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



 
                      OVERSIGHT OF WELFARE REFORM

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

                                HEARING

                               before the

                    SUBCOMMITTEE ON HUMAN RESOURCES

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED FIFTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 19, 1998

                               __________

                             Serial 105-80

                               __________

         Printed for the use of the Committee on Ways and Means


                                


                      U.S. GOVERNMENT PRINTING OFFICE
 58-826 CC                   WASHINGTON : 1999



                      COMMITTEE ON WAYS AND MEANS

                      BILL ARCHER, Texas, Chairman

PHILIP M. CRANE, Illinois            CHARLES B. RANGEL, New York
BILL THOMAS, California              FORTNEY PETE STARK, California
E. CLAY SHAW, Jr., Florida           ROBERT T. MATSUI, California
NANCY L. JOHNSON, Connecticut        BARBARA B. KENNELLY, Connecticut
JIM BUNNING, Kentucky                WILLIAM J. COYNE, Pennsylvania
AMO HOUGHTON, New York               SANDER M. LEVIN, Michigan
WALLY HERGER, California             BENJAMIN L. CARDIN, Maryland
JIM McCRERY, Louisiana               JIM McDERMOTT, Washington
DAVE CAMP, Michigan                  GERALD D. KLECZKA, Wisconsin
JIM RAMSTAD, Minnesota               JOHN LEWIS, Georgia
JIM NUSSLE, Iowa                     RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas                   MICHAEL R. McNULTY, New York
JENNIFER DUNN, Washington            WILLIAM J. JEFFERSON, Louisiana
MAC COLLINS, Georgia                 JOHN S. TANNER, Tennessee
ROB PORTMAN, Ohio                    XAVIER BECERRA, California
PHILIP S. ENGLISH, Pennsylvania      KAREN L. THURMAN, Florida
JOHN ENSIGN, Nevada
JON CHRISTENSEN, Nebraska
WES WATKINS, Oklahoma
J.D. HAYWORTH, Arizona
JERRY WELLER, Illinois
KENNY HULSHOF, Missouri

                     A.L. Singleton, Chief of Staff
                  Janice Mays, Minority Chief Counsel

                                 ______

                    Subcommittee on Human Resources

                  E. CLAY SHAW, Jr., Florida, Chairman

DAVE CAMP, Michigan                  SANDER M. LEVIN, Michigan
JIM McCRERY, Louisiana               FORTNEY PETE STARK, California
MAC COLLINS, Georgia                 ROBERT T. MATSUI, California
PHILIP S. ENGLISH, Pennsylvania      WILLIAM J. COYNE, Pennsylvania
JOHN ENSIGN, Nevada                  WILLIAM J. JEFFERSON, Louisiana
J.D. HAYWORTH, Arizona
WES WATKINS, Oklahoma


Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Ways and Means are also published 
in electronic form. The printed hearing record remains the official 
version. Because electronic submissions are used to prepare both 
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unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.



                            C O N T E N T S

                               __________

                                                                   Page

Advisory of March 12, 1998, announcing the hearing...............     2

                               WITNESSES

U.S. Department of Health and Human Services, Hon. Olivia A. 
  Golden, Ph.D., Asistant Secretary for Children and Families....     6
U.S. Department of Commerce, Bureau of the Census, Daniel H. 
  Weinberg, Division Chief, Housing and Household Economic 
  Statistics.....................................................    69
U.S. Department of Health and Human Services, Howard Rolston, 
  Ph.D., Director, Office of Planning, Research and Evaluation, 
  Administration for Children and Families.......................    79

                                 ______

Anne Arundel County Department of Social Services, Vesta Kimble..    42
Florida Department of Children and Families, Don Winstead........    36
Los Angeles County Department of Public Social Services, Frank 
  Mora...........................................................    49
Nathan, Richard P., Nelson A. Rockefeller Institute of 
  Government, University of New York.............................    65
National Center for Children in Poverty, Barbara Blum............    84
Wisconsin Department of Workforce Development, J. Jean Rogers....    28



                      OVERSIGHT OF WELFARE REFORM

                              ----------                              


                        THURSDAY, MARCH 19, 1998

                  House of Representatives,
                       Committee on Ways and Means,
                           Subcommittee on Human Resources,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 11:13 a.m., in 
room B-318, Rayburn House Office Building, Hon. E. Clay Shaw, 
Jr. (Chairman of the Subcommittee), presiding.
    [The advisory follows:]

ADVISORY

FROM THE COMMITTEE ON WAYS AND MEANS

                    SUBCOMMITTEE ON HUMAN RESOURCES

FOR IMMEDIATE RELEASE                            CONTACT: (202) 225-1025
March 12, 1998
No. HR-10

                       Shaw Announces Hearing on
                      Oversight of Welfare Reform

    Congressman E. Clay Shaw, Jr., (R-FL), Chairman, Subcommittee on 
Human Resources of the Committee on Ways and Means, today announced 
that the Subcommittee will hold an oversight hearing on implementation 
of the Temporary Assistance for Needy Families (TANF) block grant. The 
hearing will take place on Thursday, March 19, 1998, in room B-318 of 
the Rayburn House Office Building, beginning at 11:00 a.m.
      
    In view of the limited time available to hear witnesses, oral 
testimony at this hearing will be from invited witnesses only. 
Witnesses will include representatives from the Administration, State 
welfare directors, local welfare programs, the Census Bureau, the U.S. 
Department of Health and Human Services, and universities. Any 
individual or organization not scheduled for an oral appearance may 
submit a written statement for consideration by the Committee and for 
inclusion in the printed record of the hearing.
      

BACKGROUND:

      
    The ``Personal Responsibility and Work Opportunity Reconciliation 
Act of 1996'' (P.L. 104-193), created the TANF block grant, a new cash 
welfare program.
      
    This is the first hearing the Subcommittee will conduct this year 
to review the implementation and effects of welfare reform. Future 
hearings are expected to focus on impacts of the Temporary Assistance 
for Needy Families program on children and families, as well as 
implementation and impacts of the 1996 reforms of the Child Support 
Enforcement and Supplemental Security Income programs.
      
    The Subcommittee is interested in specific examples of how reforms 
are now being implemented at the State and local level. The 
Subcommittee will also review the major research information that will 
become available over the next several years that Congress, the 
Administration, scholars, advocates, and interested citizens can use to 
examine the impacts of welfare reform.
      
    In announcing the hearing, Chairman Shaw stated: ``Most of the 
provisions of the 1996 welfare reform law have now been implemented by 
every State. This is the first in a series of hearings and other 
activities that our Subcommittee will conduct over the next several 
years to carefully study the impacts of the welfare reform law.''
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Any person or organization wishing to submit a written statement 
for the printed record of the hearing should submit at least six (6) 
single-space legal-size copies of their statement, along with an IBM 
compatible 3.5-inch diskette in ASCII DOS Text or WordPerfect 5.1 
format only, with their name, address, and hearing date noted on a 
label, by the close of business, Thursday, April 2, 1998, to A.L. 
Singleton, Chief of Staff, Committee on Ways and Means, U.S. House of 
Representatives, 1102 Longworth House Office Building, Washington, D.C. 
20515. If those filing written statements wish to have their statements 
distributed to the press and interested public at the hearing, they may 
deliver 200 additional copies for this purpose to the Subcommittee on 
Human Resources office, room B-317 Rayburn House Office Building, at 
least one hour before the hearing begins.
      

FORMATTING REQUIREMENTS:

      
    Each statement presented for printing to the Committee by a 
witness, any written statement or exhibit submitted for the printed 
record or any written comments in response to a request for written 
comments must conform to the guidelines listed below. Any statement or 
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but will be maintained in the Committee files for review and use by the 
Committee.
      
    1. All statements and any accompanying exhibits for printing must 
be typed in single space on legal-size paper and may not exceed a total 
of 10 pages including attachments. At the same time written statements 
are submitted to the Committee, witnesses are now requested to submit 
their statements on an IBM compatible 3.5-inch diskette in ASCII DOS 
Text or WordPerfect 5.1 format. Witnesses are advised that the 
Committee will rely on electronic submissions for printing the official 
hearing record.
      
    2. Copies of whole documents submitted as exhibit material will not 
be accepted for printing. Instead, exhibit material should be 
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    3. A witness appearing at a public hearing, or submitting a 
statement for the record of a public hearing, or submitting written 
comments in response to a published request for comments by the 
Committee, must include on his statement or submission a list of all 
clients, persons, or organizations on whose behalf the witness appears.
      
    4. A supplemental sheet must accompany each statement listing the 
name, full address, a telephone number where the witness or the 
designated representative may be reached and a topical outline or 
summary of the comments and recommendations in the full statement. This 
supplemental sheet will not be included in the printed record.
      
    The above restrictions and limitations apply only to material being 
submitted for printing. Statements and exhibits or supplementary 
material submitted solely for distribution to the Members, the press 
and the public during the course of a public hearing may be submitted 
in other forms.

      
    Note: All Committee advisories and news releases are available on 
the World Wide Web at ``http://www.house.gov/ways__means/''.
      

    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four 
business days notice is requested). Questions with regard to special 
accommodation needs in general (including availability of Committee 
materials in alternative formats) may be directed to the Committee as 
noted above.
      

                                

    Chairman Shaw. We're just a few minutes late starting, 
because there were two votes on the floor that we had to get 
behind us. But we should go undisturbed now for a good while.
    Welcome to the Subcommittee, our Members and guests.
    It has now been more than 18 months since we passed the 
historic welfare reform law in 1996. Early indications are that 
States have taken great strides to reform their welfare 
programs.
    It is now time for our Subcommittee to begin a careful and 
thorough examination of what is actually happening at the State 
and local level, and of the impact of all this vigorous 
activity on the Nation's poor children and families. This 
morning, I personally reviewed with Mayor Penelas some of the 
problems he's having down in Miami-Dade, and some of his 
successes, too.
    Today we begin that process. We have asked the 
administration, with whom we have worked very closely and 
productively since enactment of the welfare reform law, to give 
us their views on the early stages of implementation. I'm 
looking forward to hearing Assistant Secretary Golden's views 
on what has been accomplished thus far and potential problems 
that still lie on the horizon.
    Then we are going to hear from two panels of invited 
witnesses who will help us establish the groundwork for 
subsequent hearings. The first panel consists of 
representatives from two States and two local programs who will 
describe for us the actual reforms that have been put in place. 
I think it is vital that Members of this Subcommittee, as well 
as scholars, advocates and the American public, understand the 
specific reforms that States and localities are now 
implementing.
    The evidence presented by these witnesses will show that 
the Nation's welfare programs are being transformed into 
something very different than the checkwriting operations of 
the past. The second panel will summarize the information that 
is now starting to become available to evaluate the impacts of 
welfare reform.
    The Subcommittee was very conscious of the importance of 
evaluating welfare reform. Thus, we included a three-part 
strategy for evaluation in our original bill, and then fought 
to retain these provisions in the final bill.
    First, we completely revamped State data reporting 
requirements. With the help of HHS and the States, we should 
soon have better State reported data than ever.
    Second, we gave HHS the money and authority to select 
interesting welfare reform programs to evaluate using 
scientific methods. Third, we gave a healthy sum of money to 
the Census Bureau to follow a large group of families over many 
years and to collect extensive information on children.
    Today, we will hear about all three of these evaluation 
strategies, plus other evaluation activities that are now in 
various stages of implementation.
    I'm also going to take advantage of this occasion to call 
everyone's attention to the fine study on welfare reform just 
published jointly by the University of Maryland School of 
Public Health and the State of Maryland. Based on a random 
sample of welfare recipients who left the rolls, this study 
contains information about some families who have been off of 
welfare for as long as 9 months.
    The study found that about half of the families were 
working at the time they left welfare, that the percentage of 
families working increased somewhat over the 9-month period, 
and that very few children became involved with the child 
protection system. I congratulate the State of Maryland for 
conducting this careful study, and hope that other States will 
follow this example.
    I know Mr. Cardin said he would try to join us today when 
that testimony takes place. Copies of the study are available 
on the table in the hearing room.
    Whatever else might be said about welfare reform, there are 
very significant changes now taking place in the Nation's 
welfare programs at the State and local level. Our Subcommittee 
has a responsibility to document these reforms and to study 
their impacts.
    I look forward to the testimony from today's distinguished 
witnesses that will get us started on this long and complex 
journey of evaluation.
    Mr. Levin.
    Mr. Levin. Thank you, Mr. Chairman.
    This is the first in what I hope will be a continuing 
series of efforts by this Subcommittee to assess the progress 
and problems of welfare reform. Clearly, we have taken some 
encouraging steps. Welfare rolls have dropped substantially, 
and large numbers of people have moved from welfare to work.
    Most States have taken their responsibility seriously, and 
are providing support services necessary for both parents and 
their children to transition from an income-based to a work-
based system. The environment and attitude within 
administrative structures are being transformed to place 
emphasis on the value of a paycheck.
    A real sense of partnership is evolving between local, 
State, and Federal administrative entities, replacing the 
adversarial relationships that existed in the past.
    There are also areas that need our continued vigilance. In 
a substantial portion of the transitions to work, the type of 
employment is in a low-wage job, raising questions of the 
danger of recycling from one low-wage position to another, of 
the need for additional training and the persistence of 
families at an income level below the poverty level.
    It is unclear also to what extent the persons remaining on 
the rolls present the more difficult challenges, those with 
lesser skills and those with more serious personal and health 
problems. And whether structures are in place to meet these 
challenges, and continue the very substantial progress of 
moving people off of welfare to work.
    Major progress to date has occurred during a period of 
historic, continuing prosperity. And it remains uncertain as to 
whether there are structures adequately in place to respond to 
a period of recession in order to sustain and continue the 
processes of welfare reform.
    There remains a need to sustain adequate tracking of 
recipients in other research to evaluate what is happening with 
this population, and of the various causes of the major 
successes today, in order to understand the continuing high 
rate of poverty among children. We must work to identify the 
adjustments needed to continue the vital changes in our system.
    This is indeed an important hearing, and I congratulate the 
Chairman for holding it. I hope and believe that the spirit 
among all of us will be a collaborative one, without regard to 
party affiliation, without regard to what our positions were at 
each step of the legislative process, or whether we supported 
the legislation that ultimately prevailed, as I did, or not.
    We as lawmakers, the entire Nation, and most importantly, 
children, have a major stake in seeing individuals move 
successfully from welfare to work and remaining there. The 
value and dignity of work is a key bedrock in the past, 
present, and future health of this Nation, and the life of its 
families. We cannot afford to lose this effort and this 
experiment, and must work to ensure that it spreads to all 
Americans.
    Chairman Shaw. Thank you, Mr. Levin.
    Our first witness will be Hon. Olivia A. Golden, Assistant 
Secretary for Children and Families, U.S. Department of Health 
and Human Services. It's a pleasure to welcome you back to this 
Subcommittee. I believe this is the first time since your 
confirmation that you have appeared, so it's no longer Acting 
Secretary.
    Ms. Golden. That's right.
    Chairman Shaw. We are pleased to see you back and look 
forward to your testimony.
    We have your full testimony, as we have the full testimony 
of all the witnesses that will be placed in the record, and we 
would invite all witnesses to summarize. We've got many 
witnesses today, and I want to try to move the hearing along as 
fast as we can.
    Dr. Golden.

STATEMENT OF HON. OLIVIA A. GOLDEN, PH.D., ASSISTANT  SECRETARY 
  FOR  CHILDREN  AND  FAMILIES,  U.S. DEPARTMENT OF HEALTH AND 
                         HUMAN SERVICES

    Ms. Golden. Thank you very much.
    Thank you for the opportunity to appear before you today to 
discuss implementation of the TANF, Temporary Assistance for 
Needy Families Program, with a focus on State implementation, 
the new Federal role, and upcoming plans. I appreciate this 
Subcommittee's efforts and yours, Mr. Chairman, to work with us 
in turning welfare reform into a reality.
    Over the past 2 months, I have spoken with families, with 
private employers, with welfare workers, with community 
leaders, with State and local policymakers and elected 
officials about how welfare reform is proceeding.
    In a recent trip to New Hampshire, I talked to a young 
mother who had just started a job and left welfare. She spoke 
with great passion about her joy and her children's joy after 
she accepted the job. She had gone to a clerical training 
program and found child care through the welfare agency, and 
she receives regular child support, which is critical to paying 
the bills.
    I would now like to provide an overview of our earliest 
findings on the effects of welfare reform and what we know 
about changes in State policies and practice. And there's much 
more detail in my written statement. More recipients are now 
working, and more of those who have left the rolls are working. 
Interim findings from the national evaluation of welfare-to-
work strategies and State welfare reform demonstrations 
indicates significant increases in the employment levels of 
recipients and former recipients.
    States generally are maintaining their investments in poor 
families. We have not seen a race to the bottom. For example, 
22 States have reported that they exceeded the 80-percent 
maintenance-of-effort level for fiscal year 1997.
    States are beginning to focus more attention on the hard-
to-serve and fragile families. For example, 25 jurisdictions 
have elected the family violence option to ensure that victims 
of domestic violence receive appropriate protections and 
services. States are beginning to focus their welfare offices 
on employment and are taking a variety of steps to reinforce 
the work message. Welfare offices are working closely with the 
State employment service, one-stop career centers, JTPA, Job 
Training Partnership Act, Programs and community colleges to 
place welfare recipients into jobs.
    We have continued to see dramatic declines in welfare 
caseloads. Since August 1996, 2.4 million recipients have left 
the rolls. And at the Federal, State and community level, new 
partnerships are being forged. government is collaborating with 
business, community organizations, transportation providers, 
the media, and religious leaders, to help move families to 
work.
    Key elements of ACF's new role at the Federal level include 
coordination, technical assistance, research and 
accountability. We've expanded our network of Federal partners 
to improve the coordination of Federal programs, we've been 
working with the Department of Labor on implementation of the 
$3 billion welfare-to-work grants, and on our data collection 
and evaluation responsibilities under those grants.
    The Departments of Housing and Urban Development, 
Transportation, Education, Agriculture, and the Small Business 
Administration have joined us in related efforts to move 
families from welfare to work.
    Our technical assistance initiatives will ensure that 
States, local governments and their community partners have 
access to the information they need to accomplish their goals 
for families. We are using models, onsite visits, contracts, 
and conferences to support State and local implementation 
efforts. We also collect and disseminate information on 
promising practices.
    Another key component of the Federal role has been to 
ensure State accountability in key program areas, and to 
promote high performance. In November, we issued a proposed 
rule which covered the major TANF provisions on work, 
penalties, and data collection. We are reviewing comments and 
anticipate publication of final rules by the end of the fiscal 
year.
    This month, we issued the proposed rule on bonuses for 
States that are most successful in reducing out of wedlock 
births. And we also just issued key guidance on the formula we 
will use for awarding the high-performance bonuses to States in 
fiscal year 1999, based on their performance this year. This 
summer, we expect to publish a proposed rule that will address 
the high-performance bonus for future years.
    Our research and evaluation efforts are critical to the 
achievement of the goals of welfare reform. Howard Rolston, 
Director of the Office of Planning, Research and Evaluation for 
ACF, is a member of the upcoming panel on research, and will 
provide a fuller discussion.
    Just to highlight some key points, first, States have 
myriad options available to them under welfare reform, and need 
information about which strategies are most effective. 
Fortunately, the evaluation efforts we began under prior law 
have given us useful information and will continue to produce 
more in the years to come. Disseminating information on the 
results of this research is one of ACF's major upcoming tasks.
    The second challenge we face is to get better information 
about what is happening to families who are leaving assistance. 
To answer this challenge, we worked with the National 
Governors' Association, the American Public Welfare 
Association, and the National Conference of State Legislators 
to sponsor a conference that examined the information available 
on ``leavers,'' and will be compiling a summary of followup 
studies.
    And finally, we're supporting research in five States that 
will look indepth at the effects of welfare reform on children. 
At this early stage of welfare reform, we believe that 
implementation is proceeding on the right track. We are hearing 
from States and communities about what they view as the 
critical next steps.
    First, supporting States, communities, and employers as 
they focus on job retention and earnings after the initial 
placement. Second, working with States to provide supports so 
that all families, including the hardest to serve, can succeed. 
Third, completing the transformation of welfare agencies into 
job centers, and fostering community-based approaches to 
reform. Fourth, completing the developing of a regular, 
reliable system for collecting necessary data. And fifth, 
improving our understanding about the effects of these changes 
on children and families.
    At the Federal level, the Clinton administration and the 
Congress have worked for social policies to help ensure that 
work pays, including family leave, a higher minimum wage, an 
expanded EITC, the new child credit, the work opportunity and 
welfare-to-work tax credits, and increased child support 
collections. The President's budget would build on these 
successes by providing additional supports, such as targeting 
substantial new child care funds to low-income working families 
who are struggling to stay off welfare.
    In closing, I would like to express my appreciation to the 
Subcommittee, and I look forward to future conversations about 
the progress of welfare reform.
    I would be happy to answer any questions at this time.
    [The prepared statement follows:]

Statement of Hon. Olivia A. Golden, Ph.D., Assistant Secretary for 
Children and Families, U.S. Department of Health and Human Services

    Thank you for the opportunity to appear before you today to 
talk about the implementation of welfare reform. I appreciate 
this Subcommittee's efforts to work with us in turning this 
historic piece of legislation on welfare reform into a reality. 
In light of the Subcommittee's interests, I will focus my 
remarks on the implementation of the Temporary Assistance for 
Needy Families--or TANF--program, including the patterns that 
have begun to emerge about state implementation, the new 
federal role, and upcoming plans.
    Our information comes from state plans and preliminary 
financial data and program data reported by the states. In 
addition, I learn directly about what states are doing when I 
travel and speak with those who are designing welfare reform 
and those who are impacted by it.
    Over the past two months, I have spoken to families, 
private employers, welfare workers, community leaders, state 
and local policy-makers, and elected officials about how 
welfare reform is proceeding. I have heard over and over about 
the dignity of work and about the kinds of supports communities 
and states are seeking to put in place as families move from 
welfare to work. For example, in one of my recent trips, to New 
Hampshire, I talked to a young mother who had just started a 
job and left welfare. She spoke with great passion about her 
joy and her children's joy. ``I was jumping up and down. They 
were jumping up and down. I was on cloud nine for a week after 
accepting the job.'' To help her make the step to employment, 
she had gone to a clerical training program and found child 
care through the welfare agency, and she received regular child 
support that was critical to paying the bills.
    Today, I would like to provide some information about our 
earliest findings on the effects of welfare reform and an 
overview about what we know about changes in state policies and 
practice. I also will discuss the new federal role, the steps 
we have taken at the federal level to assume our new 
responsibilities under the Act, and will indicate the 
additional steps we will be taking to move this important 
agenda forward.

                            WHAT DO WE KNOW?

    I would now like to share with you some preliminary 
observations on the impacts of welfare reform. These are 
preliminary because while many states began their welfare 
reform efforts under waivers, TANF programs have been in place 
only a short period of time and are still evolving. We will 
learn more over the coming months and years about the progress 
of welfare reform as states make further decisions about the 
design of their program and data is gathered on the state's 
choices and their impacts.
    Keeping this caution in mind, we are seeing that:
    More recipients are now working, and more of those who have 
left the rolls are working. Interim findings from the National 
Evaluation of Welfare to Work Strategies and State Welfare 
Reform Demonstrations indicate significant increases in the 
employment levels of recipients and former recipients (with 
employment rates of enrollees in the welfare reform group 
sometimes 8 to 15 percentage points above those of the control 
group). Also, research from several individual states suggests 
that 50 to 60 percent of families leaving the rolls are 
employed at follow-up; these rates are somewhat higher than the 
employment rates observed for former AFDC recipients (which 
were in the 45 to 50 percent range).
    States generally are maintaining their investments in poor 
families. We have not seen a ``race to the bottom''--in terms 
of state spending or benefit levels. Twenty-two states have 
reported that they exceeded the 80 percent maintenance-of-
effort (MOE) level for fiscal year 1997, and average spending 
per recipient on cash grants, transportation, child care, and 
other assistance has increased.
    Forty states have enacted policies to change the way income 
is counted in determining eligibility and benefits. Most of 
these have increased their earnings disregards, thus helping to 
make work pay and reinforcing the message that going to work is 
better that staying at home.
    Most states have maintained the income standards they use 
for determining benefits (according to the state plans, four 
states have increased while five have decreased their benefit 
levels). Also, 33 states raised their general resource limits, 
and 44 states have raised their automobile resource limits. To 
help families transitioning off assistance, 29 states indicate 
they are extending child care benefits for more than 12 months, 
and 13 states provide transitional medical assistance for more 
than 12 months.
    States are beginning to focus more attention on the hard-
to-serve and fragile families. For example, 24 jurisdictions 
have elected the Family Violence Option to ensure that victims 
of domestic violence receive appropriate protections and 
services, and most states exempt parents of infants from work 
requirements. (Thirty states provide statewide exemptions for 
parents with children under one, 11 states provide exemptions 
for those with children under 6 months, and 3 provide 
exemptions for children older than one.)
    States are beginning to turn their welfare offices into 
employment offices and are taking a variety of steps to 
reinforce the work message. Almost all states have adopted a 
``Work First'' model for setting individual expectations and 
responsibilities and for structuring employment and training 
services. This approach emphasizes early entry into the job 
market and often uses referrals to other local agencies and 
organizations for transitional resources. Thirty-three states 
expect parents to participate in work within six months of 
joining the welfare rolls (compared to the statutory standard 
of 24 months).
    Every state requires recipients to sign Individual 
Responsibility Plans whereby they commit to making specific 
steps toward self-sufficiency. Twenty-eight states deny 
assistance to a family for failure to sign or comply with one 
of these plans.
    States are also making greater use of their sanction 
authority to enforce the TANF work requirements. Between 1994 
and 1996, sanction rates rose about 30 percent nationally, and 
sanction rates of 25 to 30 percent--or higher--are now not 
unusual. Under their state plans, 37 states have sanctions that 
could result in the loss of benefits for the entire family. 
(Most sanctions result from failure of individuals to show up 
for initial interviews, rather than noncompliance with work 
assignments.)
    With few exceptions, we have continued to see dramatic 
declines in welfare caseloads. Since August 1996, when PRWORA 
was enacted, 2 million recipients have left the rolls. Since 
1994, the number of welfare recipients has dropped by nearly 
one-third. We know that many of these recipients are working at 
the time they leave or after they leave, but we do not know 
precisely what is happening to many of these former recipients.
    The limited information we have suggests that sanctions, 
time limits, and other changes are having mixed effects on 
families. We are not seeing dramatic changes in the average 
incomes of welfare recipients and former recipients. For 
families leaving the rolls, the proportion of families 
experiencing increases in income are comparable to the 
proportion with decreases in income. Findings for sanctioned 
families are not dissimilar; studies in Iowa and South Carolina 
showed that 40 percent of individuals who were sanctioned 
experienced income increases.
    At the state and federal level, and community level, new 
partnerships are being forged. Government is collaborating with 
business, community organizations, transportation providers, 
the media and religious leaders to help move families to work.
    For example, new partnerships with transportation agencies 
have resulted in substantial innovation. In many places, we are 
seeing revisions to traditional public transportation services 
to provide low-income families with better access to jobs. To 
pick two examples from dozens:

        In Ventura County, California, the local transit agency has 
        extended its hours of service, re-routed some lines, and 
        developed new service to some remote locations being used as 
        work experience sites.

        The remote communities of Glendale and Azalea, Oregon, have 
        adopted a combination of innovative strategies, including the 
        development of carpools with 28 volunteer drivers, to give 
        residents access to education, training, and employment 
        opportunities 10 to 50 miles away. Also as part of this effort, 
        the local school district allows TANF recipients and other 
        residents to use school buses to get to work.

                          THE NEW FEDERAL ROLE

    Consistent with the changed expectations about the federal 
role, PRWORA required significant reductions in ACF staff 
positions devoted to the programs that were block-granted and 
in Department managerial positions. As noted in GAO's February 
1998 report to you, entitled Welfare Reform--HHS' Progress in 
Implementing its Responsibilities, we achieved these 
reductions.
    At the same time, we have worked to focus on the areas 
where we have new and expanded responsibilities. Our job is no 
longer to micromanage policy, but to support states and 
communities in moving families to work, to hold states 
accountable for results, and to develop and share information 
about effective practices. Key elements of this role include: 
coordination, technical assistance, research, and 
accountability.

Coordination

    In Washington, we have expanded our network of federal 
partners to improve the coordination of federal programs and to 
make it easier for state and local program administrators to 
leverage the resources they need. These efforts are critical, 
not just for their direct positive effects, but also because 
they model the types of collaborations that we want to foster 
at the state and community level.
    We have been working with the Department of Labor (DOL) on 
the implementation of the new $3 billion Welfare-to-Work (WtW) 
program, including the issuance of guidance and Interim 
Regulations, state plan reviews, regional conferences and 
roundtable discussions. We also are working closely with DOL in 
the implementation of our data collection and evaluation 
responsibilities under the Welfare-to-Work program. 
Representatives from the Departments of Housing and Urban 
Development, Transportation, Education, and Agriculture and the 
Small Business Administration have joined in some of these 
efforts to help address the challenges of finding employment 
for hard-to-place TANF recipients and the crucial need for 
state and local collaborations.
    We also have entered into new partnerships with the 
Department of Housing and Urban Development and the Department 
of Transportation to work on improving the accessibility of 
welfare recipients to jobs and services. We are providing 
technical support to both of these federal agency efforts, 
working through our Regional offices to support similar efforts 
at the state and community level and developing information on 
promising practices that can be broadly disseminated.
    Another key target of our coordination efforts has been 
Tribal programs. Prior to the passage of PRWORA, Tribes had 
some experience operating JOBS and child care programs, but 
little direct involvement with AFDC. Many were, therefore, not 
very well positioned to make the decision whether to implement 
their own TANF program or to understand what that would entail.
    Here in Washington and in our regional offices, we worked 
extensively with Tribes to help ensure that they made informed 
decisions and could submit an acceptable plan if they decided 
to go that way. We helped facilitate communications between the 
states and Tribes about critical implementation questions, 
including service area definitions, funding implications, and 
the need for referrals and exchange of information. We also 
issued guidance to clarify that states could contribute to 
Tribal TANF programs and claim such expenditures for MOE 
purposes. This clarification facilitated the development of 
additional Tribal programs. To date, we have approved ten 
Tribal TANF plans and anticipate that several additional plans 
will be submitted this year.

Technical Assistance

    The purpose of our technical assistance (TA) initiatives is 
to ensure that states, local governments, and their community 
partners have access to the critical information they need to 
accomplish their goals for families. In these initiatives we 
use models, on-site visits, contracts, and conferences to 
promote ideas and support state and local implementation 
efforts. We also collect and disseminate information on 
promising practices.
    To help make our technical assistance efforts more 
responsive to state and local needs, we established a Peer 
Technical Assistance Network and a Technical Assistance Work 
Group. The Peer TA Network facilitates the exchange of 
information on promising and best practices among states, 
localities, and community groups. The Work Group consists of 
federal, state, local, and non-governmental representatives. In 
its first meeting in January, the Work Group decided to give 
priority to several issues during fiscal year 1998, including: 
job retention, serving families with multiple needs, and 
information systems. In its next scheduled discussion, the 
group will specifically address the issues of job retention and 
serving families with multiple needs.
    Several of the initiatives we are undertaking focus on the 
priority areas we have identified. For example,
    1) In all our regions we are co-sponsoring workshops with 
employers to develop short-term training programs that upgrade 
the skills of welfare recipients. We held the first workshop at 
a community college in Huntsville, Alabama, earlier this week;
    2) We have developed a training package for welfare 
agencies to use in implementing programs that identify and 
provide appropriate services for victims of domestic violence; 
and
    3) We have funded a National Technical Assistance Center of 
Welfare Reform and Disabilities at the University of Kansas. 
This center will provide stakeholders with information to 
assist them in developing effective strategies for serving 
people with developmental disabilities.
    Finally, in the interests of expanding access to 
information, we are creating an information center which will 
share data and information using a variety of media--such as 
the internet, conferences, brochures, and handouts--on issues 
such as the TANF statute and regulations, State plans, 
implementation status, and research results.

Accountability

    Another key component of the federal role has been to 
ensure state accountability in key program areas and to promote 
high performance. In these areas, we have taken a number of 
critical steps over the past 14 months. However, there is still 
much more to be done, and will be working hard to ensure that 
future actions are carried out in a timely fashion.
    Two TANF regulations recently have been issued which 
address the area of accountability. In November, we issued a 
Notice of Proposed Rulemaking, which covered the major TANF 
provisions on work, penalties, and data collection. This 
proposed rule sent a clear message that we recognize the 
importance of state flexibility in designing their programs, 
but we also intend to hold states accountable for meeting 
critical program requirements. We anticipate publication of 
final rules in August.
    This month we issued the Notice of Proposed Rulemaking 
regarding the bonuses for states that are most successful in 
reducing out-of-wedlock births.
    Key guidance on the formula we will use for awarding the 
High Performance Bonuses to states in Fiscal Year 1999 (based 
on their performance in Fiscal Year 1998) was also issued this 
month. The proposed formula focuses on state performance, both 
in moving individuals into the work force and in the success of 
individuals in the work force, once they are employed. We 
developed this formula after extensive consultation with the 
National Governors' Association, the American Public Welfare 
Association, the National Conference of State Legislatures, 
state agencies, advocacy groups, technical experts, and 
scholars.
    We currently are working on a Notice of Proposed Rulemaking 
that will address the High Performance Bonus process for future 
years. We are committed to exploring measures that encompass 
all of the goals of TANF, including family formation and 
stability, and will seek advice on additional measures through 
the regulatory development process. We anticipate publication 
of the proposed rule in the early summer.
    Several other TANF-related regulations will be published 
this summer as well, including Tribal TANF and employment 
programs, child poverty rate methodology, and data collection 
for the Welfare-to-Work program.
    In addition, we have issued a number of policy 
announcements that have provided critical information to help 
states proceed with the implementation of their programs. Among 
the most significant were last January's announcement on the 
ability of states to fund activities through separate state 
programs, information on funding allocations, guidance on 
access to the contingency fund, and the interim guidance on 
TANF data collection and reporting.
    Finally, we are finishing work on two Reports to Congress. 
The first report addresses Recommendations for Changes to the 
Contingency Fund and the second is the Annual Report on TANF 
Programs and Performance. We expect to submit both reports to 
this Subcommittee next month. Since the amount of performance 
information we have available is still limited, the latter 
report will not cover all the topics required by the statute. 
However, we are working with states to correct problems in 
their data submissions and will provide supplemental 
information to this Subcommittee as it becomes available.

Research

    Our research and evaluation efforts are critical to the 
achievement of the goals of welfare reform. This subcommittee's 
support has been critical to enabling reliable information 
about welfare reform to be developed. Your keen interest in 
this area is demonstrated by the separate panel in this hearing 
today, which will address the topic of research on welfare 
reform. Howard Rolston, Director of the Office of Planning, 
Research and Evaluation for ACF, is a member of this panel and 
will provide a fuller discussion of this important topic. I 
would like to briefly highlight some of the key points.
    States have a myriad of options available to them under 
welfare reform and need information about which strategies will 
be most effective. Fortunately, the evaluation efforts we began 
under prior law, and that PRWORA provided us authority to 
support, have given us some useful information and will 
continue to produce more in the years to come. Disseminating 
information on the results of our research is one of ACF's 
major tasks in the coming years.
    One of the challenges we face is to get better information 
about what is happening to families who are leaving assistance. 
To answer this challenge, the Department worked with the 
National Governors' Association, the American Public Welfare 
Association, and the National Conference of State Legislatures 
to sponsor a conference that examined what information was 
available on ``leavers.'' Building state capacity to track 
``leavers'' is central to meeting this challenge. At this 
meeting we learned that states are greatly interested in 
studying this issue further, and we are compiling a summary of 
what follow-up studies are being done. We believe this 
information is critical to learning if families leaving welfare 
are achieving self-sufficiency and improving the quality of 
their lives.
    The impact of welfare on children is also of critical 
interest to us. Because most research primarily looks at 
effects on adults, we are supporting research in five states 
that will look in depth at the effects of welfare reform on 
children.

