[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]




                          ECONOMIC OPPORTUNITY

                         AND POVERTY IN AMERICA

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

                                HEARING

                               before the

                            SUBCOMMITTEE ON
                   INCOME SECURITY AND FAMILY SUPPORT

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 13, 2007

                               __________

                           Serial No. 110-11

                               __________

         Printed for the use of the Committee on Ways and Means


















                      U.S. GOVERNMENT PRINTING OFFICE
35-776 PDF                    WASHINGTON  :  2007
---------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government
Printing Office Internet:  bookstore.gpo.gov Phone:  toll free (866)
512-1800; DC area (202) 512-1800 Fax: (202)512-2250 Mail: Stop SSOP,
Washington, DC 20402-0001 



















                      COMMITTEE ON WAYS AND MEANS

                 CHARLES B. RANGEL, New York, Chairman

FORTNEY PETE STARK, California       JIM MCCRERY, Louisiana
SANDER M. LEVIN, Michigan            WALLY HERGER, California
JIM MCDERMOTT, Washington            DAVE CAMP, Michigan
JOHN LEWIS, Georgia                  JIM RAMSTAD, Minnesota
RICHARD E. NEAL, Massachusetts       SAM JOHNSON, Texas
MICHAEL R. MCNULTY, New York         PHIL ENGLISH, Pennsylvania
JOHN S. TANNER, Tennessee            JERRY WELLER, Illinois
XAVIER BECERRA, California           KENNY C. HULSHOF, Missouri
LLOYD DOGGETT, Texas                 RON LEWIS, Kentucky
EARL POMEROY, North Dakota           KEVIN BRADY, Texas
STEPHANIE TUBBS JONES, Ohio          THOMAS M. REYNOLDS, New York
MIKE THOMPSON, California            PAUL RYAN, Wisconsin
JOHN B. LARSON, Connecticut          ERIC CANTOR, Virginia
RAHM EMANUEL, Illinois               JOHN LINDER, Georgia
EARL BLUMENAUER, Oregon              DEVIN NUNES, California
RON KIND, Wisconsin                  PAT TIBERI, Ohio
BILL PASCRELL JR., New Jersey        JON PORTER, Nevada
SHELLEY BERKLEY, Nevada
JOSEPH CROWLEY, New York
CHRIS VAN HOLLEN, Maryland
KENDRICK MEEK, Florida
ALLYSON Y. SCHWARTZ, Pennsylvania
ARTUR DAVIS, Alabama

             Janice Mays, Chief Counsel and Staff Director
                  Brett Loper, Minority Staff Director

                                 ______

           SUBCOMMITTEE ON INCOME SECURITY AND FAMILY SUPPORT

                  JIM MCDERMOTT, Washington, Chairman

FORTNEY PETE STARK, California       JERRY WELLER, Illinois
ARTUR DAVIS, Alabama                 WALLY HERGER, California
JOHN LEWIS, Georgia                  DAVE CAMP, Michigan
MICHAEL R. MCNULTY, New York         JON PORTER, Nevada
SHELLEY BERKLEY, Nevada              PHIL ENGLISH, Pennsylvania
CHRIS VAN HOLLEN, Maryland
KENDRICK MEEK, Florida

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 
printed and electronic versions of the hearing record, the process of 
converting between various electronic formats may introduce 
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 February 6, 2007, announcing the hearing.............     2

                               WITNESSES

Anita Crawley, Nashville, Tennessee..............................    44
Marilyn Bezear, New York, New York...............................    46
Douglas Noble, Gaithersburg, Maryland............................    49
Tavon Hawkins and Nicole Dodd, Baltimore, Maryland...............    51

                                 ______

Timothy M. Smeeding, Ph.D., Director of the Center for Policy 
  Research, Syracuse University..................................    69
Gary Burtless, Ph.D., John C. and Nancy D. Whitehead Chair in 
  Economic Studies, The Brookings Institution, speaking in the 
  absence of Timothy M. Smeeding.................................    68
Alan Berube, Fellow, Metropolitan Policy Program, The Brookings 
  Institution....................................................    80
Angela Glover Blackwell, Esq., Founder and C.E.O., PolicyLink....    88
Robert Rector, Senior Policy Analyst, The Heritage Foundation....    93
Jared Bernstein, Ph.D., Director of the Living Standards Program, 
  Economic Policy Institute......................................   114

                       SUBMISSIONS FOR THE RECORD

Americans For Fair Taxation, Conyers, GA, statement..............   129
Child Welfare League of America, statement.......................   129
Holland, Lary Wayne, statement...................................   135




















 
                          ECONOMIC OPPORTUNITY
                         AND POVERTY IN AMERICA

                              ----------                              


                       TUESDAY, FEBRUARY 13, 2007

             U.S. House of Representatives,
                       Committee on Ways and Means,
        Subcommittee on Income Security and Family Support,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 10:20 a.m., in 
room B-318, Rayburn House Office Building, Hon. Jim McDermott 
(Chairman of the Subcommittee) presiding.
    [The advisory announcing the hearing follows:]

ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                            SUBCOMMITTEE ON

                   INCOME SECURITY AND FAMILY SUPPORT

                                                CONTACT: (202) 225-1025
FOR IMMEDIATE RELEASE
February 06, 2007
ISFS-1

                     McDermott Announces Hearing on

              Economic Opportunity and Poverty in America

    Congressman Jim McDermott (D-WA), Chairman of the Subcommittee on 
Income Security and Family Support of the Committee on Ways and Means, 
today announced that the Subcommittee will hold a hearing on economic 
opportunity and poverty in America. The hearing will take place on 
Tuesday, February 13, 2007, in room B-318 Rayburn House Office 
Building, immediately after a brief Subcommittee organizational meeting 
beginning at 10:00 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 experts on issues related to international 
comparisons of poverty, the geographical distribution of poor 
individuals, income mobility, the relevance of Hurricane Katrina, and 
the official definition of poverty. However, 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:

      
    According to the most recent statistics, there were 37 million 
Americans living in poverty in 2005, including nearly 13 million 
children. After prior years of decline, the number and percentage of 
Americans in poverty began to climb after the year 2000, resulting in 
an additional 5.4 million Americans living below the poverty line.
      
    Research indicates that poverty, measured both on a relative and 
absolute basis, is more common in the United States than in many other 
relatively prosperous nations. Additional studies suggest that income 
mobility for children born into poverty in the U.S. may be limited, and 
that an increasing percentage of poor children have working parents. 
While still a particular problem in inner-city and rural areas, poor 
Americans have joined the general migration to the suburbs, with the 
suburban poor now out-numbering their counterparts in the cities. 
Against this backdrop, there continues to be a debate about how to best 
define and quantify poverty.
      
    In announcing the hearing, Chairman McDermott stated, ``We need to 
work to ensure the American dream can become a reality. Today, too many 
of our fellow citizens see that dream slipping away. Those in poverty 
feel trapped and the countless millions living paycheck to paycheck 
feel they could slip into poverty at any time. I hope this hearing and 
others to follow will illustrate the need for change.''
      

