARENT OR RELATIVE WITH CHILD UNDER AGE 6 DEEMED TO BE MEETING WORK PARTICIPATION REQUIREMENTS IF PARENT OR RELATIVE IS ENGAGED IN WORK FOR 20 HOURS PER WEEK- For purposes of determining monthly participation rates under subsection (b)(1)(B)(i), a recipient who is the only parent or caretaker relative in the family of a child who has not attained 6 years of age is deemed to be engaged in work for a month if the recipient is engaged in work for an average of at least 20 hours per week during the month. ][<-Struck out]- [Struck out->]
[ (C) SINGLE TEEN HEAD OF HOUSEHOLD OR MARRIED TEEN WHO MAINTAINS SATISFACTORY SCHOOL ATTENDANCE DEEMED TO BE MEETING WORK PARTICIPATION REQUIREMENTS- For purposes of determining monthly participation rates under sub-section (b)(1)(B)(i), a recipient who is married or a head of household and has not attained 20 years of age is deemed to be engaged in work for a month in a fiscal year if the recipient-- ][<-Struck out]- [Struck out->]
[ (i) maintains satisfactory attendance at secondary school or the equivalent during the month; or ][<-Struck out]- [Struck out->]
[ (ii) participates in education directly related to employment for an average of at least 20 hours per week during the month. ][<-Struck out]- [Struck out->]
[ (D) LIMITATION ON NUMBER OF PERSONS WHO MAY BE TREATED AS ENGAGED IN WORK BY REASON OF PARTICIPATION IN EDUCATIONAL ACTIVITIES- For purposes of determining monthly participation rates under paragraphs (1)(B)(i) and (2)(B) of subsection (b), not more than 30 percent of the number of individuals in all families and in 2-parent families, respectively, in a State who are treated as engaged in work for a month may consist of individuals who are determined to be engaged in work for the month by reason of participation in vocational educational training, or (if the month is in fiscal year 2000 or thereafter) deemed to be engaged in work for the month by reason of subparagraph (C) of this paragraph. ][<-Struck out]- [Struck out->]
[ (d) WORK ACTIVITIES DEFINED- As used in this section, the term `work activities' means-- ][<-Struck out]- [Struck out->]
[ (1) unsubsidized employment; ][<-Struck out]- [Struck out->]
[ (2) subsidized private sector employment; ][<-Struck out]- [Struck out->]
[ (3) subsidized public sector employment; ][<-Struck out]- [Struck out->]
[ (4) work experience (including work associated with the refurbishing of publicly assisted housing) if sufficient private sector employment is not available; ][<-Struck out]- [Struck out->]
[ (5) on-the-job training; ][<-Struck out]- [Struck out->]
[ (6) job search and job readiness assistance; ][<-Struck out]- [Struck out->]
[ (7) community service programs; ][<-Struck out]- [Struck out->]
[ (8) vocational educational training (not to exceed 12 months with respect to any individual); ][<-Struck out]- [Struck out->]
[ (9) job skills training directly related to employment; ][<-Struck out]- [Struck out->]
[ (10) education directly related to employment, in the case of a recipient who has not received a high school diploma or a certificate of high school equivalency; ][<-Struck out]- [Struck out->]
[ (11) satisfactory attendance at secondary school or in a course of study leading to a certificate of general equivalence, in the case of a recipient who has not completed secondary school or received such a certificate; and ][<-Struck out]- [Struck out->]
[ (12) the provision of child care services to an individual who is participating in a community service program. ][<-Struck out]- (c) Countable Hours-
- (1) DEFINITION- In subsection (b)(2), the term `countable hours' means, with respect to a family for a month, the total number of hours in the month in which any member of the family who is a work-eligible individual is engaged in a direct work activity or other activities specified by the State (excluding an activity that does not address a purpose specified in section 401(a)), subject to the other provisions of this subsection.
- (2) LIMITATIONS- Subject to such regulations as the Secretary may prescribe:
- (A) MINIMUM WEEKLY AVERAGE OF 24 HOURS OF DIRECT WORK ACTIVITIES REQUIRED- If the work-eligible individuals in a family are engaged in a direct work activity for an average total of fewer than 24 hours per week in a month, then the number of countable hours with respect to the family for the month shall be zero.
- (B) MAXIMUM WEEKLY AVERAGE OF 16 HOURS OF OTHER ACTIVITIES- An average of not more than 16 hours per week of activities specified by the State (subject to the exclusion described in paragraph (1)) may be considered countable hours in a month with respect to a family.
- (3) SPECIAL RULES- For purposes of paragraph (1):
- (A) PARTICIPATION IN QUALIFIED ACTIVITIES-
- (i) IN GENERAL- If, with the approval of the State, the work-eligible individuals in a family are engaged in 1 or more qualified activities for an average total of at least 24 hours per week in a month, then all such engagement in the month shall be considered engagement in a direct work activity, subject to clause (iii).
- (ii) QUALIFIED ACTIVITY DEFINED- The term `qualified activity' means an activity specified by the State (subject to the exclusion described in paragraph (1)) that meets such standards and criteria as the State may specify, including--
- (I) substance abuse counseling or treatment;
- (II) rehabilitation treatment and services;
- (III) work-related education or training directed at enabling the family member to work;
- (IV) job search or job readiness assistance; and
- (V) any other activity that addresses a purpose specified in section 401(a).
- (iii) LIMITATION-
- (I) IN GENERAL- Except as provided in subclause (II), clause (i) shall not apply to a family for more than 3 months in any period of 24 consecutive months.
- (II) SPECIAL RULE APPLICABLE TO EDUCATION AND TRAINING- A State may, on a case-by-case basis, apply clause (i) to a work-eligible individual so that participation by the individual in education or training, if needed to permit the individual to complete a certificate program or other work-related education or training directed at enabling the individual to fill a known job need in a local area, may be considered countable hours with respect to the family of the individual for not more than 4 months in any period of 24 consecutive months.
- (B) SCHOOL ATTENDANCE BY TEEN HEAD OF HOUSEHOLD- The work-eligible members of a family shall be considered to be engaged in a direct work activity for an average of 40 hours per week in a month if the family includes an individual who is married, or is a single head of household, who has not attained 20 years of age, and the individual--
- (i) maintains satisfactory attendance at secondary school or the equivalent in the month; or
- (ii) participates in education directly related to employment for an average of at least 20 hours per week in the month.
- (C) PARENTAL PARTICIPATION IN SCHOOLS- Each work-eligible individual in a family shall make verified visits at least twice per school year to the school of each of the individual's minor dependent children required to attend school under the law of the State in which the minor children reside, during the period in which the family receives assistance under the program funded under this part. Hours spent in such activity may be specified by the State as countable hours for purposes of paragraph (2)(B).
- (d) Direct Work Activity- In this section, the term `direct work activity' means--
- (1) unsubsidized employment;
- (2) subsidized private sector employment;
- (3) subsidized public sector employment;
- (4) on-the-job training;
- (5) supervised work experience; or
- (6) supervised community service.
- (e) PENALTIES AGAINST INDIVIDUALS-
- [Struck out->]
[ (1) IN GENERAL- Except as provided in paragraph (2), if an individual in a family receiving assistance under the State program funded under this part refuses to engage in work required in accordance with this section, the State shall-- ][<-Struck out]- [Struck out->]
[ (A) reduce the amount of assistance otherwise payable to the family pro rata (or more, at the option of the State) with respect to any period during a month in which the individual so refuses; or ][<-Struck out]- [Struck out->]
[ (B) terminate such assistance, ][<-Struck out]- subject to such good cause and other exceptions as the State may establish.
- (1) REDUCTION OR TERMINATION OF ASSISTANCE-
- (A) IN GENERAL- Except as provided in paragraph (2), if an individual in a family receiving assistance under a State program funded under this part fails to engage in activities required in accordance with this section, or other activities required by the State under the program, and the family does not otherwise engage in activities in accordance with the self-sufficiency plan established for the family pursuant to section 408(b), the State shall--
- (i) if the failure is partial or persists for not more than 1 month--
- (I) reduce the amount of assistance otherwise payable to the family pro rata (or more, at the option of the State) with respect to any period during a month in which the failure occurs; or
- (II) terminate all assistance to the family, subject to such good cause exceptions as the State may establish; or
- (ii) if the failure is total and persists for at least 2 consecutive months, terminate all cash payments to the family including qualified State expenditures (as defined in section 409(a)(7)(B)(i)) for at least 1 month and thereafter until the State determines that the individual has resumed full participation in the activities, subject to such good cause exceptions as the State may establish.
- (B) SPECIAL RULE-
- (i) IN GENERAL- In the event of a conflict between a requirement of clause (i)(II) or (ii) of subparagraph (A) and a requirement of a State constitution, or of a State statute that, before 1966, obligated local government to provide assistance to needy parents and children, the State constitutional or statutory requirement shall control.
- (ii) LIMITATION- Clause (i) of this subparagraph shall not apply after the 1-year period that begins with the date of the enactment of this subparagraph.
* * * * * * *
- (f) NONDISPLACEMENT IN WORK ACTIVITIES-
- (1) IN GENERAL- Subject to paragraph (2), an adult in a family receiving assistance under a State program funded under this part attributable to funds provided by the Federal Government may fill a vacant employment position in order to engage in a [Struck out->]
[ work activity described in subsection (d) ][<-Struck out] direct work activity.- (2) NO FILLING OF CERTAIN VACANCIES- No adult in a [Struck out->]
[ work activity described in subsection (d) ][<-Struck out] direct work activity which is funded, in whole or in part, by funds provided by the Federal Government shall be employed or assigned--- (A) * * *
* * * * * * *
SEC. 408. PROHIBITIONS; REQUIREMENTS.
- (a) IN GENERAL-
- (1) * * *
* * * * * * *
- (12) PROHIBITION ON OFFSHORING- A State to which a grant is made under section 403 shall not use any part of the grant--
- (A) to enter into a contract with an entity that, directly or through a subcontractor, provides any service, activity or function described under this part at a location outside the United States; or
- (B) to reduce employment in the United States through use of 1 or more employees outside the United States.
- [Struck out->]
[ (b) INDIVIDUAL RESPONSIBILITY PLANS- ][<-Struck out]- [Struck out->]
[ (1) ASSESSMENT- The State agency responsible for administering the State program funded under this part shall make an initial assessment of the skills, prior work experience, and employability of each recipient of assistance under the program who-- ][<-Struck out]- [Struck out->]
[ (A) has attained 18 years of age; or ][<-Struck out]- [Struck out->]
[ (B) has not completed high school or obtained a certificate of high school equivalency, and is not attending secondary school. ][<-Struck out]- [Struck out->]
[ (2) CONTENTS OF PLANS- ][<-Struck out]- [Struck out->]
[ (A) IN GENERAL- On the basis of the assessment made under subsection (a) with respect to an individual, the State agency, in consultation with the individual, may develop an individual responsibility plan for the individual, which-- ][<-Struck out]- [Struck out->]
[ (i) sets forth an employment goal for the individual and a plan for moving the individual immediately into private sector employment; ][<-Struck out]- [Struck out->]
[ (ii) sets forth the obligations of the individual, which may include a requirement that the individual attend school, maintain certain grades and attendance, keep school age children of the individual in school, immunize children, attend parenting and money management classes, or do other things that will help the individual become and remain employed in the private sector; ][<-Struck out]- [Struck out->]
[ (iii) to the greatest extent possible is designed to move the individual into whatever private sector employment the individual is capable of handling as quickly as possible, and to increase the responsibility and amount of work the individual is to handle over time; ][<-Struck out]- [Struck out->]
[ (iv) describes the services the State will provide the individual so that the individual will be able to obtain and keep employment in the private sector, and describe the job counseling and other services that will be provided by the State; and ][<-Struck out]- [Struck out->]
[ (v) may require the individual to undergo appropriate substance abuse treatment. ][<-Struck out]- [Struck out->]
[ (B) TIMING- The State agency may comply with paragraph (1) with respect to an individual-- ][<-Struck out]- [Struck out->]
[ (i) within 90 days (or, at the option of the State, 180 days) after the effective date of this part, in the case of an individual who, as of such effective date, is a recipient of aid under the State plan approved under part A (as in effect immediately before such effective date); or ][<-Struck out]- [Struck out->]
[ (ii) within 30 days (or, at the option of the State, 90 days) after the individual is determined to be eligible for such assistance, in the case of any other individual. ][<-Struck out]- [Struck out->]
[ (3) PENALTY FOR NONCOMPLIANCE BY INDIVIDUAL- In addition to any other penalties required under the State program funded under this part, the State may reduce, by such amount as the State considers appropriate, the amount of assistance otherwise payable under the State program to a family that includes an individual who fails without good cause to comply with an individual responsibility plan signed by the individual. ][<-Struck out]- [Struck out->]
[ (4) STATE DISCRETION- The exercise of the authority of this subsection shall be within the sole discretion of the State. ][<-Struck out]- (b) Family Self-Sufficiency Plans-
- (1) IN GENERAL- A State to which a grant is made under section 403 shall--
- (A) assess, in the manner deemed appropriate by the State, the skills, prior work experience, and employability of each work-eligible individual (as defined in section 407(b)(2)(C)) receiving assistance under the State program funded under this part;
- (B) establish for each family that includes such an individual, in consultation as the State deems appropriate with the individual, a self-sufficiency plan that specifies appropriate activities described in the State plan submitted pursuant to section 402, including direct work activities as appropriate designed to assist the family in achieving their maximum degree of self-sufficiency, and that provides for the ongoing participation of the individual in the activities;
- (C) require, at a minimum, each such individual to participate in activities in accordance with the self-sufficiency plan;
- (D) monitor the participation of each such individual in the activities specified in the self sufficiency plan, and regularly review the progress of the family toward self-sufficiency;
- (E) upon such a review, revise the self-sufficiency plan and activities as the State deems appropriate.