                     OUR FOCUS IN THE COMING MONTHS

    The passage of this legislation has presented all of us 
with a variety of opportunities and challenges. At this early 
stage, it appears that implementation is proceeding on the 
right track. That is, reform efforts reflect an increasing 
awareness of the critical importance of:
     Fostering personal responsibility;
     Maintaining investments, in order to reach all 
needy families rather than only the easiest to place;
     Getting all key players to the table (at the 
federal, state and community level) so that the many dimensions 
of underemployment and dependency can be addressed; and
     Directing agency efforts to the achievement of 
measurable employment goals and positive outcomes for families 
and children.
    Over the next several months we will continue to work along 
a broad front to further the work we have begun. In particular, 
we are hearing from states and communities about what they view 
as the following critical next steps:
    Supporting states, communities and employers as they focus 
more and more on retention and job success after the initial 
placement;
    (2) Working with states to make the investments, develop 
the knowledge, and provide the supports so that all families, 
including the hardest to serve families, can succeed;
    (3) Completing the transformation of welfare agencies into 
job centers, ensuring that appropriate linkages are developed, 
and fostering community-based approaches to reform;
    (4) Completing the development of a regular, reliable 
system for collecting the data necessary for tracking what is 
happening and ensuring program accountability; and
    (5) Improving our understanding about the effects of these 
changes on children and families so that we can develop more 
effective programs and make necessary adjustments.
    At the federal level, the Clinton Administration has led 
the call for social policies to help ensure that work pays. The 
principle of supporting work has been embedded in the 
President's agenda, including family leave, a higher minimum 
wage, an expanded EITC, the new Child Credit, Work Opportunity 
Tax Credits, the new Child Health Insurance Program, and 
increased child support collections. The President's budget 
would build upon these successes by providing additional 
supports. The President's Child Care Initiative, for example, 
targets substantial new child care funds, not to welfare 
families, but to low-income working families who are struggling 
to stay off of welfare. Many states have followed the model 
established at the federal level and have worked to enact 
programs at the state level that provide similar supports for 
low-income working families.

                               CONCLUSION

    I would like to express my appreciation to this 
Subcommittee for its interest in, and bipartisan support of, 
these endeavors. I look forward to future conversations about 
the progress of welfare reform and hope we can continue to work 
together in resolving any implementation issues that arise.
    I would be happy to answer any questions at this time.
      

                                

    Chairman Shaw. Thank you, Dr. Golden.
    Mr. Camp.
    Mr. Camp. Thank you, Mr. Chairman.
    Dr. Golden, of the $16.5 billion TANF block grant, how much 
of that was actually obligated in fiscal year 1997?
    Ms. Golden. Let me tell you a little bit about what we know 
about fiscal year 1997, both in terms of the dollars and the 
uses that States have made of their dollars. We have 
preliminary information from one quarter of the year, which was 
a transition year for the States. In that year, States were 
focusing their spending on a range of critical purposes; about 
91 percent of the block grant dollars were obligated. In 
addition, almost half the States exceeded their maintenance-of-
effort commitments.
    What that means is that in a time of substantial caseload 
decrease, States are seeing that they've got to make the 
investments in a range of critical supports. When you hear the 
speaker from Anne Arundel County, for example, I think you'll 
probably hear, as I did when I visited, about the critical role 
of investing those dollars in supports for families, including 
hard-to-serve families.
    So we know that States are investing those dollars in a 
range of critical supports for families.
    Mr. Camp. So was it 91 percent that I heard?
    Ms. Golden. From that transition quarter in 1997, from our 
preliminary information.
    Mr. Camp. How much do you think will be obligated in 1998?
    Ms. Golden. My guess is that in 1998, now that States have 
made the transition, State legislatures are really focusing on 
those dollars. We're working hard to challenge States to 
maintain their own investments on the maintenance-of-effort 
side and to invest the TANF dollars.
    My sense from talking with States is that there is a range 
of critical needs and that they are investing those dollars for 
some of the issues that both Chairman Shaw and Mr. Levin 
highlighted. States are reaching a range of families, enabling 
them to move to work. They're taking work seriously and 
investing the dollars to accomplish that.
    Mr. Camp. Do you expect then that all of the dollars will 
be obligated?
    Ms. Golden. I expect that States will be spending the 
money. I don't know whether that means 100 percent. But I 
anticipate that they will be spending the money on a set of 
critical supports. It's interesting, in a time of reduced 
caseloads, given the way State legislatures need to work, I 
would actually have expected much more delay in being able to 
get that money out. So my sense is that people have made early 
and serious moves to investing those dollars in new ways.
    Mr. Camp. And can States use this money for child care?
    Ms. Golden. States are using it for a range of purposes; 
child care is one. But there are many other critical 
investments. They're spending it for a variety of welfare-to-
work strategies, for supporting families, both before they 
leave welfare and to support low-income families afterward.
    So, they are spending it for a range of purposes, including 
but not limited to, child care.
    Mr. Camp. OK, thank you, Mr. Chairman. Thank you, Doctor.
    Chairman Shaw. Just as a followup to Mr. Camp's last 
question, do you feel that with this flexibility of the States 
and being able to transfer the money into child care, and with 
the fact that the States are performing so well, so that they 
have much money to spend per client in this regard, do you 
think we need to at this time put more money into child care, 
and if so, how much?
    Ms. Golden. Yes. I believe that President Clinton's 
initiative, the proposal of $20 billion over 5 years for child 
care, is critical to reach working families. I've been to about 
10 States in the last couple months, and I hear this not only 
from families and States, but also from employers.
    What States are doing is seeking to make the investments in 
order to move families from welfare to work, and they're having 
to work hard to do that.
    Beyond that, there are enormous needs among working 
families, which is the focus of the President's initiative. 
When he announced the report last week, the President focused 
on the fact that a family making in the high $20,000 would not 
be eligible for child care in most of the States.
    Chairman Shaw. No, under the present definition. Do you 
think, without expanding it into middle income that there is a 
need for more dollars to go into child care? I'm not talking 
about the new program that the President's expressed interest 
in. As to the present definition of child care and who is 
available, who is eligible, do you think there's more money 
than is necessary?
    Ms. Golden. Right now, of the families that are eligible, 
we reach about one in ten through the child care program. And 
that need is particularly among the working poor, low-income 
working families. So my sense is that what States are doing 
through their investments is enabling families to move from 
welfare to work.
    But the next need, the reason for the additional 
investment, is those low-income working families who are 
struggling to hold onto their jobs. That's how I see what we 
need.
    Chairman Shaw. Isn't it true, though, that the States, even 
right here in the District of Columbia, are not spending all 
the money that's available to them, because it's a matching 
program?
    Ms. Golden. That's not true nationwide. I haven't looked 
recently at the District of Columbia figures. But we have, as I 
recall, about 99 percent obligations on the child care dollars. 
We do have States making the investment to pull down the 
matching funds.
    Chairman Shaw. Have you had requests from States for an 
increase?
    Ms. Golden. What we have is States reporting both waiting 
lists and reporting working families who need the resources. I 
think States are working really hard to invest the money to 
move families from welfare to work. They're doing a lot of 
things to make that work.
    They're not getting to those families who are working, who 
are in very low-wage jobs, and who are struggling to hold onto 
those jobs, rather than to go back to welfare.
    Chairman Shaw. I'm having trouble seeing a clear picture of 
a need. If you feel there's a need for additional dollars, 
would you supply to this Subcommittee, and I'm talking about 
under existing guidelines, what exactly you feel those needs 
are on a State-by-State basis so we would have a better 
opportunity to be able to review that. Because that's something 
this Subcommittee has been very concerned about.
    Ms. Golden. OK. The national number, as I say, was about 
one in ten of the currently eligible families. Let me try to 
provide you with as much State-by-State information as we have.
    Chairman Shaw. Taking into consideration of course that 
many of the families choose to have family care, rather than to 
put the child in a day care type setting. And of course, we're 
not trying to make that decision for them. We just want the day 
care setting available where the parents choose not to do that 
for one reason or another, including the nonavailability of 
family or friends to care for the kids.
    But of course we know that putting these kids in these 
centers has both pluses and minuses, and it's not for 
everybody.
    Ms. Golden. Right. And as you know, the bipartisan 
consensus behind the child care block grant makes sure that 
those dollars go to a parent's choice of providers.
    Chairman Shaw. What I'd like for you to supply is, is there 
insufficient dollars to meet the demand for child care that's 
out there? Are there some mothers that are not able to go to 
work because there is no child care available? And that is 
within the current definition, not the expanded program that 
the President has suggested.
    I thank you.
    [The information follows:]

    [GRAPHIC] [TIFF OMITTED] T8826.001
    
    [GRAPHIC] [TIFF OMITTED] T8826.002
    
      

                                

    Chairman Shaw. Mr. Levin.
    Mr. Levin. Thank you, Mr. Chairman.
    Just so we're clear, I think what you're saying is that if 
you take all of those who are eligible outside, or perhaps 
including those who are on welfare, there are inadequate funds. 
The 1 in 10 figure is based on those who are eligible under the 
present child care statutes. The fact that States are 
emphasizing child care for those who are on welfare often means 
there are even less sufficient funds for other low-income 
families who are not on TANF, isn't that what you're saying?
    Ms. Golden. Yes. I think States are working really hard on 
this. My sense as I travel the country is that States are 
investing in child care, and they're also addressing 
complicated issues like after-hours care, weekend and evening 
care. In moving families from welfare to work, child care is 
critical.
    But I think you're absolutely right in saying that what 
they're doing with this intense focus is enabling families to 
move from welfare to work. There are additional families who 
are eligible, low-income working families struggling to hold on 
to their jobs, and there isn't enough money right now for them. 
And that's key to the President's proposal.
    Mr. Levin. Let's face the future just for a moment. You 
referred to this a bit in your testimony. What do you think the 
major barriers are to continuing and to perhaps even 
accelerating the effectiveness of welfare reform, of people 
moving from welfare to work? As you look ahead the next several 
years, what are the largest obstacles that we are facing?
    Ms. Golden. I think there is a set of important challenges. 
I believe that it's my job, the job of some of the people in 
States and localities you'll be talking with, the job of people 
in communities, to figure out how to address those. And I think 
that work is going on in several of them right now.
    I would highlight several. I'm hearing in States and 
communities everywhere about how we work to focus on job 
retention and on earnings gain after people move into work. 
That's an arena where a lot of very good work is going on. 
There are collaborative approaches at the State and local 
level. We'll be issuing the high-performance bonus to reward 
States for succeeding in those arenas.
    The second arena is reaching everyone, ensuring that we 
reach all families on welfare, including investing in people 
who have a variety of barriers to employment. Again, I think 
there's a lot of important work going on in that area. We've 
been trying to invest in technical assistance in some of those 
areas, for example, persons with developmental disabilities and 
family violence. We've been trying to assist States in meeting 
those issues.
    I would also say that States are completing the 
transformation of welfare offices, as Chairman Levin 
highlighted. There's been really important change, and there's 
a set of next steps in terms of shifting and building the links 
at the community level between welfare offices and other local 
programs.
    All of those things are critical steps, and they all 
require us to maintain the investment at Federal and State 
levels.
    Mr. Levin. You mentioned that you're working on the 
contingency fund issue. Just quickly tell us what you're 
looking at.
    Ms. Golden. Surely. That report is extremely important to 
the Subcommittee, and we will provide it to you in the first 
half of April. What we will be doing, as we're required to by 
law, is looking at an array of options and issues that have 
been identified related to the contingency fund.
    We've done some consulting with a variety of people to 
learn what the issues are, and we're trying to set out 
systematic analysis of those issues for the use of the 
Subcommittee and the Congress.
    Mr. Levin. And that includes looking at what the needs 
would be if and when there is an economic downturn?
    Ms. Golden. One of the topics is sufficiency of the fund.
    Mr. Levin. Are you comparing individuals' needs in previous 
recession periods with present levels of funding?
    Ms. Golden. We've looked at the best data we could find. 
I'm actually not positive if that specific comparison is in the 
current draft or not. But we're trying to look at the best 
information.
    Mr. Levin. We've talked about it, and I would urge that you 
do so. We need to make sure that welfare reform works during 
times of prosperity, and that there is not a destructive 
outcome in times of a downturn. While no one here wants to say 
there will be a downturn in the economy, there have been in the 
past, and there might well be another one in the future.
    Chairman Shaw. I don't know if that was a political 
prediction or what, but I think we just elected a Republican 
President. [Laughter.]
    Mr. Levin. I thought the opposite, but that wasn't the 
purpose of my question.
    Chairman Shaw. Mr. Stark.
    Mr. Stark. Thank you, Mr. Chairman.
    Welcome, Dr. Golden. I think it's important to note here 
that while you may think this TANF Program is working, there's 
precious little detail in your testimony to support that 
conclusion. And I'd just like to remind my colleagues that four 
out of the five Democrats on this panel voted against the 
legislation creating this program, and that three of the 
leading experts in Health and Human Services resigned from 
their positions in protest when this program was passed. These 
were your previous colleagues.
    So it appears to the Minority on this Subcommittee, or most 
of us at any rate, that TANF is a seriously flawed program. 
We've been looking for some hope to indicate that our fears 
were not well-founded, and you don't bring us much.
    You say in your written statement, 50 to 60 percent of the 
AFDC families leaving welfare are employed. Well, by definition 
that means that 40 to 50 percent of the AFDC families who left 
welfare are unemployed. What are they doing to make ends meet? 
And you don't know, and you don't seem to be concerned, which 
is indeed troubling.
    We have a report that the number of children receiving AFDC 
as a percent of children in poverty declined between 1995 and 
1996. And that is also true of the number of children receiving 
food stamps as a percentage of children in poverty.
    We also know the number of children receiving TANF has 
declined by another 16 percent or so between 1996 and 1997. 
There is no way that poverty has gone down 16 percent in 1 
year. You know that, I know that. I think it's suggested that 
poverty hasn't gone down 16 percent in 3 years.
    I don't know what you make of the trend, and why poor 
children are less likely to get assistance now. I don't know if 
your department has looked at it.
    I would like to think that you could tell us how you would 
define success under this program--in something other than 
caseload declines, which mean nothing. Why have you addressed 
no measures of child well-being? Why have you included no 
measures of the number of mothers in the labor force, or 
fathers paying child support? Is there any other evidence that 
would show us that welfare reform has done anything more than 
kick families off programs? You don't bring us any of that. 
What are you going to do about that?
    Ms. Golden. Let me start with the success measures 
question, which I think is a central one, and then work back to 
what we know on the others. I think it is critical to have 
measures of success that address a range of well-being----
    Mr. Stark. When do you intend to have them?
    Ms. Golden. Today we issue----
    Mr. Stark. When do you intend to have those measures?
    Ms. Golden. We've issued the high performance----
    Mr. Stark. When do you intend to have them? In 1 month or 6 
months? When do you intend to have the measures?
    Ms. Golden. We've just issued the measures, and we'll have 
information next year.
    Mr. Stark. But Madam Secretary, this is a simple question. 
You can count, you do this with your shoes and socks off. When 
do you intend to have some measures that you can bring to this 
Subcommittee that show us any results of this program? In how 
much time?
    Ms. Golden. I expect the State information to be available 
next year on----
    Mr. Stark. In 1999?
    Ms. Golden. Yes, on the full year----
    Mr. Stark. At the end of 1999?
    Ms. Golden. I think States are likely to be able to provide 
it fairly early in 1999.
    Mr. Stark. Madam Secretary, half of those children could be 
dead by then, thank you very much. But go ahead. What else are 
you going to do which will be too little, too late?
    Ms. Golden. Let me say what those measures will be, because 
I think they're important.
    Mr. Stark. The measures are not important if they're not 
going to be here. That's pie in the sky. What can you measure 
now?
    Ms. Golden. We know what families are telling us. We also 
have an array of studies which show that more families are 
working, that there is a range of income effects for families 
who leave welfare, and that there have not yet been the sharp 
negative effects that many people expected. We don't know over 
the long run how that will play out.
    In addition, when I talk to families, what I hear often is 
that the reason for going to work is because of the children.
    Mr. Stark. What families are you talking to? How many 
families have you talked to?
    Ms. Golden. Not a large number.
    Mr. Stark. How many?
    Ms. Golden. A couple of dozen, three dozen.
    Mr. Stark. That's piddling.
    Ms. Golden. Absolutely.
    Mr. Stark. Madam Secretary, that is not a statistically 
valid study.
    Ms. Golden. Absolutely.
    Mr. Stark. My heavens.
    Ms. Golden. The statistical studies show a range of 
information, but they don't show everything. I think what 
you'll be hearing in today's panel is that----
    Mr. Stark. But you show us nothing. You've got no 
statistical studies and you've talked to a couple dozen 
families. And you've kicked, or you will be kicking, hundreds 
of thousands of children off of support systems.
    Now, to me, that's pretty inhumane. To not care enough to 
know what's happening to those children and those families when 
they're booted off the welfare rolls is not something that the 
Democrats should be very proud of.
    Ms. Golden. What I'm proud of is that we will be judging 
the success of welfare by moving families to work, by their 
gains in earnings and ability to----
    Mr. Stark. You're not moving them to work. You're kicking 
them off the welfare rolls. That's all you know. All you're 
counting and all you are able to count is the decline in 
caseload. You're booting people off their support systems. You 
have no idea what happens to them after they leave, except for 
talking to a couple dozen families.
    Ms. Golden. And requiring States, if they want a shot at 
$200 million----
    Mr. Stark. Don't push this off on the States. We're running 
our own program here, thank you very much.
    Ms. Golden. Right. And what we will be measuring is 
movement to work, gains in earnings, retention of jobs----
    Mr. Stark. I suspect that you should spend less time, Madam 
Secretary, on all this public relations clap-trap that you're 
bringing here, and a little bit more time about worrying about 
what happens to poor and dependent children in our country as 
has been the previous record of your Department.
    Ms. Golden. My history of research and my personal academic 
work experience focuses on children and welfare.
    Mr. Stark. You haven't done any research.
    Chairman Shaw. The time of the gentleman has expired. Dr. 
Golden, you should see the way he talks to the Republican 
witnesses. [Laughter.]
    Ms. Golden. And I'd be happy to outline the research----
    Mr. Stark. They at least come with numbers, Mr. Chairman, 
and know what they're talking about.
    Chairman Shaw. Mr. McCrery.
    Mr. McCrery. Thank you, Mr. Chairman.
    Dr. Golden, correct me if I'm wrong, and I could be, but 
it's my impression that much of the reduction in caseload has 
taken place as a result of voluntary efforts on the part of 
former welfare recipients to leave the rolls, that many of them 
are in fact not being thrown off the rolls, they're voluntarily 
leaving the rolls to obtain employment, or due to better 
circumstances, is that correct?
    Ms. Golden. Well, let me outline what we do know, what we 
don't know, and what we will know, because I think all of those 
are important.
    What we do know right now is quite limited. There's a range 
of studies in different States, and not a systematic national 
approach. So we know some selected facts, like the percentage 
that are working and what the range is in different places. We 
know something about sanctions.
    What we know about the point you make is that about 50 to 
60 percent of those who leave the rolls are working. Of those 
who leave for sanctions, about 40 percent are working, which 
does suggest that some of those may have left by choice.
    On the other hand, I don't think we know enough to say very 
much specifically about why people are leaving or about their 
circumstances. I share Congressman Stark's concerns that we 
have to know much more than we do.
    We will know is a set of things. We are investing in 
research that will be a much more systematic look at the 
``leavers.'' The Congress appropriated $5 million, which the 
Assistant Secretary for Planning and Evaluation will be using 
for much more systematic work there.
    We will know much more through a range of evaluation 
studies, which will be discussed at length. Both Barbara Blum 
and Howard Rolston will speak about some of the specific 
research that focuses on children and outcomes for children, 
which I think is critical.
    In addition, we will know more through administrative data. 
We have just put in place, and are really very pleased to have 
put in place, a system for reporting not just caseload 
information, because as Congressman Stark points out, that's 
not complete, but also information about what happens to people 
in terms of their movement to work, their time in those jobs, 
and their wages in those jobs.
    So, we know some information on the issues you raise. We 
will know more, and it is absolutely critical for us to know 
more.
    Mr. McCrery. Let's return to the question of child care 
money. I'm told that CBO, at least, estimates that in 1998, 
only about 75 percent of the TANF money that's available to 
States will be in fact obligated. In other words, States will 
in effect save 25 percent of the money that's available to them 
for TANF.
    If that's the case, and obviously we don't know yet, that's 
just an estimate, but if that's the case, and States are able 
to use that money for child care, I'm not sure that we ought to 
dive headlong into increased funding for child care, when 
there's money on the table that's not being used that could be 
for that purpose.
    Could you submit to us your agency's analysis of exactly 
why you think more child care money is needed in view of the 
CBO estimate of utilization of TANF funds, and in view of the 
fact that we have in fact called for, I think, about a 50-
percent increase in child care funding over the next 5 years, 
which is a significant increase. So would you submit that to 
us.
    Ms. Golden. Surely, let me summarize the main points, and 
then we should submit followup. First, as you note, it is 
speculation in terms of next year for States. You may want to 
speak with other panelists about that.
    While States are holding some parts of money because they 
believe they need to address future as well as current 
contingencies, States really are finding that they have to 
invest the TANF money to address the challenges of reaching all 
families and moving families to work.
    Second, I would again make the distinction between moving 
families from welfare to work, which I believe States are 
making the investments to do, and the broader needs of those 
struggling families who are working and who should not be in a 
position where they'd have to leave work and go back to 
welfare. In that latter group of families, we're providing 
child care to about 1 in 10 of the eligible families.
    The critical needs are to make sure we have a system that 
supports work and ensure that working families don't need to 
return to welfare in order to get in line for child care. And 
we'll submit the followup analysis.
    [The information follows:]

    [GRAPHIC] [TIFF OMITTED] T8826.003
    
      

                                

    Mr. McCrery. Thank you very much.
    Chairman Shaw. Mr. Matsui.
    Mr. Matsui. Thank you, Mr. Chairman.
    Dr. Golden, I want to follow up on some of the areas that 
Mr. Stark moved into. I did skim over Mr. Rolston's testimony 
and Barbara Blum's testimony and the Census Bureau's. I just 
skimmed those. And I didn't see anything that helps me 
understand what is really happening with the welfare caseload 
at this particular time in America.
    Ms. Golden. OK.
    Mr. Matsui. I guess one of the problems I have, and I 
understand that this is a political town and this is a 
political country, but one of the real problems I think I have, 
and I think many of us have, is that the impression trying to 
be conveyed by this administration and by HHS in particular is 
that welfare reform is a wonderful success, because we've seen 
2.4 million people go off the welfare rolls.
    And we've heard it from the President, in his Saturday 
morning addresses. There's just been an array of commentary on 
what a wonderful program this is, but the Family Support Act 
actually deserves a lot of credit because the States were 
finally able to put up the match and draw down Federal funds. 
Clearly, the Family Support Act helped create the progress we 
see today.
    Because in early 1996, we saw a drop in the rolls, 
significant drop in the rolls. And we've had also 80 months of 
economic growth. So there are a lot of factors involved that 
have resulted in this drop in the rolls.
    If you came today and you had empirical evidence, data that 
Mr. Stark had requested, to show that in fact this program is 
working and you can attribute the drop in the rolls to this 
program, I would really have a great deal of respect for your 
opinion and the opinion of all the people that are touting this 
program.
    But the problem is that you're making these statements 
about how wonderful this program is and how it's worked so 
well, but you're not providing data. Just common sense tells me 
that because the economy's going so well, you have to expect 
the caseload to drop. It would have happened under the 1988 
Family Support Act. It probably would have happened even 
without any welfare program in place.
    So, I hope your rhetoric changes until you get these 
studies. Because until you get these studies, you're going to 
get people like me and Mr. Stark and others very angry. Because 
it's misleading. It's not fair to the people that are falling 
off the rolls. And it's just not an appropriate way for adults 
and people that are in positions of power and influence to be 
conducting themselves.
    Ms. Golden. What I would like to do is characterize what's 
convinced me personally, because I've been working on welfare 
for 25 years.
    Mr. Matsui. I understand that. But you see, that doesn't 
tell me----
    Ms. Golden. But I would then address data.
    Mr. Matsui. I go back home to Sacramento and people tell me 
it's not working, that there are a lot of problems involved.
    Ms. Golden. Right.
    Mr. Matsui. In fact, all the people that are eligible in 
the State of California to receive child care funds or child 
care programs are not getting it. Only 30 percent are getting 
it, you know that.
    So I'm hearing just the opposite of what you're hearing. 
But I won't go around saying it's not working, because that's 
anecdotal. That's my personal opinion, based upon a comment by 
somebody. And I don't think you should make comments based upon 
anecdotes. Because maybe somebody's feeding you information 
that may not be accurate.
    Ms. Golden. Could I characterize what we know now and what 
we don't know, because that's a very fair piece of information.
    Mr. Matsui. That's fine.
    Ms. Golden. Part of what we know is about the array of 
studies that I've just characterized, about more people 
working, but we have fragmentary information in different 
places.
    Mr. Matsui. But can you attribute these to the welfare 
reform program, or would you attribute it to the economy, or 
would you say part of it is because of the 1988 Family Support 
Act that was finally starting to work in 1996?
    Ms. Golden. I think everything, when the Council of 
Economic Advisors looked at the reasons----
    Mr. Matsui. But then you're just telling me what I already 
know, that the welfare rolls have dropped, and half the people 
that have dropped off of welfare now are working and the other 
half we don't know what happened to them. We all know that, and 
frankly that statistic, we knew before the welfare reform bill.
    Ms. Golden. I started out in welfare in Massachusetts, 
working as my first job out of college in the seventies. Two 
things are most dramatically different to me, and they're both 
indicators of progress, not success. I believe that we have a 
lot more to do and a lot more to learn.
    One of the two indicators is who's involved in moving 
families from welfare to work. When I worked in Massachusetts, 
there was no way that I or anyone else in the office would have 
thought we could call up the transportation authority, 
employers, or community organizations and get them focused on 
working with us to work with families. I now believe that has 
changed. The welfare agency is not in it alone, and that's an 
incredibly important step.
    The other thing that is enormously important is that 
perspectives by and about families on welfare have changed. 
They believe they can move to work, and employers and other 
people see them as people we ought to be supporting in that 
move.
    I think what we need to know, and I am very committed----
    Mr. Matsui. If I can just interrupt you, because I know my 
time's running out, I apologize to you.
    Ms. Golden. That's OK.
    Mr. Matsui. Mr. Stark and I had these same kind of 
discussions back in 1981 when Ronald Reagan took office.
    Ms. Golden. Absolutely.
    Mr. Matsui. Remember when he eliminated the disregards and 
made all these changes, we had that same problem. We basically 
eliminated individuals from owning cars because we increased--
--
    Ms. Golden. Right, and now we've gone the other way.
    Mr. Matsui. Right.
    Ms. Golden. We've essentially made sure that the programs 
are supporting work.
    Mr. Matsui. Many of these burdensome regulations that were 
not necessary. So you're speaking to the choir in that respect.
    But the real issue is, are sanctions working? What happens 
to these families that drop off? And there are a lot of States, 
38 States, that impose very severe sanctions.
    And you don't know, and I don't know, and I want to believe 
that they're doing better, maybe they move in with their 
brothers and sisters or mothers and fathers, and so they're 
taken care of. If you show me they're taken care of, that's 
great. But if all of a sudden we're finding out that 
homelessness is going up, people are out in the streets, then 
we need to do something.
    Ms. Golden. Right. Absolutely.
    Mr. Matsui. So before, and my time has run out, so before 
we start spreading the gospel about how wonderful this program 
is, let's get the facts. And I would hope that you and your 
department and others within the administration would be 
somewhat circumspect. Because we're talking about, as Mr. Stark 
suggested, a lot of people's lives, particularly children.
    Ms. Golden. Thank you.
    Chairman Shaw. The time of the gentleman has expired.
    I'd like to just point out to the gentleman, in addition to 
the answer that Dr. Golden was making, that if you track 
welfare reform into the States who got an early start, you will 
find that they are way ahead of the curve, even though the 
curve is very aggressive. I think that we have great evidence 
that it is working.
    Are some people falling through the cracks? Yes. Some 
people fall through the cracks of every program that we try to 
put together. But I think to take away from the tremendous 
success of welfare reform would certainly be a mistake. We've 
had years of prosperity, and yes, the welfare rolls should go 
down in those years.
    But the dramatic drop that we have seen in recipients of 
welfare in this country certainly outstrips being able to 
simply attach that to the economy. The economy's been good.
    Mr. Matsui. If the gentleman would yield, I don't want to 
make this a long discussion, because I just want to see the 
facts. We can talk rhetorically. But almost every economist 
says they have not seen growth like this since the fifties and 
sixties. So I have to say that the growth of the economy right 
now is unprecedented in terms of our generation. I think 
perhaps maybe we should give a little credit to that.
    Chairman Shaw. I give a lot of credit to the economy, and I 
think Dr. Golden was correct, that all of----
    Mr. Matsui. The only concern I have is that if the economy 
starts to dip, then what happens to these people, if this 
program isn't working as we presume it is working judging by 
our rhetoric.
    Chairman Shaw. That's a concern we all share.
    Dr. Golden, I have a question that I want to submit to you 
on the welfare-to-work program. But I'll do that, and ask that 
you reply in writing if you would.
    Ms. Golden. OK.
    [No questions were submitted by Chairman Shaw.]
    Chairman Shaw. Thank you very much for your testimony.
    Mr. Levin. Mr. Chairman, would you yield before Dr. Golden 
leaves? I just want to say to Mr. Stark and Mr. Matsui that 
whether the recession is an issue, I think no one has worked 
harder on the contingency fund issue than I have. That's why 
I've urged the Department to review it.
    Clearly, prosperity has been a major factor, and I don't 
think anybody should deny that. I've spent a lot of time in 
Michigan, mainly in Detroit. I would urge anybody who asks 
whether there's been a change in the emphasis on the State and 
local level to help people move from welfare to work to go to 
Detroit and talk with Mayor Archer, talk with the people who 
are working on that program. And they will give you compelling 
data.
    Though we don't have national data and there may have been 
exaggerated claims, I think it's a mistake to say that there 
has been a lack of overall progress.
    Mr. Matsui. I don't think anybody is. In fact, I would take 
the position, no one is saying that there's no progress. What 
we're trying to do is make sure that the words and the rhetoric 
are backed up by facts.
    Mr. Levin. I very much agree.
    Mr. Stark. Would the gentleman yield further on that point?
    Mr. Levin. Yes.
    Mr. Stark. Northwestern University economists just did a 
study suggesting that the expansion of the earned income tax 
credit is responsible for more than half of the increase in 
employment rates among single mothers over the period of 1984 
to 1996. All I'm suggesting is that you look at the relative 
importance of the EITC, welfare reform, and general economic 
conditions in moving single mothers into employment.
    At least the Northwestern study is one on which we can 
rely. I don't know whether they did any of their study in 
Michigan or not. But to me, the idea that we are claiming 
victory in welfare reform just because people are no longer 
participating in TANF is not responsible.
    Mr. Levin. That isn't what is being claimed, and as someone 
who strongly supports the IT and the President, it is obviously 
a factor, and a major factor. The question is whether the 
transition of the welfare program to a work-orientation 
caseload with the maintenance of efforts by the States, has 
contributed to a movement of people from welfare to work in 
addition to all of these other factors.
    I think the data will help us to assess all the causations. 
But I don't think there should be exaggerated claims on either 
side including those who try to minimize the significance of 
the----
    Mr. Stark. I would support----
    Chairman Shaw. This debate will be continued at another day 
in another forum.
    Before we leave, I would like to introduce the next panel, 
because I know that Mr. Cardin wants to introduce one of his 
constituents. So I would yield to Mr. Cardin.
    Dr. Golden, thank you very much.
    Ms. Golden. Thank you.
    Chairman Shaw. And thanks for putting up with Pete. I meant 
that humorously. [Laughter.]
    Mr. Cardin. Mr. Chairman, thank you very much for the 
opportunity to sit in with the Subcommittee. My colleagues from 
California thought I came to listen to their debate, but no, I 
came because I'm really pleased that Vesta Kimble is here, who 
is the deputy director of the Anne Arundel County Department of 
Social Services.
    The Anne Arundel County Department of Social Services has 
taken up the challenge that we created in welfare reform to 
establish innovative employment programs. They have developed a 
single stop shop for employment services that has been very 
successful in the county and has acted as a model for our 
Nation.
    I'm very pleased that she could be here with us today, and 
I thank you for giving me the opportunity to introduce her. And 
one of your constituents happens to be Congressman Stark, who 
lives in Anne Arundel County. [Laughter.]
    But I warn you about the questioning ahead of time.
    Chairman Shaw. Now you'll lock your doors at night. 
[Laughter.]
    I would like to introduce Don Winstead, who is from my home 
State of Florida. He's the welfare reform administrator of the 
Florida Department of Children and Families in Tallahassee. And 
we, too, are very proud of the job they're doing down in the 
State of Florida.
    Also, they will be joined by Jean Rogers, who's the 
Administrator of the Division of Economic Support, Department 
of Work Force Development in Madison, Wisconsin, and of course, 
Madison, Wisconsin, has certainly been a leader in reform. Also 
Frank Mora, Job Development Supervisor, Department of Public 
Social Services, South County GAIN Region, Rancho Dominguez, 
California.
    We are going to have a series of votes on the floor. The 
Subcommittee will stand in recess until approximately 12:35 to 
12:40 p.m.
    [Recess.]
    Mr. Collins [presiding]. If the panel that's already been 
introduced will take your seats. We will hear from J. Jean 
Rogers. We will pause for a moment and wait for Ms. Rogers.

