|
Overview of Entitlement Programs (Green Book)
FEDERAL HOUSING ASSISTANCE \12\
\12\ This discussion draws directly from Congressional Budget
Office (1988). For this report, CBO has updated all figures with 9
additional years of data. For a more recent study on these topics, see
Congressional Budget Office (1994).
---------------------------------------------------------------------------
A number of Federal programs administered by the Department
of Housing and Urban Development (HUD) and the Farmers Home
Administration (FmHA) address the housing needs of lower income
households. Housing assistance has never been provided as an
entitlement to all households that qualify for aid. Instead,
each year the Congress has appropriated funds for a number of
new commitments. Because these commitments generally run from 1
to 40 years, the appropriation is actually spent gradually over
many years. These additional commitments have expanded the pool
of available aid, thus increasing the total number of
households that can be served. They have also contributed to
growth in Federal outlays in the past and have committed the
government to continuing expenditures for many years to come.
This section describes recent trends in the number and mix of
new commitments, as well as trends in expenditures.
Types of Assistance
The Federal Government has traditionally provided housing
aid directly to lower income households in the form of rental
subsidies and mortgage interest subsidies. The 1990 Cranston-
Gonzalez National Affordable Housing Act (hereafter referred to
as the 1990 Housing Act), authorized a new, indirect approach
in the form of housing block grants to State and local
governments, which may use these funds for various housing
assistance activities specified in the law. Both the number of
households receiving aid and total Federal expenditures have
steadily increased each year, but the growth in assisted
households has slowed since the 1980s.
A number of different housing assistance programs evolved
over time in response to changing housing policy objectives.
The primary purpose of housing assistance has always been to
improve housing quality and to reduce housing costs for lower
income households. Other goals have included promoting
residential construction, expanding housing opportunities for
disadvantaged groups and groups with special housing needs,
promoting neighborhood preservation and revitalization,
increasing home ownership, and, most recently, empowering the
poor to become self-sufficient.
New housing programs have been developed because of
shifting priorities among these objectives as housing-related
problems changed and because of the relatively high Federal
costs associated with some approaches. Other programs have
become inactive as Congress stopped appropriating funds for new
assistance commitments through them. Because housing programs
traditionally have involved multiyear contractual obligations,
however, these so-called inactive programs continue to play an
important role by serving a large number of households through
commitments for which funds were appropriated some time ago.
Traditional rental assistance
Most Federal housing aid is now targeted to very-low-income
renters through the rental assistance programs administered by
HUD and the FmHA (Congressional Research Service, 1991; 1993).
Rental assistance is provided through two basic approaches: (1)
project-based aid, which is typically tied to projects
specifically produced for lower income households through new
construction or substantial rehabilitation; and (2) household-
based subsidies, which permit renters to choose standard
housing units in the existing private housing stock. Some
funding is also provided each year to modernize units built
with Federal aid.
Rental assistance programs generally reduce tenants' rent
payments to a fixed percentage--currently 30 percent--of their
income after certain deductions, with the government paying the
remaining portion of the rent.
Almost all project-based aid is provided through
production-oriented programs, which include the Public Housing
Program, the section 8 New Construction and Substantial
Rehabilitation Program, and the section 236 Mortgage Interest
Subsidy Program--all administered by HUD--and the section 515
Mortgage Interest Subsidy Program administered by the FmHA.\13\
Today, new commitments are being funded through only two of the
four--a modified version of the section 8 new construction
program for elderly and disabled families only and the section
515 program. Some assistance has also been funded annually
under two small HUD programs authorized in 1983--the Rental
Housing Development Grants (HoDAG) and the Rental
Rehabilitation Block Grant Programs.\14\ These programs
distributed funds through a national competition and by
formula, respectively, to units of local government that met
eligibility criteria established by statute.
---------------------------------------------------------------------------
\13\ A small number of renters continue to receive project-based
subsidies through the now inactive section 221(d)(3) below-market
interest rate and rent supplement programs.
\14\ The Housing and Community Development Act of 1987 terminated
the HoDAG Program at the end of fiscal year 1989; the 1990 Housing Act
repealed the Rental Rehabilitation Block Grant Program at the end of
fiscal year 1991.
---------------------------------------------------------------------------
Some project-based aid is also provided through several
components of HUD's section 8 Existing Housing Program, which
tie subsidies to specific units in the existing housing stock,
many of which have received other forms of aid or mortgage
insurance through HUD. These components include the section 8
loan management set-aside (LMSA) and property disposition (PD)
components, which are designed to improve cash flows in
selected financially troubled projects that are or were insured
by the Federal Housing Administration (FHA); the section 8
conversion assistance component, which subsidizes units that
were previously aided through other programs; and the section 8
Moderate Rehabilitation Program, which provides subsidies tied
to units that are brought up to standard by the owner.\15\ In
recent years, few, if any, new commitments have been funded
through these programs. Today, new funding for these programs
is predominantly used to replace aid to households who are
being displaced from assisted projects because the projects are
being demolished or because their owners choose to opt out of
the Federal assistance programs.
---------------------------------------------------------------------------
\15\ The 1990 Housing Act repealed the section 8 Moderate
Rehabilitation Program at the end of fiscal year 1991, except for
single-room occupancy units for the homeless.
---------------------------------------------------------------------------
Household-based subsidies are provided through two other
components of the section 8 Existing Housing Program--section 8
rental certificates and vouchers. These programs, both of which
are currently active, tie aid to households that choose
standard units in the private housing stock. Certificate
holders generally must occupy units with rents that are within
guidelines--the so-called fair market rents--established by
HUD. Voucher recipients, however, are allowed to occupy units
with rents above the HUD guidelines provided they pay the
difference.
Traditional homeowners' assistance
Each year, the Federal Government also assists some low-
and moderate-income households in becoming homeowners by making
long-term commitments to reduce their mortgage interest.\16\
Most of this aid has been provided through the section 502
program administered by the FmHA. This program supplies direct
mortgage loans at low interest rates roughly equal to the long-
term government borrowing rates or provides guarantees for
private loans with interest rates that may not exceed those set
by the Department of Veterans Affairs. Many home buyers,
however, receive much deeper subsidies through the interest-
credit component of this program, which reduces their effective
interest rate to as low as 1 percent.
---------------------------------------------------------------------------
\16\ In addition, a small number of very-low-income homeowners
receive grants or loans each year from the FmHA for housing repairs.
---------------------------------------------------------------------------
A number of home buyers have received aid through the
section 235 program administered by HUD. This program provides
interest subsidies for mortgages financed by private lenders.
New commitments are now being made only through the section 502
program, but a small number of homeowners continue to receive
aid from prior commitments made under the section 235
program.\17\ Both programs generally reduce mortgage payments,
property taxes, and insurance costs to a fixed percentage of
income, ranging from 20 percent for the FmHA program to 28
percent for the latest commitments made under the HUD program.
Households with relatively low incomes generally would have to
pay larger shares, however, since mortgage payments must cover
a minimum interest rate--currently 1 percent and 4 percent for
the FmHA and HUD programs, respectively. Starting in 1991,
however, the FmHA has allowed some very-low-income households
to defer up to 25 percent of their monthly payments, subject to
later repayment.
---------------------------------------------------------------------------
\17\ The Housing and Community Development Act of 1987 terminated
the section 235 program at the end of fiscal year 1989.
---------------------------------------------------------------------------
New directions in housing assistance
The 1990 Housing Act authorized several new housing
assistance approaches. The major initiatives of the 1990 act
are: the HOME Investment Partnerships Block Grant Program, the
Home Ownership and Opportunity for People Everywhere (HOPE)
Program, and the National Home Ownership Trust Demonstration.
Since 1996, funds have been appropriated only for the HOME
Program.
The HOME Program is designed to increase the supply of
housing affordable to low-income families through the provision
of Federal grants to State and local governments. Funds may be
used for tenant-based rental assistance or for acquisition,
rehabilitation or, in limited circumstances, construction of
both rental and ownership housing. Currently, participating
jurisdictions must provide matching contributions of at least
25 percent of HOME funds spent in each fiscal year.
Trends in Commitments and Payments
Trends in commitments
Although the Federal Government has been subsidizing the
shelter costs of low-income households since 1937, more than
half of all currently outstanding commitments were funded over
the past 21 years. Between 1977 and 1997, about 2.9 million net
new commitments were funded to aid low-income renters. Another
1.1 million new commitments were provided in the form of
mortgage assistance to low- and moderate-income home buyers.
Between 1977 and 1983, the number of net new rental commitments
funded each year declined steadily, however, from 375,000 to
78,000. Trends have been somewhat erratic since 1983. Over the
21-year period, commitments for new home buyers generally
decreased, ranging from a high of 140,000 in 1980 to a low of
less than 24,000 in 1991 (see table 15-25).
The production-oriented approach in rental programs has
been sharply curtailed since 1982 in favor of the less costly
section 8 Existing Housing and Voucher Programs. Between 1977
and 1982, commitments through programs for new construction and
substantial rehabilitation ranged annually from 53 to 73
percent of the total; since then, however, they have ranged
between 28 percent and 40 percent of all additional rental
commitments.
The total number of households receiving assistance has
increased substantially, from 3.2 million at the beginning of
fiscal year 1977 to almost 5.8 million at the beginning of
fiscal year 1997--an increase of more than 80 percent (see
table 15-26). This increase results largely from net new
commitments over the past 20 years, but also from commitments
made before 1977 that have been processed during this period.
The number of households receiving rental subsidies increased
from 2.1 to 5.1 million. The number of homeowners receiving
assistance in a given year rose from less than 1.1 million in
1977 to over 1.2 million in 1983, but then declined steadily to
less than 0.7 million by 1997. The latter pattern reflects
commitments for newly assisted households being more than
offset by loan repayments, prepayments, and foreclosures among
previously assisted households, and by sales of 141,000 loans
by the FmHA to investors. (Although these 141,000 families
continued to benefit from these loans, even after the transfer
to the private sector, data are not readily available on the
attrition of these loans between 1988 and 1994). Thus, the
proportion of all assisted households that receives
homeownership assistance has declined from 34 percent at the
beginning of 1977 to around 11 percent at the beginning of
1996. Among rental assistance programs, the shift away from
production-oriented programs toward existing housing is
reflected in the increasing proportion of renters receiving aid
through the latter approach, from 13 percent at the beginning
of fiscal year 1977 to about 40 percent at the beginning of
1997, with the proportion of renters receiving household-based
subsidies increasing from 8 to almost 29 percent.
TABLE 15-25.--NET NEW COMMITMENTS FOR RENTERS AND NEW COMMITMENTS FOR HOME BUYERS, 1977-97
----------------------------------------------------------------------------------------------------------------
Net new commitments for renters New
---------------------------------------- commitments
Fiscal year Existing New for home
housing construction Total buyers
----------------------------------------------------------------------------------------------------------------
1977....................................................... 127,581 247,667 375,248 112,234
1978....................................................... 126,472 214,503 340,975 112,214
1979....................................................... 102,669 231,156 333,825 107,871
1980....................................................... 58,402 155,001 213,403 140,564
1981....................................................... 83,520 94,914 178,434 74,636
1982....................................................... 37,818 48,157 85,975 66,711
1983....................................................... 54,071 23,861 77,932 54,550
1984....................................................... 78,648 36,719 115,367 44,409
1985....................................................... 85,741 42,667 128,408 45,387
1986....................................................... 85,476 34,375 119,851 25,479
1987....................................................... 72,788 37,247 110,035 24,132
1988....................................................... 65,295 36,456 101,751 26,200
1989....................................................... 68,858 30,049 98,907 25,264
1990....................................................... 61,309 23,491 84,800 24,968
1991....................................................... 55,900 28,478 84,378 23,879
1992 \1\................................................... 62,595 38,324 100,919 25,690
1993 \1\................................................... 50,593 34,065 84,658 30,982
1994 \1\................................................... 66,907 29,194 96,101 38,588
1995 \1\................................................... 25,822 19,440 45,262 31,985
1996 \1\................................................... 33,696 16,259 49,955 40,838
1997 (estimate) \1\........................................ 36,134 14,027 50,161 48,360
----------------------------------------------------------------------------------------------------------------
\1\ Figures are not adjusted for units for which funds were deobligated because data were unavailable.
Note.--Net new commitments for renters represent net additions to the available pool of rental aid and are
defined as the total number of commitments for which new funds are appropriated in any year. To avoid double-
counting, these numbers are adjusted for the number of commitments for which such funds are deobligated or
canceled that year (except where noted otherwise); the number of commitments for units converted from one type
of assistance to another; in the FmHA section 515 program, the number of units that receive more than one
subsidy; starting in 1985, the number of commitments specifically designed to replace those lost because
private owners of assisted housing opt out of the programs or because public housing units are demolished;
and, starting in 1989, the number of commitments for units whose section 8 contracts expire.
New commitments for home buyers are defined as the total number of new loans that the FmHA or HUD makes or
subsidizes each year. This measure of program activity is meant to indicate how many new home buyers can be
helped each year and is therefore not adjusted to account for homeowners who leave the programs in any year
because of mortgage repayments, prepayments, or foreclosures. Thus, it does not represent net additions to the
total number of assisted homeowners and therefore cannot be added to net new commitments for renters.
Source: Congressional Budget Office based on data provided by the U.S. Department of Housing and Urban
Development and the Farmers Home Administration.
