<DOC>
[106th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:57684.wais]
NATIONAL PROBLEMS, LOCAL SOLUTIONS:
FEDERALISM AT WORK
PART III
WELFARE REFORM IS WORKING: A REPORT
ON STATE AND LOCAL INITIATIVES
=======================================================================
HEARING
before the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
__________
APRIL 22, 1999
__________
Serial No. 106-18
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.house.gov/reform
______
U.S. GOVERNMENT PRINTING OFFICE
57-684 CC WASHINGTON : 1999
COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
STEPHEN HORN, California PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC
JOE SCARBOROUGH, Florida CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South DENNIS J. KUCINICH, Ohio
Carolina ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia DANNY K. DAVIS, Illinois
DAN MILLER, Florida JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas JIM TURNER, Texas
LEE TERRY, Nebraska THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California ------
PAUL RYAN, Wisconsin BERNARD SANDERS, Vermont
JOHN T. DOOLITTLE, California (Independent)
HELEN CHENOWETH, Idaho
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
David A. Kass, Deputy Counsel and Parliamentarian
Carla J. Martin, Chief Clerk
Phil Schiliro, Minority Staff Director
C O N T E N T S
----------
Page
Hearing held on April 22, 1999................................... 1
Statement of:
Allen, Claude A., secretary, Virginia Department of Health
and Human Resources; Michael Poole, chairman, Board of
Directors, Florida Work and Gain Economic Self Sufficiency
Program; Jason A. Turner, commissioner, New York City Human
Resources Administration; Julia Taylor, CEO, YW Works;
Cassandra Tucker, former welfare recipient; Genevieve
Kukla, president, Central Overhead Doors; Wendell Primus,
director of income security of the Center on Budget and
Policy Priorities.......................................... 69
Thompson, Tommy G., Governor of Wisconsin.................... 17
Letters, statements, etc., submitted for the record by:
Allen, Claude A., secretary, Virginia Department of Health
and Human Resources, prepared statement of................. 72
Burton, Hon. Dan, a Representative in Congress from the State
of Indiana, prepared statement of.......................... 5
Hutchinson, Asa, a Representative in Congress from the State
of Arizona, letter dated April 2, 1999..................... 51
Kucinich, Hon. Dennis J., a Representative in Congress from
the State of Ohio, prepared statement of................... 14
Kukla, Genevieve, president, Central Overhead Doors, prepared
statement of............................................... 107
Poole, Michael, chairman, Board of Directors, Florida Work
and Gain Economic Self Sufficiency Program, prepared
statement of............................................... 78
Primus, Wendell, director of income security of the Center on
Budget and Policy Priorities, prepared statement of........ 112
Sanders, Hon. Bernard, a Representative in Congress from the
State of Vermont, prepared statement of.................... 11
Taylor, Julia, CEO, YW Works, prepared statement of.......... 94
Thompson, Tommy G., Governor of Wisconsin, prepared statement
of......................................................... 25
Tucker, Cassandra, former welfare recipient, prepared
statement of............................................... 102
Turner, Jason A., commissioner, New York City Human Resources
Administration, prepared statement of...................... 85
NATIONAL PROBLEMS, LOCAL SOLUTIONS:
FEDERALISM AT WORK
PART III
WELFARE REFORM IS WORKING: A REPORT
ON STATE AND LOCAL INITIATIVES
----------
THURSDAY, APRIL 22, 1999
House of Representatives,
Committee on Government Reform,
Washington, DC.
The committee met, pursuant to notice, at 10:33 a.m., in
room 2154, Rayburn House Office Building, Hon. Dan Burton
(chairman of the committee) presiding.
Present: Representatives Burton, Morella, Shays, McHugh,
Mica, LaTourette, Miller, Hutchinson, Terry, Biggert, Ose,
Ryan, Waxman, Maloney, Norton, Kucinich, Davis of Illinois, and
Schakowsky.
Staff present: Kevin Binger, staff director; Barbara
Comstock, chief counsel; David A. Kass, deputy counsel and
parliamentarian; Kristi Remington, senior counsel; Mark
Corallo, director of communications; John Williams, deputy
communications director; Carla J. Martin, chief clerk; Lisa
Smith-Arafune, deputy chief clerk; Corinne Zaccagnini, systems
administrator; Nicole Petrosino and Jacqueline Moran,
legislative aides; Laurel Grover, staff assistant; Phil
Barnett, minority chief counsel; Cherri Branson and Sarah
Despres, minority counsels; Ellen Rayner, minority chief clerk;
and Early Green, minority staff assistant.
Mr. Burton. A quorum being present, the Committee on
Government Reform will come to order. I ask unanimous consent
that all Members' and witnesses' written opening statements be
included in the record. Without objection, so ordered.
I want to welcome Governor Thompson of Wisconsin, who is
with us today. Governor, we have four markups that are going on
right now, and as a result we are going to have Members coming
in and out; and I appreciate your patience with the problems we
are having here in Washington.
Today, we will continue our series of hearings on the
relationship between State and local governments and the
Federal Government, and we will look at the progress of reforms
of our Nation's welfare system.
We are very honored to have Governor Thompson with us
today, whose innovative reforms in Wisconsin set the tone for
later Federal reforms. The remarkable turnaround in welfare
policy at both the State and Federal levels has allowed
millions to free themselves from the vicious cycle of welfare
dependency and poverty, and I am glad to be able to say that
the success of the 1996 reforms and the State initiatives they
were based on has proved many of the reform critics wrong.
Since 1993, welfare caseloads have fallen by 6.5 million
people.
Welfare reform started the same way many of our most
innovative and successful policy reforms have started: in the
States. One reason for this is that every State is different,
and the government that is closest to the people is best able
to respond to the people. We already have seen that in the past
two hearings on crime and taxes. What may work in a large State
like California may not be right for Delaware. The same holds
true for welfare reform, and today we will hear from several
different States and localities on how things are getting done.
Welfare reform is one of the best examples of policy
success at the State level. Before Federal welfare reform
legislation was enacted in 1996, 43 States were already
operating under waivers from the Federal laws, a practice begun
under President Reagan. The waivers enabled States to initiate
experimental reforms in welfare that were ultimately
successful, and these reforms led to the Federal legislation
enacted in 1996.
In 1965, there were over 1 million people on welfare rolls
nationwide. By 1994 that figure was over $5 million. Even after
spending $6 trillion in the war on poverty, the poverty rates
increased from 14 percent to 15.2 percent between 1965 and 1992
and out-of-wedlock births rose from 5 percent in 1965 to
approximately 32 percent today. If you look at the inner-
cities, the figures are even higher. It became apparent that
the welfare system was not working and was actually hurting the
very people it was designed to help.
The 104th Congress made it a priority to change this system
and replace it with a program that placed an emphasis on work,
responsibility, and family. The old welfare system undermined
these basic values. The premise of reforms was rather simple.
If an individual on public assistance is able to work, there is
no reason he or she should not work. One of our most respected
Presidents once said you cannot help men permanently by doing
for them what they should and could do for themselves.
Yet welfare reform is very controversial. The President
vetoed two of these bills before he signed the third welfare
reform bill in August 1996, and many liberals said that the
bill would cause chaos and throw millions of people into the
streets. Well, that has not happened. In fact, the welfare
reform bill provided a $14 billion block grant for child care.
Other critics claimed that the States could not be trusted.
Both President Clinton and his Secretary of Health and Human
Services warned of the serious danger of providing welfare
funds to the States in block grants. When President Clinton
spoke of the pending danger of the States' race to the bottom,
he said ``It is always cheaper to cut people off of welfare
than to move them to work. It will always be cheaper to lower
benefits than to figure out how to reduce the caseload by
moving them to work.'' Well, the States did not do that. They
actually put more funds and more effort into providing their
citizens new jobs, new hope, and new opportunity.
Take, for example, Governor Thompson. Who did he talk to
when he was planning welfare reform for Wisconsin? He went
directly to the people who are most affected by the reforms in
welfare, the recipients. He found out directly from the source
why they were on welfare and how he could help them become
independent. Even with the success of the waiver reforms in
Wisconsin, it was an uphill climb to convince the
administration that the reforms would work and that we could
trust the States to provide adequate benefits to their
citizens.
Fortunately, we in Congress trusted the States and believed
that they were best equipped to assist their own citizens. One
of the truly great aspects of State control over policy is the
speed with which they can address issues or problems that
arise. If a program is not working for a State like Virginia,
Virginia can change it. Virginia does not need to come to
Congress and convince Senators and Representatives from 49
other States that a particular welfare policy should be changed
because it does not suit one State.
Representatives from several States will be here today to
tell us about their welfare reform programs and the progress
they have made. Today, we want to look forward to the future of
welfare and determine what roles the Federal, State, and local
governments should play.
Our witnesses today also will share with us their views of
the impact of present Federal laws and regulations on State
programs and whether they are helping or hindering State
efforts.
We are very happy Governor Thompson is on our first panel.
He was first elected in 1986, and has won reelection ever since
then. My gosh you have been Governor for----
Governor Thompson. Thirteen years.
Mr. Burton. And you look so young.
Governor Thompson. I am the dean.
Mr. Burton. Only 1 year after he took office, he received
his first Federal welfare waivers from President Reagan and
later received waivers from Presidents Bush and Clinton. Since
that first waiver, he has worked with true diligence to
overhaul Wisconsin's welfare system, and under his leadership
Wisconsin's welfare rolls have dropped 81 percent since 1994.
As part of his efforts, Wisconsin became the first State to
require work in return for welfare benefits. Wisconsin Works or
W-2--you know that is the same thing as the W-2 form for the
IRS. Maybe you should have thought about that.
Governor Thompson. That is why we did it. We went on to
make W-2 synonymous with work.
Mr. Burton. I understand. Wisconsin Works or W-2, the
State's welfare program is a model for the rest of the country.
In fact, W-2 has become an international model for many
European nations looking to reform their welfare systems.
The successful reforms in many States and local governments
have been widely reported. What Congress needs to know is when
to help, how to help, and when to get out of the way. And we
hope today to learn from you, Governor Thompson, and others
what it is you think we need to do to assist you further in
what you are doing in the States.
We will have other panelists who we will introduce at that
time and each participant on that panel will provide us a
different view on welfare reform. And with that I recognize Mr.
Waxman for his opening comments.
[The prepared statement of Hon. Dan Burton follows:]
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Mr. Waxman. Thank you very much, Mr. Chairman. I welcome
Governor Thompson to our hearing. This is an important hearing
because as an oversight committee we want to watch to see how
in the real world changes are taking place and whether the
original assumptions of our legislation are being lived up to.
I am glad to be able to be here and report some good news
about welfare reform. Many former welfare recipients have jobs
and have been able to move from being recipients to taxpayers.
In part, these changes are made possible through innovative
programs like that which Governor Thompson has initiated in his
State. And in large part these positive changes are the result
of a strong national economy which created 1.9 million jobs in
1998 alone. The Council of Economic Advisors attributes about
half of the decline in welfare rolls to favorable economic
conditions.
Unfortunately, the story on welfare reform is not all good
news. Since the enactment of welfare reform, welfare rolls have
declined by 46 percent. This sounds like a dramatic
improvement. But in some States, many people have left welfare
because they have been forced off by the State, not because
they have risen out of poverty.
In December, for example, a Federal court in New York City
found that applicants had been illegally discouraged from
applying for food stamps and Medicaid and cash assistance. The
court found that people were not only improperly denied
assistance, but new applicants were diverted to private
sources. And New York City may not be alone. Nationally
enrollments in the food stamp program have declined further and
faster than the decline in the poverty rate. The Department of
Agriculture has initiated investigations into whether States
have illegally diverted applicants from the food stamp program.
On the other hand, voluntary agencies have also felt the
pinch created by welfare reform. A study by Catholic Charities
U.S.A. found that the demand for food from pantries and other
church-run programs has increased over 70 percent since welfare
reform. So we see people going off food stamps. We hope they
are working and self-sufficient, but at the same time we see
them turning to Catholic charities and other charitable
organizations.
None of these trends would exist if case closures meant
that all people who left welfare were making a successful
transition to the work force. But by and large what we have had
is pretty good news. We hope it will continue. The real test is
going to be when the economy is not as strong as it is now. And
then we will have to evaluate whether welfare reform is living
up to our expectations.
I applaud the success of individuals who have made the
transition from welfare to work. I believe that just closing a
case is not necessarily the true test of whether we have a
welfare success. As an oversight committee, it is our duty to
look beyond the case closing as statistics to determine what is
really happening in welfare programs.
And so, therefore, Mr. Chairman, I see you have a long list
of witnesses who are going to give us different perspectives on
this problem. I think that is very worthwhile. And I know many
of the Members are not going to be able to be here for the
testimony, but the record that you will make today will be very
helpful for all of us on this committee and in the Congress to
continue our oversight over this important area of interest. I
yield back the balance of my time.
Mr. Burton. Thank you, Mr. Waxman. Mrs. Morella.
Mrs. Morella. Either one, we work together well. I just
want to welcome you, Governor Thompson. I am one who has had
some concerns about how well welfare reform systems would work,
and I am just so pleased to hear such good success stories. I
guess I also want to--in your remarks if at some point you
might also look at some of the legislation that we are going to
have before us. I mean, for instance, legislation that would
allow people to continue with Medicaid as they work so they
don't lose health benefits. I guess that is what I am thinking
of. Have you confronted a challenge with people who need to
have health care benefits while they are working?
And second, the concept of training. One of the things we
did in the Higher Education Act is we allowed some colleges to
be able to subsidize child care for people returning to school
to hone their skills or to learn new skills which actually
would get them off of welfare. So I am also curious about child
care and about training programs. And I really applaud your
coming here to help us learn from your experiences. Welcome.
Mr. Burton. Mr. Shays.
Mr. Shays. Governor Thompson, I consider you a real role
model for so many people. You have been out front on these
issues when they were not popular. But I would add that I also
consider you a role model because, when you moved forward with
welfare reform, you didn't just say ``OK now that we have
passed it, we can go on to the next issue.'' You truly tried to
make it work, which in some cases has meant you put more money
into programs.
I think you have made it very clear that welfare reform is
not going to work if we don't have the kind of designed
education and job training that will help people get jobs. You
are the one who said that welfare recipients are not going to
move over to jobs if they do not have some continuation of
health care. You are the one who has made it very clear that
you need transportation and day care. All of those cost money.
And I just appreciate that you have done that.
This may sound partisan, but I find it particularly
satisfying to see a Republican who has been so out front on
both sides, in the sense that you want welfare reform, but you
want to make it work. And you have shown a tremendous amount of
compassion, so to me you are a real hero.
I would also conclude that you have an outstanding
Congressman sitting next to you. I don't know how Wisconsin
does it, but you have a lot of great members on both sides of
the aisle. This fellow is tremendous. It is great to have you
here.
Governor Thompson. Thank you very much.
Mr. Burton. Any comments, Mr. McHugh? Mr. McHugh passes?
Mr. McHugh. Well, Mr. Chairman, let me just very briefly
welcome the Governor. I would certainly associate myself with
the remarks of the gentleman from Connecticut. I too look to
you, Governor, as a source of inspiration, as someone who has
really, like so many other Governors across this great country,
forged a new path that we can hopefully continue to follow. I
want to thank you for your efforts and tell you how much we
appreciate your being here today. And thank you, Mr. Chairman,
for allowing us to hear from such a distinguished panelist.
[The prepared statements of Hon. Bernard Sanders and Hon.
Dennis J. Kucinich follow:]
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Mr. Burton. Thank you. Congressman Ryan, the fine
Representative from the great State of Wisconsin and one of our
new members, we appreciate you being here to introduce the
Governor.
Mr. Ryan. Thank you, Mr. Chairman. Thank you, members of
the committee and my colleagues. I am pleased to be here today
to introduce Governor Tommy G. Thompson from the great State of
Wisconsin, my home State. Governor Thompson is the first
Governor in the history of Wisconsin to be elected to four
consecutive terms. This is a true testament to his abilities
and how he has served the people of Wisconsin. Time and again
Tommy Thompson has been willing to throw out the traditional
approaches to government and experiment with innovative ideas
in governing, and this is what is going to be shared today. He
has been and continues to be on the cutting edge of social
change in health care, long-term care, welfare reform,
education reform, and several other social issue reform areas.
It is his innovative W-2, or Wisconsin Works program that
has brought him before this committee today. This program,
which has served as a model for the rest of this country, has
reduced welfare rolls in Wisconsin, and get these numbers:
under Governor Thompson's leadership, the W-2 program has
reduced welfare rolls in Wisconsin from when he took office in
1987 of 100,000 families receiving AFDC to February 1999, 8,865
families on cash assistance. Let me repeat that just for 1
second because I think it bears repeating. When he came into
office 100,000 families on AFDC. Now we are down to 8,865.