    STATEMENT OF J. JEAN ROGERS, ADMINISTRATOR, DIVISION OF 
ECONOMIC SUPPORT, WISCONSIN DEPARTMENT OF WORKFORCE DEVELOPMENT

    Ms. Rogers. I'm honored to be here today to tell you all 
how PRWORA, the Personal Responsibility and Work Opportunity 
and Reconciliation Act, has made it possible for Wisconsin to 
help thousands of needy families reach self-sufficiency. PRWORA 
is based in large part on Wisconsin's experience and 
recommendations.
    Although over the years, Wisconsin implemented 14 cutting 
edge waiver demonstrations, it really wasn't until we 
envisioned a world without AFDC that we could create a program 
as innovative and comprehensive as we have in Wisconsin Works.
    While W-2 was fully implemented only 6 months ago, we've 
already seen a dramatic drop in our cash assistance caseload, 
from 31,476 families in September to only 14,391 in January. 
Unlike other States experiencing recent caseload declines, 
Wisconsin's drop came from an already reduced caseload. In 
1987, when we implemented our first waiver, we were over 98,000 
families. Ninety-eight thousand to fourteen thousand--our 
numbers speak for themselves.
    Without the authority granted by PRWORA, we really couldn't 
have implemented W-2. I'd like to share with you six reasons 
you were right to pass PRWORA instead of continuing the old 
ways that only allowed flexibility through the waiver system.
    By their very nature, waivers are temporary. Why? Because 
waivers were experiments which were time limited and only 
applied to some clients, and our participants knew it. Many 
figured they just had to wait it out. TANF gave us the ability 
to make our changes universal and permanent.
    Second, waivers were static and rigid. Our benchmark for a 
policy change now is, will it help the participant progress 
toward a job. If the answer is yes, we can change. Unlike a 
waiver, PRWORA allows States the flexibility to change a policy 
or procedure immediately, based on their implementation 
experience.
    Three, waivers were too restrictive to allow full 
engagement. AFDC categorically exempted so many people that 
nearly half of the caseload was not required to do anything for 
their welfare check. The result? Thousands of families 
languished on assistance for years without receiving any 
meaningful help to become self-sufficient.
    Well, no one ever got a raise on welfare. PRWORA gave us 
the ability to require everyone to work to the best of their 
abilities. The surprising result? People with even the most 
severe barriers want to work, and they can work. They just 
didn't know how, in many instances, to take that first step.
    I had a woman say to me, with tears in her eyes, thank you, 
thank you to my caseworker for believing in me, because nobody 
else ever did.
    Fourth, you couldn't waive the entitlement. Ending the 
entitlement was really as much symbolic as it was hard policy. 
Having no entitlement reinforces the work requirements and 
allows us to design the work training requirements in W-2, like 
a job in the real world, rather than a handout.
    W-2 payments are based on participation, not on family 
size. As parents move up the W-2 employment ladder, their 
income increases. And families can have outside income with no 
grant reduction, as long as they stay under the income limit of 
115 percent of poverty.
    Five, even with extensive use of waivers, it really was 
difficult to change the culture of the welfare office and our 
employers. The existence of random assignment to control groups 
really constrained our ability to advertise as we do now. The 
improved support of services available to all parents in need, 
because half of them weren't eligible before, they were in the 
control group.
    In fact, we're recruiting clients. W-2 agencies in 
Milwaukee are doing TV, radio, and full page newspaper ads, as 
well as having community parties, just to encourage needy 
families to take advantage of the services in W-2.
    Sixth, waivers didn't allow us to change the bureaucracy. 
We knew that if we were asking more of our participants, we 
really had to ask more of our W-two agencies as well. To ensure 
that they were really giving 110 percent, we instituted a 
competitive bidding process with outcome-based contracts.
    And the result? Of our 80 W-2 agencies, 63 are county run, 
3 are run by tribes, and 14 by private agencies, two of which 
are for-profit.
    We already are seeing the positive results. Just look at 
our caseload numbers and wages at full-time placement. That is 
six dollars and 38 cents and rising.
    In addition, the block grant structure of PRWORA gives 
States the opportunity to shift funds to critical areas of 
need. Because we're in the work support business, not the 
income support business, we really need to spend our money on 
things like child care and increased case management and 
transportation. And that is exactly what we're doing.
    We've tripled the funding for child care in Wisconsin, 
ending the waiting lists. And we're the only State to have no 
waiting lists. We've expanded usage up to families with incomes 
up to 200 percent of poverty and only modest copays. Example, a 
mother at the Federal poverty line with two kids on full-time 
licensed care, our most expensive, pays only $69 a month for 
over $900 in child care services.
    Let me conclude with two more things that PRWORA did really 
right. One, instead of mandating how many people cannot 
participate, as the extensive exemption criteria did in AFDC, 
PRWORA sets aggressive work participation rates, raising the 
bar for all States. And by limiting the amount of postsecondary 
education, PRWORA focuses States on the basics of getting and 
holding a job.
    Less than 18 percent of our current caseload has a high 
school diploma. That's down from 51 percent in 1995. This 
statistic shows us two things. One, many former welfare 
recipients with a high school diploma have already successfully 
entered the work force. And second, we're correct in focusing 
on basic education, rather than on college degree programs. 
Once a person has the basics and demonstrates the ability to 
hold a job, then W-2 will help with postsecondary education as 
support for life-long learning, not in place of working, just 
like in the real world.
    One last thing I would like to take this opportunity to say 
before I close, and that is, we have become aware of a budget 
proposal that would cut TANF funds in year 6. To accomplish 
this, it would likely eliminate all of the State's ability to 
have carryover funds.
    PRWORA did so much that was right, both in terms of its 
structure and in terms of its funding. Please don't now put the 
States at risk based on some early guesses on the part of the 
Congress of what future caseloads and economic conditions might 
be. As was mentioned earlier today, economies are cyclical, and 
we need to plan for the future.
    Thank you.
    [The prepared statement follows:]

Statement of J. Jean Rogers, Administrator, Division of Economic 
Support, Department of Work Force Development

    I am honored to be here today to tell you how the Personal 
Responsibility and Work Opportunity Reconciliation Act (PRWORA) 
of 1996 has made a difference in the state of Wisconsin. This 
groundbreaking legislation, based in large part on Wisconsin's 
experience and recommendations, gives each state the tools it 
needs to design a work-focused program responsive to the unique 
needs of its population. Wisconsin Works (W-2), our Temporary 
Assistance for Needy Families (TANF) program, is paving the way 
for a world without Aid to Families with Dependent Children 
(AFDC).
    Being a leader in welfare reform for ten years, there is no 
doubt that Wisconsin had a head start addressing the problem of 
welfare dependence and the poverty that it creates. In fact, 
Wisconsin's welfare legacy began in 1987, when Governor 
Thompson made welfare reform one of his top priorities upon 
taking office. At the time, Wisconsin's AFDC caseload had 
swelled to over 98,000 cases.
    Governor Thompson had little confidence that the Family 
Support Act of 1988 would do much more than continue the status 
quo. As a result, Wisconsin pioneered the way for states to 
receive waivers from the federal government to run welfare 
demonstrations. Wisconsin's first waiver, called Learnfare, 
changed the direction of welfare by connecting, for the first 
time, the receipt of welfare to personal responsibility. 
Learnfare, which has since been folded into W-2, requires 
students to attend school or face a reduction in the family's 
cash benefit.
    Since then, Wisconsin conducted 14 major welfare reform 
demonstrations, finding solutions to many of the barriers faced 
by families on welfare and steadily chipping away at the 
caseload. By 1990, the caseload had decreased to just over 
78,000 cases. Five years later, in 1995, there was a decline to 
73,000 cases. When PRWORA was signed into law, in September 
1996, 49,932 cases remained on Wisconsin's caseload. Although 
we had cut our caseload in half in the preceding nine years, we 
knew we could do better.
    In fact, it was not until we envisioned a world without 
AFDC that we could create a program as innovative and 
comprehensive as W-2. When, in 1993, Wisconsin's State 
Legislature mandated that the Governor end AFDC and replace it 
with a work-based program, most states were just beginning to 
tinker with incentives to work like increasing the earned 
income disregards. This mandate gave us more latitude than we 
could have hoped for. While many of our reforms were 
successful, they were bound by federal limits. Legislating an 
end to AFDC allowed us to start with a clean slate. We took 
nothing for granted.
    The result was Wisconsin Works (W-2), a work support, not 
an income support, program. When Wisconsin passed the W-2 
legislation in May 1996, however, states did not yet have the 
authority to end AFDC. It was the passage of PRWORA by Congress 
just a few months later that made our vision of a work-based 
program possible. In fact, Wisconsin was the first state to 
submit a TANF plan. Key provisions of W-2 were phased in soon 
there after.
    Full implementation of W-2 began in September 1997 and the 
last AFDC checks were sent out this month (March 1998). The 
transition to W-2 has been an overwhelming success. More 
parents than ever are finding employment. Since September 1997, 
our already reduced caseload has been cut in half from 31,476 
families in September to only 14,391 as of January 1998 (latest 
numbers available).

                           Caseload Reductions
------------------------------------------------------------------------
                       Month                            Caseload Size
------------------------------------------------------------------------
January 1987.......................................               98,295
January 1994.......................................               78,507
January 1995.......................................               73,962
January 1996.......................................               65,386
January 1997.......................................               43,888
January 1998.......................................               14,391
------------------------------------------------------------------------


    The decline in Wisconsin's cash assistance caseload is 
truly astonishing-- the numbers speak for themselves. Although 
Wisconsin had the groundwork laid for a work-based program like 
W-2, it was not until the advent of PRWORA that Wisconsin could 
take the final steps toward a truly work-based program. Without 
PRWORA, the decline you see since August 1996 would not have 
been possible. With PRWORA, Wisconsin was able to fully 
implement the clear lesson learned from our 10 years of welfare 
reform experience--to prepare parents for employment, a support 
program must look as much like the world of work as possible.
    It is clear that without the authority granted to all 
states through PRWORA, we could not have implemented W-2. Let 
me tell you six of the reasons you were right to pass PRWORA 
instead of continuing the waiver system.

               Six Differences Between Waivers and PRWORA

1. By their nature, waivers are temporary.

    The goal of welfare reform demonstration waivers was to determine 
whether a specific policy caused people to change their behavior. 
Waivers were generally granted for a period of five to seven years, 
after which, the state would go back to the status quo.
    The result was that many participants subject to these policy 
changes knew that it was an experiment. Many figured they just had to 
wait it out. In fact, a Manpower Demonstration Research Corporation's 
Cross-State Study of Time Limited Welfare, which focused on time limit 
demonstrations in Wisconsin, Florida, and Vermont, found that several 
participants did not believe that they would ever actually be subject 
to a time limit. In fact, one individual from Florida said that 
``somehow, some way, they'll come up with another program to supplement 
those who are off.'' [The View from the Field: As Time Limits Approach, 
Welfare Recipients and Staff Talk About Their Attitudes and 
Expectations, A. Brown, D. Bloom, D. Butler. MDRC: October 1997.]
    In contrast, TANF gives states the ability to make our changes 
universal and permanent. Wisconsin has spent a lot of time and energy 
ensuring that our participants understand that W-2 is not an 
experiment, it is this state's AFDC-replacement program: all 
participants are subject to a lifetime limit and will be required to 
participate in exchange for their W-2 payment. This fundamental change 
is not a message we could have conveyed in a few weeks. Since PRWORA 
passed 18 months ago, we have been preparing our participants to 
transition to W-2. Our efforts are paying off. Our participants are 
getting the message. Many have chosen to enter the workforce and save 
their time on assistance for when they may have a greater income need. 
The magnitude of these behavior changes would not have been possible in 
an ``experiment'' we needed a permanent program with real consequences 
to get the message across. PRWORA gave us that.

2. Waivers were static and rigid.

    Under waivers, we designed a specific program, and even if we 
discovered that the program would be more effective if we could change 
a policy, extend certain benefits to another group, or increase a 
penalty for non-compliance, we could not make that change until the 
waiver was ended. States became captives of their own experiments. 
Although keeping the policies static made the evaluation results more 
valid, it was not the best thing for the participant.
    Unlike a waiver, PRWORA allows states the flexibility to change a 
policy or procedure based on their implementation experience. Now, we 
can implement the lessons we have learned right away. We are able to be 
responsive to the concerns of participants, communities, elected 
officials, advocates, and our W-2 agencies. Our benchmark for a policy 
change is, ``Will it help the participant progress toward a job?'' If 
the answer is ``Yes,'' we make the change.
    For example, we recently extended our marginally employed policy to 
individuals placed in our W-2 Transition position, where individuals 
with extensive barriers to work such as a caring for a disabled child 
are usually placed. We originally thought that these individuals would 
not be able to work due to their severe barriers. However, in just the 
first few months of statewide implementation, we heard from 
participants, advocates and W-2 agencies that many of our W-2 
Transition individuals can work, want to work, and can benefit from 
work, even if it is only a few hours per week. Thanks to our ability to 
adapt, we have broadened our policy to include these individuals. This 
would not have been possible under a waiver. If W-2 were a waiver, we 
would have to wait until the end of the demonstration to consider 
extending this benefit.

3. Waivers made it difficult to implement Full Engagement.

    AFDC categorically exempted anyone who met pre-determined criteria 
labeled ``barriers to employment,'' which averaged nearly half of the 
caseload. These individuals received a check without any participation 
requirement. The result? Thousands of participants languished for 
years--even decades--in AFDC, often never working with a case manager. 
By shielding these families from participation requirements, AFDC 
denied them the opportunity to break down their barriers. One thing is 
clear, no one ever got a raise on welfare.
    PRWORA recognized that simply writing out a government check each 
month did not address the problems of poor families. PRWORA gave us the 
ability and the incentives to require everyone to participate. Instead 
of ignoring the hard-to-serve, W-2 works with them. W-2 requires 
everyone to work to the best of their abilities. W-2 case mangers have 
flexibility to assign work activities that address participant barriers 
such as an alcohol problem, poor work history, or a disabled child. The 
surprising result? The more we work with these individuals, the more we 
find that their ``barriers'' do not actually prevent them from working.
    In fact, most of these parents want to work, but they were told for 
years that they were not capable. And they believed it. These people 
simply did not know how to take that first step. I had a woman say to 
me with tears in her eyes, ``Thank Governor Thompson for believing in 
me.'' In Wisconsin, we are now helping thousands of parents take that 
first step. It is not an easy one, and we have to stick with these 
families to ensure that they stay on their feet, but a job is their 
best chance of becoming self-sufficient.
    Interestingly, penalties for non-participation in W-2 are not as 
high as in earlier Wisconsin demonstrations. The goal of W-2 payment 
reductions is to encourage individuals to participate, not to punish 
them. Instead of imposing uniform ``sanctions'' for non-participation 
for a month or three months, under W-2, just like a job, the parent 
receives payment for only those hours in which they participated. Every 
hour the participant fails to show up for required, pre-assigned 
activities, their W-2 payment is reduced by $5.15. Both participants 
and W-2 case managers realize that it takes a lot of hard work and 
commitment to move families toward self-sufficiency. Participants 
further realize that participation requirements, more suited to 
individual circumstances because of PRWORA, are actually helpful in 
realizing their employment goals. Case managers are more committed than 
ever to making a success story out of every family on their caseload, 
since contracts are outcome-based.

4. You could not ``waive'' the entitlement.

    Ending the entitlement was as much symbolic as it was hard policy. 
When we were designing W-2, I met with employers from across the state. 
They told me that the existence of the welfare system as an alternative 
to work was acting in a very real way as a competitor. Employers, 
particularly those needing large numbers of entry level workers, 
complained that their ability to attract and retain, and in some sense 
manage their workforce, was weakened by the alternative cash support 
system. If our workers with minor children did not like something about 
the job, they could always quit and go back on welfare. Now, under 
PRWORA, individuals who quit their jobs without good reason are no 
longer entitled to a check. Instead, we help them find a new job.
    Having no entitlement reinforces the work requirements and allows 
us to design the work-training requirements in W-2 like a job rather 
than a handout. Under AFDC, states set payment levels based on family 
size and Wisconsin was among the most generous in the nation. The 
inherent problem in that process was that there was an implied reward 
for having additional children while on welfare. In addition, the old 
concept did not reflect the working world, where parents do not receive 
a raise when they have additional children.
    PRWORA allowed states more flexibility in setting payment levels. 
W-2 payments are based on participation, not family size. As a parent 
moves up the W-2 Employment Ladder, their income increases with the 
final rung being an unsubsidized job. Even the lowest rung on that 
ladder pays more than what 80 percent of what AFDC recipients in 
Wisconsin received before W-2.
    In addition, W-2 allows families to keep more income than under 
AFDC. Previously, net income was deducted dollar for dollar from a 
family's AFDC payment eliminating any incentive to pursue other avenues 
of income. Even child support was assigned to the state and a family 
could only receive the first $50. Under W-2, once a family passes the 
gross income test (115 percent of federal poverty level or $15,330 
annually for a family of three), income does not reduce their W-2 
payment. And the W-2 payment does not count in the gross test. Even 
wages from a part-time job do not reduce the W-2 payment. In addition, 
through a federal waiver, Wisconsin asked to be even more generous with 
its needy families. In another reflection of the real world, Governor 
Thompson fought to pass through the full amount of child support paid 
each month to W-2 families.
    Because of PRWORA and creative thinking by W-2 planners, families 
are encouraged to seek other sources of income to augment earnings when 
the enter the world of work. Unlike the old system, these earnings do 
not reduce a family's grant. Again, just like the real world: you work 
more, you have more.
    Under PRWORA, eligibility requirements became much more simplified 
and Wisconsin took advantage of these less complex federal regulations. 
For example, there are no more rules excluding two-parent families and 
discouraging marriage and family formation. Gone are the strict asset 
limits which were out of step with the times. Also noticeably absent 
from W-2 are the complex benefit calculations that were 
incomprehensible to workers, not to mention recipients. Instead, PRWORA 
allows states to set reasonable limits for eligibility. Our goal now is 
to focus on case management, not mathematical equations!! Participants 
may now own a vehicle with up to $10,000 in equity value and remain 
eligible for W-2. In addition, they are able to retain up to $2,500 in 
other assets, such as savings accounts for future education or family 
emergencies.
    All of this increased generosity is made possible because of the 
end of the entitlement. States can now say, ``Just as in the real world 
of work, we will help you if you help yourself to the extent you are 
able, and do so without fear of the abuse of due process.''

5. Waivers made it difficult to change the culture of the welfare 
office.

    The existence of a random-assignment control group constrained our 
ability to advertise, as we do now, the improved supportive services 
available to parents, because half of them were not eligible--they were 
in the ``control'' group. Now we no longer have to say, ``I'm sorry, we 
know this may help you leave welfare, but because your Social Security 
Number ends in an odd number, you are not eligible.'' In fact, we are 
recruiting clients. W-2 agencies in Milwaukee are doing television and 
radio commercials and full-page newspaper advertisements as well as 
community parties to encourage needy families to take advantage of W-2.

6. Waivers did not allow us to change the bureaucracy.

    We realized that in order to change how families receive welfare, 
we had to change how we provide welfare. So we eliminated the 
entitlement counties had as the sole service providers of cash 
assistance. Instead, we asked them to compete with themselves to meet 
certain performance outcomes in order to be W-2 agencies. The benchmark 
was set high: two standards had to be met within a 12-month period:
    Caseloads had to be reduced by up to 25 percent; and
     105 out of 160 points had to be earned by progressively 
increasing the number of adults in work activities and reducing the 
amount of AFDC expenditures.
    We speculated that perhaps half would make it. We underestimated 
what a little healthy competition could do. Seventy of the 79 counties/
tribes earned the Right of First Selection. In the five unsuccessful 
counties and the seven successful counties who earned the right, but 
simply were not interested in being in the welfare business any longer, 
we opened the process up to private sector competition. In essence, we 
ended the monopoly that counties in Wisconsin had on administering 
welfare. This competitive process to select the best and most 
enthusiastic provider is integral to W-2.
    And size was important too. We wanted each agency to be small 
enough to develop a sense of community. Therefore, Milwaukee, which did 
not earn the Right of First Selection and contains over 80 percent of 
our state's cash assistance caseload, was divided into six W-2 Regions. 
As a result, while the majority of cases in Wisconsin are privatized, 
the majority of agencies are not.
    The results:
    66 Counties/Tribes; 12 Non-profit agencies; 2 For-profit agencies; 
and 2 Tribes developed their own TANF plan.
    By the way, every county agency and all but one Job Opportunity and 
Basic Skills (JOBS) agency that went through the competitive process 
was selected.
    We found that through this process, even with counties that earned 
the Right of First Selection, agencies had to redefine their mission. 
The result was more innovation and creativity than would ever be 
possible under the old system. The bidding process also established 
partnerships between private businesses, government agencies and non-
profits who in many cases will work together for the first time to 
provide the most effective and efficient services to low-income 
families across the state.
    The Department of Workforce Development is managing the W-2 
contracts through state field staff to ensure that contractors are 
meeting performance specifications. The approach is one of technical 
support and guidance rather than ``gotcha.''
    We made our goals our measures of success. The primary goal we want 
to achieve is economic self-sufficiency. We chose a modified health 
maintenance organization model. Instead of determining funding based on 
the number of cases, we made a one-time determination of the caseloads 
in each region at the start of the program, and set maximum contract 
allocations based on this number.
    W-2 agencies keep their profits. Therefore, there is a built-in 
incentive for the agencies to succeed in placing individuals in jobs. 
Rather than prospering by having a large caseload, agencies will 
succeed by helping their participants find jobs and move off the 
caseload, but not permanently. Agencies will be tracked for recidivism 
and wages at placement to ensure they are helping people properly. In 
addition, there is a $5,000 penalty per instance of failure to serve.
    Why is the competitive contracting process so important? Because we 
felt our W-2 families deserved excellent service. We knew we could best 
ensure excellent service if we had the following three things:
    A single entity to hold accountable for all aspects of the program; 
Providers who wanted the privilege of helping people help themselves; 
and The ability to change providers through time-limited contracts if 
service and outcomes were substandard.
    Wisconsin's AFDC program was state-supervised and county-
administered, with basically two separate, parallel, service delivery 
systems: 1) eligibility and check distribution, run exclusively by 
counties, some of whom did not even want to be in the business; and 2) 
the JOBS program, which could be run by public or private vendors, some 
of whom were not committed to the workforce-attachment model.
    The W-2 program was designed so that one organization is wholly 
accountable and responsible for results. By having one agency, with 
each participant dealing with only one case manager, we eliminated the 
excuses for low performance by both agency and participants.
    PRWORA also gave states the opportunity to shift funds to critical 
areas of need. One of the best examples of that flexibility is in the 
area of child care. Safe, affordable child care is a challenge for all 
working families, regardless of their economic status. It was also the 
barrier cited most often by welfare recipients trying to enter the 
workforce. Wisconsin was able to pool child care dollars into one 
funding stream, with the goal of providing access to all working 
families below 165 percent of the federal poverty level and recipients 
up to 200 percent of the federal poverty level, with child care 
subsidies. To that end, $158 million was budgeted for state fiscal year 
1998 and $180 million for state fiscal year 1999. Modest co-pays, which 
underscore personal responsibility as well as stretch available funds 
to more families, are based on a sliding scale. For example, in 
Wisconsin, a mother at the federal poverty line with two children in 
full-time, fully licensed care pays $69 per month for over $900 in 
services. Today, there is no waiting list for subsidized child care in 
Wisconsin!! Without PRWORA, we could probably not make that statement.

                         W-2 Child Care Program
------------------------------------------------------------------------
                                     # of Families
                                        Served      # of Children Served
------------------------------------------------------------------------
September 1996....................           3,552  5,847 (9,347
                                                     children on waiting
                                                     lists)
December 1997.....................          11,357  19,868
------------------------------------------------------------------------

                               Conclusion

    Let me conclude with two additional things that PRWORA did 
right:
    1. Instead of mandating how many people cannot participate 
(as the extensive exemption criteria did in AFDC), PRWORA sets 
aggressive work participation rates, raising the bar for all 
states.
    2. By limiting the amount of post-secondary education, 
PRWORA focuses states on the basics. PRWORA contains a welcome 
provision that restricts post-secondary or vocational education 
to 12 months. This reflects Wisconsin's experience with post-
secondary education for welfare recipients. Under the AFDC JOBS 
program, participants with the poorest success rate were 
enrolled in educational components; the most successful 
participated in work experience or on-the-job training.
    Currently, our most urgent educational goal is to increase 
the percentage of W-2 participants who graduate from high 
school. In December 1995, almost 51 percent of our AFDC 
population had a high school diploma or its equivalent. By 
contrast, less than 18 percent of our current W-2 caseload has 
attained that educational level. This statistic shows two 
things: 1) that many former welfare recipients with a high 
school diploma have successfully entered the workforce; and 2) 
we are correct in focusing on basic education rather than on 
college degree programs. As a result, our goal is to have each 
W-2 participant who lacks at least a high school education 
enrolled in basic skills, GED, or HSED classes.
    However, we do not stop there. W-2 also supports lifelong 
learning. Career planning and exploration go hand-in-hand with 
services provided by W-2 case managers. Wisconsin also offers 
grant money and additional subsidized child care for education 
to individuals who have a proven work history. However, just 
like the working world, families must strive first to support 
their families. Many parents have balanced work with part-time 
education over the years. And as many of us know, that 
opportunity for higher education means more when it is earned, 
rather than seen as an entitlement.
    Thank you for this opportunity to speak with you today 
about some of the many benefits Wisconsin has gained from the 
Personal Responsibility and Work Opportunity Act of 1996. We 
believe its passage was the 104th Congress' finest 
accomplishment.
      

                                

    Mr. Collins. Thank you, Ms. Rogers.
    Mr. Winstead, we'll hear from you now, please. Your entire 
statement will be entered into the record, each of you.

   STATEMENT OF DON WINSTEAD, WELFARE REFORM ADMINISTRATOR, 
          FLORIDA DEPARTMENT OF CHILDREN AND FAMILIES

    Mr. Winstead. Thank you, Mr. Chairman, Members of the 
Subcommittee.
    I appreciate the opportunity to provide you with 
information about Florida's welfare reform activities and our 
implementation of the Temporary Assistance for Needy Families 
Block Grant Program. My name is Don Winstead, and I'm the 
welfare reform administrator for the Florida Department of 
Children and Families.
    Along with the Florida Department of Labor and Employment 
Security and the Department of Health, our agency is 
responsible for administering the program that you passed with 
the National Welfare Reform bill.
    I'd like to highlight some of the comments that I've 
submitted in writing today. In the spring of 1996, the Florida 
legislature passed, by unanimous votes in both chambers, the 
Work and Gain Economic Self-Sufficiency, or WAGES Act. This act 
anticipated enactment of national welfare reform legislation. 
When you passed your bill, we were able to move very quickly, 
because our laws were already on the books. We submitted the 
required State plan and began statewide implementation of our 
program in October 1996.
    In the month prior to our WAGES implementation, there were 
slightly over 200,000 families in Florida receiving AFDC. This 
month, March 1998, the cash assistance caseload in Florida is 
110,826 families, a decline of 45 percent. When you focus 
specifically on the families containing an adult that are the 
ones under the time limit, the decline has been over half. And 
there is a chart attached to my testimony that gives more 
information about the caseload reduction.
    At the same time, our Department of Labor is reporting in 
the first year of operation over 63,000 entries into 
employment, 26,000 additional by the end of the calendar year, 
and as of yesterday, the total figure was over 105,000.
    The caseload reductions we've seen have been in spite of 
changes in eligibility rules to reward work. We have increased 
the earnings disregard, we disregard the first $200 of earnings 
and half of the remainder for as long as the individual is 
receiving welfare. We've doubled the asset limit. We have 
eliminated the so-called marriage penalties that applied to 
two-parent families under the AFDC unemployed parent program.
    We've extended transitional child care to 24 months. And 
we've also implemented a provision called transitional 
education and training where people who leave welfare can 
continue to get help to upgrade their skills and further their 
education. There's information in my testimony on our caseload 
trends and also on our experience with time limits.
    We have changed our governance structure for the program. 
The Florida legislature established a board of directors to 
have oversight to the State WAGES Program. And this board has a 
majority of private sector members.
    We've also set up local WAGES coalitions in each of 24 
regions of the State who have oversight of the local 
implementation of the program, and our implementation is very 
much community based.
    In terms of time limits, Florida was one of the first 
States to implement time limits under demonstration waiver. And 
I believe I would be accurate in saying we've had more 
experience with families actually reaching the time limit than 
any State in the country. I was in Pensacola in February to 
celebrate with them the 4-year anniversary of our demonstration 
in that county.
    There's more detail in my testimony, but bottom line, our 
experience has been that the so-called time limit cliff is more 
like a gradual slope, that the catastrophic impacts that some 
people have feared would result from time limits have not 
occurred, at least so far.
    We've seen remarkable progress in our implementation of 
welfare reform. Employment's up, caseloads are down. And we're 
keeping our commitment to provide the child care and 
transitional benefits that families need to move successfully 
from welfare to work.
    We foresee not only using all of the child care funds that 
you are providing, but we anticipate transferring the maximum 
allowable amount of the TANF block grant to the child care and 
development fund, and to the social services block grant.
    In the next State fiscal year, Governor Chiles has proposed 
to use over $80 million in welfare savings to expand child care 
for the working poor families of Florida. This proposal has 
received broad bipartisan support in the Florida legislature, 
and when implemented, will represent the most significant 
expansion of child care services to low-income working families 
in the history of our State.
    In closing, I'd like to emphasize three key points as we 
move forward. First of all is the need for continued 
flexibility. The regulations that were recently published by 
the administration for Children and Families have been the 
subject of much discussion. We have provided specific 
recommendations. We hope that they will seriously consider our 
recommendations in support of continued flexibility, and we 
hope you will do the same.
    Second, we also urge you to continue your funding 
commitments. We hear persistent rumors that Committees of the 
Congress are considering a variety of measures that would 
undercut our reform efforts. Measures that cut our Federal 
matching funds in the Medicaid or Food Stamp Programs or 
further reduce funding in the social services block grant will 
have a direct impact on our success in welfare reform.
    I have very clear memories of the recession a decade ago, 
when our AFDC caseload doubled. The effect on the State budget 
was devastating. And for each $1 of increased cost, we were 
then only responsible for 45 cents. Next time we'll be 
responsible for 100 cents on $1 of that increase. That's why 
we're using part of our TANF block grant for a welfare reform 
rainy day fund, and it's critical that we have that ability.
    In our initial implementation, we've demonstrated that the 
law you passed and the framework you established for State and 
local reform can work. The old AFDC Program no longer exists in 
Florida. In its place is a program that supports work, personal 
responsibility and self-sufficiency. With your continued 
support and through the efforts of communities throughout our 
State, we believe that next phase of welfare reform can build 
on the success of the first 18 months and complete the 
transformation that has begun.
    Thank you, Mr. Chairman.
    [The prepared statement follows:]

Statement of Don Winstead, Welfare Reform Administrator, Florida 
Department of Children and Families

               Florida's Implementation of Welfare Reform

    Mr. Chairman and Members of the subcommittee, I appreciate 
the opportunity to provide you with information about Floridas 
welfare reform activities and our implementation of the 
Temporary Assistance for Needy Families (TANF) Block Grant. My 
name is Don Winstead and I am the Welfare Reform Administrator 
with the Florida Department of Children and Families. Along 
with the Florida Department of Labor and Employment Security 
and the Florida Department of Health, our agency is responsible 
for administering the program you created in Title I of the 
Personal Responsibility and Work Opportunity Reconciliation Act 
of 1996 (Pub. L. 104-193).

Implementation of WAGES

    In the Spring of 1996, the Florida Legislature passed, by 
unanimous votes in both chambers, the Work and Gain Economic 
Self-Sufficiency (WAGES) Act. This Act anticipated enactment of 
national welfare reform legislation. With the passage of the 
Personal Responsibility and Work Opportunity Reconciliation Act 
of 1996, Florida was able to move quickly to submit the 
required state plan and implemented the new program statewide 
in October 1996.
    In the month prior to WAGES implementation, 200,292 
families in Florida received AFDC. This month, March 1998, the 
WAGES cash assistance caseload is 110,826 families, a decline 
of 45%. In the first year of operation, the Department of Labor 
and Employment Security reported over 63,000 entries into 
employment by WAGES participants, with an additional 26,000 
reported in the October 97 through December 97 quarter.
    The caseload reductions have been achieved in spite of 
changes in eligibility rules to reward work. We let 
participants who go to work retain eligibility longer by 
disregarding a higher portion of their earnings than under the 
old AFDC program. We have replaced the ``$30 and 1/3 
disregard'' under the AFDC program by disregarding the first 
$200 of earnings and 1/2 of the remainder. This earnings 
disregard is available as long as the individual remains 
eligible for temporary cash assistance.
    Other changes have raised asset limits so that people can 
exit welfare with more savings and eliminated the so-called 
``marriage penalties'' which placed severe restrictions on two-
parent families. We have also extended transitional child care 
to 24 months and implemented a transitional education and 
training provision to permit people to upgrade their skills and 
further their careers after they leave welfare.
    The following chart shows the caseload trend in Florida for 
June 1995 to March 1998. As you can see, the caseload was 
declining prior to our implementation of WAGES, but the rate of 
decline has increased considerably since October 1996.

[GRAPHIC] [TIFF OMITTED] T8826.008


Governance Structure

    In addition to changes in program design, Floridas WAGES 
program has a very different governance structure than the old 
welfare program. A State Board of Directors, with a majority of 
members from the private sector, has been established to 
provide oversight to the program. The State Board of Directors 
oversees development of the statewide implementation plan, 
oversees the program budget and charters local coalitions.
    Local WAGES coalitions have been set up in 24 regions with 
oversight, service delivery and financial planning 
responsibilities. The local WAGES coalitions provide for many 
of the work activity and training components of the program 
through contracting for services. In addition, we are in the 
process of implementing privatization projects in three areas 
of the state for all WAGES services.

Time Limit Dynamics

    Florida was one of the first states to implement time 
limits through our Family Transition Program begun in early 
1994 under a federal waiver. We are continuing that 
demonstration in Escambia County to learn more about the 
impacts of time limits. So far, over 1,400 families have 
reached their theoretical time limit in Escambia County. Very 
few individuals have used all of their benefits and been 
terminated due to the time limit. Our experience has been that 
over time, about 6% of families reach the time limit and are 
cut off. Another 6% are employed, remain eligible because of 
the higher earnings disregard and choose to continue receiving 
cash assistance until they reach the time limit.
    For families reaching the time limit, we can extend 
benefits for the children if termination of full benefits would 
make it likely that the children will come into emergency 
shelter or foster care. So far, we have used this option in 
only a handful of cases. Our experience in the Family 
Transition Program has been that most families who have reached 
the time limit have had other sources of support such as family 
members or other income.
    Our statewide WAGES program used the time limit structure 
that we tested in the Family Transition demonstration. Our time 
limits are shorter than those in federal law. For most 
families, the time limit is 24 months out of a 60 month period. 
For longer term welfare recipients and younger individuals 
lacking high school completion or work experience, there is a 
36 month out of 72 month time limit. Both the 24 month and the 
36 month limit are within an overall 48 month lifetime limit.
    As in the federal law, child-only cases, such as children 
being raised by grandparents where the benefits are only for 
the children, are not subject to either a time limit or a work 
requirement.
    The following chart shows a snapshot of the families in 
Florida who are subject to the time limit and the theoretical 
end of their eligibility. This chart shows when people would 
reach the time limit if no family left welfare for any reason 
other than the time limit and if no family received a hardship 
extension. This is a theoretical worst-case scenario that we 
use for planning purposes.
    The chart show that very few of the families who became 
subject to time limits in October 1996 are at risk of reaching 
the time limit in October 1998. Local WAGES coalitions are now 
in the process of reviewing the families who are within six 
months of the end of their time limit. Those who have 
diligently participated in the program and those with hardships 
may qualify for an extension of their time limit for up to 12 
months under state law.
    Our experience is that the so-called ``time-limit cliff'' 
is more like a gradual slope and the catastrophic impacts that 
some people feared would result from time limits have not 
occurred, at least so far.

[GRAPHIC] [TIFF OMITTED] T8826.009


The Need for Continued Flexibility and Support

    Mr. Chairman, we have seen remarkable progress in the 
implementation of welfare reform in the past 18 months. 
Employment is up, welfare caseloads are down and we are keeping 
our commitment to provide the child care and transitional 
benefits that families need to move successfully from welfare 
to work. We foresee not only using all of the child care funds 
you are providing, but we anticipate transferring the maximum 
allowable amount of the TANF block grant to the Child Care 
Development Fund and Social Services Block Grant.
    In the state fiscal 1998-99 budget, Governor Chiles has 
proposed to use over $80 million in welfare savings to expand 
child care for working poor families in Florida. This proposal 
has received broad bipartisan support in the Florida 
Legislature and when implemented, will represent the most 
significant expansion of child care services to low income 
working families in the history of our state.
    By the end of April, the Florida Legislature will pass a 
state budget that expands services for WAGES clients at risk of 
domestic violence, increases funding for treatment of substance 
abuse and expands family planning services to reduce out-of-
wedlock births.
    We're off to a good start, but we need your continued help 
and support.
    The Administration for Children and Families (ACF) has 
recently published proposed regulations that would impose 
extensive reporting requirements on states, restrict the extent 
to which state expenditures can be counted toward the 
maintenance of effort requirement and make it more difficult to 
transfer funds to the child care block grant. We have provided 
specific recommendations to ACF on ways we believe the final 
regulations can implement the statute while continuing to 
support state flexibility. Without the past support of the 
Administration for Children and Families through the federal 
waiver process, many of the lessons we have learned from 
previous demonstrations and applied in the design of the WAGES 
program would have lost.
    We hope they will seriously consider our recommendations in 
support of continued state flexibility and we hope you will 
continue to allow us the flexibility we need to best serve the 
families in our state.
    We also urge you to continue your funding commitments. We 
hear persistent rumors that committees of the Congress are 
considering a variety of measures that would undercut our 
reform efforts. Measures that cut our federal matching funds in 
the Medicaid or Food Stamp programs or further reduce funding 
in the Social Services Block Grant will have a direct impact on 
our success in welfare reform.
    I have very clear memories of the recession a decade ago 
when our AFDC caseload doubled. The effect on the state budget 
was devastating, and for each dollar of increased cost, we were 
only responsible for 45 cents. Next time, well be responsible 
for 100 cents of every dollar in increased cost. Its important 
to remember that the implementation of the Temporary Assistance 
for Needy Families Block Grant transferred the risk of future 
economic downturn and the resulting caseload increases from a 
shared federal/ state risk to a state risk.
    TANF Block Grant funds were established as funds available 
to states ``without fiscal year limitation'' under federal law. 
As federal participation rates and the pressure of time limits 
increase, we retention of the block grants is critical to 
success. The unexpended block grant balances also represent a 
``welfare reform rainy day fund.'' to protect the state from 
future caseload increases.
    Our initial implementation has demonstrated that the law 
you passed and the framework you established for state and 
local reform can work. The old AFDC program no longer exists in 
Florida. In its place is a program that supports work, personal 
responsibility and self-sufficiency.
    With your continued support and through the efforts of 
communities throughout the state, we believe the next phase of 
welfare reform can build on the success of the first 18 months 
and complete the transformation that has begun.
[GRAPHIC] [TIFF OMITTED] T8826.010

      

                                

    Mr. Collins. Thank you, Mr. Winstead.
    Ms. Kimble.

