"Superwaiver" Proposals in Current Welfare Reform Debate
CRS Report for Congress
“Superwaiver” Proposals in
the Welfare Reform Debate
Domestic Social Policy Division
Welfare discussions in the current and past two Congresses have included
consideration of an Administration-proposed “superwaiver” that would enable states and
localities to waive rules of various welfare-related programs. Formally called Program
Coordination Demonstration Projects, these waivers were included in the 109th
Congress in long-term welfare reauthorization bills approved by a House Ways and
Means subcommittee and the House Education and the Workforce Committee (H.R.
240), the Senate Finance Committee (S. 667), and in the House version of budget
reconciliation (H.R. 4241). A scaled-down version of welfare reauthorization was
included in the final agreement on budget reconciliation — the Deficit Reduction Act
of 2005 (P.L. 109-171, S. 1932) — but did not include provisions related to the
superwaiver. Moreover, the Administration’s FY2007 budget package contained no
further reference to this proposal. This report will be updated to track any further
legislative activity. (For a broader discussion of the issue, see CRS Report RL32859,
The “Superwaiver” Proposal and Service Integration: A History of Federal Initiatives,
by Cheryl Vincent.)
Bush Administration Proposal
The 109th Congress continued a debate that began in 2002 over reauthorizing the
Temporary Assistance for Needy Families (TANF) block grant and related programs.
(See CRS Issue Brief IB10140 for the outcome of this debate.) In February 2002, the
Bush Administration released an outline of its welfare package, entitled Working Toward
Independence, which included a proposal to allow states to request waivers from federal
requirements in order to integrate activities across a wide spectrum of programs.
According to that document, programs to be covered by the new waiver authority would
include, but not be limited to: TANF, food stamps, the Workforce Investment Act (WIA),
the Wagner-Peyser Act (which authorizes the Employment Service), federal housing and
homeless assistance programs, and GED and post-secondary education programs.
The Administration justified its proposal by noting the success of TANF in
transforming state-level public assistance programs into “innovative and comprehensive
workforce assistance programs.” The Administration said other federal programs provide
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similar assistance to low-income families but the potential combined effectiveness of
these programs is “compromised” by differences in administrative practices and rules.
The waiver authority would allow states to build “stronger, more integrated and effective
service systems” and “coherent and comprehensive strategies on behalf of low-income
individuals and families” and deliver “more seamless services tied to stated program goals
and self-sufficiency and employment outcomes.” The document said the proposal would
give states flexibility to establish or change eligibility criteria and program rules, as long
as they serve the same general populations targeted by the individual programs to be
included. Programs operating under waiver authority would be considered
demonstrations, subject to evaluation.
States would submit their waiver request to each affected federal agency, explaining
how they would achieve individual program goals and how the waiver would improve
achievement of these goals. Cabinet Secretaries would approve requests that appeared
likely to improve the “quality or effectiveness” of the affected programs. The
demonstrations would be cost-neutral — in other words, they could result in no additional
federal spending — and would be suspended or terminated if they exceeded specified
spending levels. Each Department would report annually on the number and scope of
waivers approved and make recommendations for modifications in current programs if
warranted by evaluation findings. Finally, an informal document circulated by
Administration officials indicated that a Federal Interagency Waiver Board would be
established through executive order to “facilitate the processing” of waiver requests.
Welfare reauthorization provisions — including the superwaiver — were approved
by the House Ways and Means Subcommittee on Human Resources and the House
Education and the Workforce Committee (H.R. 2401), and were included in the House
version of the 2005 budget reconciliation bill (H.R. 42412). For the most part, the waiver
provisions in these bills were the same as those in the House-passed H.R. 4 of the 108th
Congress, which in turn was modeled on the House-passed H.R. 4737 of the 107th
Congress. As included in H.R. 4241, the waiver provisions would have covered a more
narrow range of programs than the other proposals.
House-Senate conferees on the budget reconciliation bill (which was considered
under its Senate number, S. 1932) agreed to maintain a scaled-back version of welfare
reauthorization, extending TANF and related programs through FY2010 (see CRS Report
RS22369). However, the superwaiver provisions were dropped from the final agreement.
The conference agreement was signed into law on February 8 (P.L. 109-171), and it is
unclear whether H.R. 240 (or its Senate counterpart, S. 667, discussed below) will see any
1 In addition to these two committees, H.R. 240 was referred to the House Committees on
Agriculture, Energy and Commerce, and Financial Services, which have taken no action.
2 Because H.R. 4241 was a reconciliation bill, it was organized according to committee. Thus,
superwaiver provisions appeared both in Title II: Education and the Workforce Committee, and
in Title VIII: Ways and Means Committee. Most of the provisions were identical; however, the
Title II provisions only covered programs under Education and the Workforce jurisdiction, and
Title VIII only covered programs under Ways and Means jurisdiction.
further action in this Congress, or whether further action will be taken separately on the
The waiver authority would allow demonstrations that coordinate “multiple public
assistance, workforce development, and other programs, for the purpose of supporting
working individuals and families, helping families escape welfare dependency, promoting
child well-being, or helping build stronger families, using innovative approaches to
strengthen service systems and provide more coordinated and effective service delivery.”