FOCUS OF THE HEARING:

      
    The hearing will focus on the extent and nature of economic 
opportunity and poverty in America.
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Please Note: Any person(s) and/or organization(s) wishing to submit 
for the hearing record must follow the appropriate link on the hearing 
page of the Committee website and complete the informational forms. 
From the Committee homepage, http://waysandmeans.house.gov, select 
``110th Congress'' from the menu entitled, ``Hearing Archives'' (http:/
/waysandmeans.house.gov/Hearings.asp?congress=18). Select the hearing 
for which you would like to submit, and click on the link entitled, 
``Click here to provide a submission for the record.'' Once you have 
followed the online instructions, completing all informational forms 
and clicking ``submit'' on the final page, an email will be sent to the 
address which you supply confirming your interest in providing a 
submission for the record. You MUST REPLY to the email and ATTACH your 
submission as a Word or WordPerfect document, in compliance with the 
formatting requirements listed below, by close of business February 27, 
2007. Finally, please note that due to the change in House mail policy, 
the U.S. Capitol Police will refuse sealed-package deliveries to all 
House Office Buildings. For questions, or if you encounter technical 
problems, please call (202) 225-1721.
      

FORMATTING REQUIREMENTS:

      
    The Committee relies on electronic submissions for printing the 
official hearing record. As always, submissions will be included in the 
record according to the discretion of the Committee. The Committee will 
not alter the content of your submission, but we reserve the right to 
format it according to our guidelines. Any submission provided to the 
Committee by a witness, any supplementary materials submitted for the 
printed record, and any written comments in response to a request for 
written comments must conform to the guidelines listed below. Any 
submission or supplementary item not in compliance with these 
guidelines will not be printed, but will be maintained in the Committee 
files for review and use by the Committee.
      
    1. All submissions and supplementary materials must be provided in 
Word or WordPerfect format and MUST NOT exceed a total of 10 pages, 
including attachments. Witnesses and submitters are advised that the 
Committee relies 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 
referenced and quoted or paraphrased. All exhibit material not meeting 
these specifications will be maintained in the Committee files for 
review and use by the Committee.
      
    3. All submissions must include a list of all clients, persons, 
and/or organizations on whose behalf the witness appears. A 
supplemental sheet must accompany each submission listing the name, 
company, address, telephone and fax numbers of each witness.
      
    Note: All Committee advisories and news releases are available on 
the World Wide Web at http://waysandmeans.house.gov.
      
    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 MCDERMOTT. We will now open the regular meeting 
of--this is really our first hearing and we are quite excited 
about it because about a year and a half ago, Katrina exposed 
the brutal reality of poverty in this country I think in a way, 
that most mentioned never really had an opportunity to see it 
on television. They saw a side of our country which was quite 
surprising. Real people too poor to find a way to avoid the 
path of the storm and too forgotten to receive any immediate 
help. Even President Bush acknowledged America's shock and 
anguish at seeing so many with so little when he went to New 
Orleans, when he said we have a duty to confront this poverty 
with bold action.
    Now, unfortunately, we haven't seen that kind of bold 
action, and for that matter, in many respects, any action in 
New Orleans. To really to shake us from that lethargy, I feel 
like we needed this special hearing in Congress, and with the 
American people about the causes, the impacts and the potential 
solutions for poverty. If we can develop some level of common 
understanding about these issues, perhaps we can unite 
Republicans and Democrats under a common cause to actually act.
    In today's hearings, as well as future hearings, they will 
hopefully play a role in that process. I am certainly not 
expecting any kind of immediate consensus on potential remedies 
on or even on all of poverty's causes, but I do think we can 
confront some of the basic facts here, which we will hear a 
few.
    Our Nation has one of the highest poverty rates among all 
relatively prosperous nations. We will hear testimony today 
highlighting that fact as well as the fact that we spend a 
smaller percentage of our National wealth addressing poverty 
than most undeveloped nations.
    Secondly, poverty is more prevalent in some places than 
others, but it exists throughout America. It is not located in 
a few pockets here and there. Poverty remains a significant 
problem, so painfully demonstrated in the Ninth Ward of New 
Orleans, but we actually have more poor Americans living in the 
suburbs than we do in the cities.
    Thirdly, most poor children in our Nation have working 
parents. Work might be a requisite to have a chance to escape 
poverty, but it does not guarantee it. There are plenty of 
people work and kids living in families where both parents work 
and still living in poverty.
    Finally, to those who say poverty is simply a result of bad 
choices by individuals, I want to ask them to remember three 
things: Most of us have made mistakes in our life, but we have 
gotten a second chance and often a third or fourth chance. The 
second chances are a lot harder to come by when you are living 
in poverty. Moreover, most people fall into poverty not because 
of bad choices, but because of bad luck, the circumstances of 
life over which they have really no control: Job loss, divorce, 
family illness, can all lead to a family's downward spiral into 
poverty.
    Finally, the third thing I want you to remember is contrary 
to our best hope, there is not equal opportunity in this 
country. If you don't have access to a decent school or a safe 
neighborhood or a good job, your path to economic self-
certainty is much, much harder. Personal responsibility is 
important but so too is society's obligation to help those with 
the least.
    I look forward to having a discussion with these and other 
issues with the hope that greater understanding may bring us 
closer to working toward a solution.
    Chairman MCDERMOTT. I would now like to yield to Mr. Weller 
for any comments that he may have. Mr. Weller.
    Mr. WELLER. Thank you, Mr. Chairman, and thank you for 
convening this meeting. I certainly want to welcome our 
witnesses before us today and appreciate the time they are 
taking to be with us.
    Today's hearing covers a broad range of issues, including 
not only issues relating to poverty, but also economic 
opportunity in this country. We have an equally broad set of 
experts to discuss these topics, including several who will 
provide accounts of their continued struggles to lift their own 
families out of poverty, and I look forward to hearing that 
testimony.
    Even as we explore how to reduce poverty and promote 
economic opportunity, it is important to note the progress that 
has been made in reducing poverty through welfare reform and 
other pro-work policies. Pro-work welfare reforms reduced 
poverty since 1996. In the past decade, the overall poverty 
rate has fallen by 7 percent. Child poverty rates have dropped 
by 13 percent and today over 1.4 million fewer children live in 
poverty. Poverty declined sharply among African Americans 
Hispanics and families headed by single mothers. Despite these 
gains, our ability to make long run progress remains in 
question, because more children are born each year into the 
type of households most likely to be in poverty, that is, 
households headed by single parents.
    Today, 37 percent of all children are born to unmarried 
parents, which is both an all time high, and a number that will 
probably continue to rise. A recent Congressional research 
study report on children in poverty, which I would request we 
enter into the record for this hearing, shows children in such 
households at five times the poverty rate as children living 
with married parents. So, we have our work cut out for us.
    We should also devote some time to how poverty is measured 
and how current programs are effective. We know most government 
programs are not counted today when measuring poverty. A 
reasonable person might wonder why. Some studies suggest if we 
had the full picture of the income and benefits families 
receive, the real poverty rate will drop to a low as of 5 
percent instead of today's official poverty rate of nearly 13 
percent.
    Fortunately, we know what works and what doesn't to reduce 
poverty. Promoting full-time work and healthy marriage are the 
strongest weapons in our arsenal against poverty. Both of which 
are more effective than doubling welfare benefits. Achieving 
that will require engaging and challenging young adults, 
especially like those we will meet, to understand that their 
future and our country's future is really in their hands.
    Government can and should promote equality of opportunity 
while providing a suitable safety net for those in need. No 
matter how hard it might try, government cannot ensure equality 
of outcome. That part depends on the good judgment and hard 
work of families. I look forward to our discussion and learning 
how we can increase opportunity for more families to climb up 
the economic ladder. Again, I welcome today's witnesses and 
thank you for convening this hearing.
    Chairman MCDERMOTT. Thank you. We appreciate that and 
without objection, we will enter into the record the 
Congressional Research Service report that you mentioned. It is 
the one which I got the information about the fact that most of 
the kids are working in living in families where both parents 
are working.
    [The information follows:]



    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    

    Chairman MCDERMOTT. So, there is a good bit of information 
I recommended to the Committee to read. If you have nothing 
else for bed time reading, it is a good explanation of what is 
going on in this country.
    We will come to our first panel of witnesses. They are 
all--all of your written statements will be entered into the 
record, so we would like you to talk for 5 minutes to us and 
tell us what is on your mind. The first of the panelists that 
we have we have gotten them from a variety of places and tried 
to get some spread here about what the kinds of problems people 
face.
    Let us start, Ms. Crawley with you.

