Overview

With reauthorization of the Personal Responsibility and Work Opportunity Reconciliation Act (P.L. 104-193) under consideration in Congress, this issue brief examines some key features of the welfare reform legislation as it applies to American Indians and reviews its impact on this population. It looks at the flexibility the act has given American Indian tribes to design and operate their own Temporary Assistance for Needy Families programs and explores barriers they face in doing so. The paper also examines some of the policy issues and opportunities surrounding welfare reform for American Indians.

Welfare Reform and American Indians: Critical Issues for Reauthorization

Since the implementation of welfare reform, many states have succeeded in dramatically decreasing their welfare caseloads as they have moved people away from cash assistance and into work. In some states with a substantial American Indian^* population, however, the welfare caseload has become disproportionately Indian as their overall caseloads have decreased.¹ Several factors have contributed to this phenomenon. The poverty rate among the 2.5 million American Indians and Alaska Natives in the United States² is 25.9 percent, more than twice the national rate.³ Additional obstacles include lack of job skills, lack of job opportunities, low educational attainment, and substance abuse and mental health problems. Welfare reform has provided tribes with options—beyond those available to the states—for designing and operating their own welfare reform programs in ways that address these barriers. Although some tribes have been able to take advantage of this increased flexibility, they still face significant obstacles. Reauthorization of the Temporary Assistance for Needy Families (TANF) block grant, due this fall, has presented an opportunity to review the critical problems and policy issues facing tribes that seek to develop and maintain self-sufficiency at both the community and the family levels.

Background

The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 (P.L. 104-193) changed welfare by replacing the Aid to Families with Dependent Children (AFDC) entitlement program with the TANF block grant. Before enactment of PRWORA, impoverished American Indians received cash assistance through the AFDC benefits and income eligibility rules set by the state in which they lived, with the costs of the program being shared by the state and federal governments. The law had no provision for administration of cash aid by tribes. In Wisconsin, however, five tribes subcontracted with the state to provide AFDC and to determine eligibility requirements for food stamps and Medicaid independently on their reservations.⁴ Wisconsin was unique in having this type of state-tribal relationship pre-PRWORA.

Under the provisions of PRWORA, more than 330 federally recognized tribes in the 48 contiguous states and 13 Alaska Native groups have the opportunity to design and administer their own TANF programs.⁵ Upon approval of the tribal TANF plans by the U.S. Department of Health and Human Services (DHHS), tribes receive funding directly from the federal government to operate their plans. Tribes now have significant flexibility in administering their own programs, including the ability to (a) determine their own definitions of work, which can include education and training; (b) define their service area and population; (c) establish eligibility standards; (d) establish more generous time limits for receiving cash assistance than the federally prescribed maximum of 60 months; (e) set work participation rates that are different from the federal requirements; and (f) exempt families from time limits if they reside on reservations or in Indian country⁶ where the rate of unemployment⁷ is 50 percent or higher.⁸

A lack of infrastructure and experienced staff have held many tribes back from submitting TANF plans.

Tribal TANF Programs

As of May 2002, 36 tribal TANF plans had been approved by the Administration for Children and Families, DHHS. Encompassing 174 federally recognized tribes and Alaska Native villages in 15 states (see Appendix 1),⁹ these plans serve a combined caseload of approximately 24,000 families. Twenty-one tribal TANF plans have been approved since 1999; an additional 36 are pending. It is estimated that tribal TANF programs serve at least one-third—and perhaps as many as half—of all American Indian families.¹⁰

Tribes have several options for participating in TANF:

• A tribe may allow the state to continue to administer the TANF program and provide benefits and services to the tribe’s population based upon the state’s plan and its criteria and standards.
• A tribe may receive funds from the state and act as subcontractor, so that tribes can administer the program on behalf of the state. Under this option, a tribe provides benefits and services to its population based on the state’s plan and using the state’s criteria and standards.
• A tribe may develop its own TANF plan and use the TANF funding to subcontract back to the state or to a private organization to administer the program and provide services to the tribal population that are based on the tribe’s own criteria and standards.
• Finally, a tribe may develop its own TANF plan and administer the program, providing benefits and services based on tribal criteria and standards.¹¹

TANF is a complex and multifaceted social program. A lack of infrastructure and experienced staff have held many tribes back from submitting TANF plans. While PRWORA gives tribes more flexibility than it gives states in designing their TANF programs (for example, different required participation rates for work activities), most tribal TANF plans closely resemble the states’. Nearly all of the tribal plans set a 60-month lifetime limit on benefits, while the remaining set more stringent limits consistent with state limits. About three-fourths of the tribes and tribal consortia with approved TANF plans receive state maintenance of effort (MOE) funds to help them finance their programs.

