Mr. Chairman, Mr. Ford, and members of the Subcommittee: I
want to thank you for giving me the opportunity to testify today
about the President's vision for welfare reform. Throughout the
years, this committee, including many of its current members, has
built a great tradition of bipartisan leadership on the issues of
welfare reform. We look forward to working closely with you in
this tradition to reach a bipartisan consensus on welfare reform
legislation.
Last month, the Administration submitted to Congress a
welfare reform bill entitled the "Work First and Personal
Responsibility Act of 1996". This bill will replace the current
welfare system with one that demands responsibility, strengthens
families, protects children, and provides states with broad
flexibility. This comprehensive proposal lays the groundwork to
reform the Nation's failed welfare system and serves as an
excellent starting point for further discussions that we hope
will lead to bipartisan reform.
The President has made it clear that, if Congress sends him a
clean welfare reform bill that requires work, promotes
responsibility and protects children, he will sign it. However,
as the President has noted, good welfare reform should not be
ruined by attaching bad proposals that shouldn't be there in the
first place. For example, the President has told Congress not to
link welfare reform to Medicaid changes that cut coverage to
children, to pregnant women, to the elderly, to disabled adults,
and to families with children with disabilities, or to cuts in
the earned income tax credit which would result in raising taxes
on working families. We strongly hope for legislation that
builds upon the original NGA welfare agreement, the Senate-passed
bill, and the recent bipartisan initiatives in both Houses in a
way that can be endorsed by a majority of Democrats and
Republicans in both chambers of Congress and supported by the
American people.
We greatly appreciate the efforts of the NGA in achieving a
bipartisan consensus on a framework for welfare legislation and
in continuing to work to add further detail to their proposal.
While their proposal still needs to be improved in important
ways, we believe that the governors have moved the debate forward
and have increased the likelihood that Republicans and Democrats
will produce bipartisan solutions to reforming our welfare and
Medicaid programs. we also appreciate the fine work of the
bipartisan Castle/Tanner and Breaux/Chafee groups on welfare
reform. H.R. 3266, introduced by Representatives Castle (R-DE)
and John Tanner (D-TN), addresses many of our concerns with the
H.R. 4 conference report. It is now up to this Administration
and this Congress to build on the spirit of these bipartisan
efforts to reach our mutual goals: flexibility for the states;
incentives for AFDC recipients to move from welfare to work;
increased parental responsibility; and protections for our most
precious resource, our children.
The Administration is concerned that the Budget Resolutions
do not appear consistent with the goal of bipartisan welfare
reform that will move people from welfare to work and protect
children. Both the House and the Senate Committee-reported
resolutions seek the full level of savings that were in the bill
the President vetoed -- 6-year savings of $53 billion (excluding
Medicaid savings) under CBO's new baseline. I hope and trust
this Committee will report out welfare reform provisions that
both Republicans and Democrats can support, and will work with
the other Committees and the Senate to develop a bill the
President can sign.
The Changing Landscape
We are proud that the efforts we have taken over the past
years at both the federal and state levels have begun to pay off.
As the President noted in his State of the Union Address, we have
started to receive some considerable good news. Several
long-term negative trends have begun to reverse themselves.
Recent Trends
The welfare rolls are down. Since January of 1993, the
number of people receiving AFDC has declined about 9 percent from
14.1 million to 12.8 million in February of 1996.
Many more AFDC recipients are participating in work and
training activities. Between 1992 and 1995, the number of
recipients participating in the JOBS program (in an average
month) rose 28 percent, from 510,000 to 650,000.
The child and general poverty rates are down. The poverty
rates for children under 18 declined from 22.7 percent in 1993 to
21.8 percent in 1994, while the general poverty rate declined
from 15.1 percent to 14.5 percent. After four straight years of
increases, the number of people living in poverty fell -- from
39.3 million in 1993 to 38.1 million in 1994.
Food stamp rolls are down. Food stamp participation has
fallen by over 2 million persons since February 1994, to 25.7
million in February 1996.
Teen birth rates have gone down. According to the CDC, the
birth rate for teens aged 15-19 declined 4 percent from 1991 to
1993. (Also, in 30 of 41 reporting states, teen pregnancy rates
declined between 1991 and 1992.)
We also have encouraging evidence on how well the JOBS
program can work. A recent evaluation of employment-focused JOBS
programs showed that program enrollees received 22 percent fewer
AFDC benefits and 14 percent fewer food stamp benefits than those
not enrolled in JOBS. They also were about 25 percent more
likely to be employed and to have higher earnings.
Child support collections are up. We continue to make
progress in our efforts to ensure that absent parents contribute
to the support of their children. Between 1992 and 1995, child
support collections rose 40 percent, from $8 billion to $11
billion. Similarly, preliminary data show an estimated 735,000
paternities established in FY 1995, up from about 516,000 in
1992. These increases reflect improvements in state collection
and paternity establishment efforts, IRS offsets of income tax
refunds, and federal accountability for payments of support due
by federal employees.