- (2) TIMING- The State shall comply with paragraph (1) with respect to a family--
- (A) in the case of a family that, as of October 1, 2005, is not receiving assistance from the State program funded under this part, not later than 60 days after the family first receives assistance on the basis of the most recent application for the assistance; or
- (B) in the case of a family that, as of such date, is receiving the assistance, not later than 12 months after the date of enactment of this subsection.
- (3) STATE DISCRETION- A State shall have sole discretion, consistent with section 407, to define and design activities for families for purposes of this subsection, to develop methods for monitoring and reviewing progress pursuant to this subsection, and to make modifications to the plan as the State deems appropriate to assist the individual in increasing their degree of self-sufficiency.
- (4) RULE OF INTERPRETATION- Nothing in this part shall preclude a State from--
- (A) requiring participation in work and any other activities the State deems appropriate for helping families achieve self-sufficiency and improving child well-being; or
- (B) using job search or other appropriate job readiness or work activities to assess the employability of individuals and to determine appropriate future engagement activities.
* * * * * * *
- (h) State Option to Make TANF Programs Mandatory Partners With One-Stop Employment Training Centers- For purposes of section 121(b) of the Workforce Investment Act of 1998, a State program funded under part A of title IV of the Social Security Act shall be considered a program referred to in paragraph (1)(B) of such section, unless, after the date of the enactment of this subsection, the Governor of the State notifies the Secretaries of Health and Human Services and Labor in writing of the decision of the Governor not to make the State program a mandatory partner.
SEC. 409. PENALTIES.
- (a) IN GENERAL- Subject to this section:
- (1) * * *
* * * * * * *
- (3) FAILURE TO SATISFY MINIMUM PARTICIPATION RATES OR ESTABLISH FAMILY SELF-SUFFICIENCY PLAN-
- (A) IN GENERAL- If the Secretary determines that a State to which a grant is made under section 403 for a fiscal year has failed to comply with section 407(a) or 408(b) for the fiscal year, the Secretary shall reduce the grant payable to the State under section 403(a)(1) for the immediately succeeding fiscal year by an amount equal to the applicable percentage of the State family assistance grant.
* * * * * * *
- (14) PENALTY FOR FAILURE TO REDUCE ASSISTANCE FOR RECIPIENTS REFUSING WITHOUT GOOD CAUSE TO WORK OR REFUSING TO ENGAGE IN ACTIVITIES UNDER A FAMILY SELF-SUFFICIENCY PLAN-
- (A) * * *
* * * * * * *
SEC. 411. DATA COLLECTION AND REPORTING.
- (a) * * *
* * * * * * *
- (c) Annual Report on Performance Improvement- Beginning with fiscal year 2007, not later than January 1 of each fiscal year, each eligible State shall submit to the Secretary a report on achievement and improvement during the preceding fiscal year under the numerical performance goals and measures under the State program funded under this part with respect to the matter described in section 402(a)(1)(A)(vii).
* * * * * * *
SEC. 413. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES.
- (a) * * *
* * * * * * *
- (d) ANNUAL RANKING OF STATES AND REVIEW OF MOST AND LEAST SUCCESSFUL WORK PROGRAMS-
- (1) ANNUAL RANKING OF STATES- The Secretary shall rank annually the States to which grants are paid under section 403 in the order of their success in placing recipients of assistance under the State program funded under this part into [Struck out->]
[ long-term private sector jobs, ][<-Struck out] private sector jobs, the success of the recipients in retaining employment, the ability of the recipients to increase their wages, reducing the overall welfare caseload, and, when a practicable method for calculating this information becomes available, diverting individuals from formally applying to the State program and receiving assistance. In ranking States under this subsection, the Secretary shall take into account the average number of minor children living at home in families in the State that have incomes below the poverty line and the amount of funding provided each State for such families.* * * * * * *
- (k) Performance Improvement- The Secretary, in consultation with States, shall develop uniform performance measures designed to assess the degree of effectiveness, and the degree of improvement, of State programs funded under this part in accomplishing the work-related purposes of this part.
* * * * * * *
PART C--FATHERHOOD PROGRAM
SEC. 441. FINDINGS AND PURPOSES.
- (a) Findings- The Congress finds that there is substantial evidence strongly indicating the urgent need to promote and support involved, committed, and responsible fatherhood, and to encourage and support healthy marriages between parents raising children, including data demonstrating the following:
- (1) In approximately 84 percent of cases where a parent is absent, that parent is the father.
- (2) If current trends continue, half of all children born today will live apart from one of their parents, usually their father, at some point before they turn 18.
- (3) Where families (whether intact or with a parent absent) are living in poverty, a significant factor is the father's lack of job skills.
- (4) Committed and responsible fathering during infancy and early childhood contributes to the development of emotional security, curiosity, and math and verbal skills.
- (5) An estimated 19,400,000 children (27 percent) live apart from their biological father.
- (6) Forty percent of children under age 18 not living with their biological father had not seen their father even once in the last 12 months, according to national survey data.
- (b) Purposes- The purposes of this part are:
- (1) To provide for projects and activities by public entities and by nonprofit community entities, including religious organizations, designed to test promising approaches to accomplishing the following objectives:
- (A) Promoting responsible, caring, and effective parenting through counseling, mentoring, and parenting education, dissemination of educational materials and information on parenting skills, encouragement of positive father involvement, including the positive involvement of nonresident fathers, and other methods.
- (B) Enhancing the abilities and commitment of unemployed or low-income fathers to provide material support for their families and to avoid or leave welfare programs by assisting them to take full advantage of education, job training, and job search programs, to improve work habits and work skills, to secure career advancement by activities such as outreach and information dissemination, coordination, as appropriate, with employment services and job training programs, including the One-Stop delivery system established under title I of the Workforce Investment Act of 1998, encouragement and support of timely payment of current child support and regular payment toward past due child support obligations in appropriate cases, and other methods.
- (C) Improving fathers' ability to effectively manage family business affairs by means such as education, counseling, and mentoring in matters including household management, budgeting, banking, and handling of financial transactions, time management, and home maintenance.
- (D) Encouraging and supporting healthy marriages and married fatherhood through such activities as premarital education, including the use of premarital inventories, marriage preparation programs, skills-based marriage education programs, marital therapy, couples counseling, divorce education and reduction programs, divorce mediation and counseling, relationship skills enhancement programs, including those designed to reduce child abuse and domestic violence, and dissemination of information about the benefits of marriage for both parents and children.
- (2) Through the projects and activities described in paragraph (1), to improve outcomes for children with respect to measures such as increased family income and economic security, improved school performance, better health, improved emotional and behavioral stability and social adjustment, and reduced risk of delinquency, crime, substance abuse, child abuse and neglect, teen sexual activity, and teen suicide.
- (3) To evaluate the effectiveness of various approaches and to disseminate findings concerning outcomes and other information in order to encourage and facilitate the replication of effective approaches to accomplishing these objectives.
SEC. 442. DEFINITIONS.
- In this part, the terms `Indian tribe' and `tribal organization' have the meanings given them in subsections (e) and (l), respectively, of section 4 of the Indian Self-Determination and Education Assistance Act.
SEC. 443. COMPETITIVE GRANTS FOR SERVICE PROJECTS.
- (a) In General- The Secretary may make grants for fiscal years 2006 through 2010 to public and nonprofit community entities, including religious organizations, and to Indian tribes and tribal organizations, for demonstration service projects and activities designed to test the effectiveness of various approaches to accomplish the objectives specified in section 441(b)(1).
- (b) Eligibility Criteria for Full Service Grants- In order to be eligible for a grant under this section, except as specified in subsection (c), an entity shall submit an application to the Secretary containing the following:
- (1) PROJECT DESCRIPTION- A statement including--
- (A) a description of the project and how it will be carried out, including the geographical area to be covered and the number and characteristics of clients to be served, and how it will address each of the 4 objectives specified in section 441(b)(1); and
- (B) a description of the methods to be used by the entity or its contractor to assess the extent to which the project was successful in accomplishing its specific objectives and the general objectives specified in section 441(b)(1).
- (2) EXPERIENCE AND QUALIFICATIONS- A demonstration of ability to carry out the project, by means such as demonstration of experience in successfully carrying out projects of similar design and scope, and such other information as the Secretary may find necessary to demonstrate the entity's capacity to carry out the project, including the entity's ability to provide the non-Federal share of project resources.
- (3) ADDRESSING CHILD ABUSE AND NEGLECT AND DOMESTIC VIOLENCE- A description of how the entity will assess for the presence of, and intervene to resolve, domestic violence and child abuse and neglect, including how the entity will coordinate with State and local child protective service and domestic violence programs.
- (4) ADDRESSING CONCERNS RELATING TO SUBSTANCE ABUSE AND SEXUAL ACTIVITY- A commitment to make available to each individual participating in the project education about alcohol, tobacco, and other drugs, and about the health risks associated with abusing such substances, and information about diseases and conditions transmitted through substance abuse and sexual contact, including HIV/AIDS, and to coordinate with providers of services addressing such problems, as appropriate.
- (5) COORDINATION WITH SPECIFIED PROGRAMS- An undertaking to coordinate, as appropriate, with State and local entities responsible for the programs under parts A, B, and D of this title, including programs under title I of the Workforce Investment Act of 1998 (including the One-Stop delivery system), and such other programs as the Secretary may require.
- (6) RECORDS, REPORTS, AND AUDITS- An agreement to maintain such records, make such reports, and cooperate with such reviews or audits as the Secretary may find necessary for purposes of oversight of project activities and expenditures.
- (7) SELF-INITIATED EVALUATION- If the entity elects to contract for independent evaluation of the project (part or all of the cost of which may be paid for using grant funds), a commitment to submit to the Secretary a copy of the evaluation report within 30 days after completion of the report and not more than 1 year after completion of the project.
- (8) COOPERATION WITH SECRETARY'S OVERSIGHT AND EVALUATION- An agreement to cooperate with the Secretary's evaluation of projects assisted under this section, by means including random assignment of clients to service recipient and control groups, if determined by the Secretary to be appropriate, and affording the Secretary access to the project and to project-related records and documents, staff, and clients.
- (c) Eligibility Criteria for Limited Purpose Grants- In order to be eligible for a grant under this section in an amount under $25,000 per fiscal year, an entity shall submit an application to the Secretary containing the following:
- (1) PROJECT DESCRIPTION- A description of the project and how it will be carried out, including the number and characteristics of clients to be served, the proposed duration of the project, and how it will address at least 1 of the 4 objectives specified in section 441(b)(1).
- (2) QUALIFICATIONS- Such information as the Secretary may require as to the capacity of the entity to carry out the project, including any previous experience with similar activities.
- (3) COORDINATION WITH RELATED PROGRAMS- As required by the Secretary in appropriate cases, an undertaking to coordinate and cooperate with State and local entities responsible for specific programs relating to the objectives of the project including, as appropriate, jobs programs and programs serving children and families.
- (4) RECORDS, REPORTS, AND AUDITS- An agreement to maintain such records, make such reports, and cooperate with such reviews or audits as the Secretary may find necessary for purposes of oversight of project activities and expenditures.
- (5) COOPERATION WITH SECRETARY'S OVERSIGHT AND EVALUATION- An agreement to cooperate with the Secretary's evaluation of projects assisted under this section, by means including affording the Secretary access to the project and to project-related records and documents, staff, and clients.
- (d) Considerations in Awarding Grants-
- (1) DIVERSITY OF PROJECTS- In awarding grants under this section, the Secretary shall seek to achieve a balance among entities of differing sizes, entities in differing geographic areas, entities in urban and in rural areas, and entities employing differing methods of achieving the purposes of this section, including working with the State agency responsible for the administration of part D to help fathers satisfy child support arrearage obligations.