STATEMENT OF VESTA KIMBLE, DEPUTY DIRECTOR, ANNE ARUNDEL COUNTY 
DEPARTMENT OF SOCIAL SERVICES, ANNAPOLIS, MARYLAND; ACCOMPANIED 
 BY CHRISTINE BONDS, CHILD SUPPORT WORKER; JUANA CHAPMAN, JOB 
           COUNSELOR; AND ANGELA COLEMAN, CASEWORKER

    Ms. Kimble. Good afternoon. My name is Vesta Kimble, and 
I'm Deputy Director of Social Services for Anne Arundel County, 
Maryland. Thank you for the opportunity to testify today.
    The Anne Arundel County Department of Social Services is a 
State office, a local office of a State agency, the Maryland 
Department of Human Resources. Three years ago, our local 
office changed the culture of welfare without any State 
legislation, without any Federal waivers, without any 
additional staff and without any additional allocation of 
funds. We simply began doing business in a different way, 
transforming ourselves from an impersonal, forms-laden 
bureaucracy into a professional job center that offers 
customized employment services for any county resident.
    The job center is open Monday through Friday, 8 a.m. to 5 
p.m., for walk-in service. No appointments are necessary. We 
offer many employment services onsite, free of charge: 
Employment assessments, local job listings, onsite job fairs, 
targeted hiring, resume computers, phones for calling 
employers, occupational training, microenterprise development 
programs, and even a job club for those people who need a 
little bit more intensive services.
    We also offer employment-related services onsite, free of 
charge: Career clothing vouchers, transportation subsidies, 
child care vouchers, onsite child care, instruction in earned 
income credit, GED preparation classes and GED testing, English 
as a second language classes, and even an alternative high 
school for teen mothers.
    In addition, we offer other family services, onsite, free 
of charge: Child support services, immunizations, WIC clinics, 
Healthy Teen clinics, and even a summer camp and after-school 
club for school-age children.
    All of these services, in tandem, have helped us achieve a 
66-percent reduction in the number of able-bodied TANF cash 
assistance recipients and have helped to keep our recidivism 
rate to under 10 percent.
    Some of us would argue that welfare reform was possible all 
along, given effective management, even under the AFDC Program, 
and that we really didn't need PRWORA's time limits and other 
penalties. In 1995, a full year before any legislative reform 
in Maryland, our local office became an employment agency for 
welfare applicants in order to divert them from ever applying 
for cash assistance.
    In 1996 we opened the job centers to the general public in 
an effort to remove the stigma of welfare and to mainstream our 
recipients with other unemployed county residents. In 1997, we 
began our boldest initiative to date, to help any under-
employed county resident get a better job, one that pays at 
least $8.15 per hour and has health benefits.
    Our goal, you see, is to reduce poverty, not merely reduce 
welfare dependency. This is by far our greatest challenge. It 
is a challenge that lawmakers and policy leaders applaud, but 
do not support when the budget funds are divvied up.
    If I could ask you for just one change, it would be to 
please think in terms of outcomes that matter for needy 
families, not merely job placements, but prevention of 
recidivism. Not merely employment, but employment in living-
wage jobs that just might survive the next economic downturn. 
Not merely services for TANF-eligible parents, but services for 
all low-income individuals who seek our assistance in finding a 
job, finding affordable child care, transportation, health 
care, and training for a better job.
    Please remove the categorical chains that bind the funding 
we receive, so that we can serve our customers better. We do 
not want to, nor will we ever, turn away some residents simply 
because we cannot fit them into a particular funding category.
    Our caseloads overall have not decreased. In fact, they 
have increased slightly. Nearly every TANF case we close 
remains open for food stamps and Medicaid. Nearly every would-
be TANF applicant whom we divert up front from applying for 
TANF, applies for and receives food stamps and Medicaid, if 
only for the children. We haven't lost those people in exiting 
the TANF caseload; in fact, we still own them in many other 
caseloads.
    Now, during these glory days of economic health, is the 
time to address poverty head-on. Please help us achieve our 
goals within our existing allocation of funds.
    I'd be happy to answer any questions I can, and I will 
defer to the experts, my staff, on questions that I cannot 
answer. With me here today are Christine Bonds, child support 
worker; Juana Chapman, job counselor; and Angela Coleman, 
caseworker. All of them are from the Annapolis Job Center.
    Thank you very much.
    [The prepared statement follows:]

Statement of Vesta Kimble, Deputy Director, Anne Arundel County 
Department of Social Services, Annapolis, Maryland

         ``Changing the Culture of Welfare at the Local Level''

    My name is Vesta Kimble. I am the Deputy Director of Social 
Services for Anne Arundel County, Maryland. Thank you for the 
opportunity to testify today.
    The Anne Arundel County Department of Social Services is a 
local office of the Maryland Department of Human Resources. 
Three years ago, our local office changed the culture of 
welfare--under the AFDC program--without any State legislation, 
without any Federal waivers, without additional staff and 
without an additional allocation of funds.
    We simply began doing business in a different way--
transforming ourselves from an impersonal, forms-laden 
bureaucracy into a professional Job Center that offers 
customized employment services for any County resident.

Services On-Site, Free-of-Charge

    The Job Center is open Monday through Friday, 8 AM to 5 PM, 
for walk-in service. No appointments are necessary.
    We offer many employment services, on-site, free of charge: 
employment assessments, local job listings, job fairs, targeted 
hiring, resume computers, phones for calling employers, 
occupational training, micro-enterprise development, and a Job 
Club for those who need more intensive services.
    We also offer employment-related services on-site, free of 
charge: career clothing vouchers, transportation subsidies, 
child care vouchers, on-site child care, instruction in Earned 
Income Credit, GED preparation classes and GED testing, English 
as a Second Language classes, and even an alternative high 
school for teen mothers.
    In addition, we offer other family services, on-site, free 
of charge: child support services, immunizations, WIC clinics, 
Healthy Teens clinics, and even a summer camp and after-school 
club for school-age children.
    All of these services, in tandem, have helped us achieve a 
66 percent reduction in the number of able-bodied TANF 
recipients, and have helped to keep our recidivism rate to 
under 10 percent.

 Management by Objective

    We did not engage in a lengthy planning process before we 
began reforming the AFDC program in our local office. Rather, 
we chose to begin with a few strategies that seemed to work in 
a few other offices that we had visited around the country.
    Specifically, from Portland, Oregon, we learned about up-
front job search coupled with child care subsidies for any AFDC 
applicant, not just for AFDC recipients. From Minneapolis, 
Minnesota, we learned about on-site child care in the social 
services office. From Riverside County, California, and 
Kenosha, Wisconsin, we learned about the importance of 
professional environments.
    Unlike these other offices, however, we chose to develop a 
team of specialists--child care staff, child support staff, job 
counselors and caseworkers--and presented them with a set of 
objectives for the year, judging their performance as a group.
    Team members had free reign to design and experiment with 
strategies to achieve four specific expectations that first 
year: 1) reduce our County's AFDC caseload 3 percentage points 
faster than the other major metropolitan counties; 2) double 
the number of job placements when compared to the Private 
Industry Council agency's number from the previous year; 3) 
divert as many families from applying for cash assistance as 
possible by providing other services up-front; and, 4) keep as 
many employed parents as possible from coming back into the 
AFDC caseload within six months of employment.
    The success of the team approach that first year was 
evident in the results: the team quadrupled the number of job 
placements, decreased the caseload faster than other counties 
by 12 percentage points, and kept recidivism to 10 percent. Up-
front child care and transportation subsidies helped to divert 
hundreds of would-be AFDC applicants that first year.
    A formal cost-benefit analysis, conducted by the University 
of Maryland, concluded that every $1 invested in the Job Center 
and its services, yielded $2.70 in public program savings--
money not paid out in AFDC, Food Stamps and Medicaid.
    We received designation as a pilot site for a U.S. 
Department of Health & Human Services program called ``Changing 
the Culture of Welfare.'' At times, we had to hide behind that 
designation in order to protect our staff-directed local 
reforms both from those who sought to preserve the stigmatizing 
system of welfare, and from those who sought ``one-size-fits-
all'' welfare reform at the State level.
    There were no special permissions or financial incentives 
granted to our staff from the headquarters office in Baltimore, 
and there was no escape from the ``welfare-like'' salaries for 
caseworkers and supervisors ($17,900 annual salary for a 
caseworker with a college degree).
    Instead, the only rewards for staff were the authority and 
freedom they had to make changes in welfare as they knew it. 
For example, a renegade group of four caseworkers attacked the 
stack of State forms and the State's 14-page benefits 
application form, reducing them all to a one-page Assessment 
Form with additional information able to be input directly into 
a local data base designed in-house specifically to suit their 
needs. With this new freedom, the teams also identified several 
key operational needs: for transportation strategies; for 
training (in Earned Income Credit and domestic violence 
awareness); and, for a Job Developer to serve as a liaison to 
all the local employers who flooded the Job Center with job 
orders.

 National Attention

    This led to the development of three national models:
     A curriculum for training front-line workers in 
Domestic Violence Awareness, whose development was funded by a 
grant from the U.S. Department of Health and Human Services' 
Administration for Children and Families. This training 
protocol is now helping other jurisdictions implement the 
Wellstone-Murray provisions of Personal Responsibility and Work 
Opportunity Reconciliation Act (PRWORA).
     The AdVANtage transportation program, which 
transforms welfare recipients into van company owners who help 
transport other Job Center customers on job search and to and 
from work. This strategy was funded by a grant from the 
Community Transportation Association of America, which operates 
a demonstration grant program for the U.S. Department of 
Transportation's Federal Transit Administration.
     The Wheels for Work program, which Anne Arundel 
County Executive John Gary created in 1995, to help welfare 
recipients purchase surplus County government vehicles that 
otherwise would have been auctioned off for a very low return.
    These and other strategies have attracted national media 
attention. TIME magazine, CNN and The Washington Post have 
highlighted the Job Center as a national model, and because of 
the media attention, more than 500 visitors from local, State, 
Federal and national (for-profit and non-profit) organizations 
have toured the Job Center in an effort to learn how it has 
accomplished its objectives--in other words, to pick our 
brains.
    Most visitors are surprised to learn that the Job Center is 
run by State government employees--not some local, private 
company or national, for-profit contractor. Our usual retort is 
to be equally surprised at our visitors' amazement that 
government workers can and do operate an efficient, effective, 
business-like entity. We further assert that it is better for 
the government to operate such a facility because it can easily 
shift its objectives as customers' needs dictate, and not be 
burdened with lengthy and costly contract modifications. 
Moreover, it is better in the long run, because the social 
services agency can also carefully track whatever effect 
welfare reform might have on the foster care caseload. Notably, 
the foster care caseload in our County has decreased steadily 
during the past five years, while the rest of the State's 
caseloads have increased. Again, effective management was the 
key.

 Outcomes that Matter

    Ever since that first magical year, the Job Center's 
strategies and its objectives have continued to evolve. In 
1996, we established a second Job Center, in our other district 
office, and decided to open both Job Centers to the general 
public, in order to remove the stigma of welfare, and to 
mainstream our recipients with other unemployed County 
residents.
    Diversion is now one of the principal objectives. As Chart 
1 indicates, in September and October 1997, 3,666 County 
residents used the Job Centers. More than 2,300 of them were 
interviewed by Job Counselors, yet only 417 applied for cash 
assistance, and only 194 of those actually had their cash 
assistance cases activated.
    Recently, we began our boldest initiative to date--to help 
any under-employed County resident get a better job--one that 
pays at least eight dollars and fifteen cents per hour and has 
health benefits.
    By far the most challenging of our customers are those who 
are working, but whose wages are so low that they continue to 
qualify for, and choose to receive, TANF. Their partial monthly 
cash assistance grant is usually under $100; nevertheless, each 
month's grant still counts toward their lifetime limit of 60 
months. This group of recipients represents a different type of 
``hard-core'' population because it is difficult to persuade 
them to close their cases voluntarily, or to seek training to 
get better jobs while they are also working. Some of them, 
quite frankly, do not believe the 60-month lifetime limit will 
ever be imposed.
    Even though PRWORA allows us to claim victory for a high 
``participation rate,'' we cannot and should not rest on our 
laurels. Our goal, you see, is to reduce poverty, not merely 
reduce welfare dependency. The outcomes we focus on now are 
broader than the PRWORA or ``Welfare-to-Work'' formula grant 
programs. We seek to achieve:
     Not merely job placements, but prevention of 
recidivism;
     Not merely employment, but employment in living-
wage jobs that just might survive the next economic downturn;
     Not merely employment for those who are 
``mandatory'' for work activities, but resources to assist even 
those who are statutorily exempt from work requirements but who 
want to work, and need to work, just to stay above the poverty 
level (such as disabled parents and parents of disabled 
children);
     Not merely services for TANF-eligible parents, but 
services for all low-income individuals who seek our 
assistance--in finding a job, and finding affordable child 
care, health care, transportation and training for a better 
job.
    We seek to address these broader outcomes largely in spite 
of existing Federal and State programs, which recently have 
created some operating flexibility for local programs, but 
still rely on ``one-size-fits-all,'' restrictive, categorical 
funding.
    For example, as Chart 2 shows, the TANF grant and Food 
Stamps together do not provide enough income to meet the 
Federal Poverty Level. Clearly, in Maryland, work pays more 
than welfare. However, there are few incentives to strive for a 
better-paying job. Gains in wages decrease overall household 
income for a mother with one child because of the loss of Food 
Stamps benefits and the loss of eligibility for child care 
subsidies. Sadly, if this low-income mother has another baby, 
then the State will pay child care subsidies for both children. 
This message, of course, is counter to every common-sense 
notion in anyone's version of welfare reform. Yet, the Federal 
rules associated with these funds limit her options.
    We would prefer not to turn away low-income residents 
simply because we cannot fit them into a particular funding 
category. Those who today are living on the edge of poverty 
will tomorrow most likely spiral down to a level that will 
qualify them for services. Now is the time to address the needs 
of all low-income families.
    Although our TANF caseload has decreased markedly, our 
caseloads overall have not decreased. In fact, they have 
increased slightly, from 20,175 cases in 1995, to 20,467 in 
1998, as is shown in Chart 3. Nearly every TANF case we close 
remains open for Food Stamps and Medicaid. Nearly every would-
be TANF applicant that we divert up-front, applies for, and 
receives, Food Stamps and Medicaid, if only for the children.
    At the present time, neither the Federal government nor the 
State government measure the diversion activity that occurs on 
the front lines. Because it is not measured, it is also not 
funded. We look forward to a day when our staff and other 
resources are allocated, not based on the number of cases we 
have under care in the cash assistance caseload, but rather, 
based on the services we provide to the low-income residents in 
our County and the outcomes associated with those services.
    I'd be happy to answer any questions I can, and I will 
defer to the experts--my staff--on questions that I cannot 
answer. Accompanying me today are: Christine Bonds, Child 
Support Worker; Juana Chapman, Job Counselor; and Angela 
Coleman, Caseworker. All of them are from the Annapolis Job 
Center.
    Thank you very much.
    [GRAPHIC] [TIFF OMITTED] T8826.004
    
    [GRAPHIC] [TIFF OMITTED] T8826.005
    
    [GRAPHIC] [TIFF OMITTED] T8826.006
    
    [GRAPHIC] [TIFF OMITTED] T8826.007
    

    [The official Committee record contains additional material 
here.] 
      

                                

    Mr. Collins. Thank you. We're glad to have your staff here, 
also.
    Mr. Mora.

    STATEMENT OF FRANK MORA, GAIN SERVICES/JOB DEVELOPMENT 
  SUPERVISOR, LOS ANGELES COUNTY DEPARTMENT OF PUBLIC SOCIAL 
             SERVICES, RANCHO DOMINGUEZ, CALIFORNIA

    Mr. Mora. Good morning. Mr. Chairman, Members of this 
Subcommittee, thank you for inviting me here on behalf of Los 
Angeles County.
    We have jobs, OK, I want to start with that. On behalf of 
Los Angeles County, I have 17 staff members that work with me, 
job developers. My name, again, is Frank Mora. I'm a 
supervisor. What I do, basically, I talk to 50 to 60 employers 
a week.
    I understand what employers want, I bring it back to my 
staff, and I relay this to my clients. The process to becoming 
employed is understanding the process of getting a job, what 
you need to do, and applications, and so on, including the 
interview.
    I bring all the resources together in our region, meaning 
from the housing industry, EDD, to job services, to JTPA and so 
on, to make sure that our clients who become employed can go on 
and get the training they deserve.
    Our 17 job developers, we average approximately 325 
participants per week that we see. Of the 325 we see every 
week, we put them into a job pool, what we call a labor market 
job pool, a computerized system, that we can become somewhat 
like a temp agency. We're catering to employers. When they call 
us, we can call people, motivate people within 24 hours, and 
fill employment.
    Out of this pool, we need to identify the three groups we 
have. The first group on the labor market is the fast tracking 
client that doesn't need much, he can get out there and work 
and get going. This kind of client is very successful. Anybody 
can do it, there's nothing to it.
    The second group is the tough one. It's the person who has 
not worked in the last 3 years or has been out of work even 10 
or 12 years. We need to find out and we need to recondition, we 
need to do some self-skill training, we need to establish the 
self-confidence, motivate the client so he or she can get into 
the employment force. And we're doing that quite successfully. 
I'm talking about quite successfully, $6 an hour. That's very 
good.
    The third group that we have is the one I pride the most, 
because this is where the welfare starts, is the teen parent. 
This is where the problem begins, folks, and gets out of 
control. We're talking about keeping families together, we're 
talking about talking to young people, 19, 20 years old, and 
counseling them and keeping them together, and to employment 
and completing their education.
    Let me describe to you one case that I have, that touched 
me, and this is what's going on. I'm telling you what's 
happening right now in the trenches.
    Last September I had a gentleman by the name of David. He's 
20 years old. He came to see me. He came to see our job 
development staff, and we noticed that he was ready for 
employment. We screened him. This guy can get out there in the 
market, he can start work right now.
    So consequently, I told David, David, I'm giving you an 
appointment with me next week at 2 o'clock on Tuesday, see me, 
I'm going to talk to several employers, that's what I do for a 
living, and I'm going to get you some interviews. I want to see 
you in my office at 2 o'clock next week, so I can get you ready 
to go within 48 hours.
    The following Tuesday came and David didn't show up. I'm a 
very intense job developer. And what happened was, we made a 
house call. Because I made a commitment to an employer that I 
found that wanted to see the guy. He wanted to see this guy 
within 48 hours, because he wanted to give him a job, interview 
him, see what he's made of.
    I went to see David. He lived in a not very good area of 
Long Beach. I took a job developer with me over there, for 
safety reasons, two together. When we were outside, we noticed 
that there were some gang members that were buzzing around us 
on bicycles. My job developer became very concerned. I told 
her, don't worry, I'll take care of this right now.
    When David came out, I said, David, where were you? You had 
an appointment with me at 2 o'clock. I see there are some 
safety reasons here. I want to see you in my office this 
afternoon at 2 o'clock. If you really mean it, and you really 
want to go to work, and you have a wife, you told me you do, 
with two little babies upstairs, I want to see you this 
afternoon at 2 o'clock.
    At 2 o'clock, David came to see me. When David came to see 
me, I told David, David, we need to be responsible. David, we 
have a family that we need to keep together and you want to 
provide for, and two little babies. He opened up to me. He told 
me what the problem was and so on.
    I made an appointment with the housing authority in Los 
Angeles County to bring their resources together with him, 
because obviously, for him to work and perform, he needs 
safety. He needs to live in a place that will enable him to 
come back and forth and feel safe with his family.
    I told David, David, I got you the interview with Delco 
Machine Shop in Long Beach. You need to be there, that's your 
first responsibility, then you need to go see the housing 
authority, and everything's going to work out, we're going to 
give you the 100-percent effort. If you're giving us 100 
percent, we're going to give you 100 percent.
    David told me his wife was concerned, she didn't want to be 
alone and so on. I told David, relax, go to the interview on 
Thursday. David went to the interview on Thursday, Delco 
Machine. Saram Graham called me back from Delco Machine in Long 
Beach. She told me, you've got an outstanding client here. He 
can go to work, I don't see why not. He can be a warehouseman.
    I told David, I said, David, you got yourself a job at $7 
an hour. So David came to me, he told me, Mr. Mora, I still 
need some place to go where there's housing that I can feel 
safe. I called into the housing authority and I told Linda that 
David was coming over.
    As far as I saw, there was an effort from David coming to 
me that was going to allow him to become employed and give his 
family a chance to stay together. This is very important to us. 
This is not written policy, but it's common sense. If we're 
going to make it together, we have to maintain the family 
together.
    David became employed. He got a job at Delco Machine. David 
went to the housing authority. He moved. He got a better house, 
a better place to live.
    Three months after David was employed at Delco Machine, I 
called Saram Graham, Delco, and I said, Saram, you wanted to 
talk to me about maybe possibly sending David to training while 
he's still working. So Saram told me, Yes, we can do that, but 
I need to find out the school.
    I called Long Beach City College. We got the community 
college, we're bringing resources together here so we can do 
something to keep a family together. It makes sense.
    Long Beach City College told me, that's fine, we can do it. 
And I can tell you right now, sir, that David is going to Long 
Beach City College. When he completes machine shop operator, 
while he's making $7 an hour, still working, he's going to be 
making $15 an hour upon graduation.
    His wife is completing her GED under Cal-Learn, the State 
of California has allowed that. She graduates in June. I will 
make sure that she gets proper guidance and employment. And I'm 
talking about a family here, keeping it together, that she's 
going to be making probably $7 to $8 an hour in customer 
service.
    We're talking about maintaining a household together.
    [The prepared statement and attachments follow:]

Statement of Frank Mora, GAIN Services/Job Development Supervisor, Los 
Angeles County Department of Public Social Services, Rancho Dominguez, 
California

    Mr. Chairman and members of the subcommittee, thank you for 
inviting me to testify on the Los Angeles County Department of 
Public Social Services (DPSS) Greater Avenues for Independence 
(GAIN) program's job development efforts. As far as welfare to 
work is concerned, as a GAIN service/job developer supervisor, 
I am ``where the rubber meets the road.''
    Special acknowledgment must go to our leaders in Los 
Angeles County. Their vision of the program has allowed us the 
opportunity to excel. Our entire staff also shares in the 
dedication that has enabled us to fast-track welfare recipients 
into the workforce.
    I am here to talk to you about DPSS California Work 
Opportunities and Responsibilities for Kids (CalWORKs) 
program's job development component. I service welfare 
recipients who are at different stages within the GAIN program. 
My unit provides job development services. Job development 
consists of a job creation process for job ready welfare 
recipients who need assistance in entering the job market.
    I will describe to you my typical experiences in the 
trenches. I supervise thirteen (13) GAIN service workers and 
one (1) clerk engaged in developing jobs for the South Los 
Angeles County GAIN Region service area. Job development 
however is a countywide effort that is taking place in five (5) 
regional offices.
    A job developer is a self-motivated individual who will be 
responsible for understanding employer's needs. He/she is the 
liaison between the employer and the welfare participant. 
Employers perceive job developers as genuine and honest 
individuals who the employer can rely on and trust. Employers 
range from mom-and-pops operations, to small, medium and large 
businesses.
    The job development responsibilities impress employers and 
allow for a successful relationship with the employers. 
Employers value our providing screening, short-term training, 
employment tracking and post-employment counseling to 
participants. Consistent attention to all these components 
impress our employers and make our program successful.
    Screening consists of assessing whether or not our 
participants are job-ready and able to enter the job market 
and/or are suitable for this employer. The screening focuses on 
work history, skills, education and conditioning habits that 
are conducive or non-conducive toward the work environment.
    In Los Angeles County, we provide our employers the 
assurance that every participant who we refer to them meets the 
legal immigration status required for employment. Employers 
find in our participants a diverse prospective employee pool, 
with different skill levels, rich multicultural and language 
backgrounds.
    Another asset of our program that has impressed our 
employers is our participation in forming short-term training 
programs that help to meet the employers' current job demands. 
For example, a fork-lift program can be done in one (1) week 
through a community college, provided the participant has some 
previous warehouse experience. The forklift training has led to 
immediate employment at an average pay of seven dollars and 
fifty cents ($7.50) per hour. The certified nurse assistance 
(CNA) short-term training emphasizes acute care and can be done 
in eight (8) weeks. Our CNAs average earnings of nine dollars 
and sixty-eight cents ($9.68) per hour with benefits. Normally 
a CNA training used to take six (6) months long and the 
forklift training used to be one (1) month. The beauty of the 
short-term training programs is that they were done with 
private sector participation. There are other short-term 
training programs that are available such as welding, 
landscaping, and customer service.
    Employers are also impressed with our employment tracking 
that enables them to evaluate our retention rates and to 
predict trends in retention and growth.
    Post employment counseling is the final service in the job 
development process offered to our participants. We give 
participants essential information for their understanding 
about available transitional supportive services such as child 
care and Medical (Medicaid).
    Employee mentoring occurs as participants and job 
developers continue to nurture the relationship and the 
credibility with employers.
    The job development services enable our employers to make a 
connection with our participants before, during, and after 
participants enter the workforce. The flexibility that Los 
Angeles County has provided job developers in guiding our 
participants toward employment has left a positive impression 
with our employers. A single job developer is perceived as a 
reflection of the whole organization. Employers perceive that 
this can be a ``no-nonsense'' approach, meaning less paperwork 
and more measurable results. We continue to nurture the 
relationship with employers through follow-ups, swiftly 
addressing their trends and employment needs. This is a 
beneficial relationship where employers get ``a bigger bang for 
the buck'' while we move welfare recipients into the workforce.
    Having addressed the relationship with our employers, I 
would like to address the relationship that our job developers 
build with participants.
    Job developers identify participants as either (1) job 
ready, (2) as needing additional case management, or (3) as 
needing to complete basic education activities. Job ready means 
participants can be fast-tracked into employment. Job 
developers work one-on-one with participants who need 
additional case management in order to be ``reconditioned'' to 
enter the job market. These participants usually have some work 
history and may have been out of work for more than three (3) 
years. Participants must have a broad view of the job market to 
be successful in getting hired and keeping the job. Lastly, the 
third group of participants require basic education to be 
successful. They may be functionally illiterate in their own 
language. These participants will be encouraged to attend basic 
education classes with a vocational focus. They will also be 
encouraged to take an entry level part-time job if one can be 
found for them. If the participant is a teen, and already in 
school, he/she will be encouraged to stay on track to complete 
his/her high-school diploma or equivalent degree.
    Participants value our workshops and one-on-one servicing 
on resume preparation services, faxing resumes to employers, 
typing tests, dressing for success, and referral to private and 
public employment agencies. Most of all, participants value the 
job leads and personal contacts. It is during the job interview 
where participants ``put it all together.'' For participants, 
this is ``where the rubber meets the road.'' Once offered the 
job, participants gain reassurance to maintain self-sufficiency 
through exit interviews and mentoring with the job developer 
and when they see the job developer continue a relationship 
with the employer. If the participant does not get the job, we 
duplicate the process again and again until we succeed or until 
more information becomes available to assist us in removing the 
participant's employment barriers.
    Challenges exist. Employment does bring other issues to the 
surface such as dependable and quality child care, and reliable 
transportation. There are some very basic changes the 
participants may have to make such as personal hygiene and 
grooming habits, their concept of appropriate business attire 
and soft-skills needed to maintain employment. Such soft-skills 
may include: getting to work on time, being reliable, being a 
self-starter, following instructions and being a cooperative 
team player. Other challenges include such things as language 
barriers, the ability to read written instructions, etc. 
Substance abuse, credit record setbacks and/or convictions 
require a managed and an honest approach with the employer in 
helping the participant find employment. On the other hand, we 
do not ask or expect employers to lower their standards for our 
participants. We ask and expect of our participants to rise to 
the employer's standards. We strive to solve problems before 
the participant gets hired. That way, the problem the 
participant faces does not become a barrier to getting 
employment.
    In conclusion Mr. Chairman, our young CalWORKs program has 
developed into a successful model for welfare to work. It 
offers more open participation from all players involved--
public and private. It uses innovation to the fullest and keeps 
up with demands as they occur. In summary, I want to emphasize 
that success in our program lies in making our participants and 
our employers the central and most important elements in our 
process. Our success occurs when the participant and the 
employer find a common ground.

Attachments
      

                                


          Employers Who Hire Significant Number of Participants
------------------------------------------------------------------------
                 Employer                              Address
------------------------------------------------------------------------
Carl's Jr. Restaurant.....................  16229 Paramount Boulevard,
                                             Paramount, CA 90723
Chief Auto Parts, ATTN: Vicky Demas.......  5400 LBJ Parkway Suite 200,
                                             Dallas, TX 75240
Daniel Freeman Hospital...................  333 N. Prairie Avenue,
                                             Inglewood, CA 90301
Franklin Brass Mfg. Co....................  19914 Via Baron Rancho,
                                             Dominguez, CA 90220
Helpmates.................................  13221 South Street,
                                             Cerritos, CA 90703
Helpmates.................................  2780 Skypark Drive/Suite
                                             115, Torrance, CA 90505
Kaiser Permanente.........................  9333 E. Rosecrans Avenue,
                                             Bellflower, CA 90706
Little Company of Mary....................  4101 Torrance Boulevard,
                                             Torrance, CA 90503
Microdyne.................................  23610 Telo Avenue, Torrance,
                                             CA 90505
Saint Mary's Medical Center...............  1050 Linden Avenue, Long
                                             Beach, CA 90813
Sears (Carson/Torrance)...................  22100 Hawthorne Boulevard,
                                             Torrance, CA 90503
St. Francis Medical Center................  3630 E. Imperial Highway,
                                             Lynwood, CA 90602
Torrance Memorial Medical Center..........  824 E. Carson Street,
                                             Carson, CA 90745
United Airlines...........................  5970 Avion Drive, Los
                                             Angeles, CA 90045
Volt Temp.................................  3655 Torrance Boulevard,
                                             Torrance, CA 90503
------------------------------------------------------------------------


  Other Private and Public Agencies Who Partner With South County Gain
                                 Region
------------------------------------------------------------------------
                                                            Type of
             Agency                     Address           Partnership
------------------------------------------------------------------------
Job Training Partnership Act      7655 S. Center      Job Fairs
 (JTPA).                           Avenue.
Contact: Thelma Coles...........  Los Angeles, CA
                                   90001.
Los Angeles District 22d........  461 W. 6th Street,  Job Fairs in
Contact: Rudy Svorinich, Jr.....   Ste. 302.          South Bay Area
                                  San Pedro, CA
                                   90731.
Compton Career & Human..........  700 N. Bullis Road  Employment
Services Center.................  Compton, CA 90221.   Placement
State of California.............  1220 Engracia       Employment
Employment Development..........   Avenue.             Placement
Department (EDD)................  Torrance, CA 90501
Contact: Sharon La Floer........
Larson Training Center..........  637 E. Albertoni    Job Fairs
Contact: James Griffith.........   Street,.
                                  Ste. 100..........
                                  Carson, CA 90746..
Hub Cities Consortium...........  5610 Pacific        Soft Skills
Contact: Joe Martinez...........   Boulevard.          Training
                                  Huntington Park,
                                   CA 90255.
California State University.....  1250 Bellflower     Certified Nurse
Long Beach, CA 90840............   Boulevard.          Assistant
Contact: Sigmud Jacoby..........  Long Beach, CA       Training
                                   90840.
Carson Community Center.........  3 Civic Plaza.....  Job Fairs
Contact: Pete Fajardo...........  Carson, CA 90745..
Long Beach City College.........  1305 E. Pacific     Forklift Training
Contact: Jim Martois............   Coast Hwy.          and
                                  Long Beach, CA      Certified Nurse
                                   90806.              Assistant
                                                       Training
------------------------------------------------------------------------

---------------------------------------------------------------------------
      

                                