        STATEMENT OF ANITA CRAWLEY, NASHVILLE, TENNESSEE

    Ms. CRAWLEY. Mr. Chairman and Members of the Subcommittee, 
thank you for providing me with the opportunity to share my 
story today about my struggles to get out of poverty. My name 
is Anita Crowley. About 4 years ago, a number of things 
happened at the same time to change my life.
    Chairman MCDERMOTT. Is your mike on? If you press----
    Ms. CRAWLEY. Okay. Mr. Chairman and Members of 
Subcommittee. Thank you for providing me with the opportunity 
to share my story today about my struggles to get out of 
poverty. My name is Anita Crawley. About 4 years ago, a number 
of things happened at the same time to permanently change my 
life.
    After 12 years of working at Vanderbilt University Medical 
Center in a good paying job, I was laid off due to management 
decision to upgrade the position for a college graduate. Even 
though I was well trained and qualified for the job as a 
referral and authorization specialist, I became unemployed.
    Around the same time, my marriage of 12 years was ending in 
divorce. I decided to go back to school to further my education 
so I enrolled in college. I made it halfway through the second 
semester and then my youngest daughter was hit by a car and was 
hospitalized. My life changed. I was forced to make some hard 
decisions. I was a single mom with no support, no income, and 
now I have to take care of my injured daughter who suffered 
memory loss among other things at the tender age of 6.
    I had to take a leave from school to take care of my 
daughter. I tried to go back to school part-time, but I could 
not take two classes under the Pell grant. So, I had to make 
the painful decision to stop and take care of my daughter. I 
had used all of the money I had saved. I had to borrow money 
from my 401(k) after using all of the resources I had, I was 
broke. I could barely afford to feed and shelter my daughters. 
After losing my home, my car, my comfortable life as I knew it, 
I had no choice but to move back with my mother.
    I had to accept low income housing in a very bad 
neighborhood. My kids could not go outside to play because of 
the constant drug dealing and gunfire. I did everything I could 
to provide for my daughters. I had to get on public assistance, 
welfare, food stamps, cash benefits, TennCare, Job Search, 
Child Care Assistance while I searched for work. If it were not 
for my hope, faith in these government supports, I would not 
have been able to survive.
    Eventually, I got connected to Catholic Charities of 
Nashville for their Welfare to Work program. After my training 
was completed, I was able to find part-time employment. I am 
one of the fortunate people because I was able to find a job. I 
am still struggling every day to make ends meat.
    Things that would have been helpful: It would have been 
helpful to have more education and training assistance. Help 
with housing, better housing, a school for smoother transition 
from Welfare to Work and more work support.
    As soon as I got the job, most of my income supports were 
cut. Food stamps, cash benefits and child care services were 
cut, forcing me to pay child care expenses and grocery bills. I 
was still faced with financial difficulties and pressure to 
take care of my children and keep my job. If there was a 
smoother transition from Welfare to Work, that would have been 
very helpful.
    I am now working full-time with Catholic Charities of 
Nashville, but only making about $21,000 for my family of four 
which is barely above minimum wage.
    While my income has gone up with the full-time employment 
this January 2007, all of my other support started to go down. 
This is not an incentive to work. Some of the value of the 
increased salaries is lost because of the cut in supports.
    Mr. Chairman, I have tried to take some steps forward, but 
so many things are holding me back. I ask that you keep 
families like me in mind when you work to create new Federal 
policies to address the needs of the poor and the working poor.
    We are fighting hard and playing by the rules, but are 
still struggling, and any small thing can push us further into 
poverty. We need the help of the Federal Government. Local 
organizations like Catholic Charities of Nashville simply 
cannot do it all.
    Thank you for the opportunity to tell my story. I would be 
happy to answer any questions you may have.
    Thank you.
    Chairman MCDERMOTT. Thank you. You landed exactly at 5 
minutes. That is perfect.
    [The prepared statement of Ms. Crawley follows:]
            Statement of Anita Crawley, Nashville, Tennessee
    Mr. Chairman and members of the Subcommittee, thank you for 
providing me with the opportunity to share my story today about my 
struggles to get out of poverty.
Background
    My name is Anita Crawley, about four years ago a number of things 
happened at the same time to permanently change my life:
    After 12 years working at Vanderbilt University Medical Center in a 
good paying job--I was laid off due to management's decision to upgrade 
the position for a college graduate.
    Even though I was well trained and qualified for the job as a 
Referral/Authorization Specialist I became unemployed.
    Around the same time my marriage of twelve years was ending in 
divorce.
    I decided to go back to school to further my education, so I 
enrolled in college.
    I made it half way through the second semester and then my youngest 
daughter was hit by a car and was hospitalized.
My Life Changed
    I was forced to make some hard decisions. I was a single mom with 
no support, no income, and now I had to take care of my injured 
daughter, who suffered memory loss among other things at the tender age 
of six.
    I had to take a leave from school to take care of my daughter.
    I tried to go back to school part-time, but I could not take two 
classes under the Pell Grant, so I had to make the painful decision to 
stop and take care of my daughter.
    I had used all the money I had saved, I had to borrow money from my 
401k, after using all the resources I had, I was broke.
    I could barely afford to feed and shelter my daughters. After 
losing my home, my car, my comfortable life as I knew it, I had no 
choice, but to move back with my mother.
    I had to accept low income housing in a very bad neighborhood, my 
kids could not go outside to play because of the constant drug dealing 
and gun fire.
I Did Everything I Could to Provide for My Daughters
    I had to get on public assistance--Welfare, food stamps, cash 
benefits, Tenncare, and Job Search Child Care assistance while I 
searched for work.
    If it were not for my hope, faith and these government supports, I 
would not have been able to survive.
    Eventually I got connected to Catholic Charities of Nashville for 
their welfare to work program
    After my training was completed, I was able to find part-time 
employment.
    I am one of the fortunate people because I was able to find a job--
but I am still struggling every day to make ends meet.
Things That Would Have Been Helpful
    It would have been helpful to have more education and training 
assistance, help with housing, a smoother transition from welfare to 
work, and more work support.
    As soon as I got the job, most of my income supports were cut--Food 
Stamps, cash benefits and childcare services were cut, forcing me to 
pay higher childcare expenses and grocery bills.
    I was still faced with financial difficulties and pressure to take 
care of my children and keep my job.
    If there was a smoother transition from welfare to work that would 
have been very helpful.
    I am now working full-time with Catholic Charities of Nashville, 
but only making about $21,000 for my family of four.
    While my income has gone up with the full-time employment since 
January 2007, all of my other supports started to go down. This is not 
an incentive to work.
    Also, some of the value of the increased salaries is lost because 
of the cut in supports
    Mr. Chairman, I have tried to take some steps forward, but so many 
things are holding me back.
    I ask that you keep families like me in mind when you work to 
create new federal policies to address the needs of the poor and the 
working poor.
    We are fighting hard and playing by the rules--but are still 
struggling--and any small emergency can push us further into poverty. 
We need the help of the federal government.
    Local organizations like Catholic Charities of Nashville simply 
cannot do it all.
    Thank for the opportunity to tell my story--I will be happy to 
answer any questions you may have.
    Thank you.