- (2) PREFERENCE FOR PROJECTS SERVING LOW-INCOME FATHERS- In awarding grants under this section, the Secretary may give preference to applications for projects in which a majority of the clients to be served are low-income fathers.
- (e) Federal Share-
- (1) IN GENERAL- Grants for a project under this section for a fiscal year shall be available for a share of the cost of such project in such fiscal year equal to--
- (A) up to 80 percent (or up to 90 percent, if the entity demonstrates to the Secretary's satisfaction circumstances limiting the entity's ability to secure non-Federal resources) in the case of a project under subsection (b); and
- (B) up to 100 percent, in the case of a project under subsection (c).
- (2) NON-FEDERAL SHARE- The non-Federal share may be in cash or in kind. In determining the amount of the non-Federal share, the Secretary may attribute fair market value to goods, services, and facilities contributed from non-Federal sources.
SEC. 444. MULTICITY, MULTISTATE DEMONSTRATION PROJECTS.
- (a) In General- The Secretary may make grants under this section for fiscal years 2006 through 2010 to eligible entities (as specified in subsection (b)) for 2 multicity, multistate projects demonstrating approaches to achieving the objectives specified in section 441(b)(1). One of the projects shall test the use of married couples to deliver program services.
- (b) Eligible Entities- An entity eligible for a grant under this section must be a national nonprofit fatherhood promotion organization that meets the following requirements:
- (1) EXPERIENCE WITH FATHERHOOD PROGRAMS- The organization must have substantial experience in designing and successfully conducting programs that meet the purposes described in section 441.
- (2) EXPERIENCE WITH MULTICITY, MULTISTATE PROGRAMS AND GOVERNMENT COORDINATION- The organization must have experience in simultaneously conducting such programs in more than 1 major metropolitan area in more than 1 State and in coordinating such programs, where appropriate, with State and local government agencies and private, nonprofit agencies (including community-based and religious organizations), including State or local agencies responsible for child support enforcement and workforce development.
- (c) Application Requirements- In order to be eligible for a grant under this section, an entity must submit to the Secretary an application that includes the following:
- (1) QUALIFICATIONS-
- (A) ELIGIBLE ENTITY- A demonstration that the entity meets the requirements of subsection (b).
- (B) OTHER- Such other information as the Secretary may find necessary to demonstrate the entity's capacity to carry out the project, including the entity's ability to provide the non-Federal share of project resources.
- (2) PROJECT DESCRIPTION- A description of and commitments concerning the project design, including the following:
- (A) IN GENERAL- A detailed description of the proposed project design and how it will be carried out, which shall--
- (i) provide for the project to be conducted in at least 3 major metropolitan areas;
- (ii) state how it will address each of the 4 objectives specified in section 441(b)(1);
- (iii) demonstrate that there is a sufficient number of potential clients to allow for the random selection of individuals to participate in the project and for comparisons with appropriate control groups composed of individuals who have not participated in such projects; and
- (iv) demonstrate that the project is designed to direct a majority of project resources to activities serving low-income fathers (but the project need not make services available on a means-tested basis).
- (B) OVERSIGHT, EVALUATION, AND ADJUSTMENT COMPONENT- An agreement that the entity--
- (i) in consultation with the evaluator selected pursuant to section 446, and as required by the Secretary, will modify the project design, initially and (if necessary) subsequently throughout the duration of the project, in order to facilitate ongoing and final oversight and evaluation of project operation and outcomes (by means including, to the maximum extent feasible, random assignment of clients to service recipient and control groups), and to provide for mid-course adjustments in project design indicated by interim evaluations;
- (ii) will submit to the Secretary revised descriptions of the project design as modified in accordance with clause (i); and
- (iii) will cooperate fully with the Secretary's ongoing oversight and ongoing and final evaluation of the project, by means including affording the Secretary access to the project and to project-related records and documents, staff, and clients.
- (3) ADDRESSING CHILD ABUSE AND NEGLECT AND DOMESTIC VIOLENCE- A description of how the entity will assess for the presence of, and intervene to resolve, domestic violence and child abuse and neglect, including how the entity will coordinate with State and local child protective service and domestic violence programs.
- (4) ADDRESSING CONCERNS RELATING TO SUBSTANCE ABUSE AND SEXUAL ACTIVITY- A commitment to make available to each individual participating in the project education about alcohol, tobacco, and other drugs, and about the health risks associated with abusing such substances, and information about diseases and conditions transmitted through substance abuse and sexual contact, including HIV/AIDS, and to coordinate with providers of services addressing such problems, as appropriate.
- (5) COORDINATION WITH SPECIFIED PROGRAMS- An undertaking to coordinate, as appropriate, with State and local entities responsible for the programs funded under parts A, B, and D of this title, programs under title I of the Workforce Investment Act of 1998 (including the One-Stop delivery system), and such other programs as the Secretary may require.
- (6) RECORDS, REPORTS, AND AUDITS- An agreement to maintain such records, make such reports, and cooperate with such reviews or audits (in addition to those required under the preceding provisions of paragraph (2)) as the Secretary may find necessary for purposes of oversight of project activities and expenditures.
- (d) Federal Share-
- (1) IN GENERAL- Grants for a project under this section for a fiscal year shall be available for up to 80 percent of the cost of such project in such fiscal year.
- (2) NON-FEDERAL SHARE- The non-Federal share may be in cash or in kind. In determining the amount of the non-Federal share, the Secretary may attribute fair market value to goods, services, and facilities contributed from non-Federal sources.
SEC. 445. ECONOMIC INCENTIVE DEMONSTRATION PROJECTS.
- (a) In General- The Secretary may make grants under this section for fiscal years 2006 through 2010 to eligible entities (as specified in subsection (b)) for two to five projects demonstrating approaches to achieving the objectives specified in section 441(b)(1). Drawing on the success of economic-incentive programs in demonstrating strong employment effects for low-income mothers, projects shall test the use of economic incentives combined with a comprehensive approach to addressing employment barriers to encourage non-custodial parents to enter the workforce and to contribute financially and emotionally to their children. The Secretary may make grants based on the level of innovation, comprehensiveness, and likelihood to achieve the goal of increased employment by the applicant.
- (b) Eligible Entities- An entity eligible for a grant under this section must be a national nonprofit fatherhood promotion organization that meets the following requirements:
- (1) EXPERIENCE WITH FATHERHOOD PROGRAMS- The organization must have substantial experience in designing and successfully conducting programs that meet the purposes described in section 441.
- (2) EXPERIENCE ADDRESSING MULTIPLE BARRIERS TO EMPLOYMENT- The organization must have experience in conducting such programs and in coordinating such programs, where appropriate, with State and local government agencies and private, nonprofit agencies (including community-based and religious organizations), including State or local agencies responsible for child support enforcement and workforce development.
- (3) NEGOTIATED AGREEMENTS WITH STATE AND LOCAL AGENCIES FOR APPROPRIATE POLICY CHANGES TO ADDRESS BARRIERS TO EMPLOYMENT- The organization must have agreements in place with State and local government agencies, including State or local agencies responsible for child support enforcement and workforce development, to incorporate appropriate policy changes proposed to address barriers to employment.
- (c) Application Requirements- In order to be eligible for a grant under this section, an entity must submit to the Secretary an application that includes the following:
- (1) QUALIFICATIONS-
- (A) ELIGIBLE ENTITY- A demonstration that the entity meets the requirements of subsection (b).
- (B) OTHER- Such other information as the Secretary may find necessary to demonstrate the entity's capacity to carry out the project, including the entity's ability to provide the non-Federal share of project resources.
- (2) PROJECT DESCRIPTION- A description of and commitments concerning the project design, including the following:
- (A) IN GENERAL- A detailed description of the proposed project design and how the project will be carried out, which shall--
- (i) state how the project will address each of the 4 objectives specified in section 441(b)(1);
- (ii) state how the project will address employment barriers across programs (such as child support, criminal justice, and workforce development programs) using both sanctions and compliance along with monetary incentives for obtaining employment, with earning subsidies contingent upon work and child support payment;
- (iii) demonstrate that there is a sufficient number of potential clients to allow for the random selection of individuals to participate in the project and for comparisons with appropriate control groups composed of individuals who have not participated in such projects; and
- (iv) demonstrate that the project is designed to direct a majority of project resources to activities serving low-income fathers (but the project need not make services available on a means-tested basis).
- (B) OVERSIGHT, EVALUATION, AND ADJUSTMENT COMPONENT- An agreement that the entity--
- (i) in consultation with the evaluator selected pursuant to section 446, and as required by the Secretary, will modify the project design, initially and (if necessary) subsequently throughout the duration of the project, in order to facilitate ongoing and final oversight and evaluation of project operation and outcomes (by means including, to the maximum extent feasible, random assignment of clients to service recipient and control groups), and to provide for mid-course adjustments in project design indicated by interim evaluations;
- (ii) will submit to the Secretary revised descriptions of the project design as modified in accordance with clause (i); and
- (iii) will cooperate fully with the Secretary's ongoing oversight and ongoing and final evaluation of the project, by means including affording the Secretary access to the project and to project-related records and documents, staff, and clients.
- (3) ADDRESSING CHILD ABUSE AND NEGLECT AND DOMESTIC VIOLENCE- A description of how the entity will assess for the presence of, and intervene to resolve, domestic violence and child abuse and neglect, including how the entity will coordinate with State and local child protective service and domestic violence programs.
- (4) ADDRESSING CONCERNS RELATING TO SUBSTANCE ABUSE AND SEXUAL ACTIVITY- A commitment to make available to each individual participating in the project education about alcohol, tobacco, and other drugs, and about the health risks associated with abusing such substances, and information about diseases and conditions transmitted through substance abuse and sexual contact, including HIV/AIDS, and to coordinate with providers of services addressing such problems, as appropriate.
- (5) COORDINATION WITH SPECIFIED PROGRAMS- An undertaking to coordinate, as appropriate, with State and local entities responsible for the programs funded under parts A, B, and D of this title, programs under title I of the Workforce Investment Act of 1998 (including the One-Stop delivery system), and such other programs as the Secretary may require.
- (6) RECORDS, REPORTS, AND AUDITS- An agreement to maintain such records, make such reports, and cooperate with such reviews or audits (in addition to those required under the preceding provisions of paragraph (2)) as the Secretary may find necessary for purposes of oversight of project activities and expenditures.
- (d) Federal Share-
- (1) IN GENERAL- Grants for a project under this section for a fiscal year shall be available for up to 80 percent of the cost of such project in such fiscal year.
- (2) NON-FEDERAL SHARE- The non-Federal share may be in cash or in kind. In determining the amount of the non-Federal share, the Secretary may attribute fair market value to goods, services, and facilities contributed from non-Federal sources.
SEC. 446. EVALUATION.
- (a) In General- The Secretary, directly or by contract or cooperative agreement, shall evaluate the effectiveness of service projects funded under sections 443 and 444 from the standpoint of the purposes specified in section 441(b)(1).
- (b) Evaluation Methodology- Evaluations under this section shall--
- (1) include, to the maximum extent feasible, random assignment of clients to service delivery and control groups and other appropriate comparisons of groups of individuals receiving and not receiving services;
- (2) describe and measure the effectiveness of the projects in achieving their specific project goals; and
- (3) describe and assess, as appropriate, the impact of such projects on marriage, parenting, domestic violence, child abuse and neglect, money management, employment and earnings, payment of child support, and child well-being, health, and education.
- (c) Evaluation Reports- The Secretary shall publish the following reports on the results of the evaluation:
- (1) An implementation evaluation report covering the first 24 months of the activities under this part to be completed by 36 months after initiation of such activities.
- (2) A final report on the evaluation to be completed by September 30, 2013.
SEC. 447. PROJECTS OF NATIONAL SIGNIFICANCE.
- The Secretary is authorized, by grant, contract, or cooperative agreement, to carry out projects and activities of national significance relating to fatherhood promotion, including--
- (1) COLLECTION AND DISSEMINATION OF INFORMATION- Assisting States, communities, and private entities, including religious organizations, in efforts to promote and support marriage and responsible fatherhood by collecting, evaluating, developing, and making available (through the Internet and by other means) to all interested parties information regarding approaches to accomplishing the objectives specified in section 441(b)(1).
- (2) MEDIA CAMPAIGN- Developing, promoting, and distributing to interested States, local governments, public agencies, and private nonprofit organizations, including charitable and religious organizations, a media campaign that promotes and encourages involved, committed, and responsible fatherhood and married fatherhood.
- (3) TECHNICAL ASSISTANCE- Providing technical assistance, including consultation and training, to public and private entities, including community organizations and faith-based organizations, in the implementation of local fatherhood promotion programs.
- (4) RESEARCH- Conducting research related to the purposes of this part.
SEC. 448. NONDISCRIMINATION.