Trends in commitments, budget authority, and outlays
Traditionally, funding for most additional commitments for
housing assistance is provided each year through appropriations
of long-term budget authority for subsidies to households and
through appropriations of budget authority for grants, direct
loans, and loan guarantees to public housing agencies, home
buyers, and developers of rental housing. Today, new rental
subsidies are funded for either 1 or 5 years at a time,
depending on program type.
TABLE 15-26.--TOTAL HOUSEHOLDS RECEIVING ASSISTANCE BY TYPE OF SUBSIDY, 1977-97
[In thousands]
----------------------------------------------------------------------------------------------------------------
Assisted renters
------------------------------------------------------ Total
Existing housing Total assisted assisted
Fiscal year ------------------------------ New Total homeowners \1\ homeowners
Household Project construction assisted and renters
based based Subtotal renters \1\
----------------------------------------------------------------------------------------------------------------
1977......................... 162 105 268 1,825 2,092 1,071 3,164
1978......................... 297 126 423 1,977 2,400 1,082 3,482
1979......................... 427 175 602 2,052 2,654 1,095 3,749
1980......................... 521 185 707 2,189 2,895 1,112 4,007
1981......................... 599 221 820 2,379 3,012 1,127 4,139
1982......................... 651 194 844 2,559 3,210 1,201 4,411
1983......................... 691 265 955 2,702 3,443 1,226 4,668
1984......................... 728 357 1,086 2,836 3,700 1,219 4,920
1985......................... 749 431 1,180 2,931 3,887 1,193 5,080
1986......................... 797 456 1,253 2,986 3,998 1,176 5,174
1987......................... 893 473 1,366 3,047 4,175 1,126 5,301
1988......................... 956 490 1,446 3,085 4,296 918 5,213
1989......................... 1,025 509 1,534 3,117 4,402 892 5,295
1990......................... 1,090 527 1,616 3,141 4,515 875 5,390
1991......................... 1,137 540 1,678 3,180 4,613 853 5,465
1992......................... 1,166 554 1,721 3,204 4,680 826 5,506
1993......................... 1,326 574 1,900 3,196 4,851 774 5,625
1994......................... 1,392 593 1,985 3,213 4,962 751 5,714
1995......................... 1,487 595 2,081 3,242 5,087 705 5,792
1996......................... 1,413 608 2,021 3,293 5,079 670 5,748
1997......................... 1,465 586 2,051 3,305 5,120 631 5,751
----------------------------------------------------------------------------------------------------------------
\1\ Starting 1988, figures reflect a one-time decrease of 141,000 in the number of assisted homeowners because
of asset sales by the FmHA to private investors.
Note.--Figures for total assisted renters have been adjusted since 1980 to avoid double-counting households
receiving more than one subsidy. Data are for beginning of fiscal year.
Source: Congressional Budget Office based on data provided by the U.S. Department of Housing and Urban
Development and the Farmers Home Administration.
Annual appropriations of new budget authority for housing
assistance were cut dramatically during the 1980s. These cuts
reflect four underlying factors: the previously mentioned
reduction in the number of newly assisted households; the shift
toward cheaper existing housing assistance; a systematic
reduction in the average term of new commitments from more than
24 years in 1977 to less than 5 years in 1997; and changes in
the method for financing the construction and modernization of
public housing and the construction of housing for the elderly
and the disabled.\18\ For HUD's programs alone, appropriations
of budget authority declined (in 1997 dollars) from a high of
$77.6 billion in 1978 to a low of $11.6 billion in 1989 (see
table 15-27). The increased levels of budget authority after
1990 reflect primarily the cost of renewing section 8 contracts
that expire. The decreased levels after 1994 reflect both the
reduction in the terms of renewed contracts over time from 5
years to 1 year and further reductions in funding for new
activity.
---------------------------------------------------------------------------
\18\ Before 1987, new commitments for the construction and
modernization of public housing were financed over periods ranging from
20 to 40 years, with the appropriations for budget authority reflecting
both the principal and interest payments for this debt. Starting in
1987, these activities were financed with up front grants, which reduce
their budget authority requirements by between 51 and 67 percent.
Similarly, prior to 1991, housing for the elderly and the disabled was
financed by direct Federal loans for construction, coupled with 20 year
section 8 rental assistance, which helped repay the direct loan.
Starting in 1991, the loans have been replaced by grants, which has
reduced the amount of budget authority required for annual rental
assistance.
TABLE 15-27.--NET BUDGET AUTHORITY APPROPRIATED FOR HOUSING AID
ADMINISTERED BY HUD, 1977-97
[In millions of current and 1997 dollars]
------------------------------------------------------------------------
Net budget authority
-------------------------------
Fiscal year Current
dollars 1997 dollars
------------------------------------------------------------------------
1977.................................... $28,579 $73,356
1978.................................... 32,169 77,558
1979.................................... 25,123 55,622
1980.................................... 27,435 54,657
1981.................................... 26,022 47,112
1982.................................... 14,766 24,981
1983.................................... 10,001 16,201
1984.................................... 11,425 17,757
1985.................................... 11,071 16,595
1986.................................... 10,032 14,673
1987.................................... 8,979 12,765
1988.................................... 8,592 11,732
1989.................................... \1\ 8,879 11,576
1990.................................... \1\ 10,557 13,109
1991.................................... \1\ 19,239 22,741
1992.................................... \1\ 16,883 19,375
1993.................................... \1\ 18,466 20,564
1994.................................... \1\ 18,414 19,981
1995.................................... \1\ 11,840 12,497
1996.................................... \1\ 13,229 13,586
1997 (estimate)......................... \1\ 12,020 12,020
------------------------------------------------------------------------
\1\ Includes $99 million, $1,164 million, $8,814 million, $7,585
million, $6,926 million, $5,202 million, $2,197 million, $4,008
million, and $3,550 million for renewing expiring section 8 contracts
in 1989, 1990, 1991, 1992, 1993, 1994, 1995, 1996, and 1997
respectively.
Note.--All figures are net of funding rescissions, exclude
reappropriations of funds, but include supplemental appropriations.
Totals include funds appropriated for various public housing programs,
including modernization of operating subsidies, drug elimination, and
severely distressed public housing. Excludes budget authority for
HUD's section 202 loan fund and for programs administered by FmHA.
Source: Congressional Budget Office based on data provided by the U.S.
Department of Housing and Urban Development.
On the other hand, with the continuing increase in the
number of households served, total outlays (expenditures on
behalf of all households actually receiving aid in a given
year) for all of HUD's housing assistance programs combined
have risen steadily (in 1996 dollars), from $7.5 billion in
fiscal year 1977 to an estimated $26 billion in fiscal year
1997, an increase of 247 percent (see table 15-28). Moreover,
despite measures to contain costs, and the increase in
household contributions from 25 to 30 percent of adjusted
income, average Federal outlays per unit for all programs
combined have generally continued to rise in real terms, from
around $2,980 in 1977 to an estimated $5,490 in 1997--an
increase of 84 percent (see table 15-29).\19\
---------------------------------------------------------------------------
\19\ The change in the method for financing the construction and
modernization of public housing caused a large one-time expenditure in
1985, when most of the outstanding debt incurred since 1974 for
construction and modernization was paid off (see table 15-29). Without
that bulge in expenditures, average outlays per unit in 1985 would have
been about $3,950 in 1994 dollars.
TABLE 15-28.--OUTLAYS FOR HOUSING AID ADMINISTERED BY HUD, 1977-97
[In millions of current and 1997 dollars]
------------------------------------------------------------------------
Outlays
-------------------------
Fiscal year Current 1997
dollars dollars
------------------------------------------------------------------------
1977.......................................... $2,928 $7,515
1978.......................................... 3,592 8,660
1979.......................................... 4,189 9,275
1980.......................................... 5,364 10,687
1981.......................................... 6,733 12,189
1982.......................................... 7,846 13,273
1983.......................................... 9,419 15,257
1984.......................................... 11,000 17,096
1985.......................................... 25,064 37,569
1986.......................................... 12,179 17,813
1987.......................................... 12,509 17,784
1988.......................................... 13,684 18,684
1989.......................................... 14,466 18,860
1990.......................................... 15,690 19,484
1991.......................................... 16,898 19,973
1992.......................................... 18,243 20,936
1993.......................................... 20,490 22,817
1994.......................................... 22,191 24,079
1995.......................................... \1\ 24,059 25,394
1996.......................................... \1\ 25,349 26,032
1997 (estimate)............................... \1\ 26,110 26,110
------------------------------------------------------------------------
\1\ Figures have been adjusted to account for $1.2 billion of advance
spending that occurred in 1995 but that should have occurred in 1996.
Note.--The bulge in outlays in 1985 is caused by a change in the method
of financing public housing, which generated close to $14 billion in
one-time expenditures. This amount paid off--all at once--the capital
cost of public housing construction and modernization activities
undertaken between 1974 and 1985, which otherwise would have been paid
off over periods of up to 40 years. Because of this one-time
expenditure, however, outlays for public housing since that time have
been lower than they would have been otherwise.
Source: Congressional Budget Office based on data provided by the U.S.
Department of Housing and Urban Development.
TABLE 15-29.--PER UNIT OUTLAYS FOR HOUSING AID ADMINISTERED BY HUD, 1977-
97
[In current and 1997 dollars]
------------------------------------------------------------------------
Per unit outlays
-------------------------
Fiscal year Current 1997
dollars dollars
------------------------------------------------------------------------
1977.......................................... $1,160 $2,980
1978.......................................... 1,310 3,160
1979.......................................... 1,430 3,160
1980.......................................... 1,750 3,480
1981.......................................... 2,100 3,810
1982.......................................... 2,310 3,900
1983.......................................... 2,600 4,220
1984.......................................... 2,900 4,500
1985.......................................... 6,420 9,620
1986.......................................... 3,040 4,440
1987.......................................... 3,040 4,320
1988.......................................... 3,270 4,460
1989.......................................... 3,390 4,420
1990.......................................... 3,610 4,480
1991.......................................... 3,830 4,530
1992.......................................... 4,060 4,670
1993.......................................... 4,450 4,960
1994.......................................... 4,720 5,120
1995.......................................... 5,080 5,360
1996.......................................... 5,350 5,490
1997 (estimate)............................... 5,490 5,490
------------------------------------------------------------------------
Note.--The peak in outlays per unit in 1985 of $6,420 is attributable to
the bulge in 1985 expenditures associated with the change in the
method for financing public housing. Without this change, outlays per
unit would have amounted to around $2,860.
Source: Congressional Budget Office based on data provided by the U.S.
Department of Housing and Urban Development.
Several factors have contributed to this growth. First,
rents in assisted housing have probably risen faster than the
income of assisted households, causing subsidies to rise faster
than the inflation index used here--the revised Consumer Price
Index, for all urban consumers (CPI-U-X1).\20\ Second, the
number of households that occupy units completed under the
section 8 New Construction Program rose during the 1980s. These
units require larger subsidies compared with the older units
that were built prior to the 1980s under the Mortgage Interest
Subsidy Programs and the Public Housing Program. Third, the
share of households receiving less costly home ownership
assistance has decreased. Fourth, housing aid is being targeted
toward a poorer segment of the population, requiring larger
subsidies per assisted household.
---------------------------------------------------------------------------
\20\ For example, between 1980 and 1990, the CPI-U-X1 increased 59
percent. Over the same period, median household income of renters and
the Consumer Price Index for residential rents increased by 70 and 71
percent, respectively, but the maximum rents allowed for section 8
existing housing rental certificates--the so-called fair market rents--
rose 85 percent.
---------------------------------------------------------------------------
In recent years, annual appropriations acts have contained
several cost containment measures, including providing no or
reduced annual adjustment factors for the rents of certain
units with project-based subsidies. Because the Federal
Government pays part of those rents, subsidies have been lower
than they would have been without those provisions. Because the
Balanced Budget Act of 1997 made those provisions permanent,
starting in 1999, average subsidies are expected to grow slower
in the future.
SCHOOL LUNCH AND BREAKFAST PROGRAMS \21\
---------------------------------------------------------------------------
\21\ Other major Federal child nutrition programs include: the
Child and Adult Care Food Program (discussed in section 10) and the
Summer Food Service Program (which provides subsidies for meals served
during the summer months to some 2 million children participating in
recreational and other programs in low-income areas).
---------------------------------------------------------------------------
The School Lunch and School Breakfast Programs provide
Federal cash and commodity support for meals served by public
and private nonprofit elementary and secondary schools and
residential child care institutions (RCCIs) that opt to enroll
and guarantee to offer free or reduced-price meals to eligible
low-income children. The programs are ``entitlement'' programs,
and both subsidize participating schools and RCCIs for all
meals served that meet Federal nutrition standards at specific,
inflation-indexed rates for each meal. Each program has a
three-tiered system for per-meal Federal reimbursements to
schools and RCCIs that: (1) allows children to receive free
meals if they have family income below 130 percent of the
Federal poverty guidelines (about $20,900 for a four-person
family in the 1997-98 school year); (2) permits children to
receive reduced-price meals (no more than 40 cents for a lunch
or 30 cents for a breakfast) if their family income is between
130 and 185 percent of the poverty guidelines (between about
$20,900 and $29,700 for a four-person family in the 1997-98
school year); and (3) provides a small per-meal subsidy for
``full-price'' meals (the price is set by the school or RCCI)
served to children whose families do not apply, or whose family
income does not qualify them for free or reduced-price meals.