In a State with unemployment below the national averages,
it is important to have every available person contributing to
the work force. Governor Thompson's W-2 program continues to
move new people into the work force by providing training and
education. As the Governor describes this amazing reform
proposal here today and as participants and program operators
from the W-2 program will testify on further panels, I urge my
colleagues to listen carefully to three elements of the
Wisconsin welfare program that have been essential to its
success.
The first element I urge you to pay particular attention to
is the program design. The program is designed as a four-rung
ladder that assesses employment readiness of an individual and
places those individuals accordingly. As workers receive more
experience and training, they move up the ladder toward
independence.
Second, please take a look at the social services available
through the W-2 program and the integrative administration of
these services. If you ever have time in your busy schedules I
encourage to you come to Janesville, WI and take a look at our
job center. We retrofitted a K-Mart department store under
Tommy Thompson's leadership. We have a job center now where we
have all welfare recipients, other people coming to get one-
stop shopping in social services. This is a very, very
important point and phase of welfare reform.
Not only does W-2 assist individuals in finding employment,
at these job centers it helps link them to services such as
child care, health care, and transportation. We just had a
plant shut down in Janesville, WI, Parker Pen. Probably half
the pens you are using now were once made in Janesville, WI.
But we had to get training assistance for these displaced
workers. Where did they go? They went to the job centers that
Tommy Thompson created in Janesville, WI and other places
around every single county in Wisconsin.
Last, please note the public-private partnerships that are
a vital part of the administration of this program. It is much
to the Governor's credit that he recognized that the government
could not operate this type of a sweeping reform in a vacuum
without the assistance of private sector agencies and
businesses.
I believe the Governor can offer a great deal of insight
not only on the welfare reform but also on Federal barriers to
that reform. I am pleased that my colleagues will learn about
the success of the welfare reform in Wisconsin, but also how
Federal Government agencies and regulations have hindered that
success. I will also be listening very carefully to the
Governor's comments on what these barriers are, as well as his
recommendations on how to address them; and that is something
that is very serious work that this committee, I hope, will
undertake in the next couple of years.
I am sure you are going to agree with me that the
Governor's accomplishments have become a model for both the
State and national level. Mr. Chairman, I want to thank you for
holding this very important hearing. I want to congratulate you
for the work on this committee. And my hope is that you will
join me in welcoming Governor Tommy G. Thompson, who is a
trailblazer in social reform, not only in welfare reform but
health care and education as well. I thank the Members for
holding this hearing. Thank you.
Mr. Burton. Governor Thompson, welcome. And we appreciate
very much--I know how busy you are in Wisconsin--we appreciate
your being here, and we really are looking forward to any
advice you can give us on how we can do additional things to
help Governors across this country.
STATEMENT OF TOMMY G. THOMPSON, GOVERNOR OF WISCONSIN
Governor Thompson. Well, thank you very much, Mr. Chairman.
I appreciate very much the invitation. I also appreciate your
leadership in Congress and the fact that you are from a big-10
State. It is outstanding to have you in Congress. And I thank
you and all the Members and, of course, my very good friend,
Representative Paul Ryan, who just celebrated his 29th
birthday. I tell you. And I am delighted that he is a
Congressman. And I campaigned with him, and he is a delight to
see in action. And I thank you so very much for introducing me.
There are a lot of questions that have already been raised
by Members in Congress, and I will try and address them as I go
through my testimony. On behalf of the State of Wisconsin, I
certainly would like to thank you all for this opportunity to
address this committee regarding a very important subject to me
and that is welfare reform. I commend you, the committee, in
your role in strengthening the connection between Washington
and the American people by showing them that government is
listening and that government wants to change for the better.
And I think that even yesterday with the Congress
conference committee on educational flexibility, another giant
step forward--and I want to compliment you on that particular
piece of legislation as well. I was supportive of that, as well
as most Governors across the country.
At this time, Mr. Chairman, I would like to request that my
entire testimony be included in the record.
Mr. Burton. Without objection.
Governor Thompson. I would like to focus my comments today
on three issues: first, Wisconsin's successful welfare reform;
second, the role the Federal Government has played in that
success; and, finally, what we can do to ensure success into
the 21st century.
Wisconsin's welfare-replacement program, Wisconsin Works,
W-2, which we put out and we picked the name synonymous with
the W-2 slip that you get when you go to work, it has had
tremendous opportunities as well as expectations and successes.
W-2 was the first welfare to work program in the Nation and it
still remains as a model. The program's success can be measured
in a number of ways: first by the precedent-setting caseload
reduction, and as Congressman Ryan has pointed out in February
1999, we just had over 8,800 individual families still
receiving cash assistance. That is down from 34,000 families in
August 1997, a 44 percent reduction, and 100,000 families when
I started in 1987, or a 91 percent reduction in welfare cases.
Between January 1987 and February 1999, we have been
successfully reducing our caseload, and it is now down by more
than 91 percent. Again, this is higher than any other State in
the country. It probably is one of the reasons I started
earlier than any other State. And we have had good cooperation
from Congress. We have received waivers from Presidents Reagan,
Bush, and Clinton.
Though it is a good indicator, welfare reform's success, as
Congressman Waxman pointed out, cannot and should not be
measured by caseload reduction alone. A second measure of
success must be the direct impact the program has on our
participants, their families, and most importantly the
children.
That is why Wisconsin's Department of Workforce Development
has undertaken an evaluation project to determine how our
former W-2 participants, or ``leavers,'' are doing. To that end
we have conducted the first in a series of four leaver surveys
to find out about the well-being of our former participants.
The results are extremely favorable.
Some critics of AFDC and W-2 predicted before the end of
AFDC and the start of W-2 that most people having to leave
these programs would not make it at all. Instead, what we are
finding is that many people previously on welfare are making it
for, perhaps, the first time in their lives.
The survey shows that 85 percent have worked since leaving
welfare, that most of those are still working. Additionally, at
least 80 percent of those with jobs said they were working 35
or more hours a week. And finally, 70 percent of the leavers
said that life was better for them now than when they were
receiving welfare. And we know those leaving are succeeding.
The average wage for those leaving W-2 is $7.42 an hour, more
than $2 above the minimum wage. And I also want to point out on
top of that you get the earned income tax credit from the
Federal Government, and the State of Wisconsin is one of the
few States that have a State supplement to that. So if you are
working, you are able to get an additional $5,200. So just at a
minimum wage, you are already up to $16,000 if you apply for
the programs.
The compassion--the compassion of W-2 shines through in the
economic as well as the social successes that these families
and entire communities are seeing. The entire State is
benefiting from W-2 successes. Here are some impressive and
very telling statistics: a family of three on W-2 is 30 percent
above the poverty line of the current average wage of $7.42 an
hour. On AFDC, this same family was 30 percent below the line
of poverty. And even at a minimum wage job, which there are
very few any more in this country, the family is still 15
percent above poverty; and in Wisconsin you can still apply for
the Federal income tax--earned income tax credit and the State
earned income tax which will add an additional $5,000 if you
qualify for the maximums.
The child poverty--and this is something that I want to
address to Congressman Waxman because I know he is so
interested in it--child poverty in Wisconsin has dropped 14
percent since 1987. Overall, we have the fifth in Wisconsin,
the fifth smallest poverty rate in the country and we have the
fourth smallest gap between the rich and the poor.
Now wages for the lowest income residents--and I think this
can be directly correlated to welfare reform--are rising faster
than any other group. In 1989, Wisconsin ranked 29th in wages
for the poorest residents. Today, it ranks 12th, and it is
continuing to grow. The Milwaukee Journal Sentinel just had a
report done not too long ago that said that the bus drivers
going into the central city of Milwaukee were surprised that
their buses in the early hours were filling up with people
going to work when before they didn't have that kind of
transportation. And second, the New York Times just had--the
New York Times has a reporter that is going to be in Milwaukee
full-time for 12 months covering welfare reform; and he said
one of the interesting things in the central city of Milwaukee
is that there are a lot of new tax preparation businesses
setting up in the central city of Milwaukee, indicating that
those individuals are working and paying taxes.
Teen pregnancies are dropping. Wisconsin now is the seventh
lowest in the country, and before welfare reform it was
increasing. Crime in Wisconsin has hit its lowest level since
1973.
Third, our success can be measured through the personal
experience of our W-2 participants. I recently, as Congressman
Burton pointed out, called in welfare mothers to come to the
residence and have lunch with me. And I asked them what works,
what doesn't work. I had the opportunity to have one of those
meetings with a number of our W-2 participants in Milwaukee.
Our success can be found in the words they shared with me that
day and that I would like to share with you today.
Michelle Crawford, who had a lot of problems and she was
written up in the New York Times this week, a nice display, and
she said, I was blessed to have found W-2, and I ask others to
take a chance on W-2 workers and we won't let you down.
I had the opportunity to invite her to come to my State of
the State. As the President gives the State of the Union, all
Governors give the State of the State. And they guard it very
jealously because it gives them a chance to brag how well they
are doing. And I decided this year, since I have been doing it
so long, to do something different. So I brought in Michelle
Crawford, an individual who I had only known for a couple of
weeks and asked her to share the podium with me.
And she got in front of the legislature and told her story
and told about the fact that she hadn't worked; she had several
children and had been in an abusive situation and she said now
she is working. And this was in January and she said I was able
to buy Christmas presents for my children. And then she brought
her three children, and they introduced them in the gallery;
and she pointed to her children and said to her children, she
said, I tell my children, this is what you can do when you do
your homework. And there was not a dry eye in the whole
assembly chambers, and then she put her fist in the air and
said give us a chance. We can be very productive, loyal
workers. Give us an opportunity like W-2 gave me.
We were all, you know, very emotional and it was a
wonderful, wonderful presentation by somebody that has had the
opportunity now to be able to get off of welfare into work.
Roberta Giles, another W-2 success story, had this to say
about the program: if I had $1 for every time I tell someone
how great W-2 is, I wouldn't have to work. And finally Connie
Alston said, thank God for W-2. It works for me; I have seen it
work for others as well.
Finally, our success can be found in the innovations
developed by our W-2 agency. I set it up so the program could
have very complete flexibility. To be able to adapt programs
like you have allowed us to do at the State level, Congressman,
I have allowed the W-2 agencies at the county and the local
levels, the city levels, to develop flexible programs for
themselves so they are not hamstrung by rules, so that if they
see an individual case they can adapt their program and the
money to help that particular family.
You are going to hear from a person after this, Julia
Taylor, who I am so impressed by, is one of those innovative
thinkers. She wanted to do something so she went out and bought
a bankrupt factory, a plastics factory. W-2 allowed her to do
this and under the YWCA, which she runs, she bought a plastics
factory to teach welfare mothers how to run injection molding.
And it is an absolute success story. She called it G2P, and it
is a company created by a nonprofit organization, as I
indicated, YWCA of greater Milwaukee. Trainees are recruited
through YW Works, one of Milwaukee's five W-2 providers. We
split up Milwaukee County and contracted out. The County Social
Services Department didn't want to do it, so we contracted out
with private vendors and they bid for the opportunity to set up
this program.
Its mission, the YWCA, is to increase the self-sufficiency
of central city residents by providing living-wage jobs and
training in skilled labor for low income participants. In its
first year G2P, this plastics factory, trained 98 W-2 customers
in office, light industrial, and injection molding positions.
And upon completion, the participants are prepared for hiring
by plastics injection molding firms at wages up to $11 per hour
and some with complete benefits.
This program not only provides the job skills necessary for
our participants, but it has also formed partnerships with
other Wisconsin employers who are in desperate need of skilled
workers. This is innovation and partnership, I believe, at its
very best. I won't say any more about G2P because you are going
to have the opportunity to hear and to speak and to question
Mrs. Julia Taylor, executive director, who is going to be with
you later today.
Undeniably, Wisconsin's success in welfare reform is a
reflection, however, of the Federal Government because you have
listened; you have reacted to the needs of each and every State
in this Nation. And I personally want to come back and just say
thank you to all of you for supporting us.
It can also be said that the Federal Government's direction
on welfare reform is a reflection of what we were able to do in
Wisconsin, although from a national level it appears that
changes to the State's' welfare policy took place within the
larger context of Federal welfare reform. Our success provided
a blueprint for the Temporary Assistance for Needy Families
program. In fact, TANF reflects a number of the initiatives we
started in Wisconsin under the waiver program. Wisconsin
successfully implemented through the waivers the past 12 years
time limited benefits, emphasis on work participation,
emphasizing that teen parents should live at home and providing
supportive services such as child care, transportation, and
health care.
And Congressman Shays is absolutely correct. I have
testified in front of several congressional committees and have
always said you can't have welfare reform unless you provide
for health care first for the mother and the children. You have
to then provide for adequate and reasonable and safe and good
child care. Three, transportation. You cannot expect mothers to
go to work if they don't have a car or good bus services; and,
fourth, you have to have the training. You can't do it on the
cheap. In fact, we spend more per case in Wisconsin now moving
people off of welfare than we did under the old system of AFDC.
On a broader scale, what has TANF provided States? TANF has
provided the flexibility States need to be able to change their
welfare policy. This has been able to allow States to try
innovative approaches from Connecticut to Indiana to California
across the whole spectrum to be able to solve problems at the
State level in order to meet the needs of its disadvantaged
residents.
Generation 2 Plastics is a final example of this creativity
and innovation. In its first year G2P not only gave those
participants the necessary skills but it also importantly
increased their self-esteem, gave them the opportunity to think
for themselves that they could do it; and that is so important
when you deal with welfare mothers.
We have been able to tailor W-2 to the needs and the
problems of its participants thanks to you giving us the
flexibility to do that. TANF allowed the States to move from a
dependency model to a model that expects people to assume
control and yes, the responsibilities over their lives and to
provide for their families. By removing the entitlement, TANF
has strengthened the critical length between something of value
and the expectation that people will take control of their own
lives if you give them the appropriate incentives.
And finally, TANF guaranteed the States a fixed funding
level in order to develop these innovative programs. We
couldn't have done it without the block grants. We could not
have done it, and I want to applaud you for it--in order to
provide the services, and to be able to assist people in taking
responsibility for their lives. The results have been a
dramatic number as families have moved off the public
assistance to work, proving that State TANF innovations are
working. This country has seen its lowest level of welfare
recipients in 30 years. And together the Federal Government and
State governments have achieved this success as partners, and
now more than ever we must work together to continue this
success as we move into the 21st century.
So given the success under TANF, one might ask, as several
of you have indicated, where is there room for improvement or,
more critically, where has TANF fallen short? Despite the
successes, there are a number of areas where removing
regulatory barriers will also help future successes. However,
before I address those areas that still require improvement, I
do want to commend the Department of Health and Human Services
on the changes--and I haven't done that often, and this may be
the first time I have done it publicly in a long time--that
were made to the TANF proposed rules. More specifically, as a
State we were pleased somewhat to see the following items
contained in the final rules released early last week: the tone
has changed dramatically from the Department. It acknowledges
that States are doing well. The change in definition of
assistance. This has allowed us to be able to expand the kinds
of things we can count toward assistance and now we are down in
Wisconsin to the hardest-to-place people, so we need more
flexibility in order to move the next 8,800 people off of
welfare. So I was happy about the fact that they have
liberalized the definition of assistance and allowed us more
cooperation in child support and data reporting requirements.
Separate State programs for MOE, the maintenance of effort
purposes, the final rules recognized that States are not using
separate State programs to avoid the TANF requirement,
something that I argued in Congress we would not do. And it
recognizes the validity and the use of child-only cases. So I
want to thank you for listening.
On that note, where is there room for continued
improvement? Most importantly, Congress must reject the
efforts--and I understand that it is something that you are
always looking at as extra money. Every legislator or
Congressman in the world always wants to spend more money, it
is natural. And so Congress must reject the efforts to reduce,
to rescind, or defer the funding of the TANF block grant. Any
change in the funding mechanism would represent a breaking of
that historic agreement between the States and the Federal
Government which was established in 1996.
There are a number of factors that Congress must consider
before thought is given to reducing, rescinding, or deferring
the funding of the TANF block grant. Once we have a renewed
commitment of those dollars, Wisconsin and other States will
need additional flexibility to spend those dollars as we
provide important supportive services such as transportation,
child care to our low-income families, improvements in the TANF
legislation, include giving States more flexibility in spending
those dollars.
In order to provide the services to support low-income
families in the most practical way, States need to be relieved
of the requirement that expenditures be attached to a specific
TANF participant. Congress should recognize and applaud the
States' efforts in welfare reform. States didn't use the
flexibility of the block grants as some Congressmen said or
thought would happen, a race to the bottom. Rather we have been
able to spark a race to the top, coming up with innovative
programs, moving people off of welfare. Instead States are
using these dollars for the public good, such as spending the
block grant dollars to provide work and family stabilization
services to low-income families.