Economic Gains
Under the Clinton Administration, we are producing more jobs
and enabling more families to become self-supporting. The
financial conditions of state and local,governments have improved
enabling them to implement the provisions of the Family Support
Act more fully. States have been able to provide AFDC recipients
more of the services they need to secure and keep employment.
The President also has worked with the Congress to expand the
Earned Income Tax Credit to help make work pay more than welfare.
This program is a powerful work incentive that enables hundreds
of thousands of families to choose work over welfare. The
expansion enacted in 1993 increased the annual take-home pay by
$1,430 for a two-child family with a parent working full time at
the minimum wage.
Waiver and Demonstration Projects
In addition to the improved economy, we believe the
initiation and implementation of major welfare reform efforts at
the state and local level have been critical factors in the
decline of the welfare rolls. Over the last three years, we have
worked with governors and other state and local elected officials
to give 38 states flexibility to design welfare reform strategies
that meet their specific needs. This Administration has
encouraged states to find innovative ways to move people from
welfare to work and to promote parental responsibility. These
efforts are directly affecting almost 10 million recipients
throughout the country or 75 percent of all welfare recipients
nationwide. States, led by governors of both parties, are now
demanding and supporting work; time-limiting assistance;
requiring teens to stay in school and live at home; strengthening
child support enforcement; and strengthening families. To enable
us to be more responsive to states' interest in welfare reform,
last summer we implemented a "fast-track waiver" process which
promises approval within 30 days for state requests which follow
one of five strategies for reform. Our "fast track" process also
allows electronic application via the Internet.
Executive Activities
We continue to move ahead. The President directed and
regulations were published by the Department of Agriculture on
May 1st that would change the rule to ensure that welfare
recipients who refuse to work or go to school do not receive
increased food stamp benefits to offset the decreases made in
their welfare checks.
On May 10, the President directed Secretary Shalala to
implement an initiative to strengthen parental responsibility
among teen parents. This initiative builds on the belief --
which I'm confident is shared by this committee, Congress, and
the states -- that encouraging parental responsibility must
remain a bipartisan imperative.
Building on the successful efforts of several teen parent
demonstrations, these actions are designed to ensure that
virtually all teen parents on welfare get the education and
support they need to move towards self-sufficiency. We want to
ensure that, consistent with current law, teen parents get and
stay on a path-that will give them and their children the
opportunity to achieve productive and healthy lives. Ohio has
used the flexibility offered by the current waiver process to
implement a model program called LEAP -- Learning, Earning, and
Parenting. A recent report showed that LEAP has significantly
increased the number of teen mothers who completed school, went
to work, and left welfare.
Secretary Shalala has written to all governors recognizing
efforts made to date and soliciting their cooperation in fully
implementing the President's initiative. On May 14th, we issued
an action transmittal giving state agencies additional guidance.
The action transmittal:
1) Requires states and Tribal grantees to update their JOBS
plans by describing how they will monitor school attendance,
ensure that teen parents stay in school, and provide needed
services, such as safe and healthy child care for children while
their parents are in school.
2) Requires states and Tribal grantees to require teen
parents to sign comprehensive personal responsibility plans.
These plans address not just employment goals, but expectations
regarding school attendance, possible parenting activities or
other parental responsibilities, and services to be provided in
support of their participation in activities. The Personal
Responsibility Plan reminds the teen parent that establishing
paternity to receive child support, finishing school and then
finding work are paramount to becoming self- sufficient. In this
way, Personal Responsibility Plans reinforce state-designed
welfare reform and cultural change activities taking place across
the country.
3) Enables states to reward teen parents who stay in school
and complete high school, in addition to sanctioning those who
don't. This will allow more states to follow Ohio's lead and set
up programs similar to the encouraging LEAP initiative.
4) Strongly urges states to implement the optional AFDC
provision requiring minor parents to live at home or with a
responsible adult to receive assistance. Currently, only 21
states are implementing this minor parent provision. We are
urging all 50 states to help ensure that teen parents live in
supportive family environments to improve their chances for
productive, successful lives.
Finally, the action transmittal addresses our commitment to
working in partnership with states on developing effective teen
parent programs, through information-sharing, technical
assistance, and other related activities.
