<DOC>
[109th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:20008.wais]
WELFARE REFORM: REAUTHORIZATION OF WORK AND CHILD CARE
=======================================================================
HEARING
before the
SUBCOMMITTEE ON 21st CENTURY COMPETITIVENESS
of the
COMMITTEE ON EDUCATION
AND THE WORKFORCE
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
March 15, 2005
__________
Serial No. 109-4
1________
Printed for the use of the Committee on Education and the Workforce
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COMMITTEE ON EDUCATION AND THE WORKFORCE
JOHN A. BOEHNER, Ohio, Chairman
Thomas E. Petri, Wisconsin, Vice George Miller, California
Chairman Dale E. Kildee, Michigan
Howard P. ``Buck'' McKeon, Major R. Owens, New York
California Donald M. Payne, New Jersey
Michael N. Castle, Delaware Robert E. Andrews, New Jersey
Sam Johnson, Texas Robert C. Scott, Virginia
Mark E. Souder, Indiana Lynn C. Woolsey, California
Charlie Norwood, Georgia Ruben Hinojosa, Texas
Vernon J. Ehlers, Michigan Carolyn McCarthy, New York
Judy Biggert, Illinois John F. Tierney, Massachusetts
Todd Russell Platts, Pennsylvania Ron Kind, Wisconsin
Patrick J. Tiberi, Ohio Dennis J. Kucinich, Ohio
Ric Keller, Florida David Wu, Oregon
Tom Osborne, Nebraska Rush D. Holt, New Jersey
Joe Wilson, South Carolina Susan A. Davis, California
Jon C. Porter, Nevada Betty McCollum, Minnesota
John Kline, Minnesota Danny K. Davis, Illinois
Marilyn N. Musgrave, Colorado Raul M. Grijalva, Arizona
Bob Inglis, South Carolina Chris Van Hollen, Maryland
Cathy McMorris, Washington Tim Ryan, Ohio
Kenny Marchant, Texas Timothy H. Bishop, New York
Tom Price, Georgia John Barrow, Georgia
Luis G. Fortuno, Puerto Rico
Bobby Jindal, Louisiana
Charles W. Boustany, Jr., Louisiana
Virginia Foxx, North Carolina
Thelma D. Drake, Virginia
John R. ``Randy'' Kuhl, Jr., New
York
Paula Nowakowski, Staff Director
John Lawrence, Minority Staff Director
------
SUBCOMMITTEE ON 21st CENTURY COMPETITIVENESS
HOWARD P. ``BUCK'' McKEON, California, Chairman
Jon C. Porter, Nevada Vice Chairman Dale E. Kildee, Michigan
John A. Boehner, Ohio Donald M. Payne, New Jersey
Thomas E. Petri, Wisconsin Carolyn McCarthy, New York
Michael N. Castle, Delaware John F. Tierney, Massachusetts
Sam Johnson, Texas Ron Kind, Wisconsin
Vernon J. Ehlers, Michigan David Wu, Oregon
Patrick J. Tiberi, Ohio Rush D. Holt, New Jersey
Ric Keller, Florida Betty McCollum, Minnesota
Tom Osborne, Nebraska Chris Van Hollen, Maryland
Bob Inglis, South Carolina Tim Ryan, Ohio
Cathy McMorris, Washington Robert C. ``Bobby'' Scott,
Tom Price, Georgia Virginia
Luis G. Fortuno, Puerto Rico Susan A. Davis, California
Charles W. Boustany, Jr., Louisiana Timothy H. Bishop, New York
Virginia Foxx, North Carolina John Barrow, Georgia
Thelma D. Drake, Virginia Major R. Owens, New York
John R. ``Randy'' Kuhl, Jr., New George Miller, California, ex
York officio
------
C O N T E N T S
----------
Page
Hearing held on March 15, 2005................................... 1
Statement of Members:
McKeon, Hon. Howard P. ``Buck'', Chairman, Committee on
Education and the Workforce................................ 2
Prepared statement of.................................... 3
Kildee, Hon. Dale E., Ranking Member, Committee on Education
and the Workforce.......................................... 4
Statement of Witnesses:
Austin, Curtis C., President, Workforce Florida, Tallahassee,
FL......................................................... 32
Prepared statement of.................................... 35
Fallin, Casandra, Executive Director, Baltimore City Child
Care Resource Center, Baltimore, MD........................ 49
Prepared statement of.................................... 51
Greenberg, Mark, Director of Policy, Center for Law and
Social Policy, Washington, DC.............................. 54
Prepared statement of.................................... 56
Horn, Hon. Wade F., Ph.D., Assistant Secretary for Children
and Families, U.S. Department of Health and Human Services,
Washington, DC............................................. 6
Prepared statement of.................................... 7
Mead, Larry, Ph.D., Professor of Politics, New York
University, New York, NY................................... 42
Prepared statement of.................................... 43
WELFARE REFORM: REAUTHORIZATION OF WORK AND CHILD CARE
----------
Tuesday, March 15, 2005
U.S. House of Representatives
Subcommittee on 21st Century Competitiveness
Committee on Education and the Workforce
Washington, DC
----------
The Subcommittee met, pursuant to notice, at 10:04 a.m., in
room 2175, Rayburn House Office Building, Hon. Howard P.
``Buck'' McKeon [Chairman of the Subcommittee] presiding.
Present: Representatives McKeon, Petri, Tiberi, Osborne,
Inglis, Price, Foxx, Drake, Kuhl, Kildee, Payne, McCarthy,
Tierney, Kind, Wu, Holt, McCollum, Scott, Davis, and Bishop.
Staff present: Kevin Frank, Professional Staff Member; Kate
Houston, Professional Staff Member. Melanie Looney,
Professional Staff Member; Sally Lovejoy, Director of Education
and Human Resources Policy; Donald McIntosh, Legislative
Assistant; Stephanie Milburn, Professional Staff Member;
Deborah L. Emerson Samantar, Committee Clerk/Intern
Coordinator; Kevin Smith, Senior Communications Advisor; Rich
Stombres, Assistant Director of Education and Human Resources
Policy; Ruth Friedman, Minority Legislative Associate/
Education; Ricardo Martinez, Minority Legislative Associate/
Education; Alex Nock, Minority Legislative Associate,
Education; Joe Novotny, Minority Staff Assistant/Education; and
Mark Zuckerman, Minority General Counsel.
Chairman McKeon. A quorum being present, the Subcommittee
on 21st Century Competitiveness will come to order.
We're meeting here today to hear testimony on ``Welfare
Reform: Reauthorization of Work and Child Care.''
Under Committee Rule 12 (b), opening statements are limited
to the Chairman and the Ranking Minority Member of the
Subcommittee. Therefore, if other Members have statements,
they'll be included in the hearing record.
With that, I'll ask unanimous consent for the hearing
record to remain open 14 days to allow Members' statements and
other extraneous material referenced during the hearing to be
submitted in the official hearing record.
Without objection, so ordered.
STATEMENT OF HON. HOWARD P. ``BUCK'' McKEON, CHAIRMAN,
SUBCOMMITTEE ON 21st CENTURY COMPETITIVENESS, COMMITTEE ON
EDUCATION AND THE WORKFORCE
Good morning. Thank you for joining us for this important
hearing.
The Subcommittee is meeting today to hear testimony on the
effects of welfare reform and the Temporary Assistance for
Needy Families block grant.
In addition, we're examining one of the most important work
supports available to low-income families, Federal child care
assistance.
Many of us on this Committee remember the heated debates
Congress had over welfare reform in 1996. After President
Clinton signed the bill into law, some predicted it would have
disastrous results.
Instead, we now know that welfare reform has been an
unqualified success. The poverty rate has dropped 9 percent,
despite the 2001 recession.
In addition, poverty rates have decreased throughout
society. Since 1996, 1.4 million children have left poverty.
Welfare caseloads have dropped over 60 percent from their all-
time high of 5.1 million families in March 1994 to
approximately 2 million today, their lowest level since 1970,
according to the U.S. Department of Health and Human Services.
Census figures also show that employment by mothers most
likely to go on welfare rose by 28 percent between 1996 and
2003.
Welfare reform opponents suggest that the decreases in
welfare caseloads and child poverty during the late 1990's were
the result of a healthy economy, not the welfare reform law.
But history shows that this argument simply is not true. During
the long economic boom in the 1980's, welfare caseloads
actually rose, and during the recent recession of 2001, welfare
caseloads held steady or continued to decline in many areas.
The fact is that the 1996 welfare law's work requirements
made the crucial difference in maximizing opportunities for
welfare recipients to participate in the workforce.
The focus on work requirements has changed the whole
culture of the program for those involved, recipients, state
staff, and even the general public. States now have the
flexibility to create incentive for families to go to work.
The success of the 1996 welfare reform law is beyond
dispute. The challenge for Congress this year is to build on
that success by putting even more Americans on the path to
self-reliance.
When the law is reauthorized this year, while it is true
that the 1996 reforms significantly reduced welfare caseloads,
we still have work to do. A majority of TANF recipients today
are still not working for their benefits.
According to the Health and Human Services Department's
Sixth Annual Report to Congress, 58 percent of TANF adult
recipients are not participating in work activities as defined
by Federal law, which includes work in various job training and
education activities.
While we move families into work, one of the key supports
available is child care assistance. We know that affordable,
desirable, reliable, quality child care is critical to allow
mothers to obtain and retain employment.
Through the Child Care and Development Block Grant, the
Federal Government has made a significant financial commitment
to providing access to affordable child care to low-income
families. Current funding totals $4.8 billion annually and
states also used TANF funds to provide child care.
Our bill would enhance this commitment by providing $1
billion in additional mandatory funds for child care, and
increasing the discretionary authorization by $1 billion over
the next 5 years.
The Child Care and Development block grant provides states
maximum flexibility in addressing the child care needs of low-
income families and children.
Importantly, the program ensures parents are free to choose
the child care setting they prefer for their children. Parents
may use their certificates for center-based care, a family
child care home, relative care, or in-home care.
In addition, the quality of care children receive is
critical. Research indicates that the experiences of a young
child greatly affect a child's success in school. For that
reason, the House bill requires states to spend at least 6
percent of their child care funds on certain activities to
improve the quality of care.
Today we will hear from the administration regarding their
plans for the second phase of welfare reform, and Assistant
Secretary Horn is here to testify about that proposal. Thank
you for joining us.
In addition, we will welcome a second panel of witnesses
consisting of both researchers and those overseeing the
implementation of welfare reform and child care, to gather
their insights on the next best steps in welfare reform and
child care.
I know all will offer us insight into the strides that have
been made as well as thoughts on further steps that need to be
taken.
The Subcommittee welcomes your participation.
With that, I yield to my good friend and Ranking Member,
Congressman Dale Kildee, for his opening statement.
[The prepared statement of Chairman McKeon follows:]
Statement of Hon. Howard P. ``Buck'' McKeon, Chairman, Subcommittee on
21st Century Competitiveness, Committee on Education and the Workforce
Good morning. Thank you for joining us for this important hearing.
The subcommittee is meeting today to hear testimony on the effects of
welfare reform and the Temporary Assistance for Needy Families block
grant. In addition, we are examining one of the most important work
supports available to low income families--federal child care
assistance.
Many of us on this Committee remember the heated debates Congress
had over welfare reform in 1996. After President Clinton signed the
bill into law, some predicted it would have disastrous results.
Instead, we now know that welfare reform has been an unqualified
success. The poverty rate has dropped nine percent, despite the 2001
recession.
In addition, poverty rates have decreased throughout society. Since
1996, 1.4 million children have left poverty.
Welfare caseloads have dropped over 60 percent from their all-time
high of 5.1 million families in March 1994 to approximately 2 million
today--their lowest level since 1970, according to the U.S. Department
of Health & Human Services. Census figures also show that employment by
mothers most likely to go on welfare rose by 28 percent between 1996
and 2003.
Welfare reform opponents suggest that the decreases in welfare
caseloads and child poverty during the late 1990s were the result of a
healthy economy, not the welfare reform law. But history shows that
this argument simply is not true. During the long economic boom in the
1980s, welfare caseloads actually rose. And, during the recent
recession of 2001, welfare caseloads held steady or continued to
decline in many areas.
The fact is that the 1996 reform law's work requirements made the
crucial difference in maximizing opportunities for welfare recipients
to participate in the workforce. The focus on work requirements has
changed the whole culture of the program for those involved--
recipients, state staff, and even the general public. States now have
the flexibility to create incentives for families to go to work.
The success of the 1996 welfare reform law is beyond dispute. The
challenge for Congress this year is to build on that success--by
putting even more Americans on the path to self-reliance--when the law
is reauthorized this year. While it is true that the ``96 reforms
significantly reduced welfare caseloads, we still have work to do: a
majority of TANF recipients today are still not working for their
benefits.
According to the Health & Human Services Department's Sixth Annual
Report to Congress, 58 percent of TANF adult recipients are not
participating in work activities as defined by Federal law, which
includes work and various other job training and education activities.
While we move families into work, one of the key supports available
is child care assistance. We know that affordable, reliable, quality
child care is critical to allow mothers to obtain and retain
employment. Through the Child Care and Development Block Grant, the
federal government has made a significant financial commitment to
providing access to affordable child care to low-income families.
Current funding totals $4.8 billion annually, and states also use TANF
funds to provide child care. Our bill would enhance this commitment by
providing $1 billion in additional mandatory funds for child care and
increasing the discretionary authorization by $1 billion over the next
five years.
The Child Care and Development Block Grant provides states maximum
flexibility in addressing the child care needs of low-income families
and children. Importantly, the program ensures parents are free to
choose the child care setting they prefer for their children. Parents
may use their certificates for center-based care, a family child care
home, relative care, or in-home care.
In addition, the quality of care children receive is critical.
Research indicates that the experiences of a young child greatly affect
a child's success in school. For that reason, the House bill requires
states to spend at least six percent of their child care funds on
certain activities to improve the quality of care.
Today, we will hear from the Administration regarding their plans
for the second phase of welfare reform, and Assistant Secretary Horn is
here to testify about that proposal. Thank you for joining us. In
addition, we will welcome a second panel of witnesses, consisting of
both researchers and those overseeing the implementation of welfare
reform and child care, to gather their insights on the next best steps
in welfare reform and child care. I know all will offer us insight into
the strides that have been made, as well as thoughts on further steps
that need to be taken. The subcommittee welcomes your participation.
With that, I yield to my friend and Ranking Member, Congressman
Dale Kildee for any statement he may have.
______
STATEMENT OF HON. DALE E. KILDEE, RANKING MEMBER, SUBCOMMITTEE
ON 21st CENTURY COMPETITIVENESS, COMMITTEE ON EDUCATION AND THE
WORKFORCE
Mr. Kildee. Thank you, Mr. Chairman.
I'm pleased to join my Chairman and my friend, Buck McKeon,
at today's hearing on the aspects of welfare reform related to
child care and work requirements.
I agree with my colleague that reform of the welfare system
in 1996 was much needed. We went through various steps, and
Congress and the President finally agreed resulting in the 1996
bill being signed into law.
The system in existence before 1996 was not properly
focused on giving recipients the tools to gain high-paying
employment and therefore pull themselves out of poverty.
Families were not receiving the support they needed to ensure
their future or the future of their children.
Unfortunately, reductions in welfare caseload, employment
of current and former welfare recipients, and reductions in
childhood poverty have stalled or worsened since 2001.
While child poverty dropped from 14 million children in
1995 to 11 million children in 2000, this trend has reversed in
recent years. As of 2003, 12.3 million children are living in
families with incomes below the poverty line. Of that 12.3
million, 4.6 million children are under age six.
Additionally, many families who leave the welfare rolls
remain poor.
While welfare rolls since 1995 have dropped, children are
still more likely to be poor than the elderly and non-elderly
adults.
The facts here are clear.
Unfortunately, current efforts on welfare reform fail to
address these problems adequately.
While the legislation passed in 1996 set standards for
work, we should be responding to meet these requirements in
achievable reality.
We support work. Americans want to work for a living.
They're not looking for a handout. Instead, they need a hand
up. The welfare bill instead rips the already meager support
out from under our families on public assistance. H.R. 240, the
welfare bill, increases work requirements without sufficient
child care funding or much-needed flexibility and resources for
education and training.
The welfare bill provides for a $1 billion increase in
child care funding over the next 5 years. The Congressional
Budget Office has stated that over 4 billion in new child care
resources are needed to meet work requirements of the bill.
What are these parents who go to work going to do with
their children?
Problems children from low-income families face later in
life can be traced back to poor quality early education and
child care experiences. We need to break this cycle, not
further exacerbate it.
Getting off welfare reform should be about obtaining
employment that pays a sustainable wage. Leaving the welfare
rolls should be about leaving poverty behind. The welfare bill
doesn't help these families accomplish this goal, which we all
support.
I hope today's hearing is a stepping-stone for us to
continue to educate our colleagues on the importance of helping
and not placing more barriers in the path of self-sufficiency.
And again, Mr. Chairman, I thank you for this hearing.
Chairman McKeon. Thank you, Mr. Kildee.
Today, we have two panels of witnesses, and I'll begin by
introducing the distinguished witness on the first panel.
The Honorable Wade Horn is the assistant secretary for
Children and Families at the U.S. Department of Health and
Human Services.
Since 2001, Assistant Secretary Horn has played a key role
in implementing several of President Bush's initiatives to
strengthen children and families.
Dr. Horn oversees programs that promote the social and
economic wellbeing of America's children, youth, and families,
including TANF, foster care, Head Start, and child care.
Prior to his appointment at the administration for Children
and Families, Dr. Horn was president of the National Fatherhood
Initiative and also was commissioner for children, youth, and
families with the U.S. Department of Health and Human Services
from 1989 to 1993.
Dr. Horn received his Ph.D. in clinical child psychology
from Southern Illinois University.
Before the assistant secretary begins his testimony, I'd
like to remind Members that we will impose the 5-minute limit
on all questions.
Dr. Horn, the floor is yours.
STATEMENT OF HON. WADE F. HORN, ASSISTANT SECRETARY,
ADMINISTRATION FOR CHILDREN AND FAMILIES, U.S. DEPARTMENT OF
HEALTH AND HUMAN SERVICES, WASHINGTON, DC
Mr. Horn. Thank you, Mr. Chairman. It's a pleasure to be
here today.
Mr. Chairman, Mr. Kildee, and Members of the Committee, I'm
pleased to appear before you today to discuss the next phase of
welfare reform.
I'd like to take this opportunity to express my heartfelt
thanks to you for your leadership and to the Committee for its
unceasing efforts to further improve the lives of low-income
Americans.
The initial work in enacting PRWORA has had a profound and
positive impact on our nation's vulnerable families. Building
on this success, President Bush laid out a clear path for the
next phase of welfare reform.
I would like to briefly highlight key provisions of the
President's welfare reform package of most interest to this
Committee, and update you on the important progress we have
made in strengthening families since the President's proposal
was unveiled.
I'll begin with TANF, the cornerstone of our welfare reform
efforts.
TANF is a remarkable example of a successful Federal-state
partnership. States effectively emphasized work while providing
families with needed training, job opportunities, and work
supports.
As a result the caseload has declined by 55 percent.
Employment among never-married mothers has grown to
unprecedented levels. Child poverty rates have declined, and
birthrates for teenagers continue to decline.
But even with this notable progress, states still face many
challenges.
The majority of adult TANF recipients are not engaged in
employment-related activities. States have been less effective
in placing clients with multiple barriers, and more effective
of post-employment supports that lead to career development and
wage progression are needed.
Consequently, our efforts to reauthorize TANF build on our
past success and address current challenges by:
Strengthening the Federal-state partnership through key
policy changes to increase state flexibility and by maintaining
the current level of financial support;
By requiring states to help every family they serve achieve
the greatest degree of self-sufficiency possible;
By improving program performance; and
By permitting states to integrate the various welfare and
workforce investment programs.
I would like to turn briefly to child care, a key support
service for low-income families.
Access to child care assistance can make a critical
difference in helping low-income families retain employment.
Therefore, our proposal maintains the underlying structure and
financing of these essential child care programs at the
historically high level of funding.
Specifically, $2.1 billion is proposed for the Child Care
and Development Block Grant and $2.7 billion for the Child Care
Entitlement, for a total of $4.8 billion.
In addition, states continue to have the flexibility to use
TANF funds for child care, both by transferring up to 30
percent of TANF funds to child care programs and by spending
additional TANF money directly for child care.
When TANF funds are considered, as well as Head Start and
other state and Federal funding sources, over $18 billion
currently is available for child care and related services for
children.
Although I've focused on the areas of primary interest to
your Committee, I'd like to acknowledge other key areas of our
proposal that also play a critical role in improving the
wellbeing of children and families.
First, our proposal seeks to improve child wellbeing
through programs aimed at encouraging responsible fatherhood
and healthy marriages.
Further, we build on the success of the child support
program by increasing the amount of support collected and
directing more of this support to families.
Finally, the third piece of our welfare reform strategy
supports reauthorization of the State Abstinence Education
Program contained within PRWORA.
Mr. Chairman, the proposal I bring to you today contains
many different elements designed to improve the lives of the
families who otherwise would become dependent on welfare.
In his second inaugural address, the President stated that
in America's ideal of freedom, citizens find the dignity and
security of economic independence. These ideals certainly fit
the President's concept of welfare reform as well as those
embodied in H.R. 420.
The Secretary and I stand ready to work with you on the
next steps to making economic independence within the reach of
America's most needy families.
And I'd be very happy to answer any questions that you may
have.
[The prepared statement of Mr. Horn follows:]
Statement of Hon. Wade F. Horn, Ph.D., Assistant Secretary for Children
and Families, U.S. Department of Health and Human Services, Washington,
DC
Mr. Chairman, Mr. Kildee, and members of the Committee, I am
pleased to appear before you today to discuss the next phase of welfare
reform. Shortly after the President outlined his reauthorization
proposal ``Working Toward Independence'' in February of 2002, and again
early in 2003, the House passed bills that would achieve the necessary
next steps outlined by the President. Mr. Chairman, I note that you are
one of the original cosponsors of H.R. 240, which was introduced the
very first day that this Congress convened. I would like to take this
opportunity to express my heartfelt thanks to you for your leadership
and to the Committee for its unceasing efforts to enact the next phase
of welfare reform to further improve the lives of low-income Americans.
It has been three years since President Bush first proposed his
strategy for reauthorizing TANF and the other critical programs
included in welfare reform. During this time, the issues have been
debated thoroughly but the work has not been completed and States have
been left to wonder how they should proceed. We believe it is extremely
important to finish this work as soon as possible and set a strong,
positive course for helping America's families. Secretary Leavitt and I
are convinced that working together with you, we will be successful.
The enactment of the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 has had a profound, positive impact on our
nation's vulnerable families. With our State partners, our
accomplishments have far surpassed even the most optimistic goals. With
heightened expectations of personal responsibility and greater
opportunities, millions of families have moved from dependence on
welfare to the independence of work. We have provided the necessary
work supports, child care, and transportation to ensure that parents
can get to work and stay there without worrying about the safety and
well-being of their children.
Building on these successes, President Bush laid out a clear path
for the next phase of welfare reform. The proposal is guided by four
critical goals that will transform the lives of low-income families:
strengthen work, promote healthy families, give States greater
flexibility, and demonstrate compassion to those in need. These are the
guideposts that shaped the Administration's proposal for TANF, and
child care. This framework has not changed.
As we prepare jointly to move forward on making the President's
welfare reform proposals a reality, I would like to use my time today
to highlight the key provisions of the President's welfare reform
package of most interest to this Committee and update you on the
important progress we have made in strengthening families since the
President's proposal was unveiled. I will begin with TANF, the
cornerstone of our welfare reform efforts.
Temporary Assistance for Needy Families
As the Assistant Secretary for Children and Families, I have heard
one consistent theme about the Temporary Assistance for Needy Families
program--TANF is a remarkable example of a successful Federal-State
partnership. This Committee and Congress granted States tremendous
flexibility to reform, design, and operate their welfare programs.
Initially, some questioned the wisdom of this course of action and
expressed concern about a potential ``race-to-the-bottom.'' Instead,
States effectively emphasized work, while providing families with
needed training, job opportunities, and work supports. In recent years
after enactment of welfare reform, States have reported an average of
843,000 new job entries each year. As a result, millions of families
have been able to end their dependency on welfare and achieve self-
sufficiency. The welfare caseload has declined by 55 percent and the
total number of families receiving assistance is now lower than at any
time since 1970.
Some other positive outcomes we have seen since the law's passage
include:
<bullet> Employment among never-married mothers has grown to
unprecedented levels. For example, between 1996 and 2003, the
employment rate for never-married mothers increased 28 percent, from
49.3 percent to 63.2 percent.
<bullet>Contrary to critics who claimed that welfare reform would
impoverish one million children, the child poverty rate declined, with
1.6 million fewer children in poverty. Overall child poverty rates
declined from 20.5 percent in 1996 to 17.6 percent in 2003. The poverty
rate among African American children declined from 39.9 percent to 33.6
percent--lower than at any time before welfare reform was enacted, when
child poverty rates for African American children were 40 percent or
higher. Similarly, the poverty rate among Hispanic children declined
from 40.3 percent to 29.7 percent. Although the poverty rate has
increased some since 2000 as a result of the recent recession, the
surge in job creation over the past 20 months portends favorably for
renewed improvement in poverty rates.
<bullet> The birth rate for teenagers continues to decline, as
does the number of births to unmarried teens.
But even with this notable progress, much remains to be done, and
States still face many challenges. While the basic structure and goals
of TANF remain strong, we are concerned about some unfavorable trends.
Despite the success in moving families from welfare to work, a majority
of adult TANF recipients are not engaged in employment-related
activities. In fiscal year 2003, States reported that only 31 percent
of families with an adult recipient participated in the required 30
hours of TANF work activities. We need to reverse this trend so that
all TANF recipients are given the opportunity to become self-
sufficient.
States also have been less effective in placing clients with
multiple barriers (such as mental health issues, addiction, learning
disabilities, and limited English proficiency) in work. We need to
ensure that these barriers are addressed and that every family is given
work opportunities leading to self-sufficiency. But our efforts cannot
stop there. We also need to develop more effective models of post-
employment supports that lead to career development and wage
progression, programs that sustain and keep families together, and
programs that enable low-income, non-custodial fathers to help their
families both financially and in non-financial ways.
Consequently, our efforts to reauthorize TANF build on our past
success and address current challenges by:
<bullet> strengthening the Federal-State partnership;
<bullet> requiring States to help every family they serve achieve
the greatest degree of self-sufficiency possible through a creative mix
of work and additional constructive activities;
<bullet> improving program performance and, therefore, the quality
of programs and services made available to families; and
<bullet> permitting States to integrate the various welfare and
workforce investment programs operating in their States.
I would like to offer some detail on each of these elements.
Strengthen the Federal-State Partnership
Although national caseloads are now less than half of what they
were when the TANF block grant was first established, we propose to
maintain the current level of support for TANF of $16.5 billion each
year for block grants to States and Tribes and an additional $319
million for annual Supplemental Grants to States that have experienced
high population growth and have historically low funding levels. This
will allow States to maintain investments they have made in supporting
families' transition from welfare to work, strengthening families, and
providing other benefits and services that support the goals of the
TANF program. It also will permit them to develop innovative programs
to address remaining challenges.
Other key policy changes that will increase State flexibility
include: eliminating limitations on services for the unemployed by
defining ``assistance'' so that rules tied to such spending will not
apply to child care, transportation, and other support services;
allowing States to designate and obligate ``rainy day funds''; and
revising current restrictions on funds carried-over from one year to
the next by allowing such funds to be spent on any service or benefit
that achieves a TANF purpose.
Maximize Self-Sufficiency Through Work
A key component of our reauthorization proposal is to maximize
self-sufficiency through work. States will be required over time to
make certain that the percentage of TANF recipients engaged in work and
productive activities grows and that the primary focus is on
participation in work--subsidized or unsubsidized employment, on-the-
job training, and supervised work experience or community service.
States also will be required to engage all TANF families with an adult
in self-sufficiency activities and they must develop, and regularly
monitor progress on, individual plans for each family that include
appropriate activities leading to self-sufficiency.
The current caseload reduction credit, the effect of which has been
the elimination of the participation rate requirement in most States,
will be phased out and replaced by an employment credit. The result of
these policy changes will be to reinstitute a meaningful work
participation rate requirement while increasing flexibility in how
States can achieve that standard.