    Mr. Collins. Mr. Mora, we're out of time, sir. That's a 
good story, though, it's a good success story.
    Let me ask you a question about that. How are other 
participants, what is their attitude? This is one case. On the 
scale, since we passed the welfare reform, how has it affected 
the other participants in your area?
    Mr. Mora. I'd probably have a heart attack telling you some 
stories that----
    Mr. Collins. We don't have time for individual stories. Has 
it been positive, negative?
    Mr. Mora. Very positive. The overwhelming turnout from our 
participants, it's incredible. I mean, they want to go to work, 
sir. It's just us coming up with the manpower.
    Mr. Collins. Well, that's good. It's good to hear that.
    Ms. Kimble, how does the 1996 welfare reform law support 
the changes that Anne Arundel County made at the local level, 
and are there continued Federal barriers to the changes that 
you still want to make, and if so, what would you suggest we 
do?
    Ms. Kimble. Well, it's clear that some of the provisions of 
the PRWORA have assisted us. For instance, in Maryland we 
already passed a welfare reform bill expecting that PRWORA 
would be enacted. I don't know if we're the only State, but I 
think we're one of the few States that said, whatever State 
money is put in, we're going to keep those funds in the budget, 
so that whatever savings accrue during the year, we will plow 
those back into the programs. And in fact, 45 percent of those 
savings go back to the local jurisdictions that generated them.
    So we've had a wonderful, really a windfall of funding to 
be able to plow back into training programs and replicate the 
job center. We now have that additional money. Hopefully, that 
will continue. That is, of course, only a State option.
    Changes I would love to see, I was unfortunately a little 
bit unhappy about the welfare-to-work legislation. Because it 
was so restrictive about who we could serve with that funding, 
and how the funding was even allocated. So it's only particular 
people within the caseload who even qualify to get some of that 
funding. And categorically funded programs are just so 
difficult to operate, especially when you have a job center 
that you want to open to the public, to try to remove the 
stigma.
    So really, taking the categorical chains away from all the 
funding and just saying, ``Here is your money. What is it that 
you want to do? Demonstrate with outcomes, not merely 
participation rates.'' Quite frankly, the participation rates 
aren't helping our people. They allow us to claim victory by 
saying, a certain percentage of our welfare caseload is 
participating.
    But those people are still ``on the clock,'' and the clock 
is ticking away. So we look at that as a failure, not a 
success.
    Mr. Collins. Very good.
    Ms. Rogers, tell us more about having to advertise for 
people in Milwaukee. It's kind of unusual, isn't it?
    Ms. Rogers. Well, we believe that the way to really help 
people in the broader sense of the community become self-
sufficient is to reach out and let them know that we have 
services available to support them in work, child care, 
transportation, case management, those kinds of assistance. And 
under the umbrella of a job center, so that it doesn't carry 
the stigma of welfare.
    And that is an education and a cultural change that takes 
time. We have competitive agencies, meaning they have contracts 
that are based on competition, and they can earn profit. So for 
these agencies to be spending what amounts to hundreds of 
thousands of dollars advertising services, I think, puts a very 
strong comment on how committed they are to helping the 
community and not just pocketing savings.
    Mr. Collins. Has this been a result of the drastic drop in 
the number of cases, the success of your program has led to the 
point that you have fewer participants?
    Ms. Rogers. In a sense. Resulting from the fact that we 
realized that we have the increased flexibility to be able to 
reach out to the larger community. It was also a commitment 
from the very beginning as well, because we want to establish 
an environment in which the noncustodial parent can come to the 
door for help, too, in hopes that we can build a more 
traditional family support system. That will take some time.
    Mr. Collins. Very good.
    Mr. Levin.
    Mr. Levin. Thank you.
    Mr. Winstead, let me be sure we understand the figures in 
your testimony. On the first page, you talk about the month 
prior to the implementation of WAGES, 200,000 families, and now 
the caseload is, as of March, was 110,000. Then you referred to 
employment figures.
    Do you know what percentage of those who have left the 
rolls are now working?
    Mr. Winstead. I don't know the precise number of those that 
have left the roles that are now working. Our followups show 
it's over 50 percent. But of course, there are some people who 
don't report to us that they're leaving because of employment. 
They call up and ask that their benefits be terminated, or they 
don't come in for their redetermination.
    And we don't have information about how many of those are 
working. Some of the followups we've done, we have indications 
that many of them are, but I don't have the precise percentage.
    Mr. Levin. Is the State tracking current recipients and 
former public assistance recipients?
    Mr. Winstead. Yes, sir. We set up in essence a data 
warehouse where we're using the unemployment wage information, 
so that we can track longitudinally what happens to people who 
have left welfare.
    Mr. Levin. So let me then ask you, Ms. Rogers, about your 
figures. The chart about the caseload reduction for the State. 
Has the State of Wisconsin been tracking what happens to those 
who leave AFDC or TANF?
    Ms. Rogers. Two things. First of all, what we do have and 
have had in place for several years is the ability to look at 
what we call status codes, why a case closes. One of those 
codes has to do with what's called excess income. About 75 
percent of our reported closures are as a result of excess 
income. And excess income is driven by, largely, income, 
meaning earned income. In part, a small part, it's child 
support as well that could be part of excess income. About 75 
percent is that.
    Another thing that we're doing is working very hard to 
build a data warehouse so that we can track into the future 
against wage records the kind of information that you and we 
are looking so much for. Part of the problem in the past, and 
why we haven't been able to do that immediately in these new 
programs is because the old systems were designed simply to 
meet the Federal reporting requirements.
    That's all that was in place before. Now we have to track a 
larger set of data, and it takes time to build those programs 
onto systems that really weren't designed to do it in the first 
place. We expect that we will have our first capability in 
July, with reports coming quarterly thereafter.
    Mr. Levin. So your information is that a decrease from 
98,000 to 14,000 is not a static figure. Taking those figures 
into account, about 75 percent of the reduction involves income 
from one source or another, correct?
    Ms. Rogers. That's our best estimate, based on the data we 
have.
    Mr. Levin. Mr. Winstead, are you going to have a system in 
place soon? When do you expect your system will be up and 
running?
    Mr. Winstead. Yes, sir, we have the system in place now. We 
have built on a system that was originally put in place in our 
Department of Education to follow or develop outcome measures 
from vocational education and adult education programs. So 
we're partnering with them to enhance their capability to track 
what happens to people who leave welfare.
    Mr. Levin. Ms. Rogers, on the second to last page of your 
testimony, there's a reference to the number of people who have 
a GED. It appears that those with a diploma have been placed 
more readily than those without.
    Ms. Rogers. It would appear, from looking at what 
percentage of the caseload has achieved that, that those are 
the easier folks to help find jobs.
    Mr. Levin. Right.
    Ms. Rogers. We have a more difficult time with both the 
education and the broader aspects of readiness for the work 
force with the remainder.
    Mr. Levin. I want to say to you, Ms. Kimble, it's a factor 
like that that caused us to try to focus the $3 billion 
welfare-to-work program. We wanted to provide the States with 
some additional resources for the harder-to-place recipient. We 
didn't want States to simply work with those who are easy to 
place or easier to place or help place.
    So if you would look at testimony like from Ms. Rogers and 
other data that you perhaps have, I think you can understand, 
we weren't trying to tie hands, we were trying to focus 
resources. Because there's so much flexibility with the rest of 
the money, total flexibility.
    Mr. Collins. Thank you.
    Mr. Shaw.
    Chairman Shaw. Thank you, Mr. Chairman.
    Mr. Winstead, I enjoyed visiting with you and the Governor 
down in Florida and listening to the success of the Florida 
plan and how far you've come.
    I'd like to direct your attention to the attachment to your 
testimony entitled WAGES Monthly Flash Report. On the total 
assistance expenditures, you show your baseline for the month 
of September 1996 of $53 million. We come over to the monthly 
report for March 1998, and we find that it's only about 66 
percent of the baseline.
    Would you explain that to me, and what happens to the 
surplus?
    Mr. Winstead. Yes, sir. As you noted, in September 1996, we 
were spending slightly over $53 million a month in welfare 
payments. And this month, in March, about $30 million, so 
that's a difference of about $23 million a month in terms of 
the savings.
    What we've done in Florida is really three things with the 
savings. First of all, used a considerable portion of it to 
fund child care expenses. We have transferred, last year we 
transferred some $70 million. In addition, to that $70 million, 
the Governor has proposed an additional $80 million, over $80 
million, closer to $85 million, in terms of child care 
expenditures in the coming budget year.
    We've also used those savings to establish our work 
supports. We've significantly expanded our focus on employment 
support services, and so forth. Then we've also used a portion 
of the savings to establish a welfare reform rainy day fund, a 
reserve. Because we're very fearful of what the effect could be 
on our State should we experience an economic downturn. We 
wanted to use the fact that you've made those funds available 
without fiscal year limitation, gives us the opportunity to 
establish some reserve and we think that's prudent.
    Chairman Shaw. Thank you. Other Members will remember that 
this was something that was very important to welfare reform, 
and that is, giving the States flexibility to do precisely 
that. You spoke of, if we have an economic downturn. I think 
Mr. Levin expressed the possibility of something. I think we 
all know, however, that economic downturn is a certainty. It's 
just a matter of when. And I congratulate you for doing that 
and setting up that rainy day fund.
    I'd like to get into just one other area with you, because 
the Governor was very supportive of what I as Chairman tried to 
do last year, and that is, the possibility, worrying about the 
possibility of the impact of the Fair Labor Standards Act. 
Could you tell us, what impact would that have on the Florida 
program? I know that the Governors all across this country, on 
both sides of the aisle, have expressed concern about this.
    Mr. Winstead. Right. We're very concerned, and have been 
very concerned, about the potential impact. And it takes 
several forms. First of all, we were concerned about nonprofit 
organizations and governmental agencies even being reluctant, 
and particularly, State, local, and civic organizations and 
governments being reluctant to work with us, because of unknown 
liability, how this would affect unemployment compensation, how 
this would affect other liabilities.
    In Florida, we did pass into State law a provision that 
said in terms of workers compensation that the State would be 
responsible for workers compensation. We also passed in State 
law a provision that said people assigned to work experience 
that we would use a calculation based on their cash assistance 
and food stamps divided by the minimum wage in terms of 
adjusting the hours. So those were not issues for us.
    The concern that the Governor expressed to you that was a 
particular concern was the effect of other labor-related laws 
or payroll taxes on welfare recipients. Questions like, would 
we be required to withhold 7.65 percent from the cash 
assistance and food stamp benefits of recipients as a ``payroll 
tax'' if they were assigned to work experience. That would 
constitute one of the largest reductions in welfare benefits in 
the history of our State, and that's something that was very 
much a concern.
    Chairman Shaw. There's a concern of sending out the wrong 
message, too, because in listening to all of these witnesses on 
this panel, it's very obvious that you've turned this whole 
thing around to showing that work pays and that work is much 
better than welfare.
    I'm very, very impressed by this entire panel. We certainly 
don't want to see that all of a sudden, when someone has to 
work for their benefits, that their paycheck is less than their 
benefit. That's sending out all the wrong messages.
    I thank you all for your very fine testimony. And thank you 
for the good work that your States are doing.
    Thank you, Mr. Chairman.
    Mr. Collins. Thank you, Mr. Chairman.
    Mr. Robert Matsui, Congressman from California, is 
recognized.
    Mr. Matsui. I thank the gentleman from Georgia.
    I want to thank, first of all, both the Majority and the 
Minority staff and the Ranking Member and the Chair. Because I 
think this panel is an excellent panel, and I really appreciate 
the fact that there are a wide variety of views here, which I 
think is very, very important for us as we try to understand 
this program and obviously how adjustments could be made to it 
in future years. I just think it's an excellent panel.
    I'd like to commend you, Ms. Kimble, because you saw the 
problem back in 1993, 1994, and you made those adjustments 
under the 1988 act, and you didn't even ask for a waiver. You 
just went ahead and did it. It shows the kind of leadership 
that's required to make a program work.
    I think your concept of perhaps looking for some 
flexibility in the work program, training program, might be 
something we may want to look at in future years. I know the 
theory behind it was not to skim the cream, but I think we need 
to maybe even go beyond it. I see Mr. Mora even acknowledging 
that. I think it's probably something we need to look at.
    I'd like to ask Mr. Winstead a question, a followup to Mr. 
Levin. You said about 50 percent, I'm trying to quote you here, 
it says, there's an indication that 50 percent are working, is 
that right, or a little over 50 percent?
    Mr. Winstead. Over 50 percent.
    Mr. Matsui. When you say over 50, like 55 or 52, or 51, 60 
percent maybe, 70 percent? You don't have any statistics, this 
is anecdotal, like Olivia Golden testified, right, your feeling 
about things?
    Mr. Winstead. No, sir. I'm trying to recall, and I don't 
recall the specific percent from our demonstration program that 
we began under waiver, where we had half of the group randomly 
assigned to a control group, and half randomly assigned to the 
program, and what the experience was with the followup done by 
the Manpower Demonstration Research Corp.
    Mr. Matsui. I have a 1996 green book here. You probably 
know these numbers, but it states on page 500, most episodes of 
AFDC enrollment end within 12 months, but of those who exit, 
many come back after 24 months. Statistically, I recall, in 
fact we've had these numbers for years and years, that the 
first 12 months, about 70 percent of the recipients go off of 
welfare. They get married, they get jobs, some of them go on 
disability, I think 2 percent go on disability. Seven percent 
move.
    So we know that 70 percent go off, it's the 30 percent that 
everybody was always concerned about. The problem is that many 
of the 70 percent went back on, because they get divorced, they 
lost their job, or they quit their job because they lost their 
Medicaid benefits. So your numbers are very similar to what 
these numbers were back in 1993 when these studies were being 
done.
    So perhaps maybe over time you can do some kind of a study 
as to why this is happening. Why these numbers haven't really 
changed, even though we have this wonderful, healthy economy, 
the most healthy economy we've had in a generation. Is it 
because maybe there are impediments in the welfare law? Are the 
time limits hurting people? Are they creating more poverty?
    These are the kinds of study and data that we need in order 
to really make a fundamental, very good faith decision. This 
program may be working wonders. But we shouldn't attempt to 
skirt it and make it that way if it in fact isn't. And we 
shouldn't try to make it bad if it really isn't, either. What 
we need is hard data, and data that doesn't try to obscure what 
we want to do.
    And I appreciate the fact that you're doing a rainy day 
fund. But rainy day funds usually don't work that well. I 
remember back in 1982, in the height of our recession, that 
horrible recession, Members from Michigan, the Michigan 
unemployment department came to us and said, we have a rainy 
day fund, but it didn't work in terms of UI, unemployment 
benefits. So we had to do EB, extended benefit, Program, and a 
number of others.
    And obviously, the Federal Government in those days tried 
to bail out, obviously, States and local government, of some of 
their problems. I don't know if we're going to be able to do 
that in this case if we hit a recession, because I think we 
have a compact with you.
    And like you said, you're going to pay 100 percent of 
whatever the problem might be whenever that recession hits. And 
I think the Chairman is right, it may hit one of these days, 
hopefully not too soon.
    I don't know if you have any comments on this, but let me 
say this. The success of this program isn't necessarily going 
to be measured when we have this wonderful economy. The success 
of this program is going to be measured when we're in a 
recession, a recession that goes on 1 year or 2 or maybe 2\1/2\ 
years, whatever the case may be.
    That's when you determine whether a program is working or 
not working. Because that's when you decide whether or not you 
have people who are going to go into poverty, when people are 
hurting, when you create hardship for people.
    And that's why this is a little artificial right now. I 
mean, I don't know of anybody that complains about anything 
right now. In fact, we're seen so wonderfully, Members of 
Congress, everybody is so high in popularity now. But that's 
because we have a great economy. So we shouldn't have these 
problems.
    And I will say one final thing. And you can comment. One of 
the reasons Mr. Stark and I are intense about this issue, and 
we haven't had a chance to really talk about this, is because 
we do something to senior citizens like we did in 1996, AARP 
will be all over us, they'll be doing 150, 200 studies that 
will be commissioned by millions of dollars worth of 
consultants. They'll be shunting paper all over this 
institution, saying, you guys are screwing up, you guys aren't 
doing well, this bill needs to be changed in this way.
    Children, kids in poverty and single women don't have that 
kind of lobby. And so some of us have to take that 
responsibility on. And I hope all of you will as well, because 
you're in charge of this, and you need to make sure that if 
programs aren't working, you need to come back to us.
    Mr. Winstead. If I may respond, Mr. Chairman, a couple of 
points. First of all, one of the reasons that we are 
continuing, even though we have terminated our Federal waivers, 
because we didn't need them, we were able to do without waiver 
the things we were already doing in our program. But we 
continued the evaluation that we began under those waivers.
    And Secretary Golden mentioned five States they were 
working with to measure the impact of welfare reform on the 
well-being of children. We are one of those five States, and we 
have continued that commitment, because we want to, now that we 
have a substantial number of people enrolled in our time limit 
demonstration, we think we have an opportunity to learn more 
about, now, what's the impact on the children in those 
families. Because that is a very important issue to us.
    I work for a Governor for whom there is no higher priority 
than Florida's children. So that is the critical question. And 
I would agree that the economy has certainly helped us quite a 
bit, and I hope it continues. I hope that recession is a long 
way off. But I've administered these programs during 
recessionary times, and I know how difficult that can be.
    I don't know if a rainy day fund will work for us, but 
particularly if we have a regional recession or a short-term 
recession or a recession that disproportionately affects our 
State, given our reliance on tourism and agriculture, then it's 
one consideration, and the fact that we do not have a State 
income tax, so that State funds are affected very quickly when 
you rely on sales tax receipts. It becomes very much an issue 
for us.
    Mr. Matsui. If I may, Mr. Chairman, I apologize, but I 
appreciate this. Let me just say this. I have a great deal of 
confidence and respect for you and Governor Chiles. You have 
been wonderful over the years, and I have no second thoughts 
about your commitment.
    I'm just saying that there may be circumstances beyond your 
control. I was in local government before I came back here. And 
I have to say that when we hit a recession, and it was the 
difference between taking care of police and fire or children 
that are in poverty, it was easy to make that decision 
politically. You took care of police and fire. Because they had 
a constituency.
    Obviously, at the State level, you have those same kind of 
competing priorities. And usually, the ones that can't squeak 
are the ones that lose out, and you know which group that is.
    Mr. Winstead. Yes, sir.
    Mr. Matsui. Thank you.
    Mr. Collins. Mr. Coyne.
    Mr. Coyne. Thank you, Mr. Chairman.
    Mr. Winstead, the State of Florida has reduced its caseload 
by 45 percent since you implemented the WAGES effort.
    Mr. Winstead. Yes, sir.
    Mr. Coyne. And at the same time, Mr. Rolston, who will be 
on a panel right after this, will testify that 31 percent of 
the Florida participants HHS studied were sanctioned, 31 
percent.
    I wonder if you could tell us what percentage of that group 
that were sanctioned lost all of their benefits and therefore 
left the rolls.
    Mr. Winstead. I'm not familiar with the 31-percent 
sanctioned figure. So I can't speak to that particular----
    Mr. Coyne. Well, as I say, Mr. Rolston will testify to that 
later on.
    Mr. Winstead. Right. I'll listen very attentively.
    The sanction in Florida, the way we work our sanctions is, 
if you fail to comply with the work requirement, the entire 
family benefit is terminated. That is a new provision, a 
provision that we enacted under welfare reform, and it's 
different than what it was under our waiver demonstration.
    The reason that we recommended that to our legislature, 
which they passed, was in our family transition demonstration 
program, the case managers who worked with families told me, 
they said, Don, the people who are most at risk of reaching the 
time limit without good options started to fail to comply early 
on, and our sanctions were so weak that it did not have the 
effect of redirecting their behavior. And that's why we have 
changed our sanctioning policy.
    On the first occurrence of sanction, it is full 
termination. For chronic noncompliance, we have a provision 
where we can then restore benefits on second or third 
occurrence of sanctions to the children and pay those through a 
protective payee.
    Mr. Coyne. Can you tell us what percentage of those who 
have left the rolls have left the rolls because they found a 
job, they found employment?
    Mr. Winstead. As I said, it's something over 50 percent 
that we believe are connected to employment. When you look at 
the employment figures reported by our department of labor, 
it's over 105,000. But as you all know, the numbers associated 
with the dynamics of welfare programs can be very misleading.
    When I say that our caseload has gone from 200,000 to 
110,000, that's not because 90,000 families left the rolls. 
Actually, it's because when we were at 200,000, of those 
specific 200,000 families, 140,000 of those have left the 
rolls. And 60,000 remain, and they've been joined by another 
50,000 who have entered or reentered. That's what that dynamic 
is.
    Of those 140,000 who have left the rolls, our department of 
labor is reporting employment entries of slightly over 105,000 
as of now. It was 63,000 the first year, then an additional 
26,000.
    Some of those employed families, however, are still on the 
welfare rolls because of our earnings disregard, and have 
chosen to do that.
    Mr. Coyne. Thank you.
    Ms. Kimble, we're all pleased to hear that you're focusing 
on helping former welfare recipients find jobs that pay a 
living wage and offer the health insurance, which is critical 
to family security. I know you're very interested in that in 
Maryland. But of the former welfare recipients you have placed, 
what percent found good paying jobs with health benefits?
    Ms. Kimble. I can tell you the average wage at placement is 
climbing. And I think that has more to do with the Federal 
minimum wage increase than it does with actually our efforts. 
We started out with $6.27 an hour as an average, and it's up to 
about $6.50.
    Our goal this year for our job center teams, and let me 
just add that they come up with the strategies, we just set the 
goals for them, $7.00. So they have a way to go before 
September.
    It isn't that easy. It's easier to help someone get a job, 
any job, and then we have to make the commitment to say, we 
will help you get a better job. All of our job training slots 
for the higher wage jobs, the jobs that pay at least $8.15 an 
hour with benefits, are reserved for people who have jobs, so 
they have to have at least a part-time job in order to qualify 
for training.
    Mr. Coyne. Do you have any information that would tell us 
how many of them have health care benefits?
    Ms. Kimble. From our up front job search, where I got the 
average of $6.50 per hour, right now, about 25 percent of those 
jobs have health benefits. And that really hasn't changed over 
time. The goal for the job center is to try to get that up to 
35 percent this year.
    They've climbed a little bit, not much. And it's difficult, 
because of the Medicaid income eligibility standards, 
unfortunately, do knock the parent off of Medicaid, even though 
the children stay on Medicaid in Maryland.
    Mr. Coyne. Do you have any additional suggestions about 
what additional resources and training would be required to 
help all welfare recipients find the kinds of jobs that promote 
self-sufficiency and would provide health care insurance?
    Ms. Kimble. I guess my bottom line is flexibility with the 
money. The less time we spend administratively trying to 
pigeonhole people for particular funding categories, the more 
time we have to spend with individuals, who for want of pride, 
do not come into the TANF caseload. They're just as much in 
need, however.
    Mr. Coyne. Are you aware of the study that was done in your 
State that showed 38 percent of the companies in Maryland 
looking for employees, needing employees, but not finding them 
because of the lack of training?
    Ms. Kimble. I'm not aware of that actual study, but I do 
know that that's an issue in our State. And that's why we're 
trying to partner with employers specifically. For example, we 
know nationwide there's a need for 150,000 electricians. So we 
have just partnered with an electrical contracting conglomerate 
to do that training for us and it's our job to get the people 
there, to give them the transportation they need, to give them 
the child care.
    Our job is not to help employers get tax credits. Our job 
is to help people get jobs and keep jobs. That's our commitment 
to the employers. So we've removed all the stigma. We don't 
need tax credits. We don't need specialized things to entice 
employers. But we do need to respond to their needs, as you 
said, for specialized training.
    Mr. Coyne. Thank you.
    Mr. Collins. Thank you.
    Mr. Winstead, I want to go back and ask you a followup 
question to a question earlier. It was about sanctions. You 
understood early on that some of those who were going to reach 
the limit were going to reach that limit because of the fact 
you didn't have strong enough sanctions.
    But then in your testimony, too, you mentioned community 
based programs. Did the community-based programs have any 
effect or work with you in helping to keep the number who 
actually reached the limit from being such a large number? If 
so, how?
    Mr. Winstead. Yes sir, and I think in the experience that I 
talked about and in interacting with the case managers in our 
Pensacola office, that's an example of the community-based 
emphasis that we have. But under our new program, we've set up 
24 regional coalitions that have oversight responsibility for 
bringing together all of the State and the community resources.
    I would remark also that we gave local communities, when we 
did State level welfare reform in anticipation of your bill, we 
also did State level work force development reform in 
anticipation of something. But that hasn't happened yet at the 
national level.
    But we've reconstituted our private industry councils, we 
established work force development boards in regions. And we 
gave communities the option of having the same local board that 
administers their work force development programs be the 
oversight board for their welfare programs. In 16 of 24 areas 
of Florida, they are the same. So in fact, our welfare-to-work 
recipients will in large part be the same organizations that 
are helping us provide oversight to our welfare programs.
    But we think the more of those resources we can get 
together at the community level, and also the more authority 
that we can delegate to the community level on how they 
operationalize the program, the more effective the result.
    Right now we are going through a review process, because we 
have shorter time limits than what you permit. And for some 
families in Florida, the time limit can be 24 months. Our 
community-based coalitions are going through a review process 
now, looking with us at families that are within 6 months of 
the end of their 24-month time limit. They have authorities 
under State law to grant exemptions or extensions of the time 
limit, based on people who have diligently participated in the 
program and haven't been successful. And they'll be making 
those decisions.
    Mr. Collins. They've actually been able to guide you?
    Mr. Winstead. Yes, sir.
    Mr. Collins. Thank you.
    We thank the panel, and we will excuse you and call the 
next panel.
    We'll introduce the panel, and then we'll go back and call 
on them in the order of the introduction.
    We have Richard P. Nathan, director, Nelson A. Rockefeller 
Institute of Government, Albany, New York; Daniel H. Weinberg, 
Division Chief, Housing and Household Economic Statistics, 
Bureau of the Census, Washington, DC; Howard Rolston, Director, 
Office of Planning, Research and Evaluation, Administration for 
Children and Families, U.S. Department of Health and Human 
Services, Washington, DC; and Barbara Blum, director, Research 
Forum on Children, Families and the New Federalism, National 
Center for Children in Poverty, New York, New York.
    Very good. Welcome, each of you, and your testimony and 
your statements in full will be entered into the record.
    We'll start with Mr. Richard P. Nathan.

STATEMENT OF RICHARD P. NATHAN, DIRECTOR, NELSON A. ROCKEFELLER 
        INSTITUTE OF GOVERNMENT, UNIVERSITY OF NEW YORK

    Mr. Nathan. Thank you, Mr. Chairman.
    I'm the principal investigator for a study in 21 States 
where we're focusing on management systems, institutional 
change, the organization of agencies, their budgets, their 
staffing, their contracting, their information systems. Is 
welfare reform, with the ideas that you're trying to work with, 
penetrating to the local workers and affecting the culture and 
signals of agencies and agency systems?
    I, myself, have been to 10 States, and in the 10 States, 
I've talked to our researchers, because we have researchers in 
21 States. I've talked to officials in State agencies, and then 
I go and talk to caseworkers, to see if what they're telling 
me, people tell me is happening, is really happening.
    I've been working in this field 30 years. I started in high 
school. And I have never seen so much change as is going on 
now. New policy bargains are being struck. The work emphasis is 
happening. Welfare is being reinvented. Most agencies don't 
call themselves welfare agencies any more. Semantically, we've 
ended welfare.
    I brought a chart that's got eight points. And all I'm 
going to do is quickly mention some of these points. Number 
one, there are, to me, and I've looked at this for a long time, 
I'm a political scientist interested in management, there are 
big surprising changes in the signaling and bureaucratic 
culture and behavior of people at all levels who carry out 
these social programs.
    And when you talk to the workers and go to the local 
offices, most places I've been, this is something that I have 
not seen before. When I give talks about it, I make what I 
think is a little joke, that all of this is happening and all 
Congress did was pass a law.
    Point number two is, it's not just devolution to the 
States. It's very much also local, second order and third order 
devolution to community groups in most of the States we're in. 
And I was going to name the States, but I'm afraid I don't have 
time. But I have 7 States out of our 21 where we have data I 
could mention, including some represented here today.
    Third is a point that I didn't expect. There's a new 
politics out there. There's a new political equilibrium. People 
are much more accepting of welfare and what welfare programs 
are supposed to do. Because the time limit and the work 
emphasis are popular and there are a lot of jobs available in 
most parts of the country.
    So the mood has changed. And social agencies are getting a 
lot more cooperation from other agencies that provide services. 
Employers want to hire anybody who can breathe into a mirror in 
the morning and have a little mist form in most labor markets. 
If you're ever going to reform welfare, this is a good time.
    Point number four is the work-first emphasis. I used to be, 
and Barbara Blum and I worked on this together for many years, 
chair of the Manpower Demonstration Research Corp., and their 
research shows that immediate attachment to the labor force is 
where you get your strongest effects. That is your culture 
change, that is the signalling. And it's very strong in the 
country. Our research, yes, we look at statistics, Mr. Matsui, 
but we also spend a lot of time looking at institutions, which 
we should look at more.
    Mr. Matsui. Well, since he mentioned my name, you worked 
for Richard Nixon, didn't you?
    Mr. Nathan. I did. First term. First term. I like to--I 
don't know how to take that, but OK. [Laughter.]
    Mr. Matsui. Take it as you heard it. Take it as you heard 
it.
    Mr. Collins. Now, wait 1 minute. Let's let him finish his 
testimony.
    Mr. Nathan. I'm proud of what I did.
    Mr. Collins. You'll have your time.
    Mr. Matsui. No, I appreciate the fact, the Chairman says 
that. He should not have mentioned my name in that context. 
That's all I'm asking.
    Mr. Collins. Refrain from mentioning a Member's name.
    Mr. Nathan. I won't mention any other names.
    Thank you, Mr. Chairman.
    The fifth point on our chart is diversion. That was a 
surprise, too, to people, in that what agencies are trying to 
do, welfare agencies are trying to do, is prevent people from 
becoming permanently in assistance systems, and help them deal 
with emergencies up front. And that is happening very widely in 
a lot of States.
    Point number six is enforcement. Not so much sanctions, but 
that people are being required to sign personal responsibility 
or self-sufficiency agreements, and they're being required to 
take the steps that are part of this process embodied in 
programs that go back a ways, but particularly embodied in this 
new law and in earlier laws.
    Point number seven is that work force development, 
employment, and training agencies are playing a much bigger 
role. In fact, in many States, the responsibility for 
administering TANF Programs is being turned over to them, as 
you heard, in Florida, Michigan, Texas, in lots of States. This 
is becoming a different signalling by a different bureaucracy. 
It's very jobs focused.
    Point number eight is one that I particularly care about 
and that you've been talking about today, but I won't mention 
any names, and that is information systems. We really do need 
to give attention to how we can get and who should be 
responsible for the kind of data we need for general oversight, 
for case management by case managers and for evaluation.
    I'd like to have a word, if the opportunity arises, to talk 
about the fact that many States are collecting the kind of 
postprogram data we ought to have about what's happening to 
people who are exiting from these systems.
    Thank you very much for the chance to testify.
    [The prepared statement follows:]

Statement of Richard P. Nathan, Director, Nelson A. Rockefeller 
Institute of Government, University of New York

    My name is Richard P. Nathan. I am the director of the 
Nelson A. Rockefeller Institute of Government, the public 
policy research arm of the State University of New York located 
in Albany, and I am the Principal Investigator for a multi-
state study the Rockefeller Institute is conducting of the 
implementation of social programs. This study focuses on the 
management systems for social programs of states, local 
governments, and nonprofit and for-profit organizations. Field 
research associates--typically teams of university based field 
research analysts--in a representative sample of twenty-one 
states are participating in this study. The overview analysis 
is being conducted by a core staff of management and policy 
analysts based at the Rockefeller Institute. Funding for this 
research has been provided by the W.K. Kellogg Foundation, the 
U.S. Department of Health and Human Services, and a number of 
other private foundations. As the Principal Investigator for 
this study, I have visited ten states this year to meet with 
the field researchers, state and local government officials, 
and to visit local program offices and interview local 
workers--eligibility workers, case managers, and other front-
line workers.
    In thirty years of observing welfare policy making and 
administration, I have never seen a period of such rapid 
change. This is not the case in all states, but it is the 
case--to varying degrees--in most states. In spite of the 
tendency for the media to focus on the 5-year time limit for 
TANF cash benefits, our conclusion is that the time requirement 
that matters most right now is more near-term. The biggest 
story so far in this respect is ``Tomorrow Requirements''--by 
that I mean up-front stronger signalling and enforcement of 
work and work-related participation requirements. Some people 
may not like this. But it is surely different now. Our reports 
from the field and my visits to state and local offices suggest 
that observers need to get out of Washington and out of state 
capitals to examine these changes at ground level. Yogi Berra 
once said, ``You can observe a lot of things just by 
watching.'' He was right.
    In short, new policy bargains are being struck. The work 
emphasis is happening. National policy has shifted from the 
``income strategy'' of the seventies to an employment strategy 
that emphasizes services and sanctions in different ways and in 
different combinations in different states. One result is that 
some former recipients and applicants who might previously have 
been aided are not receiving cash benefits as employment-
related strategies and other services are being expanded in 
many states. In addition, welfare bureaucracies are being 
reinvented and given new names. They are no longer even called 
``welfare'' agencies. Semantically, we have ended ``welfare.''
    There is, as stated, diversity in how this is happening. 
Each state tends to put its own spin on reform, and many states 
claim that reform was ``invented here.'' There is a window of 
opportunity for welfare reforms now due to several factors--
added funds, added interest, political stability, and tight 
labor markets in many areas of the country. Moreover, there is 
a new political equilibrium about cash assistance for the poor 
in many states now that welfare is so visibly work-oriented and 
is time limited. This political shift has taken welfare off 
national and state legislative agendas where for a long time it 
had been a flash-point social issue. But state administrative 
systems still need to adapt to these policy and program 
changes, especially in the areas of information systems and 
with regard to the application of financial incentives to local 
public and private agencies.
    Basically what is happening is that, after several major 
national policy attempts to do so, states are now converting 
what used to be ``welfare systems'' into ``social service 
systems'' for poor people with children. This is a massive, 
complicated, uneven conversion process. But make no mistake 
about it, it is happening, although faster in some states than 
others.
    In human terms, there are both costs and benefits, both of 
which I believe we need to measure better as stressed in this 
testimony in discussing information systems for social 
programs. Some families are being helped in new ways that raise 
both their self-esteem and their living standards. On the other 
hand, some people, many of whom were already working, are being 
subjected to stronger work and participation requirements which 
many social program advocates find objectionable. However, 
these social policy requirements are not so much new as newly-
enforced.
    Following are ten generalizations based on our research to 
date:
    1. The Personal Responsibility Act of 1996 is causing 
surprisingly large and extensive changes on a bipartisan basis 
in the signalling, organization and aims of social programs for 
the poor in many states.
    2. Especially important is what we call ``second-order 
devolution,'' whereby states are assigning greater 
responsibility to local jurisdictions and groups of public, 
nonprofit, and for-profit organizations. There is diversity in 
the way this second-order devolution is occurring and in the 
organizational and institutional structures responsible for 
social programs for the poor.
    3. The third point is an especially important one and is 
also surprising. We observe a new political equilibrium 
emerging on welfare and work in many states which may over time 
detoxify these programs and make it possible for public and 
nonprofit agencies to do more and work together better to deal 
with the problems of the most disadvantaged poor children and 
families.
    4. Most states are pursuing a ``Work First'' strategy for 
welfare (i.e., immediate attachment to the labor force), which 
represents a shift from the education/human-capital investment 
strategy under the Family Support Act of 1988, which created 
the JOBS program.
    5. Another surprise is that states are devoting unexpected 
priority to what are called ``diversion'' programs to prevent 
families from becoming cash assistance recipients. Although 
some of these diversion programs involve only one-time cash 
grants in lieu of applying for continuing assistance, some 
states are using diversion to expand their repertoire of short-
term solutions to financial crises affecting families, such as 
immediate job search assistance, short-term services, and 
referrals to other public or private agencies.
    6. Many states are adopting stricter, faster, and broader 
enforcement procedures to implement the job search, work, and 
other requirements of the Personal Responsibility Act. 
Frequently, these procedures are tied to conformity with the 
terms of ``Personal Responsibility Agreements'' or ``Self-
sufficiency Agreements,'' which specify responsibilities 
related to work, job search, etc.
     Sanctions are being both threatened and imposed 
earlier as these arrangements have become more routinized and 
more serious. (HHS Secretary Donna Shalala recently referred to 
this as the ``smoke out'' effect; she made the point, with 
which I agree, that it has turned out to be larger than was 
expected.) Based on a study by the U.S. General Accounting 
Office, twenty-six states now are enabled to apply sanctions to 
the full family as opposed to limiting them to the proportion 
of the benefit designated for the family head.
     In some states benefit reductions are ratcheted up 
monthly for failure to comply with work requirements, as in 
Arizona where for the first month of noncompliance the benefit 
is cut by 25%, the second month by 50%, and the third month 
after failure to comply, the full benefit is ended. In order to 
reinstate the benefit, or a benefit reduction, the adult 
recipient has to re-apply and there is a three-day special 
programming requirement for job search, counseling, etc. In 
other states, benefit reductions are ratcheted up for each 
violation of the work requirements, as in Delaware where the 
benefit is reduced by one-third for each violation.
    7. Reorganization efforts are underway in many states to 
assign the major responsibilities for administering TANF 
programs to employment bureaucracies, combined with a related 
effort to change the signalling and culture of these programs 
to emphasize jobs and self-support.
     Although some states have consolidated 
responsibilities and operations into one agency and even a 
small number of divisions, many of these programs are spreading 
responsibilities across a large number of entities. Sometimes 
this complexity is dealt with by giving formal leadership to 
employment bureaucracies; sometimes it is managed through 
informal co-location (e.g., ``one-stop'') coordination 
mechanisms. Most commonly, it is managed at the case level 
through the use of case managers. If there is any clear 
tendency, it is to push these program responsibilities outward 
to include more organizations and service providers in a wide 
variety of formal and informal ways, producing new linkages by 
referrals as well as by contracts.
     Privatization initiatives to turn TANF-related 
social program responsibilities over to non-profit and for-
profit groups are another important way states have changed the 
signalling and procedures of a wide array of social and 
employment programs to aid poor families. States and local 
agencies are also devising innovative mechanisms for bringing 
the resources of private institutions--such as businesses, 
charities, religious institutions, and advocacy organizations--
to bear in pursuing the goals of local social programs. These 
administrative changes mean that in some states divisions 
between the public and private sectors are becoming blurred.
    8. Increasingly, the key to implementing these and related 
reforms is developing and operating information systems that 
can provide on-line, linked data for case tracking and case 
management. These systems are also critical for knowing what 
happens to people (pre- and post-program outcomes) affected by 
welfare reforms, including importantly the diverted population 
and people who leave the rolls. This is an area of major need, 
which over time will be the key both to understanding what 
happens to needy families under social programs and also will 
be the key to what these programs ultimately become in their 
on-the-ground operations.
     Although many tasks and responsibilities are being 
passed down to local governments, local state offices, and 
private service organizations, their welfare information 
systems remain more accessible and responsive for state and 
federal reporting requirements than to local administrative and 
case management needs.
     We observe tension and confusion between local and 
central authorities about what should be reported. It is 
increasingly clear that much crucial information about the 
treatments people receive is not being captured, which is a 
real problem as these treatments are becoming increasingly 
varied and complex. There is considerable disagreement across 
and within all levels of government over operational measures 
of program performance.
     Many state information systems publish little more 
than aggregate caseload information. Whatever the local 
agencies are doing or accomplishing, not enough can be learned 
about their activities from the data they are collecting and 
reporting.
    9. Most states have not yet worked out financial penalties, 
rewards, or allocation rules that are consistent with the goals 
of their new programs. Some of the existing incentives imposed 
by states on local welfare agencies and contractors may in fact 
work against program goals, such as when state budget 
allocations to local agencies depend solely on the number of 
cases in an area or the number of long-term cases.
    10. Although many states are encouraging program 
experimentation by allowing selected counties or regions to 
apply different policies or administrative structures from 
those used in the rest of the state--such as pilot 
privatization projects--few states are making efforts to 
evaluate how these variations might affect program performance 
or outcomes.
    I request that a brief description of the Rockefeller 
Institute's ``State Capacity Study'' be included in the record 
with this statement.