Need for Legislative Action
While the waiver projects, recent executive actions, and
other initiatives underway can help the welfare system work more
effectively, we know they cannot produce the fundamental,
nationwide changes that bipartisan Congressional legislation
would. As the President said in January, we should take
advantage of bipartisan consensus on time limits, work
requirements, and child support enforcement to enact national
welfare reform legislation. The President has consistently
called for bipartisan welfare reform, and the Administration
applauds the way Republican and Democrat governors came together
on the NGA recommendations. While we have some specific
concerns, we also feel there is great promise in the NGA plan and
the bipartisan proposals put forward by the Castle/Tanner group
on welfare reform in the House, and the Breaux/Chafee group in
the Senate. We hope these bipartisan efforts can provide the
necessary catalyst for enactment of legislation this year.
We all want welfare reform that promotes work, requires
responsibility, and protects children. Real welfare reform is
first and foremost about work: requiring recipients to make the
transition into the work force as quickly as possible and giving
them the tools they need to enter and succeed in the labor
market. This will require a change in the culture of welfare
offices so that every action provides support and encouragement
for the transition to work.
The President's Proposal
The President, as part of his balanced budget plan, has
proposed a common sense reform plan that would help to balance
the budget while meeting our welfare reform objectives. This
comprehensive proposal honors the values of work, responsibility
and the family, while providing states with broad flexibility to
tailor welfare reforms to meet state and local needs. The "Work
First and Personal Responsibility Act of 1996" has several key
features which we believe are essential to any true welfare
reform measure.
It promotes work. It replaces welfare with a new,
time-limited, conditional benefit in return for work. Within two
years, parents must go to work, and after five years, cash
benefits end. All adult recipients must enter into personal
responsibility agreements. States with the most effective
programs are eligible for performance bonuses.
It promotes responsibility and family. It requires minor
mothers to-live at home and go to school, and it gives states the
option to deny additional benefits for additional children who
are born while their parents are on welfare. It also contains
tough child support enforcement measures: streamlined paternity
establishment, new hire reporting, uniform interstate child
support laws, computerized statewide collections, and driver's
license revocation. In the immigration area, it increases the
responsibilities of alien sponsors by making affidavits of
support legally enforceable and expanding the deeming of sponsor
income.
It protects children. It preserves the national commitment
to healthy and safe child care, nutrition assistance, foster
care, and adoption assistance, and it preserves the ability of
states to respond to growing caseloads. It protects states in
the event of economic downturns or population growth, maintains
health coverage for poor families, provides the resources needed
to guarantee child care for families required to work and
transition off welfare, and provides mandatory vouchers for
children whose parents reach the time limit.
It provides state flexibility. It gives states new
flexibility to design their own approaches to welfare reform. It
allows states not only to set their own benefit levels, but gives
them new freedom to decide the eligibility rules for needy
families -- e.g., in terms of counting income, setting resource
limits, and defining family units. It also provides states more
flexibility to administer their programs as they see fit, with a
redirection of federal oversight from process to outcome issues.
However, it retains procedural requirements where needed to
maintain program integrity, protect against worker displacement
and protect against fraud (while making it easier to recover
improper payments).
Taken together, these proposals will end the current welfare
system, by requiring work, demanding responsibility,
strengthening families, protecting children, and providing state
flexibility.
The NGA Agreement
The NGA agreement makes numerous modifications to the
conference welfare bill that President Clinton was forced to veto
last year. Many of these modifications, if adopted by the
Congress, would improve and strengthen Congress' welfare reform
bill and move it closer to the President's vision of true welfare
bill and move it closer to the President's vision of true welfare
reform.
As we understand it, the NGA proposal:
* reflects an understanding of the child care resources
states will need in implementing welfare reform by adding $4
billion for child care above the level in the conference report
for H.R. 4. This improves upon H.R. 4, which does not provide
child care resources needed for those required to move from
welfare to work and low-income working families at-risk of
welfare dependency.
* recognizes the importance of child support enforcement to
welfare reform and includes all of the major proposals for child
support enforcement reform in the President's bill.
* makes improvements to the performance bonus provisions in
the conference agreement by establishing a separate funding
stream to pay for bonuses.
* modifies the work requirements to make them more feasible
and less costly for states to meet. In particular, the
Administration is very supportive of provisions that allow
part-time work for mothers with pre-school age children and that
give states more flexibility to set the number of hours per week
welfare recipients must work.
* adopts several provisions from the Senate-passed bill
including exemptions from the time limit; a true state option on
implementing a family cap; and requirements that teen mothers
live at home and stay- in school.
* does not include any of the provisions for a child
nutrition block grant demonstration proposed in H.R. 4, which
would have undermined the program's ability to respond
automatically to economic changes and maintain national nutrition
standards.
* does not include any immigrant provisions. However, in the
NGA letter to the welfare conferees dated October 10, 1995, the
governors specifically supported the deeming approach of the
Administration and opposed banning provisions such as those
contained in H.R. 4.
* provides some additional resources for a counter-cyclical
contingency fund and adopts another, more responsive trigger
mechanism (which allows states to qualify for contingency funds)
based on Food Stamp caseload.