Improve Program Performance
Under TANF, States have become great innovators. But, the shift in
focus to a work, and family support program has presented management
challenges. Therefore, our fourth reauthorization component highlights
improving program performance and accountability. For example, we
replace the current High Performance Bonus with a $100 million Bonus to
Reward Employment Achievement. Targeted on meeting the employment goals
of TANF, it will reward States for successful job placements, sustained
work, and wage growth.
Program Integration
For any organization to succeed, it must never stop asking how it
can do things better. Using the flexibility under programs such as TANF
and the One-Stop Career Center service delivery system under the
Workforce Investment Act (WIA), States have made great strides towards
transforming and integrating their public assistance programs into
innovative and comprehensive workforce investment programs. But, with
greater flexibility even more can be accomplished. The final key
element of our TANF proposal, therefore, seeks to enable far broader
State welfare and workforce program integration through the
establishment of new State program integration demonstrations. The
proposed demonstrations could modify all aspects of selected Federal
programs, including funding and program eligibility and reporting
rules, enabling States to design fully integrated welfare and workforce
development systems that could revolutionize service delivery.
I would like to turn now to child care, a key support service for
low-income families.
Child Care
Access to child care assistance can make a critical difference in
helping low-income families retain employment. Therefore, the
Administration remains committed to preserving the key aspects of the
child care program: parental choice, administrative flexibility for
States and Tribes, inclusion of faith-based and community-based
organizations, and development of literacy and other early learning
skills for children in care; while maintaining the underlying structure
and financing of these essential child care programs.
Our proposal supports maintaining the historically high level of
funding for child care, including $2.1 billion for the Child Care and
Development Block Grant and $2.7 billion for Child Care Entitlement--a
total of $4.8 billion for what is referred to as the Child Care and
Development Fund or CCDF. In addition, States continue to have the
flexibility to use TANF funds for child care both by transferring up to
30 percent of TANF funds to CCDF, and by spending additional TANF money
directly for child care. When TANF funds are considered, as well as
Head Start and other State and Federal funding sources, over $18
billion currently is available for child care and related services for
children.
Funding available through CCDF, TANF, and the Social Services Block
Grant will provide child care assistance to an estimated 2.2 million
children this year. This is a significant increase over the number
served just a few years ago; in 1998, about 1.8 million children
received subsidized care.
These substantial child care resources support our expectation that
all families will be fully engaged in work and other meaningful
activities by ensuring that safe, affordable child care is available
when necessary.
Other Elements of Welfare Reform
Although I have focused on the areas of primary interest to your
committee, I would be remiss if I did not briefly highlight other key
areas of our proposal that play a critical role in the well-being of
children, teenagers, and families. Indeed, we establish improving the
well-being of children as the overarching purpose of TANF.
In support of that overarching purpose, our proposal seeks to
improve child well-being through programs aimed at encouraging
responsible fatherhood and healthy marriages. By discontinuing the Out
of Wedlock Birth Reduction Bonus and redirecting part of the High
Performance Bonus Funding, we provide $200 million for programs aimed
at promoting family formation and healthy marriages. We also provide
$40 million in funding for the support of responsible fatherhood and
healthy marriage programs to reverse the rise in father absence and its
subsequent impact on children.
Further, because child support is a critical component of Federal
and State efforts to promote family self-sufficiency and child well-
being, we build on the success of the program to direct more support to
families, increase the amount of support collected, and increase
funding for the access and visitation program. If enacted, our child
support proposals will result in almost $3.4 billion in additional
financial support to families with a federal cost of only $52 million.
The third piece of our welfare reform strategy supports
reauthorization of the State Abstinence Education Program contained in
PRWORA. In 2000, there were almost 19 million new cases of sexually
transmitted diseases in the U.S. and, historically, about one-quarter
of these cases have been teenagers. We know that those teens who choose
to abstain from sex will not contact such diseases and will not become
pregnant. The State Abstinence Education Program helps people develop
inner strength, take charge of their lives, and direct their energies
to healthy and productive choices. The goal of abstinence education is
to encourage our Nation's youth to make the healthiest decisions for
themselves, and our approach links these programs to positive youth
development programs operated by community-based and faith-based
groups.
Conclusion
Mr. Chairman, the proposal I bring before you today contains many
different elements. What binds these fundamental elements together is
the desire to improve the lives of the families who otherwise would
become dependent on welfare. In his second inaugural address, the
President stated that in America's ideal of freedom, citizens find the
dignity and security of economic independence. He expressed the vision
of an ownership society, making every citizen an agent of his or her
own destiny. These ideals certainly fit the President's concept of
welfare reform as well as those embodied in HR 240. The Secretary and I
stand ready to work with you on the next steps to making economic
independence within the reach of America's neediest families. I would
be happy to answer any questions you have.
______
Chairman McKeon. Thank you, Mr. Secretary.
You know, in working on this welfare reform now for several
years, it seems in some of the debates like some people have
the idea that asking people to work is kind of a punishment,
but I have a different feeling. I think that giving people an
opportunity to work enhances their self-esteem, it does a lot
to build their character.
We had--in one of the visits in my district, I was visiting
a self-help center that helped mostly single women, single
mothers, find employment and find ways to enhance their living
conditions.
On the day I was visiting, they had a mother that had been
through the program come back and was talking to, it was about
eight or ten women in the room. She had been on welfare for
years.
She told of the problems. She couldn't afford shoes for her
children. She couldn't--she didn't get up and go to work. She
would send the kids off to school, but they would look at her
like, you know, ``What are you going to do all day, Mom?''
And she said after she had gone through this program and
gotten a job, she was doing quite well, and the testimony that
she gave to these other women of how now she could buy shoes
for her children, she could provide for her children, and the
looks that they gave her as she went off to work, you know,
was--they just all felt better about themselves. And she said,
``I will never, ever go back on welfare again.''
Well, hopefully, she won't have to, because I think the
program is there for people that need help in their lives when
they hit a bump in the road, but it's not ever--it was never
intended, I don't think, to be a lifelong standard of living.
It was to be a help.
She took advantage of that, and now is doing much, much
better, and hopefully those other women that were in that
program are now in that same situation.
I think welfare reform as we've worked on it has been a big
success in moving people from welfare to work, but some critics
commonly examine what kind of work and whether welfare reform
recipients are stuck in low-paying jobs. Do you see the job
advancement not just as job placement, but also as helping
people move from a job to a better job to a career? And do you
see that as an element of the TANF program? And how do you
think the bonus to reward employment achievement, how will that
assist in these efforts?
Mr. Horn. Well, first of all, I agree with you. I think
some of the best salespersons for welfare reform are recipients
themselves, or more precisely, former recipients.
One of the things we did before we developed the outlines
of the administration's welfare reform reauthorization proposal
is we did a series of listening sessions throughout the
country, and we were always impressed, both then Secretary
Thompson and myself, in hearing the stories of former
recipients, and the dignity that they found through the work
and employment that they achieved as a consequence of welfare
reform.
So those are stories that we heard again and again.
In order for someone to get a good job, basically they need
two things. They need a positive work history, and they need
skills. The problem with a lot of people who are trapped on
welfare is that they lack both of those things. They lack
skills and they lack a positive work history.
So what's central to the President's proposal is that we
ought to help people who are trapped on welfare acquire both a
positive work history and the skills they need to get a good
job.
Now, there's been a good deal of research that has looked
at the difference between education-first strategies and work-
first strategies, and what they have found is that work-first
strategies are more effective in getting people placed into
employment and long-term earnings growth than education-first
strategies, but the most effective strategy is a mixed
strategy, a strategy that both emphasizes going to work
quickly, but also wrapping around additional education and
training experiences.
And this is what's at the core of the President's proposal,
the idea that we would not take away from the work-first
approach, but we would encourage agencies to wrap around those
core work experiences additional education and training
experiences so they can develop the skills they need along with
the positive work history to get a good job.
And that's why the President says, ``Look, let's have 24
hours of core work, get people into jobs, have them build a
positive work history, but then don't ignore the rest of those
hours in that week, but rather, challenge the agency to put
that person in additional education and training experiences so
they can develop the skills to go along with their positive
work history so they can get even a better job in the future.
Now, you asked about the employment credit.
It's our feeling that what we ought to do is we ought to
provide an incentive to states not just to reduce caseloads,
but also to place people into jobs, and particularly jobs that
have the potential for wage growth.
And so the President's employment credit proposal is
designed to provide incentive for states to actually place
people into jobs as opposed to one that just simply provides an
incentive to reduce caseloads.
Chairman McKeon. Thank you very much.
Mr. Kildee.
Mr. Kildee. Thank you, Mr. Chairman.
Mr. Horn, thank you for your testimony this morning.
The President's budget did not propose cutting TANF or
CCDBG, but according to last week's budget action in Congress,
Republicans are planning to do just that.
How can we expect states to meet H.R. 240's new
requirements when they're going to have less money for the work
supports that have allowed families to get off welfare? Should
we follow the President's mark on TANF or the Budget
Committee's mark on TANF?
Mr. Horn. I am here representing the President's budget.
We think that it is important to maintain the commitment to
both the TANF program and the Child Care Development Fund.
Mr. Kildee. I'm encouraged by your response, and I would
certainly hope that the White House and yourself and the
President would encourage the Budget Committee to reconsider
their action on that, because I think it would be very, very
harmful to the program.
You know, we came together in 1996 in a bipartisan way, and
some of us had some great reluctance, but we did come together.
We wrote a bill that has the structural parts that can make the
system work, but there has to be appropriate funding and
adjustments must be made from time to time.
Let me ask you this. The administration's proposal suggests
that there will be more money for child care because states
will be allowed to transfer 50 percent, not 30 percent, from
TANF to CCDBG.
But Mark Greenberg, who will be testifying on the second
panel, says that this just isn't the case because the reserves
for most states are likely to be depleted within a few years
unless states make significant cuts in current level of
services. So isn't the administration's explanation more hope
than fact?
Mr. Horn. Well, first, one of the things that we would like
to do is to provide states with increased flexibility to spend
money in the areas that they feel there's a priority for them,
and that's one of the reasons we proposed raising the
transferability from the TANF program to the Child Care
Development Fund and also the Social Service Block Grant.
But one of the things I think it's important to keep in
mind is that if we pass a TANF reauthorization bill today that
incorporates a provision in both the President's plan and in
H.R. 240, if we pass that bill today, tomorrow states will have
nearly $2 billion in additional funds that become freed up to
spend for things like child care.
Why is that? Because right now, there's almost $2 billion
that is put in what are called carryover funds. Under the TANF
programs, as you know, if you don't spend all the money in 1
year, you get to carry it over from 1 year to the next.
Almost $2 billion nationally is in an unobligated balance
carried over from prior years in the TANF program.
The problem is that under current law that $2 billion can
only be spent for cash assistance, but the TANF program is no
longer primarily a cash assistance program. It's a work support
program.
So why is it that we have a law that says that if you put
money aside, the only way you can use that money in the future
is for cash assistance as opposed to other kinds of work
supports?
Well, under the President's proposal and H.R. 240, those
funds would be freed up to be used for a variety of purposes,
including child care.
So one of the consequences of not passing this bill is that
$2 billion stays locked up, unavailable for states to use for
child care.
So we do believe that there would be an immediate influx of
$2 billion nationally in additional funds which today cannot be
used for child care, but could be used for child care if we
pass this bill.
Mr. Kildee. The administration's own budget tables show
that 300,000 fewer children will have child care assistance by
2009. Where do you expect those children to get the assistance,
never mind that other children who are on waiting lists won't
get assistance?
Mr. Horn. I think it's important to keep in mind that the
budget tables presume that there is no increased spending in
discretionary budgets in the out years. That's just the way the
budget tables are presented.
But what we're proposing is the 2006 budget table of our
budget regarding how much money to spend in discretionary child
care. Decisions about how much money in discretionary child
care to spend in 2007 or 2008 or 2009 or 2010 have not been
made yet. Those will be made at those appropriate times, and
the President would then release his budget.
So when you say that there's a decrease of 300,000 children
in the budget tables, that's presuming no additional increase
in discretionary child care spending over the course of the
next 4 years, when those decisions have not yet been made.
Mr. Kildee. I see my time has expired. Thank you very much,
Mr. Horn.
Chairman McKeon. Thank you.
The Chair yields 5 minutes to the gentlelady from North
Carolina, Ms. Foxx.
Mrs. Foxx. Mr. Chairman, I was not expecting you to
recognize me at this point. Could I pass and come back?
Chairman McKeon. You bet.
Mrs. Foxx. Thank you.
Chairman McKeon. Next is Mr. Kuhl.
No questions.
Next is who? Mrs. Drake.
Mrs. Drake. Thank you, Mr. Chairman.
I'd just like to comment to you, Dr. Horn, that I know in
Virginia we really worked on the welfare to work, but in our
area, we really went to work with our social services and our
business community to bring everybody together to make sure
that there were jobs, that our business community understood,
our faith community, our social services, and our business
community, and those meetings still take place today, not quite
as frequently as they did in the early days.
But the biggest concern that I have deals with the work
component of it, because I do know people who participate in
that, and their biggest concern is they either can't find the
people who want to work or they don't come back.
And these businesses would give just about anything to have
people that they know would show up for work every day, and I'm
not talking about minimum-wage jobs, either.
So what I'm extremely concerned about is how we make sure
we support those people, get them back to work, and I never
understood why so many people seemed more concerned about
keeping a $300-a-month payment to a single mother on welfare
than to have her out in the job force earning $800 or $1,000 a
month.
So thank you for what you've done.
It's not really a question, but I really would like us to
focus on how we get more people into those roles so when I see
my friends back home, they aren't telling me that they can't
get people to fill these spots.
Chairman McKeon. Thank you.
The gentleman from Virginia, Mr. Scott.
Mr. Scott. Thank you, Mr. Chairman.
Dr. Horn, does a minimum-wage job plus the EITC get you out
of poverty?
Mr. Horn. No, it doesn't, but that is not the average wage
that someone leaving welfare gets.
The average wage, studies of welfare leavers suggests that
the initial wage that most people earn is between $7 and $8 an
hour, and that there is in fact significant wage progression
the longer that they stay in their jobs.
So--and with a $7 to $8-an-hour job working full-time,
full-year, combined with the earned income tax credit, you do
in fact lift most family configurations out of poverty.
Mr. Scott. Does the EITC plus a minimum-wage job plus child
support get you out of poverty?
Mr. Horn. Well, I suppose that would depend on how much
money you get from child support, but again, the critical thing
is, the assumption in your question seems to be that most of
those who leave welfare go to minimum-wage jobs, and that's not
the case.
Most people who leave welfare go to jobs where they're
being paid $7 to $8 an hour with significant wage progression
the longer they stay in those jobs.
Mr. Scott. Do you count food stamps as part of that? Are
food stamps part of that equation? I mean, if you get a
minimum-wage job--some people end up on a minimum-wage job,
whether it's almost or whatever, some do end up on a minimum-
wage job.
Do those in minimum wages get food stamps?
Mr. Horn. I'm sorry, say that again?
Mr. Scott. Do they get food stamps?
Mr. Horn. If you're on a minimum-wage job?
Mr. Scott. Right.
Mr. Horn. So long as you satisfy the income test and the
asset test, then you're eligible for food stamps.
Mr. Scott. One of the barriers to employment obviously is
child care, particularly if you have two children. The
arithmetic is real tight with one child, but with two children
the expenses just make the arithmetic very difficult. If we go
to a 40-hour week, that's going to make the situation even
worse than it is now.
What can we do to ensure that there's enough child care for
people that want to work?
It seems to me that if we provide that child care, not only
will the person be able to work, but you've created some jobs,
they're all domestic--I mean, it's not like, you know, some of
the money is floating out--that if you provide a lot of child
care, you'll be providing an opportunity for that person and
creating a lot of jobs in the child care industry.
What are we doing to make sure that there's adequate child
care, particularly if we're talking about going to 40 hours a
week?
Mr. Horn. Well, first of all, we share your view that the
goal of welfare reform ought not to be just to reduce the
caseloads, but to move families toward self-sufficiency, and
particularly to move them out of poverty.
The difficulty with the current system is that the emphasis
is on part-time work. The problem with part-time work is, at
relatively modest wages, it doesn't move you out of poverty. It
may earn you enough to get you out of a cash benefit in TANF,
but doesn't get you out of poverty. And so the question is, how
do we then move more people out of not just the welfare rolls,
but out of poverty?
The only way to do that is to have a strategy for helping
them get into full-time employment, because full-time
employment, as I've said, even at relatively low wages,
combined with the EITC, does move most family configurations
out of poverty.
Now, of course, child care is a very important service to
help support people in that endeavor, and as I said earlier,
one of the things, one of the consequences of passing this bill
now, is that we would immediately free up an additional $2
billion in unobligated carryover balances nationally that
states could then use for child care.
The longer we delay, the longer that $2 billion stays
locked up and not available for use for child care.
So if a state needs more money for child care to help
people get jobs and stay in jobs, then one of the ways that we
can do that is to pass this bill and unlock those unobligated
carryover balances.
Mr. Scott. The budget projects possible cuts--long-term
projections--possible cuts in Medicaid. What would that do to
someone's self-sufficiency getting off of welfare? Because a
lot of these jobs do not have health benefits.
Mr. Horn. Clearly, that--you know, health insurance and
health care is an important piece of helping families reach
self-sufficiency.
Now, I do not oversee the Medicaid program, and so I would
leave it to--
Mr. Scott. It would be your recommendation, I'd assume,
that we increase Medicaid for coverage for those that are on
the margin, near the minimum wage, or those that are getting
jobs without benefits, to help them stay self-sufficient,
because if we cut back--I know in Virginia, if you make more
than about six or $7,000 a year, you can't get on the Medicaid,
and it's kind of hard to be self-sufficient without some kind
of health insurance.
Mr. Horn. Well, under current law, and contained within the
President's proposal, there continues to be 12-month
transitional Medicaid benefits for those who earn enough when
they leave welfare--earn so much that they're no longer
eligible for Medicaid--and we do not propose to change that.
Mr. Scott. Have you done any study to see what happens to
people after the 12 months?
Mr. Horn. I'm not aware of a study that's looked at that.
Chairman McKeon. Thank you.
The gentleman from Nebraska, Mr. Osborne.
Mr. Osborne. Thank you, Mr. Chairman.
Dr. Horn, thank you for being here today.
Just a couple quick questions.
One is, what would you envision states could accomplish
with the state and local flexibility waiver you've outlined? Do
you see specific things that they might accomplish with that
procedure?
Mr. Horn. I'm very glad you asked that question, because I
think one of the overlooked pieces of the President's proposal
is the program integration waivers, and I happen to believe
that that is one of the most ambitious and revolutionary pieces
of the President's proposal, because when you get down to the
local level, whether you're talking about a service provider or
a client, the thing that drives them crazy is the fact that
they have to negotiate a maze of Federal programs that often
have conflicting eligibility and reporting requirements.
And so what a state could do under the President's proposal
for program integration waivers is, they could submit a
proposal to combine, to better align a number of Federal
programs at the local level so that people could--so that you
could create a seamless system of services for low-income
families, so they wouldn't have to negotiate this maze of
various different programs, so you could better align
eligibility criteria.
For example, you could better align work requirements. You
could develop, for the first time, an integrated information
technology system, so that you wouldn't have to have different
information systems for these various different programs.
So I think that is one of the most ambitious and
revolutionary aspects of the President's plan, and we hope that
it will be part of whatever bill is finally passed.
Mr. Osborne. And the second question. I understand that
marriage and family formation were included as pieces of the
reforming welfare in the 1996 legislation, yet we have seen
very little state activity in this area.
And I wondered if you could comment on this and speculate
as to why we haven't seen more progress; because it seems like
strengthening families is a critical issue.
Mr. Horn. And no one disagrees that strengthening families
is an important piece of welfare reform. No one disagrees that
a family starts off very disadvantaged if they have a child out
of wedlock when they're very young and before they've finished
their education.
The problem is that back in 1997, when faced with the
transition from an open-ended entitlement to a block grant,
states could rely upon a decade or so of experiments about how
to develop and implement welfare-to-work programs, but there
wasn't the corresponding research base as to how to go about
strengthening in the same way.
And so what states tended to do is they tended to focus on
the work aspects of the law and less so on the family formation
aspects of the law.
That's why the President has suggested that we ought to
take this opportunity to create two new funds, one a
competitive state grant program and the other a broad-based
research, demonstration, and evaluation and technical
assistance funding stream, that would provide funds to states
to innovate in the area of family formation, and to evaluate
those efforts so we could build that research base so that
states could then implement what we learn.
Because that's what we hear again and again from states.
It's not that they don't want to do something in this area.
They're just not sure exactly what to do in this area.
Now, that is changing. We over the last 3 years have been
doing some demonstration programs. We're learning things that
we didn't know just 3 years ago.
But there still is a need for, we believe, some separate
funding streams that would support the development of new
learning in this area.
Mr. Osborne. Thank you, Dr. Horn.
Mr. Chairman, I yield back.
Chairman McKeon. Thank you.
The gentleman from New York, Mr. Bishop.
Mr. Bishop. Thank you, Mr. Chairman.
And thank you, Dr. Horn, for your testimony.
You've said a great deal this morning that I think most
reasonable people would not only agree with but applaud. You've
said that we need--I believe I'm paraphrasing you--we need to
find policies that encourage career development and wage
progression. You've said that the goal of TANF ought to be to
move families toward self-sufficiency. You've said that we need
to develop strategies that will help people get skills to get a
good job and keep a good job.
I don't see how any reasonable person could disagree with
any of that.
But I find that at least it seems that one of the core
elements of the bill before us would take us in the opposite
direction of all of that, and that is the de-emphasis, if you
will, on vocational education. Current law allows up to a year
of vocational education to count toward the work requirement.
The bill before us eliminates that.
And I'm a firm believer in the transforming power of higher
education. Certainly the Federal Government has given its
support of higher education. And I find that incongruous, that
we would espouse all those goals, yet take away the means that
is now available to people to achieve those goals.
I'd be interested in how you reconcile that apparent
contradiction.
Mr. Horn. First, it's not correct to say that either the
President's proposal or H.R. 240 eliminates the ability to
enroll people in vocational education. What it does is, it
limits, in the case of the President's proposal, the use of
vocational education counting as work from twelve months to 3
months, and under H.R. 240, I believe it limits it to 4 months.
But in terms of the additional hours that you wrap around
the core work experience under both the President's proposal
and H.R. 240, you could continue to enroll people in vocational
education.
Mr. Bishop. If I may interrupt.
Is it your belief, then, that there are vocational
education programs that would provide people with sufficient
skills to get and hold a modest-paying job, I believe you put
it, that can be completed in 3 months, or four?
Mr. Horn. I believe that the important thing is to move
people quickly into work, while wrapping around that core work
experience additional education and training experiences.
We heard from Congresswoman Drake the concern that--from
employers--that it's hard for some employees--well, some
employees lack what employers call soft skills.
Mr. Bishop. But isn't it now the case that large numbers of
people leaving welfare have difficulty maintaining stable
employment and particularly have difficulty maintaining
employment that pays them above the poverty level? And if that
is the case, would not increased education be a vehicle to get
them beyond that status?
Mr. Horn. We're not against additional education and
training experiences. We just believe it should be wrapped
around core work experience.
Mr. Bishop. And I guess my question is, to you, is why do
you believe that if, in fact, the experience is that people are
leaving welfare and not having the capacity to hold onto jobs
that pay them a modest wage?
Mr. Horn. I don't think that the research would suggest
that what you say is necessarily so. The research that I've
seen suggests when you survey former welfare recipients
themselves, the majority say that they are better off after
having left welfare than when they were on welfare.
And again, we agree on the goal. We have no disagreement.
It's important for us to focus on not just reducing caseloads,
but moving people out of poverty and toward self-sufficiency.
In order to do that, you need two things.
Mr. Bishop. Let's stay on that for a second.
Mr. Horn. Yeah.
Mr. Bishop. Because I agree with you.
So is it the contention of either H.R. 240 or the President
that the current policy that allows for up to a year of
vocational ed to count, is it your contention that that policy
takes us away from that goal, and minimizing the vocational ed
requirement gets us close to that goal?
So in other words, the less vocational education we have,
the closer we are to the goal of providing a job that would pay
someone a modest wage?
Mr. Horn. I wouldn't put it exactly the way you just put
it.
Mr. Bishop. I'm sure you wouldn't.
Mr. Horn. I think that what has worked in welfare reform is
the focus on work, and that when you look at the research that
looks at education-first strategies versus work-first
strategies, work-first strategies out-perform education-first
strategies, but the most successful are those that have mixed
strategies, that may have some short-term, intensive training
up front, but then quickly moves people into jobs, and then
wraps around additional education and training experiences,
including vocational education.
Mr. Bishop. OK, thank you. I see my time has expired.
Thank you, Mr. Chairman.
Chairman McKeon. Mr. Price.
Mr. Price. Thank you, Mr. Chairman.
I appreciate the opportunity to see Dr. Horn once again.
I'm sorry I arrived late, and I hope that my questions are not
redundant.
I'm so pleased to have you before this Committee and
providing your expertise. I know your heart and your passion
for families and children, your history in working with the
National Fatherhood Initiative, and I commend you and
appreciate you being here today.
I'm somewhat confused, or amused, I guess, by folks who
will in essence say ``The sky is falling'' once again.
When we look back, and I was looking through your written
testimony, we've heard that leaving welfare and not holding
jobs is what is the order of the day.
In fact, if you look at the facts from our previous welfare
reform, the child poverty rates declined, 1.6 million fewer
children in poverty, overall the child poverty rates have
declined; poverty rates for African Americans have declined;
poverty rates for Hispanic children have declined.
What we have here is a success story upon which we need to
build, and I commend you for bringing forward your initiative.
I have a couple of specific questions that I'd like to ask.
The first relates to work requirements, and I apologize
again if this was covered.
But it's my understanding that the states have been allowed
to offset their work participation requirements through
reductions in their caseloads, and one of the unintended
consequences of that I believe to be diluting work
participation.
And so I would ask you about your stance, or the
administration's stance on the strengthening of work
requirements and how that's addressed in 240.
Mr. Horn. I don't think anyone in 1996 imagined that 5
years later we would see a nearly 60 percent decline in the
caseloads. Even the most wildly optimistic supporters of
welfare reform back in 1996 would never have predicted that
dramatic decline in the caseloads.
One of the consequences of that is, as you point out, the
caseload reduction credit has essentially eviscerated the work
participation requirement for most states.
The difficulty with that is when there's no longer any
pressure on the states to satisfy an ambitious work
participation rate, less people go to work, and that's what
we've been seeing the last 3 years, a declining percentage of
the caseload are fulfilling enough work to satisfy the work
participation rate, or work participation requirement.
And so one of the things that we feel very strongly about
is that we ought to re-emphasize work as the core reason why
welfare reform has been successful, and one way to get there is
to re-implement a meaningful work participation requirement on
the part of the states.
Mr. Price. And you believe that 240 addresses that
satisfactorily?
Mr. Horn. Absolutely. You know, what it does is, it moves
us toward a more ambitious work participation rate requirement
on the part of the states, because the longer that states
aren't challenged to meet an ambitious work participation rate,
the easier they fall back on the old ways of thinking of AFDC,
that somehow those who are on the rolls, despite all the
evidence to the contrary, are somehow more challenged, are
somehow more difficult to work with, and therefore are not
capable of going to work.
Mr. Price. Or want to be there?
Mr. Horn. Yes.
Mr. Price. Yeah. Absolutely. And I appreciate that.
The other point is the mandatory funding, which is set at
$1 billion over 5 years in 240. And my question relates to the
relationship between mandatory funding and the quality of the
program itself, and whether there's any virtue--do you see any
virtue or do you have any opinion about moving this program to
the discretionary side?
Mr. Horn. Well, I know there are many who would say that
they have more comfort when the dollars are on the mandatory
side than the discretionary side.
On the other hand, if you're a program manager at the local
level and you get a dollar for child care, it buys the same
amount of child care whether it came from a discretionary
pocket or a mandatory pocket.
Mr. Price. Do you believe there's any relationship between
quality and mandatory money?
Mr. Horn. I don't see how that would be the case.
Mr. Price. Thank you. Once again, I commend you for your
work.
