[House Hearing, 105 Congress]
[From the U.S. Government Publishing Office]



                 FEDERAL HIRING FROM THE WELFARE ROLLS

=======================================================================

                                HEARING

                               before the

                     SUBCOMMITTEE ON CIVIL SERVICE

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM
                             AND OVERSIGHT
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED FIFTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 24, 1997

                               __________

                           Serial No. 105-30

                               __________

Printed for the use of the Committee on Government Reform and Oversight

42-530              U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 1997
____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
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              COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT

                     DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York         HENRY A. WAXMAN, California
J. DENNIS HASTERT, Illinois          TOM LANTOS, California
CONSTANCE A. MORELLA, Maryland       ROBERT E. WISE, Jr., West Virginia
CHRISTOPHER SHAYS, Connecticut       MAJOR R. OWENS, New York
STEVEN SCHIFF, New Mexico            EDOLPHUS TOWNS, New York
CHRISTOPHER COX, California          PAUL E. KANJORSKI, Pennsylvania
ILEANA ROS-LEHTINEN, Florida         GARY A. CONDIT, California
JOHN M. McHUGH, New York             CAROLYN B. MALONEY, New York
STEPHEN HORN, California             THOMAS M. BARRETT, Wisconsin
JOHN L. MICA, Florida                ELEANOR HOLMES NORTON, Washington, 
THOMAS M. DAVIS, Virginia                DC
DAVID M. McINTOSH, Indiana           CHAKA FATTAH, Pennsylvania
MARK E. SOUDER, Indiana              ELIJAH E. CUMMINGS, Maryland
JOE SCARBOROUGH, Florida             DENNIS J. KUCINICH, Ohio
JOHN B. SHADEGG, Arizona             ROD R. BLAGOJEVICH, Illinois
STEVEN C. LaTOURETTE, Ohio           DANNY K. DAVIS, Illinois
MARSHALL ``MARK'' SANFORD, South     JOHN F. TIERNEY, Massachusetts
    Carolina                         JIM TURNER, Texas
JOHN E. SUNUNU, New Hampshire        THOMAS H. ALLEN, Maine
PETE SESSIONS, Texas                 HAROLD E. FORD, Jr., Tennessee
MICHAEL PAPPAS, New Jersey                       ------
VINCE SNOWBARGER, Kansas             BERNARD SANDERS, Vermont 
BOB BARR, Georgia                        (Independent)
ROB PORTMAN, Ohio
                      Kevin Binger, Staff Director
                 Daniel R. Moll, Deputy Staff Director
                       Judith McCoy, Chief Clerk
                 Phil Schiliro, Minority Staff Director
                                 ------                                

                     Subcommittee on Civil Service

                    JOHN L. MICA, Florida, Chairman
MICHAEL PAPPAS, New Jersey           ELIJAH E. CUMMINGS, Maryland
CONSTANCE A. MORELLA, Maryland       ELEANOR HOLMES NORTON, Washington, 
CHRISTOPHER COX, California              DC
PETE SESSIONS, Texas                 HAROLD E. FORD, Jr., Tennessee

                               Ex Officio

DAN BURTON, Indiana                  HENRY A. WAXMAN, California
                   George Nesterczuk, Staff Director
                  Ned Lynch, Senior Research Director
                          Caroline Fiel, Clerk
          Cedric Hendricks, Minority Professional Staff Member


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on April 24, 1997...................................     1
Statement of:
    Hantzis, Steven, national executive director, National 
      Federation of Federal Employees; Robert Rector, senior 
      policy analyst, welfare and family issues, the Heritage 
      Foundation; James Riccio, Manpower Development Research 
      Corp.; and Charles G. Tetro, president, Training and 
      Development Corp...........................................    79
    Johnson, Hon. Eddie Bernice, a Representative in Congress 
      from the State of Texas....................................   152
    Koskinen, John A., Deputy Director for Management, Office of 
      Management and Budget; James B. King, Director, Office of 
      Personnel Management; Diane Disney, Deputy Assistant 
      Secretary of Defense, Civilian Personnel, Department of 
      Defense; and Eugene A. Brickhouse, Assistant Secretary for 
      Administration, Department of Veterans' Affairs, 
      accompanied by Joyce Felder, Associate Deputy Assistant 
      Secretary for Human Resources, Department of Veterans' 
      Affairs....................................................    17
Letters, statements, etc., submitted for the record by:
    Brickhouse, Eugene A., Assistant Secretary for 
      Administration, Department of Veterans' Affairs, prepared 
      statement of...............................................    43
    Disney, Diane, Deputy Assistant Secretary of Defense, 
      Civilian Personnel, Department of Defense, prepared 
      statement of...............................................    34
    Ford, Hon. Harold E., Jr., a Representative in Congress from 
      the State of Tennessee, prepared statement of..............     4
    Hantzis, Steven, national executive director, National 
      Federation of Federal Employees, prepared statement of.....    83
    Johnson, Hon. Eddie Bernice, a Representative in Congress 
      from the State of Texas, prepared statement of.............   154
    King, James B., Director, Office of Personnel Management, 
      prepared statement of......................................    25
    Koskinen, John A., Deputy Director for Management, Office of 
      Management and Budget, prepared statement of...............    20
    Mica, Hon. John L., a Representative in Congress from the 
      State of Florida:
        Letter dated April 30, 1997 to James King................    74
        Prepared statement of....................................     9
    Morella, Hon. Constance A., a Representative in Congress from 
      the State of Maryland, prepared statement of...............    51
    Rector, Robert, senior policy analyst, welfare and family 
      issues, the Heritage Foundation, prepared statement of.....    93
    Riccio, James, Manpower Development Research Corp.:
        Information concerning schedule of Federal awards........   147
        Prepared statement of....................................   115
    Tetro, Charles G., president, Training and Development Corp., 
      prepared statement of......................................   122

 
                 FEDERAL HIRING FROM THE WELFARE ROLLS

                              ----------                              


                        THURSDAY, APRIL 24, 1997

                  House of Representatives,
                     Subcommittee on Civil Service,
              Committee on Government Reform and Oversight,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9:37 a.m., in 
room 311, Cannon House Office Building, Hon. John L. Mica 
(chairman of the subcommittee) presiding.
    Present: Representatives Mica, Morella, Cox, Sessions, 
Pappas, Norton, Cummings and Ford.
    Staff present: George Nesterczuk, staff director; Ned 
Lynch, senior research director; Caroline Fiel, clerk; and 
Cedric Hendricks, minority professional staff member.
    Mr. Mica. Good morning. I'd like to call this meeting of 
the House Civil Service Subcommittee to order. This morning's 
hearing will deal with Federal hiring from the welfare rolls, 
an important subject, and a proposal by the President and this 
administration.
    First, however, I would like to take just a moment and 
welcome to our subcommittee a new ranking member. As some of 
you may know, Mr. Holden from Pennsylvania had served since the 
begining of this session as ranking member, and has transferred 
to the Transportation Committee. But we've had the honor of Mr. 
Cummings serving on this panel during the past year, and he's 
moved to the ranking position, Elijah Cummings from Maryland. 
I'm delighted to have him move in this important position of 
responsibility and would like to welcome him as the ranking 
member. I don't think that he's all signed and sealed yet until 
there's approval from the full committee, but we're delighted 
to have him on board. I know he shares our interest in the 
welfare of those who are employed by our Federal Government and 
also has a very keen interest in serving the people of his 
district and the people that we represent from our American 
family.
    So with that, Mr. Cummings, you're most welcome to join us 
and serve as ranking member.
    Mr. Cummings. Thank you very much, Mr. Chairman. I'm 
honored to act as the ranking member on the subcommittee with 
such important, such an important constituency. Decisions that 
we make as a collective body have broad and meaningful 
implications for thousands of Federal employees and retirees in 
my congressional district in Baltimore and across the Nation.
    I pledge to work with you, Mr. Chairman, in a bipartisan 
fashion and the various groups that are here today so that we 
represent Federal workers and retirees who have dedicated their 
lives to the service of our country.
    I've tried to pay particular attention to legislation 
affecting Federal employees. The Baltimore area is home to 
thousands of Federal employees and retirees. I'm a member of 
the Federal Government Service Caucus, which is a group 
concerned with the issues facing Federal employees. And I am 
committed to the fair and equitable treatment for Federal 
employees and retirees.
    Mr. Chairman, the President is to be commended for 
committing the Federal Government, the Nation's largest 
employer, to the goal of moving Americans from welfare to work. 
By challenging agency and department heads to focus their 
recruitment efforts upon welfare recipients, they have 
identified more than 10,000 job opportunities which can be 
dedicated to this initiative. This represents our fair share 
toward the achievement of his larger goal of moving 700,000 
adults off the welfare rolls and into the workforce over the 
next 4 years.
    The President has issued a similar challenge to the private 
sector as well as nonprofit and religious organizations across 
the Nation. As they respond in kind, sufficient jobs should 
become available to make welfare reform work. I did not support 
legislation which became law last year because, among other 
things, it abandons our poor families and children who need us 
the most.
    I believe in reforming our current welfare system, 
including putting an end to waste, fraud, and abuse. I've 
always believed that we must reward work and put an end to a 
welfare system that perpetuates dependency. However, we must 
reform our welfare system with compassion. We must continue to 
provide food, clothing and shelter for our most defenseless 
citizens, our children.
    However, I believe that every effort must be made to ensure 
that those individuals who will soon lose their safety net that 
food stamps and Medicaid provide, have the means to support 
themselves and their families.
    I recognize that some concerns have been raised about how 
realistic the goal is that the President set for Federal job 
opportunities. One is raised that the launching of a targeted 
hiring program to fill 10,000 jobs at the same time we are in 
the midst of an ongoing effort to reduce the Federal workforce 
by 272,000 positions does present a conflict.
    What must be remembered, however, is that despite the 
downsizing, there are positions which become vacant that are 
being filled every day. In fact, last year the Government hired 
58,000 permanent and 140,000 temporary employees. Whether there 
are a sufficient number of Federal job opportunities at the 
entry level remains to be seen, but what is important is that 
we put forth the effort to find them.
    Other concerns have been raised about the negative impact 
this initiative could have on the current Federal workforce. 
Based on what I presently know about how this program will be 
managed, no current employees will be displaced, and all 
existing priorities and preferences will be respected. I plan 
to fully explore this issue with the witnesses representing the 
administration. I want to be assured by them that my 
understanding is correct.
    Finally, Mr. Chairman, I believe, as does my colleague 
Congresswoman Norton, that we in the legislative branch of 
Government should also commit to providing jobs for welfare 
recipients. She has introduced a bill urging individual Members 
to do so. I support her bill. And I have someone working in my 
district office that was once on welfare. In fact, she has 
worked for me for many years, even before I became a Member of 
Congress. She is an outstanding employee. There is more than a 
paycheck that comes with employment. It is self-esteem and 
self-respect that extend to the children and the family.
    Mr. Chairman, I very much appreciate your scheduling this 
hearing so that we might learn more about the President's 
initiative. I look forward to hearing the testimony of today's 
witnesses, and I want to thank you again for your very kind 
words.
    Mr. Mica. I thank you. And, again, welcome you as ranking 
member.
    We also are privileged this morning to have with us a new 
Member of the panel recently appointed. And I would like to 
recognize Mr. Harold Ford, Jr., from Tennessee, and delighted 
to have you serve with us on this important subcommittee, and 
we welcome you.
    Normally the chairman leads off with a statement, but this 
being Mr. Cummings' first opportunity as a ranking member and 
your first meeting with our subcommittee, I would like to 
recognize you at this time and welcome you.
    Mr. Ford. Thank you, Mr. Chairman. Let me also thank our 
ranking member, Mr. Cummings and to Ms. Holmes Norton and to 
all of my other colleagues on the committee.
    Let me begin by thanking Mr. Waxman of the Democratic 
Steering Committee for providing me with an opportunity to join 
this very important committee as we grapple and wrestle with 
some of the tough issues of the day. I'm delighted to see this 
panel here.
    I will refrain from long opening remarks or comments out of 
deference to allowing those who have come to speak to have an 
opportunity to speak. So thank you, Mr. Chairman, and thank 
you, my ranking member.
    [The prepared statement of Hon. Harold E. Ford, Jr., 
follows:]

[GRAPHIC] [TIFF OMITTED] T2530.001

[GRAPHIC] [TIFF OMITTED] T2530.002

    Mr. Mica. Thank you, and welcome. And as I always say, that 
whether you're a freshman or ranking member, you have a full 
access to service and all of the information and opportunity to 
participate. So we're delighted to have you and look forward to 
your service.
    I will begin with my opening statement now and then 
recognize Ms. Norton. We haven't forgotten you, Ms. Norton, but 
I wanted to defer to our new panelists, and we will get to you 
next.
    Again, ladies and gentlemen, today's hearing is called for 
the purpose of examining President Clinton's directive to 
Federal agencies to hire as many as 10,000 former welfare 
recipients for civil service positions in the next 4 years. We 
recognize the importance of assisting former welfare recipients 
to become self-sufficient. That's an important goal. But we 
also have a responsibility to ensure fair and equitable 
treatment for thousands of current and former Federal 
employees. That's one of our most important responsibilities on 
this subcommittee.
    Our subcommittee's oversight of the civil service requires 
us to make certain that in implementing the President's plan, 
Federal agencies did not compromise the basic tenets of the 
merit system. The taxpayers must also be assured that the high 
standards for experience and integrity in public service and 
employment are maintained.
    There are three basic concerns that I'd like to address 
today in our hearing. First, should Federal employment provide 
a solution to resolve the social welfare problem? Sort of a 
basic question in again, our role as Federal employers and 
representatives of the people. The administration's initiative 
appears to fly in the face of extensive experience that we have 
learned to date on this panel. Federal agencies have been 
involved in Welfare-to-Work Programs for nearly 30 years and 
have vast experience in this area.
    That experience, as witnesses will demonstrate today, 
teaches that making the welfare-to-work transition a success 
requires intensive training, demanding supervision, a high 
level of discipline and also a firm commitment on the part of, 
both, the people making the transition and their employers.
    This can be a laborious and extensive proposition. In such 
States as Wisconsin and Oregon, where welfare caseloads have 
been reduced substantially, the President's approach may be 
simply irrelevant to these success stories.
    My second area of concern is for the thousands of capable 
and dedicated public servants who have been separated from 
their jobs and are currently awaiting re-employment on priority 
placement lists. We have tens of thousands of temporary 
employees in our Federal workforce that are hired each year 
without the right to participate in the retirement system.
    The subcommittee has received many letters from 
individuals, and I, as Chair, have also heard from many folks 
in Federal employment who worked as long as 8 years as 
temporary employees; for example, the Federal Deposit Insurance 
Corporation. During the resolution of our Nation's banking 
problems, a lot of these folks put in a tremendous amount of 
service. They never became eligible to enter the retirement 
system. Yet that particular benefit is, in fact, being proposed 
to be extended to welfare special hires. The President's plan 
could create some serious inequities among Federal employees.
    I received numerous letters, but let me read, if I may, 
from this particular letter from a Social Security employee, 
not to be identified, which illustrates the dilemma we face.
    ``As a temporary employee hired by the Social Security 
Administration, I have no benefits. You lose your life 
insurance, and health insurance is limited to 18 months. Also, 
you're dropped from the retirement rolls.'' And, this 
individual said, ``I have 21 years of Federal service, and my 
contributions to the retirement fund is stopped. Sir, you are a 
Federal employee. How would you assess this situation I now 
endure?''
    So these are questions that are posed to me. And, again, 
just one example that I've received which illustrates the 
dilemma we face.
    After many years of bipartisan efforts to reform the 
management of Federal agencies, we've entered the reinvention 
era 4 years ago. We've reduced the number of managers and 
supervisors in the workplace. We've reinvented jobs to get rid 
of some of the occupations and moved to greater reliance on 
technology. For example, out of nearly 2 million jobs, fewer 
than 300 positions are now at the GS-1 level, where much of the 
welfare-to-work hiring is to occur. That's my understanding.
    The Department of Defense has drawn down over 200,000 
positions since 1989, and may lose another 100,000 positions in 
the next few years. Between 1994 and 1996, Federal agencies 
spent close to $3 billion paying buyouts to almost 130,000 
Federal employees, 92 percent of whom retired with tax-
supported pensions to supplement that golden handshake that we 
provided. So these situations do raise some various--very 
serious questions.
    In response to the administration's demands last year, 
Congress extended the $25,000 buyouts into fiscal year 1998. So 
here we are in a situation where we're buying out people's 
jobs, we have folks by the thousands that are in temporary 
positions, we're limiting benefits, and then we're hiring folks 
from the welfare rolls onto the Federal payroll. So it raises, 
again, many questions that need to be addressed.
    OPM reports that about 27,000 employees were involuntarily 
separated by reductions in force in 1993. Because of the 
administration's insistence last year, we continue to pay the 
$25,000 buyouts to reduce or reinvent the current workforce. 
After all these initiatives to reform, reduce, and reinvent the 
Federal workforce, how can we justify the welfare hiring 
program? It's likely to cost about $200 million per year in 
salaries and benefits. Simple math can get you to that 
startling figure. In fact, I think it's close to a quarter of a 
billion.
    Why are we placing such a prominence on efforts to hire new 
unskilled employees when recently RIF'd employees still, in 
fact, need jobs.
    I look forward to exploring these questions and receiving 
response from the administration and others involved in this 
proposal because it does, as I said, pose some very serious 
questions that should have a firm and adequate response before 
we move forward.
    With those long remarks, I don't have a lot of folks on my 
side, so I took a little of their time.
    [The prepared statement of Hon. John L. Mica, and the 
letters referred to follow:]