- The projects and activities assisted under this part shall be available on the same basis to all fathers and expectant fathers able to benefit from such projects and activities, including married and unmarried fathers and custodial and noncustodial fathers, with particular attention to low-income fathers, and to mothers and expectant mothers on the same basis as to fathers.
SEC. 449. AUTHORIZATION OF APPROPRIATIONS; RESERVATION FOR CERTAIN PURPOSE.
- (a) Authorization- There are authorized to be appropriated $20,000,000 for each of fiscal years 2006 through 2010 to carry out the provisions of this part.
- (b) Reservation- Of the amount appropriated under this section for each fiscal year, not more than 35 percent shall be available for the costs of the multicity, multicounty, multistate demonstration projects under section 444, the economic incentives demonstration projects under section 445, evaluations under section 446, and projects of national significance under section 447, with not less than $5,000,000 allocated to the economic incentives demonstration project under section 445.
-
PERSONAL RESPONSIBILITY AND WORK OPPORTUNITY RECONCILIATION ACT OF 1996
* * * * * * *
SEC. 2. TABLE OF CONTENTS.
- The table of contents for this Act is as follows:
| TITLE I--BLOCK GRANTS FOR TEMPORARY ASSISTANCE FOR NEEDY FAMILIES |
| Sec. 101. Findings. |
| * * * * * * * |
| Sec. 117. Fatherhood program. |
* * * * * * *
TITLE I--BLOCK GRANTS FOR TEMPORARY ASSISTANCE FOR NEEDY FAMILIES
* * * * * * *
SEC. 117. FATHERHOOD PROGRAM.
- (a) In General- Title IV (42 U.S.C. 601-679b) is amended by inserting after part B the following:
`PART C--FATHERHOOD PROGRAM
`SEC. 441. FINDINGS AND PURPOSES.
- `(a) Findings- The Congress finds that there is substantial evidence strongly indicating the urgent need to promote and support involved, committed, and responsible fatherhood, and to encourage and support healthy marriages between parents raising children, including data demonstrating the following:
- `(1) In approximately 84 percent of cases where a parent is absent, that parent is the father.
- `(2) If current trends continue, half of all children born today will live apart from one of their parents, usually their father, at some point before they turn 18.
- `(3) Where families (whether intact or with a parent absent) are living in poverty, a significant factor is the father's lack of job skills.
- `(4) Committed and responsible fathering during infancy and early childhood contributes to the development of emotional security, curiosity, and math and verbal skills.
- `(5) An estimated 19,400,000 children (27 percent) live apart from their biological father.
- `(6) Forty percent of children under age 18 not living with their biological father had not seen their father even once in the last 12 months, according to national survey data.
- `(b) Purposes- The purposes of this part are:
- `(1) To provide for projects and activities by public entities and by nonprofit community entities, including religious organizations, designed to test promising approaches to accomplishing the following objectives:
- `(A) Promoting responsible, caring, and effective parenting through counseling, mentoring, and parenting education, dissemination of educational materials and information on parenting skills, encouragement of positive father involvement, including the positive involvement of nonresident fathers, and other methods.
- `(B) Enhancing the abilities and commitment of unemployed or low-income fathers to provide material support for their families and to avoid or leave welfare programs by assisting them to take full advantage of education, job training, and job search programs, to improve work habits and work skills, to secure career advancement by activities such as outreach and information dissemination, coordination, as appropriate, with employment services and job training programs, including the One-Stop delivery system established under title I of the Workforce Investment Act of 1998, encouragement and support of timely payment of current child support and regular payment toward past due child support obligations in appropriate cases, and other methods.
- `(C) Improving fathers' ability to effectively manage family business affairs by means such as education, counseling, and mentoring in matters including household management, budgeting, banking, and handling of financial transactions, time management, and home maintenance.
- `(D) Encouraging and supporting healthy marriages and married fatherhood through such activities as premarital education, including the use of premarital inventories, marriage preparation programs, skills-based marriage education programs, marital therapy, couples counseling, divorce education and reduction programs, divorce mediation and counseling, relationship skills enhancement programs, including those designed to reduce child abuse and domestic violence, and dissemination of information about the benefits of marriage for both parents and children.
- `(2) Through the projects and activities described in paragraph (1), to improve outcomes for children with respect to measures such as increased family income and economic security, improved school performance, better health, improved emotional and behavioral stability and social adjustment, and reduced risk of delinquency, crime, substance abuse, child abuse and neglect, teen sexual activity, and teen suicide.
- `(3) To evaluate the effectiveness of various approaches and to disseminate findings concerning outcomes and other information in order to encourage and facilitate the replication of effective approaches to accomplishing these objectives.
`SEC. 442. DEFINITIONS.
- `In this part, the terms `Indian tribe' and `tribal organization' have the meanings given them in subsections (e) and (l), respectively, of section 4 of the Indian Self-Determination and Education Assistance Act.
`SEC. 443. COMPETITIVE GRANTS FOR SERVICE PROJECTS.
- `(a) In General- The Secretary may make grants for fiscal years 2006 through 2010 to public and nonprofit community entities, including religious organizations, and to Indian tribes and tribal organizations, for demonstration service projects and activities designed to test the effectiveness of various approaches to accomplish the objectives specified in section 441(b)(1).
- `(b) Eligibility Criteria for Full Service Grants- In order to be eligible for a grant under this section, except as specified in subsection (c), an entity shall submit an application to the Secretary containing the following:
- `(1) PROJECT DESCRIPTION- A statement including--
- `(A) a description of the project and how it will be carried out, including the geographical area to be covered and the number and characteristics of clients to be served, and how it will address each of the 4 objectives specified in section 441(b)(1); and
- `(B) a description of the methods to be used by the entity or its contractor to assess the extent to which the project was successful in accomplishing its specific objectives and the general objectives specified in section 441(b)(1).
- `(2) EXPERIENCE AND QUALIFICATIONS- A demonstration of ability to carry out the project, by means such as demonstration of experience in successfully carrying out projects of similar design and scope, and such other information as the Secretary may find necessary to demonstrate the entity's capacity to carry out the project, including the entity's ability to provide the non-Federal share of project resources.
- `(3) ADDRESSING CHILD ABUSE AND NEGLECT AND DOMESTIC VIOLENCE- A description of how the entity will assess for the presence of, and intervene to resolve, domestic violence and child abuse and neglect, including how the entity will coordinate with State and local child protective service and domestic violence programs.
- `(4) ADDRESSING CONCERNS RELATING TO SUBSTANCE ABUSE AND SEXUAL ACTIVITY- A commitment to make available to each individual participating in the project education about alcohol, tobacco, and other drugs, and about the health risks associated with abusing such substances, and information about diseases and conditions transmitted through substance abuse and sexual contact, including HIV/AIDS, and to coordinate with providers of services addressing such problems, as appropriate.
- `(5) COORDINATION WITH SPECIFIED PROGRAMS- An undertaking to coordinate, as appropriate, with State and local entities responsible for the programs under parts A, B, and D of this title, including programs under title I of the Workforce Investment Act of 1998 (including the One-Stop delivery system), and such other programs as the Secretary may require.
- `(6) RECORDS, REPORTS, AND AUDITS- An agreement to maintain such records, make such reports, and cooperate with such reviews or audits as the Secretary may find necessary for purposes of oversight of project activities and expenditures.
- `(7) SELF-INITIATED EVALUATION- If the entity elects to contract for independent evaluation of the project (part or all of the cost of which may be paid for using grant funds), a commitment to submit to the Secretary a copy of the evaluation report within 30 days after completion of the report and not more than 1 year after completion of the project.
- `(8) COOPERATION WITH SECRETARY'S OVERSIGHT AND EVALUATION- An agreement to cooperate with the Secretary's evaluation of projects assisted under this section, by means including random assignment of clients to service recipient and control groups, if determined by the Secretary to be appropriate, and affording the Secretary access to the project and to project-related records and documents, staff, and clients.
- `(c) Eligibility Criteria for Limited Purpose Grants- In order to be eligible for a grant under this section in an amount under $25,000 per fiscal year, an entity shall submit an application to the Secretary containing the following:
- `(1) PROJECT DESCRIPTION- A description of the project and how it will be carried out, including the number and characteristics of clients to be served, the proposed duration of the project, and how it will address at least 1 of the 4 objectives specified in section 441(b)(1).
- `(2) QUALIFICATIONS- Such information as the Secretary may require as to the capacity of the entity to carry out the project, including any previous experience with similar activities.
- `(3) COORDINATION WITH RELATED PROGRAMS- As required by the Secretary in appropriate cases, an undertaking to coordinate and cooperate with State and local entities responsible for specific programs relating to the objectives of the project including, as appropriate, jobs programs and programs serving children and families.
- `(4) RECORDS, REPORTS, AND AUDITS- An agreement to maintain such records, make such reports, and cooperate with such reviews or audits as the Secretary may find necessary for purposes of oversight of project activities and expenditures.
- `(5) COOPERATION WITH SECRETARY'S OVERSIGHT AND EVALUATION- An agreement to cooperate with the Secretary's evaluation of projects assisted under this section, by means including affording the Secretary access to the project and to project-related records and documents, staff, and clients.
- `(d) Considerations in Awarding Grants-
- `(1) DIVERSITY OF PROJECTS- In awarding grants under this section, the Secretary shall seek to achieve a balance among entities of differing sizes, entities in differing geographic areas, entities in urban and in rural areas, and entities employing differing methods of achieving the purposes of this section, including working with the State agency responsible for the administration of part D to help fathers satisfy child support arrearage obligations.
- `(2) PREFERENCE FOR PROJECTS SERVING LOW-INCOME FATHERS- In awarding grants under this section, the Secretary may give preference to applications for projects in which a majority of the clients to be served are low-income fathers.
- `(e) Federal Share-
- `(1) IN GENERAL- Grants for a project under this section for a fiscal year shall be available for a share of the cost of such project in such fiscal year equal to--
- `(A) up to 80 percent (or up to 90 percent, if the entity demonstrates to the Secretary's satisfaction circumstances limiting the entity's ability to secure non-Federal resources) in the case of a project under subsection (b); and
- `(B) up to 100 percent, in the case of a project under subsection (c).
- `(2) NON-FEDERAL SHARE- The non-Federal share may be in cash or in kind. In determining the amount of the non-Federal share, the Secretary may attribute fair market value to goods, services, and facilities contributed from non-Federal sources.
`SEC. 444. MULTICITY, MULTISTATE DEMONSTRATION PROJECTS.
- `(a) In General- The Secretary may make grants under this section for fiscal years 2006 through 2010 to eligible entities (as specified in subsection (b)) for 2 multicity, multistate projects demonstrating approaches to achieving the objectives specified in section 441(b)(1). One of the projects shall test the use of married couples to deliver program services.
- `(b) Eligible Entities- An entity eligible for a grant under this section must be a national nonprofit fatherhood promotion organization that meets the following requirements:
- `(1) EXPERIENCE WITH FATHERHOOD PROGRAMS- The organization must have substantial experience in designing and successfully conducting programs that meet the purposes described in section 441.
- `(2) EXPERIENCE WITH MULTICITY, MULTISTATE PROGRAMS AND GOVERNMENT COORDINATION- The organization must have experience in simultaneously conducting such programs in more than 1 major metropolitan area in more than 1 State and in coordinating such programs, where appropriate, with State and local government agencies and private, nonprofit agencies (including community-based and religious organizations), including State or local agencies responsible for child support enforcement and workforce development.
- `(c) Application Requirements- In order to be eligible for a grant under this section, an entity must submit to the Secretary an application that includes the following:
- `(1) QUALIFICATIONS-
- `(A) ELIGIBLE ENTITY- A demonstration that the entity meets the requirements of subsection (b).
- `(B) OTHER- Such other information as the Secretary may find necessary to demonstrate the entity's capacity to carry out the project, including the entity's ability to provide the non-Federal share of project resources.
- `(2) PROJECT DESCRIPTION- A description of and commitments concerning the project design, including the following:
- `(A) IN GENERAL- A detailed description of the proposed project design and how it will be carried out, which shall--
- `(i) provide for the project to be conducted in at least 3 major metropolitan areas;
- `(ii) state how it will address each of the 4 objectives specified in section 441(b)(1);
- `(iii) demonstrate that there is a sufficient number of potential clients to allow for the random selection of individuals to participate in the project and for comparisons with appropriate control groups composed of individuals who have not participated in such projects; and
- `(iv) demonstrate that the project is designed to direct a majority of project resources to activities serving low-income fathers (but the project need not make services available on a means-tested basis).
