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President Clinton Takes Action to Help Low-Income Families to Get on the Road to Work

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The Briefing Room

Office of the Press Secretary

For Immediate Release February 23, 2000

February 23, 2000

President Clinton today will unveil a new regulation and highlight several new budget initiatives to help low-income families get to work by making it easier for them to own a car or obtain public transportation. The new regulation the President is announcing will enable 150,000 individuals to own a reliable car without losing eligibility for food stamps. The President will also call on Congress to enact three legislative proposals in his new budget that will: 1) enable 245,000 more families to own a car and still get food stamps by allowing states to use the more generous rules already put in place for their welfare reform programs; 2) double funding to $150 million for Access to Jobs grants; and 3) allow low-income families to use Individual Development Accounts (IDAs) to save for a car. These steps are a key part of the Administration’s strategy to reform welfare, reward work, and help hard-pressed working families.

FAMILIES NEED TRANSPORTATION TO GO TO WORK. Low-income families cannot participate fully in our strong economy and support their children unless they can get to work. Two-thirds of all new jobs are now created in suburbs, but three-quarters of welfare recipients live in rural areas or central cities. While many states and communities are working to develop innovative transportation strategies, existing public transit often fails to link to suburban job opportunities, cover evening and weekend hours, or serve rural communities. Even in metropolitan areas with extensive transit systems, studies have shown that less than half the entry level jobs are accessible by transit.

Having a car can make a tremendous difference. Data from the Urban Institute’s National Survey of American Families show that twice as many welfare recipients with cars were working than those without cars, and 25 percent more low-income families with cars were working than those without cars. Studies of welfare recipients in Michigan and Los Angeles also underscore that access to a car is a critical factor in getting a job. The fact is, however, that many welfare recipients and low-income workers do not have a car.

PRESIDENT ANNNOUNCES STEPS TO HELP MORE FAMILIES GET TO THE JOB. The Clinton--Gore Administration will put more families on the road to work and opportunity by:

Making it Easier for Working Families to Own a Car and Receive Food Stamps. Current law forces many working families to choose between nutritional assistance and a reliable car because it limits food stamp eligibility to most families owning a vehicle worth less than $4,650. President Clinton and Vice President Gore believe working parents shouldn’t be forced into this choice, and today the President will unveil a new regulation that will enable families with low amounts of equity in their cars to qualify for food stamps (equity being fair market value minus outstanding loans). The regulation will exclude, from the food stamp program’s limit on assets, the value of any vehicle with an equity value of less than $1,000. The President will also call on Congress to pass his new budget proposal allowing state food stamp programs to use the higher vehicle asset limits of their welfare reform programs. (In most states, the welfare reform rules on owning a car are more generous than the rules that apply to food stamps). Together, the regulatory change and the budget proposal will make it easier for an estimated 400,000 individuals by 2005 to get to work (150,000 through the regulation and 245,000 through the budget proposal).

Doubling ‘Access to Jobs’ Funding. The President today will also highlight his proposal to double Access to Jobs grants to $150 million in FY 2001. These grants fund locally designed transportation projects that help hard-pressed families get to work – for example, by extending public transit hours and routes or funding van services. Under the $150 million proposal, the Department of Transportation will also set aside $5 million for Indian tribes, and designate another $5 million for applicants from the Mississippi Delta region, as part of the Administration’s Delta Initiative.

Allowing Working Families to Use Individual Development Accounts to Save for a Car that will Allow them to Get or Keep a Job. The President will also highlight a $25 million initiative in his budget to fund the third year of a five-year IDA demonstration program signed into law in 1998. As part of this budget initiative, the President will also propose allowing low-income families to use IDAs to save for a car that will help them get or keep a job. Currently, IDAs provide incentives through federal matching funds for low-income working families to save for a first home, post-secondary education, or start a new business -- but not a car.

TODAY’S ACTIONS BUILD ON A RECORD OF REWARDING WORK AND HELPING HARD-PRESSED WORKING FAMILIES. President Clinton and Vice President Gore have worked for seven years to raise incomes, make work pay, help families make a successful transition from welfare to work, and extend opportunity to all. Today’s transportation proposals will do even more to promote work and help hard-pressed working families and are part of a comprehensive package of proposals in the Administration’s FY 2001 budget to expand the EITC, health coverage, and child care, provide more housing vouchers, help low-income working families upgrade their skills and get the critical work supports they need, promote responsible fatherhood by helping low income fathers work and support their children, and enact tough new measures to collect more child support from those who can afford to pay.

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