I yield back.
Chairman McKeon. Thank you.
The gentlelady from California, Mrs. Davis.
Mrs. Davis. Thank you. Thank you, Mr. Chairman.
Thank you, Dr. Horn, for being here.
You mentioned how important it is to re-emphasize work, and
I agree with that, but we know that people can't go to work if
they don't have child care.
And you mentioned that $2 billion that's been accumulating.
Could you tell me a little more about that? How long has that
been accumulating? Why haven't those dollars been tapped
before?
Mr. Horn. One of the provisions of the original TANF bill,
as you know, is that if a state didn't spend all the money--
Mrs. Davis. Right.
Mr. Horn [continuing]. They could carry over into
subsequent years. One of the ideas was that if you needed less
money this year, you could put some money aside for when you
might need additional money because of an economic downturn.
The difficulty is that the current law does not allow
states to designate--
Mrs. Davis. Right.
Mr. Horn [continuing]. The so-called rainy day funds as
obligated, so they're in there as, and they are, technically,
unobligated funds. Once they're in a carryover status, whether
obligated or unobligated, they can only be used for--well, I'm
sorry. If they're unobligated funds in carryover status, they
can only be used for cash assistance. They can't be used for
work support, such as transportation, child care, and so forth.
And these funds have been accumulating over the last 7
years, and what we'd like to do is say let's give more--states
greater flexibility in the use of those funds, and if they feel
the need to use those funds for child care, great; if they feel
they need to use those funds--
Mrs. Davis. Would this be ongoing, then?
Mr. Horn. Would it be ongoing?
Mrs. Davis. So the $2 billion that's been accumulating is
available, but from that--once that $2 billion is used, if it
perhaps could be used for child care or whatever states would
want, are we going--are you suggesting that we basically
eliminate that and no longer have those funds accumulating in
that way, specifically targeted?
Mr. Horn. No, obviously, once those funds are depleted,
then they aren't there anymore.
However, the $2 billion is an understatement of what's
actually available. For example, in your state of California,
all of your carryover funds in the state of California, it's my
understanding, are designated as obligated. Why? Because you're
a county administered system.
Now, at the county level, they may not in fact be
obligated. At the county level, they may in fact not, they may
be unobligated carryover funds.
Mrs. Davis. I think my concern is, I'm happy to see that
there are some dollars that may be available to the states, but
whether this is more one-time funding or rather, it's ongoing
funding, because if it's more one-time funding, my guess--and I
want to ask you, too, about the unmet need that we have in
child care--is that it could be used quite quickly, and then we
perhaps have not built into the new, our new reauthorization
additional funds for child care.
Is that--would you say that's correct, or--
Mr. Horn. It's certainly correct that, once carryover funds
are depleted, then there are no more carryover funds.
Mrs. Davis. Right, right. So that we're talking about one-
time funds as opposed to ongoing dollars, and that's a concern
that I would have.
Mr. Horn. Although states would still have the ability to
put additional carryover funds, if they don't spend current
year dollars, back into their account.
One of the problems with not being able to designate so-
called rainy day funds as obligated is that several years ago,
Congress took a look at those large carryover balances and made
the assumption that states didn't need that money because, gee,
if they didn't spend it, they must not need it, and there were
some, some who wanted to go after those carryover funds and cut
those funds in order to achieve some deficit budget relief.
In fact, there were letters that were sent by Members of
Congress to states saying, ``Spend the money, don't leave it
there, spend the money.''
Mrs. Davis. Right.
Mr. Horn. And so what we're saying is that states ought to
have the ability to carry these funds over from year to year,
and then utilize them as they see fit in subsequent years.
Mrs. Davis. OK. And what would you suggest is the unmet
need in child care?
Mr. Horn. I'm not quite sure what the question is.
Mrs. Davis. In--whether it's in numbers, perhaps not
numbers, but percentages, if we--if states were to pass along a
lot of those dollars for child care, what then?
Do we have a sense of what that unmet need would be, and--
Mr. Horn. Well, it's a very--it's actually a very
complicated question to answer, because the way that we tend to
think about unmet need is we start with a single funding
source, and we ask how many people are eligible, how many
people get that benefit.
And we assume that people who aren't getting a benefit from
that funding source are not getting a benefit from any funding
source, and that's not true.
There's 900,000 kids, for example, who are in the Head
Start program, but we don't count them in the calculation of
``unmet need'' when it comes to child care.
Now, we also have to define the population. If we're
talking about TANF, there's no evidence that lack of child care
subsidies is a significant barrier to work for people who are
on TANF.
In fact, there's a provision in the law--no one suggests we
change it--that prohibits a state or local agency from
sanctioning a family who doesn't take a job, who's on TANF, if
child care is not available to them, and we're saying we don't
want to change that.
So we believe that there's, yes, that there is plenty of
money available to provide child care subsidies for those who
are TANF as they move off TANF and into employment.
Mrs. Davis. OK. My time has run out, but perhaps we can
follow up with that, because I think that we certainly have a
number of people that suggest to us that that's not the case.
Thank you.
Chairman McKeon. The gentlelady's time has expired.
The gentlelady from North Carolina, Ms. Foxx, has a
question.
Mrs. Foxx. Thank you, Dr. Horn, for your comments.
I have a question I'd like to ask you, and then I'd like to
make some comments about some of the things that have been
said.
If we took a hypothetical family of four, making $24,000,
that's never been on welfare, and compare that to a
hypothetical family of four that's been on welfare, that now
gets food stamps, that gets subsidized housing, that gets
Medicaid, that gets EITC, I'd like to compare the benefits that
that family that's never been on welfare gets to the family
that's been on welfare for many years and now is getting--they
get cash benefits through TANF for a period of time, they have
gotten free education for a period of time.
I'd really like to see a list of all of those benefits that
are given to the family that's been on welfare compared to the
family that's never been on welfare.
I think it would be an astounding thing for the American
people to see the difference in how we treat people who have
been on welfare compared with those who aren't, because there's
no end to the benefits that they get in terms of food stamps,
housing, Medicaid.
Is that correct? Those benefits will go on and on. Is that
correct?
Mr. Horn. Well, they don't go on and on. At some point, if
they earn enough money, then they lose eligibility for those
benefits.
Mrs. Foxx. Thanks.
Well, I'd like to see a little chart that shows where those
benefits begin and where they drop off, and compare that to a
family, again, making $24,000, showing what they pay in taxes.
And I just think that would be a very interesting piece to
see, because I think that the idea that somehow or another
people who have been on welfare never benefit anymore after
they stop drawing TANF funds is a very distorted picture.
The other thing, I guess, a couple of comments I'd want to
make.
I was a community college president before I was in the
legislature, and so I know a little bit about a lot of these
programs. And one of the concerns that I had as a community
college president was that there were so many programs out
there that were preparing to prepare to prepare to prepare to
commence to begin people getting into vocational education.
People could stay--and that's another chart I'd like to
see. How long can you get benefits that--from programs where
you're never in a vocational education program, but you're
preparing to get into a vocational education--I saw people
sometimes spend 2 years before they actually got into a program
that could benefit them in terms of real skills that they got,
and I'd love to see a chart that shows that. That may have
changed some over the time that I have not been directly in
education, but I would like to see that.
You mentioned a little bit about research, and I know a
little bit about that area, too, probably not enough. But one
of the things that I know most about research is that you can
put a teacher in with a class of children that are below
average, but tell that teacher that those people are above
average, and they will perform at the above average level. That
research, as I recall, is some of the best and most valid
research that we have.
Would you say that there is analogous research, or would we
think that adults might do the same kind--might exhibit the
same kind of behavior? If we tell people they're not going to
get a government handout any longer, but they have to go to
work, does that not produce different behavior?
Mr. Horn. Well, I think expectations have enormous effects
on behavior. As a child psychologist, I know that to be true.
I also think that was one of the most damaging things about
the old welfare system, is that we didn't believe that those on
welfare had the same human capacity to get and keep a job as
the rest of us, and we told them that, and we told them that so
frequently, they started to believe it.
And then one of the great successes about welfare reform is
that we changed that dynamic, and now we were challenging
welfare recipients to go get a job, and many of them will tell
you, they will say, ``You know, I was scared at first. I didn't
think I could do it. I've never actually had a job, or the jobs
I've had have always been very episodic and very spotty, but my
caseworker kept encouraging me and encouraging me, challenging
me to do it, and you know what? I got enormous satisfaction
from realizing I could do it.''
We changed the dynamic with welfare reform in 1996, and we
now think it's time for us to go to the next phase of welfare
reform that challenges people not just to get part-time jobs,
but to get full-time jobs, because if you have a part-time job
at relatively low wages, even with the earned income tax
credit, you may no longer qualify for a cash benefit, but
you're going to be poor.
The only way to escape poverty is to get a full-time job,
full-year, and when you do that, combined with the earned
income tax credit, you're not only not going to be on TANF cash
benefits anymore, you're also not going to be in poverty.
So for everybody who says, because we all agree that we
want to reduce poverty, we want to get people out of poverty--
and in fact, TANF has had some success in doing that; 1.6
million less kids in poverty than back in 1996. But for those
who say that the President's plan is the wrong plan, I say give
us another idea, then. I mean, give us another idea.
How is that we can get people out of poverty by continuing
to emphasize full-time work--I mean part-time work? We need to
move to full-time work emphasis and assume that welfare
recipients are able to move eventually into full-time work and
not assume that they are only capable of part-time work.
Chairman McKeon. The gentlelady's time has expired.
Ms. McCollum.
Ms. McCollum. Thank you, Mr. Chair.
I had the job as a state legislator serving on the Health
and Human Services Committee in Minnesota, implementing welfare
reform, and I think Minnesota had a program in place which was
nationally recognized, and we had identified, and I can get the
documentation, that access to education made a difference for
women in particular for not just being barely self-sufficient
but being self-sufficient, and weathering economic downturns.
We also were very fortunate, I think as a country, as we
move forward with this great experiment of making our
communities stronger, our country stronger by more people being
productive, of also having a really good economy kick in at the
same time.
And so I'm here to tell you that in Minnesota right now,
we're seeing the effects of the way our economy has stagnated,
because we have gone from 2001 to 2004, we have gone, with the
number of Minnesotans living in poverty now, from 6 percent to
almost 9 percent, and part of that has to do with the economic
downturn.
So some of these jobs are very sensitive to what is going
on in the economy.
One of the jobs in which women who had no education were by
and large placed in was retail, and I'll say I know quite a bit
about retail, because I did it for years, and I was a manager
there, and I know the starting salary for even someone working
full-time, if they're fortunate enough to get it in the retail
industry, is going to be $8 an hour, and it's not likely going
to come with very good health care benefits.
So I think we need to be careful when we talk about stories
that we've heard and that, without having hard evidence in
front of us and realizing each state is different in the way
that they've used funds and that.
In Minnesota, we decided that if a mother was going to go
to vocational school to learn how to become--work one of the
ladders up in the health care industry, that that was work,
that if she had two children to take care of and she went to
school and she did her homework and she worked part-time, quite
often at the hospital, that that was work, because that child
still needed to have with their homework and other things like
that, so we did count it in.
And I'm a little alarmed at the way everything is getting
all lumped together again, because I think you did point out
that some states really took the initiative.
Wisconsin, former Governor Tommy Thompson's state, took the
initiative and really had some success stories.
So what is a little disheartening to me here with what I
see the proposal is, here we go again with one-size-fits-all
from the Federal Government, and for those states who have been
the laboratories and have moved forward, and can document hard,
good, successes of people transitioning off, being able to
survive economic downturns, that we might start undoing the
very thing that has made successful families.
I'm a little concerned that I'm not seeing where--I want to
see these states that didn't heed the alarm, the warning, the
opportunity that was given to them by this Congress as some
states did, because when you start changing the work
qualifications and the way it counts, I wonder if then
Minnesota will have more people going into the retail industry
waiting at a counter, rather than going into the health care
industry, maybe starting out being a nursing assistant, and
then on their own time later on, after they're done going
through the TANF process, maybe two or 3 years later, after
they're self-sufficient and the children are a little older,
taking that LPN, then becoming an R.N.
We were developing a ladder, and education being a
foundation of that.
So the question that I have is, how are we going to make
sure that we don't undo some of the very successes that you
were talking about, in taking away some of the states'
flexibility in determining what they needed to provide in order
for their citizens to be successful families and successful
taxpayers?
Mr. Horn. Well, I think there's a great deal in both the
President's proposal and H.R. 240 that provides additional
flexibility to the states to determine how they're going to run
their programs.
There's--this is a complex piece of legislation, to be
sure, but there is a lot within the legislation that actually
increases the flexibility of the states. I've mentioned some
already.
The use of carryover funds for something other than just
cash assistance; I've mentioned the program integration waivers
that would provide enormous flexibility for states to structure
new, seamless systems of supports for low-income families.
Also, for the first time, states would be able to get
credit against the work participation rate under both the
President's proposal and H.R. 240 if the family met the core
work requirement but didn't get to the total number of hours.
Right now, if you are working 29 hours, under the current
law, 29 hours, the state gets zero credit for that individual
against their work participation rate.
Under the President's proposal and H.R. 240, you would get
a pro-rated amount of credit against your work participation
rate.
So I think there's a lot of flexibility that's provided in
the bill.
Ms. McCollum. Mr. Chair, I would--I put forth and I ask for
hard statistical information as to how--and you don't have to
provide it for all 50 states, but I would like to know how the
President's plan, how you see how it's going to impact the
success, the success that we've had in Minnesota.
And Mr. Chair, as the bill goes forward, I think we also
need to watch what's going on the bankruptcy bill, because one
of the goals of the President's plan here is collecting more
child support, and in the bankruptcy bill, child support comes
after debtor collection, is my understanding.
Chairman McKeon. The gentlelady's time has expired.
The gentleman from Massachusetts, Mr. Tierney.
Mr. Tierney. Thank you, Mr. Chairman.
Thank you, sir, for your testimony today.
You asked a moment ago for somebody to give you and the
President another idea, so I want to share with you, the Mass
Taxpayers' Foundation, which is basically a business-oriented
group in my state, together with the United Way, did a report,
``Background 2001/2002,'' and the idea they had was that the
work requirement should be filled with more education and
training, the problem being in Massachusetts, and I think a
number of other states, in order to have somebody who can
really come to work for you, their skill level and education
level has to be higher than it is, what is seen for most people
that are leaving welfare and getting ready to work on a work-
first type of basis.
So their recommendation clearly was that you could increase
the number of hours per week required, but that they supported,
in fact, the bill that Ms. Roukema from New Jersey and I had
put out, that would allow for education and training
opportunities to count for the first 24 months, and then in the
second 24 months, up to 16 hours, to count on that, and they
thought that that really would make a difference.
Part of that was based on their finding in the Census
Bureau's report that 39 percent of women without a high-school
education live in poverty. Only 17.6 percent of women with a
high-school diploma live in poverty, 8.5 percent of women with
some college live below the poverty line, but only 4 percent of
women with a 4-year college degree live in poverty at all.
So the contention, the conclusion was that obviously
education pays, it ought to count, and work on that.
So I think that was their idea, and I've heard all that
you've said about wrapping it around and whatever, but clearly,
they have their own experiences. They have their own needs in
the workforce, and their idea is quite different.
Do you have any rebuttal that you want to put out to the
numbers from the Census Bureau that show the significant rise
out of poverty from that? Is there some statistical basis that
you have?
Mr. Horn. We have at least a decade of experience using
randomized controlled experimental designs comparing education-
first strategies to work-first strategies. That's hard
evidence.
Mr. Tierney. I wish you'd share those with the Committee.
Mr. Horn. Absolutely.
Mr. Tierney. Because, you know, I don't think that, you
know, that they meet with the reality of what these studies
show, and I'd like to see them, just--
Mr. Horn. I'd be very happy to provide you with those
studies.
Mr. Tierney [continuing]. To see what they do on that.
You know, the Educational Testing Service says that at
least 70 percent of the jobs that are created are going to
require people with elevated skills and education levels, and I
just don't see throwing them into work-first, because I think
one of the things we all agree is that people can learn, and
that they will work, and they can get their skills up there.
So it sort of baffles me that we're not trying to make that
happen so that we serve two things--one, getting those people
on a sustainable course so they can really earn a decent
living, not just scrape by, and two, we've got a competitive
strategy that we need in this country while China and India and
other countries are eating our lunch.
And all the employers in New England and all in my area are
saying to me, you know, ``Work-first doesn't work for me
because they're not ready to go to work for my business. Go
down and tell the President and the people that ain't going to
work in our area, to get our types of products up to where
we're going to be able to sell back to China.''
You know, we got a situation where every six ships that
come in from China, five of them leave empty, because we're
just not making the kind of sophisticated product and new lines
or whatever that we can sell back.
So I'd appreciate it if you'd get me that information,
because I think we're going to see some disparities there.
Let me ask you a little bit about the waiver authority, the
state waiver authority on that. When Secretary Thompson was
here and testifying, we had a discussion, and he indicated that
the state waiver elimination that was in the bill was not an
important aspect of the President's plan and that he and the
President were negotiable on that. Both he and the President,
he said, support state flexibility.
In fact, we know, and I was just reading an editorial that
one of the Boston papers had on there about Secretary Thompson.
When he was Governor back in 1987, he got a waiver from the
Reagan administration and he experimented with a job training
program for teenage mothers on welfare. He had a number of
other experiments on that.
Do you still share, does the President still share the
comment of Secretary Thompson that they're not inclined to do
the waiver, that they agree with flexibility, that that's an
issue that they would talk about?
Mr. Horn. In terms of the program integration
demonstrations?
Mr. Tierney. No, they were basically for a flat-out state
waiver. You know, they were eliminating it in their bill, but
he was telling me when he was talking here that neither he nor
the President agreed to the elimination of the state waiver,
and that they would not be opposed to having the state waivers
be put back into the bill.
Mr. Horn. I misunderstood. So you're talking about the AFDC
waivers?
Mr. Tierney. Exactly.
Mr. Horn. And we do not believe that is necessary, to
extend, continue to extend AFDC waivers.
Mr. Tierney. The Secretary's position no longer is the
position, then? Because he sat in the chair where you're
sitting right now and said that as far as he was concerned, he
favored the waivers, he believed the President did support
state flexibility, and that they were not glued to, and indeed
were negotiable on that aspect.
Mr. Horn. Well, we believe that the program integration
waivers are far more helpful to states than continuing the AFDC
waivers.
Mr. Tierney. Obviously he didn't, so the position has
changed. In other words, you're no longer honed to Secretary
Thompson's position on that, there's a new game in town, and
that's changed?
Mr. Horn. As far as I'm aware, the administration's
position has been, and the proposal continues to not support
the extension of AFDC waivers.
Mr. Tierney. Well, I mean, he said what he said, and it's
on record. So that was the position then and now is now.
So thank you.
Chairman McKeon. The gentleman's time has expired.
The gentlelady from New York, Ms. McCarthy.
Mrs. McCarthy. Thank you, Mr. Chairman.
And I thank you for your testimony.
There are a couple things I want to kind of go over,
because I'm still a little bit fuzzy about it.
When you talk about jobs and moving up in the line, what
kind of jobs are you talking about? What are these, especially
the young women, single parents, what kind of jobs are they
moving into?
Mr. Horn. Well, what often happens is that the first job
that someone who has very little work history gets is in an
industry in which the standard is not full-time work, but part-
time work.
Mrs. McCarthy. Right.
Mr. Horn. And it is not impossible under the current law
for someone to earn enough in a part-time job to no longer
qualify for the TANF cash benefit.
Now, we don't think that that ought to be an occasion for
throwing a wild party.
Mrs. McCarthy. That's actually not what I'm talking about.
Are they getting a job as a secretary, or like in New York, are
they picking up garbage on the front lawn?
Mr. Horn. There's a variety of different jobs that they
get. They're often in the service industry, and in the service
industry, the jobs are often part-time, and we don't think we
ought to be satisfied with that.
Mrs. McCarthy. Most of those jobs actually don't move up.
Mr. Horn. That's right, because what happens is that you
need two things to get a good job. You need a positive work
history and you need skills. If one or both are missing, you're
not going to get a good full-time job.
And so if you go to an employer and you say, ``Look, I've
got this great Ph.D. and great skills, but I've never worked a
day in my life and I'm 45 years of age,'' that employee is
unlikely to say, ``Gee, just because you got a Ph.D., come work
for me.''
On the other hand, if you say, ``Look, I've worked for 20
years straight, but I don't have any computer skills,'' it's
unlikely you're going to get a job in a computer company.
What you need is you need both--
Mrs. McCarthy. I'm actually just--
Mr. Horn [continuing]. A work history and good skills.
Mrs. McCarthy. What I'm actually talking about is that
basically in New York, where I see these women that certainly
have wanted to work--I work with a number of homes that are
unwed mothers, they go out, they have to work, obviously, to be
in the program.
The only things that's good for these particular mothers is
basically the homes that they're in, they have volunteers that
watch the kids during the day, so they don't have to go to day
care.
Most of them end up going to school, whether in the
evening, you know, because we're trying to get them skills so
they can get out there and get decent jobs, because even in the
course of living, you know, and I can't speak for other states,
but if you're in New York, even if you're making--if you live
in my area--and believe me, we're mostly middle-income
families, middle and, you know, working poor, as I call them--
they can have two or three jobs at $7 and $8 an hour; you're
not going to find an apartment, you're not going to be able to
certainly move up the ladder.
Because I've been working with these young women for too
many years, and most of them, even when they graduate from the
program, come back at every opportunity just to get food.
So with that--but I'm going to go back to something else
again, because I know we have a confusion on the monies. When
you talk about, you know, the child care funding through the
Child Care Development Block Grant, you know, it's been frozen
technically since 2002, so when we start looking at the states
that you're saying have had a surplus, which they might have
had in the past, do we actually know if the states have a
surplus per se for 2004 to 2005?
Going with testimony of Mark Green, who is following
yourself on this panel, it has been suggested that
reauthorization could unlock as much as $2 billion in
unobligated prior year TANF funds, which currently would only
be used for assistance, which could be used for allowable TANF
purposes under the pending bill.
He supports the proposal to broaden allowances for the
reserve funds, but enacting this proposal would not free up
significant new resources for child care for two reasons.
First, the majority of the states have already effectively
used their obligated funds for child care by rearranging how
current and carryover funds are spent.
The second part, and I can't read the whole thing because
I'll run out of time, the last 3 years, states have spent more
in TANF-funded benefits and services than they have received in
their annual block grants and have drawn down prior year funds
to help pay for current service levels.
This strategy cannot be sustained, especially when the
question my colleague, Ms. Davis, had mentioned that this might
be a $2 billion increase and that would be it, then our states
are going to be in a problem.
And I guess I follow through with, you know, I spent some
time over the last break going to day care centers. They're
already getting hit.
Now, I'm lucky. I have some great day care centers around
me. Hard-working families middle-income families, and then they
take in maybe 30 or 40 families coming off welfare.
Oh, and I used up my time. Rats.
And they're going to have to let all these kids go, because
the state has already cut back on the funding, they're not
going to be able to stay in here, and per se, you know, here
you have an opportunity for these kids to be in, in my opinion,
good day cares versus just sticking them into a day care and
they're not getting an education or anything else like that.
Mr. Horn. Congresswoman, just to use your state as an
example, the state of New York has $239 million in unobligated
carryover balances, $239 million.
Mrs. McCarthy. When did that come through? What year is
that?
Mr. Horn. That's through September 30, 2004.
Mrs. McCarthy. September 30th?
Mr. Horn. 2004.
Mrs. McCarthy. Well, why aren't they using it, then?
Mr. Horn. Because they can't.
Mrs. McCarthy. Because they came down--it's not--
Mr. Horn. That's the problem.
Mrs. McCarthy. It's not getting down to the day care
centers.
Mr. Horn. They can't use it right now. That's the point.
The point is they cannot use that money, not a penny of it, for
child care.
Pass this bill, and New York tomorrow could use $239
million in additional funds for additional child care services.
Mrs. McCarthy. It doesn't make sense.
Chairman McKeon. The gentlelady's time has expired.
Mr. Secretary, thank you very much for your time, your
valuable testimony. We have been called now to vote. We will
excuse you and we will recess for 20 minutes, give us time to
vote and come back, and we'll begin the new panel.
Thank you very much.
Mr. Horn. Thank you.
[Recess.]
Chairman McKeon. The Subcommittee will come to order.
I apologize. One vote became two votes.
We're now ready for our second panel. I'll introduce the
panel.
First will be Mr. Curtis Austin, president and CEO of
Workforce Florida, which is Florida's State Workforce
Investment Board.
Mr. Austin is responsible for coordination of statewide
workforce initiatives.
Prior to holding this post, Mr. Austin served as staff in
the Florida Senate and was a faculty member in the College of
Communication at Florida State University.
Mr. Austin is a graduate of the great Brigham Young
University and attended the University of Southern California.
Next, we'll hear from Dr. Larry Mead, professor of politics
at New York University.
Dr. Mead teaches public policy in American government. He's
an expert on the problems of poverty and welfare in the United
States.
Among academics, he was the principal exponent of work
requirements in welfare, and is also a leading scholar of the
politics and implementation of welfare reform programs.
Dr. Mead has consulted with Federal, state, and local
governments in this country and with several countries abroad.
He received his Ph.D. in political science from Harvard
University.
Then we'll hear from Ms. Casandra Fallin, executive
director of the Baltimore City Child Care Resource Center.
Ms. Fallin oversees a variety of services designed to
enhance the quality, accessibility, and affordability of child
care in Baltimore City.
The center's services include resource and referral
counseling for parents and employers, recruitment and training
of child care providers, technical assistance to providers,
data collection, and community education designed to increase
public awareness of child care issues.
Her agency also is a delegated Head Start agency.
Prior to joining the center, Ms. Fallin was employed with
Maryland Department of Human Resources for more than 25 years.
She started at a very young age.
She also has served on numerous boards and committees that
address issues surrounding children and youth.
Finally, Mr. Mark Greenberg, director of policy for the
Center for Law and Social Policy.
Mr. Greenberg focuses on issues relating to Federal and
state welfare reform efforts with particular focus on job
programs, education and training, and child care issues.
He has written extensively on the implementation of Federal
welfare reform law and made presentations before numerous state
associations and advocacy groups.
Prior to joining CLASP, Mr. Greenberg worked for 10 years
in legal services programs.
Mr. Greenberg is a graduate of Harvard College and Harvard
Law School.
And I'll give you the same reminder I gave to the
Secretary, and to the Members. We have a 5-minute time limit.
The time, Mr. Austin, is yours.
STATEMENT OF CURTIS C. AUSTIN, PRESIDENT, WORKFORCE FLORIDA,
TALLAHASSEE, FL
Mr. Austin. Thank you, Mr. Chairman and Members of the
Committee.
Every morning in Africa, an antelope wakes up. It knows it
must outrun the fastest lion, or it will be killed; and every
morning in Africa, a lion wakes up and it knows that it must
run faster than the slowest antelope, or it will starve.
It doesn't matter whether you are a lion or an antelope.
When the suns up, you better be running.
Florida understands that when we started the great movement
toward welfare reform, that there were things which were of
life and death importance in many people's lives that we would
have to be able to deal with every day.
In 1994, the state was very frustrated with what they saw
was a myriad of different government entities that were dealing
with all sorts of these different parts.
One of those was the employment office. Employment became a
critical piece as we passed welfare reform. We said, how are we
going to be able get a person a job?
But we had already developed those offices in multiple
different places.
We developed them for veterans and for dislocated
homemakers, or dislocated workers, for youth, for all sorts of
different people, and we found out that at least in eight
different agencies in Florida, we were providing employment
services.
We were taking the capacity of the state, what little money
we did have in that, and developing that same capacity time and
time and time again, in different agencies.
Florida decided that we would no longer do that, that we
would consolidate those resources together.
And so the model that we developed, with the flexibility
that the Congress gave us, was to be able to focus around
functions of government, not upon funding streams.
The employment office became the key. We saw employment as
critical for self-sufficiency. We also saw it critical to be
able to eliminate the stigma that former welfare recipients
have, or to be able to teach dignity and respect.
We saw it as a place to be able to gather together all the
resources that might be able to help a person be successful.
The employment office was the front door to that
opportunity.
One of the other reasons why that was so critical is that
we looked at it as a way that we might be able to bring
together additional resources.