- `(B) OVERSIGHT, EVALUATION, AND ADJUSTMENT COMPONENT- An agreement that the entity--
- `(i) in consultation with the evaluator selected pursuant to section 446, and as required by the Secretary, will modify the project design, initially and (if necessary) subsequently throughout the duration of the project, in order to facilitate ongoing and final oversight and evaluation of project operation and outcomes (by means including, to the maximum extent feasible, random assignment of clients to service recipient and control groups), and to provide for mid-course adjustments in project design indicated by interim evaluations;
- `(ii) will submit to the Secretary revised descriptions of the project design as modified in accordance with clause (i); and
- `(iii) will cooperate fully with the Secretary's ongoing oversight and ongoing and final evaluation of the project, by means including affording the Secretary access to the project and to project-related records and documents, staff, and clients.
- `(3) ADDRESSING CHILD ABUSE AND NEGLECT AND DOMESTIC VIOLENCE- A description of how the entity will assess for the presence of, and intervene to resolve, domestic violence and child abuse and neglect, including how the entity will coordinate with State and local child protective service and domestic violence programs.
- `(4) ADDRESSING CONCERNS RELATING TO SUBSTANCE ABUSE AND SEXUAL ACTIVITY- A commitment to make available to each individual participating in the project education about alcohol, tobacco, and other drugs, and about the health risks associated with abusing such substances, and information about diseases and conditions transmitted through substance abuse and sexual contact, including HIV/AIDS, and to coordinate with providers of services addressing such problems, as appropriate.
- `(5) COORDINATION WITH SPECIFIED PROGRAMS- An undertaking to coordinate, as appropriate, with State and local entities responsible for the programs funded under parts A, B, and D of this title, programs under title I of the Workforce Investment Act of 1998 (including the One-Stop delivery system), and such other programs as the Secretary may require.
- `(6) RECORDS, REPORTS, AND AUDITS- An agreement to maintain such records, make such reports, and cooperate with such reviews or audits (in addition to those required under the preceding provisions of paragraph (2)) as the Secretary may find necessary for purposes of oversight of project activities and expenditures.
- `(d) Federal Share-
- `(1) IN GENERAL- Grants for a project under this section for a fiscal year shall be available for up to 80 percent of the cost of such project in such fiscal year.
- `(2) NON-FEDERAL SHARE- The non-Federal share may be in cash or in kind. In determining the amount of the non-Federal share, the Secretary may attribute fair market value to goods, services, and facilities contributed from non-Federal sources.
`SEC. 445. ECONOMIC INCENTIVE DEMONSTRATION PROJECTS.
- `(a) In General- The Secretary may make grants under this section for fiscal years 2006 through 2010 to eligible entities (as specified in subsection (b)) for two to five projects demonstrating approaches to achieving the objectives specified in section 441(b)(1). Drawing on the success of economic-incentive programs in demonstrating strong employment effects for low-income mothers, projects shall test the use of economic incentives combined with a comprehensive approach to addressing employment barriers to encourage non-custodial parents to enter the workforce and to contribute financially and emotionally to their children. The Secretary may make grants based on the level of innovation, comprehensiveness, and likelihood to achieve the goal of increased employment by the applicant.
- `(b) Eligible Entities- An entity eligible for a grant under this section must be a national nonprofit fatherhood promotion organization that meets the following requirements:
- `(1) EXPERIENCE WITH FATHERHOOD PROGRAMS- The organization must have substantial experience in designing and successfully conducting programs that meet the purposes described in section 441.
- `(2) EXPERIENCE ADDRESSING MULTIPLE BARRIERS TO EMPLOYMENT- The organization must have experience in conducting such programs and in coordinating such programs, where appropriate, with State and local government agencies and private, nonprofit agencies (including community-based and religious organizations), including State or local agencies responsible for child support enforcement and workforce development.
- `(3) NEGOTIATED AGREEMENTS WITH STATE AND LOCAL AGENCIES FOR APPROPRIATE POLICY CHANGES TO ADDRESS BARRIERS TO EMPLOYMENT- The organization must have agreements in place with State and local government agencies, including State or local agencies responsible for child support enforcement and workforce development, to incorporate appropriate policy changes proposed to address barriers to employment.
- `(c) Application Requirements- In order to be eligible for a grant under this section, an entity must submit to the Secretary an application that includes the following:
- `(1) QUALIFICATIONS-
- `(A) ELIGIBLE ENTITY- A demonstration that the entity meets the requirements of subsection (b).
- `(B) OTHER- Such other information as the Secretary may find necessary to demonstrate the entity's capacity to carry out the project, including the entity's ability to provide the non-Federal share of project resources.
- `(2) PROJECT DESCRIPTION- A description of and commitments concerning the project design, including the following:
- `(A) IN GENERAL- A detailed description of the proposed project design and how the project will be carried out, which shall--
- `(i) state how the project will address each of the 4 objectives specified in section 441(b)(1);
- `(ii) state how the project will address employment barriers across programs (such as child support, criminal justice, and workforce development programs) using both sanctions and compliance along with monetary incentives for obtaining employment, with earning subsidies contingent upon work and child support payment;
- `(iii) demonstrate that there is a sufficient number of potential clients to allow for the random selection of individuals to participate in the project and for comparisons with appropriate control groups composed of individuals who have not participated in such projects; and
- `(iv) demonstrate that the project is designed to direct a majority of project resources to activities serving low-income fathers (but the project need not make services available on a means-tested basis).
- `(B) OVERSIGHT, EVALUATION, AND ADJUSTMENT COMPONENT- An agreement that the entity--
- `(i) in consultation with the evaluator selected pursuant to section 446, and as required by the Secretary, will modify the project design, initially and (if necessary) subsequently throughout the duration of the project, in order to facilitate ongoing and final oversight and evaluation of project operation and outcomes (by means including, to the maximum extent feasible, random assignment of clients to service recipient and control groups), and to provide for mid-course adjustments in project design indicated by interim evaluations;
- `(ii) will submit to the Secretary revised descriptions of the project design as modified in accordance with clause (i); and
- `(iii) will cooperate fully with the Secretary's ongoing oversight and ongoing and final evaluation of the project, by means including affording the Secretary access to the project and to project-related records and documents, staff, and clients.
- `(3) ADDRESSING CHILD ABUSE AND NEGLECT AND DOMESTIC VIOLENCE- A description of how the entity will assess for the presence of, and intervene to resolve, domestic violence and child abuse and neglect, including how the entity will coordinate with State and local child protective service and domestic violence programs.
- `(4) ADDRESSING CONCERNS RELATING TO SUBSTANCE ABUSE AND SEXUAL ACTIVITY- A commitment to make available to each individual participating in the project education about alcohol, tobacco, and other drugs, and about the health risks associated with abusing such substances, and information about diseases and conditions transmitted through substance abuse and sexual contact, including HIV/AIDS, and to coordinate with providers of services addressing such problems, as appropriate.
- `(5) COORDINATION WITH SPECIFIED PROGRAMS- An undertaking to coordinate, as appropriate, with State and local entities responsible for the programs funded under parts A, B, and D of this title, programs under title I of the Workforce Investment Act of 1998 (including the One-Stop delivery system), and such other programs as the Secretary may require.
- `(6) RECORDS, REPORTS, AND AUDITS- An agreement to maintain such records, make such reports, and cooperate with such reviews or audits (in addition to those required under the preceding provisions of paragraph (2)) as the Secretary may find necessary for purposes of oversight of project activities and expenditures.
- `(d) Federal Share-
- `(1) IN GENERAL- Grants for a project under this section for a fiscal year shall be available for up to 80 percent of the cost of such project in such fiscal year.
- `(2) NON-FEDERAL SHARE- The non-Federal share may be in cash or in kind. In determining the amount of the non-Federal share, the Secretary may attribute fair market value to goods, services, and facilities contributed from non-Federal sources.
`SEC. 446. EVALUATION.
- `(a) In General- The Secretary, directly or by contract or cooperative agreement, shall evaluate the effectiveness of service projects funded under sections 443 and 444 from the standpoint of the purposes specified in section 441(b)(1).
- `(b) Evaluation Methodology- Evaluations under this section shall--
- `(1) include, to the maximum extent feasible, random assignment of clients to service delivery and control groups and other appropriate comparisons of groups of individuals receiving and not receiving services;
- `(2) describe and measure the effectiveness of the projects in achieving their specific project goals; and
- `(3) describe and assess, as appropriate, the impact of such projects on marriage, parenting, domestic violence, child abuse and neglect, money management, employment and earnings, payment of child support, and child well-being, health, and education.
- `(c) Evaluation Reports- The Secretary shall publish the following reports on the results of the evaluation:
- `(1) An implementation evaluation report covering the first 24 months of the activities under this part to be completed by 36 months after initiation of such activities.
- `(2) A final report on the evaluation to be completed by September 30, 2013.
`SEC. 447. PROJECTS OF NATIONAL SIGNIFICANCE.
- `The Secretary is authorized, by grant, contract, or cooperative agreement, to carry out projects and activities of national significance relating to fatherhood promotion, including--
- `(1) COLLECTION AND DISSEMINATION OF INFORMATION- Assisting States, communities, and private entities, including religious organizations, in efforts to promote and support marriage and responsible fatherhood by collecting, evaluating, developing, and making available (through the Internet and by other means) to all interested parties information regarding approaches to accomplishing the objectives specified in section 441(b)(1).
- `(2) MEDIA CAMPAIGN- Developing, promoting, and distributing to interested States, local governments, public agencies, and private nonprofit organizations, including charitable and religious organizations, a media campaign that promotes and encourages involved, committed, and responsible fatherhood and married fatherhood.
- `(3) TECHNICAL ASSISTANCE- Providing technical assistance, including consultation and training, to public and private entities, including community organizations and faith-based organizations, in the implementation of local fatherhood promotion programs.
- `(4) RESEARCH- Conducting research related to the purposes of this part.
`SEC. 448. NONDISCRIMINATION.
- `The projects and activities assisted under this part shall be available on the same basis to all fathers and expectant fathers able to benefit from such projects and activities, including married and unmarried fathers and custodial and noncustodial fathers, with particular attention to low-income fathers, and to mothers and expectant mothers on the same basis as to fathers.
`SEC. 449. AUTHORIZATION OF APPROPRIATIONS; RESERVATION FOR CERTAIN PURPOSE.
- `(a) Authorization- There are authorized to be appropriated $20,000,000 for each of fiscal years 2006 through 2010 to carry out the provisions of this part.
- `(b) Reservation- Of the amount appropriated under this section for each fiscal year, not more than 35 percent shall be available for the costs of the multicity, multicounty, multistate demonstration projects under section 444, the economic incentives demonstration projects under section 445, evaluations under section 446, and projects of national significance under section 447, with not less than $5,000,000 allocated to the economic incentives demonstration project under section 445.'.
- (b) Inapplicability of Effective Date Provisions- Section 116 shall not apply to the amendment made by subsection (a) of this section.
* * * * * * *
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CHILD CARE AND DEVELOPMENT BLOCK GRANT ACT OF 1990
SEC. 658A. SHORT TITLE AND GOALS.
- (a) * * *
- (b) GOALS- The goals of this subchapter are--
- (1) * * *
* * * * * * *
- (3) to [Struck out->]
[ encourage ][<-Struck out] assist States to provide consumer education information to help parents make informed choices about child care;- [Struck out->]
[ (4) to assist States to provide child care to parents trying to achieve independence from public assistance; and ][<-Struck out]- (4) to assist States to provide child care to low-income parents;
- (5) to encourage States to improve the quality of child care available to families;
- (6) to promote school readiness by encouraging the exposure of young children in child care to nurturing environments and developmentally-appropriate activities, including activities to foster early cognitive and literacy development; and
- [Struck out->]
[ (5) ][<-Struck out] (7) to assist States in implementing the health, safety, licensing, and registration standards established in State regulations.SEC. 658B. AUTHORIZATION OF APPROPRIATIONS.
- There [Struck out->]
[ is ][<-Struck out] are authorized to be appropriated to carry out this subchapter [Struck out->][ $1,000,000,000 for each of the fiscal years 1996 through 2002 ][<-Struck out] $2,300,000,000 for fiscal year 2006, $2,500,000,000 for fiscal year 2007, $2,700,000,000 for fiscal year 2008, $2,900,000,000 for fiscal year 2009, and $3,100,000,000 for fiscal year 2010.* * * * * * *
SEC. 658E. APPLICATION AND PLAN.