[GRAPHIC] [TIFF OMITTED] T2530.003

[GRAPHIC] [TIFF OMITTED] T2530.004

[GRAPHIC] [TIFF OMITTED] T2530.005

[GRAPHIC] [TIFF OMITTED] T2530.006

[GRAPHIC] [TIFF OMITTED] T2530.007

[GRAPHIC] [TIFF OMITTED] T2530.008

    Mr. Mica. I'm delighted to recognize Ms. Norton, who does 
such a great job on behalf of the people of the District of 
Columbia. Welcome. You're recognized.
    Ms. Norton. Thank you very much, Mr. Chairman. They were 
not long, but they did raise important points, and I trust that 
this hearing will clarify some of those points. I regret that, 
because of an obligation at 10 o'clock, I'm not going to be 
able to stay after my opening statement. But this is an issue 
of considerable moment that in a real sense challenges us on 
the question of whether we really know how to make public 
policy, because we are going to be called upon to reconcile 
sometimes competing goals. And I believe that it can be done, 
that appropriate safeguards can be put in place.
    Mr. Chairman, you have called this hearing soon after the 
President's announcement of his directive to hire 10,000 
welfare recipients. You deserve our appreciation for initiating 
a hearing so soon that will bring out both the advantages and 
the potential problems of the President's directive. We should 
not expect that efforts to hire people not normally within the 
preferred labor pool would be without problems. Yet Congress 
has asked private employers to do exactly what the President is 
asking our own agencies to do.
    If it may be difficult for us, it will also be difficult 
for the private sector. It is hard to argue that the Federal 
Government, the largest employer in the country, should be 
excused from hiring welfare recipients while even small 
businesses are exhorted to do so. If we simply catalog 
potential problems, we will be doing no more than writing the 
future testimony for private employers who want to avoid the 
same responsibility.
    At the same time, if the President's directive is to work, 
some of the problems inherent in his initiative need to be 
explored so they can be eliminated. Potentially among the most 
serious are displacement of employees who have not resorted to 
welfare or of others who we have promised priority placement, 
and the grant of benefits otherwise unavailable to some Federal 
employees.
    These issues are further complicated by the ongoing 
downsizing and reinvention of government. Yet if the President 
can avoid unacceptable repercussions, such as displacement of 
present or future employees, he will be doing the right thing.
    As we hold this hearing concerning the Clinton initiative, 
the Congress must also be prepared to do what is right. To 
encourage Members of the House to employ welfare recipients, I 
have written a bill that arrives at the same place as the 
President does, yet avoids the problems, in part because unlike 
our Federal agencies, each Member is a small employer with an 
uncomplicated workplace.
    In March, I introduced H.R. 1046, which would help 
facilitate and encourage Members to hire welfare recipients in 
their DC, or district office by increasing the staff allotment 
from 22 to 23 within Members' present budgetary allocations. 
Thus H.R. 1046 would neither add costs for the Government nor 
displace other employees or potential employees.
    Some Members have already hired welfare recipients, as the 
ranking member has indicated he has, but others may feel 
constrained by the limit on the number of employees each Member 
may now hire. Under current rules, House Members are limited to 
22 staff in their Capitol Hill and district offices combined. 
My legislation would increase the maximum to 23 staff, but only 
if a Member has reached the maximum of 22, and only if the 23d 
is a full-time worker who was a welfare recipient at the time 
of hire.
    Members would continue to be able, and indeed would be 
encouraged, to hire welfare recipients within their 22 staff 
member allocation, as some do now. At the present time, Members 
whose districts are spread over many miles, or who need their 
full complement for other reasons should not be barred from 
doing their part to help make welfare reform work when they 
have the funds but lack the authority to hire.
    As Members, we have the ability to allocate or reprogram 
available money, depending on the needs of our offices. Many 
Members have the funds available and indeed return money each 
year. My bill removes the potential barrier to hiring welfare 
recipients. H.R. 1046 also conforms to the spirit of the 
Congressional Accountability Act, where we seek to apply the 
laws we enact to congressional Members, in this case as 
employers, as we have the laws or the obligation would apply to 
other Americans. H.R. 1046 provides Members with the 
flexibility to lead by example and to act in the spirit of the 
new welfare reform law.
    The Congress that was serious about welfare reform last 
year must be serious about making the reform work this year. 
That, of course, is what the President is seeking to do. His 
effort has pitfalls, but they can be avoided if we or he 
include the necessary safeguards. Ours has no pitfalls.
    In the end, it is the Congress that argued that welfare 
reform would be successful. It is time for us to prove it and 
help the President do the same. Thank you, Mr. Chairman.
    Mr. Mica. I thank you, Mrs. Norton.
    And we'd now like to recognize the gentleman from New 
Jersey, Mr. Pappas.
    Mr. Pappas. Thank you, Mr. Chairman. I appreciate the 
opportunity to hear from these witnesses this morning. And as 
someone who before coming to Congress served as chairman of my 
county welfare board for over 10 years, I have a deep 
appreciation for those that have found themselves on public 
assistance and look forward to hearing what these folks have to 
say. And I thank you for holding this hearing.
    Mr. Mica. I thank you.
    And there being no other Members present, we will include 
the opening statements, without objection, as part of the 
record.
    I would like to call on our first panel this morning, and 
introduce them.
    Our first panel today is headed by John A. Koskinen, who is 
a very frequent witness on this panel. And he serves as the 
Deputy Director for Management at the Office of Management and 
Budget. Welcome back.
    We also are pleased to welcome this morning the Honorable 
James B. King, who is recently reappointed by the President to 
serve as Director of the Office of Personnel Management. He 
served with distinction the last 4 years, and we enjoyed 
working with him.
    Welcome back, Mr. King.
    Also, we have with us another frequent witness from the 
Department of Defense, the Honorable Diane Disney, who serves 
as the Deputy Assistant Secretary of Defense for Civilian 
Personnel, and who represents, in fact, the Government's 
largest employer.
    And we have two additional panelists, the Honorable Eugene 
A. Brickhouse, Assistant Secretary for Administration at the 
Department of Veterans' Affairs, who is accompanied by Joyce 
Felder, the Department's Associate Deputy Assistant Secretary 
for Human Resources.
    I welcome our panelists. As most of you know, this is an 
investigations and oversight committee and subcommittee, and it 
is customary that we swear in our witnesses. So if you will 
please stand, and raise your right hand.
    [Witnesses sworn.]
    Mr. Mica. And the record will reflect that the witnesses 
answered in the affirmative.
    Mr. Mica. I would like to welcome our panelists and 
witnesses today. And we're going to start by hearing the 
administration's justification for this proposal from Mr. 
Koskinen, Deputy Director for Management at the Office of 
Management and Budget. Welcome. And you're recognized, sir.

STATEMENTS OF JOHN A. KOSKINEN, DEPUTY DIRECTOR FOR MANAGEMENT, 
   OFFICE OF MANAGEMENT AND BUDGET; JAMES B. KING, DIRECTOR, 
OFFICE OF PERSONNEL MANAGEMENT; DIANE DISNEY, DEPUTY ASSISTANT 
    SECRETARY OF DEFENSE, CIVILIAN PERSONNEL, DEPARTMENT OF 
  DEFENSE; AND EUGENE A. BRICKHOUSE, ASSISTANT SECRETARY FOR 
ADMINISTRATION, DEPARTMENT OF VETERANS' AFFAIRS, ACCOMPANIED BY 
 JOYCE FELDER, ASSOCIATE DEPUTY ASSISTANT SECRETARY FOR HUMAN 
           RESOURCES, DEPARTMENT OF VETERANS' AFFAIRS

    Mr. Koskinen. Thank you, Mr. Chairman. I always enjoy 
having the opportunity to discuss significant issues with you 
and your subcommittee. I particularly appreciate the 
opportunity to discuss the Federal Government's role in one of 
the most important issues facing America today: welfare reform. 
With your approval, I will submit my prepared testimony for the 
record and briefly summarize it here this morning.
    Mr. Mica. Without objection, so ordered.
    Mr. Koskinen. Welfare reform has been a priority for the 
administration and Congress. As the President recently 
announced, by working with State and local governments, we were 
able to move 2.8 million people off the welfare rolls in the 
last 4 years. That represents 20 percent of all people on 
welfare in 1993. In 4 years we helped move as many people off 
of welfare as had gone on it in the previous 25 years.
    But we must do more. Last summer, Congress passed landmark 
welfare reform legislation. This provided a new framework for 
moving an additional 2 million people off the welfare rolls by 
the year 2000. But, as the President has noted, reform didn't 
end with the granting of waivers or with the signing of the 
bill into law. For reform to take hold and last, we must move 
people off of welfare and into the workforce.
    That's why, since signing the bill, the President has urged 
employers to play a part in this next, critical phase of 
welfare reform. We have a growing economy that is creating 
200,000 jobs each month. The President is asking corporate 
America to provide opportunities for those who want to make 
better lives for themselves and their families by finding 
employment.
    The President recognizes that the Federal Government is 
itself a major employer. And, as an employer, it has a role to 
play in helping move people from welfare to work. That's why he 
asked the Vice President to head up the effort to have the 
Federal Government, as an employer, do its fair share.
    On April 10, the Vice President presented agency plans that 
could result in the hiring, during the next 4 years, of more 
than 10,000 people coming off the welfare rolls. These plans 
were put together by the agencies and were the product of 
consultation with personnel specialists, government unions, the 
National Partnership Council, and front-line managers.
    These plans were put together in just 30 days, and they are 
likely to go through some refinements and improvements. Some of 
the jobs provided through the plans will be permanent. Some 
will be temporary. But each of them will give welfare 
recipients who want to change their lives new skills and 
experience that will help them hold jobs and move into new 
ones, in Government or in the private sector.
    Today, you'll hear directly from some of the agencies about 
their specific plans. So, I would like to present a brief 
overview.
    First, let me explain how we determined the Federal 
Government's ``fair share'' of jobs. The President's goal is to 
move 2 million people off of welfare by the year 2000. The 
average size of the welfare family is 2.8 people. So, those 2 
million people translate into about 700,000 adults needing to 
move into the workforce.
    The Federal Government now employees about 1.5 percent of 
the Nation's workforce, and it's appropriate that we take the 
responsibility for hiring that percentage of people coming off 
of welfare. This translates into about 10,000 jobs.
    Second, let me explain how this is possible--even as we 
downsize. As we downsize, we are still hiring to fill 
vacancies. Last year, in fact, we hired about 58,000 permanent 
and 140,000 temporary employees. So, when you put it in 
perspective, a goal of hiring 10,000 welfare recipients over 4 
years is reasonable.
    Third, I'd like to stress that the bottom line of this 
effort is commitment, starting with the President and the Vice 
President and extending throughout the entire Federal 
Government. It's about completing the job of welfare reform. 
The President and Vice President see an opportunity for the 
Federal Government to galvanize the national push to take the 
next steps in welfare reform.
    And finally, I would like to explain what the President's 
program is not. It is not a new preference program. There is no 
new category of work being set aside for welfare recipients, 
and there will be no displacement of those who might enter the 
government through veterans' preference or other such programs. 
Welfare recipients will go through the same tests and 
procedures as any other prospective employee. Further, it is 
not a make-work program. Jobs provided through this initiative 
will be real jobs, providing welfare recipients with real 
skills, and the Federal Government with real results.
    Mr. Chairman, that concludes my oral statement. I'll be 
happy to respond to any questions you may have. And, on behalf 
of the administration, I look forward to working with you and 
all in Congress to keep welfare reform moving forward. Thank 
you.
    [Note.--The ``Federal Welfare-To-Work Commitments--A Report 
to President Bill Clinton by Vice President Al Gore, 1997'' can 
be found in subcommittee files, or can be obtained by calling 
(202) 632-0150.]
    [The prepared statement of Mr. Koskinen follows:]

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    Mr. Mica. I thank you for your testimony and would now like 
to recognize the Director of OPM, Mr. King, for his statement.
    Mr. King. Thank you, Mr. Chairman.
    Mr. Chairman and members of the subcommittee, I thank you 
for this opportunity to speak on behalf of President Clinton's 
welfare-to-work program. I would, with the committee's 
approval, like to submit----
    Mr. Mica. Mr. King, I'm not sure if your mic is on. We 
can't hear you too well.
    Mr. King. Mr. Chairman, that's the kindest thing anyone has 
ever said to me.
    Mr. Mica. When I can't hear you audibly, I become 
concerned.
    Yes, that's a good idea. Thank you.
    We have interagency cooperation here.
    Mr. King. I would never use Mr. Koskinen's mic.
    Mr. Mica. The question is how many people does it take to 
change a mic?
    Mr. King. It depends whether they're from OPM or OMB.
    Mr. Koskinen. We'll just adjourn to the outside hall for a 
minute.
    Mr. Mica. This interagency conflict must stop. Go right 
ahead.
    Mr. King. Thank you, Mr. Chairman. I was asking that I 
might submit my full statement for the record and give a brief 
summary of my----
    Mr. Mica. Without objection, so ordered.
    Mr. King. Thank you, Mr. Chairman.
    As you know, the President and Congress agreed to end 
welfare as we have known it, and President Clinton has set a 
goal of moving 2 million people off of welfare in the next 4 
years. The President has asked the private sector to hire 
Americans who are leaving welfare, and he believes that the 
Federal Government, as the Nation's largest employer, has an 
obligation to provide opportunity and leadership in this area.
    We at the Office of Personnel Management, OPM, are working 
with the National Performance Review staff, the White House 
Domestic Policy Council, the Office of Management and Budget 
and other agencies in this initiative, Mr. Chairman. We have 
convened meetings at which the officials of the National 
Performance Review, the Office of Management and Budget and the 
Department of Labor and other agencies briefed Federal 
personnel directors on welfare to work.
    OPM has provided written guidance to the agencies on hiring 
options for these programs. We are working to involve the 
Federal Executive Boards and the Federal Executive Associations 
at the local level.
    OPM is developing a program to track welfare hires 
governmentwide, and we will use modern technology to get job 
information to people who often have not had access to it in 
the past.
    We at OPM have identified 25 positions that have been 
targeted for the possible recruitment of welfare recipients in 
fiscal year 1997. We will consider welfare recipients for every 
position for which we recruit outside the agency. These will 
include temporary, term, and permanent positions, often at the 
entry level, such as clerks, laborers, and custodial workers.
    Mr. Chairman, we are not creating jobs. The jobs exist. We 
are creating opportunity. We do not start with stereotypes 
about the people we hire. Some may have more skills and 
experience than the stereotypes would suggest, Mr. Chairman. 
For example, approximately 42 percent of welfare recipients 
have high school equivalent degrees, 16 percent have attended 
college, and 70 percent have recent work experience. But we 
recognize that some will need training and basic work habits 
and skills. Others may need child care and transportation 
assistance.
    I believe we can learn a lot from programs such as the 
STRIVE program that's operating in New York, Boston, Chicago 
and Pittsburgh that has prepared some 14,000 people for entry-
level jobs in the past 5 years. Strive reports that about 35 
percent of a typical class quits after the first 3-hour 
orientation.
    A nationally respected private sector program in Kansas 
City reports that about 50 percent of the 1,500 welfare 
recipients placed in jobs in the past 2 years are still at that 
same job. That statistic calls to mind a glass of water that is 
half empty or half full, depending on how you perceive it. A 50 
percent success rate may be a good one when we consider the 
obstacles that many of these Americans have faced during their 
lives.
    Also, Mr. Chairman, a 50 percent success rate shouldn't 
just be counted on the initial job entry. We're talking about 
starting a career. And that entry-level job may not be the 
career the individual chooses, so they have moved on to bigger 
and better things.
    As we reach out to these women and men and bring them into 
Federal jobs, we must welcome them and at the same time make 
clear our expectations. We may offer them part-time or 
temporary jobs in some cases, knowing these can be important 
milestones and lead to a better job later on.
    As OPM Director, I am fully committed to maintaining the 
merit system principles. We will continue to support and 
enforce the Veterans' Preference Act. We must continue to 
fulfill our legal and moral obligations to displaced Federal 
employees. Understanding and supporting all of this, I believe 
we can meet the President's welfare-to-work goals.
    We are not proposing special hiring. We are proposing to 
bring new people into the pool of those who apply for Federal 
jobs and then treat them like anyone else.
    The key is opportunity; not make work, not a guaranteed 
career, but an opportunity to compete and learn and make it in 
the world of work. We look forward to working with the Congress 
to meet this important goal.
    And, Mr. Chairman, I would be glad to respond to any 
questions from you or any other Members of the subcommittee, 
and I do thank you for your courtesy.
    Mr. Mica. Thank you, Mr. King. We will withhold questions.
    [The prepared statement of Mr. King follows:]

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    Mr. Mica. I would like to recognize now Deputy Assistant 
Secretary of Defense for Civilian Personnel, Diane Disney. 
You're recognized.
    Ms. Disney. Thank you, Mr. Chairman and the subcommittee 
members.
    I think we need some more interagency cooperation here.
    Mr. Mica. These mic's are not going on.
    Ms. Disney. Are we all right now?
    Mr. Mica. Thank you.
    Ms. Disney. Well, I'm very pleased to be here today to 
describe the efforts of the Department of Defense to support 
the President's welfare-to-work initiative. And as my two 
colleagues, I would like to submit my written testimony with 
your permission and just provide a summary.
    Mr. Mica. Without objection, so ordered.
    Ms. Disney. Thank you.
    DOD is committed to taking an active role in this effort; 
in President Clinton's words, demanding high performance from 
workers, but going the extra mile to offer opportunity to those 
who have been on welfare and want to do something more with 
their lives.
    Over the past decade, as you know, the Department has 
reduced its active duty ranks by over a third and its civil 
servants by more than 27 percent. The Department plans to 
eliminate another 90,000 civilian positions over the next 5 
years for an overall reduction of 35 percent.
    This planned drawdown constrains but does not curtail 
opportunities for additional employment, as DOD continues to 
hire some 20,000 civilians for permanent positions each year to 
meet essential needs and another 23,000 for temporary slots.
    The Department of Defense is deeply committed to its 
workforce, as demonstrated through attention to quality of 
life, training, and transition programs. Successes in these 
areas include the innovative Troops to Teachers program, 
Partnerships in Education, and Partnerships in Vocational 
Rehabilitation. These and similar programs evidence 
considerable experience in reaching out to disadvantaged 
populations.
    Within the defense community, welfare-to-work positions 
will be available in all of three concentric circles: the 
Department's civil service workforce, the nonappropriated fund 
activities, and the contractor environment.
    Our initial surveys indicate that DOD should be able to 
provide about 1,000 civil service positions for this program 
over the next 4 years at the rate of 160 to 330 a year. Eighty-
five percent of the projected civil service vacancies are in 
General Schedule positions, primarily in clerical areas. The 15 
percent in wage grade positions will fall mostly in the areas 
of laborer and maintenance worker.
    The Department recognizes the importance of the welfare-to-
work initiative; however, requirements from several other 
constituencies must be honored. First the Department must honor 
the employment preferences required by law for both the 
veterans and military spouses.
    In addition, there's a long-established hiring preference 
for DOD employees facing job loss through no fault of their 
own. For the past 3 decades, this Priority Placement Program 
has enabled DOD to retain its investment in human capital while 
enabling talented individuals to retain employment. President 
Clinton has expanded this concept to provide preference as well 
to all Federal employees facing job loss.
    To determine the probable impact of these requirements, we 
examined hiring records by type of position, grade level, and 
hiring preference. Collectively, these suggested that 
approximately 10 percent of the General Schedule positions and 
30 percent of the wage grade positions would be filled by 
individuals other than welfare recipients once they became 
available. The difference stems from the higher representation 
of preference-eligible veterans among those who qualified for 
wage grade positions. Therefore, the Department expects welfare 
recipients to be able to fill about 900 of these civil service 
positions over the next 4 years.
    Supporting the Department's core operations, there are 
approximately 150,000 nonappropriated fund activities (NAF). 
These are at facilities nationwide, located in military resale 
and morale, welfare, and recreation (MWR) activities, such as 
post exchanges, military clubs and bowling alleys.
    Unlike their civil service counterparts, NAF positions are 
not funded with congressional appropriations of taxpayer 
dollars. Instead they're supported by funds generated through 
the MWR and resale activities. They differ as well in their 
hiring rules.
    For many years, NAF employees have worked with State 
employment service offices to find individuals to work in 
positions such as those I've just identified. The high 
percentage of wage grade equivalent positions here makes it 
likely that about 73 percent of the openings identified will be 
filled by welfare recipients. It's also noteworthy that the 
positions here are more likely than their civil service 
counterparts to be part-time.
    Finally, the Department of Defense relies heavily upon 
contractors for a wide range of goods and services. As partners 
in the defense economy, contractors provide items as diverse as 
airframes, ships, and medical supplies and services ranging 
from construction to food preparation. We do not intend to 
establish a requirement or an incentive for contractors. 
Rather, the Department will encourage its contractors to 
support this vital initiative because of its inherent value.
    Combining these three major elements of the defense 
community while accommodating people with legal and regulatory 
hiring rights would yield nearly 2,900 positions over the next 
4 years. A third of these would be civil service positions; a 
quarter would be in nonappropriated fund activities; and the 
balance would be located with contractors.
    Given this committee's charge, the remainder of my remarks 
will focus on civil service positions. DOD does not have many 
positions at the GS-1, wage grade 1, and wage grade 2 levels.
    As of December 31, 1996, we employed about 4,400 people in 
such positions, about half in permanent slots, half in 
temporary ones. Typically the level 1 positions in both 
categories are temporary, and in great part, because of the 
prevalence of temporary status, occupants of level 1 positions 
tend not to receive buyouts. Indeed, no more than a dozen have 
received a buyout in any given year.
    The Welfare-to-Work Program will focus on areas where there 
is an employment need. This could result from an unexpected 
departure, additional work, or a changed mission. In any event, 
the participants will be hired individually. Even under the 
best of circumstances, moving from welfare to work presents 
major challenges. Therefore, the Department will develop 
mechanisms to provide the necessary workplace and skills 
training and take steps to help the recipients address the 
constraints that have kept them unemployed in the past.
    In response to your written question, I must note that over 
the past 7 years, our number of supervisors has fallen 29 
percent, a rate that is only slightly higher than that for the 
civil service workforce as a whole. Therefore, we anticipate no 
problems in this area.
    The Welfare-to-Work participants will receive the same 
consideration as other employees at the same grade level for 
available opportunities for continuing education and training. 
They will also be subject to the same requirements as all other 
employees. Indeed, our objective is to ensure that they become 
integral parts of the defense workforce.
    In Joint Vision 2010, the chairman of the Joint Chiefs of 
Staff points out America's enduring goals, including providing 
for the well-being and prosperity of the Nation and its people. 
Within the Department of Defense, we believe that helping to 
end welfare as we knew it is an important step toward achieving 
those goals. Therefore, we're committed to doing our part to 
encourage welfare recipients and all other disadvantaged 
populations to become productive members of our society.
    That concludes my remarks. I thank you again for this 
opportunity to present the overview, and we will be pleased to 
answer questions.
    Mr. Mica. I thank you.
    [The prepared statement of Ms. Disney follows:]