                                 

    Chairman MCDERMOTT. Ms. Bezear.

        STATEMENT OF MARILYN BEZEAR, NEW YORK, NEW YORK

    Ms. BEZEAR. Good morning. My name is Marilyn Bezear. I live 
in Harlem on West----
    Chairman MCDERMOTT. I don't think your mike is on. Press--
there you go.
    Ms. BEZEAR. Okay. My name is Marilyn Bezear. I live in 
Harlem on West 143rd Street. I am 52 years old, and a single 
mother. My husband passed away in 1997. I have a 21-year old 
daughter named Cha'ta. I am a member of Community Voices Heard. 
I am here to tell you my story.
    I was working in 1995 as a secretary in Harlem Hospital. 
After caring for my husband who died from cancer, I began to 
receive public assistance. After 5 years, I was able to get a 
position in the transitional job program working for the 
Department of Parks and Recreation. The job program lasted for 
11\1/2\ months. This program, which came through the Human 
Resources Administration, the welfare agency in New York, 
allowed me to work toward a goal of bringing home a salary and 
not have to rely on public assistance.
    One problem, however, was the education program of the 
program did not work. I wanted my General Equivalency Diploma 
(GED). After this time, I used 6 months on unemployment and 
attended adult education where I got my GED.
    I am working two jobs. One is a government agency doing 
clerical work in New York Department of Sanitation. I work 
alongside people that are making much higher salaries with 
benefits because I work through a temp agency. I am not 
entitled to the same benefits and salary, even though we are 
doing the same job. I work 20 hours a week and make $8 an hour. 
I also do office cleaning at night for another agency for 15 
hours a week for making a minimum of $10 to $15 depending on 
the site that I am cleaning.
    Together, after taxes, I bring home up to $300 a week. With 
this I pay my rent, food, telephone, and payments for the loan 
I took off for my daughter to go to college. Even this can be 
unstable. There have been times when the temp agency has less 
work and I had to find a temporary way to meet my needs like 
working part time in the bowling alley on late shift which got 
me home at 4:30 in the morning.
    I have been in New York City public housing since 1994. If 
myself and my neighbors didn't have access to public housing, I 
wouldn't be able to stay in the neighborhood that I grew up in. 
Even with poor maintenance, service, repairs and security 
leading to my daughter recently being robbed in the building I 
lived in.
    Public housing is really the only access I have to 
affordable housing due to the fact of many new high and costly 
developments now happening in Harlem due to the salary I bring 
home. Right now, one of my high priorities to get an education 
for my daughter was the college loans that I had taken out. My 
debt is almost $35,000. I knew this would be a struggle, but I 
wanted my daughter to have a high education to give her the 
opportunity to succeed.
    Even with these loans, I still had to take out money for my 
weekly salary to help her with food and all of the expenses. It 
became very challenging. She ended up leaving college at 
Florida because her housing went up, because she has limited 
public transportation, and I couldn't afford to buy her a car. 
She is now back living at home with me in New York City looking 
for a job. Hopefully, she will be attending school in New York 
City in the fall to have the opportunity to see the hardship 
and other young people encompassing their background.
    One of my biggest worries right now is my health care. I no 
longer have health insurance because of Medicaid 
recertification cut my off by mistake. When my daughter turned 
21, she was no longer eligible under my case. So, no one in my 
household has health insurance now. The temp agency that I am 
working for don't provide health insurance for me and my 
family.
    Although my daughter still lives with me, because she is 
now 21, my case only includes me. My income may be still too 
high for one person to make me eligible for Medicaid. I am 
waiting to be recertified. This is my only option.
    As you see, the struggle that I live through does not come 
from one cause and any solution for poverty need to consider 
all of these elements. It is all based on trying to achieve 
real security in life.
    A real living wage would make the security and stability 
for me and my family. It is not only by the wage, but the tools 
I need to get a better paying job. I work to get my GED and 
further access to adult training education to provide me with 
security for my life.
    Education is the key to the future. My daughter and others 
like her would be more secure and self-sufficient if more aid 
was available and loan payments didn't make such a burden on 
the whole family. The security of health coverage is limited by 
unreasonable income levels and people like my daughter are 
falling through the cracks.
    When she had to leave college, she lost her health coverage 
and is no longer eligible under my Medicaid. My access to 
housing is insecure. Frequently in my church, we have 
discussions about the fear of losing affordable housing. I hear 
the conversations on the bus, on the corner and in the stores. 
I know this conversation might be happening all over the 
country.
    I would like to take this time to thank everyone here to 
listening to my testimony. I am just one of the many who lives 
through these struggles. The challenge of trying to send a kid 
to college to work more than one job, making money stretch to 
the longest distance. Wages, education, training and health 
care are a necessity, and I hope my testimony did not fall on 
deaf ears. Thank you.
    Chairman MCDERMOTT. Thank you.
    [The prepared statement of Ms. Bezear follows:]
            Statement of Marilyn Bezear, New York, New York
    My name is Marilyn Bezear. I live in Harlem on West 143rd St. in 
New York City. I am 52 years old and a single mother, (my husband 
passed away in 1997). I have a 21 year daughter named Cha'ta. I am a 
member of Community Voices Heard and I am here to tell you my story.
    I was working in 1995 as a secretary in Harlem Hospital. After 
caring for my husband, who died from cancer, I began to receive Public 
Assistance. After five years, I was able to get a position in a 
transitional job program working for the Department of Parks & 
Recreation. The job program lasted for 11\1/2\ months. This program 
which came through HRA, the welfare agency in New York, allowed me to 
work toward a goal of bringing home a salary and not have to rely on 
Public Assistance. One problem, however, was that the education portion 
of the program did not work. I wanted my GED. After this time, I used 
the six months on unemployment insurance to attend Adult Basic 
Education where I got my GED.
    I am currently working two jobs. I am working with a temp agency 
doing clerical work in the New York City Department of Sanitation. I 
work alongside people that are making much higher salaries with 
benefits but because I work through a temp agency I am not entitled to 
the same benefits and salary even though we are doing the same job. I 
work 20 hours a week and make eight dollars an hour. I also do office 
cleaning at night for another agency for 15 hours a week making a 
minimum of $10 to $15 dollars an hour depending on the site that I am 
cleaning.
    Together, after taxes, I bring home up to $300 a week. With this, I 
pay my rent, food, telephone and payments for the loan that I took out 
for my daughter to go to college. Even this can be unstable. There have 
been times when the temp agency has had less work and I have to find a 
temporary way to meet my needs like working part-time in a bowling 
alley on a late shift getting home at 4:30 in the morning.
    I have been in New York City Public Housing since 1994. If myself 
and my neighbors didn't have the access to public housing, I wouldn't 
be able to stay in the neighborhood that I grew up in. Even with poor 
maintenance, services, repairs and security (leading to my daughter 
recently being robbed in my building), public housing is really the 
only access I have to affordable housing due to the fact of many new 
and high cost developments happening now in Harlem and due to the 
salary I bring home.
    Right now, one of my highest priorities is to get an education for 
my daughter. With the college loans that I have taken out, the debt is 
almost $35,000 now. I knew that this would be a struggle but I want my 
daughter to have a higher education to give her the opportunity to 
succeed. Even with these loans, I still had to take out money from my 
weekly salary to help her with food and other expenses. It became very 
challenging. She ended up leaving college in Florida because her 
housing went up and because she had limited public transportation in 
her city (we couldn't afford to buy a car). She is now back living with 
me in New York and looking for a job. Hopefully she will be attending 
school in New York City this fall. To have the opportunity to succeed 
shouldn't be such a hardship for my daughter and other young people 
like her that come from similar backgrounds.
    One of my biggest worries right now is about my healthcare. I no 
longer have health insurance because a Medicaid recertification cut me 
off by mistake. When my daughter turned 21, she was no longer eligible 
under my case. So no one in my household has health insurance now. The 
temp agencies that I am working for don't provide health insurance for 
me and my family. Although my daughter still lives me, because she is 
now 21, my case only includes me. My income may be considered too high 
for one person to make me eligible for Medicaid. I am waiting to be 
recertified, hoping that I am eligible because it is my only option 
right now.
    As you see, the struggles that I am living through don't come from 
one cause and any solution to poverty need to consider all these 
elements. It is all based on trying to achieve real security in life. A 
real living wage would provide that security and stability for me and 
my family. And it is not only about the wage, but about the tools I 
need to get better paying jobs. I worked to get my GED and further 
access to adult training and education would provide more security in 
my life. Education is the key to a good future. My daughter and others 
like her would have be more secure and self-sufficient if more aid was 
available and loan payments didn't put such a burden on the whole 
family. The security of health coverage is limited by unreasonable 
income levels and people like my daughter are falling through the 
cracks. When she had to leave college, she lost her health coverage and 
is no longer eligible under my Medicaid. My access to housing is 
insecure. Frequently in my church, we have discussions about the fear 
of losing affordable housing. I hear these conversations on the bus and 
in the corner stores and I know these conversations must be happening 
all over the country.
    I would like to take this time to thank everyone here for listening 
to my testimony. I am just one of many who live through these 
struggles. The challenge of trying to send a kid to college, working 
more than one job and making money stretch the longest distance. Wages, 
education, training and healthcare are a necessity. I hope my testimony 
did not fall on deaf ears. Thank You.