    [Additional material is being retained in the Committee 
files.]
      

                                

    Mr. Collins. Thank you, Mr. Nathan.
    Mr. Weinberg.

 STATEMENT OF DANIEL H. WEINBERG, DIVISION CHIEF, HOUSING AND 
   HOUSEHOLD ECONOMIC STATISTICS, BUREAU OF THE CENSUS, U.S. 
                     DEPARMENT OF COMMERCE

    Mr. Weinberg. Mr. Chairman, Members of the Subcommittee, I 
want to thank you for the opportunity to appear before you to 
report on the Census Bureau's efforts to collect the data 
necessary to evaluate welfare reform. Evaluating the effects of 
changes in a huge, national program like TANF is not easy. I 
want to focus on the analysis of longitudinal microdata, that 
is, data that allow comparisons of the same individuals or 
families at two points in time, more like a video than a 
snapshot, if you will.
    This is the preferred approach to evaluation, when there is 
a nationwide change like the 1996 welfare reforms. Analysts 
used prereform characteristics of a population group to control 
for preexisting differences among households and families. 
Analyses may be as simple as examining changes in employment 
for specific demographic groups or as sophisticated as multiple 
regression that takes account of people who leave the sample.
    There will be only two sources of longitudinal data that 
will have large enough samples for such analyses. The 1996 
panel of the Survey of Income and Program Participation, which 
we call SIPP, and the SPD, Survey of Program Dynamics, the new 
survey created by the welfare reform law.
    In the interest of time, let me focus on the latter, the 
Survey of Program Dynamics, or SPD, as we call it. The SPD data 
will provide information on spells of actual and potential 
program participation over a 10-year period, from 1992 to 2001. 
It will examine the characteristics of people who participate 
in programs and the economic consequences that changes in these 
programs have on the well-being of recipients, their families 
and their children. And the data will allow us to examine the 
characteristics of people who leave welfare and their economic 
well-being.
    Since the SPD is based on a representative national sample 
of all households, inferences about the effects of welfare 
reform nationwide on families over time will be possible. The 
data collected in the 1992 to 1995 period, using the SIPP for 
the same sample of people will provide extensive background 
information. The SIPP has more detailed data than any other 
national survey on program eligibility, access to and 
participation in programs, transfer income, in-kind benefits, 
and so forth.
    Coupled with an extensive array of economic and demographic 
data, such as employment and job transitions, and income and 
family composition, the data already collected will 
characterize the prereform situation of households 
exceptionally well. Because the SPD interviews the same people, 
analysts will have data for the baseline prereform period, the 
reform implementation period in the medium term, and through 
the 2001 postreform period. This design will provide data for 
evaluating the effects of the 1996 welfare reform that has 
seldom, if ever, been available to assess other social policy 
changes.
    Now I'd like to give you an idea of where data collection 
for the SPD stands. Once the legislation was signed in August 
1996, we determined that it was critical to collect income and 
program participation data as soon as possible from as many of 
the 1992 and 1993 SIPP panel households as we could find. 
Waiting too long to contact these households would have run the 
risk of losing many of them and missing too much going on in 
their lives.
    We collected data for 1996 in April through June 1997 by 
administering a modified version of the March 1997 Current 
Population Survey. I'm pleased to report that we found 82 
percent of the SIPP households and completed over 30,000 
interviews. We are preparing for the release of these 1996 data 
which will take place in the next few months.
    However, these data only provide an extension of the 
baseline information. The key first look at postreform behavior 
will be collected in May and June 1998, using a brandnew 
questionnaire. We developed this questionnaire in collaboration 
with other Federal agencies and with Child Trends, Inc. The 
1998 questionnaire includes many questions that focus 
specifically on welfare reform and on child well-being, 
including a special supplement for adolescents.
    We anticipate that these data, which will give the first 
picture of the effects of welfare reform on individuals, will 
be available in the summer of 1999. Along with the microdata 
from the SPD, the Census Bureau will also be releasing basic 
descriptive statistics that present the data in nontechnical 
ways.
    The great interest of the research community in these data 
suggests to us that there will quickly be a number of more 
sophisticated studies of the effects of welfare reform. These 
researchers will describe in detail what the Census Bureau will 
initially describe in summary form.
    The chart attached to my testimony illustrates the kind of 
outcomes measures that analysts will be able to examine with 
the SPD. I've given some examples there. In the interest of 
time, I'll skip that.
    We've also begun work to develop our 1999 questionnaire, 
again working with interested Federal agencies and Child Trends 
aiming toward an improved questionnaire. Finally, we are 
examining how best to present these data to the public to make 
analysis easier.
    The opportunity to conduct the Survey of Program Dynamics 
is an exciting one for the Census Bureau. It is also a sensible 
investment for the government, as it builds on the investment 
it already has in the Survey of Income and Program 
Participation. The challenges are daunting, especially given 
the length of time we will need to follow households, and 
especially since household cooperation with government surveys 
continues to decline.
    You can be sure the Census Bureau will do its best to meet 
these challenges.
    Thank you.
    [The prepared statement and attachments follow:]

Statement of Daniel H. Weinberg, Division Chief, Housing and Household 
Economic Statistics, Bureau of the Census, U.S. Department of Commerce

    Mr. Chairman, thank you for the opportunity to appear 
before the subcommittee to report on the Census Bureau's 
efforts to provide the data necessary to evaluate the Personal 
Responsibility and Work Opportunity Reconciliation Act of 1996 
as directed by that legislation.
    Evaluating the effects of changes in a huge national 
program like Temporary Assistance for Needy Families (formerly 
Aid to Families with Dependent Children) is not easy. Three 
kinds of information are critical to those investigating the 
effects of this welfare reform--process information (providing 
background descriptions), cross-section microdata (comparisons 
of different households at two points in time--a ``snapshot''), 
and longitudinal microdata (comparisons of the same individuals 
at two or more points in time--more like a ``video''). All 
three kinds are needed to understand the full effects of the 
welfare reform legislation.
    The analysis of longitudinal microdata is the preferred 
approach when there is a nationwide change like the 1996 
welfare reforms. Analysts use pre-reform characteristics of a 
population group to control for preexisting differences among 
households. It is critical to know the pre-existing differences 
when evaluating post-reform outcomes for the same people. This 
may be as simple as examining changes in employment for 
specific demographic groups, or as sophisticated as multiple 
regression that takes account of people who leave the sample. 
Only two sources of longitudinal data will have large enough 
samples for such analysis--the 1996 panel of the Survey of 
Income and Program Participation (SIPP), and the Survey of 
Program Dynamics--the new survey created by the welfare reform 
law.
    While the 1996 SIPP has a large sample size and will follow 
households for up to four years, it suffers from the deficiency 
that data collection began in April-July 1996, while the reform 
took effect on October 1, 1996. One could argue that four 
months of pre-reform information is sufficient for many 
analyses, and the SIPP does try to collect retrospective 
program participation information. Some, however, are 
skeptical, particularly those analysts who need a longer pre-
reform period to accurately measure some initial condition, and 
particularly because many (if not most) states had already 
begun to make changes under federal program waivers well before 
the beginning of the SIPP panel.
    The other, and the best, source of longitudinal information 
will be the Survey of Program Dynamics (SPD). The welfare 
reform legislation directed the Census Bureau to continue to 
collect data from members of the 1992 and 1993 panels of the 
SIPP through the year 2002. These data will:
     Provide information on spells of actual and 
potential program participation over a ten-year period, 1992 to 
2001;
     Examine the characteristics of people who 
participate in programs and the economic consequences that 
changes in these programs have on the well-being of recipients, 
their families, and their children; and
     Examine the characteristics of people who leave 
welfare and their economic well-being.
    Since the SPD is based on a representative national sample 
of all households, inferences about the effects of welfare 
reform on families over time will be possible.
    The data already collected in the 1992 and 1993 panels of 
the SIPP, which form the basis of SPD, provide extensive 
baseline (background) information from which to analyze the 
effects of welfare reform. The SIPP has more detailed data than 
any other national survey on program eligibility, access to and 
participation in programs, transfer income, and in-kind 
benefits. Coupled with an extensive array of economic and 
demographic data (such as employment and job transitions, 
income, and family composition), the data already collected 
will characterize the pre-reform situation of households 
exceptionally well. Other SIPP data of special interest here 
include those on (1) education and training, (2) marital, 
fertility, migration, and program participation histories, (3) 
family relationships within the home, (4) work schedules, child 
care, child support, support for non-household members, (5) 
medical expenses and use of health care services, and (6) child 
well-being.
    Because the SPD interviews the same people, analysts will 
have data for the baseline pre-reform period, the reform 
implementation period, and the medium-term (through 2001) post-
reform period. This design will provide data for evaluating the 
effects of the 1996 welfare reform that have seldom, if ever, 
been available to assess other social policy changes.
    Now I'd like to give you an idea of where data collection 
for the SPD stands. Once the legislation was signed in August 
1996, we determined that it was critical to collect income and 
program participation data as soon as possible from as many of 
the 1992 and 1993 SIPP households as we could find. Waiting too 
long to contact these households would have run the risk of 
losing many of them and missing too much going on in their 
lives. To get into the field quickly, we could not use a 
custom-designed questionnaire. We collected data for 1996 in 
April-June 1997 by administering a modified version of the 
annual March 1997 Current Population Survey (CPS) demographic 
supplement. We supplemented the questionnaire with a few new 
questions designed to collect summary 1995 data for the 1992 
SIPP panel (who were last interviewed in January 1995). I am 
pleased to report that we found 82 percent of the SIPP 
households, and completed over 30,000 interviews.
    We are preparing for the release of 1996 data, which will 
take place in the next few months. However, these data only 
provide an extension of the baseline information. The key post-
reform information will be collected in May and June 1998 using 
a new questionnaire. We developed this questionnaire in 
collaboration with other federal agencies and Child Trends, 
Inc.; an interagency working group reviewed the questionnaire 
to ensure that the appropriate issues were covered. The 1998 
questionnaire includes many questions that focus specifically 
on welfare reform and child well-being. We anticipate that 
these data, which will give the first picture of the effects of 
welfare reform, will be available in the summer of 1999. Along 
with the microdata from the SPD, the Census Bureau will also be 
releasing basic descriptive statistics that present the data in 
non-technical ways. The great interest of the research 
community in these data suggests to us that there will quickly 
be a number of more sophisticated studies of the effects of 
welfare reform. These researchers will describe in detail what 
the Census Bureau will initially describe in summary form.
    I must note that funding does not support continued 
interviewing all of the 30,000 households, however. We, 
therefore, reduced the number of households to be interviewed 
to about 19,000 in 1998, including all low-income households 
and nearly all households with children (excluding only those 
at the highest income levels).
    We have also begun work to develop our 1999 questionnaire, 
again working with interested federal agencies and Child 
Trends, aiming toward an improved questionnaire. Finally, we 
are examining how to best present these data to the public to 
make analysis easier. Along those lines, I would like to 
mention a contract we have with the University of Wisconsin. 
Their project team is attempting to describe all state 
programs, both pre- and post-reform, along a set of common 
dimensions (descriptive factors), such as whether applicants 
are sent on job interviews immediately, whether sanctions are 
strictly enforced, whether child care services are fully 
available, and so forth. These characteristics could then 
become explanatory variables in investigations of outcomes 
using survey data--for example: Are job placements higher in 
states that provide child care? Are earnings higher in states 
that emphasize immediate job placement? Also part of the 
Wisconsin project is a pilot study to see if such data can be 
collected at the county level.
    The attached chart illustrates the kinds of outcome 
measures that analysts will be able to examine with the SPD. 
Specifically, the SPD will measure:
     Program eligibility and participation for the full 
range of transfer programs, not just cash welfare;
     Money income, in-kind benefits, and services 
received from programs;
     Employment, earned income, and income from other 
sources;
     Family composition and changes therein; and
     Outcomes for children including key features of 
their environments.
    The opportunity to conduct the Survey of Program Dynamics 
is an exciting one for the Census Bureau. It is also a sensible 
investment for the government as it builds on the investment it 
already has in the Survey of Income and Program Participation. 
Yet the challenges are daunting, especially given the length of 
time we will need to follow households, especially since 
household cooperation with government surveys continues to 
decline. You can be sure that the Census Bureau will do its 
best to meet these challenges. I invite you and others to keep 
track of our progress by visiting the special SPD web site: 
http://www.sipp.census.gov/spd/. I am also attaching for the 
record a copy of a paper on the Survey of Program Dynamics 
presented last November at a Statistics Canada Symposium.

 Examples of Measures Collected by the Survey of Program Dynamics 1998-
                                  2002
------------------------------------------------------------------------
               Research Area                   Example of SPD Measure
------------------------------------------------------------------------
Program eligibility and participation.....  Number of months receiving
                                             cash welfare
                                            Amount of cash welfare
                                             received
                                            Did family later return to
                                             welfare after leaving the
                                             program?
In-kind benefits and services received....  Amount of food stamps
                                             received
                                            Number of months using
                                             government-supplied child
                                             care services
Employment, earned income, and other        Earnings
 income.                                    Number of months with
                                             earnings
                                            Amount of child support
                                             received
                                            Job-related health insurance
Family composition and changes therein....  Marital event (marriage or
                                             divorce)
                                            Childbirth
Outcomes for children including key         Poverty status
 features of their environment.             School-related information
                                             such as changes in behavior
                                             and participation in extra-
                                             curricular activities
                                            Contact with absent parent
------------------------------------------------------------------------

      

                                


       A Survey of Program Dynamics for Evaluating Welfare Reform

 Daniel H. Weinberg, Vicki J. Huggins, Robert A. Kominski, and Charles 
                    T. Nelson U.S. Census Bureau \1\

                                Abstract

    The Personal Responsibility and Work Opportunity Reconciliation Act 
of 1996 eliminated the main United States welfare program, the Aid to 
Families with Dependent Children program, and replaced it with another 
program providing welfare support in the form of block grants to 
states. Part of that law directed the Census Bureau to field a survey, 
whose purpose is to collect the data necessary to evaluate the impact 
of this change. To carry out that directive, we are conducting a Survey 
of Program Dynamics (SPD). The SPD will simultaneously describe the 
full range of state welfare programs along with social, economic, 
demographic and family changes that will help or limit the 
effectiveness of the reforms. We will collect data for households 
previously interviewed from 1992-1994 or 1993-1995 by the Survey of 
Income and Program Participation for each of the six years from 1996 
through 2001.
---------------------------------------------------------------------------
    \1\ Paper prepared for Statistics Canada Symposium XIV, ``New 
Directions in Surveys and Censuses,'' November 1997. Contact: Daniel H. 
Weinberg, HHES Division, US Census Bureau, Washington DC 20233-8500. 
This paper reports the general results of research undertaken by Census 
Bureau staff. The views expressed are attributable to the authors and 
do not necessarily reflect the views of the Census Bureau or the U.S. 
government. The authors would like to acknowledge and thank Evan Davey 
and Stephanie Shipp for their comments and suggestions and the SPD Team 
for doing all the work described herein; they bear no responsibility 
for any errors that remain.
---------------------------------------------------------------------------
    Key Words: welfare, surveys, evaluation
    This paper will
     describe the need for a new survey focused on 
providing the data necessary to adequately evaluate recent 
United States welfare reform legislation,
     describe the origin, purpose, status, and plans of 
the Survey of Program Dynamics, and
     discuss some technical issues we must resolve in 
the future.

                     I. WHY IS A NEW SURVEY NEEDED?

    On August 22, 1996, President Clinton signed legislation 
passed by Congress, and the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996 became Public Law 104-
193. This comprehensive legislation has extensive implications 
for many programs. The law
     eliminates the open-ended federal entitlement 
program of Aid to Families with Dependent Children (AFDC),
     creates a new program called Temporary Assistance 
for Needy Families (TANF), which provides block grants for 
states to offer limited cash assistance,
     makes extensive changes to child care, the Food 
Stamp Program, Supplemental Security Income (SSI) for children, 
benefits for legal immigrants,\2\ and the Child Support 
Enforcement program,
---------------------------------------------------------------------------
    \2\ Since changed by the Balanced Budget Act of 1997.
---------------------------------------------------------------------------
     modifies children's nutrition programs,
     reduces the Social Services Block Grant, and
     retains child welfare and child protection 
programs.
    The law also directs the U.S. Census Bureau to carry out a 
new survey to permit researchers to evaluate the impacts of the 
new law. Why would a new survey be needed?
    Three kinds of information are critical to those 
investigating the effects of this welfare reform--process 
information (providing background descriptions), cross-section 
microdata (allowing comparisons of two points in time--
``snapshots''), and longitudinal microdata (allowing pre-post 
analysis of the same individuals). All three kinds are needed 
to understand the full effects of the welfare reform 
legislation.
    Process or descriptive information provides the context to 
interpret information about welfare recipients or former 
recipients. Examples of process information are the kinds of 
support services offered by welfare agencies (e.g., child care, 
transportation vouchers, job search assistance), 
characteristics of the welfare agency itself (e.g., cases per 
case worker), benefit levels, restrictions on client behavior 
(e.g., whether a teenager must live with her parents), and so 
forth.
    There will be several sources of such information. First is 
the information that states must report about their programs to 
the U.S. Department of Health and Human Services (DHHS). These 
reports are likely to have only the minimum necessary to 
satisfy the requirements of the legislation and therefore will 
probably be insufficient on their own for research purposes. 
Nevertheless, one can use this basic ``tracking'' information 
to tell some basic stories. Two other sources of descriptive 
information seem more promising, however. The first is an 
effort, funded by the U.S. Census Bureau through DHHS, taking 
place at the University of Wisconsin. The project team will 
attempt to describe all state programs, both pre- and post-
reform, along a set of common dimensions (descriptive factors). 
These would then become explanatory variables in investigations 
of outcomes using survey data. Also part of this project is a 
pilot study to see if such data can be collected at the county 
level. A parallel effort is underway at the Urban Institute 
(UI) as part of their Assessing New Federalism Project (ANFP).
    Cross-section microdata can be and has been used to 
evaluate the effects of program changes. Most typically, 
researchers compare average characteristics of a population 
group (e.g., the percent of welfare recipients working) at two 
points in time. Two sources of cross-section microdata will be 
available--the March Current Population Surveys (CPS), and the 
National Survey of American Families (NSAF), being conducted by 
Westat as part of the ANFP project in 1997 and possibly again 
in 1999 or 2000.\3\ Because of the many variants of welfare and 
new forms of household support established by the states as 
they revise their assistance programs, survey organizations 
will have to make changes to existing survey questions to 
collect the relevant data.
---------------------------------------------------------------------------
    \3\ The NSAF has quite respectable samples in 13 states, with a 
supplementary sample in the balance of the U.S. The survey has a sample 
size of about 35,000 households, with low-income households 
oversampled; the interview mode is computer-assisted telephone 
interviewing. A major focus of the survey is health outcomes. For more 
details on the NSAF, see Brick et al. (1998).
---------------------------------------------------------------------------
    The analysis of longitudinal microdata is the preferred 
approach when social experiments cannot be used to evaluate 
program changes, as with a nationwide change like the 1996 
welfare reforms. Analysts use pre-reform characteristics of a 
population to control for preexisting differences among 
households when evaluating post-reform outcomes for the same 
people. This may be as simple as examining changes in 
employment for specific demographic groups, or as sophisticated 
as multiple regression that takes account of self-selection and 
sample attrition. Only two sources of longitudinal data will 
have large enough samples to analyze--the 1996 panel of the 
Survey of Income and Program Participation (SIPP), and the new 
Survey of Program Dynamics (SPD)--the new survey directed by 
the welfare reform law.
    While the SIPP has a large sample size and will follow 
households for up to four years, it suffers from the deficiency 
that data collection began in April-July 1996, while the reform 
took effect on October 1, 1996. One could argue that four 
months of pre-reform information is sufficient for many 
analyses, and the SIPP does try to collect retrospective 
program participation information. Some, however, are 
skeptical, particularly those analysts who need a longer pre-
reform period to accurately measure some initial condition, and 
particularly because many (if not most) states had already 
begun to make changes under federal program waivers well before 
the beginning of the SIPP panel.\4\
---------------------------------------------------------------------------
    \4\ More details about the SIPP can be found in U.S. Census Bureau 
(1991); a third edition is currently being prepared.
---------------------------------------------------------------------------
    On the other hand, the SPD, based on a sample of households 
first interviewed in February-May 1992 or 1993 to be followed 
until 2001, will provide a convincing set of baseline data, 
assuming as we must that differential attrition will not 
vitiate the usefulness of the data collected. The rest of this 
paper describes the SPD in more detail.
    No one source of information will be complete. A full 
picture of the effects of welfare reform will emerge only after 
many years and complementary studies using these different 
sources.

        II. Origin and Purpose of the Survey of Program Dynamics

    Why would a new longitudinal survey that focuses on welfare 
issues be needed? For particular agencies, a series of focused 
single-purpose surveys or experiments can serve many of their 
specific program evaluation needs. But if the research 
community were to rely solely on highly focused data 
collection, there would inevitably be major gaps. Only an 
omnibus data collection vehicle can provide the basis for an 
overall evaluation of how well welfare reforms are achieving 
the aims of the Administration and the Congress. This requires 
a survey that casts a wide net, one that simultaneously 
measures important features of (1) both reformed and unchanged 
welfare programs, and (2) other important social, economic, 
demographic and family changes that will either help or limit 
the effectiveness of the reforms. Further, ideally such a 
survey should be in place before reforms are effective to allow 
adequate assessment of baseline circumstances.
    Several years before the passage of the actual legislation, 
DHHS and the U.S. Department of Agriculture (USDA, responsible 
for the food stamps program) invested substantial resources in 
having the Census Bureau develop such a survey. They hoped they 
could fund and field such a survey to meet their needs to 
understand the effects of anticipated public policy changes on 
the population. In these planning activities, several design 
features emerged as essential. The survey should
     Measure
    --program eligibility and participation for the full range 
of welfare programs;
    --money income, in-kind benefits, and services received 
from programs;
    --employment, earned income, and income from other economic 
sources;
    --family composition; and
    --child outcomes including key features of the environments 
of children (because reforms may have positive or negative 
consequences for children through these intervening 
mechanisms);
     Be a large, longitudinal, nationally 
representative study that measures changes in each of these 
areas and allows the identification of interrelationships 
linking these changes;
     Include baseline data for a period before the 
initiation of reforms;
     Continue to collect data throughout the period of 
reform to monitor the process of change; and
     Collect data for the period after the states 
implement the reforms.
    Section 414 of the welfare reform law specifically directs 
(and funds) the Bureau of the Census to: continue to collect 
data on the 1992 and 1993 panels of the Survey of Income and 
Program Participation [SIPP] as necessary to obtain such 
information as will enable interested persons to evaluate the 
impact of the amendments made by Title I of the Personal 
Responsibility and Work Opportunity Reconciliation Act of 1996 
on a random national sample of recipients of assistance under 
State programs funded under this part and (as appropriate) 
other low income families, and in doing so, shall pay 
particular attention to the issues of out-of-wedlock birth, 
welfare dependency, the beginning and end of welfare spells, 
and shall obtain information about the status of children 
participating in such panels.
    To comply with this directive, the Census Bureau is 
carrying out the Survey of Program Dynamics (SPD) with two 
primary goals:
     Provide information on spells of actual and 
potential program participation over a ten-year period, 1992 to 
2001, and
     Examine the causes of program participation and 
its long-term effects on the well-being of recipients, their 
families, and their children.
    The data already collected in the 1992 and 1993 SIPP panels 
will provide extensive baseline (background) information from 
which to figure out the effects of welfare reform. SIPP is a 
longitudinal survey of households, interviewed at least nine 
times at four-month intervals, and followed if they moved. The 
SIPP collects more detailed data than any other national survey 
on program eligibility, access and participation, transfer 
income, and in-kind benefits. Coupled with an extensive array 
of economic and demographic data (e.g., employment and job 
transitions, income, and family composition), the SIPP will 
serve to characterize the pre-reform situation of households 
quite well.
    Further, the Census Bureau worked closely with policy 
agencies to develop and field topical modules that enhance the 
value of the basic SIPP data. Modules of special interest here 
include those on (1) education and training, (2) marital, 
fertility, migration, and program participation histories, (3) 
family relationships within the home, (4) work schedules, child 
care, child support, support for non-household members, (5) 
medical expenses and use of health care services, and (6) child 
well-being.
    By interviewing the same households in the SPD, analysts 
would then have data for the baseline pre-reform period, the 
reform implementation period, and the medium-term post-reform 
period. Researchers require these data to assess short-term and 
medium-term consequences and outcomes for families and 
individuals. The use of both panels will also double the size 
of certain groups of interest, subject of course to our ability 
to recontact households in the two panels and their willingness 
to participate. (Because the funding provided is not sufficient 
to interview all households in both panels past 1997, we will 
subsample after 1997; see section IV.)
    The topics that the SPD will cover are an extension of 
those covered by the SIPP, but placed in an annual context 
using guidance from such annual surveys as the March supplement 
to the Current Population Survey, the Panel Study of Income 
Dynamics, and the National Longitudinal Surveys.

                       III. SPD Status and Plans

    Current plans are for data to be collected for each of the 
six years from 1996 through 2001. This will provide panel data 
for ten years (1992-2001) when combined with the 1992 SIPP 
panel data (and nine when combined with the 1993 SIPP panel 
data). Our original plans were to have an instrument ready to 
field concurrently with welfare reform. Because President 
Clinton vetoed the legislation twice during 1995, we put our 
plans on hold. Consequently, we were unable to pretest the SPD 
questionnaire and could not field the survey we had designed in 
1997.
    Nevertheless, we felt it critical to fill the data gap 
between the end of the SIPP observations and the start of the 
basic SPD observations. To do so, we designed the SPD with 
three fundamental sections:
    (1) the ``bridge'' survey which will provide the link 
between the 1992 and 1993 panels of the SIPP and the SPD;
    (2) the 1998 SPD which will use the core instrument already 
developed to collect annual retrospective data starting in 
1998; and
    (3) the 1999 (and later) SPD which will include a child 
well-being module starting in 1999; its content may vary from 
year to year.

SPD ``Bridge'' Survey

    It was critical to collect income and program participation 
data in spring 1997 for calendar year 1996 from as many of the 
1992 and 1993 SIPP households as we could find, as too long a 
gap ran the risk of losing too many households and missing too 
much going on in their lives. Data for 1996 were collected in 
April-June 1997 by administering a modified version of the 
annual March 1997 Current Population Survey (CPS) demographic 
supplement, with a few new questions designed to collect 
summary 1995 data for the 1992 SIPP panel (who were last 
interviewed in January 1995).
    Eligible for the SPD sample were all SIPP persons 
interviewed in the first wave of the 1992 and 1993 SIPP panels 
and still being interviewed at the end of the panel. We decided 
not to try to find all persons in the 1992 and 1993 panels who 
left the survey (attrited) before the end of the SIPP because 
of the difficulty and cost involved in trying to find those 
people (who had already declined to participate even after 
repeated attempts to interview them) and because we felt that 
most analysts would need as much baseline data as possible. Use 
of population controls will reweight the remaining sample cases 
to represent the U.S. population.
    Finding people who move is critical to the success of any 
longitudinal survey, particularly one as focused on the low-
income population as SPD. Naturally, SIPP has developed many 
time-tested procedures that will help. But the automated 
questionnaire instrument must permit such tracking as well. 
Luckily, the CPS implemented a ``mover module'' in January 1997 
to track people leaving formerly interviewed CPS households. 
This was crucial to the SPD especially given the time that had 
elapsed since the last interview, though the CPS approach did 
not fully meet the needs of the SPD. We tracked most, though 
not all, movers and we will attempt to interview in 1998 those 
that we know about but could not interview in 1997. We also 
tested the use of a $20 monetary incentive for low-income 
households in an attempt to reduce nonresponse to the Bridge 
survey; as the Census Bureau has shown that such an incentive 
was successful in reducing nonresponse to wave 1 of the 1996 
SIPP panel.\5\
---------------------------------------------------------------------------
    \5\ See James (1998). Evaluation of the effectiveness of the SPD 
incentive is underway.

---------------------------------------------------------------------------
1998 SPD

    During the first half of 1997, the University of California 
at Berkeley translated the instrument developed in 1995 \6\ 
into computer code; UC-Berkeley is the developer of the CASES 
authoring language used for computer-assisted Census Bureau 
surveys. We carried out a pretest in October 1997 using 400 
retired 1996 CPS households in four of our regional office 
locations. From this test we will have a good idea of how well 
the instrument does in an operational environment. We also will 
test the use of a self-administered adolescent questionnaire 
using audio cassettes to obtain information from youths 12 to 
17 years old. Preliminary indications are that we may have to 
shorten the questionnaire to fit within our time constraint.
---------------------------------------------------------------------------
    \6\ For more information on the design process for the SPD, see 
Hess and Rothgeb (1998).
---------------------------------------------------------------------------
    Using the fully developed computer-assisted personal 
interview instrument, annual data collection will occur once 
each year in May and June, with annual recall for the preceding 
calendar year. The survey will include a set of retrospective 
questions covering 1997 for all persons aged 15 and older in 
the household. The topics covered are
     Basic demographic characteristics, including
    --educational enrollment and work training,--functional 
limitations and disability, and--health care use and health 
insurance;
     Basic economic characteristics, including
    --employment and earnings,--income sources and amounts,--
assets, liabilities, and program eligibility information, and--
food security;
     Information about children, including their
    --school enrollment and enrichment activities,--disability 
and health care use,--contact with absent parent,--care 
arrangements, and
    payment of child support of their behalf; and
     two self-administered questionnaires,
    --a short question sequence for adults focusing on marital 
relationship and conflict and a depression scale, and
    --a relatively lengthy questionnaire for adolescents aged 
12 to 17 focusing on such issues as family conflict, vocational 
goals, educational aspirations, crime-related violence, 
substance use, and sexual activity, (developed in collaboration 
with the Child and Family Research Network).\7\
---------------------------------------------------------------------------
    \7\ We have not yet finalized this questionnaire.

---------------------------------------------------------------------------
1999 SPD and later

    Work has begun on identifying the topics for a child well-
being module to be asked in 1999 or later. We plan to focus on 
elements that allow analysts to measure changes from pre-reform 
periods or that illuminate other mechanisms affecting outcomes. 
One possibility is to collect data on where the children have 
lived and the reasons for any absence from the parents. Also 
under investigation are question variants to address the 
changing nature of welfare programs in the 50 states and the 
District of Columbia.

                          IV. Technical Issues

    This section deals with four technical issues that affect 
the administration and usefulness of the survey--the need for 
subsampling due to budget constraints, weighting and database 
development, the collection of supplementary data, and the use 
of administrative records.
    Subsampling. It is clear we cannot interview all households 
in the 1992 and 1993 SIPP panels in 1998. The response rate to 
the 1997 Bridge survey was good, given the time that had 
elapsed since the prior interview--81.7 percent--yielding a 
sample of 30,125 interviewed households. The budget for the 
survey, $10 million per year, will allow us to complete 
interviews with about 17,500 households in 1998, given the 
projected length of the interview. Our current plans are to
     Sample with certainty
    --all households with income less than 150 percent of 
poverty, and
    --all households with incomes between 150 percent and 200 
percent of poverty with children;
     Subsample at 80 percent
    --all households with incomes above 200 percent of poverty 
with children;
     Subsample at 50 percent
    --all households with incomes between 150 percent and 200 
percent of poverty without children; and
     Subsample at 26 percent
    --all households with incomes above 200 percent of poverty 
without children.
    Subsampling will be based upon household characteristics as 
of the Bridge survey.
    Weighting and database development. Three objectives will 
influence our thinking on SPD data products and weighting. We 
want to
     Provide longitudinal data to evaluate the effects 
of welfare reform;
     Release a data product as soon as possible after 
collecting the 1997 Bridge data; and.
     Focus our scarce resources on just the products 
that our users need most.
    The first product the Census Bureau will release is a 
public use microdata file. This will include data from the 1997 
Bridge data, longitudinal weights to post-stratify up to a 
January 1993 cohort, and codes to link the SIPP and SPD Bridge 
data. We will release it as a research file with appropriate 
caveats. The weights will be crude, but should suffice for 
preliminary research purposes. Researchers always have the 
option of making additional weighting or imputation adjustments 
as they deem necessary for their specific analyses.
    We realize that users of the longitudinal data might have a 
hard time figuring out how to use data from three separate 
surveys (SIPP, CPS, and SPD) simultaneously in a longitudinal 
analysis. Our challenge is therefore to create a longitudinal 
data set with annual data from all three survey instruments 
(SIPP, CPS, and SPD) in a consistent format.\8\ Our current 
plans are as follows. The Census Bureau will release two files 
each year after 1998 and later SPD data have been collected, 
processed, and weighted. The files will include and provide 
appropriate weights for households responding to the latest 
interview. The first file will include (1) the SIPP 1992 and 
1993 panel data covering 1992-1994 and 1993-1995 respectively, 
(2) the 1997 bridge data covering 1995-1996 (1992 panel) or 
1996 only (1993 panel), and (3) the 1998 and later SPD data as 
originally collected and edited (covering 1997 and later). The 
second file will attempt to create a consistent set of annual 
measures for each year of data (a ``common format'' file), to 
simplify the analyst's chores; this file will probably use the 
``least common denominator'';--the CPS--as the common data 
format.\9\
---------------------------------------------------------------------------
    \8\ The microdata from the SIPP surveys are already available on-
line at the Census Bureau's web site (www.census.gov) through the 
``Surveys On-Call'' program; plans are underway to provide the data as 
well through FERRET (the Census Bureau's Federal Electronic Research 
and Review Extraction Tool, which already provides the CPS microdata to 
users).
    \9\ Researchers will be able to analyze drop outs by comparing the 
prior year's data file with the current one.
---------------------------------------------------------------------------
    These longitudinal products are conceptually the same type 
of products that we have issued for the SIPP since its 
inception. Usually, one defines a longitudinal cohort as all 
the people interviewed (or for whom data was imputed) in every 
interview within the period of interest. For example, the 1993-
1997 SPD longitudinal cohort will be all those people 
interviewed from February 1993 through the 1998 SPD interview 
(May-June 1998). The control date will be as of the beginning 
of the cohort period (February 1993 for this example). This 
creates a nationally representative longitudinal cohort for the 
population as of the beginning of the cohort period. We expect 
the weighting adjustments will compensate for differential 
nonresponse.
    Supplementary data. As noted earlier, the University of 
Wisconsin will create a complementary data base of state and 
county welfare program characteristics to match to the SPD 
data. County-level matches must remain confidential, and 
researchers would have to work on that matched data set at the 
Census Bureau under Special Sworn Employee status to maintain 
respondents' confidentiality.
    Administrative Records. One final hope is that 
administrative records can enhance the SIPP and SPD survey data 
to provide an even broader and long-run picture of the pre- and 
post-reform economic situation of the survey households. For 
example, Summary Earnings Records from the Social Security 
Administration for all respondents providing Social Security 
Numbers (SSN's) could provide a good way of validating and 
extending the survey earnings reports (as would matches to 
income reports provided to the Census Bureau from Internal 
Revenue Service tax records).
    One potentially useful development would be to establish a 
nationwide tracking system for welfare recipients based on SSN; 
such a system could be used to facilitate enforcement of the 
five-year lifetime assistance limit in the new legislation. We 
could then append location information and possibly benefits 
received to the survey data for welfare participants, even for 
those attriting from the sample.
    A few other alternatives present themselves. If the SPD can 
collect employer name and address successfully, a match to the 
Standard Statistical Establishment List can provide the key to 
links with business data for those in the sample who are 
working. If states collect and keep consistent caseload data 
using SSN's, and their laws permit sharing such information 
with the Census Bureau, that's another possibility for 
enhancing the data files. Finally, we could match summary 
financial data about welfare and related expenditures of local 
and state governments using the household's residential 
location. (Of course, researchers must use confidential 
information at Census Bureau headquarters or one of its 
Research Data Centers.)

