Reed said the aim of his bill is to ensure people are able to eventually leave welfare instead of letting states create incentives for people to stay on it. He said the bill "reaffirms to states that the purpose of the federal program is to be temporary."

"This legislation will end the practice of indefinite cash payments to welfare recipients to help individuals in poverty bridge the gap between welfare dependency and economic self-sufficiency," Reed said Monday. "There is a fundamental problem with the current web of programs that doesn't provide proper care for recipients and we stand with those who are trying to better themselves."

Reed said some states are continuing to offer people welfare payments beyond five years under the Temporary Assistance for Needy Families (TANF) program in order to ensure they are making minimum TANF payments.

According to the Government Accountability Office, states must make minimum "Maintenance of Effort" (MOE) payments under TANF that equal at least 80 percent of the amounts they spent in 1994. Reed says in some cases, states are continuing welfare payments after five years in order to ensure they meet this requirement.

Reed said a fix is needed to ensure TANF does not became a "limitless handout."

"TANF is designed to be a temporary program to encourage self-sufficiency, but with states counting indefinite cash payments toward the federal program, they are effectively trapping recipients in a cycle of dependency," he said.