States or substate entities that administer two or more “covered” programs could propose
a demonstration by submitting an application to each appropriate federal agency. The
proposal would describe programs to be included in the project and how the purposes of
each program would be achieved, plus how the project would improve achievement of
these purposes in terms of quality or cost-effectiveness. The proposal would identify the
population to be served, designate eligibility criteria to be used, and establish performance
objectives. The proposal would specify statutory and regulatory requirements to be
waived and justify the need for waivers.
The House superwaiver provisions would require that projects be cost-neutral as
determined by the Office of Management and Budget (OMB), meaning that they could
not result in any increased federal payments compared to what would have been paid
without the demonstration. Cost-neutrality could be determined on an annual basis or
over a five-year period. However, unlike the original Administration proposal, the House
provisions do not specify a consequence or penalty (e.g., suspension or termination of the
demonstration, repayment to the federal government of excess spending) if the project
exceeded OMB’s estimate of cost-neutral spending.
The Secretary of each affected federal Department would have to approve the
proposal and could approve proposals (and waive any requirements necessary) if a project
had a “reasonable likelihood” of achieving the objectives of the programs to be included,
could “reasonably be expected” to meet cost-neutrality rules, and coordinated two or more
programs. The Secretaries would have 90 days to approve requests; no action by the end
of 90 days would be deemed an approval. However, requests for additional information
from the applicant would extend the time available for a decision by the Secretary.
Demonstrations could be approved for up to five years (and renewed for an
additional five years under the Administration proposal). Applicants would be required
to conduct evaluations of their projects. The Secretaries would be required to notify
appropriate congressional committees of their decision to approve or disapprove waiver
applications and to report annually on approved projects, number of waivers granted and
specific provisions waived, the extent to which projects were achieving program goals
through improved quality or cost-effectiveness and meeting performance objectives and
cost-neutrality requirements, and any recommendations for program changes.
Covered Programs. During the 2002 debate, the list of programs covered by the
waiver authority changed.3 Under H.R. 240 and as passed by the House in the previous
two Congresses, the waiver would cover the following programs:
3 As introduced in the 107th Congress, H.R. 4090/H.R. 4092 included all programs administered
by the Departments of Education (ED), Health and Human Services (HHS), and Labor. As
reported, the bills included only specified ED, HHS and Labor programs. Additional programs
(housing, homelessness, food stamps) were added in the “clean” bill (H.R. 4737) sent to the floor.
!TANF, Welfare-to-Work, and mandatory child care grants under Title
IV-A of the Social Security Act,
!Social Services Block Grants (SSBG) under Title XX of the Social Security Act,
!Section 505 of the Family Support Act of 1988 (the Job Opportunities for
Low-Income Individuals demonstration),
!Adult Education and Family Literacy Act,
!Child Care and Development Block Grant (CCDBG),
!Title I of the Workforce Investment Act (WIA), except Job Corps,
!activities under the U.S. Housing Act of 1937 (assisted and public
housing, except Section 8 rental assistance and provisions that designate
certain public housing units for elderly and disabled individuals),
!activities under Titles I-IV of the McKinney-Vento Homeless Assistance Act
(Emergency Food and Shelter Program administered by the Federal
Emergency Management Agency, and four programs administered by the
Department of Housing and Urban Development: Emergency Shelter Grants,
Supportive Housing, Shelter Plus Care, and Section 8 Moderate
Rehabilitation for Single Room Occupancy), and
!the Food Stamp program.4
The superwaiver provisions included in the House budget reconciliation bill included
all the programs listed above (in either the Education and the Workforce Committee title
or the Ways and Means Committee title), except housing, homelessness, and food stamps.
Limitations on Waivers. H.R. 240 specifies certain provisions that federal
agencies could not waive. No provision could be waived if it relates to the following:
!civil rights or prohibition of discrimination,
!the purposes or goals of any program,
!maintenance-of-effort requirements (i.e., provisions that require states or
other entities to maintain a certain level of spending),
!health or safety,
!labor standards under the Fair Labor Standards Act of 1938, or
Additional provisions that could not be waived are as follows:
!Section 241(a) of the Adult Education and Family Literacy Act, which
requires that federal funds be used to supplement, and not supplant,
existing state or local spending;
!provisions under Section 5A of the United States Housing Act of 1937,
which require and govern the development and content of public housing
agency plans and require the establishment of resident advisory boards
(this is not included in the reconciliation bill, since housing would not be
a covered program);
!in the case of any waivers involving WIA, requirements related to wage
and labor standards, including nondisplacement protections, worker
4 H.R. 240 also includes a separate provision to allow up to five states — in lieu of participating
in the Food Stamp program — to receive food stamp funds in the form of a block grant.
rights, participation and protection of workers and participants, grievance
procedures and judicial review, nondiscrimination, allocation of funds to
local areas, eligibility of providers or participants, the establishment and
functions of local areas and local boards, and procedures for review and
approval of plans5;
!in the case of waivers involving the Food Stamp program, provisions that
deny benefits to certain classes of individuals (if waiver of such
provisions would expand eligibility for the program), the prohibition
against “cashing out” food stamp benefits, quality control provisions, and
noncitizen eligibility rules6 (these are not included in the reconciliation
bill since food stamps would not be a covered program); and
!any provision that requires a state to pass through funds received by the
state to a substate entity.