Children in TANF and food stamp households may automatically
qualify for free school meals without an income application,
and the majority actually receive them.
The School Lunch Program subsidizes lunches (4.3 billion
in fiscal year 1996) to children in 5,800 RCCIs and almost all
schools (89,000). During fiscal year 1996, average daily
participation was 25.9 million students (57 percent of the 45.3
million children enrolled in participating schools and RCCIs);
of these, 49 percent received free lunches, and 8 percent ate
reduced-price lunches (see table 15-30). More than 90 percent
of Federal funding is used to subsidize free and reduced-price
lunches served to low-income children. For the 1997-98 school
year, per-lunch Federal subsidies (cash and commodity support)
range from about 33 cents for full-price lunches to $2.04 and
$1.64 for free and reduced-price lunches.\22\ Fiscal year 1996
Federal school lunch costs (including commodity assistance)
totaled over $5.4 billion (see table 15-30).
---------------------------------------------------------------------------
\22\ Schools and RCCIs with very high proportions of low-income
children receive an extra 2 cents a meal. Federally donated commodity
assistance make up about 15 cents of each cited subsidy rate.
---------------------------------------------------------------------------
The School Breakfast Program serves far fewer students
than does the School Lunch Program; about 1.1 billion
breakfasts in 62,000 schools (and 5,600 RCCIs) were subsidized
in fiscal year 1996. Average daily participation was 6.6
million children (20 percent of the 33 million students
enrolled in participating schools and RCCIs). Unlike the School
Lunch Program, the great majority received free or reduced-
price meals: 80 percent received free meals, and 6 percent
purchased reduced-price meals (see table 15-31). In the 1997-98
school year, per-breakfast Federal subsidies (cash only) range
from about 20 cents for full-price meals to $1.05 and 75 cents
for free and reduced-price breakfasts, respectively.\23\ Fiscal
year 1996 Federal school breakfast funding totaled about $1.1
billion (see table 15-31).
---------------------------------------------------------------------------
\23\ Subsidies are substantially higher (about 20 cents more) for
schools in which breakfast service is required by State law or at least
40 percent of lunches are served free or at reduced price.
TABLE 15-30.--THE NATIONAL SCHOOL LUNCH PROGRAM PARTICIPATION AND FEDERAL COSTS, FISCAL YEARS 1977-96
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
Participation 9 month average (in Federal costs
millions) \1\ -------------------------
------------------------------------------
Fiscal year Reduced- Full- Current Constant
Free price price Total \3\ dollars \4\ 1996
meals meals meals \2\ dollars
----------------------------------------------------------------------------------------------------------------
1977........................................ 10.5 1.3 14.5 26.3 $2,111.1 $5,510.0
1978........................................ 10.3 1.5 14.9 26.7 2,293.6 5,596.4
1979........................................ 10.0 1.7 15.3 27.0 2,659.0 5,876.4
1980........................................ 10.0 1.9 14.7 26.6 3,044.9 5,937.6
1981........................................ 10.6 1.9 13.3 25.8 2,959.5 5,179.1
1982........................................ 9.8 1.6 11.5 22.9 2,611.5 4,256.7
1983........................................ 10.3 1.5 11.2 23.0 2,828.6 4,469.2
1984........................................ 10.3 1.5 11.5 23.3 2,948.2 4,451.8
1985........................................ 9.9 1.6 12.1 23.6 3,034.4 4,430.2
1986........................................ 10.0 1.6 12.2 23.8 3,160.2 4,487.5
1987........................................ 10.0 1.6 12.4 24.0 3,245.6 4,478.9
1988........................................ 9.8 1.6 12.8 24.2 3,383.7 4,500.3
1989........................................ 9.7 1.6 12.7 24.2 3,479.4 4,418.8
1990........................................ 9.9 1.6 12.8 24.1 3,676.4 4,448.4
1991........................................ 10.3 1.8 12.1 24.2 4,072.9 4,683.8
1992........................................ 11.1 1.7 11.7 24.5 4,474.5 5,011.4
1993........................................ 11.8 1.7 11.3 24.8 4,663.8 5,036.9
1994........................................ 12.2 1.8 11.3 25.3 4,994.5 5,294.2
1995........................................ 12.4 1.9 11.3 25.6 5,254.0 5,411.6
1996........................................ 12.6 2.0 11.3 25.9 5,439.0 5,439.0
----------------------------------------------------------------------------------------------------------------
\1\ In order to reflect participation for the actual school year (September through May), these estimates are
based on 9 month averages of October through May, plus September, rather than averages of the 12 months of the
fiscal year (October through September).
\2\ The Federal Government provides a small subsidy for these meals.
\3\ Details may not sum to total because of rounding.
\4\ Includes cash payments and the value of ``entitlement'' commodities; does not include the value of ``bonus''
commodities. Overstates actual support for school lunches because a small portion (less than $75 million a
year) of commodity support included in the figures is used for other child nutrition programs.
Note.--Constant dollars were calculated using the fiscal year CPI-U.
Source: U.S. Department of Agriculture, Food and Consumer Service (FCS): (1) budget justification materials
prepared by the FCS for appropriations requests for fiscal years 1980-98; and (2) monthly ``Program
Information Report'' summaries prepared by the FCS.
TABLE 15-31.--THE SCHOOL BREAKFAST PROGRAM PARTICIPATION AND FEDERAL COSTS, FISCAL YEARS 1977-96
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
Participation 9 month average (in Federal costs
millions) \1\ -------------------------
------------------------------------------
Fiscal year Reduced- Full- Current Constant
Free price price Total \3\ dollars \4\ 1996
meals meals meals \2\ dollars
----------------------------------------------------------------------------------------------------------------
1977........................................ 2.0 0.1 0.4 2.5 $148.6 $387.8
1978........................................ 2.2 0.2 0.4 2.8 181.2 442.1
1979........................................ 2.6 0.2 0.5 3.3 231.0 510.5
1980........................................ 2.8 0.2 0.6 3.6 287.8 561.2
1981........................................ 3.0 0.2 0.5 3.8 331.7 580.5
1982........................................ 2.8 0.2 0.4 3.3 317.3 517.2
1983........................................ 2.9 0.1 0.3 3.4 343.8 543.2
1984........................................ 2.9 0.1 0.4 3.4 364.0 549.6
1985........................................ 2.9 0.2 0.4 3.4 379.3 553.8
1986........................................ 2.9 0.2 0.4 3.5 406.3 576.9
1987........................................ 3.0 0.2 0.4 3.7 446.8 616.6
1988........................................ 3.0 0.2 0.5 3.7 482.0 641.1
1989........................................ 3.1 0.2 0.5 3.8 507.0 643.9
1990........................................ 3.3 0.2 0.5 4.0 589.1 712.8
1991........................................ 3.6 0.2 0.6 4.4 677.2 778.8
1992........................................ 4.0 0.3 0.6 4.9 782.6 876.5
1993........................................ 4.4 0.3 0.7 5.4 868.4 937.9
1994........................................ 4.8 0.3 0.7 5.8 958.7 1,016.2
1995........................................ 5.1 0.4 0.8 6.3 1,181.8 1,217.3
1996........................................ 5.3 0.4 0.9 6.6 1,122.1 1,122.1
----------------------------------------------------------------------------------------------------------------
\1\ In order to reflect participation for the actual school year (September through May), these estimates are
based on 9 month averages of October through May, plus September, rather than averages of the 12 months of the
fiscal year (October through September).
\2\ The Federal Government provides a small subsidy for these meals.
\3\ Details may not sum to totals due to rounding.
\4\ Does not include the value of any federally donated commodities. Fiscal year 1995 figure for Federal costs
is not reduced for a ``write-down'' of approximately $50-$80 million for obligations not expected to be paid.
Note.--Constant dollars were calculated using the fiscal year CPI-U.
Source: U.S. Department of Agriculture, Food and Consumer Service (FCS): (1) budget justification materials
prepared by the FCS for appropriations requests for fiscal years 1980-98; and (2) monthly ``Program
Information Report'' summaries prepared by the FCS.
SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN (WIC)
The Special Supplemental Nutrition Program for Women,
Infants, and Children (the WIC Program) provides food
assistance, nutrition risk screening, and related services
(e.g., nutrition education and breastfeeding support to low-
income pregnant and postpartum women and their infants, as well
as to low-income children up to age 5. Participants in the
program must have family income at or below 185 percent of
poverty, and must be judged to be nutritionally at risk.
Nutrition risk is defined as detectable abnormal nutritional
conditions; documented nutritionally-related medical
conditions; health-impairing dietary deficiencies; or
conditions that predispose people to inadequate nutrition or
nutritionally related medical problems.
Beneficiaries of the WIC Program receive supplemental
foods each month in the form of actual food items or, more
commonly, vouchers for purchases of specific items in retail
stores. The law requires that the WIC Program provide foods
containing protein, iron, calcium, vitamin A, and vitamin C,
and allows Federal limits on the foods that may be provided by
the WIC Program. Among the items that may be included in a food
package are milk, cheese, eggs, infant formula, cereals, and
fruit or vegetable juices. U.S. Department of Agriculture
(USDA) regulations require tailored food packages that provide
specified types and amounts of food appropriate for six
categories of participants: (1) infants from birth to 3 months;
(2) infants from 4 to 12 months; (3) women and children with
special dietary needs; (4) children from 1 to 5 years of age;
(5) pregnant and nursing mothers; and (6) postpartum nonnursing
mothers. In addition to food benefits, recipients also must
receive nutrition education and breast feeding support (where
called for).
The Federal cost of providing WIC benefits varies widely
depending on the recipient and the foods included in the food
package, as well as differences in retail prices (where
vouchers are used), food costs (where the WIC agency buys and
distributes food), and administrative costs (including the
significant costs of nutrition risk screening, breastfeeding
support, and nutrition education). Moreover, the program's food
costs are significantly influenced by the degree to which
States gain rebates from infant formula manufacturers under a
requirement to pursue ``cost containment'' strategies; these
rebates total over $1 billion a year nationwide. In fiscal year
1996, the national average Federal cost of a WIC food package
(after rebates) was $31 a month, and, for each participant, the
average monthly administrative cost (including nutrition risk
assessments and nutrition education) was about $11.
The WIC Program has categorical, income, and nutrition
risk requirements for eligibility. Only pregnant and postpartum
women, infants, and children under age 5 may participate. As
noted above, WIC applicants must show evidence of health or
nutrition risk, medically verified by a health professional, in
order to qualify. They must also have family income below 185
percent of the most recent Federal poverty guidelines
(currently, about $24,000 a year for a three-person family).
But State WIC agencies may (but seldom do) set lower income
eligibility cutoff points; they can set them as low as poverty
guidelines themselves (about $13,000 for three persons).
Receipt of TANF, food stamps, or Medicaid assistance also can
satisfy the WIC Program's income test, and States may consider
pregnant women meeting the income test ``presumptively''
eligible until a nutritional risk evaluation is made. Drawing
on a 1994 study, over 60 percent of WIC enrollees had family
income below the Federal poverty guidelines, 27 percent of WIC
enrollees were cash welfare recipients, 37 percent received
food stamps, and 53 percent were covered by Medicaid.
WIC participants receive benefits for a specified period
of time, and in some cases must be recertified during this
period to show continuing need. Pregnant women may continue to
receive benefits throughout their pregnancy and for up to 6
months after childbirth, without recertification. Nursing
mothers are certified at 6-month intervals, ending with their
infant's first birthday.
The WIC Program, which is federally funded but administered
by State and local health agencies, does not serve all who are
eligible. It is not an ``entitlement'' program, and
participation is limited by the amount of Federal funding
appropriated, whatever State supplementary funding is provided,
and the extent of manufacturers' infant formula rebates. In
fiscal year 1996, Federal spending was $3.688 billion, and the
program served a monthly average of 7.2 million women, infants,
and children: 23 percent women, 25 percent infants, and 52
percent children. The administration's most recent estimate of
the total number of persons eligible and likely to apply for
WIC benefits is 7.5 million persons. Table 15-32 summarizes WIC
participation and Federal costs.