- (a) * * *
* * * * * * *
- (c) REQUIREMENTS OF A PLAN-
- (1) * * *
- (2) POLICIES AND PROCEDURES- The State plan shall:
- (A) * * *
* * * * * * *
- [Struck out->]
[ (D) CONSUMER EDUCATION INFORMATION- Certify that the State will collect and disseminate to parents of eligible children and the general public, consumer education information that will promote informed child care choices. ][<-Struck out]- (D) CONSUMER AND CHILD CARE PROVIDER EDUCATION INFORMATION-
- (i) CERTIFICATION- Certify that the State will collect and disseminate, through resource and referral services and other means as determined by the State, to parents of eligible children, child care providers, and the general public, information regarding--
- (I) the promotion of informed child care choices, including information about the quality and availability of child care services;
- (II) research and best practices on children's development, including early cognitive development;
- (III) the availability of assistance to obtain child care services; and
- (IV) other programs for which families that receive child care services for which financial assistance is provided under this subchapter may be eligible, including the food stamp program, the WIC program under section 17 of the Child Nutrition Act of 1966, the child and adult care food program under section 17 of the Richard B. Russell National School Lunch Act, Head Start programs, Early Head Start programs, services and activities under section 619 and part C of the Individuals with Disabilities Education Act, and the medicaid and SCHIP programs under titles XIX and XXI of the Social Security Act.
- (ii) INFORMATION- Information provided to parents shall be in plain language and, to the extent practicable, be in a language that such parents can understand.
* * * * * * *
- (I) COORDINATION WITH OTHER EARLY CHILD CARE SERVICES AND EARLY CHILDHOOD EDUCATION PROGRAMS- Demonstrate how the State is coordinating child care services provided under this subchapter with Head Start programs, Early Head Start programs, Early Reading First, Even Start, Ready-To-Learn Television, services and activities under section 619 and part C of the Individuals with Disabilities Education Act, State pre-kindergarten programs, and other early childhood education programs to expand accessibility to and continuity of care and early education consistent with the goals of this Act, without displacing services provided by the current early care and education delivery system.
- (J) PUBLIC-PRIVATE PARTNERSHIPS- Demonstrate how the State encourages partnerships with private and other public entities to leverage existing service delivery systems of early childhood education and increase the supply and quality of child care services.
- (K) CHILD CARE SERVICE QUALITY-
- (i) CERTIFICATION- For each fiscal year after fiscal year 2006, certify that during the then preceding fiscal year the State was in compliance with section 658G and describe how funds were used to comply with such section during such preceding fiscal year.
- (ii) STRATEGY- For each fiscal year after fiscal year 2006, contain an outline of the strategy the State will implement during such fiscal year for which the State plan is submitted, to address the quality of child care services in the State available from eligible child care providers, and include in such strategy--
- (I) a statement specifying how the State will address the activities described in paragraphs (1), (2), and (3) of section 658G;
- (II) a description of measures for evaluating the quality improvements generated by the activities listed in each of such paragraphs that the State will use to evaluate its progress in improving the quality of such child care services;
- (III) a list of State-developed child care service quality targets for such fiscal year quantified on the basis of such measures; and
- (IV) for each fiscal year after fiscal year 2006, a report on the progress made to achieve such targets during the then preceding fiscal year.
- (iii) RULE OF CONSTRUCTION- Nothing in this subparagraph shall be construed to require that the State apply measures for evaluating quality to specific types of child care providers.
- (L) ACCESS TO CARE FOR CERTAIN POPULATIONS- Demonstrate how the State is addressing the child care needs of parents eligible for child care services for which financial assistance is provided under this subchapter who have children with special needs, are limited English proficient, work nontraditional hours, or require child care services for infants or toddlers.
- (3) USE OF BLOCK GRANT FUNDS-
- (A) * * *
- (B) CHILD CARE SERVICES AND RELATED ACTIVITIES- The State shall use amounts provided to the State for each fiscal year under this subchapter for child care services on a sliding fee scale basis, activities that improve the quality or availability of such services, and any other activity that the State deems appropriate to realize any of the goals specified in paragraphs (2) through [Struck out->]
[ (5) ][<-Struck out] (7) of section 658A(b), with priority being given for services provided to children of families with very low family incomes (taking into consideration family size) and to children with special needs.* * * * * * *
[Struck out->][ SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE. ][<-Struck out]
- [Struck out->]
[ A State that receives funds to carry out this subchapter for a fiscal year, shall use not less than 4 percent of the amount of such funds for activities that are designed to provide comprehensive consumer education to parents and the public, activities that increase parental choice, and activities designed to improve the quality and availability of child care (such as resource and referral services). ][<-Struck out]SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE SERVICES.
- A State that receives funds to carry out this subchapter for a fiscal year, shall use not less than 6 percent of the amount of such funds for activities provided through resource and referral services and other means, that are designed to improve the quality of child care services in the State available from eligible child care providers. Such activities include--
- (1) programs that provide training, education, and other professional development activities to enhance the skills of the child care workforce, including training opportunities for caregivers in informal care settings;
- (2) activities within child care settings to enhance early learning for young children, to promote early literacy, and to foster school readiness;
- (3) initiatives to increase the retention and compensation of child care providers, including tiered reimbursement rates for providers that meet quality standards as defined by the State; or
- (4) other activities deemed by the State to improve the quality of child care services provided in such State.
* * * * * * *
SEC. 658K. REPORTS AND AUDITS.
- (a) REPORTS-
- (1) COLLECTION OF INFORMATION BY STATES-
- (A) * * *
- (B) REQUIRED INFORMATION- The information required under this subparagraph shall include, with respect to a family unit receiving assistance under this subchapter information concerning--
- (i) * * *
* * * * * * *
- (iii) the gender, race, ethnicity, primary language, and age of children receiving such assistance;
* * * * * * *
[Struck out->][ SEC. 658L. REPORT BY SECRETARY. ][<-Struck out]
- [Struck out->]
[ Not later than July 31, 1998, and biennially thereafter, the Secretary shall prepare and submit to the Committee on Economic and Educational Opportunities of the House of Representatives and the Committee on Labor and Human Resources of the Senate a report that contains a summary and analysis of the data and information provided to the Secretary in the State reports submitted under section 658K. Such report shall include an assessment, and where appropriate, recommendations for the Congress concerning efforts that should be undertaken to improve the access of the public to quality and affordable child care in the United States. ][<-Struck out]SEC. 658L. REPORT BY SECRETARY.
- (a) Report Required- Not later than October 1, 2007, and biennially thereafter, the Secretary shall prepare and submit to the Committee on Education and the Workforce of the House of Representatives and the Committee on Health, Education, Labor and Pensions of the Senate a report that contains the following:
- (1) A summary and analysis of the data and information provided to the Secretary in the State reports submitted under section 658K.
- (2) Aggregated statistics on the supply of, demand for, and quality of child care, early education, and non-school-hours programs.
- (3) An assessment, and where appropriate, recommendations for the Congress concerning efforts that should be undertaken to improve the access of the public to quality and affordable child care in the United States.
- (b) Collection of Information- The Secretary may utilize the national child care data system available through resource and referral organizations at the local, State, and national level to collect the information required by subsection (a)(2).
* * * * * * *
SEC. 658P. DEFINITIONS.
- As used in this subchapter:
- (1) * * *
* * * * * * *
- (4) ELIGIBLE CHILD- The term `eligible child' means an individual--
- (A) * * *
- (B) whose family income does not exceed [Struck out->]
[ 85 percent of the State median income ][<-Struck out] income levels as established by the State, prioritized by need, for a family of the same size; and* * * * * * *
- (9) LIMITED ENGLISH PROFICIENT- The term `limited English proficient' means with respect to an individual, that such individual--
- (A)(i) was not born in the United States or has a native language that is not English;
- (ii)(I) is a Native American, an Alaska Native, or a native resident of a territory or possession of the United States; and
- (II) comes from an environment in which a language that is not English has had a significant impact on such individual's level of English language proficiency; or
- (iii) is migratory, has a native language that is not English, and comes from an environment in which a language that is not English is dominant; and
- (B) has difficultly in speaking or understanding the English language to an extent that may be sufficient to deny such individual--
- (i) the ability to successfully achieve in classrooms in which the language of instruction is English; or
- (ii) the opportunity to fully participate in society.
- [Struck out->]
[ (9) ][<-Struck out] (10) PARENT- The term `parent' includes a legal guardian or other person standing in loco parentis.* * * * * * *
MINORITY VIEWS
When President Bush spoke to the nation from New Orleans six weeks ago on September 15, 2005, he described the `deep, persistent poverty' that Hurricane Katrina had laid bare on television, and he called for bold action to combat poverty in America. i The President is right--bold action is needed. America has the most and the deepest poverty of any developed nation except Mexico, ii and we should be doing much more to address it.
But six short weeks after he delivered that speech, the President's party in Congress is preparing as much as $50 billion in spending cuts, and the poor will bear much of the brunt of these misguided cuts. At the same time, the Majority party plans to force through another $70 billion in tax cuts, on top of the trillion-dollar tax cuts that Congress has already passed over the last several years. The welfare bill considered in Committee is just more of the same--while Congress gives more handouts to people who don't need them, it further robs millions of Americans of the ability to get back on their feet. Katrina should have been a wake-up call, but the Republicans keep looking the other way when it comes to helping Americans get good jobs that lead the way out of poverty.
Democrats and Republicans alike have agreed that the welfare system of the prior half-century had significant problems and needed to be replaced with a program that stressed moving ablebodied adult welfare recipients towards employment and self-support. Nine years later, results of that experiment are in, and they are mixed. The evidence gathered in numerous studies documents that while we have moved many off of welfare, the current program enacted in 1996 has not achieved the goals of promoting long-term economic independence, jobs that lift and keep families out of poverty, or improved living standards for million of children. iii
It is clear that the next phase of welfare reform must be focused squarely on reducing poverty.
The Republican bill fails American families by neglecting to shift its focus to poverty reduction from that of simply welfare reduction. The Republican welfare bill is concerned much more with pushing people off of welfare assistance than with how they are doing once they leave the welfare rolls. Instead of building on current state strategies to help families engage in work and find better jobs, this bill would require states to adopt a rigid federally-prescribed program structure. It requires a `one size fits all' model that ignores individual differences and needs and will limit states' abilities to provide the best opportunities for lasting employment. This inflexibility will force states to create make-work and other welfare programs that limit placement of welfare recipients into real jobs with real wages.
Furthermore, it creates an enormous financial burden for states that will force states to shift resources away from helping working families. The non-partisan Congressional Budget Office estimates that H.R. 240 will cost states $11.6 billion to implement the new work requirements, maintain the current level of child care assistance, and keep pace with inflation. The Republicans provide $0.5 billion in additional mandatory funding for these purposes, shortchanging the states by more than $11 billion.
Democrats have a better idea: welfare reform should be about helping move people off of welfare and into jobs that pay decent wages that will get them out of poverty. We believe that welfare success should be gauged by employment rates, moving and staying off welfare, and mobility out of poverty. The Democratic approach to welfare reform aims to make work pay by requiring welfare recipients to engage in a combination of work, education, and training, and by providing states with the flexibility, incentives, and resources to move welfare recipients into meaningful jobs that pay living wages and benefits.
Because the Republican welfare bill fails to help American families move off of welfare and out of poverty, places enormous unfunded mandates on states that will limit their ability to run innovative programs that provide meaningful opportunities for families, and worsens the child care crisis in this country, Democrats voted unanimously in opposition to the Republican bill. Democrats offered numerous amendments in Committee as part of an attempt to amend the welfare bill to create a policy that will help move families off of welfare and out of poverty. These amendments were rejected by the Republicans. Some of these amendments are described below.
GROWING POVERTY SHOWS NEED FOR NEW APPROACH
The goal of moving from welfare to work is not going to be achieved under the approach that this bill takes. We must instead pass a bill that allows states to create programs that will really help families get out of poverty.
Census data released in August of this year makes clear the urgency of this task. Despite the growing economy, the number of Americans living in poverty has increased for the fourth year in a row, by half a million people, according to the U.S. Census Bureau. iv Today, 37 million Americans--many of them full-time workers--live in poverty. That's 13 percent of all Americans still in poverty. One in every three poor people in this country is a child. This disgraceful situation must be changed.
The poverty rate and welfare rolls began to drop in 1993, and after Congress enacted welfare reform in 1996, the welfare rolls were halved and poverty continued to decline until the year 2000. But the increasing poverty of the last few years shows that poverty declines in the 1990's were due much more to the booming economy than to welfare reform.
Though millions have left welfare, studies document that many former welfare recipients remain poor and lack a steady job. v We should not judge welfare reform by the number of people on or off of welfare assistance alone, but also by how many families still live in poverty. Welfare reform will be successful when families leave welfare for decent jobs and economic stability. Unfortunately, this bill does not get us any closer to achieving that goal.
MINIMUM WAGE
The Katrina disaster gave America a new look at our nation's poor--many of whom are deprived of decent housing, jobs that pay enough to lift them out of poverty, access to a good education, and access to health care. We can design the best welfare system in the world, but the truth is--the single most effective action this Committee and this Congress can take, to move millions of Americans out of poverty, is to increase the minimum wage. Today, a woman who gets off of welfare and lands a minimum wage job working 40 hours a week all year would still be stranded in poverty, with no reasonable shot at adequately providing for herself or her children.