                         V. Concluding Remarks

    The opportunity to do the Survey of Program Dynamics is an exciting 
one for the Census Bureau. It is also a sensible investment for the 
government as it builds on the investment it already has in the Survey 
of Income and Program Participation. Yet the challenges are daunting, 
especially given the length of time we will need to follow households, 
and as household cooperation with government surveys continues to 
decline.

                               References

    Brick, Michael et al. ``Analysis of Nonresponse and Coverage 
Adjustment Procedures for a Dual Frame Survey,'' Proceedings of 
Statistics Canada Symposium XIV, Ottawa, 1998.
    Hess, Jennifer and Jennifer Rothgeb. ``Measuring the Impact of 
Welfare Reform: Issues in Designing the Survey of Program Dynamics 
Questionnaire,'' Proceedings of Statistics Canada Symposium XIV, 
Ottawa, 1998.
    James, Tracy M. ``Results of the Wave 1 Incentive Experiment in the 
1996 Survey of Income and Program Participation,'' 1997 Proceedings of 
the Survey Research Methods Section of the American Statistical 
Association, 1998.
    U.S. Census Bureau, Survey of Income and Program Participation 
Users' Guide, Second Edition, Washington DC, 1991.
      

                                

    Mr. Collins. Thank you, Mr. Weinberg.
    Mr. Rolston.

    STATEMENT OF HOWARD ROLSTON, PH.D., DIRECTOR, OFFICE OF 
PLANNING, RESEARCH AND EVALUATION, ADMINISTRATION FOR CHILDREN 
   AND FAMILIES, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

    Mr. Rolston. Mr. Chairman, Members of the Subcommittee, it 
is a pleasure to be here today to discuss the role of research 
as one critical element in the success of welfare reform.
    This Subcommittee played a key role in making evaluation 
activities integral to TANF. To illustrate how ACF is using the 
authority and funding provided by Congress, I'll describe our 
State evaluation activities, including both what we've already 
begun to learn, and what we can expect to learn in the future.
    A central focus of ACF's evaluation approach is to develop 
reliable, credible information about how different strategies 
are working, in order to inform the State policy choices that 
TANF flexibility provides, and to inform the public and the 
Congress as to how welfare reform is progressing.
    I want to mention that the State evaluations I'll discuss 
today are only one part of a broader strategy to develop 
research and to disseminate it. Over the past 20 years, the 
application of experimental approaches to studying the effects 
of welfare reform has proven to be enormously important in 
determining what is effective and what is not.
    In authorizing the Department to fund the continuation of a 
number of pre-TANF waiver evaluations, Congress provided the 
vehicle for obtaining the earliest reliable information on the 
effectiveness of different State welfare reform strategies on 
such key goals as decreasing welfare dependency, increasing 
employment and earnings and total family income, and 
strengthening family structure.
    ACF has funded nine States to continue their evaluations 
with only minimal change, and an additional eight States to 
modify their evaluations. The main questions that the waiver 
evaluations answer is, ``What has the totality of the change in 
State policy brought about?'' But there's another equally 
important area of study which examines decisions States need to 
make about the parts of their programs.
    For example, over the last several years, it has become 
clear that many recipients do work, but that their work is 
sporadic. In addition, many of these families continue to have 
incomes that are quite low.
    As a part of the creativity that is coming about from a 
flexible work-focused system, many States are now experimenting 
with what are frequently called ``postemployment services'' in 
order to increase employment persistence in family income. I 
think you've heard about some of these from earlier witnesses. 
Rigorous evaluation can tell us which of these approaches are 
effective in achieving these goals.
    In turning to what we've learned so far, I want to stress 
that it's too early to draw inferences with a high degree of 
confidence. However, the following lessons are suggested. 
First, most State evaluations indicate significant impacts on 
the proportion of recipients and former recipients who are 
employed. These impacts range from modest to quite large, as 
high as 15 percentage points, depending on the reform 
intervention and the population subject to it.
    Second, States are dramatically increasing the mandatory 
aspect of work programs. Sanctions are much more common than 
anyone would have predicted. For example, in Delaware, nearly 
half of participants were sanctioned for failure to cooperate, 
and in Florida, 31 percent.
    Third, although States are getting out the message that 
welfare reform is occurring, and despite State efforts to 
simplify and explain their programs, many recipients don't have 
a clear understanding of the new rules. For example, in one 
State, almost 90 percent of participants knew they were under a 
time limit, but only about half knew how to calculate when 1 
month counted toward it.
    This isn't a new phenomenon. It was true under AFDC also.
    Fourth, to date, studies confirm earlier research on the 
effect of more generous earnings disregards. They appear more 
effective than other policies being evaluated in raising family 
income for single-parent families. This was most dramatically 
illustrated in Minnesota, where work incentives were a very 
central feature of the State's reforms.
    More generous disregards also appear to be increasing the 
employment of single parents, but they probably also increase 
the length of time and the total amount of welfare received 
over time, although the welfare received is essentially now a 
smaller earning supplement. So far, there is confirmation of 
previous research that the effects of more generous disregards 
on earnings are mixed, stimulating participants who would not 
have worked or worked only a little to earn more, but also 
stimulating those who have worked more substantially to earn 
less than they would have.
    Finally, the effects of family income of the common package 
of welfare reform, which combines more stringent work 
requirements, more generous disregards and time limits are not 
clear. At this point, most programs appear not to have 
increased or decreased average family income by much. More 
generous programs combining high benefits with generous 
disregards and no time limits appear to do much more to 
increase family income, but probably also increase governmental 
costs over the short run.
    These early lessons illustrate how the results of our 
evaluations hold promise to be highly informative to 
policymakers at all levels of government. Our perseverance in 
carefully evaluating State programs can make a major difference 
in the extent to which the goals of welfare reform are 
realized.
    I would be happy to answer your questions.
    [The prepared statement follows:]

Statement of Howard Rolston, Ph.D., Director, Office of Planning, 
Research and Evaluation Administration for Children and Families, U.S. 
Department of Health and Human Services

    Mr. Chairman, members of the Subcommittee, it is a pleasure 
to be here today to discuss the role of research as one 
critical element in the success of welfare reform. This 
Subcommittee played a key role in making research and 
evaluation activities integral to TANF. To illustrate how ACF 
is using the authority and funding provided by the Congress, I 
will describe our state evaluation activities, in terms of both 
what we have already begun to learn and what we can expect to 
learn in the future.
    A central focus of ACF's welfare reform research and 
evaluation strategy is to develop reliable, credible 
information about how different strategies are working in order 
to inform the state policy choices that TANF flexibility 
provides. This information can also inform the public and the 
Congress about how welfare reform is progressing.
    A key to developing this wealth of information is through 
the use of experimental evaluations of outcomes. These 
evaluations can shed light on whether state reforms are meeting 
the goals of TANF as set forth in the statute--providing 
assistance to needy families with children, ending dependence 
through increasing employment and marriage, reducing out-of-
wedlock pregnancies and encouraging two-parent families.
    My testimony today will focus on current evaluations of 
state programs, primarily of existing state waiver 
demonstrations, and future areas to consider for evaluations. I 
also will share some of our early lessons from these current 
evaluations. But before beginning this discussion I first would 
like to take a quick, broader look at other research activities 
funded by ACF.
    The waiver evaluations are only one part of a broader 
welfare reform research and dissemination effort taking place 
in ACF. Last year, for example, we were able to fund nine 
projects (from over 100 applicants) that are examining a 
variety of key issues in welfare reform, including 
implementation of tribal TANF programs, identification of 
problems and solutions in implementing TANF in rural areas, and 
a study of different diversion programs that states are 
operating.
    In addition, we are making careful investments to ensure 
that knowledge gained through evaluation is widely disseminated 
in formats that program operators find accessible, including 
the very important Manpower Demonstration Research Corporation 
(MDRC) ``How-to Guide'' entitled Work First, How to Implement 
an Employment-Focused Approach to Welfare Reform.

         Effectiveness Evaluations of State Program Innovations

    Over the past twenty years, the application of experimental 
approaches to studying the effects of welfare reform has proven 
to be enormously important to finding out what is effective and 
what is not. Because of its proven track record, in almost all 
cases ACF and the state agreed on an experiment as part of the 
approval of its waiver demonstrations begun prior to enactment 
of the Personal Responsibility and Work Opportunity 
Reconciliation Act. States randomly assigned families either to 
continue receiving welfare under the old AFDC rules, the 
``control group,'' or to another group that received welfare 
under the reform regime, the ``experimental group.''
    In authorizing the Department to fund the continuation of 
these evaluations under TANF, Congress provided the vehicle for 
obtaining the earliest reliable information on the effects of 
different state welfare reform strategies in meeting the 
objectives of TANF. ACF has funded nine states to continue 
their evaluations with only minimal changes and an additional 
eight to modify their evaluations.
    Since most of the nine states are continuing waiver 
policies into TANF with minimal change, by comparing the 
experimental and control groups over time in a state, we can 
reliably determine the causal effect of a state's reform effort 
on such key outcomes as welfare dependency, employment and 
earnings, total family income, and family structure. And by 
looking across states, we can begin to compare the relative 
effectiveness of different strategies in achieving the various 
goals of reform.
    The ability to look across states is enhanced by the fact 
that the nine states embody significantly different approaches 
to key policy decisions. For example, they include states with 
a variety of time limits: states with strict and standardized 
time limits, states with individualized time limits, states 
that prescribe work after a time limit, states that eliminate 
the benefit of the entire family, states that only remove the 
benefit of the adults and states with no time limits.
    The outcomes in the studies described above primarily 
concern adults. To better measure the effects of welfare reform 
on children, we created a team of twelve states to think 
collectively about what outcomes, both positive and negative, 
they thought their reforms might produce. We also included 
researchers to inform the team on how best to measure these 
outcomes.
    We now have been able to fund five of these states to add a 
common core of child outcome measures to their evaluations--
Connecticut, Florida, Indiana, Iowa and Minnesota. Because 
these states represent varying approaches to welfare reform, 
the results will produce rigorous information on how different 
reform policies affect children.

                      A Look at Future Evaluations

    The main question that the waiver evaluations answer is, 
``What has the totality of the change in state policy brought 
about?'' But there is another equally important area of study 
to examine decisions that states need to make about the parts 
of their programs, if they are to invest their TANF and state 
funds most effectively.
    A particularly important example that illustrates this kind 
of evaluation is the increasing efforts by states to improve 
job retention and advancement. Over the last several years, it 
has become clear that many welfare recipients do work, but 
their work is sporadic with substantial periods of unemployment 
and dependency interspersed with work. In addition, many of 
these families continue to have low incomes. We have learned a 
lot over the last twenty years about ways that are most 
effective to move recipients into work, and most states have 
moved to ``work first'' approaches, in part based on that 
knowledge. Now we need to turn our attention to learning about 
how to keep individuals employed more persistently, and how to 
raise working families' income.
    As part of the creativity that is coming from a flexible, 
work-focused system, many states are now experimenting with 
what are frequently called ``post-employment services'' in 
order to increase employment persistence. For example, some 
states are working with employers to provide mentors to 
individuals with little work experience; others are providing 
opportunities for skills enhancement for former recipients who 
show their commitment to work; and others are addressing access 
to health insurance. Rigorous evaluation can tell us which of 
the approaches, or the details of them, are actually effective 
in increasing employment and earnings.
    This example suggests how, if we continue to work with 
states to ensure that the evaluations we fund answer their most 
pressing program design questions, we have a tremendous 
opportunity to learn which strategies really achieve the goals 
of welfare reform. And this kind of learning can play a 
critical role in the success of state welfare reform efforts.

                      What we Have Begun To Learn

    In turning to what we have learned so far from these waiver 
demonstrations, I want to stress that it is too early to draw 
inferences with a high degree of confidence. Our ability to 
learn from the evaluations will certainly grow over time.
    Nonetheless, based on the information we have now, the 
following lessons are suggested.
    1. Most state evaluations indicate significant impacts on 
the proportion of recipients and former recipients who are 
employed. These impacts range from modest to quite large, 
depending on the reform intervention and the population subject 
to it. Among the states at the higher end of the range, the 
proportion of participants working in the last quarter of 
follow-up was 8 to 15 percentage points higher for the welfare 
reform group than the AFDC control group.
    2. States are dramatically increasing the mandatory aspect 
of work programs. As with time limits, states have implemented 
a variety of policies for sanctioning individuals who fail to 
comply with program requirements, including eliminating a 
portion of the grant, eliminating the entire grant, and 
progressive reductions for repeated instances of failure to 
comply. These sanctions, including whole family sanctions, are 
much more commonly applied than anyone would have predicted. 
For example, in Delaware nearly half of the participants were 
sanctioned for failure to cooperate, and in Florida the 
sanction rate was 31 percent for the welfare reform group 
compared to 7 percent for the control group.
    3. Although states are getting out the message that welfare 
reform is occurring, and despite state efforts to simplify and 
explain their programs, many recipients do not have a clear 
understanding of the new rules. For example, they may know that 
there's a time limit, but do not have a good idea of how months 
are counted toward it. Thus, in one state almost 90 percent of 
participants knew they were under a time limit, but only about 
half understood the circumstances under which a month counted. 
This is not a new phenomenon since recipients seldom understood 
AFDC rules either.
    4. To date, the studies confirm earlier research on the 
effectiveness of more generous earnings disregards. Earnings 
disregards appear to be more effective than other policies 
being evaluated in raising family income for single parent 
families. This was most dramatically illustrated in Minnesota 
where work incentives were a very central feature of the 
state's reforms.
    In theory, more generous disregards should increase the 
employment of single parents, and it appears likely that this 
is happening in current state reform efforts. At the same time, 
they probably also increase the length of time, and amount of 
welfare received over time, although the welfare received is 
now essentially a smaller earnings supplement. For example, 
again in Minnesota, under its demonstration, which had no time 
limit, both duration and amount of welfare were significantly 
increased. But even in states with time limits and tough work 
requirements, welfare duration prior to the exhaustion of the 
time limit was not reduced.
    Previous research suggested that the effects of more 
generous disregards on earnings are mixed, stimulating 
participants who would not have worked, or worked only a 
little, to earn more, but also stimulating those who would have 
worked more substantially to earn less than they would have. 
The results in Minnesota seem to confirm this with average 
earnings increasing substantially for long-term urban 
recipients, but declining substantially for two-parent families 
(especially women).
    5. The effects on family income of the common package of 
welfare reform, which combines more stringent work 
requirements, more generous disregards and time limits, are not 
clear. At this point, most programs appear not to have 
increased or decreased average family income by much, although 
undoubtedly, these averages mask the fact that some families 
have experienced positive effects and some have experienced 
negative effects. More generous programs combining high 
benefits with generous disregards and no time limits appear to 
do much more to increase family income, but probably also 
increase governmental costs at least in the short run. Thus, 
over an 18-month follow-up period Minnesota reduced poverty by 
nearly 15 percentage points for long-term urban recipients, but 
increased welfare costs by about 8 percent.

                               Conclusion

    These early lessons, I believe, illustrate how the results 
of our evaluations hold the promise to be highly informative to 
policy makers at all levels of government. Our perseverance in 
carefully evaluating the results of these shifts in states' 
programs can make a major difference in the extent to which the 
goals of welfare reform are realized.
    I would be happy to answer your questions.
      

                                

    Mr. Collins. Thank you, Mr. Rolston.
    Ms. Blum.

    STATEMENT OF BARBARA BLUM, DIRECTOR, RESEARCH FORUM ON 
CHILDREN, FAMILIES AND THE NEW FEDERALISM, NATIONAL CENTER FOR 
                      CHILDREN IN POVERTY

    Ms. Blum. Thank you, Mr. Chairman, and Members of the 
Subcommittee. It's a very great pleasure to appear before you 
today to discuss ways in which Congress can be well and timely 
informed of effects attributable to the Personal Responsibility 
and Work Opportunity Reconciliation Act of 1996.
    As my written testimony indicates, obtaining information is 
complicated now by the dynamics of devolution, which encourage 
variation in policy and practice among States and localities. 
Understanding what information will be available, when it can 
be obtained and how it can be accessed is critically important.
    Congress has a responsibility to govern well for all its 
citizens. Since welfare participants are among this country's 
most vulnerable citizens, and since two-thirds of these 
participants are children, this Subcommittee's concerns about 
the effects of the Personal Responsibility and Work Opportunity 
Reconciliation Act and the Temporary Assistance for Needy 
Families Program are commendable.
    My observations for this hearing are, in summary: First, 
findings exist from earlier research that create parameters for 
understanding the degree to which the welfare reforms of 1996 
have changed the welfare equation. Are the demographics of the 
TANF population different from those of the AFDC population, as 
analyzed by Bane and Ellwood? Do modest investments still 
produce modest returns, as MDRC's experiments have almost 
uniformly shown? Are interventions for teen parents having 
greater success in achieving employment and earnings than in 
the past? How are the long-term participants faring as compared 
to the supported work participants in the early eighties? Are 
financial incentive components continuing to produce 
significant positive effects?
    Answers to these questions are important and can help us 
understand the workings of TANF and other welfare-related 
changes across States and localities.
    Second, there is highly relevant information emerging, as 
you've heard, from the waiver experiments. Implementation and 
impact findings from these projects should be carefully 
analyzed to discover the effects of States' efforts in the 
early nineties, to test time limits, family caps, financial 
incentives, school mandates, and other program requirements. 
These findings will help us understand results that will be 
emerging in other States implementing now similar changes.
    Third, there are areas in which research efforts should be 
expanded. They include learning about child outcomes, which has 
been discussed a lot today, studying the experience of 
substance abusers in the TANF Program, tracking the impact of 
the Reconciliation Act on the immigrant populations, studying 
implementation issues, and assessing the status over time of 
those denied access to or leaving the TANF Program.
    Fourth, early information about the systemic effects of the 
Personal Responsibility and Work Opportunity Reconciliation Act 
on State and local policies and programs will be available 
through research from the Rockefeller Institute and the Urban 
Institute. But more attention should be paid to fostering such 
well-designed implementation studies at the State and local 
levels. These can highlight how changes are actually being 
implemented.
    Fifth, State capacity to use administrative data is 
important, because these data provide snapshots of client well-
being, and allow us to see trends over time. State management 
information system capabilities need to be strengthened, and 
confidentiality issues resolved to enable research that will 
provide timely and accurate information.
    Sixth, large data sets need to be enhanced so that they are 
representative of State or local populations and can be 
usefully mined. The Census Bureau's initiative, the survey of 
program dynamics, is of particular importance.
    Seventh, impact studies should be encouraged to study 
promising programs as they emerge, and funds should be provided 
for their development and execution.
    Finally, systematic ways to archive and share information 
about research initiatives should be fostered. The Welfare 
Reform Academy at the University of Maryland hosts monthly 
satellite broadcast conferences on various topics of welfare 
reform, and has convened an expert panel to evaluate current 
research efforts. The inventory of projects created by the 
Congressional Research Service on behalf of this Subcommittee 
is very useful. The data base developed by the Research Forum 
on Children, Families and the New Federalism is another 
resource providing access to extensive information about recent 
and current research projects.
    But while facilitating the collection and exchange of 
research information is critical, the experience of the 
Research Forum during the past 14 months indicates that much 
more is needed. Many opportunities exist to improve research 
design, to facilitate coordination among researchers, and to 
develop a consensus about appropriate use of research methods.
    Most of all, researchers need to be encouraged to address 
questions of relevance to policymakers and practitioners. Our 
ultimate goal should be the ability to provide extensive and 
understandable information to policymakers like yourselves, to 
researchers, to practitioners, to funders and to the media.
    Knowledge is power, and in this instance, power to make 
informed decisions.
    Thank you very much.
    [The prepared statement follows:]

Statement of Barbara Blum, Director, Research Forum on Children, 
Families and the New Federalism, National Center for Children in 
Poverty

              What Will We Know and When Will We Know It?

    Subcommittee members have expressed an interest in learning 
from the Administration and from state and local administrators 
about how the Personal Responsibility and Work Opportunity 
Reconciliation Act (PRWORA) of 1996 is being implemented, and 
from representatives of the U.S. Census Bureau, the 
Congressional Research Service, HHS/ACF, and the Research 
Forum, of ways in which Congress can be informed about the 
effects of recent changes in welfare and related policies.
    Certainly, the 1996 statute that created Temporary 
Assistance for Needy Families (TANF) and modified many aspects 
of welfare policy has profound implications for millions of our 
citizens and immigrant residents.
    The statute's thrust to devolve decision-making to state 
and local levels is stimulating great variation in program 
design at the state and local levels. The increased 
requirements for work participation and the imposition of time 
limits create challenges for state and local staff as well as 
for the TANF participants. Changes in food stamp and other 
benefits for immigrant populations are likely to have a huge 
impact on hundreds of thousands of individuals.
    Thus, understanding what information will be available, 
when it can be obtained, and how it can be accessed is 
critically important. Congress has a responsibility to govern 
well for all its citizens. Since welfare participants are among 
this country's most vulnerable citizens and 8.8 million--or 
two-thirds--of these participants are children, this 
subcommittee's concerns about the effects of PRWORA and TANF 
are commendable.

Earlier Relevant Research

    In examining what information will be available, the 
backdrop of earlier research findings should be kept very much 
in evidence. This is true for several reasons. First, during 
the 1980s a significant number of analyses and experiments 
began to produce information that improved our understanding of 
the welfare population and the effects of various 
interventions. Second, findings from this early research 
constitute a template against which changes produced by PRWORA 
can be compared. Third, the earlier research findings have 
frequently raised additional questions that need to be answered 
in order to make further progress in designing new 
interventions.
    Research accomplishments in the 1980s included analyses of 
the dynamics of the Aid to Families with Dependent Children 
(AFDC) population by Bane and Ellwood, which provided new 
information about the heterogeneity of the welfare population 
and about client characteristics which were correlated with 
duration in the caseload.
    Experiments fielded by the Manpower Demonstration Research 
Corporation (MDRC) in eight states studied a range of 
interventions (i.e. job search, community work experience 
programs (CWEP), grant diversion, education, training). These 
projects were rigorously designed using randomized samples to 
measure the impact of a specific intervention or sequenced 
combinations of interventions.
    The results of the experiments consistently showed modest 
benefits from modest investments in the tested interventions. 
Employment and income gains were reported for the experimental 
groups, along with modest reductions in welfare costs and 
dependency.
    It was also the case that impacts were largest for those 
least well off. That is, employment and income benefits and 
welfare savings were greater for members of experimental groups 
who had had the least prior work experience, and lowest grade 
completion.
    The experiments also showed that job search, when well 
administered (as in Riverside's Greater Avenues for 
Independence--GAIN--program) could be a very effective 
intervention for moving participants into the workforce. 
Education and training require a significant investment over 
time; thus, impacts were not identified in the near term. 
Nevertheless, given the very low levels of educational 
attainment by many welfare participants (a recent national 
survey shows 64% of welfare recipients not completing high 
school) and the skill demands of today's workplace, the 
outcomes achieved in well designed education and training 
programs like Comprehensive Employment Training (CET) should 
not be dismissed.
    Three earlier experiments have addressed teen parents and 
dependency. New Chance was designed by MDRC to study the 
impacts of a comprehensive services intervention on mothers and 
children. The Learning, Earning and Parenting Program (LEAP), 
an Ohio experiment evaluated by MDRC, provided financial 
incentives and disincentives based on the teen parent's school 
attendance. The Teen Parent Demonstration (TPD), evaluated by 
Mathematica, imposed mandates on teen participants that 
triggered financial sanctions for non-compliance.
    A comprehensive review of findings from these three 
projects, sponsored by the Joint Center on Poverty Research 
(JCPR), MDRC, Mathematica, and the Research Forum demonstrated 
the difficulty of making a difference among the teen parent 
population. While LEAP and TPD produced better school 
attendance, findings from all three projects were 
disappointing. Particularly important is evidence in New Chance 
that obtaining a GED had no effect on subsequent employment and 
earnings.
    Two other experiments are cited because each showed 
positive impacts for a distinct welfare group. The first, 
MDRC's Supported Work, was an experiment with structured work 
experience designed to increase demands on the worker over 
time. In this experiment, very disadvantaged women who were 
long term welfare recipients benefited significantly.
    The second, the New York Child Assistance Program (NYCAP), 
evaluated by Abt Associates, Inc. is a program designed to 
increase income from employment with child support incentives. 
The women were required to establish paternity as a condition 
for participation. Employment and income gains as well as 
savings to the state were significant.

Research in the 1990s

    During the 1990s, a new wave of research developed 
reflecting the interest of many states to institute changes 
through waiver authority. Authorization of these waivers was 
granted subject to HHS approval of a rigorous evaluation. Thus, 
today we are the beneficiaries of a significant number of 
research projects studying program components--such as time 
limits, family caps, and financial incentives--now being 
implemented in new TANF programs.
    Most of these more recent research projects are included in 
a database that has been developed by the Research Forum with 
support from the Annie E. Casey, Russell Sage, Edna McConnell 
Clark, and Chase Manhattan Foundations. The Research Forum, 
hosted at the National Center for Children in Poverty, Columbia 
University School of Public Health has three purposes, all 
relevant to the changes in social policy that we are discussing 
at this hearing. They are:
     To encourage rigorous, comparable, and policy-
relevant research as a means of monitoring and evaluation;
     To promote collaboration among researchers, 
funders, policymakers, state and local program administrators, 
and practitioners;
     To facilitate the exchange of research-based 
information among key stakeholders.
    To support the third purpose, a database accessible through 
an interactive web site--http://www.researchforum.org--has been 
designed to include extensive information about research 
projects that meet three criteria. They are large scale and 
frequently multi-site; they have been designed by social 
scientists who are recognized as having contributed to the 
field; and they are relevant to TANF. (Other projects not 
meeting all of these criteria will be included later this year 
in an abbreviated form.)
    Currently, 35 research projects are included in the 
database (see listing, p.13-14). Of these, 22 include impact 
research (see listing, p.15). Twenty-five are implementation 
studies, 20 of which are linked to impact studies (see listing, 
p. 16). In addition, the database includes 20 descriptive or 
analytical studies (see listing, p. 17).
    Most important, the research projects in the database can 
be sorted by components being evaluated. The major components 
include:
     Changes in Child Support
     Changes in Eligibility
     Educational Activities
     Employment Activities
     Family Caps
     Financial Disincentives/Sanctions
     Food Stamps
     Program operations/implementation
     Program Requirements
     Support Services
     Time Limits
    Important information about these components is emerging 
and will continue to emerge during the next several years. For 
example, a number of states are testing time limits.
     Early findings from implementation and descriptive/
analytical studies in some of these states are already 
available. Early impact findings are available for sites in 
Florida, Connecticut, and Delaware; descriptive/analytical 
studies have been completed in Iowa, Massachusetts, and 
Wisconsin.

                                                  Schedule of Project Reports on Impacts on Time Limits
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                         1997                1998                1999                2000                2001                2002
--------------------------------------------------------------------------------------------------------------------------------------------------------
Florida.........................  Interim...........  Interim...........  Interim...........  Final.............  ..................  ..................
Connecticut.....................  Interim...........  Interim...........  Interim...........  ..................  ..................  Final
 Vermont........................  ..................  Interim...........  ..................  ..................  ..................  Final
Delaware........................  Interim...........  ..................  ..................  ..................  ..................  ..................
--------------------------------------------------------------------------------------------------------------------------------------------------------


    In addition to NYCAP, a number of projects are testing 
financial incentives (see listing, p 18). Of particular 
interest are Canada's Self-Sufficiency experiment and 
Minnesota's Family Investment Program (MFIP). In both 
instances, there is an impressive take-up by participants, 
suggesting that more sophisticated approaches to supplementing 
wages should be explored. (I stress this because I believe we 
are all seeking for ways to ensure that working families have 
sufficient subsistence to provide food, shelter, and clothing 
for their children.)
    Projects in the database may be searched and analyzed 
according to the program components previously cited, as well 
as other the other project characteristics, such as the sites 
studied, outcomes assessed and organizations involved.

Publications

    It is also possible to estimate when specific reports will 
be published. Here, for example, are projections for reports 
that researchers have shared with the Research Forum. These 
projections are entered into the database and currently 
available through the web site:

April 1998

     Canada's Self Sufficiency Project: 18-month 
Impacts

June 1998 

     Evaluation of ``To Strengthen Michigan's 
Families'': Sixth Annual Report
     Postemployment Services Demonstration: Final 
Report on Implementation

July 1998

     Canada's Self Sufficiency Project: Report on SSP 
Plus

November 1998

     Postemployment Services Demonstration: Preliminary 
Impact Findings

December 1998

     Project on Devolution and Urban Change: 
Implementation Report on Policies and Practices of Individual 
Sites
     Arizona EMPOWER Process Study: Interim Report

January 1999

     Vermont Welfare Reform Evaluation Project: Final 
Report

June 1999 

     Arizona EMPOWER: Cost-Benefit Analysis Final 
Report
     Evaluation of ``To Strengthen Michigan's 
Families'': Seventh Annual Report

July 1999 

     Canada's Self Sufficiency Project: 36-month 
Impacts

December 1999 

     Project on Devolution and Urban Change: Early 
Impact Results, by Site
     Project on Devolution and Urban Change: 
Implementation Follow-up Report, by Site
     Project on Devolution and Urban Change: Reports on 
Ethnographic Reports and Community Institutions, by Site
January 2000 

     Evaluation of ``To Strengthen Michigan's 
Families'': Final Report on Eight Years of Demonstration 
Operations and Cost-Benefit Study

June 2000 

     Evaluation of ``To Strengthen Michigan's 
Families'': Eighth Annual Report

December 2001 

     Project on Devolution and Urban Change: Final 
Impact Results (Individual and Aggregate)
     Arizona EMPOWER Impact Study Draft Report

April 2002 

     Arizona EMPOWER Demonstration Final Evaluation 
Report
     Arizona EMPOWER Impact Study Final Report
     Arizona EMPOWER Process Study Final Report

Gaps in Current Research

    One aspect of the database that is seldom discussed relates 
to how it helps to identify gaps in what is being studied on 
scale. Several areas are quite evident:
    Child Outcomes: Children comprise about two-thirds of 
welfare caseloads, yet welfare research projects have seldom 
incorporated direct assessments of their well-being. Embedded 
in MDRC's National Evaluation of Welfare-to-Work Strategies 
(formerly JOBS) is an important set of studies on child 
impacts; one of which is an observational study of parent/child 
interactions. Results of these studies will be available in 
about six months.
    The Department of Health and Human Services has worked 
extensively with twelve states to stimulate interest in 
evaluating child outcomes. Funds have been provided to five of 
these states to support this work on child outcomes. Much more 
needs to be done.
    Substance Abuse: Currently, the National Center on 
Addiction and Substance Abuse at Columbia University (CASA), 
with support from the Robert Wood Johnson Foundation, is 
planning an experiment. This is the single large scale effort 
planned to examine an intervention for TANF participants who 
are substance users. Despite generous foundation funding, the 
sample size of this project will be relatively small, and child 
outcomes may not be addressed. Yet, we know that individuals 
abusing drugs comprise one of the most problematic groups in 
our TANF population and that effects of this parental condition 
on children should be better understood.
    Immigrants: This population is subject to the earliest and 
most extensive changes, yet only the Urban Institute's New 
Federalism project and a few other more modest projects are 
currently studying impacts related to PRWORA changes.
    Rural Issues: While urban areas deserve attention, we also 
should be studying rural areas, particularly those with high 
concentrations of population on welfare (i.e. Fresno County, 
California with 220,000 TANF participants out of 660,000 total 
population).
    Systematic Follow-Up of Those Who Leave the Rolls: Except 
for the Urban Institute's New Federalism project very little 
work is being done across states or on a large scale to follow 
individuals longitudinally. Efforts by individual states and 
the Hudson Institute in Milwaukee provide only limited 
information about the effects of exits on children.

Areas of Research Development/Research Tools

    Having described in broad strokes what we will know and 
what we will not know, it is important to examine not only when 
but how we can learn more.

Implementation Studies

    One avenue to understanding what is or is not happening 
will be to pay attention to implementation studies as they 
emerge. Frequently we have created strong Federal and state 
statutes, setting appropriate policy direction, but have failed 
to see those policies translated into practice. That can be 
understood, since change is hard to achieve and involves many 
levels of political structure and of management. Nevertheless, 
since PRWORA institutes change of a magnitude seldom proposed 
and since it will influence the lives of so many families, 
knowing what is and is not being achieved is essential to 
understanding the end effects.
    As identified earlier, some of the implementation studies 
are part of research projects that also evaluate the impact of 
specific program components such as time limits and family cap. 
Such studies can be extraordinarily informative in suggesting 
ways in which these interventions can be more effectively 
implemented.
    In a few instances, implementation or process research will 
be differently cast. For instance, the Rockefeller Institute 
project directed by Richard Nathan is studying the states to 
identify the degree and nature of change attributable to 
PRWORA. This work and the work undertaken by the Urban 
Institute in its New Federalism Project will provide invaluable 
``advance notice'' of what is going on generally, while 
reflecting the variations that PRWORA encourages.
    Implementation studies have in the past been delegated to a 
lesser status than other types of research. During this period 
of dynamic change, new value needs to be attached to this genre 
of research. Important work has been initiated by the Institute 
for Research on Poverty (IRP) at the University of Wisconsin to 
mobilize a diverse and distinguished group of researchers in 
order to foster attention on the contributions of well-designed 
implementation studies during a period when, for instance, 
creating a controlled experiment is not feasible or when 
information is needed in the short term.

Administrative Data

    In this era of computerized management, it seems clear that 
some of the most timely and accurate information about PRWORA 
should come from links between administrative data sets. In 
some states, this potential is developing very well; in many 
other states, capacity remains quite weak. (This is one 
instance in which variation may not be desirable.) It is clear 
that, in order to even partially answer certain basic 
questions, more extensive data links are needed. A few 
examples:
     TANF match with Unemployment Insurance (UI) and/or 
wage reporting systems will identify that portion of the TANF 
caseload moving into jobs with benefits.
     TANF match with the Internal Revenue Service 
records would give information on tax paying and income status.
     TANF match with the Earned Income Tax Credit 
(EITC) would give information on wage level achieved as well as 
the EITC supplement.
     TANF match with Child Support Enforcement (CSE) 
would show whether some custodial parent income is provided to 
supplement other sources of income.
     TANF match with Medicaid and Food Stamps would 
show what benefits are continued after termination of cash 
benefits.
     TANF match with the protective and foster care 
system would identify problems affecting children (obviously 
constructed with confidentiality safeguards).
    Confidentiality and capacity issues need to be addressed in 
order to fast-forward the use of administrative data.

Large Data Sets

    There are some opportunities to mine the major data sets--
for example, the Survey of Income and Program Participation 
(SIPP), Panel Study of Income Dynamics (PSID), National 
Longitudinal Survey of Youth (NLSY), Current Population Survey 
(CPS)--but there may be greater opportunities to examine how 
these data sets have been constructed and to address issues of 
sample size within states, coverage of program participation, 
and assessment of child and family outcomes.
    For example, the Census Bureau is extending two existing 
panels of SIPP in order to monitor the effects on families of 
the devolution of welfare policy. The result, entitled the 
Survey of Program Dynamics (SPD), is a large, longitudinal, 
nationally representative survey of program participation over 
a ten-year period, starting prior to and ending after the 
enactment of TANF. Attention will be given to measuring the 
effects of these new policies on the well-being of individual 
recipients, their families, and their children.