TABLE 15-32.--THE SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN (WIC) PARTICIPATION AND
FEDERAL SPENDING, FISCAL YEARS 1977-96
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
Participation (in thousands) Federal spending
---------------------------------------------------------------
Fiscal year Constant
Women Infants Children Total \1\ Current 1996
dollars \2\ dollars
----------------------------------------------------------------------------------------------------------------
1977............................................ 165.0 213.0 471.0 848.0 $255.9 $667.9
1978............................................ 240.0 308.0 633.0 1,181.0 379.6 926.2
1979............................................ 312.0 389.0 782.0 1,483.0 525.4 1,161.1
1980............................................ 411.0 507.0 995.0 1,913.0 724.7 1,413.2
1981............................................ 446.0 585.0 1,088.0 2,119.0 874.4 1,530.2
1982............................................ 478.0 623.0 1,088.0 2,189.0 948.2 1,545.6
1983............................................ 542.0 730.0 1,265.0 2,537.0 1,123.1 1,774.5
1984............................................ 657.0 825.0 1,563.0 3,045.0 1,386.3 2,093.3
1985............................................ 665.0 874.0 1,600.0 3,138.0 1,488.9 2,173.8
1986............................................ 712.0 945.0 1,655.0 3,312.0 1,580.5 2,244.3
1987............................................ 751.0 1,019.0 1,660.0 3,429.0 1,663.6 2,295.8
1988............................................ 815.0 1,095.0 1,683.0 3,593.0 1,802.4 2,397.2
1989............................................ 951.8 1,259.6 1,907.0 4,118.4 1,929.4 2,450.3
1990............................................ 1,035.0 1,412.5 2,069.4 4,516.9 2,125.9 2,572.3
1991............................................ 1,120.1 1,558.8 2,213.8 4,892.6 2,301.1 2,646.3
1992............................................ 1,221.5 1,684.1 2,505.2 5,410.8 2,566.5 2,874.5
1993............................................ 1,364.9 1,741.9 2,813.4 5,920.3 2,819.5 3,045.1
1994............................................ 1,499.2 1,786.3 3,191.7 6,477.2 3,159.8 3,349.4
1995............................................ 1,576.8 1,817.3 3,500.1 6,894.2 3,451.0 3,554.5
1996............................................ 1,648.2 1,827.3 3,712.3 7,187.8 3,688.2 3,688.2
----------------------------------------------------------------------------------------------------------------
\1\ Details may not sum to totals due to rounding.
\2\ Includes funding for studies, surveys, pilots, and farmers' market programs. Spending figures include
adjustments for significant interyear carryovers and reflect spending by State WIC agencies derived both from
current-year appropriations and prior-year amounts, adjusted for amounts carried forward into the next year.
Note.--Constant dollars were calculated using the fiscal year CPI-U.
Source: U.S. Department of Agriculture, Food and Consumer Service (FCS): (1) budget justification materials
prepared by the FCS for appropriations requests for fiscal years 1980-98; and (2) monthly ``Program
Information Report'' summaries prepared by the FCS.
JOB TRAINING PARTNERSHIP ACT
Title II of the Job Training Partnership Act of 1982 (JTPA)
provides block grants to States to fund training and related
services for economically disadvantaged youths and adults.
Title II consists of three programs: the II-A Adult Training
Program, the II-B Summer Youth Employment and Training Program,
and the II-C (year-round) Youth Training Program. Prior to the
1992 amendments to JTPA, which became effective July 1, 1993--
the beginning of program year 1993--title II-A provided
services to both adults and youth.
JTPA's title II programs are administered by States and
localities, which select participants and design projects
within Federal guidelines. The programs are intended to
increase participants' future employment and earnings and
reduce their dependence on welfare. Services authorized under
title II-A include institutional and on-the-job training, work
experience, job search assistance, counseling, and other work-
related assistance. In general, participants must be
economically disadvantaged, which is defined as being a member
of a family whose total income for the 6-month period prior to
application (exclusive of unemployment compensation, child
support payments, and welfare payments) does not exceed the
higher of the poverty line or 70 percent of the Bureau of Labor
Statistics' lower living standard. Members of families
receiving Aid to Families with Dependent Children (AFDC) or
other cash welfare payments and those eligible for food stamps
are also defined as economically disadvantaged.
As shown in table 15-33a, of title II-A participants who
terminated during program year 1995, 48 percent were white, 32
percent were black, and 17 percent were Hispanic. Of
participants who terminated benefits, 63 percent entered
employment. The average hourly wage for adult terminees who
entered employment was $7.26.
Among the 41 percent of title II-A terminees who were cash
welfare recipients at the time of enrollment in program year
1995, 84 percent received AFDC payments. Women comprised 83
percent of terminees receiving cash welfare payments, as
compared with 56 percent of terminees who were not recipients.
Among title II-A participants receiving cash welfare payments,
25 percent did not complete high school, compared with 21
percent of those participants who were not recipients. Fifty-
nine percent of cash welfare recipients entered employment in
program year 1995, compared with 66 percent for those II-A
terminees who did not receive cash welfare payments. The
average hourly starting wage for cash welfare recipients
entering employment was $7.01, compared with $7.39 for
nonrecipients.
As shown in table 15-33b, of the youth participants in
year-round services who terminated during program year 1995, 38
percent were white, 34 percent were black, and 24 percent were
Hispanic. Of the title II-C participants who terminated, 38
percent entered employment, and the average hourly wage for
terminees who entered employment was $5.80.
TABLE 15-33a.--CHARACTERISTICS OF JTPA TITLE II-A ADULT TERMINEES, PROGRAM YEARS 1990-95 \1\ \2\
----------------------------------------------------------------------------------------------------------------
Selected characteristics 1990 1991 1992 1993 1994 1995
----------------------------------------------------------------------------------------------------------------
Sex:
Male............................................ 42 42 41 36 33 33
Female.......................................... 58 58 59 64 67 67
Ethnic status:
White (excluding Hispanic)...................... 52 54 52 53 52 48
Black (excluding Hispanic)...................... 31 29 30 31 31 32
Hispanic........................................ 14 13 15 13 14 17
Other........................................... 4 4 4 3 3 4
Age at enrollment:
22-29........................................... 43 42 42 42 42 42
30-54........................................... 54 55 56 56 56 56
55 and older.................................... 3 3 3 2 2 2
Economically disadvantaged.......................... 93 93 NA 97 98 98
Receiving AFDC...................................... 26 27 28 32 35 35
Receiving public assistance (including AFDC)........ 31 35 33 40 42 41
U.C. claimant....................................... 8 10 13 14 10 8
Education status:
High school graduate............................ 49 50 51 55 56 56
Post high school................................ 24 24 25 21 21 21
Average weeks participated.......................... 23 25 26 31 37 39
Entered employment.................................. 63 63 62 62 63 63
Average hourly wage at placement.................... $5.85 $6.08 $6.40 $6.86 $7.09 $7.26
-----------------------------------------------------------
Total terminees................................. 307,935 276,227 257,561 180,178 175,647 162,120
----------------------------------------------------------------------------------------------------------------
\1\ Prior to 1993, title II-A served both adults and youth. Data in this table is for adults only.
\2\ Numbers (except total terminees, average weeks participated, and average hourly wage at placement) represent
percentages.
Source: U.S. Department of Labor.
TABLE 15-33b.--CHARACTERISTICS OF JTPA YEAR-ROUND YOUTH PROGRAM TERMINEES, PROGRAM YEARS 1990-95 \1\ \2\
----------------------------------------------------------------------------------------------------------------
Selected characteristics 1990 1991 1992 1993 1994 1995
----------------------------------------------------------------------------------------------------------------
Sex:
Male............................................ 48 47 47 45 44 42
Female.......................................... 52 53 53 55 56 58
Ethnic status:
White (excluding Hispanic)...................... 42 43 40 41 41 38
Black (excluding Hispanic)...................... 36 35 36 35 35 34
Hispanic........................................ 18 19 21 20 20 24
Other........................................... 4 4 4 4 5 4
Age at enrollment:
14-15........................................... 15 16 18 16 14 12
16-17........................................... 32 32 33 34 36 35
18-21........................................... 53 51 48 49 50 53
Economically disadvantaged.......................... 93 92 NA 95 95 95
Receiving AFDC...................................... 21 23 25 27 27 26
Receiving public assistance (including AFDC)........ 23 25 27 35 31 30
U.C. claimant....................................... 1 2 1 1 1 1
Education status:
Less than high school graduate.................. 74 76 78 79 77 75
High school graduate............................ 21 20 18 19 20 22
Post high school................................ 5 4 4 3 3 3
Average weeks participated.......................... 26 28 29 35 36 40
Entered employment.................................. 39 36 34 34 37 38
Average hourly wage at placement.................... $4.93 $5.07 $5.19 $5.45 $5.61 $5.80
-----------------------------------------------------------
Total terminees................................. 266,623 257,503 255,268 167,444 158,083 113,563
----------------------------------------------------------------------------------------------------------------
\1\ Prior to 1993, youth were served under title II-A. Since that time, year-round services for youth are
provided under title II-C.
\2\ Numbers (except total terminees, average weeks participated, and average hourly wage at placement) represent
percentages.
Source: U.S. Department of Labor.
Among the 30 percent of title II-C (youth) participants
receiving cash welfare payments in program year 1995, 36
percent entered employment, compared with 39 percent of II-C
participants who did not receive cash welfare payments. The
average hourly starting wage for cash welfare recipients was
$5.86, compared with $5.78 for nonrecipients. Among the 56
percent of II-C terminees who had either dropped out of school
or were behind in grade level, the average entered employment
rate in program year 1995 was 31 percent as compared with 47
percent for those not in this legislatively defined hard-to-
serve category. The average hourly starting wage for youths who
had dropped out of school or were behind in their grade level
was $5.44 compared with $6.13 for those not in this category.
In fiscal year 1997, an estimated $950 million is expected
to be spent for JTPA II-A and II-C grants, providing training
and other services to over 417,000 participants. Data on
participation and budget authority for recent years are
provided in table 15-34 below.
For the Summer Youth Program (title II-B), $625 million was
appropriated for the summer of 1996, with 409,400 participants
served. For the summer of 1997, $871 million was appropriated
to serve an estimated 530,000 individuals.
In the summer of 1996, 48 percent of title II-B enrollees
were ages 14 and 15, 37 percent were either 16 or 17 years old,
and 16 percent were between the ages of 18 and 21. During that
summer, 85 percent of summer enrollees were students and 7
percent were high school graduates. Black youth comprised 41
percent of enrollees, while 22 percent were white, 32 percent
were Hispanic, 3 percent were Asian or Pacific Islanders, and 1
percent were Native American. Fourteen percent had limited
English-speaking ability, and 15 percent had disabilities.
Table 15-35 presents a funding and participation history of
the summer program.
Job Corps, authorized by title IV-B of JTPA, serves
economically disadvantaged youth, ages 14-24, who demonstrate
both the need for, and the ability to benefit from, an
intensive and wide range of services provided in a residential
setting. The program is administered directly by the Federal
Government through contractors and currently operates at 111
centers around the country. Services include basic education,
vocational skill training, work experience, counseling, health
care, and other supportive services.
In program year 1995 (July 1, 1995-June 30, 1996), nearly
61,000 participants terminated from Job Corps, 60 percent of
whom were male. In that same year, 49 percent of terminees were
black, 29 percent were white, 16 percent were Hispanic, 4
percent were Native Americans, and 2 percent were Asian or
Pacific Islanders. Seventy-eight percent of terminees had
dropped out of high school and 64 percent had never worked full
time. Forty percent of Job Corps terminees in program year 1995
came from families on public assistance.
TABLE 15-34.--JOB TRAINING PROGRAMS \1\ FOR THE DISADVANTAGED: NEW ENROLLEES, FEDERAL APPROPRIATIONS AND
OUTLAYS, FISCAL YEARS 1975-97
----------------------------------------------------------------------------------------------------------------
Budget
New enrollees/ authority Outlays in
Fiscal year total Appropriations Outlays in constant constant
participants \2\ (millions) (millions) 1990 1990
dollars dollars
----------------------------------------------------------------------------------------------------------------
1975................................... 1,126,000 $1,580 $1,304 $3,755 $3,099
1976................................... 1,250,000 1,580 1,697 3,515 3,775
1977................................... 1,119,000 2,880 1,756 5,964 3,636
1978................................... 965,000 1,880 2,378 3,658 4,627
1979................................... 1,253,000 2,703 2,547 4,829 4,550
1980................................... 1,208,000 3,205 3,236 5,154 5,203
1981................................... 1,011,000 3,077 3,395 4,493 4,958
1982................................... NA 1,594 2,277 2,175 3,107
1983................................... NA 2,181 2,291 2,846 2,990
1984................................... 716,200 1,886 1,333 2,361 1,669
1985................................... 803,900 1,886 1,710 2,279 2,066
1986................................... 1,003,900 1,783 1,911 2,101 2,252
1987................................... 960,700 1,840 1,880 2,108 2,154
1988................................... 873,600 1,810 1,902 1,991 2,092
1989................................... 823,200 1,788 1,868 1,877 1,961
1990................................... 630,000 1,745 1,803 1,745 1,803
1991................................... 603,900 1,779 1,746 1,694 1,676
1992................................... 602,300 1,774 1,767 1,637 1,632
1993................................... 403,825 1,692 1,747 1,530 1,580
Adult.............................. 239,505 1,015 1,048 918 948
Youth.............................. 164,320 677 699 612 632
1994................................... 419,593 1,597 1,693 1,415 1,500
Adult.............................. 229,643 988 1,016 875 900
Youth.............................. 189,950 609 677 540 600
1995................................... 507,509 1,124 1,534 971 1,325
Adult.............................. 329,329 997 934 861 807
Youth.............................. \3\ 178,180 127 600 110 518
1996................................... \4\ 426,100 977 1,023 824 862
Adult.............................. 301,700 850 981 717 827
Youth.............................. 124,400 127 365 107 308
1997................................... 417,400 1,022 949 838 779
Adult.............................. 310,900 895 799 734 656
Youth.............................. 106,500 127 150 104 123
----------------------------------------------------------------------------------------------------------------
\1\ Figures shown in years 1975-83 are for training activities under the Comprehensive Employment and Training
Act (CETA); public service employment under CETA is not included. Figures shown in years 1984-92 are for
activities under title II-A of the Job Training Partnership Act (JTPA). For 1993-96 figures are for titles II-
A (adult) and II-C (youth) of the JTPA, as amended in 1992.