Ranking Member Miller and Representatives Van Hollen, Owens, and Payne offered amendments to directly, and through a Sense of the Congress, raise the federal minimum wage in three stages to $7.25. The Majority rejected both amendments.
It has been eight years since we increased the minimum wage. That alone is a disgrace. The value of the minimum wage relative to average wages is now at an appallingly 57 year low. Minimum wage employees working 40 hours a week, 52 weeks a year, earn $10,700 a year, $5,000 below the poverty line for a family of three. Raising the minimum wage to $7.25 an hour will mean an additional $4,380 a year to help minimum wage earners support their families.
According to the Economic Policy Institute, seven and a half million workers will directly benefit from the minimum wage increase to $7.25. More than 72% of those workers are 20 years old or older. Approximately 54% provide more than half of their family's income. One million and eight hundred thousand are parents with children under 18, including 740,000 single mothers. Almost half (43.9%) work full-time and another third (34.5%) work between 20 and 34 hours a week. Over sixty percent are women.
In the past eight years, Members of Congress will have raised their own pay seven times--by $28,500. In those same eight years, minimum wage workers have not gotten a single raise--they continue to earn $10,700 a year.
According to the Kaiser Family Foundation, the average premiums for health insurance for a family of four in 2005 have surpassed the total before-tax income of a minimum wage earner. If you work a minimum wage job and want to buy health insurance for your family, you'll fall almost $200 short trying to pay just the premiums, and not have a single penny to spare for any other expense--not food, not clothing, not housing--nothing.
The Committee needs to act to raise the minimum wage--this is the most effective measure for lifting families out of poverty.
EDUCATION, TRAINING AND BETTER WAGES
Democrats believe that welfare success should be gauged by employment rates, moving and staying off welfare, and mobility out of poverty. If states are to accomplish these important goals, federal welfare policy must provide the flexibility for states to design innovate programs that meet recipients' individual education, training, and employment needs, and it must provide meaningful incentives and adequate resources to states.
To ensure welfare recipients receive the education and training they need to leave welfare, stay off of welfare, and move out of poverty, Representatives Tierney, Bishop, and McCollum offered an amendment that allows expanded educational opportunities to count for the full work requirement for the first 24 months. These same opportunities can then count for 16 hours weekly for the next 24 months. The amendment expands educational opportunities to include vocational training, post secondary education, work study, internships, job training, ESL, GED and basic adult literacy.
Evidence clearly demonstrates the importance of education opportunities. In a December 2000 study by the U.S. Department of Health and Human Services and the U.S. Department of Education, TANF leavers who were most successful in sustaining employment were also twice as likely to have a technical or two-year degree. vi According to 2000 data from the Census Bureau, almost 39% of women without a high school education live in poverty, while only 17.6% of women with a high school diploma live in poverty. Only 8.5% of women with some college education live below the poverty line, while only 4.3% of women with a 4-year college degree live in poverty. vii The Educational Testing Service reports that nearly 70% of the jobs created through 2006 will require workers with education skills that are higher than the levels of most current welfare recipients. viii
Research on different welfare-to-work programs found that welfare recipients fared the best when education and training were combined with job search and work. ix The Tierney amendment allows states the flexibility to offer these types of innovative programs, but the Republican bill does not. Republicans rejected the Tierney amendment.
To ensure welfare leavers are employed at welfare exit and in well-paying jobs, an amendment to add an employment credit was offered by Representative Kind. This amendment would eliminate the current caseload reduction credit and phase in an employment credit that rewards states for helping families get jobs, with a bonus to states for families who obtain higher paying jobs. This employment credit provides an important method for creating an incentive for states to move people from welfare to work. This amendment would result in states focusing efforts on improving employment outcomes and access to work supports, efforts Democrats believe are important for realizing the welfare goal of reducing poverty.
In contrast, the Majority's caseload reduction credit rewards state for just removing people from the welfare caseload and misses an important legislative opportunity to reward states from running programs more likely to keep people off of welfare and out of poverty. Under the Republican plan, states are rewarded for caseload declines regardless of the reason for exit from the caseload.
The Republican approach is short-sighted and does nothing to help welfare-to-work programs focus on helping recipients get meaningful jobs that lead to long-term self-sufficiency. Currently, about 30-40% of welfare leavers are not employed when they exit welfare. x Under the Republican plan, states would get rewarded for this outcome even though this clearly is not a desirable situation. National data also suggest that ovr 20% of those who left welfare between 1997 and 1999 returned within that same time period. xi This too is an undesirable outcome which would be addressed by the Democratic amendment but not the Republicans. The Minority believes the Majority is inconsistent at best when they tout the goal of self-sufficiency but reject state incentives that would accomplish this goal. The Majority rejected this amendment.
CHILD CARE
Democrats also oppose this bill because its child care funding is grossly inadequate. Child care assistance for low income families is a critical part of any effort to move families into jobs and off welfare and to keep low income working families employed and off of welfare.
There are two central problems with this child care assistance program: parents are unable to access quality child care; and too many hard-working low income families do not receive child care assistance. Access to quality child care is an essential part of education reform to ensure that all children arrive at school ready to succeed. Though the Child Care and Development Block Grant promises parent choice and access to quality, it does not deliver. Parents do not have real choice in their child care options and cannot afford to put their child in quality care because the assistance payments they get are far below the cost of child care in their area. The law promises equal access but only suggests states pay 75% of current market rates. Because states are often caught in a bind between providing quantity or quality, most states set their assistance rates well below the cost of care. For example, the state of Michigan reports paying only the 75 percentile of 1996 rates. xii What this means is that parents have few choices and low-income children--who are the ones most in need of high quality child care--are often in low quality care. The Republican bill does nothing to help this situation.
Secondly, while we do not currently provide enough funding to serve the majority of the lowincome working families who are eligible and in need of this assistance, the Republican bill makes this situation much worse. If low-income workers do not have payment assistance, they may not be able to keep working. Two-parent families with two minimum wage workers often spend more than half their income on child care if they do not receive child care assistance under this program, which is why child care assistance for low-income workers is so vital to our nation's economy.
The situation is dire. According to the Department of Health and Human Services, 100,000 fewer children were served by this child care program in 2004 than in 2003 and estimates that an additional 300,000 fewer children will be served in this program by 2009. xiii Seventeen states have waiting lists. xiv For example, the state of California estimates there are 280,000 families waiting for subsidized care. These data are not surprising given the Republican child care assistance budgets of the past four years have failed to keep pace with inflation.
But according to the Congressional Budget Office (CBO), the Republicans do not even cover the cost of inflation for child care in their bill. According to CBO, $4.832 billion is needed over the next five years just to maintain the current level of services. The Republicans provide $.5 billion in mandatory funding for child care. CBO also estimates the child care costs associated with the work requirements in H.R. 240 and inflation equal $8.332 billion. According to these estimates, the Republicans are over $7 billion dollars short in providing enough child care funding to ensure that the number of children served in the program remains level with the number served today.
Representatives Miller, Andrews, Woolsey, and Holt offered an amendment that would provide $11 billion in new child care funding and require states pay at least 75% of the current market rate. This important amendment would cover the child care and inflation costs under H.R. 240, help parents access higher quality child care, and makes steps to serve more of the hundreds of thousands of names on the waiting lists all over this country. If we are serious about helping low-income workers stay employed, we have to help with child care costs. Republicans rejected this Democratic amendment.
OUTSOURCING
Many American workers' sense of job security is rapidly eroding as more and more companies ship all kinds of work offshore. According to a study by the investment firm Goldman Sachs, between 300,000 to 500,000 American jobs were sent overseas in just three years. xv Business Week estimated that 400,000 to 500,000 jobs went offshore during the same time period. xvi Even state governments, through contractors for public program work, are shipping jobs typically performed by state residents overseas. Taxpayer money should be used to create jobs at home, not overseas.
A recent study by Good Jobs First found that, as of July 2004, only 9 states had electronic benefit transfer call centers located within the United States. xvii These call centers handle electronic benefit transfer issues for programs like Food Stamps and TANF. The rest of the states had contracted with private contractors who had outsourced this call center work to foreign countries such as India.
It is especially ironic for any work financed by federal TANF funds to be sent abroad. A principle goal of TANF is to move families off welfare into work, but if jobs are moving offshore, there are fewer job opportunities for welfare families.
For this reason, Representatives Andrews, Ryan, and Bishop offered an amendment to prohibit TANF monies from being used to offshore outsource jobs. This amendment passed by a voice vote. The Andrews-Ryan-Bishop amendment prohibits use of any TANF grant monies to outsource any jobs overseas. The money may not be used to either (1) contract or subcontract out work to a location outside of the United States or (2) reduce employment within the United States by using any employees outside of the United States.
SUPERWAIVER
Democrats also have serious concern over a `superwaiver' provision in this bill which would give expansive new authority to the Executive Branch to override virtually any federal law or rule governing federal low-income programs including parts of the Workforce Investment Act, Wagner-Peyser Act, Adult Education and Family Literacy Act, CCDBG Act, and the Family Support Act. Fundamental, and even controversial, changes in federal low-income programs and policies could be made by the Executive Branch and States without the support or even consultation of Congress. Such sweeping changes could include changes in how federal funds are administered, the types and amounts of benefits provided, the target population served, and even eligibility criteria for beneficiaries.
Representative Kildee offered an amendment to strike this provision and protect federal low income programs from being drastically reshaped without the consent of Congress. Republicans rejected this amendment.
ENDNOTES
George Miller.
Danny K. Davis.
Betty McCollum.
Ron Kind.
Chris Van Hollen.
Dennis J. Kucinich.
Donald M. Payne.
Ruben Hinojosa.
David Wu.
Susan A. Davis.
John F. Tierney.
Dale E. Kildee.
Lynn C. Woolsey.
Raul M. Grijalva.
Rush Holt.
Carolyn McCarthy.
Bobby Scott.
Tim Ryan.
Major R. Owens.
Tim Bishop.
Robert Andrews.
HIGHER EDUCATION BUDGET RECONCILIATION ACT OF 2005
COMMITTEE REPORT
PURPOSE
As part of the FY 2006 budget process, the Education & the Workforce Committee was tasked with finding $18.1 billion in net savings from the direct spending programs within the Committee's jurisdiction. Chairman Boehner has consistently said the Committee would help put forward a responsible budget that cuts wasteful spending and promotes fiscal responsibility while achieving the Committee's underlying policy goals of expanding college access for low- and middle-income students. The Committee's reform package submitted pursuant to the budget reconciliation instruction achieves these goals by reducing waste and inefficiency and strengthening student benefits. A key component of the Committee's reconciliation effort was to provide relief for the victims of Hurricanes Katrina and Rita. To aid the students, borrowers and institutions of higher education whose ways of life were dramatically altered by the hurricanes, the Committee Print provides relief through waivers and forgiveness of expended funds. These provisions will assist students and borrowers attending school in, or living in, the affected areas while ensuring these expenditures are paid for to protect taxpayers and avoid adding to the Federal deficit. The reconciliation process presented the Committee with an opportunity to re-examine the mandatory spending provisions in the Higher Education Act. The reforms made in the Higher Education Budget Reconciliation Act of 2005 address excess spending in the student loan programs and ensure that the successful partnership the Federal government has had with the private sector, institutions of higher education and students continues into the future.
COMMITTEE ACTION
Of the 35 total hearings the Committee on Education and the Workforce and the Subcommittees on 21st Century Competitiveness and Select Education held since 2001 in preparation for the reauthorization of the Higher Education Act, 15 hearings were held on issues included in the Committee Print.
107TH CONGRESS
Hearings--First Session
On Wednesday, June 20, 2001, the Committee on Education and the Workforce, Subcommittee on 21st Century Competitiveness, held a hearing in Washington, D.C., on `H.R. 1992, the Internet Equity and Education Act of 2001.' The purpose of the hearing was to hear testimony on the provisions in H.R. 1992 introduced by Representative Johnny Isakson (R-GA) on May 24, 2001. Testifying before the Subcommittee were Dr. Stanley Ikenberry, President, American Council on Education, Washington, D.C.; Dr. Richard Gowan, President, South Dakota School of Mines and Technology, Rapid City, South Dakota; Dr. Joseph DiGregorio, Vice Provost for Distance Learning, Continuing Education and Outreach, Georgia Institute of Technology, Atlanta, Georgia; Ms. Lorraine Lewis, Inspector General, U.S. Department of Education, Washington, D.C.; and Mr. Omer Waddles, Executive Vice President, ITT Educational Services, Inc., Indianapolis, Indiana.