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    Mr. Mica. We will defer questions, and I'll now recognize 
Eugene A. Brickhouse, Assistant Secretary for Administration, 
the Department of Veterans' Affairs. You're recognized, sir.
    Mr. Brickhouse. Thank you very much, Mr. Chairman. And, Mr. 
Chairman, with your permission I would like to submit my 
written statement for the record.
    Mr. Mica. Without objection so ordered.
    Mr. Brickhouse. Thank you.
    Mr. Chairman and members of the subcommittee, I am pleased 
to appear before you today on behalf of Secretary Jesse Brown 
to testify about VA's welfare-to-work initiative. Our purpose 
as a Department, and our primary goal for the welfare-to-work 
initiative, is to serve veterans. In developing VA's plan, we 
identified work that needs to be accomplished and positions 
that could be filled by entry-level applicants.
    Although VA is restructuring and streamlining, we have been 
able to identify 400 potential opportunities in fiscal year 
1997 and the potential of 400 more in fiscal year 1998. These 
opportunities are at grade levels 1 and 2 and include such jobs 
as receptionist, file clerk, laborer, and food service worker. 
Although employment in these and similar occupations has 
dropped by 5,000 since March 1993, we continue to have 
significant numbers of employees, approximately 17,500, in 
these occupations. And while we are reducing overall employment 
levels, VA still has employees who leave each year and must be 
replaced. In the jobs which provide most opportunities for 
welfare recipients, the regular turnover rate is from 15 to 25 
percent.
    The entry levels for these positions require little or no 
experience, and we believe that welfare recipients will have no 
difficulty qualifying for them. In addition, many veteran 
candidates will meet the minimum qualifications by virtue of 
their military service.
    We are, as you know, a Department which exists to serve 
veterans. Therefore, we think it only proper that VA's targeted 
recruitment strategy has two important elements that focus 
specifically on hiring veterans. First, we will recruit 
candidates from among the graduates of our Compensated Work 
Therapy Program and our Vocational Rehabilitation and 
Counseling Program. These programs provide clinically based job 
training and vocational rehabilitation to veterans and are 
already successful in moving veterans from dependency to self-
sufficiency.
    The second key element is a local community-based 
recruitment effort targeting veterans through a broad array of 
community-service organizations, including Veterans 
Organizations.
    In hiring candidates, we will use all available appropriate 
hiring authorities. We will continue to meet all Title 5 and 
Title 38 requirements, including veterans preference, as well 
as adhere to rules governing re-employment for separated 
Federal workers. This means that no veteran and no employee who 
has been RIF'd will be disadvantaged by the welfare-to-work 
initiative.
    For welfare recipients who secure VA employment, a key 
component of success is training. VA has already developed 
training guidelines for these new employees and their 
supervisors. In addition, local facilities will have full 
authority to work with other Federal agencies and community 
service organizations to provide group training and coaching 
experiences.
    Local VA facilities will provide access to a variety of 
human and social services to support welfare recipients' 
successful transition into the workplace. For example, each VA 
facility already operates an employee assistance program which 
provides counseling and referrals for a range of problems that 
might affect job performance.
    With regard to child care, we will be encouraging expansion 
of sliding-scale fees of child care centers associated with VA 
facilities.
    The Department is also looking at costs and options for an 
appropriate transit subsidy policy.
    We also agree with your assessment that workers at the GS 
and wage grade level 1 require extra efforts in supervision and 
training. VA is well prepared to meet these requirements. With 
regular turnover in the types of jobs to be filled under the 
initiative, we already have in-house instruction programs for 
new employees in these occupations.
    We expect that former welfare recipients will fill entry-
level jobs, and we believe those jobs would continue to be 
needed and have high turnover and will be difficult to fill, 
rather than those eliminated from other initiatives.
    In addition, given current funding and budget levels, our 
facility managers simply cannot afford to develop make-work 
positions. They have real work to be performed and need 
committed staff to fulfill these tasks.
    In conclusion, Mr. Chairman and members of the 
subcommittee, VA has one mission and one mission only; that is, 
service to veterans. Welfare-to-Work can help support that 
mission by bringing into focus opportunities for veterans to 
participate in the dignity of work, and they put to use the 
training they have received through established VA training 
programs.
    Mr. Chairman, this concludes my testimony. We would be 
pleased to answer any questions you may have.
    Mr. Mica. Thank you, and I understand Ms. Felder will not 
have any opening statement.
    [The prepared statement of Mr. Brickhouse follows:]

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    Mr. Mica. I would like to recognize now the gentlelady from 
Maryland, Mrs. Morella, who's joined us.
    Mrs. Morella. Mr. Chairman, thank you. I would like to ask 
unanimous consent that an opening statement be included in the 
record.
    Mr. Mica. Without objection.
    Mrs. Morella. Thank you.
    [The prepared statement of Hon. Constance A. Morella 
follows:]