\2\ Figures for 1975-94 are new enrollees. total participants are shown from 1995 forward.
\3\ Reduced budget authority in fiscal year 1995 was insufficient to serve those already enrolled and to enroll
a comparable number of new participants. In fiscal year 1996, transfers from II-B (summer youth) enabled more
participants to be enrolled.
\4\ Estimate.
NA--Not available.
Source: U.S. Department of Labor.
TABLE 15-35.--SUMMER YOUTH EMPLOYMENT PROGRAM: FEDERAL APPROPRIATIONS, OUTLAYS, AND PARTICIPANTS, FISCAL YEARS
1984-97 \1\
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
Outlays
--------------------------
Appropriations \2\ Constant Participants \3\
Current 1990
dollars dollars
----------------------------------------------------------------------------------------------------------------
1984............................................ $824 $584 $731 672,000
1985............................................ 724 776 938 767,600
1986............................................ 636 746 879 785,000
1987............................................ 750 723 828 634,400
1988............................................ 718 707 778 722,900
1989............................................ 709 697 732 607,900
1990............................................ 700 699 699 585,100
1991............................................ 683 698 663 555,200
1992............................................ \3\ 995 958 \8\ 912 782,100
1993............................................ \4\ 1,025 915 827 647,400
1994............................................ \5\ 888 834 739 574,400
1995............................................ \6\ 185 883 763 \3\ 489,200
1996............................................ \7\ 625 499 421 409,400
1997............................................ \8\ 871 \9\ 913 \9\ 749 \9\ 530,000
----------------------------------------------------------------------------------------------------------------
\1\ Appropriations and outlays are for fiscal years; participants are for calendar years.
\2\ Because JTPA is an advance-funded program, appropriations for the Summer Youth Program in a particular
fiscal year are generally spent the following summer. For example, fiscal year 1991 appropriations were spent
during the summer of calendar year 1992. The pattern has varied somewhat in recent years. These variations are
noted.
\3\ Fiscal year 1992 funding includes a $500 million supplemental appropriation for summer 1992 and $495 million
for summer 1993.
\4\ Fiscal year 1993 funding includes $354 million for summer 1993 and $671 million for summer 1994.
\5\ Fiscal year 1994 funding includes $206 million for summer 1994 and $682 million for summer 1995.
\6\ Public Law 104-19 rescinded $682 million in fiscal year 1995 funds which were to be available for the summer
of 1996. The remaining $185 million was for the summer of 1995.
\7\ Fiscal year 1996 funds are for the summer of 1996.
\8\ Fiscal year 1997 funds are for the summer of 1996.
\9\ Estimate.
Source: Employment and Training Administration, U.S. Department of Labor.
The average length of stay in Job Corps in program year
1995 was 6.9 months. The Labor Department estimates that 65
percent of terminees entered employment after leaving the
program, while another 10 percent either continued their
education or entered another training program, for a total
positive termination rate in 1995 of 75 percent.
Table 15-36 provides a funding and participation history of
the Job Corps since 1982. The program was first authorized in
the mid-1960s by the Economic Opportunity Act and has been
authorized under JTPA since 1982.
TABLE 15-36.--JOB CORPS: FEDERAL APPROPRIATIONS, OUTLAYS, AND NEW ENROLLEES, FISCAL YEARS 1982-97 \1\
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
Outlays
--------------------------
Appropriations Constant New
Current 1990 enrollees
dollars dollars
----------------------------------------------------------------------------------------------------------------
1982..................................................... $590 $595 $812 53,581
1983..................................................... 618 563 735 60,465
1984..................................................... 599 581 727 57,386
1985..................................................... 617 593 716 63,020
1986..................................................... 612 594 701 64,964
1987..................................................... 656 631 723 65,150
1988..................................................... 716 688 757 68,068
1989..................................................... 742 689 724 62,550
1990..................................................... 803 740 740 61,453
1991..................................................... 867 769 769 62,205
1992..................................................... 919 834 789 61,762
1993..................................................... 966 936 846 62,749
1994..................................................... 1,040 981 869 58,460
1995..................................................... 1,089 1,011 873 68,540
1996..................................................... 1,094 994 838 \2\ 63,955
1997..................................................... 1,154 \2\ 1,165 \2\ 956 \2\ 68,317
----------------------------------------------------------------------------------------------------------------
\1\ Appropriations and outlays are for fiscal years; enrollees are for program years.
\2\ Estimate.
Source: Employment and Training Administration, U.S. Department of Labor.
HEAD START
Head Start began operating in 1965 under the general
authority of the Economic Opportunity Act of 1964. Head Start
provides a wide range of services to primarily low-income
children, ages 0 to 5, and their families. Its goals are to
improve the social competence, learning skills, and health and
nutrition status of low-income children so that they can begin
school on an equal basis with their more advantaged peers. The
services provided include cognitive and language development;
medical, dental, and mental health services (including
screening and immunizations); and nutritional and social
services. Parental involvement is extensive, through both
volunteer participation and employment of parents as Head Start
staff. Formal training and certification as child care workers
is provided to some parents through the Child Development
Associate Program.
Head Start's eligibility guidelines require that at least
90 percent of the children served come from families with
incomes at or below the poverty line. At least 10 percent of
the enrollment slots in each local program must be available
for children with disabilities. In fiscal year 1996, 752,077
children were served in Head Start Programs, at a total Federal
cost of $3.569 billion. In June 1996, 49 percent of Head Start
children came from families receiving AFDC benefits. Table 15-
37 provides historical data on participation in and funding of
the Head Start Program, while table 15-38 provides
characteristics of children enrolled in the program.
TABLE 15-37.--HEAD START ENROLLMENT AND FEDERAL FUNDING, FISCAL YEARS
1965-96
------------------------------------------------------------------------
Appropriations
Fiscal year Enrollment (in millions
of dollars)
------------------------------------------------------------------------
1965 (summer only)...................... 561,000 $96.4
1966.................................... 733,000 198.9
1967.................................... 681,400 349.2
1968.................................... 693,900 316.2
1969.................................... 663,600 333.9
1970.................................... 477,400 325.7
1971.................................... 397,500 360.0
1972.................................... 379,000 376.3
1973.................................... 379,000 400.7
1974.................................... 352,800 403.9
1975.................................... 349,000 403.9
1976.................................... 349,000 441.0
1977.................................... 333,000 475.0
1978.................................... 391,400 625.0
1979.................................... 387,500 680.0
1980.................................... 376,300 735.0
1981.................................... 387,300 818.7
1982.................................... 395,800 911.7
1983.................................... 414,950 912.0
1984.................................... 442,140 995.8
1985.................................... 452,080 1,075.0
1986.................................... 451,732 1,040.0
1987.................................... 446,523 1,130.5
1988.................................... 448,464 1,206.3
1989.................................... 450,970 1,235.0
1990.................................... 548,470 \1\ 1,552.0
1991.................................... 583,471 1,951.8
1992.................................... 621,078 2,201.8
1993.................................... 713,903 2,776.3
1994.................................... 740,493 3,325.7
1995.................................... 750,696 3,534.1
1996.................................... 752,077 3,569.3
------------------------------------------------------------------------
\1\ After sequestration.
Source: Head Start Bureau, U.S. Department of Health and Human
Services.
TABLE 15-38.--CHARACTERISTICS OF CHILDREN ENROLLED IN HEAD START, SELECTED FISCAL YEARS 1980-96
[In percent]
----------------------------------------------------------------------------------------------------------------
Age of children enrolled Enrollment by race
--------------------------------------------------------------------
Fiscal year Disabled 5 and Under Native
older 4 3 3 American Hispanic Black White Asian
----------------------------------------------------------------------------------------------------------------
1980............................. 12 21 55 24 0 4 19 42 34 1
1982............................. 12 17 55 26 2 4 20 42 33 1
1984............................. 12 16 56 26 2 4 20 42 33 1
1986............................. 12 15 58 25 2 4 21 40 32 3
1988............................. 13 11 63 23 3 4 22 39 32 3
1990............................. 14 8 64 25 3 4 22 38 33 3
1991............................. 13 7 63 27 3 4 22 38 33 3
1992............................. 13 7 63 27 3 4 23 37 33 3
1993............................. 13 6 64 27 3 4 24 36 33 3
1994............................. 13 7 62 28 3 4 24 36 33 3
1995............................. 13 7 62 27 4 4 25 35 33 3
1996............................. 13 6 62 29 4 4 25 36 32 3
----------------------------------------------------------------------------------------------------------------
Source: Head Start Bureau, U.S. Department of Health and Human Services.
LOW-INCOME HOME ENERGY ASSISTANCE PROGRAM (LIHEAP)
Background
The Federal Government has been involved in providing
energy assistance for the poor since 1973. But in 1980, in
response to the 1973-74 Organization of Petroleum Exporting
Countries (OPEC) oil embargo and the accompanying shortages and
increased petroleum prices, Congress passed the Crude Oil
Windfall Profit Tax Act (Public Law 96-223), title III of which
was officially named the Home Energy Assistance Act of 1980.
The 1980 program generally is considered the predecessor to the
present Low-Income Home Energy Assistance Program (LIHEAP).
In 1981, title XXVI of the Omnibus Budget Reconciliation
Act (Public Law 97-35), the Low-Income Home Energy Assistance
Act of 1981, authorized the Secretary of Health and Human
Services to make LIHEAP allotments to States for fiscal years
1982-84. The act permitted States to provide three types of
energy assistance. States can: (1) help eligible households pay
their home heating or cooling bills; (2) use up to 15 percent
of their LIHEAP allotment for low-cost weatherization; and (3)
provide assistance to households during energy-related
emergencies.
LIHEAP is a block grant program under which the Federal
Government gives States, the District of Columbia, U.S.
territories and Commonwealths (American Samoa, Commonwealth of
Puerto Rico, Commonwealth of the Northern Mariana Islands,
Guam, Palau, and the U.S. Virgin Islands), and Indian tribal
organizations annual grants to operate multicomponent home
energy assistance programs for needy households. Public Law
103-252, the Human Services Reauthorization Act of 1994,
reauthorized LIHEAP through fiscal year 1999. In fiscal year
1981, more than $1.8 billion was appropriated for the program.
Over the years, LIHEAP funding has reached a high of $2.1
billion in 1985 and a low of about $1.06 billion in 1996 (see
bottom of table 15-39).
Program Components
Federal LIHEAP funds may be used by grantees for the
following activities:
--Home heating and cooling assistance;
--Energy crisis intervention (with a reasonable amount
reserved, based on prior years' data, until March 15 of
each program year);
--Low-cost weatherization or other energy-related home
repairs (not to exceed 15 percent of the funds allotted
to or available to a grantee, although a grantee may
request a waiver that increases the amount of LIHEAP
funds for weatherization from 15 to 25 percent);
--Administrative and planning costs (not to exceed 10 percent
of funds net of set-asides for Indian tribal grants);
--Carryover of funds to the next fiscal year (not to exceed
10 percent of funds net of set-asides for Indian tribal
grants); and
--Development or implementation of a leveraging incentive
program that may be used by States to attract funds
from non-Federal sources.
Allotments to States
Several sources of Federal and non-Federal funds generally
are available to LIHEAP grantees:
--Federal LIHEAP block grant allotments;
--LIHEAP emergency contingency allotment for weather
emergencies (these funds can only be released at the
President's directive);
--LIHEAP leveraging incentive awards;
--LIHEAP carryover (grantees can request that up to 10
percent of their Federal LIHEAP funds be held available
for the next fiscal year);
--Oil overcharge funds (disbursed by the Department of Energy
from settlements of cases of oil price overcharges
pursuant to the Emergency Petroleum Act of 1973. States
determine how to allocate these funds among several
eligible activities, including LIHEAP.); and
--State and other funds (States use their own funds to
supplement LIHEAP benefits or administrative costs.
Other funds include reimbursements to LIHEAP agencies
for taking application for low-income weatherization
programs or winter heating protection programs.).
Table 15-39 shows State allotments for selected fiscal
years.