The workforce boards, which you all created also, in
another piece of legislation, brought together a whole series
of players.
I was very impressed in the first discussion that you had
earlier today about how often people assume that only the
resources that were available in this money were used for these
resources, that all the child care money happened to be here,
that all the employment money happened to be here.
On those workforce boards, you brought together education,
you brought together the workforce system, you brought together
the community-based organizations and the faith-based
organizations, you brought together other community-based
providers; and they have a whole lot of resources that also
address these exact same problems.
In another life, I sit--as a member of my church, I preside
over nine congregations in my church. That's not a paid
position. And I deal with as much welfare issues probably as
they do at the welfare office, every Thursday night.
Those resources were brought together at that board to be
able to say, how do we start to be able to solve problems?
Now, how much money you appropriate to us matters a lot in
Florida, but the fact of the matter is we have a problem to
deal with whether you appropriate lots or none.
And so we said, we need to be able to get onto the issue of
how do we fix that problem?
Since 2000, when the major restructuring took place in the
state of Florida, with the state-level dollars along, $100
million devoted to training, we've trained over 225,000 people
at the state level, but we had to get $400 million in matching
money. Most of it came from the private sector.
We didn't argue with the legislature or with the Congress
on how much money. We said, ``There are people who will benefit
from this. Let us go out and find that money.''
There was a lot of discussion earlier in the presentation
here about whether we have work-first or we train first. We
think it's a misnomer.
Everyone is right. If you get a lot of education, you're
going to be able to be less likely to be poor.
How do you get people to complete? The history of these
programs is not that they complete their programs if we start
to be able to train them first.
So what Florida has done, and one of the examples in my
written testimony gives you, is about what we call the career
advancement and retention challenge.
What happens if we look at all the people, not just those
who come in for cash assistance, but all who otherwise qualify
for these programs, and train them on the job with their
employer?
You'll see wage gains of over $10,000 a year, because there
is an incentive there for you to complete your training when
your boss is paying for part of your training, and when it's a
mandate for your job.
The issue isn't whether education is important or whether
work is important. Everyone agrees they're both important.
The issue is, how do you pair those two pieces together to
make sure a person completes that training and stays on the job
and is retained.
And when the business person becomes the partner, then all
of a sudden, the world starts to be able to change.
The Florida system was designed not by government, not by
social service advocates, but was designed by the business
community.
We held hearings throughout the state to be able to say how
can we fix the problems that are going on; how do we engage the
Chambers of Commerce; how do we get the Economic Development
Organizations; how do we in fact get the employers to make this
part of their assignment?
They all are the ones who designed the system and said,
``If it comes through an employment office, and I know the
person has got a skill set, we can deal with them.''
Skill sets mean, will you show up every day and will you
call if you can't come.
The employment office is given the resources to keep the
person coming. You don't have child support today, you don't
have--I mean child care money today, I can pay for your child
care. You don't have gas money today, here's a gas coupon. You
don't have a bus ticket, here's a bus ticket.
In those one-stop centers, the resources are placed there
to be able to make sure that there is no excuse that a person
can't go to a job.
Is it always easy? No. Are resources tight? Yes. But the
fact of the matter is, we have put together the business
leaders in the business community there and all of the
government communities there, and education, to be able to
solve that problem, and that's what the one-stop system is
about.
Those local one-stops, those local workforce boards have
been tasked specifically to be able to find those resources.
Are we finding, do we have continued problems in being able
to get everybody's needs met? Yes. But when we got rid of the
system of entitlements and started to say how do you invest
what resources you do back into the community, things changed.
Twenty-seven months of sustained job growth in Florida is a
testimony not only to the fact that we're a low-tax state, but
we're a state where there's been consensus.
In Florida, this isn't an R/D issue. It's not a Republican/
Democrat issue. Multiple administrations, Governor Chiles,
Governor Bush, both have supported it. It is not a rural or an
urban issue.
It is a way in which the state has been able to say, we are
going to stop arguing about what resources we are given and
give the business community the responsibility at the local
level to figure this out.
And so no longer do we spend our time arguing about what
you're going to give us, but how is the next process that will
be able to develop the economy in any given part of the state.
I think that the thing that frustrates us sometimes is that
there's a lot of bureaucracy in the back pieces of that, and I
think that frustrates you-all, also. I mean, most of you have
been in your own communities. You understand what your
intentions are as you pass a piece of legislation and what they
roll out to you sometimes are not the same.
If we can keep the focus on how we get to the end of the
road and those outcomes, and if you can continue to increase
the flexibility given to states, then those things can take
place.
But hold us strictly accountable for those outcomes. We
have no problem being held to strict accountability on
outcomes.
Florida has received $76 million in TANF bonuses, 48
million of that since the year 2000. All of it has come for
employment performance. None of it has come from putting people
on other forms of welfare, such as food stamps or Medicaid. We
are proud of that fact.
Are there people in the state who need those additional
resources? Yeah. But we are most proud of the fact that we've
been able to change the system so that it has become an
employment system, and not a system of public assistance.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Austin follows:]
Statement of Curtis C. Austin, President, Workforce Florida,
Tallahassee, FL
``Every morning in Africa, an antelope wakes up. It knows it
must outrun the fastest lion, or it will be killed. Every
morning in Africa, a lion wakes up. It knows that it must run
faster than the slowest antelope or it will starve. It doesn't
matter whether you are a lion or an antelope when the sun comes
up, you'd better be running.'' An African Proverb
Florida owes debts of gratitude to many for the success of welfare
reform. Foremost, it owes a business community that has stepped forward
and redesigned service delivery systems. The Chambers of Commerce and
Economic Development Organizations have changed the dynamic so that
Florida One-Stops more consistently provide skilled labor to the
employer community, rather than ask businesses to ``help us with our
problems'' based on civic responsibility. Florida appreciates the past
work of the Congress and the Department of Health and Human Services
for granting considerable flexibility to states to figure out how to
best implement welfare reform.
Many Florida lawmakers have assisted Governor Jeb Bush and the late
Governor Lawton Chiles in exercising leadership and utilizing the
flexibility provided by Washington, to create a demand driven, one-stop
system providing workforce services to the employer and employee
communities that today assists in maintaining Florida's vibrant
economy. That system has responded to periods of low unemployment, to
the difficulties of 9/11, and a season of unusual hurricane activity
with timely responses to business needs. In Florida, we know that the
27 months of sustained job growth that we have experienced is not just
because of workforce development, but we hope that we have been part of
the secret to success.
In the past five years, the public employment system in Florida has
trained more than 225,000 people to be more productive as they compete
in the 21st Century Economy. Workforce Florida has used state level
funds (federal and state funding) to target high skill, high wage
occupations, training over 127,000 employees with appropriations of
more than $100 million matched with more than $400 million in local and
private sector resources to truly partner with the business community
for success of all Floridians, including those who began as welfare
clients.
How is Florida ``Organized?''
Consolidated and Coordinated Administration
Policy makers in Florida began in the mid-1990's to rethink the
delivery of services to clients of its ``employment services.'' The
federal and state governments had, over a long period of time,
assembled significant resources to assist job seekers and businesses in
finding appropriate employment arrangements. As policy makers addressed
the needs of specific groups (welfare recipients, veterans, youth,
``dislocated workers,'' the disabled, youth ``aging-out'' from state
custody, ex-offenders, older workers, displaced homemakers, displaced
professionals, etc.), employment programs multiplied. Job training and
placement programs were housed in a variety of governmental agencies.
Many of these programs delivered the same services to differing and, at
times, the same clientele.
Most of the programs included: facilitated job search, development
of soft skills (dress and appearance, business etiquette, resume
construction and interviewing skills, etc.), access to job openings,
and some form of skills training. Eventually a consensus developed
among policy makers that it would be cheaper and more effective to
coordinate the administration and delivery of such services than to
duplicate them in multiple governmental agencies. Florida began to
abandon the organizational structures that had arisen around ``the
buckets of money'' and started to focus on the outcomes desired.
Recognizing that the key to success of these employment programs
was the ability of Florida employers to provide ``good jobs,'' Florida
turned to the business community to organize the system. Anticipating
changes at the national level, Florida began its primary restructuring
in 1996. The business community had little faith in government to
timely respond to business needs. In an attempt to orient the
bureaucracy to labor market needs and to keep focus on the business
customer, Florida launched public-private partnerships to spearhead its
economic development (Enterprise Florida, Inc.) and workforce
development (The Jobs and Education Partnership) efforts. Florida also
created a state level board, outside of the direct control of the state
agency traditionally tasked with welfare programs, to direct welfare
reform (The State WAGES--Work And Gain Economic Self-sufficiency--
Board). These partnerships crossed traditional agency lines and funding
streams, effectively narrowing the focus of all programs to the
employment goals shared by the policy makers that had created the
various funding streams.
The enactment of the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 allowed Florida to create a structure to
enable the transition of welfare recipients from the ``world of
government assistance'' to ``the world of work'' through one-stop
centers. The law ended low-income families' entitlement to cash
assistance and replaced it with a block grant to states. The Temporary
Assistance for Needy Families (TANF) block grant gives states broad
discretion and flexibility to reform, design and operate welfare
programs for families with children, but places a strong emphasis on
employment-oriented services by requiring families to meet work
requirements and states to meet work participation rates.
In 1998 Congress passed the Workforce Investment Act (WIA), which
overhauled the federally-funded system for job training and other
employment-related services for adults, dislocated workers, and youth.
WIA was intended to address concerns about the fragmentation of
federally-financed job training efforts, and the weak performance of
many programs financed under the Job Training Partnership Act. The
principal policy response to this fragmentation was the requirement
that every local workforce board create a ``one-stop'' delivery system
in which many local entities operating key federally-funded programs
must participate and in which individuals could more easily access
programs and services regardless of funding source or administering
agency.
TANF was not one of the partners federally mandated to participate
in the new one-stop system. However, the flexibility in the 1996 TANF
legislation allowed states to define service delivery models that best
met the needs of families in each state. Florida used that flexibility
in setting up the workforce one-stop system with the goal of meeting
the needs of job seekers, incumbent workers, and employers. The one-
stops, among their other responsibilities were tasked with providing
employment services to those families with work requirements under
TANF.
Florida further refined its model with the passage of the Florida
Workforce Innovation Act of 2000. Consolidation of many of the
workforce funding streams was completed and Workforce Florida, Inc.
(the designated state workforce development board) was born from a
merger of The Jobs and Education Partnership and the State WAGES Board.
The Legislature created Workforce Florida, a private not-for-profit
corporation, and designated it as the principal workforce policy and
oversight organization for the state. Workforce Florida's purpose is to
design and implement strategies that help Floridians enter, remain in,
and advance in the workplace. The Agency for Workforce Innovation was
also created by the legislature as Workforce Florida's administrative
agency, and tasked to insure that the state appropriately administers
federal and state workforce funding by administering the plans,
policies and oversight responsibilities of Workforce Florida.
Local Delivery of Services
Florida's integrated workforce system includes a variety of
employment and training programs, some of which are funded through the
state's TANF block grant. In addition to WIA and TANF funded employment
services, the workforce one-stop system also includes Wagner-Peyser
services, Food Stamp Employment and Training services, Veterans
employment services and resources for filing unemployment claims
telephonically or via the internet. The workforce one-stop system is no
longer the welfare office, the unemployment office or the job training
office--but rather the public employment center where all services that
support employment including labor market information, available job
listings, relevant training opportunities, work supports, career
counseling and assessment to identify and address barriers to
employment are provided.
Florida has 24 regional workforce boards which oversee the delivery
of services to families and all Floridians through the workforce one-
stop system. These regional boards work very closely with local
Department of Children and Families staff who deliver eligibility
determination for cash assistance; with local Partnership for School
Readiness staff who oversee child care services; and with local
economic development organizations who facilitate partnerships with
local businesses. These organizations work with other local partners to
ensure that programs and services do meet the needs of local families
and local businesses; that resources are maximally leveraged; and that
duplicative administrative costs are eliminated.
What Key Principles Guide the System?
The front door to the system is the employment center, not the
welfare center. The workforce system strongly embraces the concept that
is articulated in Chapter 445, Florida Statutes, of breaking the
welfare culture from the very first contact with the system. The
ability to direct individuals to employment activities rather than just
sign them up for cash assistance is the way the system was conceived
and codified in law. Florida's ``work first'' philosophy is rooted that
many of the cash assistance clients were (and are) single mothers who
have not been fully prepared for the working world. It was reasoned
that many of the skills that welfare clients would need to be self-
sufficient (showing up on time, calling if you were sick, etc.) would
best be taught in the workplace, by trial and error. While some
bemoaned the initial ``churning'' as employees found and lost
employment, that process was critical for full transition to self-
sufficiency. It was not unusual for employees to be hired into a series
of part-time jobs (sometimes simultaneously) and even sometimes
multiple full-time jobs until they found a ``permanent'' position.
The workforce system partners support the concept that the dignity
of former welfare recipients is advanced by being productive
participants in the state's job market. One-stops have been empowered
to do what is necessary to reinforce the value of work. Florida
authorizes the one-stops to divert potential clients from cash
assistance, if providing resources (bus tickets, gas coupons, child
care, etc.) can keep an employee working, rather than signing up for
cash assistance.
When cash assistance is given, it must be as an aide to employment
and self-sufficiency. All other public assistance (food stamps, child
care, Medicaid and other health assistance programs, public housing,
etc.) were all viewed in the same light. All state welfare programs
became part of the employment process which enabled the former welfare
client to become more and more self-sufficient. The system was designed
with incentives and penalties to motivate those receiving cash
assistance to move off of welfare. Those who chose employment were
better off each step of the way. Sliding scales for assistance allowed
them to have greater and greater resources.
Employers should not be confused or burdened by competing
government funded employment agencies. The current system design for
delivery of services was generated from a Florida Senate project that
solicited input from all relevant parties, including the employers of
Florida. The employer community validated the value in consolidating
the service delivery system for welfare clients, dislocated workers and
other WIA funded clients, veterans and disabled veterans and the public
labor market exchange functions (Wagner/Peyser) into the current one-
stop system. Business does not want to deal with multiple offices
chasing the same employment opportunities, and wants one interface for
all employer services. Importantly, the workforce system now is focused
on meeting the needs not only of TANF eligible clients, but also of the
business customers whose partnerships are critical for offering
opportunities for career advancement and for creating jobs.
Outcomes matter. Whether assessing the progress of welfare
transition clients, service providers, or the regional workforce boards
that oversee the one-stop system, attention to outcomes has changed
Florida's approach to employment programs, including those for TANF
clients.
How has the system worked?
High Performance Related to Case Reduction
Florida has consistently been ranked in the top four states
nationally relative to caseload reduction. As of the end of February,
2005, the number of Families containing an Adult that were receiving
Cash Assistance in Florida was 20,968, a 86% reduction from the 152,436
cases as of the time TANF was enacted in 1996.
High Performance Related to Employment
Florida's welfare transition achievements include not only ranking
in the top four nationally in caseload reduction, but also ranking
among the top performers in work-related measures--job entry rate, job
retention rate, earnings gain rate; and in annual improvement in those
work-related measures--increase in job entry rate, increase in job
retention rate and increase in earnings gain rate. Over the last six
years (beginning in 1998) Florida has earned approximately $73 million
dollars in TANF High Performance Bonus (HPB) awards for outcomes in the
work-related measures. Florida earned an additional $3 million related
to Family Formation and Stability.
Approximately $48 million of the $76 million high performance bonus
dollars noted above have been earned for years 2001, 2002, and 2003
which are years after Florida implemented the integrated TANF/WIA
workforce one-stop system. The Department of Health and Human Services
awarded Florida $28 million for 2001 ($10 million more than any other
state), nearly $10 million for 2002 (Florida ranked 4th in the nation
in work-related measures) and $10.2 million for 2003 (Florida ranked
1st in increased job entry rate).
Focusing on ``work first,'' the Florida workforce system has
successfully placed welfare clients onto the first rungs of career
ladders that are allowing them to enjoy, in many instances for the
first time, the rewards of productive employment. Florida used the
flexibility in the existing TANF Legislation to conduct demonstration
projects identifying promising service delivery models for post-
employment services to be replicated throughout the state. Two of the
successful programs that started with ``work first'' and proceeded to
``train next'' provide examples of Florida's approach.
Passport to Economic Progress (Passport)
Working One-on-One with Individual
The Passport to Economic Progress is a post-employment program and
clients must be employed and earning less than 150% of the Florida
poverty level to participate. Passport was designed to work with
individual employees to provide incentives to gain skills to increase
their salaries. Passport offers performance based incentive bonuses
contingent upon achieving specific benchmarks prescribed in the
client's self-sufficiency plan. The self-sufficiency plan is developed
by the client in consultation with the career manager, is based on her/
his objectives to become self-sufficient and emphasizes the importance
of individual responsibility. The Legislature intended to create
through this Act a demonstration program for the provision of such
incentives and services with the goal of developing a model for the
continued evolution and enhancement of welfare-reform efforts in
Florida.
Outcome data compares the wages of Passport clients from the 1st
quarter of the program year to the 4th quarter of the year and also to
the wages of the control group (employed clients who had exited cash
assistance for a job during the same time period as the Passport
program but were not enrolled in the post-employment Passport program).
There is also data that compares the employment rates for the Passport
group to the control group.
<bullet> During the 1st quarter of the Passport 03-04 program
year, passport clients were earning median quarterly wages of $2,527
(annualized wages of $10,108). These same clients were earning median
quarterly wages of $3,087 (annualized wages of $12,348) in the fourth
quarter of the program year, a 22% gain in earnings over the year.
Clients in the control group earned median quarterly wages of $2,595
(annualized wages of $10,380).
<bullet> During the 4th quarter of the Passport 03-04 program--82%
of Passport clients retained employment compared with 49% of the
control group.
Career Advancement and Retention Challenge
Working with Employers
In many of its employment training programs, Florida decided not to
treat those who had applied for cash assistance differently from those
who did not apply, but would have qualified. In many of the employment
programs, former clients and those most likely to become cash
assistance clients (low-income and food stamp clients) were also
include in training initiatives.
The CARC project is a program designed to train those who have
obtained employment, but are not yet self-sufficient. Participants must
be employed and earning less than 200% of the Florida poverty level.
CARC projects are predicated on partnerships among local employers,
TANF eligible employees, training providers and the workforce one-stop
system. Regional workforce boards work with employers to identify
innovative approaches to achieving career advancement and job retention
for TANF-eligible, employed workers.
One of the keys to this approach is that it allows training for all
qualified employees at a given worksite, rather than waiting for such
workers to contact the one-stop individually. Such innovative
approaches may include, but are not limited to creative, non-
traditional training programs, support services and mentoring services.
The Regional workforce board staff work with the employer and employees
to plan a training program that considers the employees' regular work
schedules, the needs of the employer, opportunities for earnings gains
and advancement upon completion of the program and what leveraged
dollars or in-kind contributions will be made by the employer or
training provider. The program emphasizes measurable outcomes for the
employees and employer.
Outcome data compares the wages of CARC clients from a defined pre-
program period to defined post-program period and also to the wages of
the control group (employed clients who had exited cash assistance for
a job during the same time period as the CARC program but were not
enrolled in the post-employment CARC program). There is also data that
compares the percentage of CARC clients retaining employment to the
control group.
<bullet> During the second and third quarters preceding the
beginning of the CARC 02-03 Program--CARC clients were earning median
quarterly wages of $5,081 ($20,324 annualized). During the second and
third quarters following the end of the CARC 02-03 Program--CARC
clients were earning median quarterly wages of $7,732 ($30,928
annualized). Earnings increased approximately 52% from pre-program to
post-program. This compares with the control group's median quarterly
wages of $3,064 ($12,256 annualized).
<bullet> During the first quarter following the CARC program 82%
of the CARC clients retained employment and 82% retained employment
during the second and third quarters following the CARC Program. During
the same time period, fiscal year 02-03--64% of the control group were
employed and earning median quarterly wages of $3,064.
Recommendations for TANF Reauthorization
TANF Reauthorization should build on the existing flexibility in
the current TANF legislation. Currently states have flexibility to
design welfare service delivery models and discretion to use TANF funds
for non-cash services such as child care, transportation and employment
services. These services should continue to be available to not only
families receiving monthly cash assistance checks but also to families
who have exited the cash assistance program due to employment, working
poor families who have never received cash assistance but are defined
as ``needy'' in that they are earning less than 200% of the FPL for
their family configuration and for non-custodial parents. The focus of
the TANF program services must be on helping all needy families move
along the continuum to self sufficiency.
Additional flexibility would include the following:
<bullet> Fully funding the TANF block grant and supplemental
grants to states--I would note here that even though Florida's TANF
caseload is currently approximately 21,000 families with an adult
subject to time-limits and work activities--we actually provided
employment-related services to approximately 140,000 TANF eligible
families during fiscal year 03-04;
<bullet> Increasing state flexibility in the use of funds and
allowing states to designate a contingency reserve with unobligated
funds--We learned first hand during the 2004 hurricane season the
criticality of being able to respond quickly to conditions that can
change from a situation in some localities of near full-employment,
with a desperate need for additional workers, to one of significant
lay-offs. Priority services and priority programs may change over-
night. Today, changes occur quickly and must be responded to quickly.
The introduction of a major employer or the loss of the same can also
dramatically change the economic situation. The flexibility of the TANF
block grant has allowed us to organize our local operations to respond
swiftly and in the targeted locations to changing local conditions. The
integrated TANF/WIA service delivery model in Florida has also proved
beneficial in allowing us to be responsive to changing local
conditions;
<bullet> Unlocking surplus funds that currently can be used only
to pay benefits (not for child care, job search, transportation,
training, etc.)--These funds can be used to provide employment related
services to thousands of TANF eligible Florida families to help them
achieve self-sufficiency;
<bullet> Allowing spending on all families, reducing out-of-
wedlock births and family formation to count toward the MOE
requirement--This will recognize the importance of providing and
measuring outcomes of these programs if they can be counted toward the
MOE requirement; and
<bullet> Providing a framework for state program integration
demonstrations--Florida welcomes the opportunity to further integrate
our workforce one-stop system. Florida has taken the increased freedom
granted under the Workforce Investment Act to begin an outreach to
business. Building a skilled workforce is one of the most urgent
challenges to ensuring Florida's economic competitiveness, particularly
for our value-added targeted industries statewide. Engaging the
business community not only insures jobs for all job-seekers, but
assists in the state's aggressive pursuit of other sources of funds for
existing training programs and potential expansion of services.
We look forward to the new TANF Legislation offering even greater
flexibility as we move into this next phase of welfare reform and build
on our successes.
TANF Reauthorization should first focus on outcomes. Florida
strongly encourages the model of demanding high performance and
providing flexibility in obtaining the performance goals. If processes
are dictated, the resources any given state can use to maximize
performance are significantly decreased. I would urge you to make clear
your desired outcomes, and then let the states and local areas find a
way to accomplish those goals taking advantage of local conditions. We
have used an incentive award system in Florida for four years, similar
to the work measures in the TANF High Performance Bonus Awards,
rewarding local regions with additional resources for a job well done.
It has been one of the great drivers for system-wide performance
improvement.
The outcomes must answer these basic questions:
1. After all is said and done, did the person get a job?
2. How valuable are the skills that person has acquired in the
market place? (or How much did he or she make?)
3. Have they been able to retain their employment? and
4. How much is this costing us?
Florida has now tracked these same measures for three years.
Combining effectiveness measures and efficiency measures allows
assessment of a system and allows comparison with other service
delivery systems. These questions are reasonable and should allow the
federal government to assess whether the funds are being properly
invested in communities or not. They allow individual states to add
additional measures to ensure that the needs of a particular state are
addressed.
While we have heard concern that measuring efficiency can divert
attention from the hardest to serve, that has not been our experience
in Florida. Florida's look at ``efficiency'' has revealed the
duplicative administration of the public workforce system. It is not
unusual for administrators in one part of the system, to be frustrated
and purchase duplicative services elsewhere, rather than fix what seems
to be broken. For example, when labor market information is provided in
less than friendly format to businesses, purchasing the same type of
data a second time--rather than fix the service already being provided
by the system--should not be the first solution. Measures of efficiency
are important because service costs are driven lower--not with
decreased services for those who need them, but by forcing the
bureaucracy to work for economies of scale in purchasing and
partnership in procuring services.
<bullet> We support the concept of the Employment Achievement
Bonus as this focuses on essential work measures.
<bullet> We support the concept of an employment credit that
includes diversion as this provides us with the flexibility to design
our local programs to meet the needs of job seekers and achieve the
required participation rate.
<bullet> We support the concept of allowing states to claim
partial credit for part-time work as this will allow us to design
programs to better serve clients with specific barriers and still
achieve the required participation rate.
Again, we believe that building on the existing flexibility in the
current TANF Legislation and focusing on outcomes will allow us to
continue integrating our public assistance programs into our
comprehensive workforce one-stop system. The public workforce system is
designed to direct entry level employees not only to new jobs, but to
increased skills to insure that each worker who obtains employment can
become self-sufficient. The reauthorization of TANF Legislation will
help us provide thousands of Florida families with accessible programs
and services that will allow them to reach the ultimate goal of self-
sufficiency. As the House addresses reauthorization, I would hope the
elements I have discussed are considered so that our integrated
workforce one-stop system can successfully transition into this next
phase of welfare reform.
TANF reauthorization must not lose its focus on work. States are
subject to fiscal penalties for, among other reasons, failing to meet
work participation rates, failing to implement the five year time-
limit, and failure to impose sanctions on those who do not comply with
program requirements. Florida has consistently supported these
requirements. Because of its caseload reduction, Florida has been, in
effect, exempt from participation rate requirement for many years.
Nevertheless, while we believe a sense of fairness requires
consideration of past performance, the additional pressure to continue
to transition welfare recipients to self-sufficient workers is welcomed
by the policy structure in Florida.
As the outcomes from our post-employment programs indicate,
continuing to work with employees and employers to address skills
upgrade training benefits both the worker and the employer. We submit
that a strong pre-employment and post-employment service delivery model
is essential to achieving the overarching goal of self-sufficiency for
Florida's families. ``Work'' is the key to self-sufficiency and should
be celebrated by all who work in this system.
In conclusion, I would suggest that the focus on work not only
assists in good economic times, but also in slower periods. As Florida
discovered when the economy softened post 9/11, an additional safety
net is created by the employment system for low-income Americans.
Florida saw relatively little change in the cash assistance caseload,
as the Unemployment Compensation system was the first level of safety
net for the thousands who had a record of employment. Such safety nets
are critical if we know that every day we must ``wake up running.''
______
Chairman McKeon. Thank you.
Dr. Mead.
STATEMENT OF LAWRENCE M. MEAD, PROFESSOR OF POLITICS, NEW YORK
UNIVERSITY, NEW YORK, NY
Mr. Mead. Thank you, Mr. Chairman.
I'm very pleased to be here.
I've been researching welfare and welfare reform for almost
30 years, and I think I've learned a little about it. I'll be
speaking today in part on the basis of a book I published last
year on welfare reform in Wisconsin, which involves other
states, as well.
Other witnesses have commented on how successful TANF has
been. The thing that I want to emphasize is that that success
depends crucially on tying welfare very closely to employment,
so that those who go on and or apply for aid have to do
something immediately to deal with employment.
The chief question facing reauthorization is how to bring
that link tighter than it's been, and in this respect, I want
to mention a set of issues which others have barely touched on
today, and these have to do with a series of loopholes in the
old law, in the way TANF is written currently.
The effect of these rules has been to exclude an important
part of the caseload from having to meet the work requirements.
One of those ways, the only ones that's been mentioned, is
the caseload fall credit, which has the effect of reducing the
standards that states have to meet for the work participation
rate.
The current bill and the administration propose a
replacement credit of various kinds. I would not. I would
simply eliminate this credit and hold the states accountable
for the 50 percent rate which is in the current law, phased in
over several years.
It's important to seek simplicity and clarity, to make
clear what the standards are.
The trouble with the current bill's approach is that it
ostensibly raises the threshold to 70 percent, but then there
are various credits and offsets and exclusions which affect--
have the effect of reducing the operative rate to something
like the 50 percent we already have, so I would eliminate the
credits. I would simply go to the 50 percent rate and enforce
it more clearly.
In addition to the caseload fall credit, there's the
problem of partial sanctions.