Hearings--Second Session
On Tuesday, July 16, 2002, the Committee on Education and the Workforce held a hearing in Washington, D.C., on `Access to Higher Education for Low-Income Students: A Review of the Advisory Committee on Student Financial Assistance Report.' The purpose of the hearing was to consider the issue of access to postsecondary education, specifically for low-income students, by examining two reports released by the Advisory Committee on Student Financial Assistance, entitled Empty Promises--The Myth of College Access in America (July 2002) and Access Denied (February 2001). Testifying before the Committee were Dr. Juliet Garcia, Chairperson, Advisory Committee on Student Financial Assistance, Washington, D.C.; Mr. Lawrence E. Gladieux, Education and Public Policy Consultant, Potomac Falls, Virginia; Dr. Shirley A.R. Lewis, President, Paine College, Augusta, Georgia; and Ms. Elizabeth Sengkhammee, student, University of Wisconsin-Milwaukee, Milwaukee, Wisconsin.
Legislative Action--First Session
On May 24, 2001, Representatives Johnny Isakson (R-GA), John Boehner (R-OH), Howard P. `Buck' McKeon (R-CA), Mike Castle (R-DE), and Bob Goodlatte (R-VA) introduced H.R. 1992, the Internet Equity and Education Act of 2001, to amend the Higher Education Act and repeal the 50 percent rule for telecommunications and make additional reforms regarding distance education.
On June 28, 2001, the Subcommittee on 21st Century Competitiveness considered H.R. 1992 in legislative session and reported it favorably, as amended, to the Committee on Education and the Workforce by voice vote. The Subcommittee considered and adopted by voice vote the following amendments to H.R. 1992:
Representative Isakson (R-GA) offered a substitute amendment that made technical and clarifying changes to the legislation. Specifically, the amendment clarified provisions dealing with incentive compensation and third-party service providers.
Representative Wu (D-OR) offered an amendment to require a study and a report on the effect of the provisions enacted by H.R. 1992.
On August 1, 2001, the Committee on Education and the Workforce considered H.R. 1992 in legislative session and reported it favorably, as amended, to the House of Representatives by a vote of 31-10. The Committee considered and adopted by voice vote the following amendments to H.R. 1992:
Representative Isakson (R-GA) offered a substitute amendment that made technical and clarifying changes to the legislation. Specifically, the amendment made modifications to the 50 percent rule for telecommunications. Additionally, the amendment modified the 12-hour rule to require non-traditional programs that provide less than 12 scheduled hours of instruction to notify the Secretary of Education.
Representative Miller (D-CA) offered an amendment to authorize the Learning Anytime Anywhere Partnership Grants at $30 million, an increase from the current law authorization of $10 million.
Legislative Action--Second Session
On July 11, 2002, Representatives Lindsey Graham (R-SC), John Boehner (R-OH), Howard P. `Buck' McKeon (R-CA), Todd Platts (R-PA), James Greenwood (R-PA), Johnny Isakson (R-GA), Charlie Norwood (R-GA), John Cooksey (R-LA), Sam Graves (R-MO), Van Hilleary (R-TN), Todd Tiahrt (R-KS), Richard Burr (R-NC), and Ileana Ros-Lehtinen (R-FL) introduced H.R. 5091, the Canceling Loans to Allow School Systems to Attract Classroom Teachers Act (CLASS ACT), which amended the Higher Education Act to provide discretionary loan forgiveness of up to $17,500 for math, science and special education teachers.
On Thursday, September 5, 2002, the Committee on Education and the Workforce considered H.R. 5091 in legislative session and reported it favorably, as amended, to the House of Representatives by voice vote. The Committee considered and adopted by voice vote the following amendments to H.R. 5091:
Representative Graham (R-SC) offered a substitute amendment to make technical and clarifying changes to the legislation.
Representative Kind (D-WI) offered an amendment to have the Secretary of Education notify local educational agencies eligible to participate in the Small Rural Achievement Program of the benefits provided by the teacher loan forgiveness program within H.R. 5091, and to encourage those agencies to notify their teachers of the program.
Representative Holt (D-NJ) offered an amendment to set a priority for teacher loan forgiveness for those teachers teaching math or science, or special education teachers.
Representative Miller (D-CA) offered an amendment to set a priority for teacher loan forgiveness for those teachers employed in local educational agencies that are determined by the State educational agency to have failed to make progress toward annual increases in the employment of highly qualified teachers as required by the Elementary and Secondary Education Act of 1965, for two consecutive years.
Representative McCarthy (D-NY) offered an amendment to provide loan forgiveness for spouses of victims who died or became permanently and totally disabled as a result of the terrorist attacks on September 11, 2001. The amendment also provided for forgiveness of the consolidation loan debt of surviving spouses who consolidated their loans together with the victim, as well as parent loans if the child on whose behalf the loan was taken died or become totally and permanently disabled as a result of the September 11th attacks.
108TH CONGRESS
Hearings--First Session
On Tuesday, May 13, 2003, the Committee on Education and the Workforce held a hearing in Washington, D.C., on `The State of American Higher Education: What Are Parents, Students and Taxpayers Getting for Their Money?' The purpose of the hearing was to learn what institutions of higher education can and should be doing to assure the American public that the investment in higher education by a student, parent or taxpayer is one that will produce results and assist with lifelong career pursuits. Testifying before the Committee were Mr. Charles Miller, Chairman, University of Texas System, Board of Regents, Houston, Texas; Dr. Frank Newman, Director, The Futures Project, Brown University, Providence, Rhode Island; and Dr. Mary Ellen Duncan, President, Howard Community College, Columbia, Maryland.
On Thursday, July 10, 2003, the Committee on Education and the Workforce, Subcommittee on 21st Century Competitiveness, held a hearing in Washington, D.C., on `Affordability in Higher Education: We Know There's a Problem; What's the Solution?' The purpose of the hearing was to examine the effects of ever-rising college tuition and debate some of the possible solutions to this problem. Testifying before the Subcommittee were Dr. Sandy Baum, Professor, Skidmore College, Saratoga Springs, New York; Mr. Scott Ross, Executive Director, Florida Student Association, Tallahassee, Florida; Dr. Carol Twigg, Executive Director, Center for Academic Transformation, Troy, New York; Dr. Rolf Wegenke, President, Wisconsin Association of Independent Colleges and Universities, Madison, Wisconsin; and Dr. Patrick Kirby, Vice President and Dean of Enrollment Services, Westminster College, Fulton, Missouri.
On Tuesday, July 15, 2003, the Committee on Education and the Workforce, Subcommittee on 21st Century Competitiveness, held a hearing in Washington, D.C., on `Expanding Access to College in America: How the Higher Education Act Can Put College Within Reach.' The purpose of this hearing was to examine the college access programs that currently exist at a national, state and local level; to hear recommendations for improvements in these programs; and to learn what provisions in the law may currently prohibit some postsecondary institutions from accessing resources that would enable them to work more closely with various student populations. Testifying before the Subcommittee were Dr. Richard Fonte, President, Austin Community College, Austin, Texas; Ms. Teri Flack, Deputy Commissioner, Texas Higher Education Coordinating Board, Austin, Texas; Mr. Mark Dreyfus, President, ECPI College of Technology, Virginia Beach, Virginia; Ms. Christina Milano, Executive Director, National College Access Network, Cleveland, Ohio; and Dr. Arnold Mitchem, President, Council for Opportunity in Education, Washington, D.C.
On Tuesday, July 22, 2003, the Committee on Education and the Workforce, Subcommittee on 21st Century Competitiveness, held a hearing in Washington, D.C., on `Consolidation Loans: What's Best for Past Borrowers, Future Students & U.S. Taxpayers?' The purpose of the hearing was to learn how the consolidation loan program fits into the mission of the Higher Education Act by increasing access and affordability to students pursuing postsecondary education, and to learn more about whether the program is fair for all borrowers. The first panel testifying before the Subcommittee included The Honorable Ralph Regula (R-OH), U.S. House of Representatives, Chairman, Subcommittee on Labor, Health and Human Services, and Education, Committee on Appropriations, Washington, D.C., and The Honorable Rosa DeLauro (D-CT), U.S. House of Representatives, Member, Subcommittee on Labor, Health and Human Services, and Education, Committee on Appropriations, Washington, D.C. The second panel testifying before the Subcommittee included Ms. Rebecca Wasserman, Vice President, United States Student Association, Washington, D.C.; Ms. June McCormack, Executive Vice President, Sallie Mae, Fishers, Indiana; Mr. Paul Wozniak, Managing Director and Manager, Education Loan Group, UBS Financial Services, Inc., New York, New York; Dr. Dallas Martin, President, National Association of Student Financial Aid Administrators, Washington, D.C.; and Mr. Barry Morrow, Chief Executive Officer, Collegiate Funding Services, Fredericksburg, Virginia.
On Thursday, September 11, 2003, the Committee on Education and the Workforce, Subcommittee on 21st Century Competitiveness, held a hearing in Washington, D.C., on `H.R. 3039, the Expanding Opportunities in Higher Education Act of 2003.' The purpose of the hearing was to hear testimony regarding the provisions in H.R. 3039, introduced by Representative Tom Cole (R-OK) on September 9, 2003. Testifying before the Subcommittee were Dr. Donald E. Heller, Associate Professor, Center for the Study of Higher Education Policy, The Pennsylvania State University, University Park, Pennsylvania; Dr. Antonio Flores, President and Chief Executive Officer, Hispanic Association of Colleges and Universities, San Antonio, Texas; Mr. George Chin, University Director for Financial Aid, City University of New York, New York, New York; and Mr. David G. Moore, Chairman and Chief Executive Officer, Corinthian Colleges, Inc., Santa Ana, California.
Hearings--Second Session
On Wednesday, March 17, 2004, the Committee on Education and the Workforce held a hearing in Washington, D.C., on `Fiscal Responsibility and Federal Consolidation Loans: Examining Cost Implications for Taxpayers, Students, and Borrowers.' The purpose of the hearing was to examine the consolidation loan program and how student lending issues fit within the broader goal of expanding access to low- and middle-income students pursing a postsecondary education. Testifying before the Committee were Ms. Cornelia M. Ashby, U.S. Government Accountability Office, Director, Education, Workforce and Income Security, Washington, D.C.; Mr. Titus M. Hamlett, Student, University of Maryland, Baltimore, Maryland; Dr. Tom S. Neubig, National Director, Quantitative Economics and Statistics, Ernst and Young LLP, Washington, D.C.; and Dr. Robert Shapiro, Chairman, Sonecon, LLP, and Senior Fellow, Brookings Institution and Progressive Policy Institute, Washington, D.C.
On Wednesday, May 12, 2004, the Committee on Education and the Workforce held a hearing in Washington, D.C., on `H.R. 4283, the College Access and Opportunity Act of 2004.' The purpose of this hearing was to examine the provisions in H.R. 4283 and to provide an opportunity for Members of Congress to hear about provisions in the bill. Testifying before the Committee were Mr. Jim Boyle, President, College Parents of America, Washington, D.C.; Dr. Dallas Martin, President, National Association of Federal Student Aid Administrators, Washington, D.C.; Ms. Rebecca Wasserman, President, United States Student Association, Washington, D.C.; Dr. Charles Reed, Chancellor, California State University System, Long Beach, California; and Mr. Michael Grayer, Recent Graduate, Virginia College, Jackson, Mississippi.
On Wednesday, June 16, 2004, the Committee on Education and the Workforce held a hearing in Washington, D.C., on `H.R. 4283, the College Access & Opportunity Act: Are Students at Proprietary Institutions Treated Equitably Under Current Law?' The purpose of this hearing was to examine issues facing students attending eligible proprietary institutions of higher education. Testifying before the Committee were Dr. Dwight Smith, President and Chief Executive Officer, Sophisticated Systems, Inc., Columbus, Ohio; Mr. Andrew Rosen, President and Chief Operations Officer, Kaplan Inc., President, Kaplan College, Boca Raton, Florida; Dr. Alice Letteney, Director, University of New Mexico--Valencia, Los Lunas, New Mexico; Mr. Barmak Nassirian, Associate Director, American Association of Collegiate Registrars and Admissions Officers, Washington, D.C.; and Mr. David Moore, Chairman and Chief Executive Officer, Corinthian Colleges Inc., Santa Ana, California.
Legislative Action--First Session
On January 29, 2003, Representatives Joe Wilson (R-SC), John Boehner (R-OH), Howard P. `Buck' McKeon (R-CA), Johnny Isakson (R-GA), Todd Platts (R-PA), James Greenwood (R-PA), Patrick Tiberi (R-OH), Tom Cole (R-OK), Mark Souder (R-IN), Richard Baker (R-LA), Sam Graves (R-MO) and Heather Wilson (R-NM) introduced H.R. 438, the Teacher Recruitment and Retention Act of 2003, which amended the Higher Education Act to provide up to $17,500 in loan forgiveness for math, science and special education teachers.
On June 4, 2003, the Subcommittee on 21st Century Competitiveness considered H.R. 438 in legislative se