Alaska Natives are treated quite differently from American Indians in the 48 contiguous states.

Taking advantage of the increased flexibility, many tribes are tailoring their TANF programs to meet the needs of their clients and the realities of reservation life. For example, many tribes emphasize “education first,” establishing programs of education and training that are consistent with the lack of jobs on reservations and the low educational and job experience levels of many tribal members. Likewise, the allowance for subsistence activities such as hunting, fishing, gathering, crafts, and traditional culturally related activities in some plans and the frequent focus on substance abuse issues are direct responses to cultural, economic, and social realities in some tribal communities. Overall work participation rates for all families in tribal TANF plans average about 37 percent. In its 2001 TANF report to Congress, the Administration for Children and Families noted that “the inclusion of these more broadly defined work activities could, in some cases, cause data to reflect a higher work activity rate than would otherwise be reported using the much narrower State definitions.”¹²

Economic Development

Welfare reform can not be successful without jobs and economic growth and, in the American Indian community, job scarcity is an overwhelming barrier. The recent GAO testimony indicated that a number of factors negatively affect economic growth among American Indians. These include the isolated geographic location of many tribes and the lack of education and job skills among potential workers living on reservations. Still, experts assert that the job gap in much of Indian country is so wide that even a well-designed, well-funded, and well-run employment and job training program can not be fully effective without economic development. For example, in 1989, the resident labor force on the Rosebud Reservation in Todd County, South Dakota, was 7,241, or more than 4.5 times the number of positions produced by the local economy (1,406 full-time jobs and 181 part-time jobs).²⁰

Tribes have the opportunity to provide job skills and training programs to tribal citizens living on or near reservations.

Most “official” unemployment rates generally underestimate the rate among Indians living on reservations because they count as unemployed only those who report that they are seeking work. Authors of a recent report to the NCAI noted, “those who have become discouraged by the lack of jobs and simply stop looking for work are not included in the estimates.”²¹ Unemployment rates calculated to account for discouraged workers are high across most of Indian country and illustrate the gap between employment needs and employment opportunities (see Table 1).

TABLE 1

Unemployment Rates among Bureau of Indian Affairs (BIA) Service Populations, by BIA Area, 1999.

In addition to their unemployment problems, many tribes lack some key components that are important for economic growth on reservations. These include fully exercised sovereignty, effective governing institutions, and a strategic orientation. While some tribes have successfully used strategies such as the development of tribally owned enterprises to stimulate economic growth on reservations, many others have been unable to overcome the drawbacks of geographic isolation, lack of infrastructure, and an unprepared workforce.

Workforce Training

Tribes have the opportunity to provide job skills and training programs to tribal citizens living on or near reservations through a number of federal programs. Before enactment of PRWORA, 78 tribes and tribal organizations exercised an option to run their own work and training programs, called the Job Opportunities and Basic Skills Training (JOBS) program, with 100 percent federal funds. PRWORA replaced the JOBS program with the Native Employment Works (NEW) program. In FY 2002, tribes are scheduled to receive $7.6 million for work and training activities. Between July 1998 and July 1999, 7,000 clients representing 79 American Indian tribes, tribal consortia, and Alaska Native organizations were served by tribal NEW programs. While this seems impressive, experts have raised some questions about whether the services delivered are adequate, since the funding cap translates to a typical tribal grant of less than $50,000 (with some as low as $2,000).²²

The Balanced Budget Act of 1997 created the welfare-to-work (WtW) program, administered by the Department of Labor, to supplement TANF for a two-year period only (FY 1998 and FY 1999). However, funds can be spent over a 5-year period (that is, funds awarded in FY 1998 could be spent through FY 2003). Tribes were eligible for grants if they operated a tribal TANF program, participated in the NEW program, or could show that their existing employment programs provided “substantial services” to welfare recipients. Of the $3 billion authorized for all WtW programs over the two-year period, tribes were awarded $30 million. Ninety-three American Indian tribes, tribal consortia, or Alaska Native organizations have received this funding.²³ However, as of fall 2001, most tribal grants had been exhausted.

