Inside Paul Ryan’s Next Big Thing: Welfare Reform

Draft legislation of “the biggest redesign of TANF in its history” will be reviewed on Wednesday.

WASHINGTON, DC - JUNE 11: Rep. Paul Ryan (R-WI) is trailed by reporters while walking through Statuary Hall the U.S. Capitol building, June 11, 2014 in Washington, DC. Yesterday House Majority Leader Eric Cantor (R-VA) lost his Virginia primary to Tea Party challenger Dave Brat, opening a slot for Majority Leader.
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Dylan Scott
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Dylan Scott
July 14, 2015, 4:01 p.m.

House Ways and Means Chair­man Paul Ry­an is ready to test his luck on a dif­fi­cult and of­ten-thank­less task: wel­fare re­form.

Demo­crat­ic and Re­pub­lic­an staffers have been quietly work­ing on le­gis­la­tion to sig­ni­fic­antly over­haul the Tem­por­ary As­sist­ance for Needy Fam­il­ies pro­gram since late April, ac­cord­ing to aides for both parties. A draft bill gets its first pub­lic air­ing Wed­nes­day in a sub­com­mit­tee hear­ing.

The bill is a pri­or­ity for Ry­an, and both sides agree that the ma­jor­ity has act­ively worked to in­cor­por­ate Demo­crat­ic ideas in­to the pro­pos­al, provid­ing real op­tim­ism that law­makers could pass something this Con­gress, a dec­ade since TANF was last reau­thor­ized. But as al­ways when “wel­fare re­form” and so­cial spend­ing are on the dock­et, the bill will surely have to sidestep some land mines to be en­acted.

(RE­LATED: So­cial Is­sue Head­aches Con­tin­ue for House GOP)

Ry­an said Tues­day that he was op­tim­ist­ic that wel­fare re­form would get done. His Demo­crat­ic coun­ter­part was a little more coy.

“I think it’s use­ful to be dis­cuss­ing it,” Ways and Means rank­ing mem­ber Sander Lev­in said. “I hope it’s con­struct­ive.”

The dis­cus­sion draft still has un­fin­ished sec­tions, and those in­volved em­phas­ized that the ef­fort has a long way to go.

But if a bill re­sem­bling the cur­rent draft gets done, every­body agrees it would be the most sig­ni­fic­ant makeover of TANF — cre­ated in 1996 un­der Pres­id­ent Bill Clin­ton and a Re­pub­lic­an Con­gress to re­place the pre­vi­ous wel­fare pro­gram — since its in­cep­tion. The fed­er­al gov­ern­ment and states spend about $30 bil­lion an­nu­ally on TANF, which serves about 2 mil­lion fam­il­ies.

(RE­LATED: House GOP Pulls An­oth­er Bill From Floor Over Abor­tion)

“If something close to this gets en­acted, this would be the biggest re­design of TANF in its his­tory,” said Liz Schott, seni­or fel­low at the lib­er­al Cen­ter on Budget and Policy Pri­or­it­ies. “It’s look­ing like the most ser­i­ous move­ment we’ve seen in a while.”

Ry­an said in the lame-duck ses­sion last year that he wanted to pur­sue wel­fare re­form once he had the Ways and Means gavel. But the is­sue largely flew un­der the radar while Con­gress pur­sued a per­man­ent fix to the flawed Medi­care doc­tor-pay­ment for­mula, de­bated fast-track trade au­thor­ity, and waited for the Su­preme Court to rule on the fu­ture of the Af­ford­able Care Act.

It was after an April 30 hear­ing on ideas for im­prov­ing wel­fare that staffers got to work on the re­cently re­leased dis­cus­sion draft. Demo­crat­ic and Re­pub­lic­an aides said that they have been in con­sist­ent con­tact de­vel­op­ing the bill, with the goal of pro­du­cing something that could ac­tu­ally pass and be signed by Pres­id­ent Obama. Louisi­ana GOP Rep. Charles Bous­tany and Texas Demo­crat­ic Rep. Lloyd Dog­gett are the top mem­bers of the pan­el that meets Wed­nes­day, and they have also shaped the bill.

TANF hasn’t been prop­erly reau­thor­ized since 2005, and its cur­rent ex­ten­sion ends Sept. 30.

Three changes would likely have the biggest im­pact.

(RE­LATED: The Re­pub­lic­an Es­tab­lish­ment’s Ma­jor Di­vide)

First, it would al­low states to count more activ­it­ies — such as job-skills train­ing and edu­ca­tion — to­ward the pro­gram’s work re­quire­ments. States os­tens­ibly are re­quired to have at least 50 per­cent of their TANF re­cip­i­ents par­ti­cip­ate in some kind of work activ­ity for a set num­ber of hours per week to avoid fin­an­cial pen­al­ties.

Second, it would elim­in­ate a num­ber of loop­holes that states have used to count to­ward that work-activ­ity meas­ure­ment, mean­ing states would have to have more people ac­tu­ally work­ing to re­ceive be­ne­fits. Aides cited those two pro­vi­sions as an ex­ample of the bill’s bi­par­tis­an nature: Demo­crats have long wanted more activ­it­ies to count as work and Re­pub­lic­ans have wanted to en­sure that more be­ne­fi­ciar­ies par­ti­cip­ate in work activ­it­ies.

Third, the bill would cre­ate a new ac­count­ab­il­ity sys­tem. States would have new out­come met­rics to meas­ure wheth­er people leav­ing TANF found em­ploy­ment and in­creased their in­come. If states fail to meet the met­rics, they could lose a por­tion of their TANF fund­ing start­ing in 2018, which they would be able to earn back as they made im­prove­ments.

(RE­LATED: This Is Why Paul Ry­an Didn’t Run for Pres­id­ent)

Those are also some of the pro­vi­sions that could trip the le­gis­la­tion up as it at­tracts more pub­lic scru­tiny. Some Demo­crats might not be happy that the pro­gram’s spend­ing is kept flat. TANF was cre­ated as a set block grant, so lib­er­als em­phas­ize that its real value has de­clined since 1996. On the oth­er side, con­ser­vat­ives could take is­sue with ex­pand­ing what counts as work to­ward the pro­gram’s re­quire­ments.

In a year in which he’s been at the fore­front of al­most every ma­jor policy de­bate, Ry­an has put an­oth­er am­bi­tious item on his to-do list.

“We need to do an­oth­er round of wel­fare re­form, not as an ex­er­cise to save money, but as an ex­er­cise to save lives and to get people from wel­fare to work and real­ize op­por­tun­ity and up­ward mo­bil­ity,” he said earli­er this year, “be­cause there are too many people who don’t think the Amer­ic­an idea is ever there for them again, and that’s a tragedy.”

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