Public support for such programs is evidenced by the
recently released Kellogg Foundation survey which showed
widespread support for programs to help the working poor.
Additionally, Congress should modify the data reporting
requirements. I don't know who reads all that data that you ask
us to compile. And it just takes away the opportunity. We send
in reams of paper, and I am sure, Congressman Burton, you don't
want to read all of that data that you require us to collect.
Remove that burden. Remove the burden of maintenance-of-effort
requirements that are placed on States and allow States more
flexibility in meeting the maintenance-of-efforts requirements.
Although the final TANF regulations appear to have provided
some extra flexibility in this area, it appears that not in all
cases. Let me quickly explain an example. We have reduced our
caseload down to 8,800 families. Now, in order to maintain our
maintenance of effort of $173 million, just on those 8,800
family, we would like to be able to make sure that some of
those families have moved off of welfare are still able to get
services. We have a difficulty counting that. We also have a
homestead tax credit that we give people, low-income families
that they can apply for. We cannot count that for our
maintenance of efforts. So we would like to have some more
flexibility.
Child care is the most important one. Child care is
undoubtedly one of Wisconsin's greatest factors to the success
of W-2. And what more can be done to strengthen this critical
piece of welfare reform? Again, increased flexibility in
spending. We would like to be able to have the flexibility,
Congressman, to be able to move TANF dollars into the child
care development fund because it allows us to be more flexible,
more innovative, and the TANF dollars we are very restricted in
how we can do child care. I am setting up state-of-the-art new
child care, exceptional child care, centers. In this budget
that is going to allow for at-risk children in the central
city, two of these exceptional child care centers--and we found
that the earliest you can get at children and the brain
development of that child, the better off you are going to be.
So we want exceptional child care centers set up to help at-
risk children. We want to be able to put them into a center
that they are going to hear classical music. They are going to
hear foreign languages piped in, and all of these things from
our studies indicate that it is absolutely on the cutting edge
to helping at-risk children develop properly.
The results would be better if we had the opportunity to
have this flexibility, more accessible child care services for
working families leaving welfare, so as the caseload has
dropped, due to Wisconsin's efforts, to move those who can work
into the work force. The portion of Wisconsin's caseload with
significant barriers--right now 80 percent of our welfare
caseload of the 8,800 are in Milwaukee County and 60-some
percent have an alcohol or drug dependency; 50 percent do not
have a high school education, and 40 percent have never worked
a day in their life of the remaining 8,800. So you can see it
is going to cost us more. It is going to have to have more
individualized counseling and better counseling and more
programs to develop to move those off of it. Not only is there
increased focus on these harder-to-serve cases, there is equal
focus at helping low-income families maintain and to be able to
advance their position in the workplace. Improvements in the
TANF legislation should include expanding the use of the TANF
dollars to help the hard-to-serve TANF eligibles and low-income
families to prevent recidivism. This current narrow definition
of work activities is no longer appropriate for the remaining
case loads that we have to deal with.
I want to again thank you, Mr. Chairman, and the committee
for proactively seeking out ways to strengthen the Federal-
State partnership, for serving our Nation's most disadvantaged
citizens. One way the Federal Government can help to ensure
this success is to first uphold the commitment to providing the
block grant dollars and second provide the additional
flexibility necessary to spend our TANF dollars in a way that
meets the needs of each State's most needy populations.
The changes in the final TANF regulations were a good first
step. However, while these rules are considered final, even
final rules can be changed. By doing so, the Federal Government
and State governments can work together to ensure that the 21st
century is set for success. In Wisconsin, and throughout
America, welfare reform has demonstrated that States can best
solve problems when they are given the flexibility and the
support to do so. Congress gave the States that freedom. They
gave them the freedom to design their own welfare replacement
programmings and the block grants to support them. As a result,
hundreds of thousands of families are now climbing out of
poverty and pursuing their piece of the American dream.
We certainly hope that Wisconsin's successes encourages
Congress to be able to give States even greater flexibility on
welfare reform and greater freedom on other issues, from health
care to education to welfare reform. Thank you very much,
Congressman.
[The prepared statement of Governor Thompson follows:]
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Mr. Burton. Thank you, Governor Thompson. Before we start
the questioning, Mr. Waxman has to leave, so he has a comment.
Mr. Waxman. I thank you, Mr. Chairman. I do have to leave.
I have a conflict in my schedule. But I did want to stay for
your testimony, Governor Thompson. You have given us some
impressive results in your State. I think you are absolutely
right. This is a Federal-State partnership to deal with this
problem. It certainly helps when the Federal Government
produces an economy of astounding proportions with low
unemployment and growth everywhere. It also hurts when the
Federal Government allows immigrants to come in illegally, as
it has in my State. But we have got to work together and make
sure that we are living up to all of those promises, and I
think you put your finger in your remarks on all the things
that are going to be necessary to be sure that we are doing
right by people, getting them to work and not just simply
taking them off of welfare. But thank you so much for your
testimony. Thank you, Mr. Chairman.
Mr. Burton. Governor, let me start the questioning by
saying that you had a number of people who were critics when
you first started out, and they said that people would be
moving to the bottom rather than to the top. And you have been
remarkably successful, because you did talk to these people
evidently and because you have provided safety nets in areas
where they didn't anticipate you would do that.
There are things that would concern some of my more
conservative friends--but then I am a pretty conservative
Congressman myself--but when I listen to you, I see the
reasoning behind it. That is why I think it is important for
you to be here: we can pass on to our colleagues why it is
important even as conservatives that these things be done. But
I think it needs to be elaborated on a little bit more why you
think additional funding or continued funding needs to be given
to people who are now working in the private sector and are
above the minimum wage and are fairly self-sufficient; why
there needs to be continued expenditures for transportation,
child care education and these other things that you talked
about. And if you could elaborate just a little bit, it would
be helpful.
Governor Thompson. For several reasons. But first let me
point out that you are dealing with some very fragile human
beings. A lot of people on welfare are there for reasons that
they really didn't have any control over. They may have been in
an abusive situation. They may have been a mother at a very
young age. A lot of teenage pregnancy, a lot of even younger
than teenagers are having children. And they have a self-esteem
that is extremely low. So moving them into welfare reform, and
especially now where we are down to the hardest-to-place
individuals, these are the ones with the most problems and
multiple problems; and so you are not always going to be
successful the first move from welfare into work.
Michelle Crawford was one of those examples. She had fallen
back into AFDC several different times. And the first time we
had her in W-2, we had her in a job that didn't pan out for
her. She was a janitor; she was cleaning up in a factory, and
she didn't like it. She wanted to be a machinist, and so we
took what she wanted to do and he taught her how to be a
machinist, and now she is operating a machine and she just
blossomed.
So you are not always going to be successful on the first
case. So you may have to have some extra efforts, especially
now when you are moving the easiest people off of welfare, the
ones that have been on just for a couple of months and have had
one or two problems and are now off. Now we are down to where
you really have to put in the extra efforts, individualized
counseling, individualized case studies in order to move them.
And so that is why you have to continue funding it.
The second thing is that we are trying a lot more
innovative things with welfare reform. It is not just moving
the people off of welfare. We want to be able to get at the
working poor--the working poor that are right above that level
where they could fall back and get back on welfare, or get back
on assistance but they want to work and they don't have any
benefits; and in those places we set up a program in Wisconsin
called Badger Care which is the next step to provide the
working poor health care for themselves and their family and
that is very expensive; and we are going to allow them to buy
into our Medicaid program, and the State is going to spend a
lot of our own dollars; and with the waiver from the Federal
Government, we will also be able to get a Medicaid match but,
we can't do it without the continuation of the block grant.
The third thing is on transportation and on training. You
can't expect welfare mothers to be able to improve if you don't
give them the training, and that is very expensive; and that is
why the necessary dollars and the flexibility is so important,
Congressman.
Mr. Burton. Your comments brought up a couple more
questions. I have a whole list of questions I would like to
ask, but there are questions popping into my mind as I listen
to you because it is very interesting and informative. One of
the things you said in your opening statement was that the cost
is actually not any less than AFDC; it is probably the same or
a bit more to keep these people in productive positions.
Now a lot of people would say if it is costing more, why
should we do it. But I want to ask you about tax revenues. By
making these people workers instead of dependent on welfare,
does it help the State's economy?
Governor Thompson. Sure. Absolutely it helps the State's
economy; but let me tell you--it is from a conservative point
of view--it is a good investment of dollars because when we
were on AFDC, we were spending approximately $9,400 per case.
But now we are spending close to $16,500 per case because we
are putting more in child care. For instance, we have gone from
$12 million when I started in 1987 to $175 million in child
care. That is a huge increase. But even though we are spending
more on a case and even though we spent a lot more on child
care, the amount of dollars overall that we are spending on
welfare are less because the caseload has declined. So even
though we spent more individualized cases--on individualized
cases, the overall amount of dollars being spent is actually
less because the declining numbers.
And so it is a tremendous investment. As far as the
economy, just by the numbers our unemployment is at 3 percent
in the State of Wisconsin, similar to Indiana. And we are
having good cash-flow and the amount of wages that are going
down, I mean, the wages are going up; but the decrease from the
rich to the poor is declining in Wisconsin, and we think it is
definitely correlated to more people working at the lower ends
getting better wages by the training, so it is helping our
economy overall.
Mr. Burton. Very good. Mr. Davis.
Mr. Davis of Illinois. Thank you very much, Mr. Chairman.
Governor, let me also welcome you and indicate that I
appreciate your testimony as well as the work that you have
done in the State of Wisconsin with this issue. Not only do I
appreciate your work but I appreciate the passion with which
you have done it. You display a passion for this issue in terms
of trying to really make it work. Information that I have
looked at, some of it, indicate that the welfare rolls in
Wisconsin have declined by 85 percent since March 1994. How do
you equate that with the decline of poverty? I am saying, do
you equate a decline in the welfare rolls also with a decline
in poverty? And if so, would the rate of poverty be close to
the rate of welfare decline?
Governor Thompson. I don't know if it is a direct
correlation, but I think it is close. We have seen in Wisconsin
our child abuse has gone down 13 percent. We were ranked 29th
in the country in 1989--27th in the country in 1989,
Congressman Davis, as far as disparity between the rich and the
poor. This year we are ranked No. 12th, so it is definitely the
lower income is increasing faster.
Our teenage pregnancy is down. The fact that our difference
between rich and poor is fourth in the country, and poverty we
are the fifth lowest in the country, so I would say that all of
those statistics are getting better as our welfare rolls are
going down, Congressman.
Mr. Davis of Illinois. And so the factors which contribute,
if you add them all up in terms of what we ultimately define as
being a poverty profile, certainly would have had some impact.
In Illinois we have had the experience of there being an
increase in the number of persons lacking health care or
without health care as they have come off welfare, about an 8
percent increase. What have the experiences been in Wisconsin?
Governor Thompson. Well, in Wisconsin we have 94 percent of
our population covered, Congressman Davis. And we have 1-year
transitional Medicaid coverage under our W-2 program. And we
are starting a new program as of July 1 called Badger Care that
will provide health care to families. They will be able to buy
into Medicaid. We just got a waiver from the Federal Government
in January to do that, Congressman Davis, and we are going to
set this new program called Badger Care that we think will
become a model for the country that you will be able to buy
into Medicaid and be able to cover the working poor up to 185
percent of poverty, so we are at 93 to 94 percent covered right
now in the State of Wisconsin, the highest of any State. We are
tied with Hawaii. And we expect that to go up to about 97 or 98
percent after we really implement Badger Care in the State of
Wisconsin.
Mr. Davis of Illinois. So then in reality, in Wisconsin
there are not many people having serious difficulty acquiring
health care or with access to health care?
Governor Thompson. It is obvious that it is not when you
have 93 percent covered and you are the highest in the United
States.
Mr. Davis of Illinois. You indicated in your earlier
testimony that child care obviously is one of the great cost
areas and cost factors as we deal with the whole question,
especially given the fact that so many single women with
children are the individuals who have a need to move. Do you
have an indication of how many new jobs were actually created
as a result of the increase in utilization of child care
services and whether or not the job creation really becomes
sort of a tradeoff for the costs for the increased costs?
Governor Thompson. It is hard to quantify that,
Congressman. Let me tell you a little bit of what we did in
child care so that you understand more completely. I said that
we could not expect a welfare mother to go to work unless we
provided child care, so we went from $12 million to $175
million this past year in child care. We also did something
that I don't think many States have done. We have allowed for a
provisional license, especially for the central city of
Milwaukee because we were told there would be a lot of minority
mothers and aunts and uncles and so on and so forth, grandmas,
that would like to be able to take children in three or four of
their neighbors or their immediate relatives; and so we
provided for that. So we have created sort of a cottage
industry in the child care field. And we have increased it. And
we put in $25 million for building capacity and I am happy to
be able to report to you we have no waiting list in the State
of Wisconsin for child care, none at all.
Mr. Davis of Illinois. Finally, I am a proponent of
something called the livable wage; and what that means to us is
that individuals should not have to work for less than $7.65 an
hour as being a base pay that they can manage on. Are there any
ceilings beyond the minimum wage in Wisconsin?
Governor Thompson. No, there isn't. But there are several
communities in Wisconsin that have passed living wage in the
city council and the county. And we have found in our studies
of moving welfare mothers to work, the average hourly wage is
$7.42. And you were not here when I pointed out that on top of
that, in Wisconsin they get the Federal earned income tax
credit but we are one of the few States that also has a
supplement to that State earned income tax credit. So even at
$7.42 an hour or at minimum wage, you are still qualified for a
large infusion of dollars from the Federal Government, the
State, if you are working. That could amount up to a maximum of
about $5,400 on top of your wages. You qualify for the maximums
of both the Federal earned income tax credit and the State
earned income tax credit.
Mr. Davis of Illinois. Thank you very much. And I certainly
appreciate your efforts in this arena and compliment you again
on the passion with which you have tackled this problem.
Governor Thompson. That I have, Congressman. Thank you very
much.
Mr. Ryan. We have a vote right now. We have 6 minutes left
on the vote. We were going to try to keep the hearing going,
but we have to recess for 10 minutes. We will be back. Thank
you.
[Recess.]
Mr. Burton. We will reconvene the hearing. We have Members
wandering in and out now, Governor, because we have a vote on
the floor and 15, 16, or 17 or so committees and we are
beginning the markup phase and we have votes. People are
running around. That is why we are all so thin. We are running
back and forth to the floor all the time.
Let me just ask my colleagues, do you have any questions at
the moment? Well, let's go right down the line. Mrs. Biggert,
we will start with you.
Mrs. Biggert. Thank you, Mr. Chairman. It is good to see
you, Governor. You may not remember, but I served in the
Illinois general assembly. We had an opportunity to discuss a
lot of these issues and you were very helpful. My question is,
and being on the other side now, you talked a little bit about
the block grants. It is still a concern from the State
perspective that there will be kind of backsliding from the
Federal Government once we see success and to start limiting
the funds and everything. I hope that you will remind us as we
move along. In Illinois we have a low income tax but we also
have a low threshold. So it is very difficult for some of the
people coming off of welfare and getting established and
suddenly they are faced with being in an area, a bracket, where
they are going to have to start paying income tax. Do you have
a higher threshold as far as just above poverty for paying
income tax?
Governor Thompson. Yes, we do. First, let me congratulate
you on your promotion. It is great to have you in Congress. I
will be reminding you and anybody else that will listen to me
about keeping your hands off of the block grant because we need
to do that. Right now we are moving into the next phase,
several States are moving into the next phase to really use the
money to place the hardest to place individuals. In my case we
are now down to 8,800 families from 100,000 families, and 80
some percent of them in Milwaukee and 66 percent or more have
got alcohol or drug problems, sometimes a combination of those,
and 50 percent have not graduated from high school and about 40
percent have never worked. So you can see that we have a really
difficult time. But what we did in the last session of the
legislature along with this is we were able to reduce the
threshold from anybody. The families making less than $18,000
would not have to pay any income tax in the State. That should
solve a lot of the problems. But there is no question that a
lot of individuals that have never worked before or haven't
worked consistently are now finding out the luxuries of paying
income taxes and they are sometimes complaining. Some of them
more than likely may become Republicans as a result, so it is
not all bad.
Mrs. Biggert. Along with that, I think that something that
was important in Illinois with having people that had never
worked before was the training and the actual skills training.
If you have reduced your role so much, you may not have to be
providing that so much--the actual training on how to get up in
the morning and dress.
Governor Thompson. We are actually spending more because
the harder to place require more individualized counseling and
more individualized training. A lot of the cases we got right
now are not going to be successful on the first try. So you may
have to train them for something and find out that they are not
suitable for that and retrain them for another. We are actually
spending more money on training right now. We are also moving
to the next step in trying to followup for 6 months anybody
that is placed so that if they need some extra training, extra
counseling, so on and so forth, we will not just be putting
them into a job and walking away. We are continuing to give
them counseling and giving them services. Also we provide for
individuals that don't receive any cash, that if they want to
come in and get some counseling on different things, maybe food
stamps, some transportation assistance, we do that as well.