Two additional restrictions would effectively narrow the waiver authority’s scope.th
Specifically, under the 109 Congress proposals and as previously passed by the House,
the legislation would prohibit the following:
!waivers of any funding restriction or limitation included either in an
appropriations act or any other legislation; or
!transfer of funds from one covered program to another (either
appropriated funds or direct spending).
However, the bills specify that funding restrictions or limitations, which could not
be waived, do not include such program requirements as application procedures,
performance standards, reporting requirements, or eligibility standards. In other words,
such provisions (e.g., food stamp eligibility rules in the case of H.R. 240) could
potentially be waived. Moreover, it is unclear how the Administration would interpret
“funding restriction or limitation.”
Finally, H.R. 240 specifies that any project that includes housing must certify that
the annual public housing agency (PHA) plan includes information about the project, and
that any relevant resident advisory board recommendations are included in the PHA plan.
The bill also makes necessary conforming amendments to Section 5A of the Housing Act.
The Senate Finance Committee approved a draft welfare bill on March 9 that was
subsequently introduced by Chairman Grassley on March 17 as S. 667. This bill would
authorize Program Coordination Demonstration Projects that are identical to the
superwaiver provisions in H.R. 240 and the House reconciliation bill, with two critical
!S. 667 would only include programs under Title IV-A of the Social
Security Act (i.e., TANF, Welfare-to-Work grants, and mandatory child
care grants under Section 418), and SSBG; and
5 This list of WIA provisions that could not be waived is also the list of provisions that cannot
be waived under WIA’s current waiver authority (Section 189(i)(4)(A)(i) of the act).
6 Despite these restrictions, provisions that could be waived under the proposal are broader than
the list that can be waived under the Food Stamp program’s current waiver authority.
!S. 667 would limit the number of states that could participate to 10.
S. 667 further specifies that provisions in Section 418 of the Social Security Act,
requiring mandatory child care grants to be used only for child care assistance, could not
be waived. S. 667 also would require project evaluations to be conducted by an
independent contractor and to use random assignment methodology to the maximum
extent feasible; H.R. 240 and the House reconciliation bill would require evaluations but
would not mandate an independent contractor or a particular methodology.
Discussion of Waiver Proposal
Congress has previously included authority to waive statutory and regulatory
provisions in numerous programs, and in fact, the challenge of integrating and
coordinating programs that assist the same general population has been debated for
decades. (See CRS Report RL32859.) Typically, waivers are advocated by recipients of
grant funds (most often states) as a way to provide flexibility and encourage innovation
within federal parameters. Concerns raised about waivers usually focus on accountability
and the extent to which Congress can ensure that federal funds are used to meet nationally
established goals. Some waivers have been justified as a way to test the impact of new
policies, with mandatory evaluations to help inform future decisions. Other waivers have
been enacted to address specific concerns within specific states or localities.
Currently, programs with waiver authority include some Social Security Act
programs (e.g., TANF, child support enforcement, Medicaid, child welfare), food stamps,
the Employment Service (Wagner-Peyser Act), and WIA. At first blush, the proposed
superwaiver appears broader than existing waiver authorities; however, in the case of
WIA for example, the same limitations on waivers in current law would apply to the
proposed new waiver authority. On the other hand, the superwaiver would be broader
than current food stamp law allows and also than currently allowed under Wagner-Peyser.
And some programs included in H.R. 240 (housing, homeless, and adult education) now
allow no statutory waivers at all. Thus, the impact of this proposal could vary by
Some programs are already very broad with few mandatory rules to waive, most
notably SSBG. Other programs have more targeted purposes and specific rules, such as
housing and homeless programs. Further, some covered programs are state-administered,
while local governments or entities play a significant (or in some cases primary) role in
others, such as WIA, Welfare-to-Work, and housing. Finally, the waiver included in H.R.
240 would cover major programs such as TANF and food stamps, which provide billions
of dollars and operate nationwide, but also would include Job Opportunities for Low-
Income Individuals (JOLI), a very small demonstration ($5.5 million annually) in which
HHS gives competitive grants to about a dozen nonprofits each year. (The Administration
has proposed to terminate the JOLI program in its FY2007 budget.)
Since the superwaiver contains few limitations on what could not be waived (for
most of the covered programs), and also because its stated purpose is very general, this
new authority would give great discretion to the Executive Branch, in combination with
state and/or local applicants. However, restrictions in the bills — prohibiting transfer of
funds among programs or waiver of congressional funding limitations within programs
— could also limit the scope of potential waiver demonstrations.