TABLE 15-39.--LOW-INCOME HOME ENERGY ASSISTANCE PROGRAM STATE ALLOTMENTS, SELECTED FISCAL YEARS 1981-97
--------------------------------------------------------------------------------------------------------------------------------------------------------
States 1981 \1\ 1985 1990 1991 1992 1993 1994 1995 \2\ 1996 \3\ 1997 \4\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama......................... $15,674 $18,234 $11,961 $15,856 $12,664 $11,344 $12,127 $11,063 $9,077 $9,937
Alaska.......................... 7,505 7,247 7,635 9,594 8,034 7,241 7,741 7,062 5,794 6,343
Arizona......................... 6,426 8,150 5,785 6,200 6,125 5,486 5,865 5,350 4,390 4,806
Arkansas........................ 11,960 13,973 9,127 11,069 9,663 8,656 9,253 8,442 6,926 7,582
California...................... 84,088 97,894 64,168 68,764 67,940 60,855 65,056 59,352 48,693 53,308
Colorado........................ 29,319 33,299 22,373 23,419 23,688 21,218 22,683 20,694 16,978 18,587
Connecticut..................... 38,247 43,440 29,187 35,541 30,902 27,680 34,986 28,011 22,148 24,247
Delaware........................ 5,077 5,931 3,874 5,471 4,102 3,674 4,214 3,583 2,940 3,218
District of Columbia............ 5,940 6,940 4,533 5,269 4,799 4,299 4,595 4,193 3,440 3,766
Florida......................... 25,921 28,970 18,926 21,731 20,039 17,950 19,188 17,506 14,362 15,722
Georgia......................... 19,609 22,910 14,964 17,439 15,844 14,191 15,171 13,841 11,355 12,431
Hawaii.......................... 1,975 2,243 1,507 1,531 1,596 1,429 1,528 1,394 1,144 1,252
Idaho........................... 11,181 12,877 8,727 9,493 9,240 8,277 8,848 8,072 6,622 7,250
Illinois........................ 105,862 123,679 80,784 85,711 85,533 76,614 93,921 90,445 61,302 76,588
Indiana......................... 47,431 55,371 36,577 41,069 38,727 34,689 39,408 39,568 27,756 30,386
Iowa............................ 29,470 38,581 25,922 28,719 27,466 24,584 34,335 28,584 19,671 24,576
Kansas.......................... 15,515 18,211 11,905 12,901 12,605 11,290 12,069 11,011 9,034 9,890
Kentucky........................ 24,943 29,141 19,034 22,537 20,153 18,052 24,639 22,996 14,444 15,813
Louisiana....................... 16,024 18,867 12,228 13,203 12,947 11,597 12,398 11,311 9,279 10,159
Maine........................... 27,513 27,914 18,908 23,550 20,020 17,932 27,275 17,489 14,349 15,708
Maryland........................ 29,285 34,214 22,348 29,361 23,662 21,194 29,288 20,671 16,959 18,566
Massachusetts................... 82,707 86,878 58,383 69,364 61,815 55,369 73,071 56,312 44,304 48,502
Michigan........................ 111,598 113,951 76,697 86,099 81,206 72,738 126,605 81,746 58,201 63,717
Minnesota....................... 72,409 82,239 55,256 62,063 58,504 52,404 93,421 56,152 41,931 52,386
Mississippi..................... 13,930 15,683 10,255 12,391 10,858 9,725 10,397 9,485 7,782 8,519
Missouri........................ 37,885 48,026 32,268 35,779 34,165 30,603 32,715 37,030 24,487 30,592
Montana......................... 11,350 12,298 10,236 10,938 10,838 9,708 10,378 9,468 7,768 9,705
Nebraska........................ 13,799 19,032 12,820 13,851 13,573 12,158 12,997 14,572 9,728 12,154
Nevada.......................... 3,560 4,151 2,717 3,214 2,877 2,577 2,754 2,513 2,062 2,257
New Hampshire................... 14,481 16,447 11,051 13,648 11,700 10,480 14,352 10,535 8,386 9,180
New Jersey...................... 71,025 82,849 54,200 66,929 57,386 51,402 61,894 50,132 41,129 45,027
New Mexico...................... 8,867 9,973 7,242 8,123 7,668 6,868 7,342 6,698 5,495 6,016
New York........................ 231,907 263,291 176,970 214,983 187,373 167,835 240,880 175,232 134,293 147,019
North Carolina.................. 34,561 40,378 26,374 35,612 27,924 25,013 26,739 24,394 20,014 21,910
North Dakota.................... 7,995 14,612 11,120 12,503 11,773 10,546 19,376 10,868 8,438 13,302
Ohio............................ 93,651 109,413 71,465 78,365 75,666 67,776 96,381 76,346 54,231 59,370
Oklahoma........................ 15,998 16,004 10,995 12,250 11,641 10,427 11,147 10,169 8,343 9,134
Oregon.......................... 22,723 25,808 17,340 19,298 18,360 16,445 17,580 16,039 13,159 14,405
Pennsylvania.................... 124,568 141,479 95,059 107,475 100,647 90,152 116,857 95,330 72,135 78,971
Rhode Island.................... 12,594 14,220 9,610 11,572 10,175 9,114 11,471 9,341 7,293 7,984
South Carolina.................. 13,822 14,544 9,500 12,451 10,058 9,009 9,631 8,787 7,209 7,892
South Dakota.................... 10,241 11,434 9,031 10,691 9,562 8,565 11,150 9,319 6,853 10,802
Tennessee....................... 25,267 29,520 19,281 21,652 20,415 18,286 19,548 17,834 14,632 16,018
Texas........................... 41,261 48,206 31,487 36,455 33,337 29,861 31,922 29,123 23,893 26,158
Utah............................ 13,289 14,827 10,397 11,062 11,008 9,860 10,541 9,617 7,890 8,637
Vermont......................... 10,854 12,328 8,283 9,813 8,770 7,855 13,197 7,908 6,285 6,881
Virginia........................ 39,019 41,677 27,222 36,051 28,822 25,817 28,277 25,179 20,657 22,615
Washington...................... 33,104 40,896 28,522 31,495 30,199 27,050 28,917 26,382 21,644 23,695
West Virginia................... 16,507 19,285 12,596 13,676 13,337 11,946 16,503 11,651 9,559 10,465
Wisconsin....................... 61,679 74,027 49,738 56,987 52,662 47,171 65,147 53,718 37,744 41,320
Wyoming......................... 3,561 6,195 4,163 4,605 4,407 3,948 4,220 3,850 3,159 3,458
-----------------------------------------------------------------------------------------------------------------------
U.S. total.................... 1,813,177 2,077,577 1,390,749 1,607,819 1,472,503 1,318,961 1,709,998 1,386,368 1,055,364 1,188,225
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Includes reallocation of funds and crisis intervention funds.
\2\ Includes $100 million in LIHEAP emergency contingency funds.
\3\ Includes $180 million in LIHEAP emergency contingency funds.
\4\ Includes $215 million in LIHEAP emergency contingency funds.
Note.--Columns may not add due to rounding. The table includes payments to Indian tribal organizations and excludes payments to the insular areas.
Source: U.S. Department of Health and Human Services.
Eligibility and Types of Assistance
States have considerable discretion to determine
eligibility criteria for LIHEAP and the types of energy
assistance to be provided. At State option, LIHEAP payments can
be made to households, based on categorical eligibility, where
one or more persons are receiving Supplemental Security Income
(SSI), Aid to Families with Dependent Children (AFDC),
Temporary Assistance for Needy Families (TANF), food stamps, or
needs-tested veterans benefits. States can also elect to make
payments to households with incomes of up to 150 percent of the
Federal poverty income guidelines or 60 percent of the State's
median income, whichever is greater.
Individuals who are denied benefits are entitled to an
administrative hearing. The term ``household'' is defined as
any individual or group of individuals who are living together
as one economic unit and for whom residential energy is
customarily purchased in common, or who make undesignated
payments for energy in the form of rent. States cannot
establish an income eligibility ceiling that is below 110
percent of the poverty level, but may give priority to those
households with the highest energy costs in relation to
household income, taking into consideration the presence of
very young children, frail elderly, or persons with
disabilities. States also are prohibited from treating
categorically eligible and income eligible households
differently with respect to LIHEAP. However, Public Law 103-185
permits States to reduce benefits to tenants of federally
assisted housing if it is determined that such a reduction is
reasonably related to any utility allowance they may receive.
LIHEAP benefits cannot be used to calculate income or
resources, or affect other benefits, under Federal or State
law, including public assistance programs.
Section 607(a) of Public Law 98-558 directs the Department
of Health and Human Services to collect annual data, including
information on the number of LIHEAP households in which at
least one household member is 60 years old or handicapped. In
addition, Public Law 103-252 authorized the establishment of
the Residential Energy Assistance Challenge (REACH) Program, an
incentive grant program designed to increase efficient energy
use, minimize health and safety risks, and prevent hopelessness
among low-income families with high energy burdens. Up to 25
percent of leveraging incentive moneys may be used to fund
REACH Programs.
States have considerable discretion in the methods they may
use to provide assistance to eligible households, including
cash payments, vendor payments, two-party checks, vouchers/
coupons, and payments directly to landlords. When paying home
energy suppliers directly, States are required to give
assurances that suppliers will charge the eligible households
the difference between the amount of the assistance and the
actual cost of home energy. Also, States may use Federal funds
to provide tax credits to energy suppliers that supply home
energy to low-income households at reduced rates. Table 15-40
presents estimates by State for 1995 of total dollars spent on
heating assistance, the number of households receiving benefits
from the single largest program component (heating assistance),
and average heating benefits.
TABLE 15-40.--LOW-INCOME HOME ENERGY ASSISTANCE PROGRAM (LIHEAP), ESTIMATED HEATING ASSISTANCE BENEFITS, NUMBER
OF HOUSEHOLDS, AND ESTIMATED AVERAGE BENEFITS, FISCAL YEAR 1995
----------------------------------------------------------------------------------------------------------------
Estimated heating Number of Estimated
State assistance households average
benefits assisted benefits
----------------------------------------------------------------------------------------------------------------
Alabama.................................................... $6,763,061 50,085 $122
Alaska..................................................... 4,220,958 11,850 345
Arizona.................................................... 3,421,066 22,928 163
Arkansas................................................... 4,848,231 48,129 87
California................................................. 32,768,699 346,452 93
Colorado................................................... 16,617,579 61,237 303
Connecticut................................................ 28,915,128 75,636 411
Delaware................................................... 2,636,007 13,623 194
District of Columbia....................................... 2,882,551 14,607 197
Florida.................................................... 11,292,706 88,169 92
Georgia.................................................... 10,325,887 65,689 157
Hawaii..................................................... 1,033,936 6,519 159
Idaho...................................................... 4,883,453 27,005 181
Illinois................................................... 56,944,972 201,597 267
Indiana.................................................... 28,440,973 108,210 254
Iowa....................................................... 14,598,217 72,395 197
Kansas..................................................... 4,436,830 28,139 164
Kentucky................................................... 9,493,563 110,823 86
Louisiana.................................................. 3,565,059 24,064 139
Maine...................................................... 11,225,463 52,648 201
Maryland................................................... 19,559,137 85,713 225
Massachusetts.............................................. 48,846,902 140,158 348
Michigan................................................... 69,058,318 378,725 182
Minnesota.................................................. 42,997,221 103,760 414
Mississippi................................................ 5,317,082 33,100 150
Missouri................................................... 21,355,601 115,248 187
Montana.................................................... 6,041,867 21,684 267
Nebraska................................................... 4,950,000 32,509 152
Nevada..................................................... 2,318,599 9,534 230
New Hampshire.............................................. 8,191,877 22,363 366
New Jersey................................................. 44,016,381 164,918 283
New Mexico................................................. 5,645,250 48,083 89
New York................................................... 98,256,990 957,442 108
North Carolina............................................. 14,926,921 186,152 80
North Dakota............................................... 6,032,757 15,130 411
Ohio....................................................... 27,788,359 287,629 97
Oklahoma................................................... 7,010,932 75,603 95
Oregon..................................................... 11,085,376 54,225 215
Pennsylvania............................................... 49,043,261 330,502 171
Rhode Island............................................... 7,759,275 22,787 349
South Carolina............................................. 5,772,063 77,053 78
South Dakota............................................... 6,758,611 16,859 394
Tennessee.................................................. 13,894,707 66,390 200
Texas...................................................... 5,096,583 44,565 145
Utah....................................................... 7,291,941 33,027 219
Vermont.................................................... 6,772,740 22,745 281
Virginia................................................... 20,657,059 118,709 174
Washington................................................. 17,057,014 67,540 209
West Virginia.............................................. 6,601,747 56,796 116
Wisconsin.................................................. 32,625,604 117,562 300
Wyoming.................................................... 2,801,630 11,303 232
-------------------------------------
Total................................................ $884,846,144 5,147,619
----------------------------------------------------------------------------------------------------------------
\1\ Includes leveraging awards.
Source: Administration for Children and Families, U.S. Department of Health and Human Services.
Planning and Administration
LIHEAP is administered within the Department of Health and
Human Services by the administration for Children and Families.
Grantees are required to submit an application for funds to the
Secretary of Health and Human Services. As part of the annual
application, the chief executive officer of the State (Indian
tribe, or territory), or her designee, is required to make
several assurances related to eligibility requirements,
anticipated use of funds, as well as to satisfy planning and
administrative requirements. States are prohibited from using
more than 10 percent of their total LIHEAP allotment for
planning and administrative costs.
States must provide for public participation and public
hearings in the development of the State plan, including making
it, and any substantial revisions, available for public
inspection and allowing public comment on the plan. Public Law
98-558 requires States to engage an independent person or
organization to prepare an audit at least once every 2 years.
However, the Single Audit Act of 1984 (Public Law 98-502)
supersedes this requirement in most instances, and requires
grantees to conduct an annual audit of all Federal financial
assistance received.
VETERANS BENEFITS AND SERVICES
The Department of Veterans Affairs (VA) offers a wide
range of benefits and services to eligible veterans, members of
their families, and survivors of deceased veterans. VA programs
include veterans compensation and pensions, readjustment
benefits, medical care, and housing and loan guaranty programs.
The VA also provides life insurance, burial benefits, and
special counseling and outreach programs. In fiscal year 1996,
Federal outlays for veterans benefits and services were nearly
$37 billion (see table 15-41).
Service-connected compensation is paid to veterans who
have disabilities from injuries and illnesses sustained while
in service. The amounts of monthly payments are determined by
disability ratings that are based on presumed average
reductions in earning capacities caused by the disabilities.