In addition, the Indian Employment, Training, and Related Services Demonstration Act of 1992 (P.L. 102-477, usually referred to as “477”), gave tribal governments the option to integrate the employment, training, and related services (such as child care services) they operate into a single plan with a single budget and a single reporting system, even if these services are funded by different federal agencies. There is no separate funding associated with the act. All the funds involved in a tribe’s “477 plan” are those which the tribe would otherwise receive under the authority of the individual programs it chooses to consolidate. Employment programs that can be integrated under 477 include WtW, TANF, and NEW.

Although tribes using 477 plans have been able to reduce their administrative burdens, 477 has not been widely used, since there is no clear financial incentive to participate. Currently, 42 tribes and tribal consortia (representing a total of 211 tribes) have 477 plans. Of these 42 tribes, 11 consolidate their TANF funds and 28 consolidate their NEW funds with those from other programs under the P.L. 102-477 authority.²⁴

Support Services

Often seen as the key to the success of welfare reform, support services aid TANF recipients in getting off the welfare rolls and moving toward self-sufficiency. On the other hand, problems with these programs, including lack of access, funding, or coordination with TANF, can complicate the transition to work. Some of the main services offered to TANF recipients include child care, child support enforcement, transportation, Medicaid, and food stamps.²⁵

A Closer Look at Tribal Experiences

The success of a tribal TANF plan depends on many factors, including state-tribal relationships and job opportunities. The Kaiser Family Foundation, through the work of Jo Ann Kauffman, has studied eight tribes’ experiences with TANF. The information below briefly illustrates three of the tribal TANF plans examined.³³

Pending Legislation

As part of the TANF reauthorization deliberations, Congress is now considering bills that address some of the concerns of American Indians trying to administer or develop tribal TANF plans. In the House, the TANF reauthorization bill, H.R. 4737, renews tribal and NEW grants for 5 years (through FY 2007) at their current level. This bill was passed on May 16 and has been sent to the Senate.

The American Indian Welfare Reform Act (S. 2484) introduced May 8 by Sens. Max Baucus (D-Mont.), Tim Johnson (D-S. Dak.), and Tom Daschle (D-S. Dak.) would create a tribal TANF improvement fund of $500 million over 5 years. Of these funds, $225 million would be set aside for grants to improve program infrastructure, $140 million earmarked for tribes whose caseloads are significantly larger than first estimated, $120 million allocated to encourage states to help fund tribal programs, and $15 million allocated for technical assistance to tribes. This bill would also make tribes eligible for TANF high-performance bonuses and the contingency fund that is available to states in the case of an economic downturn.

Policy Issues in TANF Reauthorization

Under PRWORA, the challenges tribes encounter extend beyond welfare policy and into the jurisdiction of economic development and tribal sovereignty. The concerns of American Indians are likely to occupy a prominent position in the deliberations over TANF reauthorization. Some of the key issues under discussion are the following:

• A new funding formula that would take into account the administrative costs of developing and operating a tribal TANF program as a necessary step in alleviating some of the financial impediments faced by many TANF tribes.
• Ways to make the 477 legislation more attractive or useful to tribes, especially since it helps to stimulate greater control over the use of federal resources and can conserve tribes’ time and financial resources.
• Strategies for encouraging tribal economic growth, perhaps based on a technology and service orientation suited to the 21^st century economy.