The current law allows states to exclude simply the adult
from the grant in the case of noncooperation with the work
test. That's a serious problem in California and New York, the
states with the largest caseloads.
In New York, it's virtually impossible to apply the work
test seriously, because something like 40 percent of the cases,
or 30 percent, are outside--they're in sanction status, and
therefore, in effect, outside the work test.
A further issue is child-only cases. Currently, 37 percent
of the caseload is child-only. These cases escape the work
requirements and the time limits.
In addition to this, these programs are TANF-funded. In
addition, some states have separate state programs which they
use to put cases that are at the time limit or which have been
sanctioned. These separate state programs are not TANF-funded,
but they have the effect of excluding important parts of the
caseload.
This Committee should address how to bring the state-only
programs and the child-only cases under the work test. I think
there are a number of ways to do this, and I discuss this in my
testimony.
Probably the most feasible might be simply to include these
programs in the denominator of the calculation for a state's
participation rate, so the states will have some incentive to
restrict the number of cases going into these categories.
Without this, unless we address the child-only issue in
particular, you do not have a complete work test intent.
Now, alongside these exclusions of various elements of the
caseload, I think the issues the committee has addressed are
important, but less important.
The committee proposes that there be enhancements in the
percentage of participation rate that a state has to achieve,
and also the number of required hours be raised from 30 or 25
to 40.
I recommend against these steps. I think that it's
infeasible as a practical matter to expect to see 70 percent
participation without the various offsets and exclusions and so
on, which really make it 50 percent. Let's be honest. Let's go
for the 50 percent and enforce that, and not claim we're doing
something more.
And the same with the 40 hours. We can't do that as a
practical matter. We can do 30 hours.
I base this on the Wisconsin experience. This state has
extraordinary administration. They rebuilt welfare from the
ground up. It's the most unusual performance, really, in
welfare reform that the Nation has seen.
This state does not achieve 70 percent. This state does not
achieve 40 hours. If this state can't do it, nobody can do it.
Now, I agree with the Secretary's statement that we have to
seek full-time jobs, but that's a different point from
mandating a certain number of hours for the state. What TANF
initially does is mandate the state, sets standards for the
state, and the state then sets standards for the caseload.
If we really enforce the 50 percent and the 30 hours,
rather than claim to do it and then do something--claim to do
more and then do something less, if we really enforce the 50
percent and 30 hours, we will transform welfare, particularly
if we also eliminate these exclusions, and especially the
partial sanction and the child-only cases.
It's like tax reform. The goal should be to broaden the
base, and if you broaden the base, then you can actually limit
how much you have to impose on the people that you are taxing.
Same thing here. Broaden the base of the work test. Bring
in all these excluded groups. And then you won't have to go
beyond 50 percent or 30 hours.
[The prepared statement of Mr. Mead follows:]
Statement of Lawrence M. Mead, Professor of Politics, New York
University, New York, NY
I am a Professor of Politics at New York University and a longtime
student of welfare reform. I've written several books on the subject,
most recently a study of welfare reform in Wisconsin.\1\ I appreciate
this chance to testify on the work and child care provisions of H.R.
240, which would reauthorize Temporary Assistance for Needy Families(
TANF).
---------------------------------------------------------------------------
\1\ Lawrence M. Mead, Beyond Entitlement: The Social Obligations of
Citizenship (New York: Free Press, 1986); idem, The New Politics of
Poverty: The Nonworking Poor in America (New York: Basic Books, 1992);
idem, ed., The New Paternalism: Supervisory Approaches to Poverty
(Washington, DC: Brookings, 1997); idem, Government Matters: Welfare
Reform in Wisconsin (Princeton: Princeton University Press, 2004).
---------------------------------------------------------------------------
The Success of Reform
Welfare reform is unquestionably a success. Since their height in
1994, the rolls in AFDC/TANF have plummeted by over 60 percent. The
overall poverty rate fell from 14.5 percent in 1994 to 11.3 percent in
2000, before rising to 12.5 percent in 2003 due to the recent
recession. For children, the equivalent figures are 21.8, 16.2, and
17.6 percent.\2\ These gains are less dramatic than the caseload fall
but still notable. Other research establishes that the noneconomic
effects of reform on families and children have also largely been
positive.\3\
---------------------------------------------------------------------------
\2\ U.S. Department of Commerce, Bureau of the Census, Income,
Poverty, and Health Insurance Coverage in the United States: 2003,
Series P-60, No. 226 (Washington, DC: U.S. Government Printing Office,
August 2004), tables B1, B2.
\3\ Rebecca M. Blank and Ron Haskins, eds., The New World of
Welfare: An Agenda for Reauthorization and Beyond (Washington, DC:
Brookings, 2001); Gayle Hamilton, with Stephen Freedman and Sharon M.
McGruder, National Evaluation of Welfare-to-Work Strategies: Do
Mandatory Welfare-to-Work Programs Affect the Well-Being of Children? A
Synthesis of Child Research Conducted as Part of the National
Evaluation of Welfare-to-Work Strategies (Washington, DC: U.S.
Department of Health and Human Services and U.S. Department of
Education, June 2000).
---------------------------------------------------------------------------
Most analysts think that the main force behind these gains was that
work levels among poor heads of family rose. In 1993, only 44 percent
of poor female heads with children were employed, only 9 percent full-
year and full-time. These figures rose by 1999 to 64 and 17 percent,
before ebbing to 55 and 16 percent in 2003.\4\ Like the caseload fall,
the work gains reflected TANF's stiffer work requirements as well as
good economic conditions and new subsidies for wages and child care.
Yet most studies conclude that welfare reform was the most important of
these forces.\5\
---------------------------------------------------------------------------
\4\ Data from the March Current Population Survey for 1994 (table
19), 2000 (table 17), and 2004 (table POV15)
\5\ Council of Economic Advisors, ``The Effects of Welfare Policy
and the Economic Expansion on Welfare Caseloads, An Update''
(Washington, DC: Executive Office of the President, August 3, 1999);
David T. Ellwood, ``The Impact of the Earned Income Tax Credit and
Social Policy Reforms On Work, Marriage, and Living Arrangements''
(Cambridge, MA: Harvard University, Kennedy School of Government,
November 1999); Jeffrey Grogger, ``Welfare Transitions in the 1990s:
The Economy, Welfare Policy, and the EITC,'' Journal of Policy Analysis
and Management 23, no. 4 (Fall 2004):671-95.
---------------------------------------------------------------------------
The new work requirements diverted many families into jobs who
might previously have gone on aid. Under JOBS, the predecessor of TANF,
the share of AFDC cases meeting work participation norms rose from 22
percent in 1994 to 33 percent in 1996. Under TANF, much more of the
caseload was made mandatory for work and the hours demanded increased,
yet the work participation rate still rose from 31 percent in 1997 to
34 percent in 2000, before falling to 33 percent by 2002.\6\ By a
broader measure, 19 percent of cases were active in 1994, rising to 43
percent in 2001.\7\ While the majority of cases were not yet meeting
the work test, the pressure to work was sufficient to transform welfare
in much of the country, at least in the conditions of the last decade.
---------------------------------------------------------------------------
\6\ Data from the U.S. Administration for Children and Families.
\7\ U.S. Congress, House, Committee on Ways and Means, 2004 Green
Book: Background Material, and Data on the Programs Within the
Jurisdiction of the Committee on Ways and Means (Washington, DC: U.S.
Government Printing Office, March 2004), p. 7-81. The broader measure
includes activity for any number of hours and applies to all cases,
whereas the TANF rate has higher hours demands and excludes some cases.
---------------------------------------------------------------------------
The ideal in welfare reform is to link benefits as tightly as
possible to work. That requires a clear work test that employable
recipients must meet as soon as they apply for aid, not sometime later.
Equally important, there must be ample benefits to support working,
particularly child and health care. That combination was realized most
fully in Wisconsin, the subject of my recent book. For that reason, the
Badger State achieved almost the greatest caseload fall in the country
as well as almost the highest work participation rate--69 percent in
2002.
Reauthorization should maintain pressure on states to move the
remaining recipients toward work. That in my view mainly requires
fixing problems in TANF that have shielded many recipients from a need
to work at all. Raising formal work standards should be secondary. I
close with some shorter comments about child care.
Fixing Problems in TANF
Recently, due to shortcomings in the original law, some states have
found ways evade TANF's work demands. Some of these problems are
addressed by H.R. 240, but some are not.
Caseload fall credit
TANF demanded that states raise the share of their cases where
adults were in work activities by increments, until 50 percent were so
engaged by 2002. But the law also allowed states to count against those
targets any percent by which their caseloads fell after 1995. Because
the fall was unexpectedly great, the credit cut the standards states
had to meet to trivial levels. In 2002, the threshold was zero for
twenty states. In that year, all states met these reduced standards,
but only twelve states would have met the original 50 percent norm,
only five of them without benefit of a waiver (see further below). The
national participation rate reached only 34 percent in 2000, in 2002 33
percent.\8\
---------------------------------------------------------------------------
\8\ These five were IL, IA, OH, WI, and WY. See U.S. Administration
for Children and Families, Temporary Assistance for Needy Families
Program (TANF): Sixth Annual Report to Congress (Washington, DC: U.S.
Administration for Children and Families, November 2004), table 3:1.
---------------------------------------------------------------------------
The credit adds complexity, making monitoring the states more
difficult. Most important, it is duplicitous, reducing the actual work
standard states have to meet far below what TANF claims to the world.
The case for the credit is also weak. When PRWORA was drafted in 1995-
6, some states feared that rapid caseload fall might drive the most
employable cases off the rolls first, making it impossible to meet the
new work participation levels on the rolls. The credit allowed states,
in effect, to get work credit for the decline itself. This was
plausible in TANF's early years, when massive diversion occurred and
work levels soared off the rolls. It is less plausible today, when the
caseload has changed little for several years and work levels off
welfare have drifted down. The main task now is no longer to divert
people from welfare but to make cases already on the rolls more active.
To do that, TANF's original activity norms must finally be enforced.
To that end, H.R. 240 would replace the current credit benchmarked
on 1995 with one based on the four previous years. The Senate bill has
an employment credit. While both versions improve on current law, they
are still complicated and misleading. I would rather omit the credits
and offset this by keeping, rather than raising, the 50 percent work
participation norm (see further below).
Sanctions
Another major limitation of TANF is that it allowed states to
sanction cases only partially if they failed to fulfill work
requirements. A dozen states fail to end grants even in the face of
open-ended noncompliance. Among these are California and New York,
which have the largest caseloads, comprising 31 percent of the national
caseload in 2002.\9\ In these states, reform cannot be fully
implemented because much of the caseload is allowed to defy the work
test. In New York City, 31 percent of the employable cases cannot be
engaged because they are tied up in sanction status or in adjudication
that may lead to sanctions.\10\
---------------------------------------------------------------------------
\9\ 2004 Green Book, pp. 7-8, 7-33 to 7-34.
\10\ Data for February 13, 2005, from the Human Resources
Administration, New York, NY. Not all these sanctions, of course, are
for work offenses.
---------------------------------------------------------------------------
H.R. 240 would mandate a full-family sanction for cases that defied
activity requirements for two months or more. The Senate bill, I am
told, has no such clause. It is essential, in the eventual conference,
that the House insist on its provision.
Child-only cases
An emerging crisis in welfare is that more and more of the caseload
is made up of ``child-only'' cases. These are cases where the children
receive assistance but not the caretaker. The share of AFDC/TANF cases
including no adult was under 10 percent in 1988, but by 2001 it had
soared to 37 percent.\11\ While there is little applicable research,
many of the caretakers in these cases are thought to be aliens. Their
children are American-born and thus eligible for aid, but they are not,
either because they are legal aliens disqualified by PRWORA or because
they are illegal. By this route TANF helps to finance illegal
immigration. That is reason enough to address the problem. But what is
relevant here is that these cases are not subject to TANF's time limits
or work requirements.
---------------------------------------------------------------------------
\11\ 2004 Green Book, p. 7-88.
---------------------------------------------------------------------------
Under AFDC, the caretaker in a child-only case could not be the
biological parent; commonly, it was another relative who took charge of
children when the parent was incarcerated or incapacitated. But this
restriction ended with TANF. Recently, some states have begun to
classify some cases as child-only even when the biological parent is
still present. This allows them to exempt these cases from the work
test or time limits and still draw TANF funding for them.
The child-only ``out'' must be ended. One option is to restore the
AFDC ruling that excluded biological parents as caretakers in such
cases. This would force these parents back into regular TANF, where
they would face the usual work test and time limits. Another option
would be to expand eligibility to cover some alien caretakers, who in
turn would face normal work tests and time limits. A third option is to
bring these cases under the work tests indirectly, by including them in
the denominator for the work participation rate calculation. This would
put force states either to limit child-only cases or to enforce work
more strongly on the rest of TANF.
The idea that only the children receive support in these cases is a
fiction. Now that family welfare is a work-based program, it is
inappropriate for TANF to fund cases where no adult shares
responsibility for the family through employment. In Wisconsin, such
reasoning led the state to exclude from TANF (the state's W-2 system)
cases where the adult was unemployable or not legally responsible for
the child. These families were diverted to separate programs based on
SSI or kinship care. Those programs still draw TANF funding but are
closely controlled and have not undercut W-2. Through reauthorization,
TANF must work toward the same outcome nationwide.
Separate state programs
Similar abuses have arisen in connection with separate state
programs (SSP). These are programs that states run for cases that they
cannot support on TANF. Of these cases, 64 percent are in California.
That state and some others use SSP mainly to support two-parent cases.
The reason is to escape the very high work participation standard--
currently 90 percent--that TANF demands for these families. Other
states use SSP to support aliens ineligible for TANF. New York uses SSP
to support the many cases that go beyond TANF's five-year limit due to
the state's weak sanctions. In New York City, these cases comprise 40
percent of family aid.\12\
---------------------------------------------------------------------------
\12\ Data for January 2005 from the Human Resources Administration,
New York, NY.
---------------------------------------------------------------------------
SSP is another ``out'' from the work test. The problem is smaller
than with child-only. Just 84,697 families were on SSP in 2001, or 4
percent of the TANF caseload in that year, \13\ although the programs
have grown recently by some accounts. SSP is also less abusive than
child-only, because the programs do not draw TANF funding directly.
However, states' SSP spending counts toward their maintenance of effort
(MOE) requirements, so the programs are indirectly part of TANF.
---------------------------------------------------------------------------
\13\ 2004 Green Book, pp. 7-31 to 7-32, 7-35.
---------------------------------------------------------------------------
One solution is to end the special work participation target for
two-parent cases, as H.R. 240 proposes. This would remove the largest
impetus behind SSP. Another choice, as with child-only, would be to
include these programs in the denominator for the work participation
rate calculation. This again would force states to limit the programs
or else enforce work more seriously in TANF.
Waivers
A final out is the waiver programs run by some states. These were
experimental approaches to aid that many states initiated prior to
PRWORA, and then were allowed to continue afterward. In the AFDC era,
these programs usually toughened work requirements beyond what was then
permitted by normal federal rules. Since PRWORS, however, they have
done the opposite. Typically, the programs exempt more of the caseload
and expect less effort to fulfill the work test than would be allowed
under TANF. Massachusetts, for instance, exempts parents with children
under age 6, allows indefinite job search to count as a work activity,
and demands only twenty hours of activity weekly. In contrast, TANF
exempts only parents with children under 1 at state option, limits job
search to six weeks a year, and demands thirty hours of effort a
week.\14\
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\14\ Douglas J. Besharov and Peter Germanis, ``Toughening TANF: How
Much? And How Attainable?'' (College Park: University of Maryland,
School of Public Affairs, March 23, 2004), p. 25.
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In 2002, fifteen states ran waiver programs, and in every case the
program recorded higher work participation rates than they would have
under regular TANF rules. Only one of these states would have met
TANF's original 50 percent norm for 2002 (in advance of the caseload
fall credit) without its waiver. Seven others met that standard only
with the waiver. The remaining seven fell below 50 percent even with
the waiver.
The solution is to phase out waiver programs. H.R. 240 would forbid
their renewal. I understand the Senate bill is unclear. Again, the
House should insist on its provision.
Raising Work Standards
I would be more cautious about raising TANF's formal work standards
than in fixing the above problems. The Bush Administration's proposals
and H.R. 240 embody some good ideas, but in some case they overreach.
Full engagement
Both the Administration and H.R. 240 require'' universal
engagement,'' and I support this, but the meaning has to be clear. The
basic idea is that recipients cannot ignore the work test. They must
enroll in the work program and enter its activities when they first go
on aid. What that requires has to be defined clearly in the law or,
perhaps, in regulations. H.R. 240 would require that each case have a
``self-sufficiency'' plan, but this might easily become mere paperwork.
More meaningful might be to require actual participation in some
activity such as orientation or job search.
Work participation standards
The Administration has recommended raising the all-family work
participation target from 50 to 70 percent of the caseload. H.R. 240
and the Senate bill would both do so. On its face, this is too
ambitious. Seventy percent is more than double the national
participation rate actually achieved in 2002, only 33 percent. A real
activity rate of half the caseload is probably as much as most states
can achieve, given the practical difficulties of getting welfare
mothers out of their homes and into programs or jobs. Wisconsin's W-2
program achieves rates above 60 percent only through intense case
management and lavish support services. Most other states are not yet
capable of this.\15\
---------------------------------------------------------------------------
\15\ Mead, Government Matters, chs. 5-8, 11.
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As if realizing the difficulties, the current bills would offset
the 70 percent target with many credits and exemptions, including the
modified caseload fall or employment credits. These would reduce the
effective rate that states had to achieve to something like the current
50 percent. I would rather keep the 50 percent, phase it in over
several years, and omit the credits and exemptions. That would be more
honest and also more effective, because it would make clearer what was
expected.
Required hours
The Administration and H.R. 240 would also raise the weekly hours
of activity required to qualify a case as active from the current 30
(35 for two-parent cases) to 40. Hours required of actual work within
this total wold rise from 20 to 24. As above, however, the rise would
be more apparent than real because the activities that count as work
would also be broadened. The hours between 16 and 40 would now be more
loosely regulated, with previous curbs on vocational education
eliminated. And for three months out of every 24, clients could go into
full-time substance abuse treatment or other remediation. States would
also get pro rata credit for hours worked short of 40.
Again, it would be better to expect fewer hours but have the
demands be real. It is unrealistic to expect an actual work week of 40
hours from poor single mothers. Even Wisconsin, with its intense
administration, could not achieve this. In W-2., in practice, for most
of the caseload the demand fell to 30 hours of actual work, usually in
a community service job, with perhaps some education or training on the
side.\16\ New York City has constructed an effective program combining
20 hours of public service employment with 15 hours of job search or
training for most recipients. While most localities will prefer
unsubsidized employment to government jobs, this general approach is
sound.
---------------------------------------------------------------------------
\16\ Mead, Government Matters, pp. 120, 147.
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I would keep TANF's current 30- or 35-hour standard for overall
activity, its 20 hours for actual work, and its current rules for
``creditable'' work activities. Omit the pro rata credit. To raise
expected hours simply generates unjustified demands for increased child
care funding (see below).
H.R. 240 would calculate a state's work participation rate using
the total number of countable hours worked per month, rather than the
number of families meeting the participation standard. This would
simplify the calculation of the pro rata credit, but it would probably
concentrate hours worked on fewer cases. The number of families
actually participating could be reduced. Since the goal of
reauthorization should be to broaden the reach of the work test, this
would be a step backwards.
Permissible work activities
Under existing law, recipients can go to school and receive work
participation credit for no more than one year, and the share of
recipients meeting the work test this way is capped at 30 percent. H.R.
240 would restrict educational programs to four months but remove the
30 percent cap. The Senate bill would allow longer educational programs
than before, in some cases even four-year college. Both of these
changes would probably lead to a higher share of the caseload meeting
the work test through education than before.
This would be a mistake. It would take welfare work policy back
toward the era of the Family Support Act and JOBS, when most recipients
were allowed to substitute school or training for actual employment.
Evaluations demonstrated that ``work first'' was a better strategy.\17\
The fact that many recipients today are more disadvantaged than those
who left the rolls earlier does not change this verdict; they, too, are
likely to profit most from actual work. To allow recipient to turn
welfare into a college scholarship also offends equity, since many of
the taxpayers who pay for welfare lack the same opportunity. On both
grounds, TANF should continue to stress work first. I would keep
current rules on permissible work activities.
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\17\ James Riccio, Daniel Friedlander, and Stephen Freedman, GAIN:
Benefits, Costs, and Three-Year Impacts of a Welfare-to-Work Program
(New York: Manpower Demonstration Research Corporation, September
1994); Gayle Hamilton, Stephen Freedman, Lisa Gennetian, Charles
Michalopoulos, Johanna Walter, Diana Adams-Ciardullo, Anna Gassman-
Pines, Sharon McGroder, Martha Zaslow, Surjeet Ahluwalia, and Jennifer
Brooks, with Electra Small and Bryan Ricchetti, National Evaluation of
Welfare-to-Work Strategies: How Effective Are Different Welfare-to-Work
Approaches? Five-Year Adult and Child Impacts for Eleven Programs (New
York: Manpower Demonstration Research Corporation, November 2001).
---------------------------------------------------------------------------
Performance standards
H.R. 240 would have states define their own performance measures
for TANF. I find this unrealistic. Not all states can do this well. The
resulting measures would also not be comparable across the country,
making holding states accountable more difficult. The dangers are
illustrated by school reform, where No Child Left Behind has allowed
states to define their own tests for student performance. Coupled with
tough federal standards, the result has been chaos.
Welfare reform should do the opposite: Let states choose goals, but
control measures centrally. The objectives could include employment
outcomes, such as job entries, wages, or job retention, but also
reduction in poverty or nonmarital births. Up a point, states could
state their own mix of objectives. But the definitions and indicators
themselves should be developed nationally. It would then be clearer
what states were doing and how they compared to one another. To draft
indicators may require a regulatory process, but the new TANF
legislation should authorize it.
Child Care
Whether child care funding is adequate for welfare reform has
become a major issue in TANF reauthorization. Advocates contend that
funding is insufficient to achieve the higher work participation rates
contemplated in both the House and Senate bills. As now written,
neither bill would raise those levels as much as appears.\18\ If my
recommendations were followed, work levels would rise somewhat more,
but I still think planned funding would be sufficient.
---------------------------------------------------------------------------
\18\ This is the main point of Besharov and Germanis, ``Toughening
TANF.''
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Federal funding for child care across all programs rose from $8.9
billion to $14.1 billion from 1994 to 1999, or by 60 percent.\19\ And
this increase occurred in the face of sharply declining welfare
caseloads. I have seen no systematic evidence that lack of child care
has impeded states' ability to move recipients off welfare and into
jobs. Arguments to the contrary are unpersuasive.
---------------------------------------------------------------------------
\19\ Douglas J. Besharov with Nazanin Samari, ``Child Care after
Welfare Reform,'' in New World of Welfare. ed. Blank and Haskins, pp.
463-4.
---------------------------------------------------------------------------
Critics charge that only a minority of families leaving welfare
have claimed the subsidized child care that is offered to them. But
this is probably because they do not need or want it, not because they
cannot get it.\20\ Critics also note that there are long waiting lists
for subsidized care, and only 15 percent of eligibles received
subsidized care under the Child Care and Development Block Grant
(CCDBG) in 1999.\21\ But child care is a normal market good. Most of it
is bought and sold privately, not provided through government. To
provide a subsidy lowers the cost to consumers and raises demand; hence
the waiting lines. But the fact that people seek a subsidy does not
establish that they cannot afford child care without it, let alone that
they cannot find care at all.
---------------------------------------------------------------------------
\20\ Besharov with Samari, ``Child Care after Welfare Reform,'' pp.
464-7.
\21\ 2004 Green Book, p. 9-28.
---------------------------------------------------------------------------
It is true that states have found CCDBG funding insufficient to
meet demand. In 2002, $3.7 billion in federal TANF money was spent
either directly on child care or transferred to CCDBG for that purpose.
On the other hand, over 1997-2001, states spent only $62 billion of $81
billion in total federal TANF grants.\22\ It is thus implausible to say
that they have done all they can to fund child care and that large
funding increases are needed.
---------------------------------------------------------------------------
\22\ 2004 Green Book, pp. 7-48, 9-29.
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While certainty is elusive, the $1 billion increase in funding
contemplated by H.R. 240 is probably enough to cover the child care
needs of single mothers leaving welfare. One can argue for more money
only if one posits other goals, such as providing more subsidized care
to families already off welfare or improving child care quality. Those
aims might be valuable, but they go well beyond the needs of welfare
reform. Reauthorization should not be held hostage to them.
Conclusion
Welfare reform has succeeded largely by enforcing work requirement
on more of the caseload than under previous law. Reauthorization should
expand the reach of the work test until, in every state, aid to needy
families is closely tied to employment by the parents.\23\
---------------------------------------------------------------------------
\23\ This would include additional measures to achieve greater work
levels and child support payments by absent fathers, but I do not
address these here.
---------------------------------------------------------------------------
The main challenge now is not to raise formal work demands but to
overcome the weaknesses in TANF that have allowed much of the caseload
in some states to escape the work test entirely. If we do that, there
will be little need to raise work standards. The logic is the same as
in tax reform: Broaden the base to which requirements apply, and what
is demanded can be quite modest.
To make work standards more transparent is also important. The
caseload began to fall in 19994, well before TANF was even enacted, let
alone implemented. It was driven as much by politics as by formal
requirements. Due to the debates over welfare, recipients got a message
that work would now be expected of them. Many then went to work and
left the rolls before welfare told them to.\24\ But to maintain that
pressure, recipients and the public alike must understand what welfare
demands. The rules under TANF are already complicated. H.R. 240 as now
written would make them more so. Let us instead seek simplicity and
clarity. Let us seek a more definite and more certain work test rather
than a tougher one.
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\24\ Mead, Government Matters, ch. 9.
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______
Chairman McKeon. Thank you.
Ms. Fallin.
STATEMENT OF CASANDRA FALLIN, EXECUTIVE DIRECTOR, BALTIMORE
CITY CHILD CARE RESOURCE CENTER, BALTIMORE, MD
Ms. Fallin. Chairman McKeon, Congressman Kildee, and
Members of the Subcommittee, thank you for inviting me to speak
to you about quality child care and the important legislation
you have before you today.
My name is Casandra Fallin. I an executive director of the
Baltimore City Child Care Resource Center in Baltimore City.
I am also chair of the Public Policy Committee for NACCRRA,
the National Association of Child Care Resource and Referral
Agencies.
At the Baltimore City Child Care Resource Center, we
provide a variety of services designed to improve the quality,
availability, and affordability of child care.
There are over 850 child care resource and referral
agencies located in every state in most communities. We assist
over 5 million parents each year with information on child care
in their communities.
We also help over 500,000 child care providers improve the
quality of their care through basic training on health, safety,
and child development.
Each day in the United States, over 12.5 million children
under the age of five from families across the economic
spectrum are in the care of someone other than their parents.
According to a report released in November, 50 percent of
all children are in some form of child care by the age of 9
months, nearly 2 million babies. The number goes up as children
get older, and according to the National Research Council, most
children spend an average of 40 hours per week in child care.
Whether we like it or not, child care is where most of our
youngest children are getting their early education and
preparation for school. As a result the quality of their care
must be a key Federal issue.
Child care keeps parents working. In 2003, 78 percent of
children receiving child care assistance were in care because
their parents were working.
Child care is vital for low-income working families. We
support additional increases in funding to support working
families.
You have asked me to comment on the proposed revisions to
the Child Care and Development Block Grant, or CCDBG.
First, I applaud the Committee for its commitment to making
quality child care a national priority. It is widely reported
that only 9 percent of family child care homes, 14 percent of
child care centers, and a dismal 8 percent of infant/toddler
child care is of good quality.
Adding quality as a Federal goal is a critical first step
we enthusiastically support.
However, we also urge the Committee to commission a
national study on the quality of care.
This study would establish a national baseline that would
support other provisions in the bill and set the state for hire
levels of accountability.
Second, we applaud the increase in the quality set-aside
from 4 percent to 6 percent.
Research shows that the education and training of child
care workers are the biggest single indicators of quality.
There are over 2.3 million child care workers in the United
States, most of whom have little or no formal education, yet
studies show that caregivers who have completed even a 120-hour
training program exhibit higher levels of sensitivity and are
more involved with the children for whom they care.