Maintaining a strong federal-state partnership. While the
NGA proposal improves on the conference bill in a number of ways,
the Administration has serious concerns about several provisions.
We agree that states must have flexibility to design programs to
meet their specific needs. However, it is equally essential that
the federal government ensure accountability in the use of tax
dollars and make certain the safety net for poor children is
maintained.
A serious concern about the NGA proposal generally is that
the federal-state partnership is severely weakened. The current
system of federal and state matching always has been the "glue"
that holds this partnership together; it is an integral part of
the welfare reform plan the Administration has proposed, but is
largely absent from the NGA proposals. There is not adequate
accountability for taxpayer dollars or adequate protections
against worker displacement. Among the specific NGA provisions
we oppose are:
* the authority of states to transfer up to 30 percent of
their cash assistance block to other programs such as Title XX,
the Social Services Block Grant -- in effect, permitting
substitution of federal dollars for state dollars and potentially
reducing the effective maintenance of effort requirement to 45
percent or less (and 0 percent for some states).
* the omission of Senate provisions for ensuring safe and
healthy child care.
* the lack of a strong requirement that states set forth and
commit themselves to objective criteria for the delivery of
benefits and fair and equitable treatment.
* the block grants in child welfare. Federal and state child
protection programs provide an essential safety net for the
nation's abused and neglected children in foster care and special
needs children needing adoption. As we embark upon bold new
welfare reform initiatives, it is critical to maintain a strong
child protection system for these extremely vulnerable children.
Unlike the Senate's bipartisan approach to child protection, the
NGA proposal jeopardizes this essential safety net by allowing
states to replace current entitlements for adoption, foster care,
independent living and family preservation with block grants.
The NGA proposal also would block grant important programs
focused on prevention of child abuse and neglect.
* the optional food stamp block grant and other provisions
that weaken national standards. The nutrition and health of
millions of children, working families, and elderly could be
jeopardized if many states took advantage of this option.
* the NGA would cut off all food stamp benefits to over half
a million low-income Americans who cannot find a job after four
months. We agree that anyone who can work should work, but think
that work programs need to be available to people who want to
work but can't find a job.
Castle/Tanner Proposal
The Castle/Tanner proposal addresses many of our concerns
about the NGA proposals and provides more viable funding for
welfare to work activities than either H.R. 4 or the NGA
proposal. In particular, this bipartisan compromise provides
better assurances that recipients will be treated fairly and
equitably; provides $3 billion in additional federal matching
funds for work activities; maintains health and safety
protections for children in child care; allows for further
expansion of contingency funding (above the $2 billion cap) under
poor economic conditions and during periods of increased need;
strengthens the general maintenance-of-effort requirements;
requires personal responsibility plans for all AFDC recipients;
includes a modest proposal for a national strategy for preventing
out-of-wedlock teen pregnancies; and maintains the current safety
net for the nation's abused, neglected and adopted children and
children in foster care.
We believe this proposal provides more viable work, child
care, and contingency funding than either H.R. 4 or the NGA
proposal, and it provides for a stronger federal-state
partnership. We have some specific concerns with the proposal,
however, which generally involve the AFDC-Medicaid linkage,
support for children after the time limit, and immigrant
provisions. We also have some general budgetary concerns in both
the Castle-Tanner proposal and the NGA agreement. We support the
increased work and child care funding in both these proposals,
but we are concerned that changes and reductions in other areas
may be deep and could harm children. We believe it is possible
to promote work and protect children without banning benefits to
legal tax-paying immigrants or cutting nutrition programs too
deeply.
With these changes we believe the Castle-Tanner bill could
provide the foundation for a truly bipartisan bill.
Conclusion
In conclusion, Mr. Chairman, let me restate the
Administration's commitment to enact bipartisan welfare reform
legislation. I know the President shares my hope that, with the
leadership of this committee, the bipartisan cooperation that
existed in 1988 will surface again to address the critical issue
of welfare reform.
The American people want Congress to pass a bill that the
President can sign -- that honors our values and ensures fiscal
integrity. They want a bill that promotes work and
responsibility, but also protects children and our other most
vulnerable citizens. They want a bill that supports families who
play by the rules and rewards those who work hard to support
themselves. They want a bill which ensures accountability for
use of taxpayer funds. They want real welfare reform; they do
not want the federal government to abdicate its responsibilities.
The challenge you face is to develop a bill that can do all
these things. It is a difficult challenge, but we know it can be
done. The Administration was disappointed with the bill that
came out of conference on H.R. 4 last year, but we have been
heartened by some of the developments that have taken place since
then. We hope that additional progress can be made and that
Congress will produce a bill the President can sign.
Again, I want to thank this Committee for giving me the
opportunity to testify today, and I look forward to answering
your questions.