Conclusion

In order for a new welfare system predicated on work to succeed in the American Indian community, tribes must be able to move welfare clients into sustained employment. This employment must be based on the skills and knowledge of the clients as well as clients’ ability to function successfully in work environments and in specific job situations. Although some tribes have successfully developed and administered tribal plans to serve their populations, many have not yet taken advantage of this opportunity. The lack of funding for administration of the program and a lack of prospects for economic development and growth on many reservations presents very significant barriers for tribes with and without tribal TANF plans.

Although emphasizing education first has been an important strategy for tribal leaders, in the presence of job scarcity and significant deficit of prepared workers, education alone is unlikely to have a major impact on welfare dependency. Without tribal and policymaker attention to the job scarcity problem, welfare reform will not benefit many tribal communities. The current welfare reauthorization provides an opportunity for policymakers involved in welfare policy, economic policy, and Indian affairs to collaborate on addressing the multiple needs and concerns affecting American Indians.

Endnotes

1

Kathleen Maloy, “Welfare Reform Reauthorization in 2002: What Are the Issues for Tribal Communities and Indian Families?” issue brief, Kaiser Family Foundation, Menlo Park, California, March 2002, 10; accessed June 14, 2002, at http://www​.kff.org/content​/2002/20020415/.

2

U.S. Census Bureau. “American Indian/Alaska Native Heritage Month: November 2001,” press release; accessed January 14, 2002, at http://www​.census.gov​/Press-Releases/www/2001/cbo1fff15.html.

3

This Census Bureau figure represents a three-year average (1997-1999) poverty rate for American Indian and Alaska Natives, with an estimated 700,000 living in poverty. Because the American Indian and Alaska Native population is relatively small, multiyear averages provide more reliable estimates. The Census Bureau recommends, however, that “caution be used in interpreting these data,” since 1990 census results showed “differences in poverty between the American Indian and Alaska Native population living in American Indian or in Alaska Native areas and those residing outside those areas.” See U.S. Census Bureau, “Poverty Rate Lowest in 20 Years, Household Income at Record High, Census Bureau Reports,” press release, U.S. Department of Commerce, Washington, D.C.; accessed June 14, 2002, at http://www​.census.gov​/Press-Release/www/2000/cb00-158.html.

4

Eddie F. Brown and Shanta Pandey, “Implementation of the Temporary Assistance for Needy Families (TANF) on American Indian Reservations: Early Evidence from Arizona,” testimony before the Committee on Indian Affairs, U.S. Senate, April 14, 1999; accessed June 17, 2002, at http://www​.senate.gov​/~scia/1999hrgs/wlfr4.14/brown.pdf.

5

A “federally recognized” tribe is a tribe and/or tribal group that has a federally acknowledged legal and political relationship with the federal government. This relationship is referred to as a government-to-government relationship. This unique relationship is based on Article I, Section 8 of the U.S. Constitution and has been given substance through numerous Supreme Court decisions, treaties, legislation, and executive orders. See Office of Environmental Management, “Frequently Asked Questions,” U.S. Department of Energy; accessed June 17, 2002, at http://www​.em.doe.gov/public/tribal/faq​.html.

6

“Indian country” includes not only Indian reservations and dependent Indian communities but Indian allotments as well. For example, Oklahoma, which is considered Indian country, has federally recognized tribes but no reservations anywhere in the state. Ray Apodoca, telephone interview with author, May 22, 2002.

7

Some prefer the term “nonemployment” as apposed to “unemployment,” since nonemployment refers not only to those who are seeking work but also to those who have given up looking for work due to lack of opportunity.

8

Administration for Children and Families, “Tribal TANF—Opportunity, Responsibility, and Governance,” slide from presentation given at Spring 2000 “Empowering Tribal Families in the New Millennium” conference, U.S. Department of Health and Human Services, Washington, D.C., slides 5, 43; accessed December 20, 2001, at http://www​.acf.dhhs.gov​/programs/dts/pwerppt​/ovrview/TTovervw/sld001.htm.

9

Vee Burke, “Indian Tribes and Welfare Reform,” Report 97-86, Congressional Research Service, Washington, D.C., May 22, 2002, 1.