                                 

    Chairman MCDERMOTT. Mr. Douglas Noble.

       STATEMENT OF DOUGLAS NOBLE, GAITHERSBURG, MARYLAND

    Mr. NOBLE. Thank you. Thank you for the chance to speak 
today about the difficulties I have had and still are having 
with getting a job and moving out of homelessness and into my 
own home. My name is Douglas Noble, and I was born 50 years ago 
in the middle class community in Silver Spring, Maryland and 
went to the local Catholic high school. In 1980, I moved out of 
my mother's house and began living on my own, renting my own 
apartments, owning my own car, and working full-time for nearly 
2 decades.
    I am dually diagnosed. That means I have a diagnosed mental 
health problem, in my case depression, along with a substance 
abuse problem. In my case, I am an alcoholic. I have had 
depression all of my adult life. When my depression got really 
bad until 1998, I drank a lot to try and control things until I 
finally lost control of my life in 2001. I first began losing 
jobs and then my apartment. I temporarily moved in with my 
mother. The agreement was that I could stay there if I took my 
medication and stopped drinking. The medication was too 
expensive, and I wasn't ready to stop drinking.
    I moved out of my mother's house and began staying in the 
warehouse where I was working. That went on for some time until 
I broke my foot. In December of 2001, I fell and shattered my 
right foot so badly that I was in and out of the hospital many 
times. After the hospital, I moved into a respite care 
emergency shelter and transitional housing. I would like to 
point out that the community ministry shelter in Rockville and 
the out-patient addiction service program in Rockville both 
were very successful in helping me.
    A condition of transitional housing was sobriety. So, for 
the first time I started to think about stopping drinking. For 
the year, I worked on my dual diagnosis and graduated from the 
program I was in. The foot injury was still giving me problems 
and preventing me from working full time. Given that I had 
worked for many years and was now disabled, I applied and 
received Social Security disability income, approximately $800 
a month. Social Security Disability Insurance (SSDI) gave me 
enough income and access to health insurance to live in a 
temporary group home paying for rent and expenses. Health 
insurance was paid for, my doctors' visits and medications.
    In 2005, my depression was under control with medication, 
but my foot was still really bothering me. I started working on 
new goals, taking my medication for depression, taking college 
classes, getting a job and moving into my own home. I began 
taking graphics arts classes at a community college and began 
working seasonal jobs. I was meeting my goals and things were 
looking much better. Late in 2005, the Social Security 
Administration (SSA) determined that I was no longer disabled 
and canceled my benefits along with my health insurance. It has 
been a real struggle since then.
    Even though my foot bothers me when I stand on it for a 
while, my caseworker says that it is probably not worth 
appealing the decision after SSA has made up their minds.
    I am still living in temporary housing and working with an 
employment counselor. I saved a little money from a job I had 
over the holidays and from the remainder of my SSDI it is 
enough to cover my living expenses and the medications for 
depression, it costs a lot and is getting more and more 
expensive.
    I have worked most of my life and had some setbacks, but I 
am committed to returning to work and getting my own home.
    Friday I had a job interview that looks promising. It pays 
enough for rent and expenses and has health insurance. With 
that in place, I can move into my own apartment. Without it, 
life just stays a lot more difficult.
    Thank you.
    [The prepared statement of Mr. Noble follows:]
           Statement of Douglas Noble, Gaithersburg, Maryland
    Thank you for the chance to speak today about the difficulties I've 
had and still are have with getting a job and moving out of 
homelessness and into my own home. My name is Douglas Noble and I was 
born fifty years ago in a middle class community in Silver Spring, 
Maryland and went to the local catholic high school. In 1980, I moved 
out of my mother's house and began living on my own, renting my own 
apartments, owning my own car and working full time for nearly two 
decades.
    I'm dually diagnosed, that means I have a diagnosed mental health 
problem--in my case depression--along with a substance abuse problem--
in my case I'm an alcoholic. I've had depression all my adult life. 
When my depression got really bad in 1998, I drank a lot to try and 
control things, until I finally lost control of my life in 2001. I 
first began losing jobs and then my apartment. I temporarily moved in 
with my mother. The agreement was that I could stay there if I took my 
medication and stopped drinking. The medication was too expensive and I 
wasn't ready to stop drinking. I moved out of my mother's house and 
began staying in the warehouse where I was working. That went on for 
some time until I broke my foot.
    In December 2001, I fell and shattered my right foot so badly that 
I was in and out of the hospital many times. After the hospital, I 
moved into a respite care, emergency shelter and transitional housing. 
A condition of transitional housing was sobriety. So, for the first 
time I started to think about stopping drinking. For two years I worked 
on my dual diagnoses and graduated from the program I was in. T he foot 
injury was still giving me problems and preventing me from working full 
time. Because I had worked for many years and was now disabled, I 
applied and received Social Security Disability Income, approximately 
$800. SSDI gave my enough income and access to health insurance to live 
in a temporary group home, paying for rent and expenses. Health 
insurance was paying for my doctors' visits and medication.
    In 2005, my depression was under control with medication, but my 
foot was still really bothering me. I started working on new goals: 
taking my medication for depression, taking college classes, getting a 
job and moving into my own home. I began taking graphics arts classes 
at a community college, and began working season jobs. I was meeting my 
goals and things were looking much better.
    Late in 2005, the Social Security Administration determined that I 
was no longer disabled and cancelled my benefits, along with my health 
insurance. It's been a real struggle since then. Even though my foot 
bothers me when I stand on it for a while, my case worker says that 
it's probably not worth appealing the decision after SSA has made up 
their minds.
    I'm still living in temporary housing and working with an 
employment counselor. I saved a little money from a job I had over the 
holidays and from SSDI. It's enough to cover my living expenses and the 
medication for depression that costs a lot and is getting more and more 
expensive.
    I've worked most my life and had some set backs. But, I'm committed 
to returning to work and getting my own home. Friday I had a job 
interview that looks promising. It pays enough for rent and expenses 
and has health insurance. With that in place, I can move into my own 
apartment. Without it, life just stays a lot more difficult.