Despite this, most child care workers are required to have
no previous training before they begin work and only minimal
training after they begin caring for children.
We also recommend that the Committee maintain current law
regarding the use of quality funds so all children can benefit
from improvements.
Third, H.R. 240 encourages better--I'm sorry.
We support the provisions of H.R. 240 that require states
to focus on training, education, and professional development
of the child care workforce.
Third, H.R. 240 encourages better coordination between
early childhood programs, something I personally support and
promote daily.
My agency, Baltimore City Child Care Resource Center, is a
delegate Head Start agency involved in a Head Start child care
demonstration program for more than 100 years.
We partner our Heat Start teacher trainer with a child care
teacher in existing child care programs and provide Head Start
services to eligible children.
This collaboration creates a full-day, year-round
programming for Head Start eligible children enrolled in child
care programs and creates unique quality improvement
opportunities for child care staff.
We're now seeking approval to expand that model by
including family child care programs.
Fourth, H.R. 240 also supports public-private partnerships.
These partnerships are critical and can leverage the assets and
strengths of many organizations.
For example, NACCRRA has established a partnership with the
Department of Defense to share lessons learned from the
nationally recognized military child care program.
Through this partnership, local child care resource and
referral agencies will gain access to materials and trainings
developed by the Department of Defense and military families
will gain access to higher-quality care in civilian programs.
Finally, we support requirements in H.R. 240 that emphasize
the need for child care for certain hard-to-reach populations.
Access to infant and toddler child care, care for children with
special needs, and care for children whose parents work
nontraditional hours has reached a crisis.
We also know high-quality child care for those 2 million
babies mentioned earlier can cost from $8,000 to $13,000 per
year, well beyond the financial means of families served by
CCDBG.
In conclusion, your efforts to improve the quality of child
care through changes to CCDBG have been, and will continue to
be, supported by the child care resource and referral
community. With over 12 million children under age five in
child care each day, it goes without saying that the quality of
the care matters.
Thank you again for the opportunity to speak before the
Subcommittee.
[The prepared statement of Ms. Fallin follows:]
Statement of Casandra Fallin, Executive Director, Baltimore City Child
Care Resource Center, Baltimore, MD
Thank you, Chairman McKeon, Congressman Kildee, and members of the
Subcommittee for inviting me to speak to you about child care and the
important legislation you have before you today.
My name is Casandra Fallin and I am the Executive Director of the
Baltimore City Child Care Resource Center, in Baltimore, Maryland. I am
also Chair of the Public Policy Committee for NACCRRA--the National
Association of Child Care Resource and Referral Agencies. NACCRRA is a
membership organization that represents over 850 state and local Child
Care Resource and Referral agencies, such as mine, from across the
country. In addition, I am a former program manager for the Maryland
Department of Human Resources. I have seen first hand the impact of
federal legislation on children and families, especially the Child Care
and Development Block Grant.
At the Baltimore City Child Care Resource Center, we provide a
variety of services designed to improve the quality, availability, and
affordability of child care. Services include help for parents looking
for child care, recruitment and training of child care providers, data
collection, and community education designed to increase public
awareness of child care issues. At Baltimore City Child Care Resource
Center, we serve over 5,200 children annually.
Child Care Resource and Referral Agencies like mine are located in
every state and most communities in the United States. These agencies
provide a critical link between parents looking for child care and
licensed or legally operating child care providers. We assist over 5
million parents each year with information on the cost, quality and
availability of child care in their communities. We also help over
500,000 child care providers improve the quality of their care by
providing basic training on health, safety, child development and other
important topics.
Each day in the United States, over 12.5 million children under the
age of five are in the care of someone other than their parents.
According to a report released by the U.S. Department of Education in
November 2004, 50 percent of children are in some form of non-parental
child care by the age of 9 months. This is nearly 2 million babies. The
number increases as children get older. And, according to the National
Research Council, children spend an average of 40 hours per week in
child care.
Whether we like it or not, child care is where most of our youngest
children are getting their early education and preparation for school.
As a result, the quality of that care must be a key federal issue.
Child care helps parents work and contributes to our economy. The
child care industry generates almost $9 billion in tax revenue and
enables Americans to earn more than $100 billion annually. Child care
is a vital support for low-income working families. In 2003, over 1
million families and 1.75 million children were served by the Child
Care and Development Block Grant. Almost 90 percent of the children
receiving child care assistance were in care because their parents were
working, in school, or in training (78 percent because their parents
were working; 12 percent while their parents were in training or
school).
Child care provides the stability needed to keep families working.
Research has found that former welfare recipients are 82 percent more
likely to keep a job after two years if they receive child care
assistance. As a result, we support increased funding to help working
families meet the daily demands of work.
You have asked me to comment on the proposed revisions to the Child
Care and Development Block Grant or CCDBG. I would like to address five
key provisions of the bill:
<bullet> First, establishing quality care as a federal goal;
<bullet> Second, increasing the amount of the quality set aside;
<bullet> Third, the call for better collaboration at all levels of
government,
<bullet> Fourth, encouragement of Public-Private Partnerships; and
<bullet> Fifth, access to care for certain populations such as
children with special needs.
First, keeping in mind that so many of our young children are
getting their preparation for school in child care programs, I applaud
the Committee for its commitment to making quality child care a
national priority. It is widely reported that only 9 percent of family
child care homes, 14 percent of child care centers and a dismal 8
percent of infant/toddler child care is of good quality. Adding
``quality'' as a federal goal is a critical first step, and one that we
enthusiastically support. However, we also urge the committee to
commission a national study of the quality of child care in all
settings. The data on the quality of child care is limited in scope and
dated. This study could establish a national baseline that would
support other provisions in HR240 that require states to use funds to
improve the quality of care. Such a study would set the stage for
better measurements and higher levels of accountability.
Second, we applaud the Committee's proposal to increase the quality
set-aside from 4 percent to 6 percent. Research shows that both the
education and training of child care workers are the biggest single
indicators of quality. There are over 2.3 million child care workers in
the United States, most of whom have little or no formal education. Yet
studies show that caregivers who have completed even a 120 hour
training program exhibit higher levels of sensitivity and are more
involved with the children they care for. Despite this, 30 states
require no previous training before child care workers begin work and
only minimal training after they begin caring for children.
We must do more to hold the states accountable for training of the
child care workers. We support the provisions of HR240 that require
states to focus on training, education and professional development of
the child care work force.
In addition, we support the provision of HR240 that allows States
to use the quality set-aside to fund tiered reimbursement and other
provider retention initiatives. If training and education programs are
to have a lasting impact on child care quality, these efforts must be
combined with initiatives to retain well-trained providers. In a market
where the median hourly wage is $8.37, high turnover is a consistent
problem. Child care is ranked second in turnover rates only to the fast
food industry. Tiered reimbursement rates encourage high-quality
providers to remain in the child care field and provide incentives for
other providers to work towards State-defined quality standards.
Child Care Resource and Referral Agencies believe in accountability
for public funds. Such measures include tiered reimbursement rates as
well as quality rating systems for consumers, rated licensing and other
tiered quality strategies. In addition to retaining skilled providers
and increasing the quality of care, tiered quality strategies improve
consumer education by making information on quality care easy for
parents to use and understand. Thirty-six States have implemented
tiered quality strategies and eight States currently operate pilot
programs.
We commend your efforts to increase accountability measures to
ensure that the child care supported by CCDBG funds promotes school
readiness goals. Child Care Resource and Referral Agencies are strong
supporters of the quality improvement initiatives highlighted in this
proposed legislation.
Third, HR240 encourages better coordination between early childhood
programs, something Child Care Resource and Referral Agencies across
the country are involved with, and something I personally support and
promote daily. More than 65 percent of Child Care Resource and Referral
Agencies work with city government, public schools, the media and
colleges. In addition nearly 60 percent serve on community planning
councils to help find solutions for the ever-increasing demand for
care.
My agency, Baltimore City Child Care Resource Center, is a delegate
Head Start agency and has been involved in an innovative Head Start/
Child Care demonstration program for more than 11 years. This
partnership is mutually beneficial to both the Head Start and the child
care communities and to families by partnering a Head Start teacher-
trainer with a child care teacher in existing child care programs. It
creates full day, year round programming for Head Start eligible
children enrolled in child care programs and creates unique quality
improvement opportunities for its child care partners. Benefits of the
collaborative include:
<bullet> full day programming for Head Start eligible families;
<bullet> ability to serve Head Start eligible families whose needs
are not met by the part day programming found in traditional Head
Start;
<bullet> expansion of Head Start's services to children and
families in the child care setting;
<bullet> extensive on-site training for child care staff;
<bullet> quality improvement for the child care programs; and
<bullet> cost-effective approaches that maximize the resources of
both Head Start and the child care partners.
We are now seeking approval to expand the model into family child
care programs.
Fourth, HR240 also supports public-private partnerships. These
partnerships are critical and can leverage the assets and strengths of
many organizations. For example, NACCRRA has established a partnership
with the Department of Defense to share lessons learned from the
nationally recognized military child care program. Through this
partnership, NACCRRA is developing projects to provide quality care for
military personnel who are not living on or near bases, but still need
help finding the same high quality child care service members have on
base.
Through this partnership, local Child Care Resource and Referral
Agencies will gain access to materials, technology and trainings
developed by the Department of Defense and military families will gain
access to higher quality care in civilian programs.
One of the projects NACCRRA is working on with the United States
Air Force seeks to improve the quality of training for family child
care providers through use of the military's professional development
model. We anticipate that this project will prove to be a viable model
for professional development nationally. This is a real win--win
partnership and one of which we are especially proud.
Finally, we support requirements in HR240 that emphasize the need
for child care for certain hard to serve populations.
Access to care for infants and toddlers, children with special
needs, and children whose parents work nontraditional hours has become
a crisis in many communities. According to our latest figures, 45
percent of all child care referrals were for parents with infants and
toddlers. We know the demand for quality care for infants and toddlers
far outweighs the supply. We also know that high quality child care for
those 2 million babies mentioned earlier can cost from $8,000 to
$13,000 per year, well beyond the financial means of families served by
CCDBG. We support the requirements in this bill that will ensure that
states collect and analyze data on the types and quality of care
parents need.
We also applaud the requirements in HR240 to collect and utilize
data to inform child care planning and policies on the local, state and
national level. These provisions will help ensure that data aggregated
on child care supply and demand will direct our progress in improving
parents' access to quality child care.
Further, we support the mention of Child Care Resource and Referral
Agencies' child care data as a source for this local, state, and
national data. Child Care Resource and Referral Agencies are unique in
their ability to gather detailed child care supply and demand
information through relationships with both sides of the child care
market: parents and child care providers. Over 70 percent of Child Care
Resource and Referral Agencies conduct studies on the supply and demand
to allow state and local decision-makers to better target specific
needs of the community. Child Care Resource and Referral Agencies also
derive statistics using local data to produce market rate surveys and
child care worker salary surveys.
In conclusion, your efforts to improve the quality of child care
through changes to the CCDBG have been, and continue to be, supported
by the Child Care Resource and Referral community. All of the research
demonstrates that the earliest years set the stage for success in life.
With over 12 million children under five in child care each day, it
goes without saying that the quality of the care matters.
Thank you again for this opportunity to speak before the
Subcommittee.
______
Chairman McKeon. Thank you.
Mr. Greenberg.
STATEMENT OF MARK GREENBERG, DIRECTOR OF POLICY, CENTER FOR LAW
AND SOCIAL POLICY, WASHINGTON, DC
Mr. Greenberg. Mr. Chairman, Members of the Subcommittee,
thank you for inviting me to testify today.
Since 1996, we've spent a lot of time following closely
developments around TANF and child care implementation in the
states. Over the next few minutes, I'd like to talk about the
context for reauthorization and then offer some thoughts on the
work and child care provisions of the pending bills.
First, for the context.
Since 1996, our nation really has seen an unprecedented
growth in employment among single-parent families. We've also
seen an unprecedented decline in the welfare caseload. Most of
the caseload decline probably is due to employment, though
certainly not all of it.
At the same time, families leaving welfare have typically
entered low-wage jobs with considerable employment instability
and very limited upward movement over time.
In the first years after 1996, we did see significant drops
in child poverty, even though a large share of the families who
leave welfare are still poor or near poor.
We've also seen a significant group of families leave
welfare without finding work.
Welfare reform, by numerous studies, did play an important
role in the employment growth over this period. It wasn't the
only factor, but it was a significant one.
The economy played a role. The large expansion of the
Federal earned income tax credit played a role. Broadening the
availability of health care outside of welfare played a role, a
stronger child support enforcement system, the minimum wage
increases, and child care.
As a result of the 1996 law, both the increased child care
funding at the time and the ability of states to redirect TANF
funds to child care, we saw a dramatic increase in child care
funding in the late 1990's. It tripled in a very short period
of time, and that meant that at the same time that welfare
caseloads were falling by half, the number of children
receiving child care subsidies increased from about a million
to 2.4 million.
For many states, the ability to expand the availability of
child care outside of welfare was a critical part of their
strategy, because it made it possible for them to say to
families, ``You don't need to come into the welfare system in
order to get child care. We will support child care for low-
income working families so that you never need to turn to
welfare.''
Over the last 3 years, while reauthorization has been
pending, several of the key indicators have turned less
positive. Employment for single mothers has fallen, though
their employment rates are still more than that of married
mothers and still much more than they were in the mid-1990's.
Child poverty has grown for the last 3 years.
At the same time, welfare caseloads have stayed essentially
flat, which raises concerns that the system is not as
responsive as it should be in times of increased need, and
Federal child care funding has been flat, and the number of
children receiving subsidy assistance has fallen.
Reauthorization over this period has been largely stalled
over the details of TANF participation rates--what the rates
should be, what the hourly requirements are, what activities
should count, how long they should count.
We've criticized the bill that came out of the House on
several grounds.
We've criticized it for being detailed and prescriptive in
a way which frankly seems unnecessary.
We've criticized it for making it harder for states to do
education and training if that's what they choose to do in
their programs.
We've criticized shifting to a 40-hour requirement because
there is no research evidence that suggests that that will lead
to states running better employment programs.
And we've expressed concern that the Congressional Budget
Office estimates some significant costs in meeting these
requirements. At a time when TANF funding is flat, that raises
major concerns for states.
Finally, another reason for criticizing the overall
approach on the participation rate has been that a
participation rate fundamentally measures process, not
outcomes.
I think the goal that many people share is that the best
outcome is families getting jobs, and getting jobs so that they
don't need welfare, and that would be the key thing that one
would want to see focused on in the system.
There's a serious risk, though, that if you build in a
detailed prescriptive participation rate, the thing that states
most focus on is not how do you link families with jobs, but
rather, how do we manage to meet the Federal requirements. It
shifts the whole focus of program administration to managing to
meet participation rates.
So based upon this, we have two principal recommendations.
First, give states an option to be held accountable for
outcomes. That's the approach the Committee takes in relation
to the Workforce Investment Act, focus on earnings gains,
employment entries, employment retention, the outcomes that
matter, and give states that option.
Second, for the participation rate itself, ensure, as you
design it, that states are never put at a disadvantage when a
family leaves welfare because they've got a job. Don't reward
them simply for cutting their caseload if families aren't
getting jobs. Don't set the hourly requirements so high that
meeting participation rates becomes the central mission of the
system, and be sure that states have the flexibility to read
the research themselves and make their own judgments over time
about what are appropriate activities.
Finally, let me just underscore the critical importance of
child care funding.
As I suggested before, in the initial years, a big part of
the story really was states' ability to expand child care
funding and expand it outside welfare. It was an enormously
positive story until the last several years.
Over the last several years, Federal child care funding
from the Child Care and Development Block Grant has stayed
flat. Initially, states were able to redirect substantial sums
of their TANF money to child care. That peaked in 2000, and for
the last 3 years, they've been able to devote less of TANF
funds to child care than they were in the year 2000.
Furthermore, at this point, for the last 3 years, states
are spending more in TANF funds than they're receiving from the
Federal Government each year, so they've got a structural
deficit built in.
That means necessarily that whatever they're doing now,
they're not going to be able to sustain it over the next 5
years. They're going to have to make cuts in other benefits and
services just to manage in this structure, and so it means that
in all likelihood, the funding from TANF to child care is going
to wind up being less, not more.
So if the Committee wants to ensure that the progress that
we did see after the 1996 law continues, it is crucial to
address the need for sustained ongoing child care funding, not
one-time funding from simply shifting funds out of state
reserve funds and leaving them with nothing in reserve, but
sustained funding over time.
Thank you very much.
[The prepared statement of Mr. Greenberg follows:]
Statement of Mark Greenberg, Director of Policy, Center for Law and
Social Policy, Washington, DC
Mr. Chairman and Members of the Subcommittee:
Thank you for inviting me to testify. I am the Director of Policy
for the Center for Law and Social Policy (CLASP). CLASP is a nonprofit
organization engaged in research, analysis, technical assistance, and
advocacy on a range of issues affecting low-income families. Since
1996, we have closely followed implementation of the work and child
care provisions of the Personal Responsibility and Work Opportunity
Reconciliation Act. This testimony will discuss background for
reauthorization of the work and child care provisions of the 1996 law,
pending reauthorization proposals, and our recommendations. This
testimony reflects ongoing work with CLASP colleagues including Nisha
Patel, Hedieh Rahmanou, Danielle Ewen, and Hannah Matthews.
The Role for this Subcommittee
The jurisdiction of the Subcommittee on 21st Century
Competitiveness includes the work provisions of the Temporary
Assistance for Needy Families (TANF) Program and the Child Care and
Development Block Grant (CCDBG), along with workforce and education
programs including the Workforce Investment Act (WIA) and the Higher
Education Act (HEA). Thus, it is appropriate and important that this
Subcommittee consider reauthorization within the broader context of
workforce development, training, early education, and higher education
policies. As discussed below, this focus is needed because the
reauthorization bill previously adopted by the House and under
consideration this year is, in important respects, inconsistent with
key provisions of WIA and with efforts to expand access to training and
higher education. Moreover, the child care funding level under the
House bill would not be sufficient to sustain current levels of child
care assistance for working families, meet the bill's new TANF
mandates, or adequately address the goals this Subcommittee has
established for CCDBG reauthorization.
The Background for Reauthorization
In 1996, Congress enacted TANF and restructured federal child care
funding. Generally, the legislation gave each state annual TANF block
grants with broad discretion in use of funds; sought to place a strong
emphasis on linking families receiving public assistance with work;
established time limits for providing federally-funded assistance; and
significantly expanded federal child care funding while giving states
broader discretion in use of child care funds.
In the years after enactment of the 1996 law, there were dramatic
changes in employment, child poverty, welfare and child care
participation. While there were some troubling aspects, much of the
experience was strikingly favorable in the initial years of
implementation. However, in the last several years, several of the most
positive indicators have slowed or reversed. Thus, reauthorization
should be a time to build on the successful aspects of the 1996 law,
while addressing problems that have become apparent over time.
Starting in the mid-1990s, there was a historically unprecedented
increase in employment among single parents. The growth began before
enactment of the 1996 welfare law, but continued after that time. The
employment rate for single mothers grew from 57.3 percent in 1993 to
63.5 percent in 1996, and then rose to 73 percent by 2001.\1\ Many
factors likely contributed to this employment growth, including the
strong economy, state and federal welfare reforms, the large expansion
of the Earned Income Tax Credit in 1993, increased child care spending,
increases in the minimum wage in 1996 and 1997, broadening of access to
health care outside of welfare, and a stronger child support
enforcement system.
During this period, both the TANF assistance caseload and the
nation's child poverty rate fell. Welfare caseloads fell from 5 million
in 1994 to 4.4 million by the time the 1996 law was enacted, and then
to 2 million by 2001. Child poverty fell from 22.7 percent in 1993 to
16.2 percent in 2000. Welfare participation fell much more than did
child poverty, with the share of poor children receiving assistance
falling from 62 percent in 1994 to 35 percent in 2001.\2\
Numerous studies found that most families leaving welfare (in the
range of 50 to 60 percent) were working, but typically in low-wage jobs
without access to benefits, such as employer-sponsored health insurance
and paid vacation/sick leave.\3\ The families still receiving
assistance were a heterogeneous group, but generally had more serious
barriers to employment (e.g., health and mental health issues, domestic
violence, substance abuse, limited English proficiency, severe basic
skills deficits) than those who had left assistance. And, some of the
families that left welfare without finding employment were among those
with the most severe barriers to employment, with weaker work
histories, less education, and higher rates of disabilities.
During this early period, declining welfare caseloads freed up
resources for states. States were able to use TANF funds to broaden
services for working families outside the traditional welfare system.
Initially, the single biggest redirection of TANF funds was to increase
child care for working families. In 2000, states committed $4 billion
of TANF funds to child care.\4\
Between 1996 and 2000, combined federal and state funding for child
care tripled. Most of the growth was attributable to federal funds, and
the single biggest factor was the ability of states to redirect TANF
funds. As a result of this increased funding, the number of children
receiving subsidies grew from an estimated 1 million in 1996 to 2.4
million in 2001, and states were able to improve child care payment
rates to providers, reduce required family copayments to make child
care more affordable, and expand quality initiatives.
Thus, there was much that was positive in the early experience
after 1996, but also areas of concern. There had been dramatic growth
in employment and a decline in child poverty, but many families who
left welfare for work were still poor, and many families with
significant barriers had left welfare without finding work. While the
child care experience had been strikingly positive, there was still
much to do: only an estimated one in seven children eligible for
federal child care subsidies were receiving them; payment rates to
providers in half or more of the states were below local market rates;
and quality initiatives were often limited and uneven.
During the last three years, several key indicators have become
less positive. The economy entered into a recession, after which
initial job growth was slow. States entered into a period of large
budget deficits, placing strains on TANF funds and other state
resources, and forcing cutbacks in child care and other services. The
pressures resulting from the economy and state budget crises are
apparent in indicators of employment, child poverty, child care and
welfare participation. Specifically:
<bullet> Since 2001, employment has declined among both single and
married mothers. Employment among single mothers fell from 73 percent
in 2001 to 69.7 percent in 2004. Employment among married mothers
showed a similar decline, from 68 percent to 65.3 percent, during the
same period. Single mothers are still more likely to be employed than
married mothers and much more likely to be employed than before the
1996 law.\5\ Since the recession, the industries most likely to employ
welfare recipients and large proportions of single mothers have either
lost jobs or are experiencing slower job growth.\6\ Thus, there is
little reason to attribute the decline in employment to state TANF
performance. Reflecting the decline in employment, the Urban Institute
has reported that employment among welfare leavers fell from 50 percent
in 1999 to 42 percent in 2002.\7\ Similarly, the share of families
engaged in employment for enough hours to meet TANF work rates dropped
from 22 percent in 2001 to 18 percent in 2003 (while the share of
families participating in other activities remained relatively
unchanged).
<bullet> The decline in employment has generally not resulted in
increased welfare caseloads, but child poverty has risen. Between 2001
and the 2003, the number of families receiving assistance (including
those in separate state programs) rose at least somewhat in 31 states,
while the national caseload fell by 0.5 percent.\8\ The continued
national caseload decline occurred despite the fact that child poverty
increased from 16.2 percent in 2000 to 17.6 percent in 2003.\9\ The
fact that employment fell and child poverty increased while TANF
caseloads remained flat or declined raises significant concerns that
the program has not been sufficiently responsive to increased needs.
The share of poor children receiving TANF assistance dropped to 33
percent in 2002.\10\
<bullet> The share of families without welfare or work has grown.
Urban Institute research indicates that the share of all families that
have left welfare, but are not employed, do not have an employed
partner, and are not receiving income from Supplemental Security Income
(SSI) rose from 10 percent in 1999 to 14 percent in 2002.\11\
<bullet> For the last three years, state TANF spending levels have
exceeded annual block grants, and state reserves have fallen sharply.
As long as welfare caseloads were falling rapidly, TANF was, in effect,
a source for ``new'' funds each year. Once caseload decline slowed or
stopped, states have increasingly faced the pressures resulting from a
block grant set at mid-1990s funding levels and not adjusted for
inflation. In each of the last three years, states' use of TANF funds
has exceeded their basic block grants, and states have increasingly
resorted to drawing down carryover (reserve) funds to pay for current
services. In fiscal year 2003, states used $1.8 billion more than they
received. Between the end of 2002 and the end of 2003, the amount of
carryover TANF funds dropped by one-third, to $3.9 billion. This
represented the lowest level for carryover funds since 1997, the first
year of TANF implementation.\12\ Some states now have no carryover
funds, and for most states, the amount of carryover funds represents
less than one-quarter of the state's annual block grant funding level.
<bullet> Federal child care funding under CCDBG has been flat
since 2002, and the number of families receiving child care assistance
has fallen, with the greatest impact on low-income working families not
receiving welfare. The Administration estimates that the number of
children receiving subsidy assistance remained in the range of 2.4
million from 2001-2003, declined in 2004, and will fall to 2.2 million
2005. CCDBG funding has been flat since 2002, and the use of TANF for
child care peaked in 2000, and has now stayed at or near $3.5 billion
for the last three years.\13\ Child care curtailments have particularly
hurt working families not receiving welfare: In April 2003, the
Government Accountabilty Office (GAO) reported that, since January
2001, nearly half the states (23) had made policy changes that reduce
the availability of child care subsidies for low-income working
families.\14\ Between 2002 and 2003, eighteen states and the District
of Columbia cut total spending on child care (TANF and CCDBG).\15\
Implications for Reauthorization
As the above discussion outlines, there has been dramatic growth in
single-parent employment since 1996, but often in low-wage jobs without
employer-provided benefits. Many families still receiving assistance
have serious employment barriers, and a group of families with serious
barriers is now not in work and not receiving welfare. A well-
functioning TANF program would assist needy families while connecting
those who are able to work with sustainable employment; however, there
are clear indications that the current program makes it difficult for
needy families to receive assistance and serves a steadily declining
share of poor children. The expansion of supports for working families
outside welfare has been a critical contributor to the employment
growth, but those supports are increasingly at risk because TANF and
child care funding have remained flat. The sharp decline in reserve
funds underscores that at current funding levels, states will find it
difficult or impossible to sustain current service levels over the
coming years.
Based on this experience, CLASP has urged that the work-related
provisions of reauthorization focus on efforts to improve job quality
and encourage a stronger focus on employment retention and advancement,
expand child care and other supports for working families outside
welfare, and ensure that states have incentives to work with, rather
than terminate assistance to, families with the most serious employment
barriers.
We have also urged that reauthorization promote TANF-WIA
coordination. While H.R. 27, the WIA reauthorization bill passed by
this Subcommittee and by the House, and H.R. 240 both contain
provisions intended to promote coordination, \16\ Congress could do
more. We do not advocate broad cross-program waiver authority, such as
is provided for under H.R. 240; nor would we support a proposal like
the Administration's WIA Plus Consolidation proposal, which would give
Governors the option for broad authority to consolidate funds intended
for targeted populations. Rather, we believe Congress and relevant
federal agencies should work together to identify the principal areas
of statutory and regulatory differences between TANF and WIA; examine
whether there are strong policy justifications for maintaining those
differences; and either harmonize or allow states to harmonize each
area for which there is not a strong underlying federal policy basis
for a different approach across programs. And, at the same time,
Congress should ensure that new TANF provisions do not impose detailed
and prescriptive requirements that make it more difficult to coordinate
TANF strategies with those under WIA.
Over the least three years, much of the reauthorization debate has
centered around the mechanics of the participation rate calculation for
families receiving TANF assistance: the required rates; how those rates
should be adjusted based on caseload reduction, employment, or other
factors; the number of hours to fully count as a participant; which
activities should be allowed to count, for how many hours and how many
months. While there are better and worse ways to resolve each of these
issues, this Subcommittee should appreciate the striking contrast
between the approach in TANF and the approach in the rest of the
workforce system. In WIA legislation, this Subcommittee has not sought
to dictate which activities should count for how many hours or months;
rather, it has kept its focus on state and local accountability through
the performance indicators of importance to the system: employment
entries, earnings gains, employment retention, acquisition of
credentials. Moreover, historically, this Subcommittee has sought to
promote access to education and training. The same philosophy ought to
apply to TANF.
