Welfare Reform Legislation Message to the Congress on the Proposed Legislation.

To the Congress of the United States:

I am submitting today my Welfare Reform program in two bills: the Social Welfare Reform Amendments of 1979 and the Work and Training Opportunities Act of 1979. Enactment of these proposals will be an important step in addressing the key failings of the present welfare system-promoting efficiency, improving incentives and opportunities to work, and substantially improving the incomes of millions of poor people.

For too many years, we have lived with a welfare system universally recognized to be inadequate and ineffective. It is a crazy-quilt patchwork system stitched together over decades without direction or design. It should offer opportunity, but often breeds dependency. It should encourage and reward useful work, but often penalizes those who find jobs.

The guiding principles of my proposals are simple: those who can work should; and there should be adequate support for those who cannot.

The legislation I am submitting today will: —redirect our welfare system towards employment wherever possible, and provide training and jobs to break the cycle of poverty;

—help secure stable employment with an adequate income for millions of low-income families;

—save hundreds of millions of dollars each year by reducing waste, fraud, and error through tightened and streamlined administration;

—remove major inequities in the present welfare system and redirect assistance to those most in need and least able to help themselves.

In my campaign I pledged to work for welfare reform. The need for reform is no less serious now. I urge Congress to act promptly on this critically important social legislation. The need for action is clear:

The present system is both inadequate and unacceptably unfair. Despite major efforts at all levels of government in the last twenty years, millions of American families throughout the U.S. still live in poverty. Moreover, under the present system assistance to needy households varies widely from state to state. Welfare benefits, including both food stamps and cash assistance, range from 49 percent to 96 percent of the poverty level. For example, current combined benefits in Mississippi for a family of four are $3,540 per year, while a poor family in Vermont receives $6,540. Twenty-four states have chosen not to provide Federally-supported cash benefits to two-parent families, while twenty-six do provide such assistance.

Many technical provisions of current law are inequitable or unnecessarily restrictive. For example:

—In those states which have adopted two-parent coverage, the family suddenly loses all benefits when the family breadwinner begins to work more than 100 hours a month. For a minimum wage earner that is only $290 per month. Yet a higher wage earner can earn more in 100 hours while retaining welfare benefits.

—A family which has been receiving public assistance and then starts to work, can continue receiving assistance even though their earnings may be higher than those of low-income families who are working but have never been on public assistance.

The present system is cumbersome and needlessly difficult to administer. For example:

—Recipients who work are required to submit detailed lists of work-related expenses-which must then be used to calculate benefits. This is burdensome to the recipient and the system, and invites errors and fraud.

—The basic Federal welfare program and the food stamp program currently have different definitions of income and assets, although the same state offices usually administer both programs, and although welfare recipients are almost always eligible for food stamps as well.

This new legislation makes a number of important program simplifications and adopts measures to reduce error and abuse. Savings from reduced errors in the first full year of implementation will be about $300 million. This is in addition to the Administration's present efforts in child support enforcement and error reduction, which will yield savings of over $800 million in the coming year.

The present system provides insufficient opportunities for families to move off cash assistance and into productive jobs. The great majority of family heads receiving cash assistance want to work. Most of the poor who are able to work do in fact work, but usually in low paying and sporadic jobs. In 1977, more than three-fifths of the 3.8 million families with children with incomes below the official poverty line had either a part-time or a full-time worker. Over a million of these families were headed by women, most of whom supplemented their meager earnings with welfare. Yet, only one-fifth of these working poor families had a worker who was able to find a full-time, year round job. In addition, almost three million other families with children live close to the poverty line despite the efforts of one or more family workers.

Even in a period of austerity and fiscal stringency, our Nation cannot afford to ignore its most pressing needs and its most needy. We must do what we can as soon as we can.

The legislation I am submitting today will help to meet the most pressing problems of our welfare system in the following ways:

• increase employment and training opportunities. Those who are expected to work will be required to do so if a suitable job is available. In addition, my proposed new legislation will assure participation in a structured job search effort, add resources for training and—for those for whom a private job cannot be found-seek to provide a public sector work opportunity. There will be over 620,000 work and training opportunities for welfare eligibles including 400,000 newly funded public service employment and training slots. The program is structured to assure that required work will always pay more than welfare. Subsidized public sector jobs will only be available to those who have completed a rigorous search for private work. Thus, individuals will have substantial opportunity and incentive as well as a requirement to move from welfare to work. And the legislation assures that states will have substantial incentives to join in the effort to move individuals from welfare to work.

• improve the fairness and adequacy of welfare cash assistance to needy families with children by:

—establishing a national minimum benefit (for AFDC and food stamp benefits combined) at 65% of poverty, raising benefits to 800,000 people in the 13 lowest benefit states; mandating coverage of two-parent families in the 24 states which now lack this coverage; and simplifying the benefit computation and eliminating several sources of inequity in the current system.

• improve welfare administration by aligning definitions in the Aid to Families with Dependent Children (AFDC) and food stamps programs,.standardizing certain deductions that are now itemized, tightening eligibility determinations, and building upon HEW's program of antifraud, anti-waste efforts. Furthermore, food stamps will be cashed out for a portion of the needy aged, blind and disabled population receiving Supplemental Security Income (SSI). This step towards program consolidation will extend benefits to needy individuals who are eligible but do not currently participate in the food stamp program, and simplify the welfare system for recipients and administrators.

• expand the earned income tax credit to provide greater assistance to low-income working families and provide greater incentives to take private sector jobs.

• provide fiscal relief to state and local governments.

These two bills will increase the incomes of 2.3 million families, or nearly 6.5 million people. They will remove from poverty 800,000 families, or 2.2 million people. They will achieve important gains in reducing error and waste. Their cost-$5.7 billion when fully implemented in FY 1982—is included in the Administration's budget projections submitted to Congress last January and fully consistent with a prudent budget policy.

It is rare that the President and Congress are given the opportunity to work together on legislation that does so much to benefit so many of the most needy.

I recognize that welfare reform is a difficult undertaking. No legislative struggle in the last decade has provided so much hopeful rhetoric or so much disappointment and frustration. We have spent several months in quiet, detailed consultations working to develop a package which I hope provides a basis for a legislative consensus.

I urge the Congress to cap a decade of debate on welfare reform with action. America's people, particularly her poor, have waited long enough for important progress in this area. A society like ours must be judged by what we do for the most needy in our midst. America must meet this challenge. Congress can make an important contribution by enacting the proposals I am making today.

JIMMY CARTER

The White House,

May 23, 1979.