Disability ratings generally range from 10 percent to 100
percent in 10-percent intervals; however, some injuries are
compensable at a zero-percent rating. Death compensation, or
dependency and indemnity compensation, is paid to survivors of
veterans who died as a result of service-connected causes. In
fiscal year 1996, about 2.2 million disabled veterans and
306,241 survivors received about $15 billion in compensation
payments.
TABLE 15-41.--EXPENDITURES FOR VETERANS BENEFITS AND SERVICES, SELECTED FISCAL YEARS 1975-96
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
Other
Compensation Readjustment, veterans
Fiscal year and pensions education, Medical Housing benefits Total
\1\ job training programs \2\ loans \3\ and
services
----------------------------------------------------------------------------------------------------------------
1975.................................. $7,860 $4,593 $3,665 $24 $442 $16,584
1980.................................. 11,688 2,342 6,515 -23 648 21,169
1981.................................. 12,909 2,254 6,965 201 643 22,973
1982.................................. 13,710 1,947 7,517 102 662 23,938
1983.................................. 14,250 1,625 8,272 3 673 24,824
1984.................................. 14,400 1,359 8,861 244 725 25,588
1985.................................. 14,714 1,059 9,547 214 728 26,262
1986.................................. 15,031 526 9,872 114 784 26,327
1987.................................. 14,962 454 10,266 330 737 26,750
1988.................................. 15,963 454 10,842 1,292 834 29,386
1989.................................. 16,544 459 11,343 878 808 30,031
1990.................................. 15,241 278 12,134 517 888 29,058
1991.................................. 16,961 427 12,889 85 943 31,305
1992.................................. 17,296 783 14,091 901 992 34,064
1993.................................. 17,758 826 14,812 1,299 976 35,671
1994.................................. 19,613 1,115 15,678 197 982 37,585
1995.................................. 18,966 1,124 16,428 329 1,043 37,890
1996.................................. 18,201 1,114 16,586 66 1,018 36,985
----------------------------------------------------------------------------------------------------------------
\1\ Primarily compensation and pension benefits; includes amounts for insurance and burial benefits.
\2\ Medical program expenditure data include outlays for direct medical services, medical research and training,
and construction programs.
\3\ Numbers provided for expenditures under housing loans are not comparable to program expenditures in the
other columns because they are revolving funds with loan outlays and repayments.
Source: Office of the President (1997).
Veterans pensions are means-tested cash benefits paid to
war veterans who have become permanently and totally disabled
from non-service-connected causes, and to survivors of war
veterans. Under the current or ``improved law'' program,
benefits are based on family size, and the pensions provide a
floor of income. For 1997, the basic benefit before subtracting
other income sources is $11,115 for a veteran with one
dependent $8,486 for a veteran living alone). Somewhat less
generous benefits are available to survivors; a surviving
spouse with no children could receive two-thirds of the basic
benefit amount given a single veteran. About 765,406 persons
received about $3 billion in veterans pension payments in
fiscal year 1996.
Several VA programs support readjustment, education, and
job training for veterans and military personnel who meet
certain eligibility criteria. The largest of these programs was
the Montgomery GI bill (MGIB). The MGIB provides educational
assistance to persons, who as members of the Armed Forces or
the Selected Reserve, elect to participate in the program after
June 30, 1985. The purposes of the MGIB are to assist service
members leaving the Armed Forces in their readjustment into
civilian life, to provide an incentive for the recruitment and
retention of qualified personnel in the Armed Forces, and to
develop a more educated and productive work force. To
participate in the MGIB, active duty military personnel
contribute $100 per month, for the first 12 months of
enlistment. Benefit levels are contingent upon length of
service. To receive the maximum benefit of $427.87 per month
for 36 months, service members must generally serve
continuously for 3 years.
The VA also provides vocational rehabilitation to disabled
veterans. In fiscal year 1996, net outlays for VA readjustment
programs was $1,114 million (see table 15-41). In addition, the
Department of Labor also provides employment counseling and job
training for veterans.
The VA provides a comprehensive array of inpatient and
outpatient medical services through 173 medical centers, 133
nursing homes, 40 domiciliaries, 398 ambulatory clinics, and
205 readjustment counseling centers (Vet centers). Public Law
104-262 reformed eligibility rules for VA medical services.
These reforms not only simplified the rules, but give the VA
greater flexibility in how it provides medical care to
veterans. Past eligibility rules were seen as emphasizing
inpatient over outpatient care and, thus, impeded the efficient
use of VA medical resources. Under the new eligibility rules,
the VA provides free medical care, both inpatient and
outpatient, to veterans for service-connected conditions and to
low-income veterans for nonservice-connected conditions. For
1997, veterans with an income of $25,935 or less, and married
or with one dependent; plus $1,445 for each additional
dependent; or $21,610 or less if single; would meet the low-
income criterion for free medical care. As facilities and other
resources permit, the VA provides care to veterans for
nonservice-connected conditions with incomes that exceed these
limits; however, copayments are required. Again, as facilities
and other resources permit, the VA provides nursing home care
to veterans, with priority going to those with service-
connected disabilities. The VA also contracts with private
facilities and/or medical providers when it is determined to be
in the interests of the veteran and cost effective for the VA.
VA-operated nursing home care is augmented by VA-supported care
through contracts with private community nursing homes and with
per diem payments for veterans in State-run homes for veterans.
In fiscal year 1996, VA medical programs cost $16.6
billion (see table 15-41). VA medical services were provided to
about 1.6 million separate applicants, resulting in over
932,000 inpatient episodes and over 29 million outpatient
visits (see table 15-42).
TABLE 15-42.--NUMBER OF RECIPIENTS OF VETERANS BENEFITS AND SERVICES, SELECTED FISCAL YEARS 1975-96
[In thousands]
----------------------------------------------------------------------------------------------------------------
Readjustment, Medical care
Fiscal year Compensation education, ------------------------------- Housing
and pensions job training Inpatient \1\ Outpatient \2\ loans
----------------------------------------------------------------------------------------------------------------
1975................................... 4,855 2,692 1,220 14,630 290
1980................................... 4,646 1,233 1,359 17,930 297
1981................................... 4,535 1,081 1,360 17,809 188
1982................................... 4,407 906 1,358 18,510 103
1983................................... 4,286 755 1,401 18,616 245
1984................................... 4,123 629 1,412 19,601 252
1985................................... 4,005 492 1,435 20,188 179
1986................................... 3,900 419 1,462 21,635 314
1987................................... 3,850 365 1,466 21,635 479
1988................................... 3,762 352 1,224 23,233 235
1989................................... 3,686 349 1,153 22,629 190
1990................................... 3,614 360 1,113 22,600 196
1991................................... 3,546 322 1,072 23,007 181
1992................................... 3,462 388 1,053 23,902 266
1993................................... 3,397 438 1,043 24,236 383
1994................................... 3,351 472 1,032 25,443 602
1995................................... 3,332 476 1,003 27,528 263
1996................................... 3,315 475 932 29,295 292
----------------------------------------------------------------------------------------------------------------
\1\ Patients treated: the sum of discharges and deaths during the period plus patients remaining as bed
occupants or absent bed occupants at the end of the report period.
\2\ Visits for outpatient care.
Source: U.S. Department of Veterans Affairs.
WORKERS' COMPENSATION
Overview Through 1993 \24\
---------------------------------------------------------------------------
\24\ Largely drawn from Schmulowitz (1995).
---------------------------------------------------------------------------
Workers' compensation laws provide for cash and medical
benefits to persons with job-related disabilities and
survivors' benefits to dependents of those whose death resulted
from a work-related accident or illness. In 1993, workers'
compensation laws protected approximately 96.1 million workers
in 51 jurisdictions, including the District of Columbia.
Although the laws vary from State to State, and among the
Federal programs, the underlying principle is that employers
should assume the costs of occupational disabilities without
regard to fault. Prior to the enactment of workers'
compensation laws (the first of which was enacted in 1908), a
worker was only protected in cases in which employer negligence
could be proven as the cause of injury or death. By 1949, all
States and the Federal Government had enacted laws to cover
workers and their dependents in any case of occupational
disability or death.
Most workers' compensation benefits are paid by insurance
companies through policies purchased by private employers that
are keyed to the benefits required by the State or Federal
workers' compensation law covering the employer. In addition,
benefits may be paid by special State or Federal insurance
funds, by employers themselves acting as self-insurers, and by
the Federal Government (for Federal employees and some black
lung beneficiaries). State laws generally are administered by
entities such as industrial commissions or special units within
State labor departments. Federal laws are administered by the
U.S. Department of Labor, although the Social Security
Administration has responsibility for paying some black lung
claims.
Federal involvement in the workers' compensation system is
minimal. Federal laws cover work-related disability and death
benefits for Federal employees, certain maritime and railroad
employees, and benefits for black-lung-related disability or
death.\25\ In general, Federal funding extends only to benefits
for Federal employees and some black lung beneficiaries and
administrative costs at the Labor Department and Social
Security Administration.\26\ There are no Federal standards for
or controls over the State laws that cover most of the work
force, although they are structured similarly, and a 1972
Federal commission issued a still-current set of recommended
goals for State laws. Workers' compensation benefits are not
taxed at any level of government; if taxed as income by the
Federal Government, the Joint Committee on Taxation estimates
revenues would be about $4 billion (for tax year 1995).
---------------------------------------------------------------------------
\25\ The Federal Employees' Compensation Act (FECA) covers Federal
employees and certain others (e.g., some law enforcement officers and
volunteers, postal service employees). The Longshore and Harbor
Workers' Compensation Act (LHWCA) and the Jones Act cover certain
workers in maritime endeavors (including, for example, workers on the
outer continental shelf). The Federal Employers' Liability Act (FELA)
covers interstate railroad employees. The Black Lung Benefits Act
(BLBA) provides for benefits to coal mine employees and survivors for
disability or death related to black lung disease.
\26\ Under the FECA, the Federal Government pays all administrative
and benefit costs from annual appropriations to the employing agencies
and the Labor Department. Under the LHWCA, private employers are
responsible for virtually all benefits; the Federal Government pays for
a very small and declining payment to pre-1972 claimants and, standing
in the place of a State, the administrative costs of the system. Under
the Jones Act and the FELA, there are few Federal costs, limited to
some Federal court costs and potential effects on the Federal
appropriation for Amtrak. Under the BLBA, Federal appropriations pay
for benefits and administrative costs for claims filed before 1974
(through the Social Security Administration) and Department of Labor
administrative expenses (for claims filed later). Black lung benefits
for claims filed after 1973 are paid directly by responsible coal mine
operators or the Black Lung Disability trust fund (which is financed
through an excise tax on coal and borrowing from the Federal Treasury).
---------------------------------------------------------------------------
Cash compensation for lost earnings made up 59 percent of
total workers' compensation benefits in 1993. Some 70 percent
of cash payments are for permanent partial disabilities of
either major or minor severity. These payments cover loss (or
loss of use) of body parts and partial, but permanent, loss of
earning capacity due to work-related injuries. About 5-8
percent of cash benefits are awarded to survivors because of
work-related deaths. The remainder is paid for temporary
disabilities in which an employee is unable to work, or must
work at a reduced level, but is expected to recover fully.
Permanently disabled workers receiving workers'
compensation also may be eligible for benefits under the Social
Security Disability Insurance (DI) Program if they meet
generally more stringent DI tests. However, the Social Security
Act stipulates that total benefits under workers' compensation
and DI cannot exceed 80 percent of a worker's former earnings
(or, if higher, 80 percent of the total family Social Security
benefit). If there is an excess, the Social Security benefit is
reduced by the amount of the excess, or, in 13 States, the
workers' compensation benefit is reduced.
Workers' compensation laws require that all injury-related
medical and hospital care be paid for. As a result, medical
expenses made up 41 percent of total workers' compensation
benefits in 1993. Medical benefits are typically paid on an
``as-charged'' basis; the majority of States and the Federal
Government allow relatively unfettered employee choice of
physician/care provider. However, the medical benefit component
of workers' compensation has grown substantially in recent
years, and a growing number of States (now over half) have
instituted at least some form of ``managed care'' or ``fee
schedules'' to control these costs.
Workers' compensation laws make coverage compulsory for
most private employers, except in South Carolina and Texas.\27\
If employers reject coverage in these States, they lose the use
of common-law negligence defenses if sued. However, many State
laws exempt from coverage employees of nonprofit, charitable,
or religious institutions, as well as very small employers,
domestic and agricultural employment, and casual labor.
Coverage of State and local government employees differs widely
from State to State.
---------------------------------------------------------------------------
\27\ While coverage in New Jersey is technically elective, no
employer has chosen an exemption from the workers' compensation
statute, which requires that the election be made in writing prior to
an accident.
---------------------------------------------------------------------------
In 1993, 96.1 million employees were covered by State or
Federal workers' compensation laws, and wages and salaries of
covered workers totaled $2.5 trillion, about 82 percent of all
civilian wages and salaries. However, while the number of
covered employees grew from 1991, when 93.6 million workers
were covered, the proportion of the civilian payroll covered by
workers' compensation laws declined from 84 percent.
The total of $42.9 billion in 1993 workers' compensation
benefit costs (including those for black lung recipients) is
driven by the level of benefits provided under workers'
compensation laws, the cost of medical benefits, and injury
rates, as well as ``administrative'' factors such as the degree
of litigation involved.