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    Mr. Mica. And Mrs. Morella also announced at this time that 
House Concurrent Resolution 13, a joint resolution, I guess it 
is, that you've introduced in opposition to the proposal to 
delay Federal retirees' COLAs, will be heard next Tuesday 
immediately following the subcommittee's hearing on the DC 
Retirement Proposal, probably about 4 o'clock. I'm sorry that 
we've had to put that off a week, but we will hear that 
immediately following our DC Retirement Proposal hearing.
    Mrs. Morella. Thank you.
    Mr. Mica. Tuesday afternoon in room 2154, Rayburn.
    Mrs. Morella. I will mark that in big letters on my 
calendar. And thank you for your leadership, Mr. Chairman in 
pursuing that.
    Mr. Mica. And thank you, it is a very important issue 
before this subcommittee and before the Congress, and we thank 
you for your leadership and bipartisan cooperation on that 
important issue.
    Mrs. Morella. I thank you for having this hearing. And I'm 
going to have to be excused to handle two bills on the floor 
for the Science Committee.
    Mr. Mica. We recognize the double duty that our Members 
sometimes serve.
    We have finished our panel and our comments from Members. I 
would like to begin now with several questions. This proposal 
to hire some 10,000 welfare recipients on our Federal payrolls 
does raise a bunch of questions.
    One of the questions that recurs, and I don't know what the 
status of the administration's proposal is and how far they 
developed this working with OPM, but we have had some reports 
that some of the requirements as far as complying with the 
merit system might be changed; that, in fact, there may be some 
fast-track access to employ these welfare recipients.
    Mr. Koskinen, could you tell us the status of any of those 
proposals, or Mr. King?
    Mr. Koskinen. I think Mr. King is the better responder.
    Mr. King. Well, the measures that OPM will take to ensure 
that this will advance merit and all that entails will include 
competitive aspects from whether they are permanent and time 
limits are accepted, veterans readjustment employment, student 
employment, special appointment for readers, interpreters, 
special assistants, special appointment for the severely 
handicapped persons, and other appropriate agency-specific 
authorities. And these authorities encompass all competitive 
aspects of the merit system principles which include applying 
veterans preference and displaced employee entitlements. And 
the worker trainee are filled by TAPER appointments, which 
require public notice and the application, again, of veterans 
preference and a priority referral of displaced Federal 
employees.
    Mr. Mica. What percentage of positions would you anticipate 
would fall into those exceptional categories?
    Mr. King. Right now, in the Federal Government as a whole, 
about 70 percent of the positions are what would be considered 
competitive, if you would. The rest come under the other 
special authorities.
    Mr. Mica. So this would be under existing authorities that 
would create no new openings or exceptions, you are saying? 
About 70/30 percent?
    Mr. King. Yes, Mr. Chairman. And in this, what we haven't 
done, we have used are all existing, and what we are 
emphasizing is using existing and not creating anything new. As 
you mentioned, Mr. Chairman, that the authority that is being 
talked about in the training was first instituted by President 
Nixon, and it is counting that authority that has been around 
now for almost 30 years and continuing to use it.
    But, Mr. Chairman, I would be remiss if I didn't point out 
that at grade levels 1 and wage grade 1 and 2, there is an 
assumption built in that the individuals applying for those 
positions will, in fact, have little or no skills. So that is 
an understanding we had and it has been on the books from the 
beginning. And so I thought that might be helpful.
    Mr. Mica. I appreciate that. It is my understanding that 
the Vice President, on April 10, presented plans and that in 
the meantime, each agency has been responding on how they would 
implement this. Have all the agencies presented their response, 
Mr. Koskinen?
    Mr. Koskinen. That is my understanding, Mr. Chairman. They 
all have presented plans.
    Mr. Mica. So these will be meshed together by who? By OPM? 
And is it accepted or are we setting up new rules?
    Mr. Koskinen. No, these are not plans that they are asking 
for waivers or changes, as Mr. King emphasized. These are their 
plans in terms of how they plan to use the existing hiring 
authority to hire the number of welfare people they think they 
can hire. No one was assigned a quota. These were all numbers 
that the agencies independently said were numbers they were 
confident over the next 4 years they could hire under existing 
authorities and existing programs.
    Mr. Mica. Have you shared those totals with the 
subcommittee?
    Mr. Koskinen. I don't know if we have, but we would be 
happy----
    Mr. Mica. Could you do that? I think that is important, 
because when we are discussing buyouts, when we are discussing 
downsizing, when we are discussing RIFs, and the administration 
has plans from these agencies to employ welfare recipients or 
former welfare recipients, we need to see what their proposals 
are, how this fits into the larger scheme.
    Now, in the area of buyouts, how many buyouts did we do 
last year and what are anticipated this year, Mr. King?
    Mr. King. Well, our total----
    Mr. Mica. From last year, 1996?
    Mr. King. What I have, I can get a disaggregate for the 
record, but nondefense agencies did pay out about 36,000 
buyouts.
    Mr. Mica. 36,000 last year. What do you anticipate?
    Mr. King. No, no, it ended, as you know--this was acting on 
the information we have in--the last full report we have from 
across Government was the end of the fiscal year, and that was 
1996.
    Mr. Mica. Two-year total.
    Mr. King. Yes, that is over the period, the life of the 
buyouts and the anticipated buyouts; 36,035 is what we have.
    Mr. Mica. Is that civilian Defense, too?
    Mr. King. No, Defense had about 92,500, rounding up.
    Mr. Mica. 92,000 over a 2-year period, it came to 128,500.
    Ms. Disney. It is 92,000 since we have had the buyout 
authority of 1993.
    Mr. Mica. So yours is over 3 years and you are talking 
about over 2 years.
    Mr. Koskinen. I would stress that those numbers are 
predominantly, if not totally, the buyouts used under the first 
buyout authority under the Workforce Restructuring Act, and as 
the chairman knows, we have had a lot of conversation back and 
forth, but that buyout ended as of decisions made in the spring 
of 1995 with some carryover for a 2-year period thereafter.
    Mr. Mica. What I am trying to get at is some round figures 
as to what we are buying out.
    Now, the other thing that we do not want is the agencies 
coming back to us, or reports to this subcommittee where a 
position has been bought out that it is filled by a welfare 
recipient. Is there any protection to make certain that this is 
not going to occur?
    Mr. King. Mr. Chairman, I was just looking at--I got a 
disaggregate of the numbers for the record. The fiscal year 
1994 was 14,531 on the non-DOD. It was 18,203, fiscal year 
1995, non-DOD. And 3,300. But I think, Mr. Chairman----
    Mr. Mica. But my point is, though, you are going to have 
some feathers of Congress ruffled if we are buying folks out 
for $25,000, and they are being replaced with a welfare 
recipient, or that we have, as my first line of questioning, 
are we bringing folks in in some extraordinary fashion to fill 
slots?
    So, we have to be concerned that we are not creating any 
great exceptions, that people whose position has been bought 
out is not going to be filled by a welfare recipient and that 
we have some rhyme and reason across the agencies in the manner 
in which this is conducted.
    This is a hard sell from any standpoint when we have got 
thousands and thousands of people who have lost their jobs and 
try to explain to them that we are filling the position with 
welfare recipients.
    Mr. Koskinen.
    Mr. Koskinen. Those are two important questions and I think 
the answer should be clear. First of all, as Mr. King has 
noted, there are no new programs or exceptions being created to 
hire welfare recipients. They will, in fact, apply as any other 
American citizen will apply for the jobs. That should be clear. 
I hope it is understandable to everybody.
    Your point about buyouts is a good question. OPM has the 
detailed numbers, but the experience that the vast majority, if 
not all of the buyouts, were at levels of GS-8 and above, 
generally, managers and senior people able to retire. The 
expectation and most of the agency plans are that welfare 
workers, to a large extent, will be hired at the very low end 
of the wage grade. Whereas virtually no buyouts have been 
given.
    Mr. King. Of the thousands that have been bought out, we 
have records of 503 of employees at the wage grade that we are 
talking about or GS-1.
    Mr. Mica. Do we have any plan to make certain that those 
positions--again, if you all come back here and these positions 
are filled with any of these folks, the dome will be raised a 
few inches.
    Mr. Koskinen. The limitations on the first buyout program 
was that agencies, in fact, could not buyout someone and 
replace--there were protections against replacement. The second 
buyout program is limited, as you know, to an overall decline 
in agency FTEs, so, in fact, the agencies are not going to be 
growing as a result of hiring welfare people if we are engaged 
in a second buyout program. A number of agencies are not 
engaged in that program.
    Mr. Mica. Mr. King just testified that 500 would be 
possibly in this range. That is 5 percent of the 10,000 figure, 
so we just want to make certain that, again, we do not put 
ourselves in that situation or expose ourselves.
    Mr. King. Mr. Chairman, but I think it is interesting to 
note, as Mr. Koskinen said, the average was a GS-11, roughly, 
that we bought out that is about $38,000. Now, Mr. Chairman, I 
would like to think--well, as long as it is done fairly, we 
certainly would not be replacing a $38,000 individual with a 
person coming in an entry level at around $13,000.
    Mr. Mica. That is right, but you told me there are about 
500 positions that will fall into the category.
    Mr. King. No, Mr. Chairman what we are talking about here 
is skill mix. The skill mix is that we may be deciding that 
something is going to be removed, but we need someone with a 
different set of skills to come in. An entry level at this 
level has little or no skill, by the way, whether they are 
coming in--this program is an existing program, Mr. Chairman. I 
don't mean to be contentious. I get excited.
    Mr. Mica. I thank you. I just have one more question. I am 
running over my time, but on our priority placement program in 
DOD, and we have a re-employment priority list, how many folks 
do we have that are waiting for Federal employment, former 
Federal employees that have been RIFed or that have lost their 
position? Ms. Disney, what kind of numbers are we looking at 
there?
    Ms. Disney. When we look at the three grade levels that we 
are talking about here, GS-1, wage grade 1, wage grade 2, we 
have about 830.
    Mr. Mica. And what is the total that are waiting for 
placement?
    Ms. Disney. That are waiting for positions at any level, 
approximately 18,000. What we did was look for carefully at how 
many had been placed in these positions through priority 
placement, through veterans preference, through spouse 
preference in the past couple of years in order to discount the 
figures as mentioned earlier.
    Mr. Mica. Well, I want to get back to these numbers and 
issues, but I have taken more time than I should. I will now 
recognize our ranking member for an extended period. You are 
recognized, Mr. Cummings.
    Mr. Cummings. First of all, I thank you all for your 
testimony, and I want you to, first of all, understand that my 
questions come from a perspective that I literally live in an 
area which probably has about 50 percent black male 
unemployment. And I would guess about 20 percent, somewhere 
between 15 and 20 percent female African-American unemployment.
    I am wondering where are these jobs? Where are they? In 
other words, all of these jobs--I mean are they going to be in 
Mr. Ford's district? Are they going to be in the District of 
Columbia? Where would most of these jobs be?
    Mr. King. They are nationwide. They are nationwide, they 
are located where the Federal Government is. Eighty-six percent 
of Government jobs are outside of the Washington metropolitan 
area, so that you could almost pick a location, go from place 
to place, and we can give you the numbers, if you would like 
that, on a disaggregate basis of where these positions are 
located.
    Mr. Cummings. I would like to know, I guess one of the 
things that I am concerned about is that I don't want us to be 
in a position where we are painting a picture that is a 10,000 
rosy job picture, when in fact it is not. And that is why I 
want to ask you some of these other questions. Don't get me 
wrong, I want to see people employed. It is very important to 
me. But I also--I want to make sure that we are saying that we 
are providing jobs, that there are, in fact, jobs. Because I 
think one of the worst things we can do is make a promise of 
something that really does not exist or that is not what it is 
supposed to be.
    You all talked about, one of you talked about training. 
Tell me about what kind of training you are planning on 
providing these welfare recipients. There have been a lot of 
recent articles in various papers throughout the country that 
talk about the intensity of training that is necessary for 
people, many of whom have never had a boss, many of whom, 
unfortunately, have been in situations where maybe they never 
saw somebody get up and go to work every day, and that is real. 
And I am just wondering, talk about that training, because you 
don't want to put people in positions where they are destined 
for failure.
    Mr. King. First of all, they are real jobs and I will give 
you, if you would like, for your own office or for the 
committee, we will give you a WorldWide address where most of 
the jobs are published. And I think if the chairman and this 
committee's bill goes through on veterans preference and the 
RIF regulation, H.R. 240, it says all jobs will be published. 
On the Web you will see every Federal job published. We have 
made this available to the State organizations and the other 
organizations that will actually interface with welfare 
recipients so that they will see all of the jobs that are 
available, period.
    Again, we are not stereotyping. We are using, where the 
worker trainee would come into being, an existing authority 
that has been there for years that is an intake for those 
folks, and I am using virtually a quote, ``those with little or 
no skills.'' There is opportunity there. And those jobs turn 
over, I think, on an average when I was looking at them I think 
my average attrition rate was about 18 percent.
    So if you just take the number of jobs at that entry level, 
and we are not talking everyone is at entry level. Again, 
avoiding the stereotype, at an 18 percent turnover, that would 
be in a 4-year period we are talking about. We are talking 
about 18,000 jobs turning over. They turn over. Folks move on 
to other careers. They may enter and move on, promote upward, 
stay in an agency or go somewhere else to work.
    Once they go into a job, the agency itself takes over the 
training because it is agency-specific. And I think if you 
talked to VA or you talk to defense or you talk to any agency, 
when you bring in people you know when they are coming in they 
have little, few skills, and you work within the ethos of your 
own agency so the training responsibility is taken over by that 
agency. They have been doing training because they have been 
intaking people at the GS-1 and the wage grade 1 and 2 level 
for years. They are familiar with that and that is one of the 
things that I was talking about, so that it is a decentralized 
system and it is a job specific.
    Mr. Cummings. Other than the Net, how do you get this word 
out? Because the people that I know don't access computers.
    Mr. King. Every State employment office has been notified, 
and at this time I am being told that they are wired in. They 
all have the equipment to wire in.
    Mr. Cummings. So in other words, it would go through the 
social service agency.
    Mr. King. That's correct, the agencies who actually touch 
the people. I am not being naive and suggesting that a welfare 
family has a PC with a modem at home. It is the folks that the 
agencies are interfacing with that are looking for jobs. What 
we want to do is broaden our recruitment, broaden and deepen 
our pool of applicants for these jobs that we know are real, 
that are necessary to be filled, and for which we must hire 
someone. And we would like to give these folks an opportunity. 
And that's what this does.
    Mr. Koskinen. Let me add, because the Congressman has 
focused on an important issue that goes to the heart of what we 
are talking about. Congress and the administration decided last 
year that we needed to change the culture of our approach to 
welfare. We need not to consign people to welfare and assume 
they will always stay on welfare. What we needed to do was, in 
fact, to reach out to them and encourage them and move them 
back into the workforce.
    What we are talking about here, and the private sector 
companies have the same experience and as the Congressman said 
you have people who are unemployed on welfare often anxious to 
work who do not have access normally to the employment pools 
because employers do not have a history of reaching out to 
those communities and affirmatively encouraging them to work in 
their enterprises.
    What the President has done is challenged the private 
sector and the private sector companies to work with all of us 
to, in fact, change that set of assumptions. And what we are 
talking about here, and I think the Congressman has his focus 
on exactly the right point, is not creating new jobs, not 
changing the standards for jobs, but reaching out to a 
constituency that historically we have not reached out to, in 
fact, advise them of the jobs and encourage them to apply for 
those jobs.
    We're creating over 200,000 new jobs a month in this 
economy, but many of those jobs are not available to people 
because there is not an outreach program, so I think, as you 
will see in the agencies and with OPM work, the major focus of 
this program is not creating new jobs. The major focus of this 
program is reaching out to people we are now encouraging to 
enter the workforce and making available to them the 
opportunity to apply for those jobs. It won't be easy. The 
Congressman is right. We ought not to hold out a will-o-the-
wisp. Many of them will not succeed.
    But we need to recognize that the glass will either be half 
full or half empty. We can look at those who didn't succeed or 
look at those who did who otherwise would not have been offered 
the opportunity. And that is the core of what we are talking 
about here. We are talking about energizing Federal agencies 
and private sector companies to reach out to a core of people 
who historically they haven't reached out to offer them 
meaningful employment.
    Mr. Cummings. Let me ask you this, talk about benefits, 
what do you anticipate with regard to benefits? We are talking 
about, in many instances, temporary jobs. Our experience in 
Maryland has been that State government has hired a number of 
temporary employees. They don't have any--when Christmas comes, 
they don't get paid. They have no insurance benefits. A child 
gets sick, no kind of leave whatsoever.
    And I am just trying to figure out, we are talking about 
moving people from welfare to work, I am just wondering exactly 
how that works, especially when I hear all of this temporary 
jobs. In one of your statements, it talks about the census 
jobs, which we know are temporary. Someone mentioned part-time 
jobs. In other words, I am trying to make sure that whatever 
picture you are painting, I want to make sure that I have an 
accurate understanding of what it is. In reality.
    Mr. King. Your question goes to really this training coming 
in through the worker trainee authority, because if you are 
brought in that way, you are treated as a permanent employee. 
And that means you are treated like every other Federal 
employee who is hired as a permanent, there is no exception 
made.
    Mr. Cummings. So, therefore, across the board are you 
saying that people will, whatever the benefits at the 
appropriate levels are for other employees----
    Mr. King. They will receive the same. In the category. I 
think that says it.
    Mr. Cummings. The reason why I ask, in Maryland I have some 
concerns, I have talked about it many times, that we have 
certain agencies that will bring people in and these people in 
many instances are placed in a position where they do not have 
any benefits. So the State gets off pretty good, because they 
have got a whole group of people over here who are getting 
benefits which do cost money and then they can bring in folks 
to replace them or whatever who don't have any benefits.
    Therefore, it enures to the benefit of the State to have 
people who are basically called temporary employees with no 
benefits.
    Mr. King. There is one other thing in the training though, 
we should understand. The only thing that is unlike and where 
these folks are treated differently from other employees is, if 
you were a regular permanent employee coming in, you would have 
1 year of probation. Basically, these folks have 3 years of 
probation before the permanent job is offered and available to 
them.
    Mr. Cummings. That is the only difference.
    Mr. King. That is if they are coming in under the worker-
trainee authority, there is a 3-year oversight period before 
the job is offered finally. And so your rating, then, is 
important as you progress.
    By the way, just as a quick aside on your State issue, I 
think it is interesting to note, to add a bipartisan touch to 
this, that the State of South Carolina, under the leadership of 
its Governor, has determined that it is important that welfare 
to work be appropriately covered, so in instances there they 
have provided free child care, transportation stipends, where 
people needed uniforms, they bought them uniforms. So the State 
has been extraordinarily supportive on their end of individuals 
who are trying to be a success in this workforce, and who have 
no basic resource to get into this mainstream, as you 
suggested. So I think the States have a role to play, but that 
is not my role in speaking to this. I am merely responding to 
an article that I read.
    Mr. Cummings. In a recent article in the Washington Post, 
they state that about 40 percent of the jobs that President 
Clinton is hoping to offer would be in the Department of 
Commerce, and that they are temporary jobs and they are needed 
because of the census. And I was just wondering, again, I am 
going back to my point trying to paint the picture as it 
actually is and not as we want to make it appear. These jobs 
will be over by 2000; is that right?
    Mr. Koskinen. Yes, the point is that I think it is 
important, and I think all of our testimonies note, that some 
of these jobs will be permanent and some will be temporary and 
people need to understand that. But even in temporary jobs for 
people who have not held jobs before or have a difficult 
employment history, to have a job for 6 to 12 to 18 months, now 
have a resume that shows that you have work skills and are able 
to hold a job, it is important. We should not overemphasize 
that everyone who fills these positions will be permanent.
    As Mr. King noted, they will fill positions in the same way 
that other Federal employees fill them, and if they have 
benefits, they will have benefits in the training program. If 
they are in positions that don't have benefits, then they will 
not have benefits here either.
    Secretary Shalala announced with her plan and other 
agencies understand it, that these initiatives now, as we look 
at them in terms of how to deal with new employees, will apply 
across the board. As she said, what we need to do is look at 
our low-income workers, not whether they are just coming off of 
welfare or not, but let's see what our programs are for all of 
the people who work for us at very low-graded wages. People 
making $12,000 or $15,000 or even $18,000 a year with families 
are obviously going to have a very difficult time making ends 
meet, and we have to look at what are our relationships and 
provisions and support for people in those grade levels and 
wage levels wherever they came from.
    Mr. Cummings. I agree with you. I think just to have the 
opportunity to work, to develop new friendships and working 
relationships, certainly helps one's self-esteem, no doubt 
about it. And probably will enable them to go on and do some 
better things, but I am just wondering do you agree with the 
Washington Post number that 40 percent is accurate?
    Mr. Koskinen. Forty percent is the commitment by Commerce, 
and it is tied primarily to their census. And so as you say, 
the 2000 census and at end of the census, the bulk of those 
jobs will go away, both for welfare workers and others who are 
hired. There is 2,000 people that are hired as part of the 
census operation.
    Mr. Cummings. Thank you very much.
    Mr. Mica. I thank the gentleman. You raised a number of 
questions and points that we need to get additional information 
on the administration's plans, because the reason people are on 
welfare is they do not have the education, they do not have the 
job training skills, they do not have available day care. And 
if we are not prepared--and you are going to get into this 
program to address some of the fundamental problems--we are not 
doing the right thing.
    So, we are going to ask you for written testimony. And 
please keep this subcommittee posted on what your plans are in 
those areas as this proposal moves forward. With those 
comments, I yield to Mr. Pappas from New Jersey.
    Mr. Pappas. Thank you, Mr. Chairman. Mr. King, I am 
wondering if you would be the one to clarify for us the overall 
pool of potential Federal job vacancies that the 10,000 would 
fit into?
    Mr. King. I can--you mean the types of jobs?
    Mr. Pappas. No, just the number.
    Mr. King. The logical number that would turn over? First of 
all, the 10,000 were designated by the agencies themselves and 
sent forward, I believe, through OMB. They were identified by 
each agency.
    Mr. Pappas. No, what I am saying is out of how many job 
vacancies within the Federal workforce would the 10,000--excuse 
me, we have been told that it is a small number out of----
    Mr. King. Last year we hired, in the Federal Government, 
58,000 permanent full-time new hires, and 142,000 temporaries. 
That is while we were downsizing.
    Mr. Koskinen. And that was just last year. This is a 4-year 
program. You are talking about a goal of hiring 10,000 over a 
4-year period. The 58,000 permanent and 144,000 temporary hires 
was our experience last year.
    Mr. Pappas. Thank you. My next comment, I guess it is not 
so much a question, is for Ms. Disney. In your written 
testimony, you indicate that there will probably be over the 
next 5 years approximately 90,000 civilian positions 
eliminated, and the Department of Defense continues to hire 
20,000 civilian personnel a year.
    Within my district, there is a facility called Fort 
Monmouth, and I would like to forward to you, and not pose the 
question to you here, but a letter that I sent with another 
Member from my region of New Jersey trying to get some 
clarification as to how folks who are being in one sense, the 
position is being eliminated, yet the function shifting from I 
think the Department of the Army to the Department of Defense 
and their inability to apply for those positions. So I would 
like to forward that to you, and I appreciate your assistance 
in getting that clarified.
    Ms. Disney. I look forward to it. Yes, sir.
    Mr. Pappas. The other comment, I want to agree with the 
gentleman who questioned you folks earlier, besides welfare 
recipients not having the training or the access to learning 
what positions may be available, many of them have just not had 
an orientation to work, have not had any opportunity to have 
good work experience.
    In New Jersey, there is a program which I don't know if you 
folks are aware of it is called the Community Work Experience 
Program. And we in my county found it very helpful to many 
welfare recipients in that they were given an opportunity to 
work, if you will, in quotes, for a county agency and were 
given the opportunity to report to work on time, to just gain 
some work experience. And this was not an effort to displace 
employees that we had. We did not reduce the workforce in an 
effort to save money. It was really an effort to help those 
that wanted some experience and could then be given a letter of 
reference as they were really entering the job market. Is there 
any kind of a program that we have in the Federal Government 
that is similar to that?
    Mr. King. Under this authority, no. What it is, though, 
again, is the operating assumption of little or no skills on 
the part of employees entering these two lower grades. We use 
numbers a lot, and I have done it, so forgive me. When we talk 
about 42 percent, for example, have high school or high school 
equivalency, that is 800,000 people. That is a pretty good pool 
of talent that can be hired above a GS-1 or wage grade 1. Those 
are not the only jobs.
    So what we are saying is that even for people of very 
humble circumstances who are motivated, there is opportunity 
through this training program as an entry. That entry level, 
the commitment to all of the organizations who are hiring at 
that level understand the folks that they will be working with, 
who they will be, and will try to organize programs around 
them. I don't believe it is any surprise. I yield to the 
operating agency. VA has had probably as much experience as any 
organization in the Federal Government, and I will yield to VA.
    Ms. Felder. Mr. Pappas, the question you raised about the 
training for welfare recipients, I think, as we have begun to 
look at developing plans and programs, we have learned, and I 
think Mr. King referred to this earlier, these are going to be 
local, community-based programs. The actual implementation will 
occur at the local level.
    The local facilities are going to work with their 
communities. In fact, here in Washington, we have already had a 
presentation by the State of Maryland. So we are aware that the 
local welfare jurisdictions will be looking at ways of 
transitioning their own people from welfare to work. And as a 
part of that, there will be training. There will also be access 
to community resources such as the one you just described. And 
the VA, as an organization itself, already has a tradition of 
doing two kinds of training. There is one, training that we 
provide as a part of our rehabilitation of veterans so that we 
can move dependent veterans back into the workforce and we have 
a program called our compensated work therapy program. And as a 
veteran benefit, these people are given the opportunity to have 
work experiences, to go through training and counseling.
    And then they are moved into paid employment as a part of 
our service to veterans. And as a part of our own organization, 
because we have a workforce which has in it a lot of entry 
level jobs, we do traditionally have a development orientation 
kind of program. And we would anticipate moving the welfare 
recipient into these programs and that they would be mentored 
where that is necessary.
    Generally, we are only looking at hiring one or two or 
three at a facility. And that number can be incorporated into 
our normal workforce and given special attention when 
necessary. But we do intend to provide them the training and 
support that they will need and to work with the local 
communities to identify resources available to them.
    Mr. Pappas. We have found through the CWEP program, where 
some of these welfare recipients have worked in a sense for 
nothing, many of them have been actually hired as vacancies 
have occurred, so our experience has been very, very positive.
    And I guess my last two comments is following up on that, 
which I had mentioned to you, Ms. Disney, is that there are 
many very loyal Federal employees who are either being 
displaced or are soon to be displaced. And I just hope that we 
will take great steps, important steps, to keep a balance 
between what we are trying to do to help those who are not 
employed and those that may find themselves unemployed.
    And my last comment is that this is the Federal 
Government's part in this effort to assist those that seek 
gainful employment, but I also think it is important to keep in 
mind actions that we take with regard to reducing taxes, I 
think, could help the private sector in creating new jobs that 
would be more permanent and I think have a better and more 
secure future for those that would gain that employment. Thank 
you, Mr. Chairman.
    Mr. Mica. Thank you, Mr. Pappas. I would like to recognize 
now the gentlewoman from the District, Ms. Norton.
    Ms. Norton. Thank you very much. I would like to let Mr. 
Ford go ahead of me since he heard all the testimony, and then 
I would go after him.
    Mr. Mica. All right, Mr. Ford, you have been here and heard 
it and welcome again to the panel. This is your opportunity for 
questioning. You are recognized, sir.
    Mr. Ford. Thank you, Mr. Chairman. Let me say to my 
colleague, Mr. Cummings, and the panelists, we will take all 
the jobs that you want to create in the city of Memphis. My 
colleague didn't know where the jobs would be created. We would 
certainly want them there.
    Let me ask a few questions. All of the Members have spoken 
to some of the issues that concern me as well. But in reality, 
we are talking about, if I am not mistaken, about 100 Federal 
agencies that have at least expressed an interest or 
willingness to participate. And we are talking about 10,000 
jobs. So certainly we are only talking about each agency 
nationwide creating 25 jobs per agency over a 4-year period, if 
I am not mistaken. Am I correct in that analysis or that 
calculation?
    Mr. King. I think what you are hearing is from the major 
executive agencies. We have focused in the conversation first 
on a GS-1, which is probably one of the smallest percentages of 
all the Federal job classifications as far as actual employees. 
And then wage grade 1 and 2, which is fairly small, but still 
significant. But it pales in comparison.
    Let me set the context, if I am correct. Those jobs would 
be, again, for those folks with little or no skills. What we 
want to do and what we wanted to make very clear--and we 
emphasized this--is that we wanted to provide opportunity.
    I think Mr. Pappas was kind enough to indicate where in his 
community they were working on those skills that would prepare 
people to enter work. It is interesting to note that 70 percent 
of our group of 2 million have had previous work experience. 
That is almost 1\1/2\ million of the 2 million that are going 
to go forward.
    So, we are not--what we are saying is there are a number of 
jobs available. We don't want to stereotype. What we did say to 
the agencies, I believe the President said, and I yield to Mr. 
Koskinen on this. The President asked the agencies, what would 
be the level that you could best look at at these particular 
levels that provided opportunity for those with few, if any, 
skills? And that is really what you are seeing, if I am not 
mistaken.
    Mr. Koskinen. Probably there are over 100 agencies, but a 
number of them have very few people. We focus the 10,000 and 
the surveys are basically the 22 largest agencies, and if you 
look at what percentage of their workforce this is on average, 
it is six-tenths of a percent of their workforce. So agencies 
are talking about 50 to 2,000 people over a 4-year period would 
be their commitments with the exception of Commerce, as we 
talked about, with about 4,000 because of the decennial census 
and the Defense Department, which, of course, is larger, but 
its percentage is the same. It just has a larger number of 
people as a result. It is half of a percent to six-tenths of a 
percent is the average that agencies are talking about and that 
is over 4-years.
    Mr. Ford. I stress also, underscore the point that my 
ranking chairman said, Mr. Cummings, and I am not being 
critical, but really trying to ferret out some of the germane 
issues. In terms of the temporary and permanent employee 
status, in terms of I have heard Mr. Secretary you talk a 
little bit about exposing workers to the rigors and habits of 
work and perhaps providing some experience so they can put on a 
resume and at least provide them with some job-related 
experience. How is that compatible in terms of the 
implementation strategy for this moving people from welfare to 
work? How do you sort of reconcile those two different strands 
of thought?
    Maybe I am not being clear. If you are hiring some folks to 
expose them to the rigors and habits of work, and you are 
hiring some folks for permanent employee status, how do you 
convey that to workers? And I guess it speaks a little bit to 
what Congressman Cummings has spoken about. I don't see how the 
two of those reconcile and perhaps you can explain that to me a 
little better or maybe one of the panelists can elaborate on 
that point.
    Mr. Koskinen. As everyone in the private sector has 
discovered, as well, probably the concept of what is a 
permanent job has changed a lot over the last 20 years and if 
you look at particularly the employment experience of young 
people or people entering the workforce in the private sector, 
they move on in very short periods of time.
    Mr. Ford. I understand that certain people move on, but it 
seems that the approach of the Federal Government is that some 
folks we are hiring for permanent and other folks we are hiring 
for temporary.
    Mr. Koskinen. And the agencies all look at what their needs 
are as we have tried to stress, these are all real jobs. They 
are real openings. Some agencies, as with Commerce with the 
census, has real openings in the census board that are 
temporary. They will run from 6 to 18 months or longer, but 
they are temporary in the sense that there is a beginning and 
the middle and an end. That is a temporary program.
    Other agencies will have vacancies, some of which will be 
in temporary jobs, others will be permanent and it is up to the 
agency to figure out where is the work that needs to be done 
and what are the programs and the positions that are open? So 
that we have not limited them to one program or another.
    We have said here is what we need to do, how many jobs do 
you think over the 4-year period can you comfortably commit you 
can hire? Most of the agencies are focusing that effort where 
they can on permanent positions, but it depends on what their 
situation is.
    Mr. Ford. In closing, let me say I know my colleague from 
New Jersey made the point about lowering taxes and, hopefully, 
being able to invigorate job growth and other opportunities. I 
am going to salute this administration, salute our President 
and those of you here. So often, those of us in Congress, and I 
was not here in the 104th Congress, we showed a lot of courage 
and temerity to poor people to say that we can be tough and 
eliminate a guarantee to poor children.
    So I salute this President for stepping up to the plate and 
creating some jobs and some opportunities and I would hope that 
the private sector would pay attention. I am a proponent of 
private sector and small business and I would hope they pay 
attention to the travails and advantages and disadvantages and 
the strengths and weaknesses of this plan and would look to the 
Government for leadership in these areas. And with that, I 
thank you, Mr. Chairman.
    Mr. Mica. Thank you, Mr. Ford, and I recognize now Ms. 
Norton.
    Ms. Norton. Thank you, Mr. Chairman.
    First, let me indicate that a real sense that what the 
President proposes to do is unavoidable. The question is when 
would you do it? Would you do it after public pressure or do it 
on your own initiative, because you can't go around the country 
saying you all have to hire the welfare workers and have the 
biggest employer up here exhorting, but doing very little. So 
you would have been slashed about the head and shoulders if you 
had not moved up and we ought to all recognize that there was 
no way for them to avoid what they have done. And I commend you 
on doing what you have done.
    My concern is more to avoid perverse effects which often 
occurs with even the best of intention and the best of efforts. 
And, therefore, I am interested in the existing workforce and 
priority placement which I fought hard for in the 104th 
Congress, and with displacement, which I think is inevitable in 
the way in which some of the welfare reform will be carried 
out.
    I do not have a problem with the temporary nature of the 
jobs. Hey, you know, we're not trying to manufacture some 
Cadillacs here. We are trying to give people, at the very 
least, a work history. So that if you can say you worked for 6 
months in the Federal Government as a census taker or whatever 
you give the person to do, and I got satisfactory or 
outstanding in that, and I was a GS-2, you got something that 
you can go to town with. And these are folks that are starting 
with nothing, so I am not worried that you are not providing 
him a lifetime guarantee of a job.
    We have to really face what we are facing in the workforce. 
Being on welfare is the functional equivalent of having a 
criminal record today. I mean, maybe all you have had is a 
child, but the fact is, with two similarly situated people 
before an employer, the likelihood that he will go for the 
welfare recipient, not welfare worker, but the welfare 
recipient over somebody else is not very likely. And so, I 
regard this as kind of giving people a push or a start since it 
is so difficult to go straight from welfare and get a job at 
all.
    At the same time, the Federal workers are a largely white 
collar workforce. You don't have to work with what some other 
sectors do. This was going to be difficult under the best of 
circumstances. So I am not discouraged by the difficulties. 
What did we expect? That when we flood the market or try to 
flood the market with hundreds of thousands of people who never 
had a job, it would be easy or we shouldn't have to try to 
struggle to find what the problems are and eliminate them?
    Most people get off welfare themselves within 2 years. So, 
what we're doing here may make it easier to stay off of welfare 
because you have a work history and all kinds of problems that 
we can't deal with, like some of the people who will have child 
care and other kinds of things that are not going to come with 
this initiative.
    My first question is about the 10,000 number. Could you 
describe to me where the 10,000 number came from?
    Mr. Koskinen. We started without a number. The Vice 
President asked the agencies to develop their plans. People 
then began to come back and ask what number overall are we 
shooting for, and we kind of, consistent with Congressman 
Ford's point of view, was that the Federal Government had to be 
a leader. It had to be out saying we will do our fair share. It 
is going to be tough and difficult, but the vast number of 
these jobs will be in the private sector and that is 
appropriate.
    And as I noted in my testimony, if you look at the goal of 
moving 2 million off of welfare into the workforce, and look at 
the average size of the welfare family, that means you have 
about 700,000 people who will need to find jobs. The Federal 
Government employs about 1.5 percent of all people in the 
United States and therefore 1.5 percent or 10,000 people would 
be in effect our fair share.
    But we were doing those calculations while the agencies 
were doing their plans, and there is some slight difference in 
terms of what the final calculations turned out to be. But it 
turns out that, in fact, about 10,000 is the number of jobs 
that agencies feel comfortable they can fill over the next 4 
years, either on a temporary or permanent basis.
    Ms. Norton. Well, it is a nice round number, but my concern 
is while it is a good fair share number, some of the questions 
raised here go to the realism of the number in light of the 
nature of the workforce, and, of course, the literally 
unprecedented times in which we find ourselves.
    The Federal Government has been growing all of my life as a 
native Washingtonian, and I never expected to see the day when 
we would really be cutting the workforce. I realize the 
difficulty here and I believe the number has to be adjusted as 
necessary as time goes on. I hope it will be adjusted upward, 
but I would hate to see us fail to meet it or meet it in a way 
that brought us great criticism, but I think you have done 
right to set a number that is not minimal and that is in 
keeping with the size of your workforce.
    I am concerned about displacement for two reasons. We 
simply don't want to send the message to people at lower levels 
of the workforce that the way to get a job with the Federal 
Government is to get on welfare. Nor do we want to displace 
people who would ordinarily go out to get a job even at the 
lower levels. And I recognize this is difficult to do. But 
this--we are already seeing displacement of Mr. Cummings, and I 
read in the paper about some displacement that has gone on in 
Baltimore in the hospitality industry. It is almost natural and 
the only way to avoid it is, in fact, try to keep it from 
happening. Particularly, if there is a number and an agency is 
supposed to meet anything or try to meet it.
    What I would like to know is if you have thought through 
what safeguards exist or you would be willing to put into place 
to keep displacement from occurring or to keep a situation from 
occurring where people at a certain level of the workforce find 
that they simply can't get a job unless they have been on 
welfare, which, again, is not the message that I know you want 
to send.
    Mr. Koskinen. Well, we are not proposing that people on 
welfare will move to the top of the queue. These are vacant 
jobs. Last year, we had a total of 200,000 positions that had 
to be filled in the Federal Government. Nobody is being 
displaced. By definition, these jobs are open.
    The welfare recipients will apply with others interested in 
those jobs, and as noted, both the Defense and the Government, 
generally all of the existing priorities and preferences will 
be protected. So veterans preference will be protected, and 
those who have priority placement rights will be protected.
    As I was saying to Congressman Cummings, what we are doing, 
and what we are asking the private sector to do, is to reach 
out to a different constituency. We are advertising vacancies 
to encourage people who otherwise did not know of the vacancies 
or didn't view them as appropriate or relevant to them to focus 
on these vacancies as jobs they can fill.
    Ultimately, we have all benefited from the economic impact 
of the programs that Congress and the administration have put 
in place. These programs have allowed us to generate over 12 
million new private sector jobs since 1993. Our unemployment 
rate is lower than it might otherwise be, and the economy is 
more vibrant. But ultimately, what we're talking about here is 
not creating special jobs, not displacing Federal workers. We 
are saying we have jobs, can we reach out to a constituency, in 
this case welfare workers, and encourage them to apply on an 
equal footing with others who are available to apply.
    Ms. Norton. I recognize that there are already remedies in 
place for abusing existing legal entitlements such as veterans 
preference and priority placement. I am less sanguine that for 
people walking through the door there would not be 
displacement. The examples that were reported from Baltimore 
happened to simply be people walking in the door and, of 
course, there are some incentives that are involved.
    Mr. King. Did that happen at a Government agency?
    Ms. Norton. No, no these were in the private sector. And 
the point is to get the early warnings now of how this operates 
or may operate in particular settings.
    Now, if in fact it is as you say, that there are very 
limited 1's and 2's in the first place, and many of these 
workers or recipients will be inclined to be in the lower 
levels, what I am saying is that you could get to the point 
where people want to, in fact, with every good reason to meet 
their goals for people in this lower level to be welfare 
workers and the perverse effect would be you didn't go on 
welfare, you could have gone on welfare, you went out here and 
you got your own job, but you found out that every job at your 
level in the Federal Government is going to go to a welfare 
recipient.
    Mr. Koskinen. You have to be careful with it. It is a very 
important question. We are not obviously suggesting to the 
business where the bulk of these jobs are going to be filled 
that they should only fill jobs with welfare recipients where 
there is absolutely nobody else in the country applying for 
that job. What we're saying is that we need to expand the group 
of people to whom we reach out, that we need to, in fact, if we 
are going to require welfare recipients to work, we need to 
give them a fair opportunity, not a special opportunity, but a 
fair opportunity to know where those jobs are to be able to 
apply for them.
    Ultimately, somebody will have a job. Theoretically, you 
could argue any time a welfare worker has a job that means 
somebody else doesn't have that job, but as I say, it seems to 
me the perverse result would be that if we said that our 
process is going to be that the only job a welfare worker is 
eligible for is a job that we could establish no one else is 
interested in.
    Ms. Norton. Well, my only warning is that this is a zero 
sum game. This is not an expanding workforce. And one of the 
things I think you should do is to monitor, especially the low 
level jobs and see who, in fact, is getting them. Obviously, I 
am not arguing for not giving these jobs or large numbers of 
them to welfare recipients. But, again, when we try to do 
something good, an unintended consequence could result, and 
something that we would not endorse.
    There is some concern among employee organizations about 
this. Less, I think--I don't think there needs to be a great 
deal of concern. I think the protections are in place. Have you 
met with all of the employee organizations?
    Mr. Koskinen. We have had meetings. Mr. King chairs an 
organization called the National Partnership Council, which has 
the heads of the four largest employee organizations. We had a 
full presentation of this program with them with a set of 
Federal managers so they are well-acquainted with what the 
nature of this program is. And specifically, these same 
questions have come up there, and I think they are comfortable 
that we are not providing special jobs or special benefits for 
people who come off welfare to the Government as opposed to 
anyone else who comes into the Government.
    Mr. King. But the concerns were legitimate, and they were 
very profound, to the point, and very well taken, as you well 
know.
    Ms. Norton. Mr. Chairman, with your indulgence, one more 
question. It really comes with the experience I had with a 
temporary employee. You may even remember it. Just a few years 
ago, there were stories in the paper about a man who scrubbed 
out the Lincoln Memorial, had seven children, dropped dead on a 
very hot day, literally from overwork. He had been working 
around the clock.
    And because he had been a temporary employee at the Park 
Service for 7 years and had never been made permanent, he had 
no benefits. Ultimately, literally, I went on the floor and was 
able to get the other side to agree to what was no more and no 
less than a special bill for the wife and seven children. By 
the way, they've now bought a house. And that's one story that 
turned out all right.
    And, of course, there were promises made about how to deal 
with temporary employees, and I know that there has been an 
attempt to try to deal with temporary employees. Nevertheless, 
I do note that it appears that some temporary employees would 
not get at least some of the benefits that welfare recipients 
would get, and I wish you'd clarify that for me.
    Mr. King. Whatever authority and whatever circumstances the 
individual is hired under, everyone will be treated the same.
    Ms. Norton. So that what; what? So that, for example, a 
welfare recipient simply gets what anybody else gets?
    Mr. King. Welfare recipient, as far as we're concerned, is 
an American citizen. But they have been in many ways--because 
of the situation, have been--not had the opportunity to be even 
aware of the kinds of things that we're talking about. And this 
is an opportunity to join that pool of candidates for 
employment.
    Within that pool, we have talked about just really one 
authority. There are several authorities that are available. 
You can use any one of those authorities to come in. You can 
come in as just a regular citizen and apply for a job at any 
level, and be competitive, and be tested, and compete within 
that and get the same benefits.
    I think the emphasis has been on people who were really 
just starting out and had no real work record and no 
educational background. What we're talking about, by the 
numbers that we're looking at, are overwhelmingly people who 
have enough basics, but we are talking about those who are the 
exception, not the rule.
    Ms. Norton. Well, it is the worker training program where 
you could convert to civil service status, are there benefits 
at that level----
    Mr. King. Yes.
    Ms. Norton [continuing]. That there are not now?
    Mr. King. The assumption on coming in is that you will be a 
permanent employee.
    Mr. Koskinen. If you're in that program. That's not a 
program just for welfare recipients. That's a program that 
applies across the board. Those in that program will have 
whatever benefits that program provides. Those who are hired in 
other programs will have the same benefits that employees in 
those areas have.
    As we discussed earlier, one of the things we need to focus 
on when we look at the status of temporary employees is not 
whether they're temporary welfare employees or temporary 
employees. The issues about temporary employment are 
appropriate--as I said, Secretary Shalala noted that one of the 
things this initiative is having as a positive impact is 
agencies looking at how our lower graded employees, whether 
permanent or temporary, are and how are they faring, and what 
additional support and resources can we and should we provide 
to them.
    So the goal here is not to have a special welfare program. 
The goal here is to have a special outreach program to 
encourage welfare recipients to apply for jobs. They'll apply 
on the same basis as others. The existing preferences will 
apply. And to the extent that we focus on the status of 
temporary employees in the Federal Government, if there are 
issues raised about that, we should address those. We should, 
in fact, make sure that we're providing the same support and 
benefits for people in similar classes within the Government.
    Ms. Norton. Mr. Chairman, I just want to say, as I have 
finished my questions, that I think the questions you have 
raised and the questions the Members have raised have been very 
legitimate questions. We've raised them, however, at the outset 
before there is any experience. And I hope that those who have 
testified have heard the questions, because I believe that the 
chairman will want to hold a hearing in the near future when 
there has been some experience to see if some of these problems 
have been avoided. And I should think you would want to monitor 
this program very carefully, because if you succeed, you will 
encourage the private sector. If, in fact, problems develop, 
you will have the opposite effect. I congratulate you on 
trying.
    Mr. Mica. Thank you for your questions.
    A number of points have been raised today. Let me just 
follow, if I may, on the gentlelady's line of questioning. You 
did describe that these folks, many of these folks, or you did 
testify today that many of these folks would be temporary 
employees, I think, probably the Census Department, some of 
those jobs, many of those----
    Mr. Koskinen. Yes.
    Mr. Mica [continuing]. That we're talking about. What 
concerns me, too, is that we aren't really addressing the 
problems or the needs of welfare recipients even in this 
program. Then, in fact, they won't have health care benefits.
    Most--many of these folks are single mothers with dependent 
children. They need day care. They need transportation. They 
need education. So it creates the same dilemma that you see in 
the private sector that we're doing in the public sector. We're 
offering part-time, low-paying jobs with no benefit, no 
opportunity.
    And the alternative in my State, I come from Florida, and 
they get $7.75 an hour equivalent--multiply that out, that's 
about $300 a week times 50 weeks is $15,000--and health care 
benefits if you stay on welfare versus what's a GS-1 make, 
$13,000 entry?
    Mr. Koskinen. Give or take a little, yes.
    Mr. Mica. Yes. Or temporary positions with no benefits.
    We want to monitor this program. We don't want to say we're 
doing something when we're not. Of course, providing some work 
experience is better than none, but are we providing an 
alternative? What would your choice be if you get no benefits 
and more money versus working and less benefits? So we need to 
monitor this very carefully.
    I'm also concerned, now, Ms. Disney, you said that one-
third of the positions you thought would come from private 
contractors. Is that----
    Ms. Disney. Well, slightly higher than that, yes, sir.
    Mr. Mica. Well, I have no problem. We're asking and we've 
been involved in this for 4 years of moving Federal employees 
into the private workforce, RIF'ing them and putting more 
contracting positions in and privatization. Is there a 
directive going out now to all the private contractors? I think 
I had heard they were asking the private contractors to pull 
their fair share.
    Mr. Koskinen.
    Mr. Koskinen. Yes, we have not made a requirement in any 
procurement regulation. What we have done is encouraged all 
Government procurement officers to advise contractors that this 
is a nationwide effort, that the administration and the 
Congress are committed to hiring welfare workers, and that 
everyone ought to pull their fair weight, and that we are 
encouraging. But it's moral assuagement more than anything 
else. We're encouraging Federal contractors to look hard at 
their ability to hire welfare recipients.
    The advice we've reminded them of is any employee training 
due, to the extent they train new employees for the jobs they 
are performing, those costs are acceptable costs for 
reimbursement if you're on a cost reimbursement contract. But 
basically we have not required it. We have simply stated this 
is a goal. We're asking all private sector companies to 
participate, and we expect that Federal contractors will pull 
their fair share.
    Mr. Mica. Well, the other final caution is Mr. King, who's 
talking about maybe 500 positions, Ms. Disney is talking about 
800 positions that would fall into these categories for which 
there may be buyouts, have been buyouts overall. And, again, I 
caution you. If we hear instances where there had been buyouts 
of these positions filled by these folks, again, it's going to 
raise a tremendous ruckus.
    One final point per chairman's prerogative, Veterans' 
Administration representative, and the point of buyouts, I was 
accosted yesterday by Mr. Everett from Alabama, I guess he's 
with the Veterans' Committee, about buyouts and issuing buyouts 
to a veteran agency employee who had a sexual harassment charge 
against that individual. That is not what we intended. So Mr. 
King is gone, but we need to have some very specific guidelines 
that prohibit the awarding of any buyout to any Federal 
employee who has some type of charges pending against them, not 
that they may not be entitled to it, but if they are, and we 
want due process here.
    But it is not pleasant for me as Chair of this subcommittee 
to find out that these instances where there may be individuals 
who violated personnel ethics and codes and responsibility, and 
then be awarded a buyout. So we need to make sure we're all on 
the same frequency and this is properly approached.
    Do you want to comment?
    Mr. Brickhouse. Mr. Chairman, you're correct. That did 
happen in our agency. I might add that, and I'm not making 
excuses, but the person who took advantage of the buyout took 
advantage of it before charges were brought. So these 
allegations weren't confirmed, if you will, and he retired and 
took advantage of it.
    But I might add you make a good point. We will look at 
that. We will monitor that, and we understand.
    Mr. Mica. Well, these things do happen, but they can't be 
repeated. Mr. King is gone, and I direct staff to make sure he 
gets a letter to this. And then we are held responsible. With 
that, I'll yield to the ranking, Mr. Cummings.
    [The letter referred to follows:]