There is still a lot of dollars going out there to help the
working poor. Our Badger care, which is a new health insurance
program for all of those up to 185 percent of poverty, is also
very expensive for the State but it is also a partnership with
our State and Federal Government through the Medicaid program.
We just got a waiver to do that. We are the first State to have
a waiver in that regard.
Mrs. Biggert. What about businesses? I know that we were
successful in being able to find jobs for people because of the
help of businesses and committing to finding so many jobs and
ensuring that they were not splitting somebody else's job or
taking away hours from other people. It was something that
really helped Illinois to be able to get these people back to
work or to work for the first time.
Governor Thompson. I know that was a big concern in
Congress about splitting jobs and about displacing jobs, but I
don't think that has happened. Jerry Greenwald from United
Airlines is the national chairman, along with the cochairs and
myself and Governor Tom Carper, to encourage employers all
across America to hire welfare mothers. I think it has been
extremely successful. I think we are up to close to 30,000 some
employers who have indicated their desire to hire welfare
mothers and taken the pledge that they will hire at least one
welfare mother in the next 12 months. I think that is growing
and we are trying to move that across America. I think that we
have to encourage because mostly a lot of employers have got
the typical stereotype of a welfare mother that doesn't want to
work and is going to work one day. We found just the opposite.
We found that they are very productive. Once they are able to
find their niche, they are extremely loyal because somebody has
given them hope and somebody has given them a chance and they
are very loyal and very productive employees, the vast majority
of them.
Mrs. Biggert. I would congratulate you on your success.
Thank you, Mr. Chairman.
Governor Thompson. It is our success. It is the success of
Governors, but also the success of this Congress who had the
foresight and the vision to give us the flexibility to do what
had to be done. So I compliment you as well.
Mr. Burton. Mr. Hutchinson.
Mr. Hutchinson. Thank you, Mr. Chairman. Thank you for
holding this hearing. I want to express my appreciation to
Governor Thompson. We in Arkansas have followed what you have
done and we congratulate you and we hope that we can strive to
do just as well. I wanted to relate to you something that is
happening in our State in the private sector that helps in this
regard and then one problem area that I would like for you to
respond to.
In my northernmost county, Benton County, we have the
Benton County single parent scholarship program that raises
private funds. They do an outstanding job. They give
scholarships to single parents and they also provide mentoring
to them. But the scholarship is to help them move from welfare
to get more education. I have actually heard the experiences of
one person who moved from welfare, got a 4-year degree with the
assistance of this program and became an accountant. It was
quite a transition that they made and they are really doing
remarkable work. One thing that related, though--these are not
full scholarships that cover everything. It is just an
assistance to help them. But the work requirement part of
temporary assistance program, I think there is a 12-month
limitation on education and they want that extended. They say
that 12 months just gets them started and all of a sudden they
have to go to work and they can't go to work and raise a kid
and go to school full-time as well or even sufficiently. So it
is a real burden, that work requirement.
I want to add to that, before I give you plenty of chance
to respond here, I would like permission of the committee. I
have asked for the committee's consent to submit a letter from
the Arkansas Department of Human Services and some of their
comments on this hearing, today.
Mr. Burton. Without objection.
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Mr. Hutchinson. One comment that they made: While we
support TANF's time limit provision and the emphasis on
employment outcomes as a matter of broad social policy, the
department has found that the legislation went too far in
limiting the State's ability to achieve such outcomes for a
portion of its caseload through educational activities.
Although a small number of cases may involve higher education,
a vast majority of cases infected with this limitation are
those needing basic remedial education and post secondary
vocational educational services that often extend beyond the 12
months.
Governor, if you could, just comment about that 12-month
limitation.
Governor Thompson. I don't think that you should change
that, Congressman. I think that this Congress made a decision
that work is vitally important. There was a lot of flexibility
built into that. The 12-month was part of that flexibility. A
lot of people work. A lot of people raise children and go to
college and so on. I think the 12 months is the thing. I think
once you start retracting from the mandates of work, I think
then you are going to set a sort of slideback and not be able
to get more people motivated that they have to work and get off
of welfare. The work provisions were set up so that States and
the Federal Government had requirements that made people get
off of assistance and go to work. Education of 12 months is
there, but you can continue--there is a lot of programs that we
set up in the State to allow them to work half time and
continue on with their education after work and so on. We
provide with training and encouragement to do that. I am a big
believer in education but I think relaxing the 12 months, I
think there is more harm that can be done than good.
You are going to find individual cases, I am confident,
Congressman, that will solidify and corroborate your position.
I think that I can find more cases to indicate to you that we
should continue the work requirements because that is the
driving force to move people from welfare, off of welfare. That
is so important, to get that motivation going.
Mr. Hutchinson. Thank you very much. I yield back.
Mr. Burton. Will the gentleman yield to me very briefly. I
just had one comment and one question, Governor, and that is
that you indicated one lady who has been a real success story.
She went to work as a janitor. That didn't work out and she
went to this injection molding plant and I guess has done very
well. Do you give aptitude tests for these people on welfare?
Have you thought about that?
Governor Thompson. We give a lot of testing, but not all
testing is going to be successful because a lot of individual
welfare mothers have a lot of problems and the testing will not
show those problems like drugs and alcohol, lack of high school
education, and so on.
Mr. Burton. I was just curious about that.
Governor Thompson. In this case this woman never told
anybody, but her father was a machinist and she always wanted
to be a machinist. She was working in this G2 plastics factory
cleaning up. She wanted to go out and learn how to run the
machine. She finally got the courage to ask if she could be
trained to work on the machine. She didn't like the work of
cleaning, but she loved the job of running that machine. She
has been very extremely successful.
Mr. Burton. Very good. The last thing I would like to say,
and I thank the gentleman for yielding, is that you indicated
that paperwork is causing you and the other Governors a great
deal of problems. I wonder if you and the other Governors that
have worked on welfare reform could send us a letter or some
kind of a statement telling us how we could reduce the
paperwork legislatively that would help you do your jobs
better.
Governor Thompson. I don't know about the other Governors,
but I will love to do that, Congressman.
Mr. Burton. Get something to this committee and we will get
legislation drafted, if possible, to deal with that.
Mr. Terry.
Mr. Terry. Thank you, Mr. Chairman. Governor, good to have
you here today. I am from the State of Nebraska. After our
football season, our claim to fame is that we gave Barry
Alvarez his coaching start.
Governor Thompson. We are very happy you did. He has done
well in Wisconsin.
Mr. Terry. Yes, he has. There are so many areas that we
could have a good conversation for the next couple of hours,
but I will try to limit it to 5 minutes. There are two ways to
look at the success of welfare reform. First of all, I missed
your opening but I have read it here since, or at least gleaned
it. One is the success of the individual, and you have stressed
that. I wonder if you have done any type of a study that
economically shows how, on average, the people that have gotten
off of the welfare system and into the work force in Wisconsin,
how much better they are off economically today versus when
they were on welfare. I noticed that one of the statistics is
that for the lowest income people in your State, that Wisconsin
ranked 29th and now they are 12th. I have a feeling that you
are better off, but have you gauged that?
Governor Thompson. There is no question about that. You are
absolutely correct. We have gone from 29th in 1989 to 12th as
far as increasing the wages of the lowest wage earners in
American. We are also the fifth lowest in poverty and the
fourth lowest between rich and poor, the disparity between the
rich and poor. It is obviously the working poor coming off of
welfare and getting an opportunity.
But there are some statistics that I think really point out
crystal clear what your position is and my position is. You
can't get out of poverty by not working. The old FDC, just
getting the FDC benefits, you were 15 percent below the lines
of poverty. At minimum wage currently in America you are 15
percent above poverty. The people coming off of welfare in
Wisconsin were averaging out at wages of $7.42 an hour. That is
30 percent of poverty. You add to that then when you work the
opportunity to qualify for the earned income tax credits of the
Federal Government, which is around $3,900. Then in Wisconsin
it is one of the few States that have added to that an earned
income tax credit from the State, which is another $1,500. So
you can actually qualify for the maximums for an additional
$5,400 by working which is added onto your wages. That really
helps you a great deal. The minimum wage, if you qualify for
the maximums with all of the credits in Wisconsin, you will get
$16,000 for a family, which is $6,000 more than if you
qualified for everything under AFDC. So on minimum wage, you
are bound to be better off by working. That is the principle
that we as Governors have worked from. You are better off as a
person and family by working.
Mr. Terry. That would make sense to me; $6,000 better off.
That is impressive. That certainly answers some of the critics.
The other fact is how it helps the State and the economy. Have
you been able to gauge the impact?
Governor Thompson. It was interesting. The New York Times,
which is not a paper that I religiously read or quote, but they
have placed a reporter full-time in Milwaukee to cover welfare
reform. They had a report just recently saying it was
interesting to note that some of the new businesses in the
central city of Milwaukee were small tax preparers setting up
offices to prepare taxes from the central city. That is a
strong indication. The Milwaukee Journal just had a report done
not too long ago that interviewed several bus drivers of
Milwaukee that were the bus drivers in the central city of
Milwaukee, say before W-2 started they didn't have very many
passengers in the early hours when they drove into the central
city. But now their buses are full taking people from the
central city to other areas of the city or to the suburbs for
working.
There is every indication, anecdotally as well as the fact,
that our unemployment is 3.2 percent in Wisconsin. Our wages
for the lowest income people are going up. All of these are
strong indications that the overall economy of the State is
much better off because we have started W-2.
Mr. Terry. One last question. One of my frustrations coming
from local government is the job training type programs,
especially under the old Federal edicts that simply scored you
on how many people you could get into the system and then would
never follow through with the people that actually dropped out
of the system, couldn't find a job or couldn't hold a job. What
are you doing in Wisconsin and what can the Federal Government
do by way of empowering you to get to the people that need the
most help with job training, make it successful as it can be?
Governor Thompson. The best thing that you could do is
compress the 163 programs in the job training field at the
Federal level and compress them into a block grant and give us
the complete flexibility to do it. I would applaud you and that
would be the greatest thing that would ever happen in Congress
and it would be as big as welfare reform and accomplish just as
much.
Mr. Terry. I agree. I think that we now have our project
for next year.
Mr. Burton. 163 programs. Mr. Davis.
Mr. Davis of Illinois. Let me just say, Mr. Chairman, I
certainly want to agree, Mr. Governor, that work is worthwhile.
I always say that it is a virtue and actually the greatest
builder of self-esteem that there is. When one works you not
only earn a livelihood but contribute significantly to the well
being of the environment of which you are indeed a part.
The one question that I have got is you have gone around to
that group of individuals--Mr. Chairman, let me also just agree
that when it comes time to reduce this paperwork, sign me up.
Governor Thompson. I applaud you, Congressman.
Mr. Davis of Illinois. I think that certainly could go a
long way. Some individuals have been taken off the rolls
because of infractions in terms of not being in compliance with
some rules and regulations. How do you feel about that?
Governor Thompson. Well, I don't want to lose anybody,
Congressman. I want to get everybody moving as much as
possible. There are going to be some that fall through the
security blanket. What we have tried to do is tried to go back.
Now we are down to such a small caseload that we are going back
now that--we call it--it is a LEAP program. The W-2 agencies in
Wisconsin, in Milwaukee, that is where the biggest problem is,
that we are going back to those individuals. We have advertised
on television and radio. We are actually going door to door in
some areas where we know that there is a family that needs some
help. What we are trying to do is encourage them to come in to
one of our W-2 agents and be able to sit down and we can assess
them and see if they have had an infraction, what is the
infraction. We do a lot of in-depth counseling to find out what
the problem is. Is it domestic abuse, is it problems with the
children, and so on.
I am sure that you would be supportive of this,
Congressman, but also we found in some instances that W-2
mothers have had some disabled children. They would like to
work and they couldn't because they couldn't find a proper
child care center to take care of the disabled child. So in my
budget that is being debated right now we have set aside some
TANF dollars to set up child care centers in Milwaukee to take
care of that population.
Then we found out another big problem was when a welfare
mother wants to go to work and her child is at home sick. Then
sometimes she doesn't know that she has to call to say she
can't be at work, she doesn't show up, and gets penalized or
maybe gets kicked off the program. What we have done to address
that, Congressman, in this budget--we haven't set it up right
now--we are also trying to set up a child care center for a
central collecting place in the city where we could have for
sick children to go. Maybe they have the flu or a cold or
something like this. And then we are hoping to diagnose them
and catch early a contagious disease or something like this.
That has not been set up but that is the next step in both of
those areas. We feel that that will also reduce a number of
infractions and penalties because we found a lot of people have
worked, they were doing well, but then they don't show up for 3
or 4 days, the employer gets mad and they don't call in and
fires them and then they are off the program. We are trying to
address these problems to keep them working.
Mr. Davis of Illinois. Is that what you are also doing with
the hard to place, the core group that you are down to now,
really the untouchables, the unreachables, the most difficult
element of our society, that extensive counseling?
Governor Thompson. That is what we are doing. Congressman.
We are now--as can you well imagine, 8,800 families are the
ones if they could have had some skills, they probably would
have been working by now. Most of them are in Milwaukee County;
80 percent of our remaining 8,800 are in Milwaukee County. We
found about two-thirds of those have at least an alcohol or
drug problem or combination of the two. About 50 percent do not
have a high school education and about 40 percent have never
worked before. So what we have really now, we have to spend
more money and really give the in-depth counseling.
We have to have the flexibility, Congressman, to be able to
adapt a program to almost an individual family. We may even
have to go out to that family and get them up in the morning
and transport them to work to teach them how all of these
programs work. And so it is a big job, but we want to make sure
that we do it and we do it right. That is why we are spending
more money to accomplish that. That is why I need the
flexibility.
I think that buttresses what I told this Congress about 4
years ago, trust the Governors. We will not have a race to the
bottom. Give us the flexibility to develop innovative programs
and you will be surprised with what we come up with.
Mr. Davis of Illinois. Thank you, Mr. Chairman, and again I
appreciate it.
Mr. Burton. Thank you, Mr. Davis. Mr. Souder.
Mr. Souder. I wanted to followup on one of the comments
that you made just a few minutes ago regarding parents with
disabled children or some sort of special needs child because,
as you have pointed out, you are getting down to those where it
is almost like an individual case-by-case basis. I have run
into a few cases in my district where the health insurance risk
of those kids--I mean it is hard enough with the wage rates to
try to figure out how to do the transition on the health care,
and the health cares costs are often horrendously large in
those cases. Have you run into that much and how are you
addressing that?
Governor Thompson. There are four things that really
prevent a welfare program from being successful and from moving
a welfare mother from welfare to work. The first one is health
care. The second one is child care. The third one is training
and the fourth one is transportation. In order to be
successful, you have to address each one of those four items.
What we have done in Wisconsin, we allow for the State under
our W-2 provisions--we got a waiver, I believe that waiver we
got from President Bush, was to allow for them to continue on
with Medicaid for a year after they started working. Now we
just got a waiver from the Federal Government in January of
this year for the working poor and all of those coming off of
welfare to be able to buy into our successful Medicaid program
and up to 185 percent of poverty. That of course is a waiver
from the Federal Government. We had to assure the Federal
Government that it wouldn't cost more. You have the Federal
program and CHIPs for taking care of poor children. We have
found that if the parents are not included, they are not as apt
to sign up just the children. So we had to get a waiver to use
the CHIP program and to be able to use our successful Medicaid
program to allow the working poor, and that is those coming off
of welfare, up to 185 percent of poverty. Then if they get on
the program while they are still under 185 percent of poverty,
they can stay on 200 percent of poverty. The State is
backfilling that with our own State dollars. It is expensive,
but if you are going to be successful you have to do something
like that.
Mr. Souder. That sounds like an excellent way of
transition, something logical, and I am glad to see some
flexibility with that. In the catastrophic cases, much like we
are seeing with IDEA in the schools where all of a sudden you
have this level and one State that takes $200,000. Do you see
very many of the--you could still have a break of where the
insurance costs are running $3,500--that would be a way
understatement. It can be $50,000 a year for that parent----
Governor Thompson. You can but most of the time those
individuals would qualify for SSI.
Mr. Souder. So you have a second fallback that you work
with. One of the early criticisms that we have some statistics
here, that Wisconsin was merely dumping their caseload into
Illinois, but I see Illinois is down 40 percent, Indiana went
down 46 percent and Michigan down 59 percent. The question is
it doesn't seem like a lot of dumping if there they are all
going down as well. Did you find that out in your individual
case work, that while initially people may have tried to escape
Wisconsin because you were first, now you are actually seeing
individuals where you are making the progress?