                                 

    Chairman MCDERMOTT. Thank you very much.
    Mr. Hawkins and Ms. Dodd, do you want to talk together? You 
can split the time any way you want.

           STATEMENT OF TAVON HAWKINS AND NICOLE DODD

    Mr. HAWKINS. Good morning. Thank you for giving me the 
opportunity to testify. My name is Tavon Hawkins. My fiance and 
I participate in the Center For Fathers, Families and Workforce 
Development, Baltimore Building Strong Family Program. The 
program provides us with relationship skills building and a 
great deals of emotional support. My parents were not together 
when I was growing up. My father was not active in my life. The 
absence of my father made me realize the importance of a father 
figure. I may not have had a father in my life, but I do 
realize the importance of being there for my son. The Building 
Strong Family Program has helped me learn that I need to be not 
only good father, but also a good partner to Nicole.
    My fiance and I have 2 years--been together for 2\1/2\ 
years. Just recently had our first child. During our time 
together, I have been employed on and off. Most of the 
employment I have been able to obtain is seasonal. I have a 
misdemeanor offense on my record and it makes it hard for me to 
find long-time employment. I am the provider for my family and 
at times--at times I find that hard to make ends meet.
    Ms. DODD. Good morning. Thank you for giving me the 
opportunity to testify. My name is Nicole Dodd. My fiance and I 
have participated in the Baltimore Building a Strong Family 
program. The program helped us to strengthen our relationship 
by teaching us the right ways to talk to each other when we are 
angry and frustrated. I have worked often on my adult life. I 
have experience. However, I do not have a high school diploma. 
I realize that that is stopping me for really getting a good 
job. I know the importance of having a high school diploma, but 
since I have a child, I don't have the child care and cannot 
afford to pay for it. Social services will not assist me unless 
I take my fiance to child support.
    I do not want to do that because Tavon takes good care of 
our child. I think--I think that that will be a slap in his 
face. I am committed to our relationship and know that we will 
make it regardless of our struggles, and I am thankful for the 
Building of a Strong Family program for helping us to see that. 
We will be getting married on March 24th, 2007.
    [The prepared statement of Mr. Hawkins and Ms. Dodd 
follows:]
    Statement of Tavon Hawkins and Nicole Dodd, Baltimore, Maryland
    Mr. Chairman and Members of the Subcommittee:
    Thank you for giving me the opportunity to testify. My name is 
Tavon Hawkins. My fiance and I have participated in the Center for 
Fathers, Families and Workforce Development's (CFWD) Baltimore Building 
Strong Families program. The program provided us with relationship 
skill building and a great deal of emotional support.
    My parents were not together when I was growing-up. My father was 
not active in my life. The absence of my father made me realize the 
importance of a father figure. I may not have had a father in my life, 
but I do realize the importance of being there for my son. The Building 
Strong Families Program has helped me learn that I need to be not only 
a good father but also a good partner to Nicole.
    My fiance and I have been together for 2\1/2\ years and just 
recently had our first child. During our time together I have been 
employed on and off. Most of the employment I have been able to obtain 
is seasonal. I have a misdemeanor offense on my record and it makes it 
hard for me to find long term employment. I am the provider for my 
family and at times I find it hard to make ends meet.
                                 ______
                                 
Testimony of Nicole Dodd

    Mr. Chairman and Members of the Subcommittee:
    Thank you for giving me the opportunity to testify. My name is 
Nicole Dodd. My fiance and I have participated in the Center for 
Fathers, Families and Workforce Development's (CFWD) Baltimore Building 
Strong Families program. The program helped us to strengthen are 
relationship by teaching us the right way to talk to each other when we 
are angry and frustrated.
    I have worked off and on all of my adult life. I have work 
experience; however I do not have my high school diploma. I realize 
that this is stopping me from really getting a good job. I know the 
importance of having a high school diploma, but since having my child I 
do not have childcare and cannot afford to pay for it. Social Services 
will not assist me unless I take my fiance to child support. I do not 
want to do this because Tavon takes good care of me and our child and I 
think that would be a slap in the face to him.
    I am committed to our relationship and know that we will make it 
regardless of our struggles and I am thankful to Building Strong 
Families for helping us to see this. We will be getting married on 
March 24, 2007.

                                 