    [GRAPHIC] [TIFF OMITTED] T2530.035
    
    Mr. Cummings. I just have a few questions. First of all, I 
want you all to understand, I agree with Ms. Norton. I think it 
is very important that we do this. As a matter of fact, it's 
imperative. The question becomes, I guess, let's make sure we 
do it. And I think a lot of the concerns, as she stated, that 
we have voiced here are the kind of things that we hope that 
you all will be looking out for.
    Other than the private contractors, trying to encourage 
them to hire people who are on welfare, and other than 
President, I guess, using his position as a bully pulpit to try 
to get the various corporations, some of which he mentioned in 
his State of the Union Address, to hire people off of welfare, 
what else is being done with regard to the private sector? 
Because I think so often we look to Government to do certain 
things, and 10,000 jobs is very nice, but the private sector is 
where the jobs are. I'm just trying to--I just wonder what else 
is being done, if anything, to try to get those companies to do 
the--to help us out on this.
    Mr. Koskinen. Well, as you noted, we have five companies 
that have agreed to take a leadership role, and they are United 
Airlines, Sprint, Monsanto, United Parcel Service, and Burger 
King.
    Next month, the President will host a meeting at the White 
House with business leaders from across the country to not only 
encourage, but to hopefully get more of them committed not only 
to work in their own companies, but in their industry groups, 
because I think this is not going to be--will not work if it's 
a one-time initiative or exhortation. We need to have continued 
followup and dialog.
    I think thus far our experience is that the private sector 
is responding privately. Over the last 20 years, people have 
lamented the problem with the welfare system, the inability on 
welfare to find jobs in many cases, the stereotype that they're 
not interested in jobs. I think now we all have a chance and 
opportunity to, in fact, see if we can change that culture.
    So at that White House meeting next month, the President 
will not only be exhorting the private sector, but hopefully 
signing them up for major commitments on their part to assert 
leadership in the private sector.
    Mr. Cummings. Mr. King, I think it was you that said you 
identified 25 positions at OPM.
    Mr. King. Right.
    Mr. Cummings. I was just curious. How did you come to the 
conclusion that those, you know, those jobs were appropriate 
for people coming off of welfare?
    Mr. King. We did operate on the assumption that a number of 
the folks that would be coming to us may have little experience 
and few skills, and therefore we identified those positions at 
a career entry level that would meet those criteria, and our 
hope is that we will work and create a climate in which people 
will apply. If we have a deep pool, we can select the best 
candidates from that pool.
    Mr. Cummings. My friends from the VA, we in Baltimore, of 
course, we have a VA hospital, had a lot of interaction with 
the VA Hospital, and one of the things that they continuously 
complain about when we try to get them to hire people from the 
Baltimore area, people who live in Baltimore, because it's like 
a large percentage of their employees do not live in the area, 
and a lot of these people will be the very folks that we're 
talking about, but their constant complaint is that they--I 
think it's Dennis Smith----
    Mr. Brickhouse. Yes.
    Mr. Cummings. Yes.
    Mr. Brickhouse. He's the director of the hospital.
    Mr. Cummings. His constant complaint is that they RIF so 
many people that they are worried about taking care of the 
RIF'd people who are standing there on the sidelines.
    I'm trying to put all this together to make sure what we 
hope happens happens. And that's my concern. I--I really want 
to see this, this effort be successful. But when I hear things 
like that--and one of the other things that I hear is that 
people in my district, the first thing they ask me, and I'm 
sure Ms. Norton probably hears the same thing to some degree, 
most people ask me, can you get me a Government job? I don't 
know why that is, but that's the first thing they ask. I mean, 
if nine people ask me about a job, at least four of them are 
going to say, well, can you get me a job with the city of 
Baltimore?
    In other words, I guess there is a feeling that that brings 
a certain level of security. And so, you know, people in my 
district would be happy to take some jobs at the VA, I mean, 
because it's a--it's kind of a clean-cut job, and they probably 
would really like that. But you know what we found is that, 
like I said, in my efforts, they've been hitting a brick wall, 
and I just want you to address that.
    Mr. Brickhouse. Well, first of all, Congressman Cummings, 
we do have some potential candidates to be hired in the 
Baltimore area. I have a list of all of our facilities.
    Mr. Cummings. Good. We'll have to talk right after this.
    Mr. King. As long as it's under the context of the merit 
system, this conversation is totally on the up and up.
    Mr. Brickhouse. Mr. King, we understand the merit system, 
and we follow it.
    I might add that, to answer your question a little further, 
though, we have in the VA over 240,000 employees. And I will 
admit to you we are in the midst of RIF'ing people, as we 
mentioned earlier to Mr. King and Mr. Koskinen, though 
primarily those RIFs are at higher level employees and not down 
at the wage grade or the GS grade. And as you very well know, 
in some of those areas, for example, we do have consolidations. 
In other words if we have two hospitals within 15 minutes of 
each other, why do we need two pharmacy staffs, if you will? 
But most of those are targeted, in my estimation, at senior 
levels.
    I think, as I have mentioned earlier, we targeted 400 jobs 
this year and 400 jobs next year because we have such a large 
turnover in those types of jobs in the VA. So I think, as you 
have mentioned, though, we will continue and we do have some 
avenues to hire some of these people, but at the same time my 
belief is that we will still be conducting RIFs because of some 
of those consolidations and some of those positions that we do 
not need in some of those facilities, if you will.
    Mr. Cummings. Just one last question. When we have this 40 
percent of the people going into the proposed positions with 
Commerce and Census, again I agree with Ms. Norton, it is 
important to establish a track record, employment record. I'm 
just wondering, though, is there any aim at sort of trying to 
guide folks?
    We know that's going to come to an end, and our objective, 
of course, is to keep people employed. And we also know that 
people have limited time that they can be on welfare, pursuant 
to legislation. And some of them will probably--once they get 
these jobs will probably maybe, I don't know, run out of their 
time or close to it. And I guess all I'm asking you is there 
any--are you giving any consideration to trying to make sure 
that people are at least steered in the direction of some kind 
of other employment so that--so that we don't--and I understand 
that this is a program, you're trying to do something for 
people that is no preferences, understand all of that. But 
still, the Government will have taken these people in and in 
many instances will have trained them, will have invested in 
them, and will have placed them in a position whereby we 
definitely are, you know, cutting into this whole welfare 
situation. The question then becomes do we allow them to fall 
off a cliff without giving them some kind of guidance? That----
    Mr. King. Once they come onto the payroll and they are 
employees, we have historically bent over backward to 
accommodate our employees, whoever they are and wherever they 
are. I would have to yield to the Chair, who has provided 
enormous personal leadership in this area, when we talk about 
soft landing for Federal employees, the attempts that were made 
when we knew we were faced with downsizing to have voluntary 
departures from Government so that we didn't force people on to 
the street, so that we are concerned.
    That's--I can't think of any agency here as I'm looking at 
the people here, I actually know their conduct and the work 
that they have done to help people through that.
    I think Ms. Norton made an excellent point that here we are 
in Washington where we view Government as the business, and 
yes, it is huge. But two-thirds of the jobs in this 
metropolitan area are in the private sector. The eastern-
Silicon Valley, the largest communication complex in high 
technology, is 5 miles from where we're sitting.
    I mean, the world is changing as we're talking, and what we 
would like to do, as we're saying, is we want every American to 
be part of that world and that future. We think we can 
contribute in the way we're speaking, and we would like to 
think that we continue to support our Federal employees, 
whomever they are and no matter what their grade level is, but 
there is an equity involved there, and there is a commitment 
from all of us.
    Mr. Cummings. Thank you very much. And I wish all of you 
the very best in what you're trying to do.
    Mr. Mica. Thank you Mr. Cummings.
    I yield now to Ms. Norton.
    Ms. Norton. No further questions, Mr. Chairman.
    Mr. Mica. Well, I thank the panelists.
    I have one final question. We're going to have testimony in 
our last panel from one of our Members, Eddie Bernice Johnson, 
a Congresswoman from Texas, to introduce legislation that would 
provide welfare recipients with a 3-point preference in Federal 
hiring. Has the administration taken a position on H.R. 1066, 
or is there any inclination toward supporting this type of a 
measure?
    Mr. Koskinen.
    Mr. Koskinen. We're not taking a position. As I understand 
it, it was only introduced very recently. As I say, our general 
approach has been to treat our program not as a preference, but 
to treat our program as an outreach program to try to encourage 
people to become aware of the opportunities in the Federal 
Government and to have a commitment on the part of agencies to 
participate in that outreach.
    But at this point we have not in response, but really 
anticipation of the concerns that might be raised, have tried 
to view this not as a preference program. We are trying to view 
this primarily as a program designed to fill available slots 
with people who are qualified at whatever the level of 
qualifications are.
    Mr. Mica. And, Mr. King, you went out for a moment, a 
personal privilege, when I was lambasting the practice of 
giving buyouts to individuals who had some pending personnel 
charges against them. I'm not going to ask you to respond, but 
we did have an instance that was brought to my attention 
yesterday in the Veterans' Administration where an individual 
was charged with sexual harassment was getting a buyout. And we 
need to make sure--you know the problems we've had in the past 
in defending that program, and when you have instances like 
that, it doesn't set well on the Hill.
    I want to thank you. I think you all have helped, as Ms. 
Norton said, at an early stage of helping us look at the 
administration's proposal.
    We're treading into some new water here. I think we've 
raised many serious questions that need to be addressed as they 
proceed, and it is very difficult as Chair of this 
subcommittee, when I'm involved in unprecedented RIFs, when 
we've been involved in incredible downsizing, consolidations, 
the buyout program, for me to look these Federal employees in 
the face, or former Federal employees, or employees that are 
waiting for a position to come back to work with us, who have 
dedicated part of their lives, we are--the administration is 
proposing to employ welfare recipients or former welfare 
recipients in the Federal workplace.
    So it raises many questions. We need to work together as 
you develop your plans to implement this. And we need to 
possibly revisit this with another hearing.
    In the mean time I'll excuse the panel, and thank you for 
your testimony and participation.
    Mr. Koskinen. Thank you, Mr. Chairman.
    Mr. Mica. And I'll call our second panel this morning. The 
second panel today consists of Mr. Steven Hantzis, and he is 
the national executive director of the National Federation of 
Federal Employees and will present the Federal employees'--
represent the Federal employees' viewpoint on today's panel.
    We also have in this panel Mr. Robert Rector, who serves as 
the senior policy analyst on welfare and family issues at the 
Heritage Foundation, and he'll provide the benefit of his 
expertise in studying various welfare issues.
    We also have Mr. James Riccio, senior research associate at 
the Manpower Demonstration Research Corp. in New York, and he 
will provide his perspective on the issues facing our 
subcommittee.
    And the fourth member of the panel will be Mr. Charles 
Tetro, who is the president of the Training and Development 
Corp. in Bucksport, ME. He has implemented welfare-to-work 
training programs for more than to 20 years and should be able 
to provide us some insight based on his work.
    As I mentioned to our previous panel that this is an 
investigation and oversight subcommittee, and it is the custom 
and practice requirement that we swear in our witnesses. So if 
you will please stand.
    Raise your right hand.
    [Witnesses sworn.]
    Mr. Mica. Thank you. The witnesses have answered and 
responded in the affirmative, and we're pleased to have this 
panel and welcome you as--I think you all are new witnesses. 
What we do is allow you to summarize, if you can, or present 
your testimony within 5 minutes, and lengthier statements will 
be submitted for the record.
    Now, I'll recognize Mr. Steven Hantzis, national executive 
director of National Federation of Federal Employees.