The remainder of this testimony will discuss TANF work
participation rates and child care funding. On a number of key
provisions, the approach taken by the Senate Finance Committee
represents a more reasonable, balanced approach than that reflected in
H.R. 240.\17\ While we continue to urge improvements in the Senate
bill, we think the Senate provisions reflect efforts to be responsive
to the principal goals of the Administration's proposal, while still
allowing states significant flexibility in designing effective work
programs. We also urge the Subcommittee to give serious consideration
to the provisions of H.R. 751, the Work, Family and Opportunity Act,
introduced by Congressman McDermott.
Reauthorization should encourage states to focus on employment and
job quality and should not reward caseload reduction in itself. H.R.
240's caseload reduction credit creates incentives to terminate
assistance rather than help families find jobs. We recommend replacing
it with an employment-based credit.
The ultimate goal of the work provisions of any TANF bill should be
to improve employment outcomes. Participation rates measure the share
of families involved in activities while receiving assistance, but they
do not capture the outcome of greatest concern: the number of families
getting jobs and earning enough that they no longer need assistance.
CLASP has urged that states be given the option to be held
accountable for employment outcomes in lieu of participation rates.
Last year, a bipartisan group of Senators (Alexander, Voinovich,
Carper, and Nelson [of Nebraska]) proposed an amendment to allow up to
ten states to be accountable for outcomes relating to employment;
success in activities designed to improve employment and related
outcomes; job retention; entry earnings and earnings gains; and child
well-being. H.R. 751 would allow states to be accountable for
improvements in job entries and jobs with higher earnings. We recommend
that the Subcommittee consider approaches such as these. Ultimately, we
recommend that all states should have the option to be accountable for
common performance measures across TANF and WIA.
So long as there is a participation rate structure, it is important
that a state not be disadvantaged in the participation rate calculation
when a family gets a job and leaves welfare. This can happen under
current rules, because as long as the parent is receiving assistance
and participating in an activity, the family counts toward the rates,
but if the parent gets a job and leaves assistance, the family stops
counting.
Under current law, rates are adjusted downward by a caseload
reduction credit, calculated as the number of percentage points by
which the state's caseload has fallen since 1995 for reasons other than
changes in eligibility rules. The current structure has been criticized
for lowering effective participation rates to zero for many states.
The other problem with a caseload reduction credit is that it
rewards a state if its caseload falls, whether or not families are
working, and even if the decline occurred simply because the state has
made it harder to receive assistance. H.R. 240 would make this problem
worse by maintaining a caseload reduction credit, adjusted so that
states only get ``credit'' for recent caseload declines. Moreover,
under H.R. 240's ``superachiever'' credit, a group of states would be
rewarded for having had large caseload declines between 1995 and 2001,
without regard to employment or other outcomes. It is difficult to see
any conceivable policy justification in 2005 for arbitrarily rewarding
states simply based on caseload decline that occurred years ago.
In 2002, the Administration recommended eliminating the caseload
reduction credit, and providing instead that families leaving
assistance due to employment could count as participants for 90 days.
The Senate Finance bill uses an ``employment credit'' instead of a
caseload reduction credit, providing adjustments based on the numbers
of families leaving assistance due to employment, the number leaving
with higher earnings, the number of families working after receiving
diversion assistance, and the number of families receiving TANF-funded
child care and transportation benefits. H.R. 751 also provides for an
employment credit.
A credit or adjustor for employment would communicate the
importance of focusing on whether families leaving assistance are
working, and communicate to states that the goal is the promotion of
employment, not simply cutting caseloads.
Raising the number of hours needed to count as a participant to 40
will make it harder for states to run effective programs to connect
families with employment. It would be better to maintain current law
hourly requirements.
Under current law, single parents with children under age 6 can
count toward TANF participation rates through 20 hours a week of
countable activities; all other families must meet a 30-hour
requirement. H.R. 240 would raise the requirement to 40 hours for all
families. The Senate Finance bill would raise the requirements to 24
hours for single parents with children under six, 34 for other single-
parent families, and 39 hours for two-parent families. H.R. 751 would
maintain the hourly requirements of current law.
In our view, it is unfortunate that much time over the last three
years has been devoted to arguments about the ``right'' number of hours
to require for participation, because there is no evidence that
increasing hours of participation beyond current law requirements would
lead to more effective programs. The welfare-to-work research
consistently finds that the most effective programs provide a mixed
menu of activities, combining job search, training, and other work-
related activities, but these programs do not typically combine
multiple activities for the same individual at the same time.\18\ None
of the highest-impact programs routinely imposed 40-hour requirements.
Nothing in the research suggests that restructuring programs to make
them require 40 hours instead of 30 hours would make them more
effective.
Moreover, raising the hourly requirement to 40 runs the risk of
resulting in less effective programs, for three reasons. First, it
creates the danger that program administrators will need to shift their
focus from efforts to promote employment to efforts to ``manage'' 40
hours of participation. Second, the need to generate activities, even
low-cost ones, and pay attendant child care costs, will force a
misallocation of scarce resources at a time when states are struggling
to sustain current services. Third, many observers have recognized the
need to do more to engage families with the most serious employment
barriers. These families are likely to have the greatest difficulties
in meeting 40-hour requirements. If any individual who has difficulty
consistently participating at a 40-hour level will become a ``drag'' on
the state's ability to meet participation rates, there will be an
increased risk that such families are sanctioned and terminated from
assistance rather than provided needed assistance to move toward
employment.
While the Senate's approach to hours is more moderate, the best
resolution here would be to maintain current law. Every state would be
free to increase hourly requirements if it wished to do so. But, there
is no reason to compel all states to adopt an approach that has no
basis in research, and that is contrary to the best judgment of many
program administrators.
The list of countable activities should give states flexibility to
make their own judgments about effective ways to promote employment.
States should be free to use education and training and barrier removal
activities, and not be compelled to use unpaid work experience.
H.R. 240 sharply limits the activities that can count toward the
first 24 hours of participation each week. After a three- to four-month
period, the only activities that could count for adults would be
unsubsidized or subsidized work, or unpaid work experience or community
service. Thus, the bill would make it impossible to count full-time
education or training for more than four months, and would impose
similar restrictions on participation in barrier removal and
rehabilitative services. Given the costs of subsidized employment, the
bill would, in effect, create strong pressure on states to use unpaid
work experience or community service for those individuals unable to
get unsubsidized jobs within four months.
The H.R. 240 approach is not consistent with relevant research.
There is encouraging non-experimental evidence from transitional jobs
programs that provide highly structured, paid subsidized employment
experiences for individuals with multiple employment barriers, \19\ and
other research suggests favorable impacts for on-the-job training
programs.\20\ However, the available research has not suggested strong
effects on employment and earnings for unpaid work experience programs.
There is only limited recent research on the employment impacts of
unpaid work experience; however, in a review of research conducted in
the 1980s, the Manpower Demonstration Research Corporation (MDRC)
concluded, ``there is little evidence that unpaid work experience leads
to consistent employment or earnings effects.'' \21\
From the welfare-to-work research, the clearest guidance is that
states should avoid the extremes of focusing exclusively on job search
or on adult basic education unconnected to employment. Instead, the
most effective welfare-to-work programs use a ``mixed strategy''--
focusing on employment; including job search, education, job skills
training among program activities; and structuring activities on an
individualized basis.\22\ There is clear evidence that a strong skills
training component can lead to improved employment outcomes, and that
postsecondary education is increasingly crucial in efforts to improve
earnings.\23\
In fact, as of June 2002, at least 40 states allowed more access to
postsecondary training or education services than would be countable
under H.R. 240.\24\ If H.R. 240 were to become law, a large number of
states would feel pressure to reduce access to these services for TANF
recipients in order to avoid penalties. And, the restrictions on
education and training in H.R. 240 would pose increased barriers to
TANF-WIA coordination because full-time participation in WIA-funded
training for more than three or four months would not be able to count
toward TANF work participation requirements.
The approach taken by the Senate Finance Committee is more balanced
than that in H.R. 240, though still restrictive in certain ways. The
Finance bill maintains the current law 12-month restriction on counting
vocational educational training toward core participation hours, while
creating a new option for states to count participants in postsecondary
education under certain circumstances. The Finance bill also allows
participation in certain rehabilitative services to count for up to six
months, and allows continuation of individualized activities beyond six
months for individuals with disabilities under limited circumstances.
H.R. 751 would also broaden the countability of a set of
activities, counting up to 24 months of participation in education and
training, and counting up to 18 months of participation in
rehabilitative services, if the last 12 months are combined with work.
Our principal recommendation here is that federal law should not
seek to narrowly restrict which activities can count toward
participation rates. In the TANF fiscal structure, a state has no
incentive to place individuals in activities unless the state believes
the activities are likely to be effective, and state perspectives on
effective activities will continue to evolve over time based on
research and experience. Thus, we recommend that participation rate
rules not compel states to use unpaid work experience, not restrict the
ability of states to use education and training, and allow for
individualized determinations about participation in rehabilitative and
barrier removal activities.
Reauthorization should ensure that states have incentives to work
with families with serious employment barriers, rather than incentives
to cut off assistance to these families. Accordingly, the bill should
build safeguards into the sanction process, and not mandate full-family
sanctions.
Under federal law, states must reduce or terminate assistance when
a family does not comply with program rules without good cause. There
are essentially no safeguards in current federal law beyond a provision
saying that states may not terminate assistance to a single parent of a
child under six who fails to participate due to lack of needed child
care. Sanctions have not been the principal reason for caseload
decline, but it is clear that they are used extensively in some states.
Research confirms that families with the most barriers to employment
and the most difficulty succeeding in the labor market are the most
likely to be sanctioned. Moreover, families who leave assistance due to
sanctions are less likely to be employed and more likely to return to
welfare than families who leave for other reasons.\25\ Testimony
submitted to the Human Resources Subcommittee of the House Ways and
Means Committee by Dr. Deborah Frank of the C-SNAP project describes
the harm that can occur to children in sanctioned families.\26\
H.R. 240 would require all states to use full-family sanctions
(i.e., terminate all TANF assistance for failing to meet program
requirements). We urge that this provision be dropped. There is no
research evidence that programs that cut off all assistance are more
effective in moving families to employment or economic independence,
and, as noted, there is clear evidence of potential harm. Moreover, in
the context of high participation rates and scarce resources, there is
considerable risk that when a parent with employment barriers is unable
to meet program requirements, states will perceive a much stronger
incentive to terminate assistance than to actively work with the family
to resolve barriers to participation.
The Senate Finance bill does not mandate full-family sanctions.
Instead, it contains a provision requiring that, prior to imposing
sanctions, states must, to the extent determined appropriate, review
the family's plan and make a good faith effort to consult with the
family. A provision such as this, and additional safeguards, could help
communicate that the goal of federal policy is to work with families to
promote employment, not simply terminate assistance. H.R. 751 would not
require full-family sanctions, and would provide for new safeguards in
the sanction process.
Reauthorization should provide states with enough child care
funding to sustain current service levels, meet new work requirements,
and make progress in addressing access for all low-income working
families and quality in the next five years. The current House bill
would accomplish none of these goals. We recommend increasing child
care funding.
In the initial years after enactment of the 1996 welfare law,
states made dramatic progress in expanding child care assistance for
low-income families. Child care is critical to helping parents find and
keep jobs. Compared with mothers on waiting lists for child care
assistance, mothers receiving subsidies for their child's care were
more likely to be employed, spent half as much of their income on child
care, and were less likely to be very poor.\27\ Data from the 1990s
shows that single mothers who receive child care assistance were 40
percent more likely to still be employed after two years than those who
did not receive any help paying for child care, and that former welfare
recipients with young children were 82 percent more likely to be
employed after two years if they received help paying for child
care.\28\
States were able to increase child funding for two principal
reasons. First, the 1996 law provided for steadily increasing amounts
of dedicated child care funding through 2002. Second, when TANF
caseloads declined, states were able to redirect TANF funding to child
care. In 2000, states redirected $4 billion in TANF funds to child
care, an amount larger than the entire child care block grant. However,
child care funding through TANF has fallen to about $3.5 billion in
each of the last three years, and it is doubtful that states will be
able to sustain this funding level, in light of the fact that states
are currently spending TANF funds at a level above their block grants
and drawing down reserve funds to pay for current service levels.
It has been suggested that reauthorization could ``unlock'' as much
as $2 billion in unobligated prior-year TANF funds, which can currently
only be used for ``assistance,'' but which could be used for any
allowable TANF purpose under the pending bill. We support the proposal
to broaden allowable uses of reserve funds, but enacting this proposal
will not free up significant new resources for child care, for two
reasons:
<bullet> First, the vast majority of states can already
effectively use their unobligated funds for child care by rearranging
how current and carryover funds are spent (i.e., spend prior year funds
for assistance to free up current year funds to spend for child care).
Based on 2003 spending data, forty-seven states could already, in
effect, spend every penny of their unobligated funds on child care this
year, but if they did so, they would have no reserve funds for the
future. The remaining four states could, in effect, spend all of their
carryover funds for child care within two or three years, if they
wished to exhaust their reserve funds.
<bullet> Second, as noted above, for the last three years, states
have spent more for TANF-funded benefits and services than they have
received in their annual block grants, and have drawn down prior year
funds to help pay for current service levels. This strategy cannot be
sustained indefinitely; reserves for most states are likely to be
depleted within a few years unless states make significant cuts in
current levels of services. Thus, most states cannot simply use reserve
funds to expand child care services without creating deeper deficits
for future years.
When child care funding was expanding, it resulted in dramatic
improvements in the availability of child care assistance for low-
income families. For many states, a key part of the strategy to promote
work and reduce the numbers of families receiving TANF assistance was
expansion of child care outside welfare. In recent years, as child care
funding has been flat or declining, it has become increasingly
difficult or impossible to provide continued access for working
families that are not receiving or leaving TANF assistance. The
Administration now estimates that flat funding levels will cause the
number of children receiving child care to fall from 2.4 million in
2003 to 2 million by 2009.
Although funding levels have not changed since 2002, the cost of
child care has continued to rise because the wages and salaries of
child care workers, the cost of renting space, and the cost of supplies
increase over time. A September 2004 report from the National Women's
Law Center documented the specific impacts for families as states
struggle to meet increasing costs with flat funding levels. NWLC found
that between 2001 and 2004, the income eligibility cutoff for a family
to qualify for child care assistance declined as a percentage of the
poverty level in about three-fifths of the states. NWLC also found that
the number of states that had waiting lists or had frozen intake
altogether for low-income working families not receiving welfare rose
to 24 states by 2004. The NWLC study also found that increases in
copayments are further limiting access to child care help for many
families. In about half the states, the copayment for a family with an
income at 150 percent of poverty increased as a percent of income
between 2001 and 2004 or the family became ineligible for help at this
income level due to a decrease in the income cutoff. Copayments also
increased in about half the states for families at 100 percent of
poverty, those least able to make adjustments in their budgets to pay
for higher child care costs.\29\
The Administration has proposed no increase in mandatory child care
funding for the next five years; H.R. 240 provides for $1 billion; last
year, the Senate voted, 78-20, to provide for $7 billion in child care
funding over five years, and the Senate Finance Committee bill would
provide for $6 billion. H.R. 751 would increase mandatory funding by
$11 billion over five years. How do these amounts compare to need?
In essence, the Senate Finance Committee's bill would address
inflation and the projected costs of the Senate work requirements;
under the House bill, there would be about an $11 billion shortfall.
Congressional Budget Office (CBO) staff has preliminarily estimated
that $4.8 billion in total funding (federal and state) would be needed
to sustain 2005 service levels over the next five years.
<bullet> CBO estimates that the combined work and child care costs
of meeting the House work requirements through increased participation
would be $8.3 billion. After allowing for overlap, the resulting
preliminary staff estimate is that the additional cost of sustaining
current service levels and paying for the work and child care costs
would be $12.5 billion.
<bullet> CBO staff has preliminarily estimated that the cost of
meeting the Senate Finance work requirements through increased
participation would be $1.8 billion, and that the combined cost of
meeting such requirements through increased participation and
sustaining current service levels would be $6.3 billion.
While the Senate Finance figure is near the projected costs of
inflation and meeting new work requirements, even this figure would not
provide for access to child care for additional working families
outside welfare or for expanding quality investments. At the same time,
the CCDBG reauthorization bill approved by this Subcommittee in 2002
and 2003 (and contained in H.R. 240) clearly signals the need for
expanded quality initiatives by states. The bill increases the required
child care quality set-aside; adds CCDBG goals of improving quality and
promoting school readiness; requires an annual strategy for the use of
quality funds; and describes a set of potential quality activities for
states. Yet, if funding is not sufficient to sustain current service
levels and meet new requirements, it is difficult to see how states can
at the same time make significant progress in improving child care
quality in the coming years.
We understand the difficulties in urging additional child care
funding at a time when there is a need to address the federal deficit.
However, child care funding is an essential support for work and a
crucial way of addressing the well-being and developmental needs of
children in working families. Providing for increased funding will be
crucial to sustain progress in the coming years.
Conclusion
While we urge a number of changes in the House's approach, we share
the view that it is important for Congress to resolve outstanding
issues and complete TANF reauthorization. During the last three years,
there has been a significant cost to the uncertainty and instability
resulting from lack of reauthorization and repeated short-term
extensions. We urge the Subcommittee to work for enactment of a final
bill that is responsive to the need for state flexibility and that
addresses issues of better jobs, employment retention and advancement,
helping families with the most serious barriers, and providing adequate
funding for child care and other supports to help working families both
on and outside welfare.
Endnotes.
\1\ Burke, V. et al. (December 2004). Children in Poverty:
Profiles, Trends, and Issues. Table A-3. Washington, DC: Congressional
Research Service.
\2\ U.S. Department of Health and Human Services. (2004).
Indicators of Welfare Dependence: Annual Report to Congress, Table TANF
2. Washington, DC: Author. Available at: http://aspe.hhs.gov/hsp/
indicators04/
\3\ Richer, E. et al. (November 2001). Frequently Asked Questions
about Working Welfare Leavers. Washington, DC: Center for Law and
Social Policy. Available at: http://www.clasp.org/publications/faq--
about--working--welfare.pdf
\4\ Administration for Children and Families. (2001). Fiscal Year
2000 TANF Financial Data. Washington, DC: US Department of Health and
Human Services. Available at: http://www.acf.dhhs.gov/programs/ofs/
data/tanf--2000.html
\5\ Burke, V. et al. (December 2004). Children in Poverty:
Profiles, Trends, and Issues. Table A-3. Washington, DC: Congressional
Research Service.
\6\ Boushey, H., and Rosnick, D. (April 2004). For Welfare Reform
to Work, Jobs Must be Available. Washington, DC: Center for Economic
and Policy Research. Available at: http://www.cepr.net/labor--markets/
welfarejobshit-2004april01.htm
\7\ Loprest, P. (August 2003). Fewer Welfare Leavers Employed in
Weak Economy, Snapshots of America's Families III, No. 5. Washington,
DC: The Urban Institute. Available at: http://www.urban.org/
url.cfm?ID=310837
\8\ Falk, G. (March 2004). Caseload Trends. Washington, DC:
Congressional Research Service.
\9\ U.S. Census Bureau. (August 2004). Income, Poverty, and Health
Insurance Coverage in the United States: 2003 (P60-226). Table 3.
Washington, DC: Author. Available at: http://www.census.gov/prod/
2004pubs/p60-226.pdf
\10\ U.S. Department of Health and Human Services. (2004).
Indicators of Welfare Dependence: Annual Report to Congress, Table TANF
2. Washington, DC: Author. Available at: http://aspe.hhs.gov/hsp/
indicators04/
\11\ Loprest, P. (August 2003). Disconnected Welfare Leavers Face
Serious Risk. Snapshots of America's Families III, No. 7. Washington,
DC: The Urban Institute. Available at: http://www.urban.org/
url.cfm?ID=310839
\12\ Greenberg, M. and Rahmanou, H. (February 2005). TANF Spending
in 2003. Washington, DC: Center for Law and Social Policy. Available
at: http://www.clasp.org/publications/fy2003--tanf--spending.pdf
\13\ Matthews, H. and Ewen, D. (2005). President's Budget Projects
300,000 Low-Income Children to Lose Child Care By 2010. Washington, DC:
Center for Law and Social Policy. Available at: http://www.clasp.org/
publications/cc--2006--budget.pdf
\14\ U.S. General Accounting Office. (2003). Child Care: Recent
State Policy Changes Affecting the Availability of Assistance for Low-
Income Families. Washington, DC: Author. Available at: http://
www.gao.gov/new.items/d03588.pdf
\15\ CLASP unpublished analysis of ``State Spending Under The
Fiscal Year 2003 Appropriation For
Child Care And Development Fund (CCDF) as of 9/30/2003'' available
at http://www.acf.hhs.gov/programs/ccb/research/03acf696/overview.htm
\16\ For example, H.R. 27 and H.R. 240 would each make TANF a
mandatory partner in the one-stop system unless the Governor opted out.
In addition, H.R. 240 would require TANF state plans to describe the
extent to which TANF employment and training services are provided
through the one-stop system and the extent to which former TANF
recipients have access to additional core, intensive, or training
services. Finally, H.R. 240 requires that the Secretary of Health and
Human Services and the Secretary of Labor jointly submit a report to
the Congress describing common or conflicting data elements,
definitions, performance measures, and reporting requirements in TANF
and WIA.
\17\ The descriptions of the Senate Finance Committee bill are
based on the description of the bill available at: http://
www.senate.gov/?finance/sitepages/leg/030905mrkup.pdf
\18\ Martinson, K., and Strawn, J. (May 2002). Built to Last: Why
Skills Matter for Long-Run Success in Welfare Reform. Washington, DC:
Center for Law and Social Policy and the National Council of State
Directors of Adult Education. Available at: http://www.clasp.org/
publications/BTL--report.pdf ; Michalopoulos, C., Schwartz, C., with
Adams-Ciardullo, D. (August 2000). National Evaluation of Welfare-to-
Work Strategies, What Works Best for Whom: Impacts of 20 Welfare-to-
Work Programs by Subgroup. New York: Manpower Demonstration Research
Corporation. Available at: http://aspe.hhs.gov/hsp/NEWWS/synthesis-
es00/index.htm; Strawn, J., Greenberg, M., and Savner, S. (February
2001). Improving Employment Outcomes Under TANF. Washington, DC: Center
for Law and Social Policy. Available at: http://www.clasp.org/
publications/improving--employment--outcomes--under--tanf.pdf
\19\ Kirby, G. et al. (April 2002). Transitional Jobs: Stepping
Stones to Unsubsidized Employment. Princeton, NJ: Mathematica Policy
Research.
\20\ Orr, L. et al. (1996). Does Training for the Disadvantaged
Work? Evidence from the National JTPA Study Washington, DC: Urban
Institute Press; Plimpton, L. and Nightingale, D. S. Welfare Employment
Programs: Impacts and Cost-Effectiveness of Employment and Training
Activities, unpublished paper; U.S. Department of Labor. (January
1995). What's Working (and what's not).Washington, DC.
\21\ Thomas, B., Butler, D., and Long, D. (September 1993). Unpaid
Work Experience for Welfare Recipients: Findings and Lessons from MDRC
Research. New York: Manpower Demonstration Research Corporation.
\22\ See, for example, Gueron, J. and Hamilton, G. (April 2002).
The Role of Education and Training in Welfare Reform. Policy Brief No.
20. Washington, DC: The Brookings Institution. Available at: http://
www.brookings.edu/dybdocroot/wrb/publications/pb/pb20.htm; Martinson,
K., and Strawn, J. (April 2003). Built to Last: Why Skills Matter for
Long-Run Success in Welfare Reform. Washington, DC: Center for Law and
Social Policy. Available at: http://www.clasp.org/publications/BTL--
report.pdf; Mathur, A. et al. (May 2004). From Jobs to Careers: How
California Community College Credentials Pay Off for Welfare
Participants. Washington, DC: Center for Law and Social Policy.
Available at: http://www.clasp.org/publications/Jobs--Careers.pdf
\23\ From Jobs to Careers: How California Community College
Credentials Pay Off for Welfare Participants. Washington, DC: Center
for Law and Social Policy; see also, Duke, A. ``Provide Post-Secondary
Education and Training to Low-Income Parents.'' in McNichol, L. &
Springer, J. (December 2004). State Policies to Assist Working Poor
Families. Washington, DC: Center on Budget and Policy Priorities.
Available at: http://www.cbpp.org/12-10-04sfp.pdf
\24\ Center for Law and Social Policy. (June 2002). Forty States
Likely to Cut Access to Postsecondary Training and Education Under
House Welfare Bill.. Washington, DC: Author. Available at: http://
www.clasp.org/publications/doc--Postsec--survey--061902.pdf
\25\ See: Pavetti, L. et al. (April 2004). The Use of TANF Work-
Oriented Sanctions in Illinois, New Jersey, and South Carolina.
Washington, DC: Mathematica Policy Research. Available at: http://
aspe.hhs.gov/hsp/TANF-Sanctions04/; Wu, C. et al. (June 2004). How Do
Welfare Sanctions Work? Institute for Research on Poverty. Discussion
Paper No. 1282-04. Madison, WI: Institute of Research on Poverty.
Available at: Available at: http://www.ssc.wisc.edu/irp/pubs/
dp128204.pdf; For a summary of earlier research, see: Goldberg, H. and
Schott, L. (October 2000). A Compliance-Oriented Approach to Sanctions
in State and County TANF Programs. Washington, DC: Center on Budget and
Policy Priorities. Available at: http://www.cbpp.org/10-1-00sliip.htm.
\26\ See Statement of Dr. Deborah A. Frank, Boston Medical Center
(February 10, 2005), available at: http://waysandmeans.house.gov/
hearings.asp?formmode=view&id=2498
\27\ Fred Brooks, Ed Risler, Claire Hamilton and Larry Nackerud.
(2002) ``Impacts of child care subsidies on family and child well-
being.'' Early Childhood Research Quarterly 17 (2002) 498 511. (See
also Errata to ``Impacts on child care subsidies on family and child-
well-being,'' Early Childhood Research Quarterly, Volume 18, Issue 1,
Spring 2003, Page 159).
\28\ Heather Boushey, ``Staying Employed After Welfare: Work
Supports and Job Quality Vital to Employment Tenure and Wage Growth''
(Economic Policy Institute Briefing Paper), Washington, DC: Economic
Policy Institute 10 (2002).
\29\ Karen Schulman and Helen Blank (2004) Child Care Assistance
Policies 2001-2004: Families Struggling to Move Forward, States Going
Backward. Washington, DC: National Women's Law Center.
______
Chairman McKeon. Thank you.
Mr. Austin, in your testimony you discuss leveraging
additional resources, including the private sector resources.
Mr. Austin. Yes.
Chairman McKeon. How has integrating the TANF work services
in the one-stop delivery system enhanced your ability to
leverage these resources?
Mr. Austin. It gives me another bucket of money.
Let me tell you what we have done.
We've actually gone out and said, who benefits each time?
The concept of welfare in many of these programs are that we
have one individual who walks into an office and asks for
resources.
If you work with an employee and say, ``Let me deal with
all of your people''--the gentlelady from North Carolina made a
point. She talked about people who don't ever access these
resources.
Fifty percent of the people who, for example, qualify for
food stamps never access them. There are a lot of people who
could be able to have TANF cash assistance, but never access
it.
And we said, let's look at all that whole population, the
working poor, and say, when I walk in, can I deal with anybody
who is TANF eligible, not just people who have signed up for
cash assistance, but TANF eligible, with an employer?
If they can tell me, ``Here are your top 25 percent of your
people right here that are in this category that I think
tomorrow, with 3 months worth of training will be making
significantly more,'' I can be able to partner with that
employer and say, ``Now, look, part of the benefit goes to the
individual, part of it is to the state of Florida, because I
keep that skilled person in here, but part of it's to that
businesswoman or that businessman who I'm dealing with.
If I can be able to get them to say, ``I will pay $3 for
every dollar you put into the training piece here,'' I leverage
that fund significantly.
So whatever--I'm not going to be able to meet all the
supposed needs. I don't know what the word ``needs'' means,
because I have a hard time with that one.
If we have--if we've got programs out there, people will
sign up, but if I've got somebody out there who I know is not
making as much money as at least we think they should to be
able to be self-sufficient, I've got to be able to find enough
money to be able to spread that around.
That employee benefits for having a better-skilled person,
and they will be willing to pay. They have been in Florida.