    Chairman MCDERMOTT. Okay. Thank you very much for your 
testimony, and thank you all for your testimony.
    I would like to ask Ms. Bezear. One of the things that I 
think that is hard for us to understand is how does somebody 
live on $300 a week in New York City?
    Ms. BEZEAR. You are right, because it is a--really, really 
a struggle. Like I stated, with that money I pay my rent and I 
do my----
    Chairman MCDERMOTT. Tell me specifically, you are living in 
public assisted housing?
    Ms. BEZEAR. I live in public housing.
    Chairman MCDERMOTT. So, it is a percentage of how much 
money you have that goes to your pay? How much rent do you pay 
a month?
    Ms. BEZEAR. Right now I pay $285.
    Chairman MCDERMOTT. So, one week is for rent. What else do 
you to have pay for?
    Ms. BEZEAR. I have to pay for my telephone, food expenses 
because I am not entitled to food stamps because my income is 
so high. I am not going to--like I stated, I also have to pay 
for my daughter's college loans.
    Chairman MCDERMOTT. Let me ask about the food. What is the 
level at which food stamp cuts off? It sounds like you have got 
$100 a month. That is too much to get food stamps?
    Ms. BEZEAR. Exactly. It is too much. It is too much. They 
go on the level of how much you make. So my--what they consider 
to be hundred--1,200 added up, that is too high. So, I am not 
entitled to food stamps. That is how they work it in New York 
City. So, as I stated, the money I do have, it is a struggle 
because I have to pay college loans for my daughter, so that is 
why I think more money should be going to affordable--more into 
affordable housing for people and for colleges for people like 
me and my daughter.
    Chairman MCDERMOTT. How did you get a loan for colleges for 
your daughter?
    Ms. BEZEAR. Well, through Sallie Mae. Through Sallie Mae. 
The college loan place. Since she is an independent child, they 
considered, okay, then I was working at the time so they don't 
really--they go by your income, but they want to make sure you 
have good credit and you can pay the loan back. So, as I said, 
most of my money goes to paying the loans back. That is why she 
is not in college, because it was expensive and she had to come 
back home. So, once again, I think I feel there should be more 
affordable colleges and lower interest rates for college loans.
    Chairman MCDERMOTT. Your health care is by the emergency 
rooms of New York City hospitals?
    Ms. BEZEAR. It is for Medicaid.
    Chairman MCDERMOTT. You are still on Medicaid?
    Ms. BEZEAR. I was. I was on Medicaid but I am not on 
Medicaid any more.
    Chairman MCDERMOTT. Because you don't have a child.
    Ms. BEZEAR. Medicaid, they cut me off by mistake. They cut 
me off by mistake because the recertification. I sent my--what 
they call--you send recertification through the mail. When I 
sent it through the mail, they lost it. They cut me off. When I 
went to the clinic, I found out I was cut off. I didn't realize 
it until I had the clinic appointment. When she turned 21, they 
cut me off and they consider me single. Since they consider me 
single, they state they are going to go by income because my 
daughter is no longer on my income on my case.
    Chairman MCDERMOTT. Mr. Hawkins and Ms. Dodd, how do you 
live now? I didn't hear your income level. How do you get by?
    Ms. DODD. Right now we are living with a family member.
    Chairman MCDERMOTT. So, you are living in somebody else's 
house?
    Ms. DODD. Yes.
    Chairman MCDERMOTT. Neither of you have employment at this 
point?
    Ms. DODD. No, sir.
    Chairman MCDERMOTT. What kind of employment--are you in any 
kind of training program or any kind of program where you might 
have assistance to get in to employment like the one that Ms. 
Crawley was talking about?
    Ms. DODD. The Build a Strong Family program, it helps you 
with employment and things like that.
    Chairman MCDERMOTT. Your health care presently?
    Ms. DODD. No.
    Chairman MCDERMOTT. Neither of you have access to health 
care?
    Ms. DODD. No.
    Chairman MCDERMOTT. Do you have access to health care?
    Ms. CRAWLEY. Yes, sir.
    Chairman MCDERMOTT. Because of----
    Ms. CRAWLEY. Well, I still have TennCare, and they approved 
me until 18 months after I started. Well, I had to work on my 
job and they only go ahead and give it to me for 18 months. I 
guess that is just their law or policy there. So, everything 
else was cut off except our TennCare.
    Chairman MCDERMOTT. Okay. Thank you.
    Mr. Weller.
    Mr. WELLER. Thank you, Mr. Chairman.
    Again, welcome to our panelists, and I want to commend each 
of you for your presentation. I remember the first time I 
appeared before a legislative Committee and how nervous I was. 
I want to congratulate each of you on how well you presented 
yourself in talking about something personal, which is your 
daily lives.
    We are limited in time so I would like to direct my 
questions to Mr. Hawkins and Ms. Dodd. First I want to 
congratulate you on your plans to get married. That is 
wonderful news. You have got a little boy now, a 4-month-old, I 
understand. Congratulations. He is doing well?
    Ms. DODD. Yes.
    Mr. WELLER. Congratulations.
    Mr. McDermott kind of started on a question I was 
interested in directing to both of you. Tell us more about this 
program at the Baltimore Center for Fathers Families and 
Workforce Development. What do they offer and have they made 
some changes in your life? Do you feel they have helped you?
    Ms. DODD. Yes. Actually, they made a big change in our 
lives. First, coming to people who you really don't know, just 
letting your feelings out on life. They actually--they take you 
in and they sit and one on one and you have your conversations 
with the facilitators. They kind of pinpoint everything that 
you really need. Like, well, housing, where we are still 
working on that. On housing situation. Jobs.
    On the limit of working on that--as I stated, my son is 
only 4 months now. Child care is kind of hard. Actually we 
really haven't looked at different day care providers and 
things like that, but normally we--they don't take you until 
you are about 6 months to a year.
    So, that left me out of work for that long. They are trying 
to work on different pinpoints. They are helping us with the 
wedding and things like that. Things that we need, expenses, 
and things like that.
    Mr. WELLER. Mr. Hawkins, looking at Ms. Dodd's testimony, 
you must be a pretty good father. Pretty good dad.
    Mr. HAWKINS. Yes.
    Mr. WELLER. The program that you are in--this Baltimore 
program, does it help you find ways to be a better father?
    Mr. HAWKINS. You have little sessions. You have little 
videos, and you sit back and talk about like what would you do 
different when it comes down to your child, how would you raise 
your child from how that you have been raised. So, it basically 
helps you out with a lot because actually getting to sit down, 
like you said before, in front of people that you don't know 
and express your feelings on life and what you remember and how 
can you become better. How can you become better for your 
child?
    Mr. WELLER. You have indicated in comments regarding this 
program that the program helps you in searching for jobs and, 
Mr. Hawkins, you indicated you have been looking.
    Mr. HAWKINS. You can go up and ask RUN for their training 
and once you complete that, you can verify your job.
    Mr. WELLER. For you, what has been your biggest challenge 
in finding full-time employment?
    Mr. HAWKINS. I guess, like before the misdemeanor charge I 
have. So, it played a major part like trying to find a job with 
a criminal background. It is a little hard.
    Mr. WELLER. Ms. Dodd, in your statement, you indicated that 
you do not have a high school diploma.
    Ms. DODD. Right.
    Mr. WELLER. Are you working to obtain a GED?
    Ms. DODD. Actually, well, we go back--we are supposed to be 
looking for a program so I can get my GED.
    Mr. WELLER. Is this Baltimore Center--do they have a 
program that they sponsor or do they help?
    Ms. DODD. Yes. From my understanding, they help me find a 
program, so----
    Mr. WELLER. Then your goal is to have your own----
    Ms. DODD. Salon.
    Mr. WELLER. Have you worked in a salon? Have you been able 
to have experience----
    Ms. DODD. No. I haven't worked in a salon. I started to go 
the hair school. So, you have your basics and all of that, but 
I worked out of a house a lot.
    Mr. WELLER. The programs where you would learn these 
skills, do they require a GED before you can enter the program?
    Ms. DODD. No, they don't.
    Mr. WELLER. I see my time has expired. Thank you for being 
here. You both have presented yourself very well.
    Chairman MCDERMOTT. Thank you. Mr. McNulty.
    Mr. MCNULTY. Thank you, Mr. Chairman.
    Mr. Noble, thank you for being here today and for sharing 
very personal aspects of your life. I know that you are taking 
medication for your depression. What are you currently doing 
with regard to your addiction to alcohol?
    Mr. NOBLE. I go to self-help groups, and I have a close 
community of friends that I communicate with on an almost daily 
basis, almost every day.
    Mr. MCNULTY. How is that coming along? How long have you 
been sober now?
    Mr. NOBLE. Since December of 2001.
    Mr. MCNULTY. Congratulations.
    Ms. Bezear, I would like to follow up on the Chairman's 
questions about just the practicality of trying to live on that 
limited income for you and for your daughter, and if it is not 