  STATEMENTS OF STEVEN HANTZIS, NATIONAL EXECUTIVE DIRECTOR, 
NATIONAL FEDERATION OF FEDERAL EMPLOYEES; ROBERT RECTOR, SENIOR 
    POLICY ANALYST, WELFARE AND FAMILY ISSUES, THE HERITAGE 
FOUNDATION; JAMES RICCIO, MANPOWER DEVELOPMENT RESEARCH CORP.; 
AND CHARLES G. TETRO, PRESIDENT, TRAINING AND DEVELOPMENT CORP.

    Mr. Hantzis. Thank you, Mr. Chairman. My name is Steve 
Hantzis, and I'm the national executive director of the 
National Federation of Federal Employees. NFFE President James 
Cunningham wanted to be here today to present NFFE's views on 
this important issue. Unfortunately, President Cunningham is in 
California and can't be with us this morning.
    At the outset, I would like to make it clear that NFFE 
applauds the efforts of the Clinton administration to set an 
example for the private sector. Federal employees support the 
concept of hiring former welfare recipients and help them make 
a better life for themselves through hard work and opportunity. 
Our members know very well the value of hard work and 
diligence.
    However, as supportive as NFFE is of the conceptual under-
pinnings of the President's plan, we have some significant 
concerns with the manner in which his plan is being implemented 
and the potential impact of the plan's implementation on the 
Federal workforce.
    NFFE is troubled by the fashion in which this plan was 
created. It appears to be another example of policymaking by 
headline. The President announced his goal of hiring welfare 
recipients to the media and the Nation with no concrete plan in 
place to accomplish the task. The administration then required 
Federal agencies to rapidly develop and implement this program 
with little thought apparently being given to the long-term 
effects of their actions. NFFE is concerned that the hasty and 
potentially short-sighted method in which the plan was 
developed will harm the administration's previous efforts to 
reform the Federal Government.
    Additionally, NFFE is concerned with what many of the 
members have termed the hypocrisy of this plan. To many Federal 
employees, the fact that the Clinton administration, after 
eliminating over 300,000 Federal jobs, has decided to suddenly 
create jobs in order to accomplish the goals of this plan is 
outrageous.
    NFFE understands that the administration claims that no new 
jobs will be created and that these employees will just be 
considered for existing jobs that need to be filled. At the 
same time, however, the administration has stated that most of 
these jobs will be at the GS-1 and GS-2 levels.
    According to the Office of Workforce Restructuring at the 
Office of Personnel Management, the Federal Government had a 
total of 677 GS-1 and GS-2 employees on the payroll as of 
September 1996. If no new jobs are to be created, and the new 
employees are slated to be GS-1's and 2's, NFFE asks where 
these new positions are going to come from?
    NFFE is also concerned that former welfare recipients may 
be swiftly placed into Federal positions while some 
involuntarily separated employees remain on displacement lists. 
NFFE maintains that the Federal Government has a responsibility 
to first help those employees who have faithfully served their 
fellow citizens, and that these employees should be the first 
to be considered for all job openings.
    There are currently 21,000 employees on the stopper list at 
the Department of Defense. Unfortunately, since OPM does not 
maintain a governmentwide re-employment priority list, it is 
unclear how many Federal employees remain on displacement 
lists.
    The employees on these lists are hard-working, dedicated 
individuals who have lost their jobs through no fault of their 
own. If the administration is going to make extraordinary 
efforts to find jobs for any group of individuals, hiring 
displaced employees should be their No. 1 priority.
    Additionally, there is a question of equity between current 
Federal employees and employees that will be hired under this 
proposal. It is NFFE's understanding that the employees hired 
under this plan will be eligible to convert to permanent career 
status after 3 years. If this is true, NFFE is deeply troubled.
    Currently there are tens of thousands of temporary 
employees working for the Federal Government. These employees 
work each day to provide their fellow citizens with the comfort 
and security they deserve. However, these workers do not enjoin 
a similar peace of mind. They have no retirement benefits or 
job security. And although they were recently given the right 
to purchase health insurance under FEHBP, they're required to 
pay the full cost, which, for many, prevents them from 
purchasing insurance.
    Fortunately, the plight of these workers only surfaces 
after a tragedy like the Colorado fire where 14 temporary 
employees lost their lives, or when a dedicated employee like 
James Hudson loses his life while performing his job.
    Temporary employees deserve to be treated fairly. Allowing 
a new hire to convert to permanent status without providing 
long-term temporaries with the same opportunity would be a slap 
in the face to these workers.
    The situation at one agency illustrates potential inequity 
in the President's plan. Currently there are thousands of 
employees within the Forest Service that have worked as 
temporaries for over 10 years. These employees are not eligible 
for conversion to career status. In fact, because of the OPM's 
new policy on temporary employees, many of these dedicated 
individuals are about to lose their jobs.
    If the administration is going to allow these new hires to 
convert to permanent status, fairness demands, that it 
immediately convert these long-term temporaries already on the 
payroll to convert them to permanent status.
    NFFE is also troubled by the potential drain this program 
could have on agency training budgets. In this budget-cutting 
era, funding for agency training programs has been stretched to 
the limit. In fact, many of our members have expressed concern 
that their agencies are no longer able to provide them with the 
training they need to excel in their duties. In today's complex 
and increasingly high-tech workplace, employees need to be--
need to receive training if they are to perform their jobs at 
highly skilled levels.
    NFFE is concerned that the need to intensively train these 
new hires will have a dramatic negative impact on the ability 
of agencies to provide training to its current staff, thereby 
reducing the ability of agencies to serve the public. NFFE 
urges the Congress to ensure the agencies receive the funding 
adequate to provide the new hires with the training necessary 
to succeed at their jobs and continue to provide training to 
current employees.
    Finally, Mr. Chairman, I want to highlight a problem that 
the administration may or may not be aware of. The average 
Federal employee is very disturbed by this plan. It is 
important to know that Federal employees are not upset because 
they do not want to help these individuals make a better life 
for themselves, but rather they're upset because they cannot 
understand how, after 4 years of massive downsizing and budget 
cuts, the administration can suddenly find the ability to hire 
and train thousands of new employees. In discussing the 
President's proposal with our membership, the phrase we hear 
most often is ``outrageous.''
    For the last 4 years, Federal employees have suffered 
through the largest job-slashing program in history. We have 
watched countless jobs transfer to the private sector 
contractors, who overcharge and underperform. They have been 
consistently asked to perform an ever-increasing range of 
duties with fewer and fewer resources. They have received 
minimum pay increases that are far below what they're entitled 
to under the law and have been watched with dismay as their 
benefits are cut in the name of budgetary savings. Now these 
employees watch in amazement as the administration declares it 
has the resources to hire, train, and provide benefits for a 
new pool of employees. It's no wonder Federal employees are 
upset, confused, and demoralized.
    The administration needs to do a better job communicating 
the details of this plan to employees. These hard-working and 
dedicated employees deserve to be told how the administration 
will implement this plan, what positions will be filled and 
why, what the impact will be upon current employees and agency 
budgets, and why these new employees may be receiving 
opportunities that former employees are not. American workers 
deserve and demand no less.
    And this concludes my testimony. I will be pleased to 
answer my questions.
    Mr. Mica. Thank you, and we will defer questions to all the 
panelists who testify.
    [The prepared statement of Mr. Hantzis follows:]

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    Mr. Mica. I'll recognize Mr. Robert Rector, with the 
Heritage Foundation. You're recognized, sir.
    Mr. Rector. Thank you very much for the opportunity to be 
here today and to testify about this policy. Unfortunately, I 
find this policy is at best irrelevant, and at worst it creates 
a pattern of discrimination against American citizens, who have 
not been on welfare and Government hiring. It's a very foolish 
policy, and it has nothing to do with reducing welfare 
dependence.
    You know, one would think that if the Clinton 
administration were interested in generating self-sufficiency 
and reducing dependency, that they would go to those 
individuals and those States that have a remarkable track 
record in reducing dependency and generating self-sufficiency. 
Did they do that? Absolutely not.
    Instead what they do is turn to a set of failed, tired 
policies and to a set of advisors who have a perfect track 
record in increasing dependency and come up with a policy that 
is more a press release than an actual mechanism for helping 
the poor.
    We have a kind of myth here that as the welfare state has 
grown and grown and grown since Lyndon Johnson created it, the 
dependence is in some way inevitable, and we're all trying to 
figure out how to reduce dependence. Well, the reality is we've 
known for over 25 years how to reduce dependence. And this city 
has basically spent most of that time trying to prohibit States 
from operating programs that will get people off of welfare and 
into jobs.
    The reality is that it's not all that difficult to reduce 
dependence, and that if we look at States today, such as 
Wisconsin, Oregon, Massachusetts, South Dakota, we can see how 
this is done. In particular, if we look at Wisconsin, which has 
the leading policy in the Nation, we look at the time since 
Governor Thompson took office in Wisconsin, we see that the 
overall AFDC caseload has dropped by an astonishing 55 percent, 
utterly unprecedented. In inner-city Milwaukee, a depressed 
ghetto area, the caseload is down 32 percent, and in the rest 
of the State 70--the caseload has dropped 71 percent. Now, how 
did they do that? And as we speak, the AFDC caseload in the 
city of Milwaukee is continuing to drop at 2 percentage points 
per month. How did they do that? Let me just briefly go through 
it.
    When somebody comes and applies for AFDC in Milwaukee, the 
first thing they do is surprisingly counsel them on the 
negative effects of welfare dependence. Then they offer them 
short-term aid: Is there something we can do to help you not 
get on welfare in the first place; exactly the opposite of what 
every other welfare office does.
    Then they say, look, before you come onto welfare, we're 
going to require you to search for a job for 60 hours to 
essentially earn your right into entry into welfare. And then 
you know what? As soon as you get on welfare, we're going to 
make you work for the benefits that you get. And you know what 
happens when they do that? Roughly 1 out of 3 of the recipients 
coming in and applying for welfare simply turn around and walk 
right back out because they have other options. They don't 
really need to be on welfare in the first place.
    If they do go on and get onto welfare, what they then do is 
say, all right, welfare is no longer a free income. You must 
perform community service work in exchange for the benefits you 
get. If we require you to do 30 hours of work, and you do 15, 
we're essentially going to cut your benefits in half. It's 
called Pay for Performance. And what this means, both in Oregon 
and Wisconsin, is that people who are put under those 
circumstances very, very quickly leave welfare because welfare 
is no longer a good deal for them. They're no longer getting a 
free income for nothing. They must work for their welfare 
income, and all of a sudden taking some other job in the 
private sector is much more attractive.
    Massachusetts, Wisconsin and Oregon have demolished all of 
the prevailing mythology about welfare dependence. They have 
proven to us that what was said in the past is simply not true. 
In the past we've been told welfare recipients want to work, 
but there's no jobs available. It's absolutely untrue, and it's 
disproved every time you put this type of work in place.
    Second, the shortage of day care and transportation means 
people can't get jobs. Absolutely untrue. It's not a 
significant problem. It's not a barrier to self-sufficiency in 
major detail.
    Third, radical drops in caseload will cause huge economic 
deprivation. Simply not the case. These families are much 
better off because they are setting up working role models. And 
these kids are going to benefit because the pattern of 
dependence is being disrupted.
    In reality, there's a revolution going on in welfare all 
across the United States as the national caseload has dropped 
about 20 percent in the last 2 years. That's the biggest drop 
since the Korean water.
    We're essentially in the Jet Age of welfare reform. What 
President Clinton has put forward here is instead a hot air 
balloon from the 18th century. It has nothing to do with 
reducing dependence and will have no effect other than possibly 
to reward those people who have gotten on welfare by giving 
them a Federal job that might otherwise have gone to someone 
else who has not been on welfare. Thank you.
    Mr. Mica. Thank you Mr. Rector.
    [The prepared statement of Mr. Rector follows:]

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    Mr. Mica. And I'll now recognize Mr. James Riccio. He is 
with the Manpower Demonstration Research Corp. Is it Riccio?
    Mr. Riccio. Riccio.
    Mr. Mica. Thank you.
    Mr. Riccio. Thank you.
    The President's initiative raises the question of 
employment potential of the people to whom this initiative is 
targeted, and I would like to comment on what we know from 
research studies about the kinds of people Federal agencies 
itself are likely to find as they begin recruiting from this 
particular labor group.
    I think if anything is clear about adult welfare recipients 
is that they're a very diverse group. Although they share some 
characteristics in common, such as most are single mothers and 
do not have advanced job skills, they differ widely in their 
preparation for work, the severity of the obstacles they face 
in finding and keeping a job, and their actual employment 
experience. So it's risky to generalize.
    As you've heard, nearly half of all welfare recipients do 
not have a high school diploma or GED certificate, and few have 
college degrees. Many, but certainly not all, also score quite 
low on standardized tests. To the extent that employment 
opportunities offered as part of the worker training initiative 
require advanced education, credentials and skills, many 
welfare recipients clearly would not qualify. At the same time, 
about half could be candidates for jobs that required a high 
school diploma or a GED. Many would also bring with them a 
considerable amount of employment experience.
    Despite a mixed educational record, a large proportion of 
welfare recipients, more than most people realize, do have a 
work history or eventually acquire one. Studies of welfare-to-
work programs illustrate this. For example, the study of the 
GAIN program in California, which is the largest welfare-to-
work program in the country, found that as many as 70 percent 
of welfare recipients who entered the program worked at some 
point within the subsequent 5 years, although they did not all 
do so quickly.
    Nonetheless, findings from this study and other data 
suggest that most recipients are at least capable of starting a 
job, even if not immediately. However, job turnover is high. 
This is a big problem that even the most successful welfare-to-
work programs have not solved yet.
    When welfare recipients do work, the jobs they get are 
usually low pay and offer no benefits. For example, the 
recipients in the California program who became employed 
reported on survey that they earned about $6 an hour on 
average, and almost half earned $5 or less. Moreover, only 
about one-third or fewer got any paid sick days, vacation days, 
or health benefits.
    The reasons for job--for high job turnover among welfare 
recipients varied, but in many cases are related to the 
marginal nature of the jobs themselves. In the California 
study, among the people who left jobs, 46 percent left because 
the job itself was not permanent. Recipients were either laid 
off, or the job came to an end.
    In contrast, about 13 percent said they were fired from 
their jobs, and 41 percent said they'd quit. The reasons they 
gave for quitting resolved around seeking more--more suitable 
and better employment, but also, much more commonly, problems 
they experienced at the workplace, changes in family situations 
and illnesses.
    Although most recipients do eventually work, many 
experience times in their lives when serious problems such as 
family emergencies, physical and emotional illnesses, 
disruptions in child care and housing crises make it 
exceptionally difficult for them to work at that time.
    A number of studies suggest that a substantial minority, 
perhaps a quarter, may not reasonably be expected to work at 
any given point in time, even if a suitable job and child care 
arrangements could be made available.
    For many, these problems are likely to be temporary. 
However, given the kinds of jobs welfare recipients tend to 
hold, these problems can quickly jeopardize their employment. 
The lack of benefits such as sick days and vacation days offers 
them little flexibility for dealing with these issues and can 
lead them to quit or be fired.
    Evidence of employer satisfaction with the performance of 
welfare recipients is scarce; however, some information of this 
kind is available on AFDC recipients assigned to unpaid work 
experience or workfare programs in the 1980's. Special surveys 
that were conducted with workfare participants and their 
supervisors in six States help inform this issue. The jobs 
these recipients typically got were entry-level positions, and 
in the opinion of the supervisors and the recipients 
themselves, the work being performed was important to the 
agency and not make-work.
    Most supervisors said that the performance of the 
recipients was as good as that of most entry-level employees, 
and although the programs were small-scale, they offer at least 
some evidence that welfare recipients can be productive 
employees in Government entry-level jobs.
    To summarize, research shows that many welfare recipients 
can and do become capable employees and, given the right 
opportunity, have little difficulty working productively and 
continuously and without unusual levels of supervision.
    Others, however, have more difficulty making the transition 
for a wide variety of reasons, but can succeed with some extra 
assistance and support, and this should be anticipated and 
planned for. Still others, but a much smaller group, face 
exceptionally challenging employment obstacles.
    Finally, it's reasonable to expect that if entry-level jobs 
can be made available in Federal agencies, many welfare 
recipients would be eager to fill them. If those positions 
offered medical benefits and paid sick days, it would be more 
appealing, and perhaps job turnover would be somewhat lower 
than it usually is for this group because most recipients do 
not leave jobs that provide them with such benefits. Thank you.
    Mr. Mica. Thank you for your testimony.
    [The prepared statement of Mr. Riccio follows:]