Governor Thompson. There was so much distrust, so much
false information about what W-2 was all about that there was a
lot of skepticism. Now the more that we are in it, the more
people we are helping, the more people we have convinced that
it is the right thing to do, the more people are out there
applauding what we are doing. Those individuals that come off
of welfare and working, they are really happy. They are the
biggest supporters. If you have a typical welfare mother that
has been in an abusive situation, has been a teenage mother and
has got very low self-esteem and you encourage her to get the
training and to be able to know that she can do a job and do it
successfully and she gets promoted once or twice and starts
being able to buy her children some gifts and clothes and so on
and so forth, that person just blossoms.
That is what we have been able to do in welfare reform.
That is so exciting to me to see somebody that has been beaten
down have the opportunity to step forward and get the chance to
prove themselves and prove their self-worth. They are
exceptional.
Mr. Souder. You were one of the first if not the first to
see the interrelationship of education and welfare issues. I
know you tried learnfare, and got bottled up a little bit on
that. I would be interested if you have any additional comments
on that. Also with the Milwaukee choice program, do you think
that some of the reason that parents want to move their kids
into these choice programs is that if they don't have the
traditional all weekend, always draw the welfare check, and the
success in the workplace or also seeing that success in the
workplace that that has energized some of Wisconsin choice in
education programs and other things that you are doing?
Governor Thompson. I think it has. We had an interesting
election 2 weeks ago in Milwaukee. We had a school board that
was dominated by people that were not reform minded and they
were most of those individuals on the Milwaukee school board.
The five reform minded candidates won the election against
three incumbents--two incumbents and two open seats and one
reform minded candidate won; but all five reform minded. But in
one instance, the citywide candidate for the school board had
$500,000. I don't think this has ever happened in America;
$500,000 was spent against that one person. Most of the money
came from outside the State of Wisconsin to defeat that reform
minded candidate because he was pro-choice and pro-change and
pro-opportunity, and he won by 60 percent of the vote.
That has completely energized the educational system.
Milwaukee is the only city in America now that you have the
complete choice to send your child to a public school, a
private school non-sectarian and a private school religious, a
charter school run by the school district, a charter school run
by the city, a charter school run by the university, a charter
school run by the school and a complete science school set up
by an individual stand-alone charter school. No other city in
America has as many choices as the city of Milwaukee does right
now.
I am confident that, since it is only starting this year,
that you are going to see the education quality improve
considerably over the next several years. It is going to be
almost as big an eye opener as welfare reform has been to this
country.
Mr. Burton. Thank you, Mr. Souder. Ms. Schakowsky.
Ms. Schakowsky. Thank you, Mr. Chairman. I come from
Illinois and the Illinois State Legislature----
Governor Thompson. This committee is dominated by people
from Illinois.
Ms. Schakowsky [continuing]. Where at one time I chaired a
task force on welfare reform, so I know how hard it is. I
applaud your entrepreneurial spirit in dealing with this issue
and showing, I think, that real welfare reform does require on
a per person basis that you spend real money, in your case even
more money than you were spending before. We have some
wonderful programs in Illinois, including More Pays, where TANF
recipients can keep more of the money that they earn. Also, a
concern that of the 40 percent decrease in the rolls, as Mr.
Souder said, about half of the people that are leaving welfare
right now are doing that because they have failed to make an
appointment. A number of us are raising those kinds of
concerns, why are people off the welfare rolls. We are also
finding, and maybe it has been brought up before, forgive me it
if it has, but there has been a decrease in programs like
Medicare and Medicaid and food stamps that even those not
receiving cash assistance would be eligible for.
At the same time we are seeing increases in food pantries,
Catholic Charities, new ports. I want to ask you a question
about what is going on in that regard in Wisconsin. I am told
that in your current policy manual and your draft request for
proposals for the next round of W-2 contracts, that W-2
agencies are specifically directed to not proactively offer
these entitlements. Is there any truth to that?
Governor Thompson. I hope not. Unless we are complying with
the Federal laws in that regard. In regards to----
Ms. Schakowsky. Let me put it this way then. Do your front
line people try to make sure that those programs, that people
ineligible for cash assistance, are eligible for it. Do you
promote those programs?
Governor Thompson. Yes, we do. I want to point out we did
see a decrease in food stamps, but now it has leveled off and
we are seeing a slight increase back up of people qualifying
for food stamps. We make no apologies for that at all. We think
it is good. We think it is good that people are using it to
supplement their earned income and be able to qualify. We have
no problems with that whatsoever. It is a Federal program and
we are going to qualify for it.
Wisconsin is one of the few States--we are the 49th. I keep
talking to Congressman Ryan about giving us some more Federal
dollars. We are 49th in America about getting any help from
Washington.
Ms. Schakowsky. We are pretty low, too, in Illinois.
Governor Thompson. But a lot better in Wisconsin. You are
still higher.
Mr. Ryan. You are still higher.
Governor Thompson. The Midwest as a block of States get
fewer Federal dollars. As far as food stamps, if we qualify, we
are going to certainly accept it.
Ms. Schakowsky. It is understandable how a former
beneficiary might think that off is off. They might not
understand----
Governor Thompson. I understand that. The question was
raised by Congressman Davis. We are down to the hardest to
place individuals. We are doing a lot of followup. We are also
extending the W-2 counseling for an additional 6 months to 9
months for those people that have gone off of work to keep
counseling them to see what we can do to make sure they stay in
their jobs and find out if any cross training needs to be done,
what other kind of programs we can be of assistance. W-2 is
just not cash. W-2 is a whole plethora of programs encompassing
the human person to try to get that individual trained, get
them into a job that is going to be one that they are going to
like and be able to perform at. We are not going to be
successful 100 percent of the time. I don't want to leave that.
If we can get those individuals placed, we are going to do
everything that we possibly can do, and we are going to make
their life as easy as possible.
Ms. Schakowsky. This may have been asked before. I know
that you have private agencies that conduct the W-2 program. Is
there the kind of followup so that you know where people are
and what has been happening to them, et cetera?
Governor Thompson. Not as good as I would like. I am the
first that would admit that. But what happened with the W-2--W-
2 has only been in operation for about 16 months. We have been
tremendously successful. Since W-2 started we reduced our
caseload 74 percent and 90 percent totally from the time I
started in 1987 with our first pilot program. We had so many
people going off of AFDC the first couple months that we had a
terrible time. It was difficult tracking everybody. Now we have
set up a new procedure. We have had our first study done and we
are going to do four more quarterly studies, where these people
are, how well they are doing. Their criticism was constructive.
We are doing a much better job now and it is not nearly as good
as it is going to be a year from now of tracking people. We
will have a lot more empirical data a year from now if you call
me back to give you that.
Ms. Schakowsky. Thank you very much.
Governor Thompson. I would like to point out we do have
private, we do have profit, and we do have nonprofit agencies
running our W-2 but we also have the counties as well. They all
bid it and the one that wants to do the best job will do that.
Mr. Burton. Mr. Ryan.
Mr. Ryan. Governor, I think that we have heard some very
enlightening questions and testimony here today. Mr. Waxman was
asking about some instances where New York State or New York
City, they are pushing working poor off the cliff and going to
the charities and other places. Ms. Schakowsky had some
insightful questions on what happens after W-2. You have shed
so much light on welfare reform, on bringing our States
throughout this country onto the road of welfare reform. Now
that we are beginning to mature through that process, given
some of the concerns that we look at welfare reform that people
going off of welfare are just going off of a cliff, could you
shed some light on how Wisconsin is making sure that W-2
recipients aren't slipping through the cracks? And then I would
have a followup question.
Governor Thompson. What we are doing is a lot of
counseling, Congressman Ryan, and we are also doing a lot of
followup. Ms. Schakowsky pointed out that she wants to make
sure that people are not dropping through the cracks, as you
are and everybody in Congress. We have not done as good as job
as I would have liked. It was just because of the tremendous
numbers that we were dealing with at the beginning. So we are
following up completely. We are also trying to find out--in
this budget we have gotten extended for another 6 to 9 months--
for in-depth counseling of everybody that we placed to work to
find out how well they are doing and what their problems are
and how the State could benefit them and be a partner with
them. We don't want to dictate, we want to be their partners.
We also are doing a lot of innovative things as far as Badger
care. The next step is health care. We have got a waiver on
that, as I mentioned to one of the previous Congressmen, and
that we are going to provide health care up to 185 percent of
poverty, especially to the working poor. Once that kicks in
that is going to help them keep their jobs much better because
they can't afford health insurance. It is much better to keep
them working and have the State help them with their health
insurance.
In child care we are going the next step. I am really
passionate about this and excited about it, setting up in this
budget a completely new kind of quality child care centers for
children at risk and trying to get to them at an early age so
that when their brains are in the formative stages that we can
impact on that correctly. It is sort of an exciting thing.
These are the things that we are doing and I think that it
is sort of model setting, but it is the right thing and we are
helping to be able to move the remaining people off of welfare
over the next several years.
Mr. Ryan. I just want to compliment you on the way you are
implementing this at the county-by-county level. I have toured
the job centers in the First Congressional District, and it is
just astounding to see how the one-stop shopping principal is
being applied within Wisconsin. In Janesville, WI, I don't know
if you have been to that job center where you took an old K-
Mart department store and retrofitted it and changed it into a
job center. If you do have job training problems, health care
problems, child care problems, you can go to the job center and
meet with a consultant and they can help you get on the road to
self sufficiency.
One of the things that Congressman Davis mentioned was
getting a livable wage. I think there is an unjust criticism on
welfare reform in general that we are simply putting people in
the minimum wage jobs. I know that that is not the case with W-
2, but could you just enlighten us a little bit about how W-2
specifically deals with promoting people to getting off of
minimum wage jobs into higher paying jobs?
Governor Thompson. I certainly can, Congressman, but I
would just like quickly to comment on your one-stop shopping
center. This is something that we started in Wisconsin. A lot
of States are doing it. It is a combination of the State, city
and county. If you were able to give the employment training
provisions in the block grant, you would, Congressman Ryan, do
so much to unleash the innovation of different States on
training people and getting them off of low skilled into higher
skilled. It does work. You can go in there and take your
children in. They will be taken care of in the child care
center while they are there. In the city, if you have a problem
with whatever, we are going to take care of you. That to me is
the beauty of it. You don't have to waste going from one agency
to another. If it is a city problem or a county problem or a
State problem, they are all going to be dealt with in that one-
stop shopping center. You have been there, you know they are
successful. But if we could get that block grant on the
employment training, I could tell you we could do so much more
for your constituents and for mine and for the people of this
country. People have the mistaken belief that you are able to
get out of poverty by being on welfare. You are 15 percent
below the poverty line on AFDC standards. The only way to get
out of poverty in this country is by working. It just makes
common sense. If you are 15 percent below poverty staying on
welfare, you are never going to get above it. It is impossible.
So the only way to get above poverty is by working. Even at the
minimum wage, which everybody knows you don't find many minimum
wage jobs in many places across this country because people are
working. When people are at full employment or close to full
employment, wages go up. McDonald's is always used. Why are you
training people to go into McDonald's? McDonald's, I am sure,
are paying $7 an hour right now just starting. Most of the
welfare case workers that we have are people that have moved
off of welfare into work, are making on the average of $7.42 an
hour, which is $2 above the minimum wage. On top of that, at
$7.42 you are 30 percent above the minimum wage, above the
lines of poverty. And on top of that in Wisconsin, you qualify
for earned income tax credit and from the Federal you get that
any place in this country, which you can't get when you are on
AFDC. That, if you qualify for the max, is $3,900, over $300 a
month on top of that. Even at minimum wage you can qualify for
that. Then on top of that in the State of Wisconsin, we are one
of the few States that has their own State earned income tax
credit, which can give you another $1,500. So actually you can
get an additional $5,400, more than $100 a week, just by
working, from the Federal and State government, if you qualify
for the maximum earned income tax credit. So it makes sense to
work.
Mr. Ryan. Just to bring you up to date, Governor, as vice
chair on one of the subcommittees on this committee, the
Natural Resources, Economic Growth, and Regulatory Affairs
Subcommittee, we are going to launch a series of hearings
looking at Federal barriers toward State and local government
reform. That is why it is so informative and helpful to have
you come up and testify and tell us precisely what those
barriers are. Just for the record, I wanted to get this down,
which is you need assistance with the job training block
grants. You need the paperwork burden to be lessened or
removed. Is there anything else off the top of your head----
Governor Thompson. If you could get those two, you would
make my life a lot better and every Governor in this country,
and you would do so much to help improve the quality of life.
Mr. Ryan. We look forward to working with you.
Governor Thompson. Thank you so very much.
Mr. Burton. Let me just say, Governor, before I yield to
Mr. Mica, that if you will get through to Mr. Ryan or directly
to me these requests for changes, I will talk to some of the
other committee chairman of the relevant committees and see if
we can put some of that on a fast track.
Mr. Mica.
Governor Thompson. Thank you, Mr. Chairman.
Mr. Mica. Thank you, Mr. Chairman. First of all, Governor,
I would be remiss if I didn't compliment you on the incredible
record of accomplishment that you have achieved. I came into
the minority in 1992 from the business sector determined to
balance the budget, welfare reform, and other reform of some of
the Federal programs that had gone askew. We had some
incredible battles and we appreciate your assistance. We were
defeated several times, but we finally came back and won at the
Federal level. During that debate I always liked to use the
quote from Thomas Jefferson that said dependency begets
servitude.
I think that you have freed in your State and across the
Nation thousands and thousands of people. I think history will
record that as probably the most significant thing that we have
done in a generation, really, at the Federal and State level,
to help people gain self-respect, self-worth, and dignity and
part of what this country is about, economic opportunity and
personal freedom, not being dependent on government programs. I
just had to say that.
One of the things that has concerned me is that as we take
people from welfare to work is, again, they are going to enter
at the lower paying level. I think Mr. Davis asked you a
question about health care, which is of great concern to me.
You don't want to take people out of a system that they have
been dependent on and also gone to for health care and for
other benefits that they can't get because we provided more not
to work than to work. Then if you work, you have got less and
you have got fewer benefits.
If I am a parent, I am concerned about health care. I was
astounded by the figure that you said, 93 or 94 percent of your
folks have health care coverage in your State, which I think
should be a model for this country. It is a sin that 43 million
Americans do not have health care coverage. Could you tell us
how you did that and maybe recommend how we could do that? If
we could do welfare reform and we could do that, we have
accomplished two great things, allowing people to work and then
allowing them to have the most important benefit, which is
health care coverage in my estimation.
Governor Thompson. I can't take that much credit for it,
Congressman. It is sort of the whole State has pulled together.
We have a lot of insurance companies in the State of Wisconsin.
We were one of the first States to start managed care and HMOs.
It was very helpful in getting people covered by health care.
We were the first State to start the COT program which allowed
people to choose to stay in their own home rather than going
into a nursing home. Then under the welfare program, we just
made it a policy that we were going to cover welfare mothers
for a year after they left welfare so that they would have the
security of knowing that they would be covered.
There are four things that prevent a welfare mother from
going to work. The first one was health care, which was
dominant. I looked at that. We got a waiver. I believe it was
under President Bush that we got that waiver to provide for
health coverage for 12 months after they started working so
that there would not be the immediate falloff. The second thing
is day care, which we provided. The third one is transportation
and the fourth one is training. Now we tried Badger care. That
is going to raise our level from 93 to 94 percent. We are tied
with Hawaii for having more people covered by health insurance.
Hawaii has sort of universal health, but they are only about 93
or 94, so we are tied right there. So we are going to have
Badger care for the working poor. We just got a waiver from the
Federal Government to do that. We are hopefully going to have
it up and running by July.
The Federal Government says for this waiver, we can't cost
the Federal Government any more money. So it is going to be an
expensive program for the State, but it is the right thing. It
is an investment in the health care. It is the working poor--
that person that has never asked for anything, maybe coming off
of welfare, but also maybe a poor farmer in the State or
somebody just above minimum wage that just can't afford it. We
are going to allow that family to be able to buy into our
successful Medicaid program up to 185 percent of poverty. Then
if they get in below 185 percent of poverty, they can stay in
until they reach 200 percent of poverty. It is going to, we
think, increase the number of people that are covered by health
insurance in Wisconsin from about 93 percent all of the way up
to about 98 percent.
Mr. Mica. Thank you again, Mr. Chairman. Thank you,
Governor.
Mr. Burton. Let me just say, Governor Thompson, first of
all, I am sorry that our Members weren't all here at one time.
This has been a very busy day. You can see they have been in
and out. The information that you have given us I think will
lead to legislation. I can tell you from my own personal
standpoint, and I am sure Mr. Ryan and others on the committee,
that we will do everything that we can do to help you to reduce
the paperwork burden and maybe streamline some of our other
programs and get money back to help solve the problems. If you
will get that information to us through Congressman Ryan we
will really work on that.