They paid $400 million to the $100 million we put in for the
last 4 years on training just on state-level projects.
We're right now working on how we do that at the local
level. We've got a lot of money sitting at the local level,
saying, OK, how do I be a little bit more sophisticated
negotiating? How can I negotiate with the community college and
say, ``Won't you train 30 rather than 20 if I'm going to be
your provider here, and we'll make a deal?''
And that's what it is. When we get those resources in here,
it allows us to be able to expand that base and to deal not
just with the person who walks in the office, but be able to do
that with the employer.
And being able to do that, we've also done that
competitively. We'll say, who will play with this? Maybe one
part of the state won't play. Maybe we have an office there
where people have done things traditionally and they're not
going to be able to deal with it.
That's fine. There will be enough pressure on that
community eventually that they will come together and find a
solution.
And we'll say we'll put all of our money into Jacksonville,
and then we will go down and tell the business leaders, ``We
didn't put a nickel into Ocala, because Jacksonville came
through.''
And those people then kind of beat the system and say, ``I
need a solution, because we don't want you to leave us
behind.''
Chairman McKeon. Thank you.
The Workforce Investment Act, we had the jurisdiction for.
The welfare reform goes to, I think, seven Committees, so we
have a small part of it.
But our goal on the Workforce Investment and on welfare
reform is to get everything into the one-stop, and we haven't
quite been able to do all of that yet.
The reauthorization that we passed last week goes a little
bit further, but I think--I think in a bipartisan way, if you
can have that one-stop where people can go in, whatever their
situation, and find out what resources are available and where
they should go, and if they're out of work they can help get a
job, help get the resources that they need to tide them over,
if they have a job, but it's not a good one, or not what
they're capabilities are, to help upgrade them--we're not quite
there yet, but it sounds like you are down there.
Mr. Austin. Well, you've given us great leadership, Mr.
Chairman, on this issue.
And Florida, our statute specifically require them to be a
mandatory partner in the one-stop, so that we don't have this
fighting over resources, because if we want to develop capacity
to be able to place people in employment, we should be
developing that capacity one time, not multiple times in
multiple agencies.
Chairman McKeon. The 40 hours and the 30 hours, you know, I
guess our thinking was that eventually people, most people now
work more than 40 hours, and it's kind of realistic thinking
that if you're going to move somebody from welfare to full
employment, productive employment, at some point they're going
to be working at least 40 hours, and how do we get them
transitioning there; and that's why we put the 40 hours in
there.
Mr. Mead. That's the goal, and I accept that they will have
to work 40 hours to get off welfare.
But I don't think that's the best way to mandate the states
to move toward an effective work test, which is a different
question.
Chairman McKeon. We required 24 hours of work and then 16
hours, they could--
Mr. Mead. I understand that.
Chairman McKeon. OK.
Mr. Mead. But just to reach 40 hours at all, on any basis,
with no stipulations at all about hours, is beyond the capacity
of any state in this country, including Wisconsin.
They had to move away from 40 hours toward more like 30
hours, most of which is work, to be sure, but--and with some
other things added in. They simply can't get to 40 hours, and I
don't think they have to get to 40 hours to have an effective
work test.
Much more important is to have the work test cover
everybody in the caseload, and we're not covering everybody in
the caseload now, not even close to it, because of the caseload
fall credit and the partial sanction, and above all, the child-
only programs that nobody has mentioned, that's more than a
third of the entire caseload now. They're not subject to any
work test or any time limit.
Why don't we talk about that? That's the elephant in the
room. That's a big, big problem.
And then you've got, I didn't mention this before, the
waiver programs, some of which, like Massachusetts, have the
effect of excluding most of the caseload.
Now, the bill, as I understand it, does not allow those to
be continued after they expire. That's the very least you could
do. You might talk about ending them early. I mean, I don't
know whether that's legally possible or not.
But again, the contrast here, you can look at tax reform,
where we need to broaden the base of the tax system, and then
we can lower the rate.
Same thing here. If you broaden the base of the work test,
you won't have to go to 70 hours, or 40 hours. You would be
able to have something feasible, which will nonetheless have a
dramatic effect on the caseload, particularly in the big states
like New York and California, where these problems with the
state-only and the partial sanction are prohibitive.
It really isn't possible to implement welfare reform in New
York City because of systematic violation of the work test,
which the state can do nothing about, and that has also meant
that the community groups and democratic politicians in the
city do not really accept welfare reform. They see it as
something that might be rolled back if they can just elect a
different mayor, and so they don't really come to terms with
it.
Whereas, because you had a truly universal requirement in
Wisconsin, everybody came to terms with it, not just the
politicians, the bureaucrats, the recipients, and that's why
you have a virtual extinction of traditional cash welfare in
that state, because there's no going back, and because there's
no escape.
In New York, there is still escape. In California, there is
still escape.
So let's worry about closing the escape hatches, rather
than raising the titular work participation rate and the number
of hours, when you don't really require it, because there are
these exemptions and offsets and so on that in fact make it 50
percent.
Let's enforce the 50 percent. Right now we have 33 percent.
It's going to be tough enough to get to 50 percent. And if you
do that, that will have a transforming effect, all by itself.
Chairman McKeon. Thank you very much.
My time has expired.
Mr. Kildee.
Mr. Kildee. Thank you, Mr. Chairman.
Dr. Greenberg, Dr. Horn said that research shows that a
mixed approach is the best way to move people out of welfare
and into jobs.
Do you agree with this? And should H.R. 240 help states
accomplish this?
Mr. Greenberg. Thank you.
The research that I believe Dr. Horn was referring to is
the research from what's known as the NEWWS evaluation, the
National Evaluation of Welfare-to-Work Strategies, and in the
NEWWS evaluation, they tested a range of different approaches,
and as Dr. Horn indicated, some of the approaches were ones
which largely focused on job search; some of the approaches
were ones which largely focused on basic education.
The program that by far performed most strongly of any of
them was the one out of Portland, Oregon, and it's become known
as a mixed services approach.
I think where there's some confusion, though, is mixed
services doesn't mean do a whole bunch of things all at one
time. What it means is, instead of treating everybody the same
way, that the program itself has a range of services available,
and so what was distinctive about the program in Portland is,
for those who were able to enter into jobs right away, the
program emphasized job search but also emphasized trying to
help them get the best jobs they could, not just the first job
they could.
The program also placed significant emphasis on access to
education and training. It built in access to GED completion,
to vocational training.
Of all the programs that were evaluated as part of the
NEWWS strategy, the NEWWS evaluation, it had the strongest
record in both increasing GED completions and increasing
occupational certificates.
So it was a mixed strategy approach that emphasized looking
at people as individuals, figure out what makes sense, include
education and training along with other components, and keep a
strong focus on linking families with employment.
So to answer, just in summary on this, the kind of approach
that Portland took and the kind of approach that a very large
number of states now take could not be able to be sustained
under H.R. 240, and the reason for that is because H.R. 240
only allows vocational training to count toward full-time
participation for three to 4 months.
Anything that couldn't be done in that three-to-four months
couldn't be a full-time activity, and even for that three-to-
four months, it's essentially, this is the flexible period, so
this is the competition between vocational training and job
search and anything else preparatory to being involved in a
program.
So the bottom line is, as we suggest in our testimony, when
we looked at this and gathered data from states from their
policies in 2002, at that point there were 40 states that
currently allow more access to education and training than
would be allowed under the H.R. 240 approach.
Mr. Kildee. So you would find that to be a significant
deficiency in H.R. 240?
Mr. Greenberg. I do, and the thing that I would most
emphasize here is, in the block grant structure, a state has no
reason to put a family in a vocational training program unless
the state thinks it's a good thing to do.
There is no sense in which somehow the state is able to
circumvent something or play some games. From the state's
perspective, this is a fixed block grant. It's a flat amount of
funding that the state has to work with.
States understand that the goal of this process is to link
people with jobs and they understand that in the political
process, when their caseload goes down, things are better for
them.
So a state has no interest to put an individual in a
vocational training program unless it's the state's judgment
that that is going to help that person in the long run be able
to earn enough to not need TANF and to not need other forms of
public assistance.
Mr. Kildee. Thank you.
Ms. Fallin, can you describe from your experiences in
Maryland how working parents are affected by difficulties in
finding affordable, stable, high-quality child care?
Ms. Fallin. I think that right now in Maryland I'll begin
by saying that we currently have a wait list for child care of
19,000 children.
Mr. Kildee. 19,000?
Ms. Fallin. 19,000. When you think of 19,000 children on a
wait list, you must wonder, where are those children, have
concerns about where they're staying, who is caring for them.
And when you also think about the issue of school
readiness, then you have to be concerned about what they're
receiving, wherever they're being cared for.
I think that this whole issue of welfare reform is not just
one of getting parents to work, but we have to think in terms
of our future workers, as well, and those are their children.
So our difficulty is, in Maryland, that we have the ability
to provide a subsidy for those families that are on TANF, but
we do not have the ability right now to provide services for
those who are the working poor.
We know that 82 percent of parents who are still working
after 2 years have been able to do so because of the fact that
they had a child care subsidy, and as you yourself mentioned
earlier, that movement along that line to a place where you
might not need that kind of assistance takes time. You move
along in order to increase your income.
So that in Maryland, I think we continue to struggle, as
others do, to try to get to a place where families have an
adequate amount of subsidy to assist them.
And we also have the additional issue of co-payments. Many
of our families are now required to pay an additional co-
payment that also creates a situation in which many of them
cannot afford that.
We talk about quality and we talk about the need for
quality for all children, but I think we all recognize that the
low-income family is the family that is least able to succeed,
if quality care is not available to them.
Mr. Kildee. Thank you very much.
Thank you, Mr. Chairman.
Chairman McKeon. Ms. Davis.
Mrs. Davis. Thank you, Mr. Chairman.
If we could just continue a little bit more on the child
care area, because I actually, in sitting here and thinking
about those one-time funds that were suggested earlier, I was
concerned, and actually I hadn't read your testimony, Mr.
Greenberg, at that time, and the concerns that you raised.
But what is important here is the sustainability, and the
messages, I think, in addition, that we send about how
important this is.
And I believe it was stated that, to the knowledge of the
witness, all children who are receiving TANF are--all families
that are TANF, generally speaking, are in a child care program,
and perhaps I think you just said that, also, but that those
families who have left TANF, who need to have child care
support as well to continue not just in part-time jobs but
hopefully getting into a full-time job which is really the
critical element in moving out of poverty, that they don't
necessarily have that kind of care.
Is there any kind of other model that we've seen that would
allow more credits to states that have more families that move
into that situation, the subsidy is not adequate?
How can we try and address this, then? Because this is so
critical, and we may argue for additional funding, we may argue
for additional help, that may fall on some deaf ears down the
line.
Is there some other way that this can be addressed? And I'm
also concerned, as I think we all should be, about the quality
of the care, because clearly, kids who are not exposed to as
much in those early years are not going to be as successful,
but child care can, just as I think a public education system
can, can mitigate that to a certain extent.
So what should we be doing? What else is critical here?
Mr. Greenberg?
Mr. Greenberg. First of all, let me just say a little bit
more about the current picture, and then directly respond to
you.
Assistant Secretary Horn indicated that currently sort of
the most typical situation is child care available for families
receiving TANF assistance and leaving TANF assistance, at least
for some period of time.
The biggest issue really involves low-income working
families that don't have any recent connection with the TANF
system.
I think that description is right. I should say I wish we
had better Federal data on this, and if the Committee--there
are things that could be done for us to have better data than
we have, but I think that overall picture is right.
It is a huge problem, and it is a huge problem because it
does mean that in community after community, families are now
told that if you're a working family and you don't have any
recent connection to the welfare system, that the only way you
can get access to child care is by going through welfare, which
is the opposite of what states want to do.
So the National Women's Law Center, in a study they
released last year, estimated that there are now 24 states in
which either there are waiting lists or intake has been frozen
for low-income working families outside the welfare system, and
that's really what's at stake in the issues around child care
funding.
I wish that there were a helpful answer I could give on
your direct question about what we can do to better reach out
and improve services to those families who right now can't be
reached. It really is a resource problem.
When one looks at the patterns over time in participation
in the program, when money was going up, more families were
getting help.
When money has stayed flat, fewer families are getting
help, and the picture threatens to get worse over time.
So on the one hand, I do commend the Committee for the
emphasis on quality that is shown in a number of features of
the reauthorization provisions of the Committee for increasing
the set-aside for quality, for urging states to be more
purposive in how they think about the use of their quality
funds, and being more strategic in that. I think that's a
positive thing.
And I would say that states are struggling across the
country with how they can do a better job in a situation where
the resources really are strapped.
Ms. Fallin. I would just add to that that I'm not so sure
that I can tell you something different to do, but I do know
that for many states, eligibility requirements have actually
been lowered, which makes fewer people eligible for subsidies,
for example.
So that if we use some of the existing kinds of programs
that we have in a better way, like lowering the co-pay, for
example, like raising the eligibility level so that more people
qualify, I think that would go a long way in improving
accessibility for families to child care that they need.
And I also agree that a quality issue on the other side is
that poor people, just like any other people, want their
children in safe, healthy, and developmentally appropriate
environments, so it's extremely important that they're
comfortable, too, when they go to work, that they have a
program that they can send their children to that makes them
feel able to be at work and to do what they need to do there
and to be successful with that.
So I think that the quality side goes hand in hand with the
resource availability for subsidy.
Mr. Mead. May I just add one comment?
The fact that there are waiting lines does not, to me,
indicate that there's unmet need.
The reason for the waiting lines could be simply that a
subsidy is being offered. When you subsidize something, more
people necessarily would like it. Most of us would like
something subsidized that we otherwise would have to pay on the
open market. And so the effect of subsidy is raised demand, so
people sign up.
That does not establish that they can't afford the care
without the subsidy, and it doesn't establish, let alone, that
they can't get it at all.
Now, that might be true, but we don't know that, and until
you find out what they were paying previously and what their
alternative is to getting the subsidy, you can't conclude that.
Now, if you find that people have to go back on TANF in
order to get child care, if that's the effect, I would agree
with you that's undesirable, but I don't know of any evidence
for that. I don't know of any study that shows that inability
to get subsidized care off welfare drives people back on
welfare. I don't know any evidence to that effect.
So it's something to look at. I don't mean that it's not an
issue. But we can't assume, just prima facie, that that is
evidence of unmet need.
Chairman McKeon. The gentlelady's time has expired.
The gentleman from Virginia.
Mr. Scott. Thank you, Mr. Chairman.
To follow through on that, what is your income to qualify
for this subsidy?
Mr. Mead. For what?
Mr. Scott. For the child care subsidy.
Mr. Mead. I don't know the--
Mr. Scott. I mean, do you have to qualify by having a low
enough income?
Mr. Mead. There is some limit to income, and I think it's
set by the states to some extent, but my point is a more
general more, that there's--
Mr. Scott. Let me get this number first.
Ms. Fallin, is there--
Ms. Fallin. Yes, I can tell you about Maryland.
Mr. Scott. OK.
Ms. Fallin. In Maryland, a family of three that earns a
little less than $30,000 a year is eligible for a child care
subsidy.
Mr. Scott. And how much is the subsidy?
Ms. Fallin. Well, for an infant, I can tell you this, that
for an infant care it costs about $10,300 a year for--
Mr. Scott. OK. So I guess the question is, for a $10,000
child care bill, the fact that they're in a wait list--you
know, I guess, whether they need it or not, the subsidy is
there.
You would think anybody making $30,000 a year looking at a
$10,000 child care expense for the first child, and then if
they've got two children, you're talking about--they both won't
be infants--you know, whether they need it or not.
I mean, can we assume that anybody under $30,000 with these
kind of bills would need that subsidy, without doing a study?
Ms. Fallin. I would assume that, and I can tell you my
locate staff, which helps parents to find child care, every day
have folks on the telephone who are looking for child care, and
one of the things that we do as an R&R is to assess their--we
do sort of a preliminary assessment of their eligibility for
subsidy.
Mr. Scott. You mentioned 19,000 people on the waiting list.
How many people were getting services?
Ms. Fallin. I'm sorry. Say that again?
Mr. Scott. How many people were receiving services?
Ms. Fallin. Oh, how many--I don't have that number, but I
can certainly--
Mr. Scott. I mean--
Ms. Fallin. In Maryland?
Mr. Scott. Yeah. Well, you said there are 19,000 people on
the waiting list.
Ms. Fallin. That are currently on the--these are people
who, after they put in place a wait list.
Mr. Scott. How many people--I mean, is that out of how
many? I mean, do you have 2 million getting services, or 10,000
getting services?
Ms. Fallin. There are 21,000.
Mr. Scott. 21,000. So you have about as many people on the
waiting list as you're serving.
Ms. Fallin. That's true. Thank you. That comes back to me.
Yes, because we're anticipating that if it continues the way
it's going now, that eventually the number of children on the
wait list will outrank the number receiving care.
Mr. Scott. OK.
Mr. Greenberg, you mentioned that the economy helped get
people off of welfare.
What about child support enforcement, food stamps, and the
earned income tax credit?
Mr. Greenberg. There are a number of studies that have
tried to disentangle what helped explain the big growth in
employment during the 1990's, and the pretty broad consensus
out of the studies is that a number of factors all mattered.
It's very hard to ascribe particular percentages to say,
welfare reform did this much, the economy did this much.
Mr. Scott. Without percentages, you could say that child
support enforcement was a major factor, an important factor.
Mr. Greenberg. It makes a lot of sense that child support
would have been an important factor, because child support
plays a critical role in making it possible for a low-wage
parent to make ends meet.
There are also, on the earned income tax credit, there are
a number of studies that do highlight the importance of the big
earned income tax credit expansion of the mid-1990's as a
significant factor, and also raising employment in that period.
Mr. Scott. And food stamps?
Mr. Greenberg. I'm not aware of studies that concern the
role of food stamps in this.
I do think one of the important things that has happened
during the 1990's is that there was increasing recognition of
how valuable food stamps can be as a way of helping a low-
earning family make ends meet, that particularly for families
who are in low-wage jobs who otherwise risk food insecurity,
that the food stamp program both improves nutrition for the
family and reduces economic stress for the family.
And so in a number of states, there's increased emphasis
now on efforts to try to connect low-income working families
with food stamps as a way of improving the well-being of the
families and helping them sustain employment.
Mr. Scott. Thank you.
Ms. Fallin, your testimony talks about half-day and full-
day Head Start.
We've been told that the educational value for the full-day
Head Start is limited.
Are you suggesting that there are other significant
benefits in going to full-day Head Start?
Ms. Fallin. Absolutely. Absolutely.
Although our demonstration project is a unique one, the
children--these are children who have actually entered through
the child care program, and so they're able to have wrap-around
services at that particular program, so that it isn't
specifically Head Start all day, but it's a combination of the
child care program as well as the Head Start collaboration
classroom.
And I think that what it does in addition to providing the
kind of services that the Head Start family requires, and it
helps to prepare children for the public school system, but
what it also does is create an atmosphere in which the child
care program becomes much more quality, and allows for the
teachers that are in the Head Start classroom, who come from
the child care center, to move out and to bring in a new
teacher.
So that in addition to the kind of services that are needed
for Head Start, we're also doing a lot to raise quality for the
child care community, and without Head Start resources being in
those child care centers, those child care providers just don't
have the resources to do it.
Chairman McKeon. The gentleman's time has expired.
The gentleman from New Jersey, Mr. Payne.
Mr. Scott. I cut Dr. Mead off. I didn't know if he had
completed his--we have 5 minutes, and sometimes we get a little
rude around here. I don't know if he had a little more to say
on that, or he had completed his thought. I'd appreciate--
Mr. Price. I'd yield to the gentleman.
Mr. Scott [continuing]. If we could give him that
opportunity.
Mr. Mead. Your question was, again?
Mr. Scott. Well, I cut you off in the middle of one of the
questions earlier, and if you had completed your statement,
that's fine. I just didn't want you to--
Mr. Mead. Yeah. No, I'm--
Mr. Scott. Let me apologize for being rude, then. Thank
you.
Mr. Mead. OK.
Chairman McKeon. You're never rude, Bobby.
Mr. Payne.
Mr. Payne. I just wonder when he started apologizing for
it.
[Laughter.]
Mr. Payne. I'm sorry that I missed most of the--all of the
discussion. I was trying to browse through the testimony. This
is one of the busier days. When the middle of March comes, it's
our March madness, because everyone in the world comes to
Washington.
But I just wonder, just in general, what the question of
the so-called welfare reform, and we saw the numbers about the
number of people who initially had, you know, the 5-year for
life, and the 2-year and off policy.
The question of really what happens to people--and I'm sure
that all of you have done some research on what's been the
experience of the 2 years you're off, and are people any better
off?
I know the governments feel they're better off because they
feel everyone should work and all that stuff, but are the
families any better off? Are they working their way out of
poverty in general? Are children better served?
If anybody could just deal with how the results in your
opinion of the Clinton welfare reform as we know it has worked?
Mr. Mead. Let me just summarize some of the facts that
there's no dispute about. There are some facts where there is
dispute.
But it's clear that the caseload has fallen by about 60
percent, that work levels for single mothers have risen
sharply, although they've declined a bit in the last few years,
probably due to the recession.
According to surveys of people who have left welfare, at
the time they 're surveyed, about 60, 65 percent are employed,
a high percentage at some time since they left welfare; about
40 percent are not employed. We don't know what happened to
them.
There's some evidence to suggest that people who leave
welfare without working are worse off, at least initially.
It looks like those who go to work improve their wages if
they stay working over several years, and eventually escape
poverty, usually not immediately, but eventually.
So an emerging issue is whether those who leave welfare are
working steadily or not.
As to effects on the families, they appear to be small, but
mostly positive. These are based on evaluations, now, not
leaver surveys.
The evaluations suggest that the effects on young children
are mostly positive, but small; the effects on older children,
sometimes negative.
In the case of teenagers who have less supervision because
the mothers are now working, they sometimes show negative
effects in some studies, but again, small.
So welfare reform is about the adults. It's hard to show
strong effects on the children. But since many thought there
would be adverse effects, this is still good news.
So I think that's the basic picture. There is economic
improvement. It's not overwhelming. It doesn't mean everyone
escapes poverty. But if they stay working, they eventually do
escape poverty.
In my view, the question of incomes, what people should
earn after reform, gets to be an issue.
Precisely because we now have more people working, that
issue must finally be addressed more than we have done.
So the poverty goal, and the administration has provided
for this, the poverty goal gets to be more important after we
get people off welfare. We have to focus on to what extent they
can actually escape poverty.
But that issue becomes more pressing after reform, after
everyone is working.
Mr. Payne. What about health care? I mean, we know that
that's--and I would assume that these people who are leaving
welfare are not necessarily getting jobs that provide health
care and--
Mr. Mead. Not necessarily, but it's--the level is greater
than many people think. It's about a third to a half in various
studies I've seen, a third to a half of those who go to work
get health care.
Now, it depends what you mean when you say get health care.
It might mean that they're offered it by the employer, but they
have to pay something for the premiums, and they may decide
they don't want to pay, and they'd rather go to an emergency
room or count on their transitional care that they get from
Medicaid.
I have not seen studies suggesting that lack of health care
is a barrier to leaving welfare. I have not seen that.
Rather, the lack of health care for some people among low-
wage workers is an ongoing problem that is not really a welfare
reform problem, it's a general problem for the entire
workforce, which I think Congress has to address.
Mr. Austin. Mr. Payne, one of the things that we don't
think about is that we build a second safety net as those
workers come off and establish their track record of work.
When the economy got soft in Florida, after 9/11, we had a
period of time where we were struggling being able to make sure
we had enough jobs in an economy that was driven mostly by
tourism.
What happened was, we found out that welfare didn't go up
at all. What went up were our unemployment disbursements.
OK. So you build a second safety net. You've got one safety
net, which is TANF. The second safety net is you have
unemployment insurance which is accumulated, and most of the
people who came off of welfare who had any type of disruption
at that point had a second safety net, and they weren't drawing
upon future TANF payments, but they were drawing upon
unemployment compensation.
We view that as a second piece that people don't talk
about, that you build a second net for low-income families to
be able to draw upon in times of difficulty.
Mr. Greenberg. Let me just add several comments on that.
First, specifically on the health care issue for families
leaving welfare, there were a number of studies, particularly
in the earliest years after TANF, by looking at what happens to
families who leave welfare, and a lot of the story initially
was that families often got separated from Medicaid.
It shouldn't have happened, because the children should
have continued to be eligible. The parent may or may not have
been eligible, but there were significant drops in Medicaid
coverage.
There have been some improvements in connecting children to
health care over time. There is still clearly a problem for
parents.
And the problem that consistently we see is that parents
are entering into jobs in which either health care is not
available or there may be premiums or co-pays or things that
make it difficult to take up the health care on the job at the
earnings that the individual has.
There is clear evidence of drops in health care coverage
for parents after leaving welfare, and that continues to be a
problem.
On the particular issue of the caseload falling and then
the unemployment system, back at the time in the first years
after welfare reform, a big question for many of us was what
will happen when there's an economic downturn, and how will the
system respond at that time?
What unfortunately now seems pretty clear is when the
economic downturn hit, that a number of families did lose jobs,
we do see a decline in employment for single-parent families,
we don't see an increase, at least at the national level, in
families receiving welfare.
There is a small increase in unemployment insurance. There
has been some increase there, but it's not nearly enough to
explain the drop in employment and the fact that welfare
caseloads have basically stayed flat.
So it does raise concerns that the system has not been as
responsive as we would want it to be during an economic
downturn.
Let me just quickly say that much of the evidence that
Larry Mead summarized is, I think, consistent with the evidence
that I summarized in my testimony also.
The couple of things that I would want to add in addition
to that are, in the early period, in the late 1990's, the
studies pretty consistently showed 50 to 60 percent of families
leaving welfare were employed. The most recent study from the
Urban Institute shows a lower figure, shows it now down around
42 percent.
So there is concern that as the economy got worse, that the
share of families leaving welfare with jobs went down.
It's also clear that a group of families has left welfare
without finding work and without being able to sustain work.
In some instances, those are situations where families are
living with other family members, where they may have
disability benefits, where they may have child support, other
sources of income.
But it's also clear that some of those who fell out of the
system had the biggest problems, were most likely to have
limited educations, limited work histories, health issues,
disability issues, things that made it much more difficult to
work.
And people sometimes now refer to this group as the
disconnected, a group that's not in welfare and not in work,
and that continues to be a significant source of concern.
Mr. Mead. May I just add one comment, that when you have
extreme caseload fall--and this definitely occurred in
Wisconsin--there is a concern that some of those who left maybe
shouldn't have left, or they should have left later, because
they do have serious problems.
What's occurred in Wisconsin is they've developed outreach
to the community. Many of the agencies running welfare reform
in Milwaukee have done what I call going into business.
That is, rather than trying to restrict the caseload, which
was always our concern, they're now trying to sell welfare to
the community. They're going out to people who might well need
aid and saying to them, ``Well, we're going to--we have aid
available, we're prepared to help you. You also have to work,
and we want you to take up that bargain. We're offering you a
deal, basically. You work, and we will help you.''
And the need to outreach and offer that deal is a part of
the welfare of the future.
I don't think we should seek to abolish welfare, but we
should engage in outreach to people who maybe should take up
the deal. They need help, and they also need to work, and we
ought to offer it to them, and we shouldn't be squeamish about
that.
That's the system that we want, one in which people work
and they get help as needed, and that we help them get back on
their feet and they go back out and they leave welfare.
We shouldn't expect to undo welfare, but we should expect
it to be something that people use when they need it, on a
short-term basis, we hope, and we should be prepared to engage
in outreach to do that.
So that's part of a solution to the people who are
disconnected.
Chairman McKeon. The gentleman's time has expired. That's a
good discussion of the Clinton welfare bill.
[Laughter.]
Chairman McKeon. It's nice to see President Clinton take
credit for it. We passed it three times. He vetoed it twice. He
finally signed it.
But it was a bipartisan effort, and I'm happy that we were
all part of it, and I'm happy that you've been here. I think
it's been a good hearing. I think you've added a lot. And I
would encourage you to stay involved in the process as we go
through this reauthorization, because you're all experts that
we'd love to be able to call on, and appreciate your help.
No further business, the Subcommittee stands adjourned.
[Whereupon, at 1:16 p.m., the Subcommittee was adjourned.]
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