10

Eddie Brown et al., “Welfare, Work, and American Indians: The Impact of Welfare Reform,” report to the National Congress of American Indians, Washington, D.C., November 27, 2001, 7; accessed June 14, 2002, at http://www​.ncai.org/main​/pages/issues/human_resources​/documents​/cornell_brown_report.pdf.

11

Administration for Children and Families, “Nuts and Bolts of Planning for Tribal TANF,” slide presentation given at Spring 2000 “Empowering Tribal Families in the New Millennium” conference, U.S. Department of Health and Human Services, Washington, D.C., slides 2–4; accessed December 20, 2001, at http://www​.acf.dhhs.gov​/programs/dts/pwerppt/ttplans/index​.htm. Also Ray Apodaca, telephone interview with author, May 30, 2002.

12

Administration for Children and Families, “Fourth Annual TANF Report to Congress,” U.S. Department of Health and Human Services, Washington, D.C., April 2002, XI–10; accessed May 24, 2002, at http://www​.acf.dhhs.gov​/programs/opre/ar2001/chapter11.pdf.

13

The 12 Alaska Native corporations are based on the geographic locations of tribes in Alaska. These corporations are charged with overseeing the administration of TANF for the individual tribes and villages in their jurisdictions. See P.L. 104-193, Section 419(4)(B); accessed June 13, 2002, at http://frwebgate​.access​.gpo.gov/cgi-bin/getdoc​.cgi?dbname=104​_cong_public_laws&docid​=f:publ193.104.pdf

14

P.L. 104-193, Section 412(h).

15

State options for TANF funding include (a) one-third of the total amount of the federal payment for FY 1992, FY 1993, and FY 1994; (b) the amount of the federal payment in FY 1994; or (c) four-thirds the amount of the federal payment in the first quarter of FY 1995. See Sarah L. Hicks and Eddie F. Brown, “The Future of Welfare Reform: Considerations for Reauthorization,” National Congress of American Indians, October 25, 2000; accessed May 8, 2002, at http://www​.ncai.org/main​/pages/issues/human_resources​/documents/futureofWR.htm.

16

Cynthia M. Fagnoni, “Welfare Reform: Tribes Are Using TANF Flexibility to Establish Their Own Programs,” testimony before the Committee on Indian Affairs, U.S. Senate (GAO-02-695T), U.S. General Accounting Office, Washington, D.C., May 10, 2002.

17

Maintenance of effort refers to a provision under the 1996 welfare law that requires states to continue to spend state TANF funds at a level equal to at least 80 percent of their FY 1994 AFDC levels. If states meet the minimum work participation rates, the law allows them to reduce their minimum spending requirement to 75 percent.

18

Fagnoni, “Welfare Reform.”

19

Fagnoni, “Welfare Reform.”

20

Brown et al., “Welfare, Work,” 38.

21

Brown et al., “Welfare, Work,” 38.

22

Brown et al., “Welfare, Work,” 30.

23

A “tribal consortium” is a partnership between two or more Indian tribal governments. Examples include the Tanana Chiefs Conference (a 37-village consortium) in Alaska and the Southern California Tribal Chairman’s Association (an 18-tribe consortium).

24

Ray Apodaca, telephone interview with author, May 22, 2002.

25

Much of the information in this section is based on Brown et al, “Welfare, Work.”

26

Burke, “Indian Tribes,” 3.

27

Burke, “Indian Tribes,” 3.

28

Maloy, “Welfare Reform Reauthorization,” 10.

29

In September 2001, the U.S. Department of Health and Human Services approved an amendment to Minnesota’s Medicaid plan to allow the Mille Lacs Band of Ojibwe (a tribe that administers a tribal TANF program) to determine Medicaid eligibility for tribal TANF clients.

30

Brown et al., “Welfare, Work,” 26.

31

Brown et al., “Welfare, Work,” 24.

32

Brown et al., “Welfare, Work,” 24.

33

Jo Ann Kauffman, “Welfare Reform and American Indian Tribes: Critical Decisions for the Future of Indian Families,” Kaiser Family Foundation, Washington, D.C., April 2002, 23; accessed June 14, 2002, at http://www​.kff.org/content​/2002/20020415/.

34

Sarah Hicks, telephone interview with author, May 14, 2001.

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