Impact Studies

    As a former state administrator and then, subsequently, 
president at MDRC, I want to make a personal pitch to support 
impact research, particularly randomized studies. The current 
ferment will settle down; some exemplary initiatives will be 
recognized. These should be tested at the earliest time 
possible.
    My own experience has been that controlled experiments 
yield far superior information. Future work should foster such 
rigorous research initiatives.

In Conclusion and to Recapitulate

     First, findings exist from earlier research that 
create parameters for understanding the degree to which PRWORA 
has changed the welfare equation. Are the demographics of the 
TANF population different from those of the AFDC population as 
analyzed by Bane and Ellwood? Do modest investments still 
produce modest returns? Are TANF strategies able to move 
individuals with low educational and employment experience into 
the workforce? Are interventions for teen parents having 
greater success in achieving employment and earnings than past 
interventions? How are the long-term participants faring as 
compared to Supported Work participants? Are financial 
incentive components continuing to produce positive effects?
    Answers to these questions are important and can help us 
understand the workings of TANF and other PRWORA changes across 
states and localities.
     Second, there is relevant information emerging 
from the ``waiver experiments.'' Implementation and impact 
findings from these projects should be carefully analyzed to 
discover the effects of states' efforts in the early 1990s to 
test time limits, family caps, financial incentives, school 
mandates, and other program requirements. These findings will 
help us understand results that may emerge in other states 
implementing similar changes.
     Third, there are areas in which research efforts 
should be expanded. They include: learning more about child 
outcomes, studying the experience of substance abusers in the 
TANF program, tracking the impact of PRWORA on the immigrant 
population, studying implementation issues in rural areas, and 
assessing the status of those leaving the TANF program.
     Fourth, early information about the systemic 
effects of PRWORA on state and local policies and program will 
be available through work at the Rockefeller Institute and the 
Urban Institute. More attention should be given to fostering 
such well-designed implementation studies at the state and 
local levels; these can highlight how well changes are actually 
implemented.
     Fifth, state capacity to use administrative data 
is important because these data provide ``snapshots'' of client 
well being and allow us to see trends over time. State 
management information system (MIS) capabilities need to be 
strengthened and confidentiality issues resolved to enable 
research that will provide timely and accurate information.
     Sixth, large data sets need to be enhanced so that 
they are representative of state or local populations and can 
be usefully mined. The Census Bureau's initiative, the Survey 
of Program Dynamics, is of particular importance.
     Seventh, impact studies should be encouraged as 
promising programs emerge, and funds should be provided for 
their development and execution.
    Finally, systematic ways to archive and share information 
about research initiatives should be fostered. The Welfare 
Reform Academy at the University of Maryland hosts monthly 
satellite broadcast conferences on various topics of welfare 
reform and has convened an expert panel to evaluate current 
research efforts. The inventory of projects created by the 
Congressional Research Service (CRS) on behalf of this 
committee is very useful. The database developed by the 
Research Forum on Children, Families, and the New Federalism is 
another resource.
    But, while facilitating the collection and exchange of 
research information is critical to providing information, the 
experience of the Research Forum on Children, Families, and the 
New Federalism during the past fourteen months indicates that 
much more is needed. There exists many opportunities to improve 
research design; to facilitate coordination among researchers; 
and to develop a consensus about research method, terms, and 
definitions, comparability in research questions, and common 
outcomes. Most of all, researchers need to be encouraged to 
address questions of relevance to policy makers and 
practitioners.
    Our ultimate goal should be the ability to provide 
extensive and understandable information to policymakers like 
yourselves, to other researchers, to practitioners, to funders, 
and to the media. Knowledge is power--in this instance, the 
power to make informed decisions.

                              Project List
------------------------------------------------------------------------
                   Title                              Evaluator
------------------------------------------------------------------------
A Better Chance Evaluation................  Abt
Alabama ASSETS Evaluation.................  Abt
Arizona EMPOWER Welfare Reform              Abt
 Demonstration.
Assessing the New Federalism..............  Urban Institute
Big Cities Confront the New Politics of     Columbia SSW
 Child and Family Policy.
Canada's Self-Sufficiency Project.........  SDRC
Confronting the New Politics of Child and   Columbia SSW
 Family Policy in the U.S..
Connecticut's Job's First: Welfare Reform   MDRC
 Evaluation Project.
Devolution of Welfare: Assessing            Yale
 Children's Changing Environments and
 Effects on School Readiness .
Devolution, Welfare Reform, and Wellbeing   Columbia SSW
 Study.
Florida Family Transition Program (FTP)     MDRC
 Evaluation.
Fragile Families Project..................  Columbia/Princeton
GAIN Evaluation...........................  MDRC
Iowa's Limited Benefit Plan (LBP)           Mathematica
 Evaluation.
JOBS-PLUS Community Revitalization          MDRC
 Initiative for Public Housing Families.
LEAP Evaluation...........................  MDRC
Minnesota's Family Investment Program       MDRC
 (MFIP) Evaluation.
Monitoring States' Welfare Reforms........  GAO
National Evaluation of Welfare-to-Work      MDRC
 Strategies (formerly JOBS).
New Chance Demonstration..................  MDRC
New Hope Project..........................  MDRC
New York Child Assistance Program (NYCAP)   Abt
 Evaluation.
Newark Young Family Study (sub-study of     Columbia/NCCP
 Teenage Parent Demonstration Program).
Parents' Fair Share Demonstration.........  MDRC
Postemployment Services Demonstration.....  Mathematica
Project on Devolution and Urban Change....  MDRC
State Capacity Study......................  Rockefeller Inst.
State Policies and Practices Regarding      CASA
 Substance Abuse, Medicaid, and the
 Employment Needs of Welfare Recipients.
State Policy Documentation Project........  CBPP
Substance Abuse, Economic Self-             CASA
 Sufficiency, and Welfare Reform.
Teenage Parent Demonstration Program .....  Mathematica
To Strengthen Michigan's Families (TSMF)    Abt
 Evaluation.
Vermont Welfare Restructuring Project       MDRC
 Evaluation.
Welfare Reform and the Well-Being of        U Chicago
 Children and Families: A Multi-City Study.
Welfare Reform: States' Early Experiences   GAO
 with Benefit Termination.
------------------------------------------------------------------------


                              Project List
                            [Impact Studies]
------------------------------------------------------------------------
                   Title                              Evaluator
------------------------------------------------------------------------
A Better Chance Evaluation................  Abt
Alabama ASSETS Evaluation.................  Abt
Arizona EMPOWER Welfare Reform              Abt
 Demonstration.
Assessing the New Federalism..............  Urban Institute
Canada's Self-Sufficiency Project.........  SDRC
Connecticut's Job's First: Welfare Reform   MDRC
 Evaluation Project.
Florida Family Transition Program.........  MDRC
GAIN Evaluation...........................  MDRC
JOBS-PLUS Community Revitalization          MDRC
 Initiative for Public Housing.
LEAP Evaluation...........................  MDRC
Minnesota's Family Investment Program       MDRC
 (MFIP) Evaluation.
National Evaluation of Welfare-to-Work      MDRC
 Strategies (formerly JOBS).
New Chance Demonstration..................  MDRC
New Hope Project..........................  MDRC
New York Child Assistance Program (NYCAP)   Abt
 Evaluation.
Parents' Fair Share Demonstration.........  MDRC
Postemployment Services Demonstration.....  Mathematica
Project on Devolution and Urban Change....  MDRC
Substance Abuse, Economic Self-             CASA
 Sufficiency, and Welfare Reform.
Teenage Parent Demonstration Program .....  Mathematica
To Strengthen Michigan's Families (TSMF)    Abt
 Evaluation.
Vermont Welfare Restructuring Project       MDRC
 Evaluation.
------------------------------------------------------------------------



                              Project List
                        [Implementation Studies]
------------------------------------------------------------------------
                   Title                              Evaluator
------------------------------------------------------------------------
A Better Chance Evaluation*...............  Abt
Alabama ASSETS Evaluation*................  Abt
Arizona EMPOWER Welfare Reform              Abt
 Demonstration*.
Assessing the New Federalism..............  Urban Institute
Canada's Self-Sufficiency Project*........  SDRC
Connecticut's Job's First: Welfare Reform   MDRC
 Evaluation Project*.
GAIN Evaluation*..........................  MDRC
Iowa's Limited Benefit Plan (LBP)           Mathematica
 Evaluation.
JOBS-PLUS Community Revitalization          MDRC
 Initiative for Public Housing.
LEAP Evaluation*..........................  MDRC
Minnesota's Family Investment Program       MDRC
 (MFIP) Evaluation*.
Monitoring States' Welfare Reforms........  GAO
National Evaluation of Welfare-to-Work      MDRC
 Strategies (formerly JOBS)*.
New Chance Demonstration*.................  MDRC
New Hope Project*.........................  MDRC
New York Child Assistance Program (NYCAP)   Abt
 Evaluation*.
Parents' Fair Share Demonstration*........  MDRC
Postemployment Services Demonstration*....  Mathematica
Project on Devolution and Urban Change*...  MDRC
State Capacity Study......................  Rockefeller Inst.
Substance Abuse, Economic Self-             CASA
 Sufficiency, and Welfare Reform*.
Teenage Parent Demonstration Program *....  Mathematica
To Strengthen Michigan's Families (TSMF)    Abt
 Evaluation*.
Vermont Welfare Restructuring Project       MDRC
 Evaluation*.
Welfare Reform and the Well-Being of        U Chicago
 Children and Families: A Multi-City Study.
------------------------------------------------------------------------
Projects marked with ``*'' are linked to impact studies.



                              Project List
                          [Descriptive Studies]
------------------------------------------------------------------------
                   Title                              Evaluator
------------------------------------------------------------------------
A Better Chance Evaluation................  Abt
Assessing the New Federalism..............  Urban Institute
Big Cities Confront the New Politics of     Columbia SSW
 Child and Family Policy.
Canada's Self-Sufficiency Project.........  SDRC
Confronting the New Politics of Child and   Columbia SSW
 Family Policy in the U.S..
Devolution of Welfare: Assessing            Yale
 Children's Changing Environments.
Devolution, Welfare Reform, and Wellbeing   Columbia SSW
 Study.
Fragile Families Project..................  Columbia/Princeton
Iowa's Limited Benefit Plan (LBP)           Mathematica
 Evaluation.
Monitoring States' Welfare Reforms........  GAO
Newark Young Family Study (sub-study of     Columbia/NCCP
 Teenage Parent.
Parents' Fair Share Demonstration.........  MDRC
Postemployment Services Demonstration.....  Mathematica
Project on Devolution and Urban Change....  MDRC
State Capacity Study......................  Rockefeller Inst.
State Policies and Practices Regarding      CASA
 Substance Abuse, Medicaid,.
State Policy Documentation Project........  CBPP
Teenage Parent Demonstration Program .....  Mathematica
Welfare Reform and the Well-Being of        U Chicago
 Children and Families: A Multi-City Study.
Welfare Reform: States' Early Experiences   GAO
 with Benefit Termination.
------------------------------------------------------------------------



                              Project List
                [Projects Studying Financial Incentives]
------------------------------------------------------------------------
                   Title                              Evaluator
------------------------------------------------------------------------
A Better Chance Evaluation................  Abt
Alabama ASSETS Evaluation.................  Abt
Arizona EMPOWER Welfare Reform              Abt
 Demonstration.
Assessing the New Federalism..............  Urban Institute
Canada's Self-Sufficiency Project.........  SDRC
Confronting the New Politics of Child and   Columbia SSW
 Family Policy in the United.
Connecticut's Job's First: Welfare Reform   MDRC
 Evaluation Project.
Florida Family Transition Program (FTP)     MDRC
 Evaluation.
GAIN Evaluation...........................  MDRC
JOBS-PLUS Community Revitalization          MDRC
 Initiative for Public Housing.
LEAP Evaluation...........................  MDRC
Minnesota's Family Investment Program       MDRC
 (MFIP) Evaluation.
Monitoring States' Welfare Reforms........  GAO
National Evaluation of Welfare-to-Work      MDRC
 Strategies (formerly JOBS).
New Hope Project..........................  MDRC
New York Child Assistance Program (NYCAP)   Abt
 Evaluation.
Parents' Fair Share Demonstration.........  MDRC
Postemployment Services Demonstration.....  Mathematica
Project on Devolution and Urban Change....  MDRC
State Policy Documentation Project........  CBPP
Substance Abuse, Economic Self-             CASA
 Sufficiency, and Welfare Reform.
To Strengthen Michigan's Families (TSMF)    Abt
 Evaluation.
Vermont Welfare Restructuring Project       MDRC
 Evaluation.
------------------------------------------------------------------------



                Government Grants to NCCP in Past 2 Years
------------------------------------------------------------------------
             Amount                      Title           Project Period
------------------------------------------------------------------------
$100,000........................  Child Care Research  9/30/95 - 9/29/96
                                   Partnership.
$100,000........................  Child Care Research  9/30/96 - 9/29/97
                                   Partnership.
$136,000........................  Child Care Research  9/30/97 - 9/29/98
                                   Partnership.
$200,000........................  Child Care Research  9/30/97 - 9/29/98
                                   Partnership
                                   Affecting Welfare
                                   Recipients & Low
                                   Income Working
                                   Families.
$35,000.........................  Process Evaluation   10/1/97 - 9/30/98
                                   Pronect (thru
                                   University of
                                   Wisconsin).
$103,000........................  State Welfare         8/1/96 - 7/31/97
                                   Reform
                                   Demonstrations and
                                   Infant & Toddler
                                   Care (thru
                                   Teacher's College).
$13,000.........................  Child Health and     9/30/97 - 9/29/98
                                   Development
                                   Programs in the
                                   Context of Welfare
                                   Reform.
------------------------------------------------------------------------

      

                                

    Mr. McCrery [presiding]. Thank you, Ms. Blum.
    Mr. Levin.
    Mr. Levin. Well, simply to say thank you very much. This is 
a wonderful note upon which to end this hearing. The belief 
that knowledge counts is critical. I think all of you have 
suggested to us and everybody that before we reach final 
conclusions, we should have as many facts as we can.
    I'm glad we provided the money for these programs. I'm glad 
there's a lot of private research going on. And, the more the 
better, because this effort is worthy of it.
    I have been somewhat discouraged to ask some questions, 
since your testimony has suggested that we had better ask a lot 
of questions as these programs continue to unfold.
    Thanks.
    Mr. McCrery. Mr. Matsui.
    Mr. Matsui. Thank you, Mr. McCrery.
    Ms. Blum, 50 different States now have programs. And in 
California, some counties have a lot of flexibility. What are 
we really looking at? When we had, obviously, the Family 
Support Act of 1988, which is actually a work first program as 
well, but some people may not have read it, we had one program. 
And we were able to collect data, we were able to analyze it.
    Obviously, there were some flaws in it. I thought in terms 
of the fund for the work program, we shouldn't have had such a 
tough match for States, particularly when they were in a 
recession.
    Ms. Blum. Right.
    Mr. Matsui. They never really got to it until about 1994. I 
think once they started getting to it, that's when we started 
seeing progress, and that's why in 1996, we started to see some 
progress on it.
    Nevertheless, it's over. It's gone. How are we going to 
collect the data and how are we going to analyze these 
different programs? And I'll ask you this, also, Dr. Rolston. 
Because you've got so many programs now, how do you say, this 
is working. Because there is so much flexibility with various 
States and various counties, like in California. Perhaps you 
can help us with this.
    Ultimately, we're going to need, 1 year from now or 2 years 
from now, an evaluation. And my State may work well, some other 
State may not work well. Maybe my State won't work well, but 
maybe New York will.
    How do we evaluate it?
    Ms. Blum. You and I certainly agree on the Family Support 
Act, entirely.
    Mr. Matsui. Exactly.
    Ms. Blum. However, in answer to your question, I think my 
written testimony highlights the difficulty that you are 
suggesting. We are going to have to take our evaluations down 
to the local level. I think that can be good, because we'll 
really understand community effects.
    I was in your State about 3 weeks ago, and heard about 
Fresno County, where there are 660,000 people in the county, 
220,000 on the rolls, with an agricultural economy. Now, we 
have to understand that that county is going to operate very 
differently from an urban area. And I think the research 
community is hard at work now, trying to understand how to move 
their work down to the community level. I also think 
administrative data become extraordinarily important.
    But we also can look at measures, child poverty measures 
will tell us a story, wage levels at the local level will tell 
us a story. We have to start thinking, it seems to me, very 
differently. And of course, Dick Nathan has been thinking about 
this for a long, long time.
    Mr. Matsui. Maybe I can ask you, Dr. Rolston. How are you, 
I'm assuming you're in charge of collecting the data and coming 
up with some conclusions on this, is that my understanding? 
Yes. Well, that's good. I'm glad we have somebody in charge at 
HHS who's going to be held responsible and accountable. Maybe 
you don't want to have that word, but at least accountable for 
the collection of data, so 2 years from now, when we sit down 
with you or you appear before us, we're going to be able to 
say, is it working, and you're going to be able to give us hard 
evidence that it is or isn't working, or these are changes that 
could be made.
    Now, tell me how, what's your methodology? It certainly is 
not going to go to some welfare office and say, geez, 
everybody's really excited, they wake up in the morning, look 
in the mirror and say, I want to go to work. That's not what 
we're talking about. We're talking about data.
    How are you going to do this?
    Mr. Rolston. I guess the reason I don't actually say I'm in 
charge of it is because, I think it's like many other areas. 
There's no single person in charge of it. As Barbara described, 
there are a lot of people who have to do this. There isn't 
going to be a single study that's going to answer the question.
    There's going to have to be a multiplicity of studies that 
answer a variety of questions. I think some of it's going to be 
triangulation of a lot of different approaches.
    I mean----
    Mr. Matsui. Triangulation? I don't understand that. I don't 
even understand that from Dick Morris.
    Mr. Rolston. This is a very significant piece of social 
legislation, and I don't think there is a way to do a single 
study that will in any definitive way answer what is the effect 
of welfare reform in Omaha versus Los Angeles versus some place 
else.
    At the same time, I do think there are tremendous 
opportunities. One of our best methods of learning, we've 
learned over the last 20 years, is through experiments. A 
number of people have alluded to them.
    Mr. Matsui. But I think what Ms. Blum is saying, though, is 
that, you see, this is just the problem. In a way it's kind of 
clever, and I know you're not suggesting it's clever, but it's 
very clever. Because you can't hold anybody accountable any 
more.
    Mr. Rolston. Well, no, I----
    Mr. Matsui. Well, no, no, because now it's at the local 
level. So it's a supervisor or it's a city council member or 
it's the mayor.
    How do we do this? Ms. Blum is talking about poverty rates. 
Is that a major factor?
    Mr. Rolston. Yes, I think----
    Mr. Matsui. Because poverty hasn't gone down. So we're 
saying all wonderful things about this bill, but childhood 
poverty hasn't gone down. So how could we say it's wonderful if 
that's not the case?
    Mr. Rolston. Well, first of all, child poverty hasn't been 
measured after TANF. The latest data are from a prior period.
    Mr. Matsui. We only have some anecdotal information. But 
the Center for Budget and Policy Priorities, which I think most 
people feel is pretty objective, has said childhood poverty may 
have gone up a little bit.
    Mr. Rolston. But that's through 1996, it's not----
    Mr. Matsui. I understand that. I understand that. You're 
right.
    Mr. Rolston. But I'm certainly not at all trying to absolve 
myself or others from responsibility. I think we all have 
important----
    Mr. Matsui. I'm not suggesting you are.
    Mr. Rolston [continuing]. Responsibilities to learn this. 
I'm saying----
    Mr. Matsui. I'm not suggesting you are. I'm just saying the 
bill maybe lent itself to that.
    Mr. Rolston. I think we're doing a number of studies that 
will tell us a lot about which different kinds of policies are 
effective, what the effects are on employment, on earnings----
    Mr. Matsui. OK.
    Mr. Rolston [continuing]. On child poverty and other 
things.
    Mr. Matsui. How does that help us, how does that help us as 
policymakers, though? If the program is working in Fresno but 
not in San Francisco, what will that tell us? I mean, how do we 
deal with that nationally?
    Mr. Rolston. Well, I think it will be partly from the 
perspective of understanding the effects in various places of 
different kinds of policies, understanding how widespread those 
policies are. Certainly, studies like the data collection the 
Census is doing also can be very helpful in understanding these 
things.
    It will produce a data base that researchers will be able 
to use, but it won't produce a definitive answer.
    I think to come up with an analogy, if we dramatically 
change the way that we financed highways, for example, you 
wouldn't learn about the effects of that from one study. You'd 
learn about it by studying a lot of different things in a lot 
of different places and then trying to pull it together.
    Mr. Matsui. And that's why we have a national highway 
program, because it's so difficult to analyze unless you have a 
national program. But we don't now. I mean, we have a different 
program for the highway system, which is a national program, 
than we do for children. I guess what I'm saying, and I know my 
time is running out, what we really need from you is a road 
map.
    I'd like to sit down with you maybe and find out, what are 
the criteria you're going to use to talk about the success or 
failure of this program once you collect your data 3 years from 
now, so that we can sit down and compare that with, whenever we 
meet or whenever you provide that information to us or me, and 
we can say, you're right, this program really is working well.
    And then I can say, I made a mistake. But if it's not--see, 
we need criteria. And we can't do the criteria after we collect 
all the data and say, well, this is the way we want to analyze 
this to make it fit our preconceived belief. Are you doing that 
now? Is that the kind of work you're doing to try to give us 
some idea of whether this thing will be successful or not?
    Mr. Rolston. We're trying to do a number of different 
things. What concerns me about what you're asking is that you 
expect that a single study from a design----
    Mr. Matsui. No.
    Mr. Rolston [continuing]. That we could say, these are the 
values and if these are the successes----
    Mr. Matsui. You know, you were here--
    Mr. Rolston [continuing]. And I don't think it will--
    Mr. Matsui [continuing]. You were here when we questioned 
Dr. Golden. The only thing I'm asking right now at this moment 
is that, if you have some data to say this is a wonderful 
program, produce it. If you don't, then you shouldn't be 
talking about what a wonderful program this is. And I don't 
think we can say that right now. I can't say it's a bad 
program, because I don't have data to back that up. And you 
don't have enough data to say it's a good program.
    What we need to do is take a deep breath and step back and 
let time work its will. And you need to collect data and try to 
come up with the criteria. Because I'm telling you that nothing 
has changed over the last 3 years from my perspective in terms 
of what I consider the potential problems of this bill to be.
    If we hit a recession, it's going to be pretty cataclysmic 
for a lot of communities and a lot of--this is my opinion. Now, 
maybe I'm wrong. And if I'm wrong, I need the data when you 
collect it to tell me I'm wrong, that these time limits really 
won't have the adverse effect that I felt it should or would 
when I went before the House and gave my statement. That's all 
I'm saying.
    Mr. Rolston. We would certainly be glad to sit down with 
you and talk to you about the kinds of measures that we think 
are important in terms of assessing and the kinds of things----
    Mr. Matsui. But what, let me ask you this, because you've 
been doing a lot of work on it. Is childhood poverty, is the 
poverty rate for children a significant factor in this, the 
national rate? Is it significant?
    Mr. Rolston. I think it's a significant factor.
    Mr. Matsui. OK, and so that would be one of your criteria.
    Mr. Rolston. I think the child poverty rate is one of the 
things that a lot of people will measure by. I think there will 
be differing views, and it will be complicated to figure out 
what the bill contributed to, for a lot of the reasons that 
people have, you yourself have----
    Mr. Matsui. Like the economy right now, right? You can't 
compare 1982 with 1998.
    Mr. Rolston. Right, but scientists can work with data to 
try to parse out those factors.
    Mr. Matsui. I really appreciate this, and thank you.
    Mr. McCrery. Mr. Coyne.
    Mr. Coyne. Thank you, Mr. Chairman.
    Mr. Nathan, based on your research to date, what impact is 
the ``work first'' strategy being pursued by most States having 
on the kinds of jobs former welfare recipients get? In other 
words, what kind of impact has that switch made, that is, the 
work first concept?
    Mr. Nathan. Mr. Coyne, I appreciate the question. And I 
think the job this panel has, which is a complicated one, is to 
try to give a good sense of what we can know and when we can 
know it and how we can link up different studies. And our study 
is on institutions, using people in 21 States, college 
professors primarily, to look at how administrative systems are 
changing.
    We are analyzing that data now. As I highlighted in my 
chart, these are early findings from 21 States, which includes 
most of the big States in this data set.
    I would say, in interpreting the data at this stage, that 
the time limit and the signaling is being changed as welfare 
caseworkers have said. I find I learn a lot by talking to the 
caseworkers, now called case managers, asking questions such 
as, What are you doing?
    The signaling is different. The work-first emphasis of this 
law, which is stronger than it's been before, is saying work, 
immediate attachment to the labor force is the emphasis. You'd 
better get to it, because you have only so much time, unless 
you're in the 20-percent exemption group. Lots of States are 
using maintenance-of-effort money and the 20-percent exemption 
in ways that are important in our institutional research.
    But I do think that even economists--I'm a political 
scientist, but even to economists, Lord Keynes said this--
signals matter. The way an economy signals to people, the way 
businesses, the way government signals to people influences 
behavior. I believe that this law is having surprisingly big 
signaling effects which we're already beginning to pick up in 
our research, bigger than a lot of people expected.
    Mr. Coyne. OK, well, that's fine. The concept will be work 
first, but can we expect from that that if they go to work and 
don't get additional training and education, that they'll 
really get the good jobs, the jobs that would pay a living 
wage, and in addition to that, enough money to pay for health 
care benefits?
    Mr. Nathan. Well, I hope our research will, as Howard 
Rolston said, give you information to pass judgment on. There 
is a lot more to be said on your question, which is a very good 
one, where the previous panel, which I thought was an excellent 
panel, talked about how programs are now looking at upgrading 
and job retention and using the TANF money in ways that provide 
quite concentrated service packages designed to help people 
make it and stay in and move up in the labor market.
    Now, we hope in our research over the next 3 years to be 
able to tell you more about that. Because that's a big issue, 
as to whether the strategy of just putting people to work is 
enough. I hope our research and the research on institutional 
change and administrative behavior will give you the kind of 
information you should have to decide whether this work-first 
signal is too harsh. Many people say it isn't. Indeed, that may 
be what people conclude.
    But our job, as this panel has said, and we're 
institutional, administrative researchers, is to give you good, 
clear, honest, and impartial information to decide whether the 
signaling is too strong or whether it's helpful. And I can tell 
you what my opinion is, but I'd much rather work through our 
research and have the research enable people to reach their own 
conclusions.
    Mr. Coyne. Thank you.
    Mr. McCrery. Mr. Matsui.
    Mr. Matsui. Thank you very much, Mr. Chairman.
    Dr. Rolston, I just want to make sure, so I have a clear 
understanding of this, HHS is the lead agency in the collection 
of data and trying to put together the analysis of the success 
of this program. I remember when Secretary Shalala appeared 
before the full Ways and Means Committee, I believe it was last 
year sometime.
    And I asked her, I said, do you have the capability, the 
wherewithal, the staffing, to collect the data, so we can find 
out if this program worked or didn't work, or was kind of in a 
gray area when it's fully implemented and after we've had a lot 
of information. And she said certainly, or something to that 
effect.
    Now, are you the individual that we're to look to for this 
information, or is it HHS or tell me who it is. Because I want 
to be able to really hold that person accountable 3 years from 
now or 2 years or 6 months from now as this thing develops. Is 
that you?
    Mr. Rolston. Well, I work for Olivia Golden, there are also 
other parts of the Department involved in this, like the 
Assistant Secretary for Planning and Evaluation. So I'm 
certainly not responsible for all of it. I'm not trying to duck 
this----
    Mr. Matsui. Who is? Who is? Give me----
    Mr. Rolston. The Secretary, I guess, is.
    Mr. Matsui. The Secretary is? Wait 1 minute. Come on. Who 
at the staffing level, who's going to collect the data?
    Mr. Rolston. Me and others. I'm just telling you, I'm not--
--
    Mr. Matsui. You and others. Who else? Can you give me three 
or four other people that have your stature in the Department--
I want all three of you, I want all four of you.
    Mr. Rolston. Pat Ruggles, Deputy----
    Mr. Matsui. Are you the lead on this? You're the one who is 
going to be coordinating this?
    Mr. Rolston. I would say we work together, her office and 
my office and other offices----
    Mr. Matsui. No, look, you'll have to excuse me for 
interrupting you, but I just want to know who is going to be in 
charge of this when it's all said and done. Because this, to 
me, this is the ball game. This is very, very important. I need 
to know, to my satisfaction, on behalf of my constituents, and 
probably the 32 million people of the State of California, with 
Pete Stark, and others, who are concerned about this, how we're 
going to make sure this program works, and if it doesn't, what 
adjustments we're going to make.
    And how we're going to be able to really deal with the 
whole issue of getting people from welfare to work. Now, I want 
to know who's going to be responsible for making sure that that 
data are available to us. Now, it was August 1996 when that 
bill passed. We're 2 years, almost 2 years beyond that now.
    Who in the Department is in charge of what I just 
suggested, or what I just requested?
    Mr. Rolston. Mr. Matsui, I'm doing the best I can to 
answer. I certainly feel a great responsibility. But for 
example, in the last appropriation bill, the Congress 
appropriated $5 million to look at people who are leaving 
welfare. That's certainly a very important investment in a very 
important question.
    Mr. Matsui. Is that you?
    Mr. Rolston. No.
    Mr. Matsui. Well, who is it? Come on, give me a break.
    Mr. Rolston. Patricia Ruggles--I'm sorry, I can't give 
you----
    Mr. Matsui. Well, can I make a suggestion? I'm going 
circular right now, so will you do me a favor? Maybe you ought 
to discuss this in your interdepartmental discussions, 
interagency, if it even gets to the White House, and find out 
who's going to be in charge. When we have a trade bill, 
somebody is in charge, right? When we have a health care bill, 
somebody is in charge.
    Why can't we do it for children? Why can't we do it for 
this issue? Can we do it for this issue?
    Mr. Rolston. I can only tell you that I am not responsible 
for the entire activity. I'm responsible for part of it that--
--
    Mr. Matsui. OK, I won't go any further, but will you do me 
a favor? Will you bring that up with whomever your boss is and 
then see if we can get this kind of data? Because I'm afraid 1 
year from now we're going to have this same discussion and 
nobody's going to be held accountable for it. And then we're 
going to say, oh, well.
    Mr. Rolston. I can just say, we feel a deep sense of 
accountability for----
    Mr. Matsui. Then find somebody.
    Mr. Rolston. Nobody is passing the buck here. I feel 
accountable----
    Mr. Matsui. The only way government works, the only way 
government works is if somebody is in charge, OK? Thank you.
    Mr. McCrery. Dr. Rolston, is your department working with a 
specific authorization of money from the Congress under the 
welfare bill that was passed?
    Mr. Rolston. Yes.
    Mr. McCrery. You're getting money specifically for that?
    Mr. Rolston. There was money that was in the bill. The 
Congress has elected to appropriate it through another 
mechanism, but it comes essentially from what was included in 
TANF.
    Mr. McCrery. And it's specifically for research?
    Mr. Rolston. Research and evaluation on a broad variety of 
topics, most of which have been mentioned today.
    Mr. McCrery. And Dr. Weinberg, is that true, too, for the 
Census Bureau?
    Mr. Weinberg. The money for the Survey of Program Dynamics 
was appropriated in the welfare reform legislation directly, 
yes.
    Mr. McCrery. And in your opinion, is it a good idea for us 
to specifically appropriate money for research and evaluation 
by the Census Bureau?
    Mr. Weinberg. That's really beyond my pay grade. I really--
--[Laughter.]
    Mr. McCrery. Well, it's not beyond your pay grade. I mean, 
you're----
    Mr. Weinberg. The proper way for Congress to appropriate 
money is really up to Congress. That's all.
    I appreciate getting an extra $10 million, but whether 
that's the right way to do it is really up to you to decide.
    Mr. McCrery. Well, I appreciate your deference to our 
authority. However, we cannot make informed decisions unless we 
have the opinion of folks like you, and that's what I'm asking 
for, is your opinion as to whether this is money well spent. If 
it's not, we can take it back.
    Mr. Weinberg. No, I think it definitely is money well 
spent.
    Mr. McCrery. That's all I wanted to know.
    Mr. Weinberg. It leverages money that was already spent in 
ways that make this a very productive investment.
    Mr. McCrery. Thank you.
    Now, Mr. Nathan, I'm told, I wasn't here for your 
testimony, but I'm told that you wanted to discuss postprogram 
data a little more indepth, and I'm willing to give you a 
couple of minutes to do that if you'd like.
    Mr. Nathan. I very much appreciate that. What I want to say 
about that, and as I listened this morning to Assistant 
Secretary Golden and to the two previous panels, I'm struck by 
the fact that many States are doing studies like the Maryland 
study, which the Chairman mentioned this morning, where State 
governments are providing data and money to researchers to see 
what happens to people who exit from welfare or from TANF 
systems.
    I was in Mississippi doing our research the week before 
last. Millsaps College in Mississippi has money from the State 
and data from the State to study what happens to people who 
exit from their TANF work program. In fact, it's very 
interesting, because the agency people, and often we don't 
think in this way, although Barbara Blum does, that people in 
human service agencies care a lot about keeping their business 
going. They're a little worried that as the rolls go down, 
they're not going to keep their work force and keep their 
rolls.
    So in many States, what I'm----
    Mr. McCrery. A shocking revelation.
    Mr. Nathan [continuing]. Finding is that State agencies and 
State workers are very concerned to find out what's happening 
to people, why they're leaving. Do they already have income, do 
they get jobs, what is happening to them? I have a temporary 
assignment now at the General Accounting Office. What GAO is 
going to do, and we were talking about this earlier with Howard 
Rolston and others, is gather data from all the States that are 
doing these kinds of studies. Many of them are well-designed 
studies of postprogram conditions, of people who exit from the 
TANF assistance systems.
    I am going to use our network in 21 States to the fullest 
extent we can to find out what kind of data will be available 
to you, to your Subcommittee, and to the people who are 
interested. I'm delighted that this Subcommittee is interested 
to have a panel on research, and what we can learn, and how we 
can help you think about what's happening under this law and 
what that means in terms of how you might want to change it or 
view it in the future.
    Mr. McCrery. Thank you very much.
    I appreciate all of you coming today and giving us the 
benefit of your experience and your opinions and your research.
    The reason that we included money in the bill specifically 
for research is so that we policymakers might be better 
informed as to the results of our policies. We who fashioned 
the welfare reform bill did it for the purpose of trying to 
better our society, and to better the lot of those who had been 
on our, some of our welfare programs for long periods of time. 
And we didn't see that they were making much progress.
    We hope this is a better way. We don't know that. And I'll 
be the first to admit that. This is an experiment. And we have 
lots of experiments going on at local levels and State levels. 
I happen to think that's good, not bad. Because we can learn 
from those experiments.
    I have faith in the local, and I know there are two 
examples of Sacramento and somewhere else in California.
    I have faith in that local organization. So if they're 
failing, they'll look toward San Francisco that's succeeding, 
and maybe adopt some of the things they're doing. I don't know. 
But that was part of the whole thinking that we were going to 
expand the number of experiments around the country, so that we 
might learn from those.
    But certainly, in my view, and I think as illustrated by 
the testimony today, we don't have enough data yet. We don't 
have enough experience with this new approach yet to draw any 
conclusions. So I'm pleased to hear that there is research 
going on by, in a number of different quarters, public and 
private, and we look forward to hearing from all of you and 
others in the future, when we perhaps can draw some more 
conclusions.
    Thank you all very much.
    [Whereupon, at 2:45 p.m., the hearing was adjourned, to 
reconvene at the call of the Chair.]

                                  
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