Cash compensation levels are established by formulas set
in State and Federal workers' compensation laws and are
typically a percentage of weekly earnings at the time of injury
or death. Most laws provide benefits equal to two-thirds of
gross (pretax) lost earnings (or earning capacity); but several
States calculate benefits as a percentage of lost ``spendable''
(aftertax) earnings, usually replacing 75 or 80 percent.
Workers' compensation laws also set maximum weekly benefit
amounts. While maximum benefits are most often set at between
two-thirds and 100 percent of the State's average weekly wage,
they vary widely. For example, as of January 1996, maximum
weekly compensation for permanent total disability ranged from
$1,299 for Federal employees ($782 for those covered by the
Federal LHWCA) to $846 for Iowa (the highest State figure) and
$264 for Mississippi (the lowest State figure).
In 1993, compensation under regular Federal and State
Workers' Compensation Programs totaled $24.2 billion, of which
$1.2 billion was paid to survivors. In addition, $1.2 billion
in black lung cash benefits were provided, almost 60 percent of
which went to survivors.
In 1993, medical and hospitalization payments under
regular Federal and State workers' compensation laws totaled
$17.4 billion, and an additional $100 million was paid out for
black lung beneficiaries.
The Bureau of Labor Statistics (BLS) reported a 1993
workplace injury and illness incidence rate of 8.5 cases per
100 full-time equivalent private industry workers. The
incidence rate for lost workday cases was 3.8. Since 1989, the
overall incidence rate has ranged between 8.9 and 8.4, and the
lost-workday rate has varied between 3.8 and 4.1. According to
the Survey of Occupational Injuries and Illnesses, the total
number of private sector workplace injuries/illnesses in 1993
was 6.7 million, of which nearly 3 million involved lost
workdays. In addition, the BLS Census of Fatal Occupational
Injuries reported some 6,300 fatalities resulting from on-the-
job injuries (see Schmulowitz, 1995).
Generally, employers insure against their workers'
compensation liability through commercial insurance companies.
However, they also may self-insure by providing proof of
financial ability to carry their own risk (normally, large
employers), purchase their insurance through a State ``fund''
(essentially, a State-run insurance company), or buy insurance
commercially through a State-established ``high-risk''
insurance pool. In two States (North Dakota and Wyoming),
employers must purchase insurance from their State fund, and,
in four other States (Nevada, Ohio, Washington, West Virginia),
they must either self-insure or buy insurance from the State
fund. And nearly half of the remaining States have fully
``competitive'' State funds that allow employers to buy private
insurance, self insure, or buy from a State fund.
In 1993, 51 percent ($21.8 billion) of the total of $42.9
billion in workers' compensation benefits (including all cash
and medical costs under Federal and State laws) was paid by
private insurers; 23 percent ($9.9 billion) was provided
through self-insurance; 19 percent ($8.1 billion) came from
State funds; and 7 percent ($3.1 billion) was paid under
Federal programs.\28\
---------------------------------------------------------------------------
\28\ Federal program disbursements were for black lung benefits and
payments for Federal employees. Some of the payments financed through
private insurers, self-insurance, and State funds were mandated by
Federal laws covering private-sector employers (e.g., the LHWCA).
---------------------------------------------------------------------------
Total workers' compensation costs to employers in a given
year are greater than annual benefits paid out because of the
built-in cost of long-term benefits. In 1993, employer costs
totaled $57.3 billion. These costs included benefits paid,
administration of insurance operations, insurer profits and
taxes, and reserves for future benefit payments. Where
insurance is purchased, the premium paid by employers varies
with the risk involved in the covered employment and the
industrial classification of the employer's particular
industry, although it may be modified by ``experience rating''
for some moderate to large employers and other factors judged
relevant by the insurer.
By type of insurer, the total 1993 cost to employers was:
$33.6 billion (59 percent) paid to private insurers, $10.9
billion (19 percent) paid to State funds, $10.6 billion (18
percent) financed by self-insured employers, and $2.3 billion
(4 percent) from Federal appropriations for Federal employees
and from that portion of black lung benefits financed by coal
mine employers (as opposed to Federal appropriations).
In 1993, average employer costs per covered employee were
$597; as a proportion of employers' payrolls, this represented
$2.30 per $100 of payroll. Although substantial increases in
employers' workers' compensation costs were recorded in the
1980s, these costs actually decreased in real terms in the
early 1990s, dropping from a high of $2.40 per $100 of payroll
in 1991.
Table 15-43 shows the estimated number of workers covered
and the total annual payroll in covered employment for selected
years between 1948 and 1993. Over that time, the number of
workers covered in an average month increased from 36 to 96.1
million, and covered payroll rose from $105 billion to $2.5
trillion.
TABLE 15-43.--ESTIMATED NUMBER OF WORKERS COVERED BY WORKERS' COMPENSATION IN AVERAGE MONTH AND TOTAL ANNUAL
PAYROLL IN COVERED EMPLOYMENT, SELECTED YEARS 1948-93 \1\
----------------------------------------------------------------------------------------------------------------
Workers covered in average Total payroll in covered
month employment
----------------------------------------------------------
Percent of
Year employed Percent of
Number (in wage and Amount (in civilian wage
millions) salary billions) and salary
workers \2\ disbursements
----------------------------------------------------------------------------------------------------------------
1948................................................. 36.0 77.0 $105 79.9
1953................................................. 40.7 80.0 154 81.5
1958................................................. 42.5 80.2 192 83.1
1963................................................. 47.3 80.5 254 83.7
1968................................................. 56.8 83.8 376 83.0
1973................................................. 66.3 86.3 578 84.2
1978................................................. 75.6 86.7 922 84.3
1983................................................. 78.0 85.6 1,382 84.6
1988................................................. 91.3 87.0 2,000 84.2
1990................................................. 95.1 87.0 2,250 84.0
1991................................................. 93.6 87.0 2,300 84.0
1993................................................. 96.1 NA 2,500 82.0
----------------------------------------------------------------------------------------------------------------
\1\ Before 1963, excludes Alaska and Hawaii.
\2\ Beginning in 1968, excludes those under age 16 and includes certain workers previously classified as self-
employed.
NA--Not available.
Source: Nelson (1991, 1993); Schmulowitz (1995).
Table 15-44 illustrates benefit payments under workers'
compensation laws by type of benefit for the years 1987-93
(except 1992). In 1993, total benefits paid equaled $42.9
billion, of which $41.6 billion was paid out under regular
State and Federal workers' compensation laws and nearly $1.4
billion was provided through the Federal Black Lung Benefit
Programs.
TABLE 15-44.--ESTIMATED WORKERS' COMPENSATION BENEFIT PAYMENT AMOUNTS BY TYPE OF BENEFIT 1987-93
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
Type of benefit 1987 1988 1989 1990 1991 1993
----------------------------------------------------------------------------------------------------------------
Regular program:
Medical and hospitalization......... $9,794 $11,401 $13,299 $15,067 $16,715 $17,409
Compensation........................ 15,979 17,833 19,538 21,737 24,063 24,160
Disability...................... 15,046 16,956 18,553 20,635 22,840 22,930
Survivor........................ 933 877 985 1,102 1,223 1,229
-----------------------------------------------------------------------
Total....................... 25,773 29,234 32,837 36,804 40,778 41,569
=======================================================================
Black Lung Program:
Medical and hospitalization......... 118 117 125 120 117 112
Compensation........................ 1,426 1,381 1,354 1,314 1,274 1,243
Disability...................... 698 657 618 577 533 520
Survivor........................ 729 725 736 737 741 723
-----------------------------------------------------------------------
Total....................... 1,545 1,499 1,479 1,434 1,391 1,355
=======================================================================
Regular and Black Lung:
Medical and hospitalization......... 9,912 11,518 13,424 15,187 16,832 17,521
Compensation........................ 17,406 19,215 20,892 23,051 25,337 25,403
Disability...................... 15,775 17,613 19,171 21,212 23,373 23,450
Survivor........................ 1,631 1,602 1,721 1,839 1,964 1,952
-----------------------------------------------------------------------
Total....................... 27,318 30,733 34,316 38,238 42,169 42,925
----------------------------------------------------------------------------------------------------------------
Source: Nelson (1991, 1993); Schmulowitz (1995).
Recent Developments in Employers' Costs and Benefit Payments \29\
---------------------------------------------------------------------------
\29\ Largely drawn from Burton, Yates, and Blum (1997) and National
Foundation (1997).
---------------------------------------------------------------------------
The historical data series providing national information
on the costs, benefits, and coverage of the workers'
compensation system (used in the above overview through 1993)
was discontinued by the Social Security Administration (SSA)
after publication of data for 1993. However, while not directly
comparable to the historical SSA series, estimates from other
sources the now-retired author of the SSA series (Jack
Schmulowitz) and John F. Burton (editor of John Burton's
Workers' Compensation Monitor) are available to portray cost
trends since 1993. And recent work by the National Academy of
Social Insurance as reported by the National Foundation for
Unemployment Compensation and Workers' Compensation updates
benefit payments under State workers' compensation laws through
1995.\30\
---------------------------------------------------------------------------
\30\ Note: Unlike the SSA series of data through 1993, the National
Foundation data does not include amounts paid under the workers'
compensation system for Federal employees and the Black Lung Programs.
These payments totaled some $3.1 billion in fiscal year 1995.
---------------------------------------------------------------------------
Preliminary estimates made available by Schmulowitz (that
both revise and extend the SSA series) indicate that workers'
compensation costs to employers have declined from 1993 through
1995, both absolutely and as a percent of payroll. First,
revised figures for 1993 show costs of $60.8 billion (2.17
percent of payroll) in 1993, as opposed to $57.3 billion (2.3
percent of payroll) noted earlier in this section (and drawn
from the unrevised SSA data series). Then, an extension of
these revised figures estimates that costs dropped to $60.3
billion (2.04 percent of payroll) in 1994 and $56.9 billion
(1.82 percent of payroll) in 1995.
Another set of estimates produced by Burton and his
colleagues, and derived from different data sources, indicate
that, since 1993, employers' workers' compensation costs have
increased in absolute terms, but decreased slightly as a
percent of payroll. After estimating 1993 costs at $80.4
billion (well above other estimates), the Burton figures show
absolute dollar costs rising to $87.3 billion in 1994, $87.6
billion in 1995, and $92.7 billion in 1996. However, as a
percent of payroll, the Burton figures estimate costs at 2.67
percent 1993, rising to 2.75 percent in 1994, and then dropping
to 2.61 percent in 1995 and 1996.
Estimates of benefit payments under State workers'
compensation laws and the Federal Longshore and Harbor Workers'
Compensation Act by the National Foundation for Unemployment
Compensation and Workers' Compensation (based on work done by
the National Academy of Social Insurance) indicate that they
have dropped since 1993. A revised 1993 estimate for total
(cash and medical) payments places them at $47.1 billion,
slightly higher than the amount included in the SSA series for
1993. For 1994 and 1995, the National Foundation figures show a
decline to $41.5 billion and $40.1 billion. In addition, the
National Foundation's estimates indicate a reduction in average
annual benefit costs per covered employee under State workers'
compensation laws from $453 in 1993 to $413 in 1995.
REFERENCES
Burton, John F., Elizabeth H. Yates, and Florence Blum (1997).
The employers' costs of workers' compensation in the
1990s: The $100 billion gap. John Burton's Workers'
Compensation Monitor. March/April 1997. pp. 1-11.
Committee on Energy and Commerce, U.S. House of
Representatives. (1993). Medicaid source book:
Background data and analysis (Committee Print 103A).
Washington, DC: U.S. Government Printing Office.
Congressional Budget Office. (1988). Current housing problems
and possible Federal responses. Washington, DC: Author.
Congressional Budget Office. (1994). The challenges facing
Federal rental assistance programQ. Washington, DC:
Author.
Congressional Research Service. (1991). Housing assistance in
the United States (91-872E). Washington, DC: Author.
Congressional Research Service. (1993). HUD housing assistance
programs: Their current status (93-222E). Washington,
DC: Author.
Food and Consumer Service. (1995, July). Food stamp quality
control annual report, fiscal year 1995. Washington,
DC: U.S. Department of Agriculture.
National Academy for State Health Policy. (1997). Medicaid
managed care: Program characteristics and State survey
results. Volume 1. Washington, DC: Author.
National Foundation for Unemployment Compensation and Workers'
Compensation. (1997). Fiscal data for State workers'
compensation systems 1986-95. Research Bulletin, 97 WC-
2. September 15, 1997. pp. 1-17.
Nelson, W.J. (1991). Workers' compensation: Coverage, benefits,
and costs, 1988. Social Security Bulletin, 54(3), pp.
12-20.
Nelson, W.J. (1993). Workers' compensation: Coverage, benefits,
and costs, 1990-91. Social Security Bulletin, 56(3),
pp. 18-74.
Schmulowitz, J. (1995). Workers' compensation: Coverage,
benefits, and costs, 1992-93. Social Security Bulletin
58(2), pp. 51-57.
U.S. Department of Agriculture. (1994, October). Food stamp
participation rates: January 1992. Washington, DC:
Author.
U.S. Department of Agriculture. (1995, December). Trends in FSP
participation rates: Focus on August 1993. Washington,
DC: Author.
|