AUGUSTA, Maine — Gov. Paul LePage on Tuesday unveiled a bill aimed at keeping Mainers from falling over the “welfare cliff” — an abrupt loss of all public assistance that can result from a recipient experiencing an income bump.
The complete loss of welfare funds means those who go over the cliff can find themselves with fewer resources than they had before they started earning more money. LePage and others said recipients of the Temporary Assistance for Needy Families program shouldn’t be set back because they took a job, added hours or earned a pay raise.
“There is perhaps no more frustrating indictment of our current welfare system,” than the cliff, said Mary Mayhew, the governor’s Health and Human Services chief, during a news conference Tuesday morning.
LePage’s bill is not the first proposed this session to deal with the welfare cliff. Rep. Drew Gattine, D-Westbrook, the House chairman of the Health and Human Services Committee, has his own bill to smash the cliff.
The bills have their differences. But weaning low-income Mainers off assistance, rather than pulling the rug out from under them after they get a job, may be that ever-elusive creature under the State House dome — a proposal that could unite the often disparate Republican and Democratic caucuses in the Legislature.
Current eligibility rules for TANF disregard the first $108 of income per month, plus 50 percent of all other income up to the federal poverty limit. After that, income is factored into eligibility. Earn too much money, in other words, and lose your benefit.
Here’s an example: A single parent with two dependent children who earns $1,023 per month is eligible for TANF income. That same parent would become ineligible if she earned just $1 more.
LePage’s bill, LD 1402, seeks to build a fence around the welfare cliff by changing eligibility rules for those who work at least 20 hours per week. Those who work between 20 and 40 hours per week will see 100 percent of the total income disregarded for two months; 75 percent for the next six months; and 50 percent for each month thereafter.
Those who work 40 hours or more per week would have 100 percent disregarded for two months, but otherwise follow the same tiered schedule.
LePage said the plan would incentivize work, rather than punishing it.
Under the current system, “people will say, ‘I can’t take a pay increase,’ or ‘Can you just give me more time off instead of a raise? I can’t lose my benefits,’” he said.
The bill also increases the eligibility period for transportation assistance from 12 months to 18 months, and dedicates $500,000 in state funds “to promote financial literacy and healthy savings habits” for families who make less than twice the federal poverty limit.
Maine Equal Justice Partners, a nonprofit legal assistance and low-income advocacy group, described LePage’s bill as a good start, but said it would create a new, steeper cliff for those who work fewer than 20 hours per week.
That’s because LePage’s plan would eliminate the current “discard” of $108 plus half of all income up to the federal poverty level, in favor of his new tiers. Those who work fewer than 20 hours, though, will see no income exemption at all.
“What the governor’s bill does is predicate whether or not you get relief from the cliff when you go to work as to whether or not you’re actually meeting that [20-hour per week] requirement,” said Christine Hastedt, public policy director at MEJP. “There are lots of people trying to find work who cannot. So if you find an 18-hour-per-week job, under the governor’s bill, you could lose your assistance.”
Hastedt’s organization favors LD 1268, Gattine’s bill, which he described Tuesday as “basically a jobs bill.”
Like the governor’s, Gattine’s bill would establish increased income exemptions for TANF recipients who work, thereby preventing them from going over the cliff. However, Gattine’s bill exempts 100 percent of earnings for the first two months for all workers, whether they work 10 hours or 50. After two months, it exempts $250, plus half of the remainder of the worker’s monthly income would be disregarded.
The bill would also make child care assistance retroactive to the date of application. Gattine said that’s a recognition of the fact that TANF recipients who find work often have to go into debt to afford child care while they wait several weeks to be found eligible by DHHS.
The bill would also establish a working group to examine ways to expand transportation assistance, create a “navigator” program to help welfare recipients understand and access available programs, and direct the department to work with Maine’s higher education institutions to develop “pathways” to more gainful employment or job training.
“The goal should be not just getting people into their first low-wage job, but to get them into a position where they’re in the workforce but then see a path to move them ahead,” Gattine said Tuesday. “The goal isn’t just to get them working, but to create success, to get them moving ahead so they don’t cycle back into public assistance.”
The administration has already asked questions about whether Gattine’s bill could add more Mainers to the TANF rolls. Buried in its language is the elimination of what’s known as the “deprivation rule,” which state that, with a few exceptions, children must be deprived of one parent — through death, disability or absence, for example — to be eligible for TANF benefits.
“Eliminating this eligibility requirement would expand the TANF benefit to an estimated 1,800 cases, where both parents are present in the home, and where both are non-disabled and able to work,” the department wrote in its testimony on Gattine’s bill. “We are against this expansion of welfare to able-bodied adults.”
While the bills have differences, neither Gattine nor LePage seemed interested in drawing battle lines around those discrepancies.
LePage, who has never been afraid to say when he thinks the Legislature would gut his policy proposals, was buoyant.
“I am very confident. It’s unusual that you have both parties looking at the same idea, the same concept, so hopefully this can get through in some fashion,” he said. “In a session, there are very few items that both parties talk about in a positive manner. This here, both Democrats and Republicans agree and see opportunities to improve the system.”
Gattine said he was happy to see the governor introduce a bill that shares his goals, and said that given the divided government in Augusta, any successful effort this year will require support of Democrats, Republicans and the governor.
“I hope people don’t start looking at my bill and the governor’s as two camps, and you have to get in one camp or another. I think that would be a mistake. There’s a real opportunity here to do something,” he said.
Follow Mario Moretto on Twitter at @riocarmine.