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    Mr. Mica. And we'll now turn to Charles Tetro, who is 
president of the Training and Development Corp.
    Mr. Tetro. Thank you very much, Mr. Chairman. I appreciate 
the opportunity to be able to speak with this committee today 
and testify before you. I'm joined today by three senior 
program managers from my own organization in case there were 
questions that penetrated beyond my own familiarity. Sandy 
Brawders is executive director of our career advancement 
services in Maine. Vinceretta Henderson runs our career 
advancement services operation in Richmond, VA. And Wayne Tapp 
runs the Penobscot Job Corps center. Each of these people run 
programs for thousands of people, about 40 percent of whom 
historically have been on welfare, so they have a real intimate 
knowledge of this subject. I do share that knowledge as well. 
Sandy ran the House of Ruth here in Washington, DC, for 8 
years, the largest homeless shelter for women in the United 
States. So we come to the table with a considerable amount of 
experience with this issue.
    We also--in summarizing my testimony, as I'm sitting here, 
I was realizing, Mr. Chairman, that you summarized half my 
testimony better than I could have, and I want to use your 
statement and then just focus on one piece I brought with me.
    You said, unless we're addressing the fundamental problems, 
lack of education, training, day care and the like, then we're 
not really doing the right thing as we come to an initiative 
like this. And that was a lot of what I had to say in different 
words in the testimony that I share with you in writing.
    Another thing that I had to say we may not agree about, but 
it's something that I also would like to put before this 
committee today. And as I'm sitting here listening to the 
testimony that's preceded me, it struck me that we all can come 
to this issue, I think, with one conviction that we share and a 
value that we share deeply, and that is the conviction that 
we're a country about opportunity, and we share a value in the 
worth of work. Every single one of us is engaged deeply in it. 
We value it as a society more than many others do. And so we 
sit here today in common in that pursuit.
    Where we seem to come apart is around our perceptions of 
what happens around the issues of work; why people do, and why 
people don't. And as this testimony was coming before you 
today, it struck me that one of the reasons we can seem to 
disagree so much about some of these issues is that we're 
always looking at incomplete pictures. And when we look at 
incomplete pictures, we can amplify aspects of what we see, 
generalize from those things that we see, and form an opinion 
which may or may not reflect the large picture.
    The large picture that welfare reform in this initiative is 
taking place in is a picture of a whole economy, of a whole 
range of labor markets and equations that go beyond labor 
market participation. And to simplify that, it seemed to me, as 
I looked at the issue of work, that every one of us has three 
stark choices to make. We either engage in the legitimate 
economy, we're involved in illicit economic activity, or we 
become dependent. Somehow or another, we end up in one of those 
domains. Most of us in this room have chosen to work and 
succeed in the legitimate economy. But if we weren't, we would 
face those other alternatives, as many other people do.
    When we look at something like the welfare issue, we look 
at it and see things that are appearing to be different, but I 
think they are somewhat the same. We see a miracle in 
Wisconsin, and one that we all ought to look carefully at, 
because much of what was shared in testimony today was quite 
important.
    If we give people good information about how to get 
employed, their inclination is to go and get employed. That's 
why 75 percent of welfare recipients in the past, with a very 
flawed system, sought employment and were employed within 2 
years. It's always been a floor in the secondary labor market 
system. It's been the place passed the job that you couldn't 
find for 75 percent of the people who ended up on welfare.
    We also need to look deeply at what seem to be miracles, 
and Wisconsin may be one because it has, it seems, much of its 
work based on good solid common sense, a set of steps that do 
make sense and do seem to indicate that people taking those 
steps would get jobs.
    But sometimes miracles are posing--are miracles posing as 
something else? And they might be magic, they might be sleight 
of hand. And we need to really study them to learn what they 
have to tell us, because many of us who have worked with these 
people see people often with deep problems. And they're perhaps 
that other 25 percent of people who are the core problem that 
most of us are looking at when we talk about the welfare 
problem in the United States. Most of us aren't really thinking 
about the person who was divorced and went into welfare and 
somehow within a couple of years got a job. We're thinking 
about the person who lives in a culture of dependency for whom 
work has not been part of their experience nor a part of their 
future plans. And I think that when we turn to that population, 
we turn with a very significant burden of effort that's 
required to make this work.
    As my testimony suggests at the end, I think the good news 
in this is that we have currently a vibrant economy. We should 
worry about times when we don't. We also have much more 
knowledge with how to prepare people for work cost-effectively. 
It no longer requires long periods of formal education and 
classrooms at high costs. It can begin very effectively at work 
in workplace settings with workplace-focused learning programs 
and with appropriate support can be successful.
    And I think that as we look to the future of welfare as we 
all want to see it performed, we need to continue to look in 
the direction of guiding people into employment and then 
providing the performance support that's required to make them 
effective once they're there, and that can be accomplished at 
much lower cost than the historical approach of pulling people 
out, putting them into long-term training education programs 
that are unconnected with work, and only after that getting 
them connected with the purpose that they originally were 
identified to the program to pursue, which was work itself.
    Thank you for this opportunity to speak here today.
    [The prepared statement of Mr. Tetro follows:]

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    Mr. Mica. I thank all of our witnesses on this panel.
    I have a couple of questions. To Mr. Hantzis, 
representative of the Federal employees, are you saying ``just 
say no'' to this whole proposal?
    Mr. Hantzis. Mr. Chairman, the most salient point had to do 
with communications here. I believe the Federal workers that we 
represent would like to know what it is that's going on prior 
to just having bombshells dropped in their lap. And what we 
have here is we have a headline that comes forward that says 
the Federal Government is hiring 10,000 welfare recipients, and 
at the same time the big headline in the Federal workforce is 
contracting out, downsizing, RIFs. And so when you throw those 
two things together, you have a cataclysmic reaction that is 
not very favorable.
    Mr. Mica. Well, obviously from what we heard today here all 
the plans aren't together, all the specifics are not there. But 
if there are positions available--and they are--and with folks 
on some of these priority lists--do you have a problem with 
filling them in the fashion described today?
    Mr. Hantzis. The way it has been described by the first 
panel seems very fair and equitable. When you get down to the 
street level and the agencies that we work with daily that are 
agencies in St. Louis, MO, or somewhere else in the field, I 
have to bring to your attention the fact that it's not always 
Mr. King's policies that are followed at that level, too.
    So, yes, I heard what the first panel said, and I'm very 
supportive of what they had to say, but sometimes once it gets 
out into the streets, it's a different policy.
    Mr. Mica. Right.
    Mr. Rector, you had talked about the myth of day care. 
We're impressed by the testimony you gave us, but we still have 
a large number of the individuals on welfare, primarily female, 
who are single parents with dependent children. In order to go 
to work, they must have some assistance. You say that day care 
is available, and that the day care problem that has been 
enunciated is a myth. Could you elaborate?
    Mr. Rector. Certainly. Any credible study that studies 
success rather than failure, which is a policy I would 
recommend, would show that, in fact, day care has never been a 
substantial problem to employment of welfare mothers that has 
been indicated. Particularly in inner-city communities, what 
you have there is an absolute abundance of unemployed women who 
are taking care of kids, and, therefore, any policy that has 
ever had--that has seriously required work does not find an 
absence of day care to be a problem.
    For example, funding has gone up rather dramatically on day 
care in Wisconsin, but it still remains less than 5 percent of 
the total. They're not having any problem with it at all. 
There's no problem in Oregon. You can go back 15 years in this, 
and if you really look at the literature, this is just a myth. 
It's an excuse about why we really can't do welfare reform 
rather than being based on any factual matter.
    Mr. Mica. Mr. Riccio, you had testified that we can succeed 
with taking people from welfare to work if they get the extra 
assistance and support that they need. We just heard the 
comments from Mr. Rector. You also, I think, were here to hear 
the testimony of the first panel. It doesn't sound like they 
have that support system or assistance in place, which is a 
concern to me. Also, the majority of the positions are part-
time, low-paying, no benefits, no health insurance. It doesn't 
appear that, from what I've heard preliminarily, that they have 
set in place a pattern or a plan for providing this extra 
assistance and support for these folks. Would that be your 
assessment?
    Mr. Riccio. I can't assess independently what would be made 
available in terms of the jobs under this initiative, but I 
would say that, for some, that kind of assistance will be very 
important.
    Mr. Mica. But it is essential, you testified----
    Mr. Riccio. And for others.
    Mr. Mica [continuing]. To make this a success----
    Mr. Riccio. It may be for some.
    Mr. Mica [continuing]. Otherwise----
    Mr. Riccio. It may be for some.
    Mr. Mica. Otherwise we go from welfare, to a part-time 
public job, then back to welfare. Maybe not. Maybe.
    Mr. Riccio. I'd say that welfare population is very mixed. 
For some people child care is absolutely essential. Others can 
make informal arrangements that work out. It's a very mixed 
bag. Some people, though, will absolutely need subsidized child 
care in order to work, but not necessarily everybody.
    If the job is part-time, and the parent is working while 
the child is in school, then obviously there's less of a demand 
for child care. Jobs that don't provide health benefits or sick 
days or vacation days make it very difficult for people to cope 
with emergencies that inevitably come up, and if the current 
jobs don't provide those kinds of benefits, they may be subject 
to the same kinds of high turnover rates we typically see.
    Mr. Mica. Is there, Mr. Rector, or Mr. Riccio, any study or 
information on when a welfare individual gets a job in the 
private sector versus the public sector, are there different 
success rates? Mr. Riccio.
    Mr. Riccio. I haven't seen studies with convincing evidence 
on that. I'd say about 19 percent of the folks that have gotten 
employed in the California study were employed in Government 
jobs. Most of the jobs are in the private sector.
    Mr. Mica. Mr. Rector.
    Mr. Rector. Most employment in Wisconsin would be in the 
private sector. But it doesn't really matter that much. What 
really matters is when the individual takes a job, they're very 
apt to lose it again or lose a job. And then what matters is 
what happens? Do you now recycle them back into AFDC and let 
them sit there for a couple years where you apply some extra 
training and stuff and just let the system linger along, in 
which case you're not going to have any drop in caseload.
    What really matters is that then that individual, you have 
to create a push to get them out of welfare, and the way you do 
that is to say, look, if you've lost a private sector job, lost 
a public sector job, you come back to welfare, you must perform 
community service in order to get the benefit. And when I do 
that, in Oregon, for example, six out of seven of the people 
will just turn out and say, oh, guess what, I found a new job 
in the private sector, I'm out of here. They just don't stay on 
welfare if they have to work for their benefits. That's the 
bottom line, and that's what's caused this caseload reduction. 
That's what needs to be done. The rest of this is just--it just 
has very little to do with anything.
    Mr. Mica. Mr. Tetro, I have been concerned about the 
effectiveness of public job training programs. About a year ago 
a study was done in my State of Florida, and there's an article 
about it in the Orlando Sentinel. It was a State study of job 
training and vocational ed programs, and said State and Federal 
Government spend about a billion dollars a year on vocational 
education programs in Florida. Of those who enter a program, 
less than 20 percent complete the program. Of that figure, only 
19 percent found a full-time job, and most of them found a job 
at minimum wage, and most were out of the job within 6 months.
    Ms. Norton is gone, but I just read last week on the way 
home in the April 17th, Washington Post, that the DC job 
training program ranks dead last in the Nation. They spent $7.3 
million in locally raised taxes designated for job training 
programs without training a single person. These are not 
examples of how we spend public money successfully in training 
people for jobs, and it's a great concern for me.
    Now, it's my understanding that your firm has been the 
recipient of substantial Federal dollars in training folks. 
What's your success ratio? I mean, what's it costing to train 
these folks? And is this one of the things we should be looking 
at?
    Mr. Tetro. I definitely think it's one of the things you 
could be looking at, and it's one of the strong agreements I 
would have with some of the earlier statements made by the 
researcher from the Heritage Foundation.
    The way interventions occur matters a lot, and our 
organization has been researched by many research organizations 
over the last 22 years, and I think that one of the things that 
has resulted in the success of our organization is that we've 
been concerned throughout that time not with maintaining 
bureaucratic operations and the status quo, but rather with 
finding solutions to problems.
    A number of years ago, we realized that the design of our 
own organization wasn't as effective as it needed to be, and 
long before re-engineering became a topic of conversation, we 
re-engineered an organization to reduce the overhead that it 
bore by over 40 percent. We automated many of the functions, 
and some of the systems that we built right now are being used 
in over 300 sites across the country managing some of the 
successful initiatives that are underway where people have 
taken this kind of work seriously.
    We took a program much like the one you just described in 
the newspaper over a couple of years ago in Richmond, VA. It 
was the one of the lowest job training programs in the United 
States, and it was certainly the lowest performing in that 
State. And within 1 year we had turned that program around and 
is ending its second year in our management right now, and it 
will be one of the top one or two performers in the State of 
Virginia, which, as you know, has a strong commitment to 
putting people to work and to making the idea of work first a 
reality for welfare recipients as well. We're implementing that 
kind of effort there and as we have for many years in Maine.
    I think that the--all these issues bear real close scrutiny 
and effort. None of it is simple. Job training programs work 
some places and are terrible other places.
    All these things, whether they're schools, job training 
programs, welfare-to-work programs, welfare recipients, 
students, employees, each is a different circumstance than it 
was 5 or 10 years ago. There has been a revolution in this 
country in the economy, in the way learning can take place, in 
the demands placed upon all of us, and in the technologies and 
in the knowledge base that's available to us.
    And those organizations that recognize those changes, that 
are putting that research and knowledge to work, that are 
employing new technologies both to manage those processes and 
to deliver some of those learning results are the organizations 
that are doing the work right and that will be increasingly 
relevant.
    The organizations that are sitting in the past, the way 
most of this welfare bureaucratic apparatus is, are part of the 
drag on change, and they're properly criticized for what they 
don't accomplish.
    But I think what becomes important is to draw these things 
out and to tease up the distinctions between what works. And 
again, I would agree with an earlier panelist. We ought to be 
looking at success. As I mentioned in my testimony, the focus 
of most of these bureaucracies is on failure and on the stories 
of people's continued failures. That's not the place to look. 
The place to look is very--in a very focused way on the results 
people are trying to get to.
    Mr. Mica. I appreciate your testimony.
    Were you trying to get recognized, Mr. Rector, now?
    Mr. Rector. Yes.
    Mr. Mica. OK. If you would like to respond.
    Mr. Rector. Yes. I think the first, most important thing is 
to judge by the bottom line. Maine does not have a particularly 
successful record in terms of reducing dependence. If you look 
at those States that do have successful records in terms of 
reducing dependence, they have very deliberately shifted the 
orientation away from education and training and on to an 
immediate work requirement either through a subsidized job in 
Oregon or through community service in Wisconsin.
    The reality is, for example, that training programs simply 
do not succeed in doing what they purport to do, which is to 
raise the hourly wage rate of the trainee by putting them in 
better jobs. The Labor Department itself did a massive study on 
JPTA, which concluded that it effectively had no impact on the 
hourly wage rate.
    Those people who run successful programs and really 
understand the system understand one thing, that in the current 
context, education and training for recipients is often a 
mechanism for avoiding the work obligation, OK. Everybody who's 
at the ground level in welfare knows that. You give a person, 
well, you can either go here and be a Candy Striper in the 
hospital and clean up the hospital, or you can go over here and 
sit in the classroom for 6 months. The going and sitting in the 
classroom is an avenue to prolonging welfare dependence rather 
than getting off.
    Mr. Mica. Thank you for your comments.
    Well, I guess, if you could just really quickly summarize, 
Mr. Tetro.
    Mr. Tetro. Just a real quick comment because I agree again, 
ironically. The State of Maine is one of those States that has 
left the responsibility of welfare reform in the hands of 
welfare bureaucracy. We think that's a mistake in Maine, and we 
think it's a mistake across the country, and I included that 
comment in my testimony.
    I agree we have to focus these programs on performance 
results, and the answer is in a workplace-based strategy, not 
in a strategy that takes people out of the labor market. And my 
final illustration would be this: We were heavily involved 
early on in helping Maine's Workers Compensation Reform Program 
get underway. And there, as here, the single most important 
determinant was, when you intervened, and if you did it 
immediately, you had a profoundly positive effect. When they 
got in the system, the people were lost in that system and 
stranded in that system. Work first is a very beneficial 
strategy and is what all look forward to.
    Mr. Mica. I appreciate your testimony.
    I yield to the ranking member, Mr. Cummings.
    Mr. Cummings. I'm just curious about some things, Mr. 
Tetro.
    Mr. Tetro. Yes.
    Mr. Cummings. Is all your training, is it on--is it on the 
job training?
    Mr. Tetro. I----
    Mr. Cummings. You disagree with Mr. Rector, and I'm trying 
to see where we fit here.
    Mr. Tetro. OK. Our work--in our work we run Job Corps 
centers, which are residential schools.
    Mr. Cummings. Right. I'm familiar with Job Corps.
    Mr. Tetro. OK, and that's the preponderance of our work. We 
also run career advancement centers.
    Mr. Cummings. But isn't that a program just like a 
program--I mean, Job Corps trains people, and then hopefully 
they go out to work.
    Mr. Tetro. Job Corps trains people and is quite successful 
as a vocational-career-oriented school system in delivering 
those students into work, yes.
    Mr. Cummings. Well, I'm confused. You just said you agree 
with Mr. Rector, and Mr. Rector said that, and correct me if 
I'm wrong, that you need to get people to work, you don't need 
the programs. And I'm trying to--I'm confused as to you--then 
you agree with them, but the very program you run is a very 
program, I take it, that he thinks is a waste of time.
    Mr. Tetro. And again I'd say it all really boils down to 
what you're talking about. When we're speaking in the precise 
ways as we are here, it's confusing.
    Mr. Cummings. Yes it is.
    Mr. Tetro. Work-based learning is powerful. Job Corps 
increasingly does it. It's one of the reasons why as a school 
it's successful and increasingly will be successful. Combining 
learning with work is a very effective strategy.
    What I was agreeing to that he suggested was that getting 
people to work as quickly as possible, and I'm saying in 
delivering the performance support, learning there is a more 
cost-efficient and effective way to do that than our 
alternative ways such as taking people and putting them through 
long periods of school and separate them from work.
    That's not to say that school is bad or that formal 
learning isn't any good. That isn't what I'm saying. But I'm 
saying that when you're looking at delivering in a very focused 
way the result of moving welfare recipients into work, a 
strategy that organizes learning and quickly moves people, that 
employment status is a very powerful one and works.
    Job Corps also works, as do other training programs. We, as 
an organization, bring people into training programs and 
deliver them out very successfully. Over 71 percent of the 
people that come into our programs, all of them are placed at 
the end of the programs. We do longer-term followup than the 
Government. We're interested in making sure that those people 
stick, their employment rates downstream are higher, as one 
would want them to be and expect them to be. Our wage recovery 
rates outperform the national system quite substantially.
    So it's not to say that one shouldn't do programs. It's to 
say that, in coming at this, we can be more sophisticated than 
to talk in simplistic terms about either this way over here or 
that, and need to really look at what the result is we're 
trying to create, what the best strategy is to create it, what 
resources are available to us, and in combination make choices. 
And some of the times those result in long-term programs, and 
other times they can be very quick placement kind of 
activities.
    Mr. Cummings. Mr. Rector, I'm fascinated by your comments 
about child care. As a father who has two kids and who runs 
around and tries to get my children to school and to day care, 
and they have to be at a certain place at a certain time by 6 
o'clock when I'm in Baltimore or else they charge me more, or--
maybe I'm--maybe--children--I'm just confused. I mean, do you 
have children?
    Mr. Rector. Yes.
    Mr. Cummings. Oh, OK. I was just curious.
    I am just curious. It seems to me that that could be and is 
a problem when you don't have child care.
    Mr. Rector. The--I agree. I mean, I think your perception 
is exactly the common perception. In fact, it was my perception 
a couple of years ago, that this was a substantial obstacle. 
The reality is, though, if you go on the ground in a place like 
Milwaukee, it is not.
    Mr. Cummings. Who is keeping the kids?
    Mr. Rector. Who?
    Mr. Cummings. Who is keeping the kids?
    Mr. Rector. Grandma, the aunt, several ladies down the 
street in a day care center, and they are all mixing together. 
And the reality is that there is a whole abundance, perhaps 
more so in these intercity communities than anyplace else in 
the country, an abundance of people available to take care of 
kids.
    Mr. Cummings. Was there any analysis as to the quality of 
the day care? Because I have a 3-year-old and I know it makes a 
difference if the 3-year-old is staying with some lady down the 
street, who may have a sixth grade reading level, as opposed to 
being in some kind of day care.
    And you made an interesting comment, and I want to just 
quote these two things up. In your statement, I don't think you 
mentioned this, but you said something very interesting in your 
written statement. You said studies which compared children on 
welfare with children not on welfare show that it is actually 
welfare dependence not poverty which harms children. Being 
raised on welfare lowers children's IQs, increases school 
failure and diminishes a child's future earnings as an adult. 
Welfare is a system of child abuse. By radically reducing 
dependence, reforms will improve the future well-being of 
children.
    Mr. Rector. That's right.
    Mr. Cummings. All right. So I am trying to put these two 
together.
    Mr. Rector. I would say I thank you for reading that. 
That--the biggest effect in terms of children's development is 
the negative image that they got from having a role model in 
the home, that there is no role model of a working adult. OK? 
Another big advantage is not having a father in the home. Day 
care relative to that is just not that big a deal.
    If the goal is to have kids in some type of very, very 
effective child development program or something like that, 
that's a separate policy goal. OK? And maybe that's a laudable 
goal. But what we can agree on is that the other goal, of 
reducing dependence, OK, is also a laudable goal and that is 
even more important in terms of the child's development.
    So the first and foremost question is, in terms of reducing 
dependence, is there adequate day care out there? And the 
answer is, it is in every community it--where I have these 
programs I have seen put into effect is, yes, it is not a real 
problem. And most of the researchers, particularly Dr. Larry 
Meade, who is the No. 1 researcher in this field, has been for 
10 years, it has never been a substantial problem.
    Now, if you have a separate policy goal--so people can find 
day care. They can get into the labor market. If you have a 
separate policy goal of saying, well, maybe we ought to look at 
whether that's the best day care developmentally and we ought 
to have more subsidies to get them into higher quality care, 
fine. But that's a different issue. It's an additional issue.
    Mr. Cummings. Can we--let's stay there for a moment. Day 
care is expensive. And I know maybe, maybe--I mean, even if you 
are talking about somebody who is keeping a child as a 
relative, I mean, whatever.
    Mr. Rector. Uh-huh.
    Mr. Cummings. And if you already have a low paying job and 
you are paying, even if it is $60--I mean, let's say $60, $70 
every 2 weeks, I mean, that's low, low.
    Mr. Rector. Uh-huh.
    Mr. Cummings. But I am just saying, if you have a limited 
budget, I mean----
    Mr. Rector. The day care----
    Mr. Cummings. Maybe I am in another world or something.
    Mr. Rector. Day care in Oregon and Wisconsin is subsidized. 
They provide an awful lot of subsidized day care. If you look 
in my testimony, Document 5 shows the increase in subsidized 
day care in Wisconsin. But the fact of the matter is that as 
your caseload drops 55 percent, for heaven's sakes, that 
provides the State with just an enormous surplus of funding to 
use for all kinds of day care subsidies.
    Mr. Cummings. Let me ask you----
    Mr. Rector. I mean, that's why, even as the other States 
have done nothing in comparison to Wisconsin, but they are 
beginning to run big surpluses in the AFDC program under the 
new system. They actually are ending up with a lot more money, 
which can go for day care or can go for a variety of different 
things. I would not personally put it into day care. I would 
put it into other things, like school reform, but the surplus 
funds are there that you can provide subsidized day care.
    Now, what they do do in Wisconsin is they do require a 
certain copayment, a small copayment from the parent, on day 
care, which makes the parent a little bit more prudent----
    Mr. Cummings. Sure.
    Mr. Rector [continuing]. In how that money is spent. But 
they are spending a lot of money on day care and they are 
perfectly willing to do that. But they are saving far, far more 
money by--in close to a third of the counties in Wisconsin, the 
caseload has already dropped over 80 percent.
    Mr. Cummings. But you are saying, then, that day care does 
help in Wisconsin then?
    Mr. Rector. It is an absolutely key part of it. But it is 
not that there is a physical shortage of day care and therefore 
people can't get work. OK? There needs to be a subsidy to day 
care, but there is not a physical shortage of day care that 
prevents mothers from taking jobs. And in every situation where 
I have seen a serious work program go in, a shortage of day 
care has never been a major impediment.
    You could go all the way back to a study that we did in the 
late 1970's, called the Seattle-Denver Income Maintenance 
Experiment. It was the biggest controlled experiment on welfare 
in the history of this country and the world. It did not find 
that a shortage of day care was--way back in the 1970's, didn't 
find it was a major impediment to employment.
    Mr. Cummings. But on the other hand--well, I am not going 
to belabor the point, but Wisconsin provides a substantial 
amount of funds for day care.
    Mr. Rector. Absolutely.
    Mr. Cummings. I mean, you have really--I mean, I think we 
agree on that point, I think. But let me go to something else.
    If you were--if you went to Baltimore and you made this 
statement about lowering IQ, and I am sure you have got the 
studies to back it up, I think you would find that you would 
run into some problems, because some of the greatest leaders in 
our city, unfortunately, when they came up, they were on--they 
come from welfare families, and some of the most brilliant 
people in our State.
    As a matter of fact, one of the--the Secretary of Children, 
Youth and Families for the State of Maryland comes from a 
welfare family, where all of her brothers and sisters are--have 
a Masters or above, and the mother was home. And I am not 
trying to defend welfare, because I believe welfare needs to be 
reformed. But the mother was at home. You know, like the 
``Father Knows Best,'' all that kind of stuff. Apparently there 
was some value in a mother being at home with those children to 
raise them.
    I know our society has changed substantially, but I just--I 
am just curious, since you are saying that poverty is welfare 
that causes children to have lower IQs and do poorly in life, I 
am just wondering, you know, what your reaction is to what I 
just said.
    Mr. Rector. Well, clearly that doesn't mean that everyone 
who is raised in welfare is going to be a failure. Obviously, 
we can turn around and in any room find that that's not the 
case. On the other hand, I have always--I have--there are 
people who have jumped out of airplanes without parachutes and 
survived. That's not a policy that I think we would recommend. 
OK?
    The reality is that statistically it is not a good idea to 
jump out of an airplane without a parachute and statistically 
it is not a good idea to be--to have a child out of wedlock and 
raise that child on welfare. OK? That all other things held 
constant, that's going to be a downer for the child. It is 
going to reduce the child's probability of success.
    Does that mean that there won't be 500,000 kids who are 
raised exactly in those circumstances and go on to be brilliant 
successes? Absolutely not. But on average, it is a very 
negative thing. It is something that we want to avoid.
    And I do believe that, in fact, a mother in the home does 
have a positive effect. But you need a whole home environment. 
What I think that is best for kids is a two-parent family, 
particularly for young boys. That father figure in the home is 
very, very important, two-parent family, lots of care and love, 
a model of self-sufficiency, not a negative image of prolonged 
welfare dependence. That's the best model for children to be 
raised in. That's where we are all, I think, trying to go in 
welfare reform.
    Mr. Cummings. I don't have anything else.
    Mr. Mica. I have no further questions of the panel. I think 
you have provided some interesting testimony, if not 
controversial. We appreciate your taking time to be with us and 
contribute today.
    As you see, we have a tough task in overseeing all of 
Federal policy relating to Federal employment, and this is one 
element, one question, and one proposal that we must address. 
We thank you for providing us your comments and testimony. This 
panel is excused.
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    Mr. Mica. I would like to call our last panel, which 
consists of one of our colleagues, Congresswoman Johnson from 
Texas. She has introduced a bill, H.R. 1066, that would 
provide, as I understand it, a preference for those who are on 
welfare for Federal employment. And since her proposed 
legislation dealt with this subject, we thought it would be 
appropriate to hear her proposal today.
    We welcome our colleague. As you know, you are allowed to 
submit additional testimony for the record, but we welcome and 
recognize you to summarize your proposal. Thank you.

