Unprecedented changes in federal welfare law required New York State and New York City to respond in a way that forever altered the core of its social welfare programs. The passage of the federal Personal Responsibility and Work Opportunities Reconciliation Act of 1996 (PRWORA) created the Temporary Assistance to Needy Families (TANF) Block Grant to fund social services programs, imposed time lim- its on public assistance and required work participation for able-bodied recipients in exchange for benefits. The New York State Welfare Reform Act of 1997 changed welfare programs to comply with changes in the federal PRWORA and to conform to New York State’s Constitution, which requires care for the needy despite federal time limits on assistance.

In the first five years of implementation, it appeared as though welfare reform was meeting its intended results. Declining welfare caseloads were brought about by chang- ing welfare policy, the nation’s booming economy in the 1990’s and a record number of families moving from wel- fare to low wage work. The larger issues of whether the new welfare program could withstand the impact of a stalled economy or the state’s ability to cover 100% of the welfare costs after families exhausted their federal time limit are, as yet, untested by experience. As New York City’s first families reach the federal time limits on public assistance, New York State and New York City has the opportunity to re-evaluate programs and practice consis- tent with changes in federal welfare law and identify policy improvements to be realized in the next phase of welfare reform and at a time when the weakened economy is cre- ating increased pressure on public benefit programs serv- ing the poor. While little is known of families leaving wel- fare, debate and discussion of proposed changes in federal PRWORA and the reauthorization of the TANF Block Grant will need to respond to how children and families are faring after the first five years of the welfare reform experiment.

Although the few available welfare leaver studies con- ducted by the State and City tell little about families leav- ing welfare, there are clear indications that the improved economic well-being of children and families has not been a primary goal of welfare reform especially given the increased number of children born into poor families over the past decade. Families continue to encounter numerous roadblocks when applying for public assistance and strug- gle to transition from welfare to stable work with adequate benefits. Although decreasing welfare caseloads have been directly correlated with a significant increase in services to families under 200% of the Federal Poverty Level (FPL), the flexibility guaranteed by federal regulations for use of TANF Block Grant funds has not been fully explored by state and city agencies who instead have imposed even stricter policies than federal law required, forcing eligible families off welfare and in search of alternative supports.

The New York City welfare reform experience reveals six problematic outcomes:
• Caseloads have dropped but child poverty persists;
• Families leave welfare for low paying jobs and unstable work;
• Eligible families do not receive medicaid and food stamps;
• The lack of affordable, quality child care has made it difficult to maintain employment;
• The Eligibility Verification Review (EVR) process and other anti-fraud tactics have diverted numerous families from receiving needed assistance; and
• Family homelessness is rising at a dramatic rate.

As families reach the five year limit on federally funded assistance and the reauthorization of the TANF Block Grant in October 2002 nears, Citizens’ Committee for Children of New York (CCC) will work to secure changes to the federal PRWORA that will require New York State and New York City to reaffirm its commitment to low income families. Our recommended changes to the federal PRWORA will promote the expansion of education and training opportunities to families in transition, increase flexibility of TANF funds to allow states to tailor a network of support services to families that have moved from wel- fare to low wage work, and ban time limits for those fami- lies that have been working but continue to need income assistance because of low wages. In addition, to ensure that New York State and New York City have the ability to continue and expand upon existing programs and services to low income families, CCC recommends that the federal TANF Block Grant be reauthorized at current funding lev- els, indexed for inflation; the state Maintenance Of Effort (MOE) requirement be maintained; and transfer authority of TANF funds to the Social Services Block Grant and the Child Care and Development Fund be preserved.