DELEGATION NEWS: WELFARE REFORM FIX CLEARS SENATE

FOR IMMEDIATE RELEASE                             October 1, 1996

CONGRESSIONAL DELEGATION: SENATE MOVES TO ENSURE WELFARE REFORM PAYMENT FOR NEW MEXICO

WASHINGTON -- The New Mexico congressional delegation today announced that the Senate has approved an amendment to the new federal welfare law that will allow New Mexico to receive an estimated $12.3 million in supplemental federal contingency funds as it reforms its welfare program.

The legislation, supported by the New Mexico congressional delegation, should ensure that New Mexicans who receive welfare assistance will not receive reductions in benefits as the state transitions into a federal block grant program.

The welfare legislation was introduced by Senator Pete Domenici and co-sponsored by Senator Jeff Bingaman. It was approved by the Senate on Tuesday, and the delegation is now attempting to gain a commitment in the House of Representatives to consider the bill there before Congress formally adjourns. Members of the delegation are Domenici and Bingaman, and Representatives Joe Skeen, Bill Richardson and Steve Schiff.

"This is good news for New Mexico, which would then be able to continue making adequate assistance payments and provide child care assistance during this transition period," the delegation members said. "We now look forward to the House accepting this, and then to the governor and legislature working together to reform New Mexico's welfare system."

"Congress never intended that states have financial difficulties prior to starting the new welfare program. Congress created a contingency fund to resolve just such problems. However, the Department of Health and Human Services has determined that the new law inadvertently prohibits states from receiving federal contingency funds until they submit plans for reformed welfare programs. This bill meets the Department's requirement that corrective legislation be approved by Congress," they said.

The amendment accepted by the Senate clarifies congressional intent in the new welfare reform law, by saying states are able to operate under the former Aid to Families with Dependent Children (AFDC) program until July 1, 1997. This gives states, like New Mexico, the time to enact welfare reform programs that conform to the new Temporary Assistance for Needy Families (TANF) block grant.

The delegation noted that the amendment is already paid for in federal budget projections and will not dilute the momentum behind timely welfare reform.

The measure would also benefit states like Nevada, Alaska, Hawaii, Idaho and Minnesota.

Earlier in September, the congressional delegation sought assurances from the U.S. Department of Health and Human Services (HHS) that it would follow congressional intent. Without the corrective legislation, New Mexico will face $12.3 million in federal funding cuts in 1997, which would necessitate an across- the-board cut in benefits for welfare recipients.

The reduction would stem from an HHS interpretation of the new law by holding states to the full-year block grant level regardless of when the state opts into the TANF block grant. The HHS Department had determined that eligible states for the contingency fund are only those states that have already opted into the block grant program.

Congress intended a smooth transition between the AFDC entitlement program and the TANF block grant. To that end, the delegation argued, a reasonable interpretation would assume that if a state waited until July 1 to submit to the conditions of the new block grant, funding restrictions would start then.

CONTACTS:
Chris Gallegos/Domenici                    Stu Nagurka/Richardson
(202) 224-7082                                     (202) 225-6190
Roberta Heine/Bingaman                     J. Barry Bitzer/Schiff
(202) 224-1804                                     (202) 225-2245
Selma Sierra/Skeen
(202) 225-6989