 STATEMENT OF HON. EDDIE BERNICE JOHNSON, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Ms. Johnson. Thank you very much, Mr. Chairman.
    I appreciate this opportunity to speak on behalf of the 
Welfare to Work initiative. Programs which create jobs for 
welfare recipients are vital to restoring the family's 
stability and financial security. In light of recent welfare 
laws, such programs are more important than ever.
    I think I will leave the rest of my written testimony for 
submission and simply make a statement.
    Clearly, in order to reform welfare as we have passed, we 
must offer real incentives for people to go to work. And 
actually, it is sometimes just a human frailty to choose those 
persons who might qualify the same as others, but to choose 
those persons that maybe look a little better, dressed a bit 
more upscale and perhaps have had a more consistent work 
history in the past.
    Very, very frequently, those persons leaving welfare and 
going to work are persons who have had to go in and out of the 
workforce because as soon as their children get sick they have 
to quit in order to get health care accessibility. And I have 
lots of experience with this in the State of Texas. That is the 
State with the largest number of working parents without health 
care coverage.
    So when they return to the workforce making very low wages 
usually, it is very difficult for someone to look at a record 
and decide to hire them and give them an opportunity.
    I am simply proposing that we add a 3 percent advantage for 
those persons who are seeking work. It does not interfere with 
the veterans preference. It does not create quotas. It is not 
race-based. It is simply making a little further effort to 
bring persons from the welfare to the workplace.
    We cannot just pass welfare and expect that it is going to 
automatically and magically work. We have to take strong steps 
to make it work, to make sure those opportunities are there to 
put these parents to work. I have visited with them. I have 
worked--I have observed over the years that most of the people 
that I have talked with want to work, but because of the cost 
of health care, because of the wages, most of the persons who 
are on welfare because of poverty and opportunities for the 
lowest income jobs they cannot support a family.
    This is simply an incentive that I ask to be really 
seriously considered, to give a little opportunity, a little 
extra nudge, to the employer, to offer this opportunity to the 
one who is leaving and attempting to go into the marketplace 
for work and leaving the welfare system.
    We simply, as a country, must do this. We must make efforts 
to make opportunities for those people who have not had the 
opportunities in the past. Incentives often have died, simply 
because of the toil of trying to get into the workplace and 
trying to live on very low income wages.
    I think that any further plea would be redundant, but I 
will answer any questions and I will ask unanimous consent to 
submit my written statement to the record.
    Mr. Mica. Thank you. And without objection, your complete 
statement will be made a part of the record.
    [The prepared statement of Hon. Eddie Bernice Johnson 
follows:]

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    Mr. Mica. Could I ask you, first, if you made--I am not 
sure when you introduced your bill, but did you propose this 
before the President's action in directing the agencies to look 
at this, or afterwards?
    Ms. Johnson. Well, I came here with this in mind this year, 
after visiting around my district and around the State. So the 
first year--I am not sure when I actually dropped it in, but it 
was certainly before the President's.
    Mr. Mica. It was before the President's?
    Ms. Johnson. Yes.
    Mr. Mica. Well, my question, then, is, rather than to set 
this into law or a requirement that----
    Ms. Johnson. It works in conjunction now.
    Mr. Mica [continuing]. The Congress must address, could you 
be satisfied or are you satisfied with what the President has 
proposed? And we--this is not an easy thing to implement, even 
his directive to the agencies, and it is not certainly without 
controversy. You missed the first couple of panels here. And it 
is very difficult to implement. The timing couldn't be worse 
because we are in a time of unprecedented RIFs, downsizing.
    Ms. Johnson. It doesn't conflict with the RIFs. It has a 
provision in there that allows it not to conflict with those 
jobs that are at risk and might be RIFed.
    Mr. Mica. Well, they are trying to work through this. The 
President has directed it. It is not mandated by law. But that 
is not satisfactory to you. You would like to see it instituted 
through legislative procedures as you have recommended. And 
that's your bottom line?
    Ms. Johnson. Mr. Chairman, I have been in this business 25 
years. Bottom lines are determined by the numbers of people on 
that committee.
    Mr. Mica. That you can get votes?
    Ms. Johnson. That's right.
    Mr. Mica. I didn't ask you if you had the votes. But you 
are not interested in basically taking the President's 
proposal? You want to pursue this further, legislatively?
    Ms. Johnson. Mr. Chairman, I feel that it will work in 
conjunction with the President's proposal. The reason I feel 
strongly about this proposal is because I know from personal 
experience and from the experience of observation, if two 
people come to apply, and this job will not--there will be no 
obligation to hire this person unless there is an opening, and 
clearly if a RIF is going on where people have to go into other 
areas, those positions will not be advertised until they are 
settled. And then if there is an opening, they are advertised 
as openings.
    If two people walk into a room and one is looking very 
well-groomed and very updated in their attire and seem very 
familiar with the workplace, that welfare recipient who perhaps 
does not have the money to look as well, to have had as 
consistent employment, is not going to be the one chosen unless 
there is some incentive for sensitivity to give that person a 
chance or an opportunity. And that is why I feel very strongly.
    I am interested in relieving us of welfare altogether, but 
we have to have opportunities and incentives for employers and 
employees to be cooperatively surviving together. And one of 
the ways we can do this is to get the attention of the 
employer, and 3 points is not very much. You know, anything 
that causes change is often controversial, and this is a 
change.
    Reforming welfare was a major change and has caused a great 
deal of attention, as well as frustration, questions and 
suspicions. But we have a responsibility to make it work and 
this, I feel, though small, can have some impact in making it 
work.
    Mr. Mica. Well, I appreciate the intent of your proposal. 
The premise, though, that in Federal employment that someone 
who comes in that is dressed or looks better, to my knowledge 
employment, Federal employment, isn't conducted or applicants 
aren't considered on that basis. I think it is pretty much a 
blind assessment of the individual, but based on the 
qualifications they set forth on paper.
    All things being equal, you would be giving a 3 
percentage--or 3 point preference to folks. And we must 
preserve that equality and standard of employment in our merit 
system so these folks would be picked out.
    We heard testimony earlier that we have tens of thousands 
of people who have been RIFed or have been laid off and are 
even on priority waiting lists to come back on and they have no 
preference.
    Ms. Johnson. They are given preference in this bill because 
it does not compete with those persons who are in the RIF 
situation.
    Mr. Mica. OK. Well, but you have set up a preference for 
them then. You address that problem?
    Ms. Johnson. Yes. But the preference only begins after the 
RIFed employees are taken care of. It does not compete with 
veterans. It does not compete with----
    Mr. Mica. It may be a nonprogram then because of the 
backlog that we have. That may not be the case.
    Ms. Johnson. Sure.
    Mr. Mica. Again, I just wanted to point out that 
difference, as I see it. Everyone should be treated equally, 
blindly and fairly in the selection process, but will receive 
this preference within the guidelines which you have set forth?
    Ms. Johnson. Mr. Chairman, let me say this: I have been a 
Federal employee in a supervisory position most of my career. I 
know what happens in the workplace. I have been pretty much a 
supervisor or some senior level person within Federal 
Government the majority of my years as an adult, starting at 
age 19 as I graduated from nursing, going to work at the 
Veterans Administration Hospital and being a head nurse by age 
21. I have seen what happens in the Federal workplace.
    I simply want to encourage opportunity for those we want to 
take care of themselves. I believe strongly that people ought 
to be self-sufficient, but I also know from experience that 
they cannot be without an opportunity. And these are the people 
who have the least opportunity. They are white, they are black, 
they are Hispanic, all over this country. And in Texas, the 
majority of them are white.
    I am not attempting to add another layer of quotas for 
minorities, except for the fact that these are people trapped 
at the bottom because of their opportunity and income 
limitation. I simply plead for a little helping hand to be sure 
that we accomplish what we intend when we make welfare work, 
and the only way we make it work is to provide opportunity for 
work.
    And I thank you for consideration.
    Mr. Mica. I thank you.
    Ms. Johnson. Please don't shut it out. Think about it a 
little longer.
    Mr. Mica. We have----
    Ms. Johnson. I am depending on you.
    Mr. Mica. We have opened the opportunity for you to testify 
and discuss the measure. Now, I would like to yield to our 
ranking member, Mr. Cummings.
    Mr. Cummings. I just have a few questions, Congresswoman 
Johnson. I certainly understand your concern, and I admire you 
for your commitment. It is a difficult problem, and I do 
understand what you say when you say that you are trying to 
help some people who oftentimes are passed over.
    My question goes to a little bit earlier somebody said 
something here that was very interesting. They said that they 
did not want to create a situation where it was attractive to 
be on welfare and then--so that you could accomplish some 
things. We see that--and I am just wondering--do you understand 
the concern?
    Ms. Johnson. Yes, sir. That reminds me of somebody saying 
the only reason somebody had another baby is because they are 
going to get a little bit more on welfare. I think it is the 
same false theory.
    Mr. Cummings. Well, could you elaborate?
    Ms. Johnson. Yes. Very honestly----
    Mr. Cummings. I am not saying I agree with it, but I just 
wanted you to address that concern.
    Ms. Johnson. Sure. I have heard so many times that welfare 
recipients have more babies because they will get more money. 
Well, in Texas, the most you will ever get for all of your life 
in Texas is $56 a month for Aid to Dependent Children. Nobody 
can live on that. That is not an incentive.
    But when people are trapped at the bottom, they do lose 
encouragement. They lose the sense of having an opportunity. 
And unless there is some kind of understanding of those persons 
in charge of hiring, they are trapped. Unless there is some 
opportunity where they can be consciously looked upon as 
someone that must be helped to work, they are trapped out of 
the system.
    They cannot make it independently, and that's what we all 
strive for is independence and self-supportiveness. We have got 
to do something.
    Mr. Cummings. You know, it was very interesting. A little 
bit earlier the folks who testified from the Government made a 
big deal of saying that the President's proposal is one which 
will treat everybody pretty much the same across the board.
    In other words, they were targeting people who were on 
welfare trying to get them off of welfare, but that if somebody 
came in--and I call them, say, the working poor--the working 
poor comes in, and they are alongside somebody on welfare, that 
they would all be treated the same.
    And as you know, there are a lot of people who would never 
accept a dime of welfare, no matter what. They just wouldn't do 
it. They would dig a ditch before they would do that.
    Ms. Johnson. My parents were that way.
    Mr. Cummings. Yes, mine were, too. So I am wondering, does 
this--and I haven't read your proposal, but does this give an 
advantage if over--let's say, for example, our parents came in 
and they really hit hard times, couldn't find any other way and 
after several years of working hard and doing the best they 
could with what they had and then they come in at the same time 
someone who has been on welfare comes in, I mean, is that--
would your legislation give them an advantage over somebody 
like our parents?
    Ms. Johnson. I think to a certain degree, it would. And the 
reason why is because initial jobs, the initial effort to get 
into the workplace, from the welfare system, is what it 
targets. And if there are persons who are already working, then 
clearly although they might be making less at that point, it 
does still give the incentive to that person leaving the 
welfare roll to come into the workplace.
    Mr. Cummings. I don't know whether you were here a little 
bit earlier--and this is my last comment--when Mrs. Norton was 
here, one of the things she talked about was the significance 
of having a job, of just getting a job and so that you could 
create some kind of work record so that--and it sounds like you 
are saying pretty much the same thing, that that is a 
significant thing. I guess there is a difference between 
someone who has had a track record and someone who has no track 
record.
    Ms. Johnson. Yes. Because often what happens is that 
persons who are working, who are in that category that you 
mentioned, will have to stop working and go into the welfare 
system if a child gets sick. And when they are in that 
situation where they have been off or had to quit because of 
that, then they qualify to go to--to use that 3 point 
incentive, simply because the other opportunities are not there 
if you can't buy them.
    If your job is such, and most--and that's where you don't 
have insurance is low-income workers. It is rare that poor 
children go from birth to adulthood without illnesses. The 
risks are higher; the living situations; the food content or 
even the knowledge of attempting to eat correctly, the risk of 
having to do a number of things that middle and upper income 
people don't even have to deal with in getting to school, or 
leaks in the home, the illness is much more likely for children 
in poverty. Therefore, their parents are often in and out of 
the workforce because they do not have access.
    Those are the ones that don't have access to health care 
because they don't qualify for Medicaid if they are working and 
cannot afford--or the companies do not afford them the 
opportunity to buy their own insurance. I mean, in Texas, we 
are working to try to get opportunities for people to simply 
buy their own health insurance coverage. Often, that 
opportunity is not offered from jobs.
    Mr. Cummings. Thank you.
    Ms. Johnson. Thank you.
    Mr. Mica. Well, I thank our colleague----
    Ms. Johnson. Thank you very much.
    Mr. Mica [continuing]. For coming forward with her 
proposal. As you know, the administration is having a tough 
sale with their proposal just in their directive. So I don't 
want to be too encouraging, but we do want you to have a forum 
to present your proposal.
    Ms. Johnson. Sure. I thank you very much, Mr. Chairman. Let 
me say that if you like it and don't like the administration's, 
don't hold it against me. If it works, you know, you put it 
together. But put me in my category of trying to really help 
and do the best I can to try to see if we can get this.
    Mr. Mica. You have been around a long time.
    Ms. Johnson. I know you don't care much for this 
administration.
    Mr. Mica. A lot longer than both Mr. Cummings and myself, 
and you know the process and the consensus building that is 
required to make any proposal a law or prevail here.
    Ms. Johnson. Well, let me ask this: Are you saying that if 
the administration endorses this, it will have a better chance?
    Mr. Mica. Oh, certainly, certainly. And we asked them that 
question earlier.
    Ms. Johnson. OK.
    Mr. Mica. And they are noncommittal at this time.
    Ms. Johnson. OK.
    Mr. Mica. So I think it wouldn't hurt for you to discuss 
your proposal with the administration.
    Ms. Johnson. Thank you.
    Mr. Mica. The more support from any corridor you can 
generate here, the better.
    Ms. Johnson. Thank you. I will start by asking you and if 
you lead the way, I will get the rest of it.
    Mr. Mica. Well, I thank you. I will yield on that to our 
ranking member who just joined us today. We will work together, 
and we do appreciate your willingness to come forward. It fit 
in perfectly with the subject and matter under consideration as 
the initial proposal by the administration. So we thank you.
    Ms. Johnson. Thank you.
    Mr. Mica. There being no further business to come before 
the subcommittee, this meeting is adjourned.
    [Whereupon, at 1:10 p.m., the subcommittee was adjourned.]
    [Additional information submitted for the hearing record 
follows:]

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