I would like to say one more thing. You are living proof
that good government is good politics. I know that Wisconsin is
a switch State. For you to be Governor for 13 years proves you
are doing the job right, and we really appreciate what you do.
Thank you, sir, very much.
Governor Thompson. You are a wonderful person. Thank you
for having me, Congressman.
Mr. Burton. Thank you, Governor. Our next panel is Claude
A. Allen, secretary of the Virginia Department of Health and
Human Resources; Michael Poole, chairman of the Board of
Directors of the Florida Work and Gain Economic Self
Sufficiency Program; Jason A. Turner, commissioner of New York
City Human Resources Administration; Julia Taylor, the CEO of
YW Works; Cassandra Tucker, a former welfare recipient and now
gainfully employed; Genevieve Kukla, president of Central
Overhead Doors; and Wendell Primus, director of income security
of the Center on Budget and Policy Priorities. Would you all
come forward and sit here at the table. Before we start, we
have one of our valued members of the committee from the great
State of Florida, Ms. Ileana Ros-Lehtinen, who would like to
make a remark or two about some of her constituents.
Ms. Ros-Lehtinen. Thank you, Mr. Chairman. It is a pleasure
for me to welcome Mr. Michael Poole, the chairman of Florida's
Work and Gain Economic Self Sufficiency Wages. This is a
program that has performed an outstanding job in reducing
Florida's welfare caseload while improving services to the
truly needy. With the wages effort under the leadership of Mr.
Poole, this program began in 1996 while our State of Florida
has led the Nation's eight largest States in the decline of its
welfare rolls. The number of families on welfare has dropped by
more than 60 percent and more than 140,000 individuals have
returned to work. As a result of this amazing success story,
more than $250 million in savings has been used to reinvest in
clients who face more formidable barriers and as a rainy day
fund for a possible future economic recession. Another $70
million in wages savings has been used for the very important
needs of child care for the working poor.
Recognizing the benefits are limited and taking advantage
of increased employment assistance, the average stay on welfare
in Florida has dropped significantly from 23 months to 14
months in July 1998. The most comprehensive State study ever
taken shows that over 75 percent of Florida families who have
left the welfare rolls have found employment and that most
believe that they are far better off since leaving the welfare
system.
We congratulate Mr. Poole and the reforms that he has
adopted. They have been very effectively implemented in the
State of Florida with a strong Federal-State partnership
reducing welfare rolls while utilizing our State's private
sector with economic incentives to boost payrolls. I welcome
him to our panel and I thank you, Mr. Chairman, very much for
inviting us in Florida to participate and boasting about what a
good job we have been doing.
Thank you, Mr. Chairman.
Mr. Burton. Thank you, Ms. Ros-Lehtinen. And the other
Congressman from the State of Florida, Mr. Mica, has a comment.
Mr. Mica. Thank you, Mr. Chairman. I won't take too much
time, but I just want to associate myself with the remarks of
my colleague from Florida and also welcome Mr. Poole and
compliment him on the outstanding job that he has done,
compliment the wages program in Florida and what it has done to
allow people self-sufficiency and local control and local
responsibility, and we are so pleased to have him with us.
I really would like to utilize the rest of my time, sir, to
hear from him. Thank you, and I will yield back.
Mr. Burton. Thank you, Mr. Mica. Mr. Ryan.
Mr. Ryan. I would just like to welcome Julia Taylor,
Cassandra Tucker, and Genevieve for coming today. We just heard
from our Governor, Tommy Thompson, about how he structured W-2,
how it is working and how the policy works. I am looking
forward to hearing from you how it is working on the front
lines, how it is working in reality and in practice. I am very
excited about having you here. I am glad your plane made it on
time. Good to have you.
Mr. Burton. Speaking of planes, I think Mr. Primus is going
to have to leave in a little bit, so we will get you on the
program here relatively soon. But you will probably get out to
the airport, if it is National, and you would probably be
waiting anyhow.
Mr. Allen, would you like to start off? If it is possible,
I would like for you to try to confine your remarks to 5
minutes because we have so much we have to cover.
STATEMENTS OF CLAUDE A. ALLEN, SECRETARY, VIRGINIA DEPARTMENT
OF HEALTH AND HUMAN RESOURCES; MICHAEL POOLE, CHAIRMAN, BOARD
OF DIRECTORS, FLORIDA WORK AND GAIN ECONOMIC SELF SUFFICIENCY
PROGRAM; JASON A. TURNER, COMMISSIONER, NEW YORK CITY HUMAN
RESOURCES ADMINISTRATION; JULIA TAYLOR, CEO, YW WORKS;
CASSANDRA TUCKER, FORMER WELFARE RECIPIENT; GENEVIEVE KUKLA,
PRESIDENT, CENTRAL OVERHEAD DOORS; WENDELL PRIMUS, DIRECTOR OF
INCOME SECURITY OF THE CENTER ON BUDGET AND POLICY PRIORITIES
Mr. Allen. Certainly. Thank you, Mr. Chairman, members of
the committee. It is indeed a pleasure to be here on behalf of
Governor Jim Gilmore and the citizens of the Commonwealth of
Virginia. In November 1993, the citizens of the Commonwealth
elected Republican George Allen to be Governor of the State
with a mandate, among other things, to reform Virginia's
welfare reform program. At that time, the average welfare
recipient received about $291 per month in food stamps,
Medicaid, and other ancillary benefits like transportation and
child care assistance, which has been talked about here
earlier. The former system, however, penalized individuals for
working, getting married, and saving money. We realized that
the best intentions of the former welfare plan had done more to
keep people in poverty than to help them out of it. It created
a greater dependence on government than on one's self, one's
family, or one's community. Welfare programs rewarded people
for dysfunctional behavior that tore families apart rather than
bring them together.
I am proud to say that 1\1/2\ years prior to the passage of
the Personal Responsibility and Work Opportunity Reconciliation
Act of 1996, Virginia passed and began to implement our
historic Virginia Independence Program.
In the past 3\1/2\ years, Virginia has experienced
unprecedented success in moving welfare recipients to work
while reinstilling the values of personal responsibility.
Virginia's welfare caseload has declined 51 percent from 73,000
families to under 36,000 families on welfare. More than 73
percent of the VIEW participants are working and 90 percent of
those are working in full-time, unsubsidized employment. VIEW
participants are averaging wages in excess of $834 per month,
which is almost triple the average welfare payment of $291.
Virginia's welfare recipients have earned and contributed
more than $130 million back to Virginia's economy through
employment, therefore becoming taxpayers and consumers, not tax
burdens. Virginia's welfare reform program and success are
greatly attributed to the enormous support and efforts of the
local communities and businesses. Virginia has created hundreds
of partnerships with each facet of the community, nonprofit
organizations, businesses, and faith based organizations to
provide the necessary support and services needed by welfare
clients to achieve lasting employment and self sufficiency.
Despite these clear successes, there are some critics who
want to claim that welfare reform has failed. These are people
who argue against mandatory work requirements and the use of
sanctions to change behavior. These opponents initially paint
vivid and horrifying pictures of women and children being cast
adrift in a sea of public indifference. An example of this
would be where estimates of a million children would be thrown
into poverty and homeless shelters would be exploding with all
of the women and children.
This indeed has not happened in Virginia. I doubt that it
has happened throughout the United States. By any standard of
empirical, anecdotal, or statistical measure, the conservative
pro-family welfare reform initiatives implemented in Congress
and by the Republican Governors have been an overwhelming
success.
There are, however, a few things that Virginia recommends
in the continued implementation of welfare reform, and I will
touch on those briefly. Federal work participant rates do not
measure outcome. These work participation rates that States
must meet in order to receive full TANF funding is a process
rather than an outcome measure and does not measure the number
of individuals who have left welfare for work or have been
diverted from welfare rolls. Many States, including Virginia,
have seen significant caseload declines and many individuals
who have gone to work and are now successfully supporting their
families with higher income than when they were on welfare.
However, under the Federal participation rate requirements,
States are actually given more credit for keeping someone in a
subsidized job and on welfare than for placing that person in a
job with a sufficient income so that he or she no longer is
eligible for cash assistance.
Second, flexibility is needed in the food stamp program. In
the era of welfare reform, the food stamp program remains an
old style entitlement program with its major emphasis on being
payment accuracy rather than on measurement of outcomes, such
as increased nutrition or movement of clients beyond
dependency. To come in line with the direction taken in the
TANF program, several changes are needed.
First, we would recommend amending Section 17 of the Food
Stamp Act to allow the Secretary of the Department of
Agriculture to approve a broader array of waivers. Second, we
would urge the committee to consider expanding the definition
of cost neutrality in the waiver approval process to take into
account savings over multiple years and in all Federal programs
rather than in measuring cost neutrality over 1 year limited to
the food stamp program alone.
In closing, Virginia's last recommendation to this body
would suggest that you continue to provide maximum flexibility
to States so that they can identify and solve the problems
unique to their individual populations. What is vital to the
citizens in the Commonwealth of Virginia is that you do not
retreat from the foundational principles of work first and time
limited assistance. By any measure, it is clear that all of the
people of Virginia have benefited from this program. I thank
you again and I would be glad to entertain any questions at the
appropriate time.
Mr. Burton. Thank you, Mr. Allen.
[The prepared statement of Mr. Allen follows:]
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Mr. Burton. Mr. Poole, we would love to hear from you next.
Mr. Poole. Thank you, Mr. Chairman. Mr. Chairman and
Members of Congress, on behalf of the Florida WAGES Board and
the Governor, Jeb Bush, I thank you for giving the opportunity
to share my experiences and insights gained in the
implementation of welfare reform in our State.
The State of Florida began implementing welfare reform on
October 1, 1996, approximately 2\1/2\ years ago. The Florida
Legislature passed the WAGES law prior to the Federal Personal
Responsibility and Work Opportunity Act. Of chief importance,
our welfare program was designed with strong philosophical
foundation and substantial program flexibility.
The philosophy is best described as local control, local
responsibility. I have discovered, though, that while control
is always embraced, responsibility is often avoided. Individual
and community acceptance of responsibility is a learning
experience, and although it has been difficult, we have
succeeded because of the willingness of community leaders to
sacrifice and contribute countless hours to helping neighbors
on the road to work and self-sufficiency.
The organizational structure of our effort is unique. In
essence, the State WAGES Board acts as a holding company that
oversees 24 subsidiaries we call the local WAGES coalitions.
State WAGES Board is comprised of 17 members, 9 of whom are
volunteers with diverse business and leadership backgrounds.
The remaining members represent various State departments and
agencies and State-sponsored economic development partnerships.
An organizational chart, I believe, has been provided to you.
On the local level, welfare reform in Florida is
implemented through 24 local WAGES coalitions comprised of
volunteer business and community leaders who are responsible
and accountable for overseeing the design, delivery and funding
of services. You can say that no two organizations, by the way,
are the same; all service deliveries are different across the
board.
A fundamental factor behind our success is the enormous
flexibility that these local communities have in addressing
barriers in helping people become self-sufficient. We all work
together under common guiding principles. We are customer-
focused, community-based, outcome-driven. We try to be caring
communities, including our business leaders who are engaged in
the process, and we are flexible and open to new ways and
innovations. The board sets the policy, the local coalitions
implement it, and we all work together in focusing on the
results.
Some of the successes that we have accomplished are these:
The number of families subject to time limits and work
requirements has declined by 71 percent as of today. We do lead
the Nation's eighth largest State in welfare caseload declines
and people in Florida staying on welfare for shorter periods of
time, decreasing from 23 months to 14 months.
We just finished research on 45,000 families, which we were
told is the largest study of families leaving welfare in the
country, and we found that 75 percent of those who have left
WAGES report that they have found employment. They are stable.
In fact, 60 percent of those who found employment are still in
the same job that they left welfare for. Approximately 60
percent left the welfare rolls due to employment or earnings.
And as it relates to sanctions, we found that only 8
percent have left welfare due to noncompliance with the
program. And although these highlights point to good success,
we do have concerns. Most of our workers earn between $6 and $7
per hour, and this is not a wage that will allow self-
sufficiency in our State. The majority of those who have left
welfare for work are working in jobs without health benefits.
And many people are unaware that they might qualify for
other governmental assistance programs, such as food stamps and
child care and housing, et cetera, when they do leave welfare
because they consider welfare being any benefit that they
receive from the government. It is to say that we are in the
process of looking at these issues and concerns and are trying
to find ways to improve those areas.
I do want to highlight three issues. Governor Thompson,
before us, hit on the new regulations, and there are three
issues that we have. I won't go into detail, but do want to
highlight them.
The way we are interpreting the law prevents us from using
the reserve funds to serve families who are off of welfare. It
seems that we are also having to account for them as two
different funding sources, the current funds and the reserve
funds, the unspent money. So I would ask you to look at that
interpretation. Maybe we are wrong in the interpretation.
Whatever you could do to help us with that.
Another one is the interpretation of the adjustment to the
participation rate requirement that the States receive for
caseload reduction. And I would ask you to look at that issue
and the regulations requiring extensive reporting. They have
increased the elements from 60 to, I believe, over 200, and we
are just wondering how much paperwork again do we have to have
to show results.
On the areas of innovations in our State, because of the
entrepreneurship, it is kind of hard to go into all of them, so
I would ask to you look at the paperwork we provided on these,
because what I want to do is shift my remaining time to
recommendations to have you all look at.
One is I would like you to look at the redefinition of
poverty. It is an old definition. It has been created back in,
I believe, the 1940's and the 1950's and underestimates what it
costs to be in poverty or the level of poverty. It is archaic.
It doesn't have any relevance to today's economics, and you
should look at that issue.
I think that we should allow remedial education to count as
a work activity. It is hard to put someone into a job and have
them on the road to self-sufficiency if they can't read, write
or do math. And as long as it is within the work element, that
should be counted as a work activity.
We need to start redefining economic development. Currently
economic development is viewed as job creation. We need to
broaden our definition to embrace the concept of improving the
income of the working poor.
I would like you to look at--welfare reform in reality is
really an expanded version of the unemployment compensation
program that we have. The common denominator to both programs
is requirement to seek work. The only difference is the level
of benefits one receives. And I would encourage to you explore
how the public and private side of welfare reform and
unemployment compensation can work together.
I believe that to implement the successful policy of
welfare reform and other governmental assistance programs, I
think some of the work-first ideas that have worked on this
cash payment program could work related to housing and food
stamps and other what I would call welfare programs that the
government provides.
I would also look at the distribution systems of our
welfare system, and that is, why not combine food stamps and
housing subsidies and child care subsidies into one income
stream? It would make sense. It is more efficient. Companies do
this all the time, and I think that we can work up some common
philosophies like the earned income tax credit, which is
probably the most direct welfare program that we have in our
country. We would save a lot of time and money in helping
people.
And last, I would encourage to you look at the issue of the
living wage, and I want to hasten to point out that to me this
is not raising minimum wage. I don't think that is the right
way. But we can do things to encourage businesses to pay a
living wage. It costs a lot of our communities every time a job
is created that doesn't pay a living wage. Someone has to
subsidize that family, and one way that you all might help in
doing that is to award extra points to a company bidding on a
contract that shows and demonstrates that they are paying their
employees a living wage, which might include health benefits.
I thank you for your comments and look forward to your
questions.
[The prepared statement of Mr. Poole follows:]
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Mr. Burton. Before I go to the next witness, let me say
that any recommendations that you have, if you can be sure to
give them and condense them as much as possible. People send us
volumes of things, and we just don't have the time to go into
them all, even our staff. So if you can condense, give us the
Henny Youngman one-liners, and we will see if we can do
something to accommodate you as much as possible.
Let me go to Mr. Primus. I know you have to catch a plane.
Mr. Primus. I am fine. I have to leave by 1:20.
Mr. Burton. Oh, you are in good shape.
Mr. Turner.
Mr. Turner. Thank you, Mr. Chairman. First I would like to
give you two one-liners on food stamps. I agree with Mr.
Allen's remarks that food stamps is an archaic program in the
sense that its proponents argue that it really isn't welfare,
that it is a nutrition program. But studies show that food
stamp recipients use the money just the way they use cash. And,
in fact, if you look at what the amount of food and the kind of
food that people who receive food stamps use it on, you find
that both people who have income from food stamps and others in
studies where cash has been given instead of food stamps end up
both having the same amount of food and getting the same amount
of nutrients, calcium, protein, vitamin B.
We need to look at food stamps like it is. It is a welfare
program. And what I would like to suggest to this committee is
that food stamp benefits should be merged with cash assistance
and made possible to impose the same kinds of work and other
requirements that we at the local level have as a condition of
receiving cash assistance for food stamps. Right now the
Federal food stamp rules don't permit that. And I will send you
a very short summary of how those changes could be made.
Mayor Giuliani has reduced the number of welfare recipients
in New York City by over 450,000 individuals, over a population
greater than the size of the second largest New York State
city, that is, Buffalo. At this point, 1 in 17 households in
the city of New York is a household that was receiving welfare
benefits in prior administrations and now is free from welfare.
That is quite a number.
In July, the mayor went further. He said he wanted all
individuals who were receiving welfare benefits to be engaged
in work activities for 35 hours a week or 35 hours a week as a
standard, meaning that typically 3 days out of the 5 would be
in work experience programs in various things like working in
the parks or working in the courthouses, cleaning and so on, or
doing other things that are making New York City more
beautiful, and the other 2 days would be in other activities
leading to immediate employment.
Your 1996 welfare reforms, the U.S. Congress, although they
make it--although we have a lot of work to do to get to our
objective, gave us a clean and clear run for the end zone so we
can actually do what we want to do to meet that objective of
the mayor's because of the reform that it is Congress gave us,
and we appreciate that very much.
I think what you are going to hear over the next several
years in playing out the debate as to whether the reforms were
a good idea or not, is many individual anecdotal examples of
things where individuals supposedly are falling through the
cracks. But let me describe a way to interpret those anecdotes
that you are going to hear in a way that I think makes sense
for us.
You heard from Governor Thompson, and as he mentioned, the
New York Times is doing an in-depth 1-year study of Wisconsin's
reforms. About a month ago, there was a front page article in
the New York Times in which a grandmother was confronting her
daughter in a jail who had given up her daughter, the mother's
daughter, to the grandmother because she was not following
through on her work assignments and had no income. And you saw
in the news article the grandmother insisting that the mother
in jail was not meeting her responsibilities and that she was
burdened with this young child. And I think the news article's
cast on that was that this was somehow a necessary failure as
we move to welfare reform.
Actually, I saw that article in a different way. It was a
success in this sense--in this important sense: What we have
done is shift the anonymous giving through welfare where people
were not responsible to each other, even within families, and
we have made individual mothers responsible and fathers, for
working in exchange for benefits.
And when they failed to do that, what you are finding is
interactions between parents, grandparents, and children and
mothers. And it is a constructive reorganization of
responsibility within the family unit which is actually making
people responsible to one another. So I would encourage this
committee not to be overly concerned when they hear stories
which actually are part of the solution in the long run to
responsibility.
Finally, I want to just say that I am heartened to hear and
agree with many of the others who say the first job that you
get, even if it is a minimum wage job, is a way out of poverty.
In New York State now, because of welfare reforms and the
earned income tax credit, even a mother with two children going
from no job on welfare below the poverty line to only 20 hours
of work at minimum wage, that is like the lowest threshold in
the private sector you could imagine, the mom and two kids
brings their family out of poverty when you include the earned
income tax credit and the residual amounts she receives still
on welfare, plus Medicaid and other things.
So the real solution is to move people into early
employment at first possible opportunity and that is the way to
make steps up the ladder, not to withhold people while they go
through some extended training program hoping to get a so-
called living wage. Let us get them into early employment, and
then they will move up. Thank you.
Mr. Burton. Thank you, Mr. Turner. And that deductive
reasoning you used in looking at that article, I think I agree
with. It shows that it is putting family pressure, trying to
get people to do the right thing. I think it is great.
[The prepared statement of Mr. Turner follows:]
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Mr. Burton. Mrs. Taylor.
Ms. Taylor. Good afternoon, Mr. Chairman, and members of
the committee. We are pleased to be here today. As a matter of
fact, I think we used some of the same innovation and ability
in the program to get on the planes and change planes to get
here today.
We are grateful for the opportunity to speak to you about
the strides we have made in Wisconsin in building a community
of work through partnerships with employers in the greater
Milwaukee area. Government alone cannot address the challenges
of welfare reform. Rather, a broad range of community
partnerships must be involved to refocus the welfare to work
system. I am pleased to provide the committee with an overview
of our experience in establishing linkages with these partners
and suggest ways that the delivery of service could be
enhanced.
Joining me today are Genevieve Kukla, president of Central
Overhead Door Co. in Milwaukee, and Cassandra Tucker who you
will hear from in a moment. We are here to provide firsthand
testimony of the way in which our program, YW Works, has built
a bridge between the cycle of dependency in the former welfare
system and the world of personal responsibility and work.
YW Works was formed in 1997 and selected by the State of
Wisconsin to be one of the private agencies to manage the
Welfare to Work Program in Milwaukee. We did form an
entrepreneurial venture with our partner, CNR Health, and
Kaiser Group to make W-2 work for participants, employers, and
community-based organizations. With over 14 months of
experience, I believe that our performance and results deserve
to be graded very highly.
As Governor Tommy Thompson indicated in his testimony
today, Wisconsin has achieved much success in its historic
Wisconsin Works or W-2 program. This program provides
assistance to individuals for job preparation, work and support
services to enable them to leave the program and become self-
sufficient.
Since the inception of W-2, well over 10,000 AFDC
recipients began moving into new unsubsidized jobs in
Wisconsin. In 1998 alone, YW Works placed 925 people into
employment with an average wage of $6.71 an hour. One of the
underlying philosophies and goals of W-2 has been to enhance
the ways communities and employers support individual efforts
to achieve self sufficiency. We are very proud of the part we
have done, but we couldn't have done it without the support of
private sector employers such as Ms. Kukla and the
determination and discipline of people such as Cassandra
Tucker.
Our success lies in the fact that most individuals truly
want to become self-reliant members of the work force if they
are given the opportunity, the training, and the family support
services. And we have seen that borne out.
A key ingredient of our success has been the involvement of
not only employers but other community resources, including
advocacy groups and community-based nonprofits. They have
helped immeasurably in creating an environment that translates
into jobs for lower-skilled workers. And the environment is
characterized by a new culture in which innovation and reform
is rewarded as is individual achievement and effort.
Despite our early success, we must be realistic in terms of
the prospect for the future. In the wake of a declining
caseload, we are now seeing individuals with more severe
barriers to employment. Our continuing challenge will be to
improve the network of employment and behavioral health
services available to job seekers. We are seeing three factors
that will shape our future work participation rates.
The first is that there is a much lower level of job
readiness. As our caseloads have declined, so have the skill
levels of participants. Measurements such as reading levels and
a higher incidence of alcohol and drug abuse and mental illness
suggest a need to develop basic skills and to streamline the
model for delivery of AODA and other mental health services
before a complete transition can occur.
Some of the basic problems are lack of knowledge by the
participant on how the system works in terms of getting into
services. We have a very active EAP program at YW Works staffed
with clinicians who provide basic assessment and referral for
both mental health and AODA symptoms.
Consumer education with participants about what they can
expect from health care providers is greatly needed. Our staff
provides a great deal of one-on-one education and client
advocacy within the current system. An initial orientation and
well-developed curriculum on what to expect would be an
important first step.
I strongly suggest that States and localities implementing
welfare reform programs initiate onsite EAP programs at their
site and upfront education and orientation on AODA issues and
how the health care system works.
Another factor is transporation. We have often experienced
supportive employers with a supply of jobs but located in areas
unreachable by public transportation. Housing and transit
strategies need to be developed to address these problems, and
we have seen employers go to extraordinary lengths, including
one that just established a $100,000 pool for us to get workers
out to their site in Waukesha.
A final factor is potential economic downturn. We are at
near record low unemployment in Wisconsin. So we need to watch
what is going to happen as unemployment rates rise to continue
to increase people staying in jobs.
One of the other big issues that we have been looking at
and working on is trying to get applicable transferable skills
in employers's industries and we have been doing a lot of
training for specific skills and on-the-job experience. But
what we have seen is the wage at placement correlates directly
with the amount of training that we can work with a person on
before placement.
Particularly if that training is at the employer's site. We
have the highest level of wage placement in the Milwaukee area
as an agency, and it is because we spend the most on training.
Innovative and flexible approaches such as Generation 2
Plastics which the Governor mentioned, and our house project,
which Cassandra
is going to mention, give you an idea of new approaches that
can be used. But innovation and flexibility is very important
or entrepreneurial agencies such as ours the not be able to
function. Thank you.
Mr. Ryan [presiding]. Perfect timing, thank you, Ms.
Taylor.
[The prepared statement of Ms. Taylor follows:]
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Mr. Ryan. Mrs. Tucker.
I think we are going to go with Mrs. Tucker next, and then
Mrs. Kukla we will go in the order of the witnesses.
Ms. Tucker. Good afternoon, Mr. Chairman, my name is
Cassandra Tucker. I am currently employed as a project
coordinator at Central Overhead Door. I got a job through the
YWCA, also through the W-2 project. I know I wrote a lot of
things on my paper. Understandably, you know, I have heard a
lot of things today that--some I disagree with; some I agree
with. But I really, you know, to treat a person with respect
and dignity, no matter where they are is, I think, the first
principle of anything.
You want someone to be successful, then you treat them as
if they were human beings. And being in the W-2 program, I
found positive people on the way, yes, but there are negative
people out there that hold power. You know, power-hungry
people. You understand what I am saying, you know? And they
feel that they have your destiny in their hands and they can
control your life, and, therefore, if they are controlling your
life, you feel like you have no control and therefore you
don't.
Now, if you want to empower me--that is what I have been
hearing today. You want to empower people like myself. If you
want to empower me, it starts with giving me self-respect,
dignity. I need to know how to read and write. When I came in
the W-2 program I had college under my belt; I had worked a
full-time job. I have six children. You know, and I had to find
a way to support them when I got divorced.
So, therefore, YW Works came into my life, you know, and it
was a positive thing. They gave me the training I needed. Now I
am a foreman. I have an all-male crew that is under me, you
know, and I get to hire, and I get to fire people. But first it
had to start at the basics. They said, you can do it.
Halfway through the program, I am giving up. I am saying, I
can't do this. And they were like, yes, you can, you know. And
they encouraged me, and they supported me. Yes, they even
checked up on me after I got the job. And they still call me,
and say how you are doing? Is everything going OK? That is
giving somebody a basis, a foundation. And I hear that, that is
what you guys are talking about today, that you want to give us
the foundation, and a basis. That is the starting point, you
know?
I understand they are saying, well we are giving money.
There is only 1 cent--I researched this--out of every dollar
going to W-2, and it is like where is your other 99 percent
going? But you don't look at that. You are saying I am giving
you. You are not giving me anything. If I worked for it, then
hey, OK, I am on the system for a moment, briefly. You
understand?
Some people don't want to be on the system, that is why
they go to shelters. That is why they are overloading food
pantries, because they are ashamed and they feel that they have
been stigmatized. They are not going to get food stamps, nor do
they want the medical assistance. Their child could be dying,
and their pride is in the way. But yet still we are statistics.
We are figures on pieces of paper. But we are human beings
first of all. And I need, you know, to hear--I understand you
have done research, but have you been to my neighborhood? You
know, have you checked up on the people that are supposed to be
overseeing the program? I mean the social workers, all of those
people. Until you come down to the basics, you are not going to
have a successful program.
Mr. Thompson said a lot of positive things. And they have
been incorporated, you know, into W-2 in Wisconsin. I can only
speak for Wisconsin. I don't know about any other State. But
they have been incorporated.
But my point is, the necessities are out there. But, yet,
still some people are ignorant to the fact that they are there.
I need you to help other people to realize that they are there.
And when they go there, not feeling as if you, you know, they
are just a piece of dirt, honestly, that you decided to sweep
up.
Instead of, you know, portraying that issue, you should
say, look here I know you are down on your hard luck, hard
times now, but we are here to get you back on your feet. That
is the whole basis; that is all I had to say. Thank you for
your time.
Mr. Burton. Thank you, Cassandra. That was very
interesting.
[The prepared statement of Ms. Tucker follows:]
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Mr. Burton. I want to pursue some questions with you, but
in fairness to the other witnesses we will continue with Ms.
Kukla.
Ms. Kukla. Good afternoon. I run a small business located
in central Milwaukee which provides customized garage overhead
doors installation for commercial and residential applications.
Our experience with W-2 was born out of a need.
We had received a large contract and required additional
personnel to meet the job-site requirements. We took a stab of
contacting the YW Works to help us find workers. Our experience
has been very positive. We have found that workers' attendance
is good. Their performance is good or better than regular
employees, and they have more buy-in. They feel they have been
given an opportunity they might not normally have gotten, and
their attitude reflects that.
Employees such as Cassandra come to work and do a job. It
is hard to find in today's market people that want to work, and
they are eager to better themselves. Women such as Cassandra
are also having a positive impact in the workplace. They are
entering in nontraditional jobs such as construction and
changing attitudes about career paths for women.
What makes the system work is individual one-to-one
relationships whenever possible. I have tried to provide
personal and job-related guidance--from helping employees to
proper transportation to child care to encouraging them to
continue their education.
Both my late husband and I strongly felt an obligation to
seek out young people who have not had all the advantages in
their homes or education. It was also being my interest to
mentor Cassandra and help her develop additional skills so that
she can assume more responsibility within our company. So ours
is a story of--success story, not just for women like
Cassandra, but for our company and for me personally.
My message to other employers is that programs such as W-2
work and will make your business stronger. After all, if I can
do it at my age, other businesses can and should take advantage
of it.
I want to tell you that for our experience, Cassandra--I
start our people--our W-2 people at $8 an hour. We have
Cassandra take some under her wing because we have trained her
for that and scrutinize the ones that are good. The ones that
are not working, she lets them go. And we do prevailing wage
jobs. They are eager to go because they get the prevailing
wage.
The prevailing wage in Wisconsin runs anywhere, we are
doing carpenter work, they run about $20, $22 an hour for
laborers or helpers, or trainees it runs about $18. And we have
a lot of that, and they are eager to perform. And we have been
told on jobs there were never any minorities working. We have
opened the doors for them. And we have gotten such a response
that they recommend us for jobs.
And I am very happy to be here to talk about this W-2
because I have seen it work. And I would hope that it would be
used throughout the country. It is like Cassandra says, they
need a responsibility, they need to be known that they are
going to grow in their business and that they are going to have
positions that will be able to grow. If they don't want to,
say, stay with that company they can go some place else and
they have got experience and they have a record of good work.
Thank you for the opportunity to come before you.
Mr. Ryan. Thank you for your testimony.
[The prepared statement of Ms. Kukla follows:]
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Mr. Ryan. Mr. Primus.
Mr. Primus. Mr. Chairman, I very much appreciate your
invitation to testify on the impact of welfare reform on low-
income families.
Under the welfare legislation enacted in 1966, States
currently are receiving considerably more Federal funding than
they would have under prior law and are given more flexibility
and how to spend those moneys. The conventional wisdom is that
welfare reform is working because welfare caseloads have
declined sharply. Caseload reduction, however, is a very poor
measure of welfare success. Any assessment of the success of
welfare reform law should take into account not only caseload
declines but also evidence of whether welfare reform has
improved the economic circumstances of poor, single-mother
families.
Improvements in the well-being of poor, single-mother
families can only take place if increased earnings and
increased child support collections are sufficient to replace
lost benefits of cash assistance and food stamps.
Preliminary data to answer this question are just becoming
available on a national basis. These data suggest just that
while welfare reform has undoubtedly improved the lives of some
families, some other families are losing ground and appear to
have been made worse off as a result of changes in the welfare
system.
Our study uses the public census files; and, using standard
techniques, we have concentrated on single-mother families and
have arrayed them from low- to high-income, adjusted for family
size, and then compared economic circumstances of those
families in 1993, 1995, and 1997.
Our study shows two kinds of major findings. First, program
caseloads are falling much more rapidly than need. As you can
see in the chart, between 1993 and 1995, the number of people
receiving AFDC and food stamps began a gradual decline. And the
economy largely explains that decline. The number of poor
people declined about as much as the decline in the caseload.
However, between 1995 and 1997, the situation changed
dramatically. Caseload declines can no longer be explained
primarily by changes in the economy. As you can see here, the
number of people receiving food stamps declined about 17
percent while the number of poor individuals declined only 2
percent.
The next figure shows exactly the same thing with respect
to TANF. Between 1995 and 1997, the number of poor individuals
in female-headed families declined by 4 percent, but the
caseloads declined 22 percent. A fivefold difference between an
objective measure of need and what is happening to caseloads.
The most telling finding from this analysis are centered in
the divergent income paths of the bottom two quintiles of
persons in single-mother families between 1995 and 1997. Each
quintile has about 5.7 million individuals in it, to give you
some basis. So if you look at those numbers in the chart, it is
also in your testimony on page 4, you can see that the picture
was very good between 1993 and 1995. Families in that second
quintile actually gained in after-tax real income $2,000. About
a 15 percent gain. There were also gains in the bottom decile
and in the second decile, and you can look at those bottom
numbers in terms of a percentage of poverty.
The situation though--and that is because earnings
increased and they were only offset by a very small amount of
welfare benefits declining. The situation changes dramatically
between 1995 and 1997. The earnings gains that we saw in the
earlier 2 years came to a halt, basically; and we see huge
declines in the level of benefits these families receive.
So in the second quintile, you will see economic welfare
has stayed about the same. In fact, improved a little bit. And
even in the second decile, families are doing OK. But in that
bottom decile, again about 2.8, 2.9 individuals about equal to
5 congressional districts, they have lost ground. About $1,000
on average. And that is because earnings have remained roughly
constant, and welfare benefits have declined significantly.
There are many reasons for that.
And I guess in conclusion, I would argue that a healthy
economy, policies that make work pay such as increased EITC and
State welfare policies have provided the supports to move
welfare recipients into jobs. A large portion of that research
has shown is due to the increased EITC. However, other poor
mothers have not fared as well. On average, the economic well-
being of persons in the poorest single-mother families has
decreased substantially. No one predicted such a result would
occur during a period of strong economic growth and before any
sizable number of welfare recipients reached their time limits.
This result is disturbing and should give us considerable
pause before we simply pronounce welfare reform a success. I
think these preliminary results need to be examined in light of
more national data that will become available later this year
as well as other efforts to evaluate the findings in several
States. Hopefully, States can respond to this challenge and use
their TANF block grant moneys to improve the well-being of poor
children in single-headed family households.
[The prepared statement of Mr. Primus follows:]
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Mr. Ryan. Let me just ask you a question, since you just
finished. Is it your opinion, given the totality of the
results, given the testimony here by Cassandra and Ms. Taylor
and others, that with hindsight being close to 20/20 as
possible, do you believe the welfare reform law was a prudent
law to be passed that the President signed into law? Given the
fact that we don't have the statistics yet available to help us
target the resources as well as we would like to, and that we
might in the future, do you think it is a good idea that we
passed the welfare reform law?
Mr. Primus. Well, as an economist, I am going to say yes
and no. I think the increased funding that is available to the
States was a good thing. I think the States did need more
flexibility. And there were a lot of work requirements, and I
believe in work. In fact, I believe in it so much that I am
going around to States and arguing that our child support
system has to also be more focused on moving men, the men look
very much like the mothers here into the labor force. So there
are some good aspects.
Mr. Ryan. So the premise and the principles--you pretty
much revealed the main principles of welfare reform.
Mr. Primus. But I do think that the downside of this is
that there is no emphasis on moving families out of poverty.
And there is no incentives to serve low-income families with
children. And so when I look at incentives in the block grant,
and the pressures that State legislatures and decisionmakers
are under, we see welfare declining much more rapidly.
And I think we should be concerned about that $1,000 loss
of income in the very poorest single-mother families. And that
is why I think the test of welfare reform is does it make
children better off? And this is preliminary data. We need a
lot more data before we can reach a final conclusion.
Mr. Ryan. Thank you. And I think Governor Thompson
highlighted that very point. We have 8,800 people left on W-2
assistance. It is going to take some work. And it is going to
take many more dollars to rescue those people, to get them on
to self-sufficiency. So I think what you are saying essentially
corroborates the point that we are now getting to the people
who really need the assistance, who really need the help; and
we have to figure out how to handle that.
Mr. Primus. If I can say one other thing. I mean, I guess
it is a little disconcerting to me when he said poverty
decreased 14 percent, but caseloads have declined 85 percent.
It seems to me that is somewhat out of balance, and we are all
for poverty reduction, and indeed the studies that I have
looked at coming out of Wisconsin suggest some people are
better off. But there are a lot of people that don't have a job
and are, indeed--I think the numbers that are in the one study
is that 66 percent of people are worse off than the month
before they left welfare reform.
So I think people should work, but some people are going to
need support; and our goal should be to help them climb the
economic ladder and not take benefits away as they enter that
work force.
Mr. Ryan. Thank you.
Cassandra, I just wanted to ask you a quick question. I
found that was a very interesting point that you made about
some of the people who are refusing to go to the job centers,
to W-2 to seek assistance because of pride. You say they are
going to Catholic Charities or the soup kitchens because they
don't like the stigma that is attached to getting help.
How do we get to those people? What would you say we do to
try to get over that obstacle to give them the self-esteem, to
show them that this is not welfare, this is not a bad thing,
this is a program to help get you up and on your feet moving as
you described. What do you think we should do?
Ms. Tucker. From my opinion, if they need a high school
diploma, some people need, like the gentleman said down there,
basic education. How can you ask them to go into a job you know
there is no room for progressing at all because they can't read
nor write, but they can do the job function in that particular
area. They need the basic education. They also need the job
training.
Some people even need nurturing skills, like she said,
counseling. It is deeper than what you see. I am just stating,
you see a bunch of numbers; you don't see the people. And today
I am just representing all the people, you know. I am on both
sides so I understand. That is all I am saying.
Mr. Ryan. Thank you.
Mrs. Taylor, I wanted to ask you a question. With your
extensive experience and putting together the welfare-to-work
program--through your own personal experience, what do you see
as the biggest obstacle for moving individuals from welfare to
work and what do you think is the most important component of
the W-2 program?
Ms. Taylor. I think one of the biggest issues is trying to
get people to be upfront about all the issues in their lives
especially with case managers. We have built in a lot of pieces
in our program where we have people that are staying in touch
with people and spend more than a half hour with them. But to
establish that level of trust so people will be upfront about
the issues going on. And then to wrap around the services.
When I was talking about the EAP and the behavioral health
component, that has been critical for us for success in our
program; and that is going to be one of the most critical
things going forward. People need supports to get their life
together to go to work and be successful.
Mr. Ryan. Mr. Mica.
Mr. Mica. I heard Mr. Primus say that we needed more data
information on some of these specific cases; is that correct?
Mr. Primus. Yes, I think that data will be forthcoming; and
I am just cautioning before we judge it a complete success, we
need to see what is happening to the economic well-being of
these families.
Mr. Mica. Then I heard Mr. Poole from Florida saying that
we are spending too much time and money on regulatory
paperwork, data collection, for reporting requirements. Mr.
Poole what do you think?
Mr. Poole. Well, I think it all depends what we are
collecting data on. I think the issues that maybe Mr. Primus is
trying to figure out is what is happening at family level, not
collecting data about who they are before they come on to
welfare. And to our analysis is what is really happening at
family level.
I agree with Mr. Primus, it is too soon to call it a
success. We know that about 80 percent of our families in our
study say they are better off, but we have 17 percent of our
families saying that they are not. And the question is whose
responsibility is it? We know it is individual responsibility
to participate and to have those people denied themselves of
their own responsibility rights or is it our failure to provide
quality service?
And I think that is where we have to dig down--just as a
company would have to dig down to figure out why customers are
unsatisfied and not buying their product--we have got to figure
out why are people who are poor and in poverty not buying the
product of our service which is to help them get to self
sufficiency.
Mr. Mica. Since the adoption of Federal welfare reform,
what changes have you seen in reporting requirements, and what
parts of that would you modify?
Mr. Poole. I believe the initial rules there were 60 data
elements that the Federal Government asked us to report on and
it has now gone up to 232; 140 of them, I understand, represent
something about the client. When you multiply that times how
many people are on our welfare rolls and how many people come
off and on, that is an awful lot of data collection. In our
State we started off with 30 performance measurements. We are
down to six. I think I will get down to a couple more after
analysis of what is really important, and what is really
important is the measurement of self sufficiency.
Mr. Mica. So you have gone from 30 to 6 and we have gone
from----
Mr. Poole. From 60 to 232.
Mr. Mica. So we are headed in the wrong direction.
Mr. Poole. Just a tad.
Mr. Mica. Are there any other recommendations? We passed
this thing, and I am sure it is not perfect. I am sure from the
Federal level we can improve it. One thing you mentioned is
data reporting and information that is required. If you had
one, two, three, your top priorities for the Feds to change to
help you improve what you are doing, what you would recommend,
Mr. Poole?
Mr. Poole. Maybe being flip but also straight forward,
maybe tear up the regulation book and asking the States to be
responsible for the money that you have given them and look at
the results. And let the States be responsible. What you have
told us in our communities is that when the communities in our
State look at it, they recognize that if they don't help
someone to self-sufficiency in 2 years they are going to have
to take 100 percent of the burden because you are going to stop
the funding for that individual. That is pretty strong
responsibility. You don't need any regulation other than that.
Mr. Mica. Basically you would favor some block grant with
minimal reports, and the reporting would be from the State to
the Federal?
Mr. Poole. Correct.
Mr. Mica. Any other majors?
Mr. Poole. That would be major enough.
Mr. Mica. What do you think about that, Mr. Primus?
Mr. Primus. I guess in terms of recommendations to this
committee I want to agree with Governor Thompson. I think you
shouldn't be reducing or rescinding or deferring the size of
the block grant. I think that was a commitment you made, you
ought to keep. I also want to compliment the Governor, I think
one of the innovations he has done is passing through all of
the child support. And you might want to consider ways of
encouraging States to follow that example in Wisconsin.
I don't think you should followup on his recommendation to
reduce the maintenance of effort. I think again, it was part of
the deal. I think there are plenty of needs among low-income
custodial families with children and needs of the father who we
should be concentrating on as well. And so before you reduce
the maintenance of effort, I think I would really make sure
there is no need left. And I think that would be a hard thing
to establish.
I think the reporting requirements were put in there by the
majority, and I think they are good. And before you reduce
them, I think you run the risk of not understanding what we are
about in welfare reform. And so I urge caution. And I think the
HHS has issued a good final rule and again, I just urge
caution.
Mr. Mica. Thank you.
Mr. Ryan. Mrs. Biggert.
Mrs. Biggert. Thank you, Mr. Chairman. In Illinois, when we
started to revise the welfare reform, we did an Illinois bill
as well as then having the Federal reform, and the biggest
problem that we had was the computer. And to start to solve a
problem was to figure out what was happening before that, and
to go to a one-stop shopping. And we discovered that with all
of the different agencies that we had was that we were double-
counting. Families were not listed as families, but everyone
was given a number. And then if they were out of the process
and came back, they were a new entry.
So this was the biggest thing that we had. And I wondered
if some of you have had that problem, because it took an awful
long time to find a computer system that was sufficient,
really, to be able to put that data. We finally have a
warehousing for the reform. But I would like to know what
happened as far as computers.
Mr. Allen. I will be glad to try to address that. In
Virginia, we still have a challenge with adapting the existing
computer systems to try to accommodate not only going from 60
reporting requirements to 232, but all of the various programs
trying to bring in the food stamp program, bringing child
support enforcement on line, coordinating that with Medicaid,
which is, in our State, a different agency. But having to
coordinate those is not only a challenge in and of itself, but
being pushed up against the Y2K issue as well. So you cannot
make the changes that are going to be necessary to try to keep
up with the paperwork that is being required from Washington.
So we continue to have ongoing challenges and struggles
with our technology trying to keep up with the rules and regs
that are being imposed upon the States to provide information
to the Federal Government.
Mr. Poole. I would say that we have had the similar problem
of information. We have had a data collection system related to
food stamps and referral before, and now we are trying to move
to a case management local-network system so different agencies
and providers can talk to each other. And we are, at least,
probably a good year away from having a decent system. And this
is true, I think around the State in our research.
Mrs. Biggert. And then to Ms. Tucker, I think something
that is very important is to go out and see what is happening.
And in the Illinois general assembly, I spent a lot of time
going throughout the State, particularly with the Department of
Children and Family Services, to talk to the clients, to talk
to food stamp foster parents, to talk to case works, et cetera,
and I think that is very important.
And one of the things that we put in as far as the welfare
reform was the training for the one-stop shopping so that the
person that a client comes into see is that one person can make
such a difference in how--the reaction, and the treatment there
is by the training of the case manager. And so that is
something that I think you bring up and is a very good point to
be sure that they are well treated and that the State is very
concerned about that first contact.
Ms. Taylor. If I could respond to the computer question. We
have a State system called CARES that we use that basically was
built as an eligibility system years ago. And we have developed
a system ourselves that is a web-based software system known as
GEMS that is actually a case management system that measures
behavioral changes, changes in skill-building, we can input
different test levels and track where people are at, and it is
a much more user-friendly system as well. But it is something
that we spent time developing, and we have actually been using
it in other States at this time.
Mrs. Biggert. Thank you, thank you all.
Thank you, Mr. Chairman.
Mr. Ryan. Mr. Turner, we haven't heard from you yet, and I
understand that you were one of the gentlemen responsible for
putting together Wisconsin's W-2 program and that now are
attempting to do the same in New York. New York City's caseload
was probably greater than many States we have heard from yet
today and in recent history here. What do you think of the
concerns raised by Mr. Primus, as you have read some of his
studies earlier and his testimony now? Given the fact that you
have been through the Wisconsin experiment, and you are doing
the same thing in New York.
Mr. Turner. I am sorry he had to step out.
Mr. Ryan. He is still here.
Mr. Turner. Good, I am happy about that. As it relates to
poverty in the lower quintiles in those remarks, I would like
to mention that the Congressional Budget Office looking at CPS
data in a recent year showed that for nonmarried mothers, aged
18 to 44, with kids under 18, that is your hard-core welfare
population, welfare-at-risk population, the percent of the
labor force recently is about 59.5 percent. That is up from
49.2 percent only 2 years before. That is a social revolution.
That is something that we have just never seen before.
Mr. Ryan. We have seen employment gains to the tune of 10
percentage points in that decile.
Mr. Turner. No, that is a little bit of a different cut of
the cat. This is all nonmarried women with children under 18,
what portion of that group, rich and poor, are engaged in the
labor force; 59.5 percent are. And it was 49.5 percent only 24
months before. You can't imagine any kind of social policy
legislated from the Congress that could have had that impact
other than what you did, combined with a strong economy.
So with that, combined with availability of the earned
income tax credit which takes virtually anybody that works
full-time at any wage out of poverty, I can only say there is
not much more that I can think of that could be done by the
Congress that could be more constructive than what we have
already done. And I think, at this point, it is up to both the
local governments running the programs and let us not forget
the individuals who are moms with children, to take available
positions and move up and out. I think that is the solution.
Mr. Allen. Mr. Ryan, if I may, because we have touched on
this twice, I think it is important that we recognize what the
purpose of welfare reform was. It was not to eradicate poverty.
The purpose of welfare reform was to put those who were
currently in poverty, who were participating in public
assistance programs on the road to self sufficiency. And I
think Ms. Tucker's testimony bears this out that only 17
percent of those who were in poverty actually participate in
public assistance programs. So the vast majority of people that
would qualify for being in poverty are not in any program
whatsoever. And so we need to be very careful when we try to
change the focus or the goal of welfare reform after the fact.
It was not to eradicate poverty. Rather it was self-
sufficiency. And I think that we shouldn't get away from that
to recognize that, therefore, we can declare in many States
welfare reform a success. But we do need to be very cautious as
we move into the deeper caseloads and the more difficult to
employ.
Mr. Ryan. Thank you. You mentioned in your testimony, Mr.
Allen, that earlier estimates prior to welfare reform's
implementation--I think Mr. Primus is one of those who
estimated that we would see 1 million children thrown into
poverty in welfare reform.
Mr. Allen. Absolutely.
Mr. Ryan. Could you just comment on that? I would think
that he would probably redo his estimate now that we have some
facts in front of us.
Mr. Allen. I can comment on Virginia, and I think that is
nationally we have not seen the type of dramatic downshift or
the dramatic outcomes of women and children being thrown into
poverty. That just has not happened. Some have moved out much
quicker, but many, and most, are actually above the poverty
level. And that is what we need to be looking at, that we are
on the road to success.
It will take time, indeed, for them to move from that
minimum wage job into higher levels once they get additional
training, education. We do need to provide those wraparound
services to afford them that of transportation and health care.
But at the same time we can't say that it has not been
successful and that, I think, is what is very key to recognize.
And we also need to coordinate the programs that are currently
existing out there. We have children's health insurance program
which will also benefit this population greatly.
Mr. Ryan. Thank you. This has been a very interesting
panel. What we have seen with this panel is a cross-section
between the policy formulators, the policymakers, the policy
receivers, and the doers who are on the front lines doing this.
Mrs. Kukla, with your business on trying to implement welfare
to work, seeing and hearing from you exactly what you go
through to accomplish that.
Cassandra, to hear from you what it is that--the
psychological change that you have experienced, I think as
Governor Thompson said, it is a blossom. That is precisely what
we were hoping to achieve with this. It is helpful to hear you
share your story with us so that the policymakers here who are
seated to your right and those of us who are trying to do a
better job of bringing people into the lives of self-
sufficiency. That helps us do our jobs better here. Thank you
to everybody on this panel. I think it has been a very
interesting panel. At this time I like to say this hearing is
adjourned. Thank you.
[Whereupon, at 1:30 p.m., the committee was adjourned.]
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