too personal--if it is too personal, just tell me so, but if it 
is not too personal, can I ask you about the diet that you are 
able to afford on such a restricted income? Is that a struggle?
    Ms. BEZEAR. Of course it is a struggle. It just--I am just 
barely managing. Like because right now, my priority like I 
said, was trying to get a better education for my daughter so 
she won't have to go through the same thing I am going through. 
I am paying college loans. I am doing my food and everything 
with the money I make, and so I barely get by on what I do. I 
work two jobs, and I bring home a limited amount of money, that 
is what the $300 is what I bring home after taxes taken out. 
So, it is very limited.
    Mr. MCNULTY. I presume that your nutrition needs therefore 
are a major concern?
    Ms. BEZEAR. Of course it is. As I said, it is hard. I am 
barely making it, but I am able to like kind of do what I gotta 
do. Okay, like that. That is basically what I--basically what I 
do right now.
    Mr. MCNULTY. On another matter, you don't have health 
insurance. You don't have Medicaid. What do you do if you get 
sick or your daughter gets sick?
    Ms. BEZEAR. There is nothing I could do right now because I 
am waiting for results and like I said, I am hoping they don't 
say that my Medicaid that--$300 is no money but through 
Medicaid, they say you got to work a certain amount and now 
that my daughter is 21, she is no longer on my case now. So, 
that is when they took her off, and that is one thing like I 
would like to state that I think there should be programs where 
kids like her, they are going to school, they should still 
have--continue with their Medicaid and health insurance.
    Mr. MCNULTY. Thank you very much. Thank you, Mr. Chairman. 
I just wanted to thank you for your leadership on these issues 
through the years, and I look forward to working with you in 
your role as Chairman of this Committee, and I have been in 
public life a long time at the local, State and national 
levels, and people today ask me what my priorities are, and 
they think I am going to mention some project in the district 
or something. It goes back to the basics. In the year 2007, in 
the richest Nation on the face of the Earth, no one should be 
hungry. No one should be homeless. No one should be without 
adequate health care, and I believe that, under the leadership 
of Chairman McDermott, you will see some attention to these 
issues.
    Thank you very much.
    Ms. BEZEAR. Okay. Thank you.
    Chairman MCDERMOTT. Mr. Herger.
    Mr. HERGER. Thank you very much, Mr. Chairman, and Mr. 
Chairman, I want to congratulate you on your Chairmanship. I 
enjoyed very much the 6 years that we spent together here, and 
I recognize and want to congratulate you on your priorities in 
these areas. These areas certainly remain my priorities as 
well, so I thank you for this hearing.
    I want to just commend each and every one of you for being 
here this morning, and even though there are very difficult 
situations that each of you have found yourselves in and, I 
might mention, for even those of us up here, no matter where 
you are, we find ourselves in difficult situations. When we 
come to this Earth, I think each of us has this little bag of 
challenges that we have, and everyone's is different. Yet, each 
and every one of us has them, and I want to thank you for the 
positive ways, as we have heard in your testimony, that you are 
working to deal with your challenges of rolling up your 
sleeves, of working to help yourselves better the situations 
that have been most challenging in your lives, and I would just 
like to ask you: With what experience you have had and with 
where you have been, do you have any recommendations? There is 
nothing like hindsight.
    We look back and we say, ``Gee, if I had to do that over 
again, I would do it this way, and I wish we would have had 
more common sense back when we were younger than we have now,'' 
but again, that is how we all are, but having said this, are 
there any of you who would like to give any comments on maybe 
what you would do differently or recommendations to others that 
you might do to help yourselves and that others might do to 
help themselves? For example, education, we know that is 
important, or some of these decisions we make.
    I want to commend the two of you, Mr. Hawkins and Ms. Dodd, 
for your working together.
    Mr. Hawkins, we heard from you, how you mentioned that, for 
whatever reason, you did not have a father in your life, but 
yet, you have learned from that that you want to be a father 
and are a father to your son. How commendable.
    Mr. HAWKINS. Thank you.
    Mr. HERGER. If we could just incorporate that into our 
communities. Being a father of nine and being married 31 years, 
boy, it is a challenge being married, more a challenge to my 
wife than it is to me, but the challenges of working together, 
the counseling you mentioned the two of you have had, we all go 
through that, and yet, that staying together and working to 
make it, how rewarding that is. So, I am kind of going around 
and around here. Are there any things that you would do 
differently or things that you see that would help to make your 
life and others' better if you could?
    Mr. HAWKINS. I am not even sure at this point.
    Ms. DODD. For me, education.
    Mr. HERGER. Education?
    Ms. DODD. Education.
    Mr. HERGER. So, what would you have done differently if you 
had it to do over again or recommend to others, I might say?
    Ms. DODD. Sit in classrooms.
    Mr. HERGER. Pardon?
    Ms. DODD. Sit in the classrooms.
    Mr. HERGER. Stay in the classrooms. We see that, and that 
is really the key to doing well, education.
    I want to commend you. I understand you are getting that 
high school diploma, and this idea--I want to commend you--
college is so expensive with children, all the money that goes 
out, but yet, that is really such a key.
    Ms. BEZEAR. Yes, it is. Uh-huh.
    Mr. HERGER. Ms. Bezear, do you have any comments?
    Ms. BEZEAR. Well, first, I think that the interest rates on 
loans are very high. There should be lower interest rates on 
kids that want to go to college. I think everybody--school is a 
necessity that you need in life to achieve something, because 
without--even with a GED, you need more than that. You need 
college; you need a college degree, and right now, that is 
something I want to get, but I cannot do that simply because I 
am working a job, and I am trying to maintain a life style for 
my daughter, and for me doing that, I want her to succeed in 
her life where I did not.
    So, I think there should be more programs for kids, for the 
blue collar kids and mostly lower interest rates on college 
loans.
    Mr. HERGER. Well, my time is up, but really what each of 
you are doing are, really, in your ways, being role models by 
the fact that you are working for your life and for others 
around you, and I want to commend you.
    Mr. Noble, just a last comment here. There are so many 
today who struggle with this chemical imbalance and the 
different things that cause depression. I want to thank you for 
your hanging in there and for being drug free and alcohol free 
for these years.
    Again, I want to thank each of you for coming here and your 
courage. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman MCDERMOTT. Mr. Lewis.
    Mr. LEWIS OF GEORGIA. Thank you very much, Mr. Chairman, 
and thank you, Mr. Chairman, for holding this hearing today. I 
appreciate your work, your leadership, your vision, your 
dedication, to this issue.
    I appreciate each and every one of you for being here 
today, and Ms. Crawley, Ms. Bezear, I appreciate your emphasis 
on education. I happen to believe that education is a great 
equalizer.
    Ms. BEZEAR. That is right.
    Mr. LEWIS OF GEORGIA. Ms. Crawley, I attended school in 
Nashville for 6 years. I grew up on a farm, very poor, in rural 
Alabama, and moved to Nashville in 1957 when I was 17 years 
old, and I want to welcome you here----
    Ms. CRAWLEY. Thank you.
    Mr. LEWIS OF GEORGIA [continuing]. And thank you for being 
here.
    I do not understand it. I do not understand how people 
survive. I do not understand how you make ends meet. I know you 
believe, with your faith and everything, that you can make your 
way out of nowhere, but can you just tell me what it is like to 
survive each and every day?
    Ms. CRAWLEY. Yes. Well, my faith is a big part of my life, 
and I depend on what my belief is to get me through the day, so 
I depend on that, first of all. I always put that first, and I 
just do what I have to do. It is hard being a single mom with 
two kids, and even though I work full-time, and I have a good 
job and they pay way more than minimum wage, it is still not a 
lot, and with children, you have to have child care.
    If I work a full-time job, I have to have child care, which 
is very expensive, so it is hard with that. At the end of the 
month, I do not have hardly any money, but I have family that 
is in a better situation who can help me, and I just do what I 
have to do, and like I said, my faith, I believe, takes me 
through, and I know that to be. That is just my strength right 
there, and I hope for--I want to go back to school, and I plan 
on going back to school this fall because I want a better life 
for my children. They deserve a better life, so that is what I 
am working for.
    Mr. LEWIS OF GEORGIA. When I was growing up, I heard my 
mother and father say over and over again ``Go to school. Get 
an education so you will not have to go through what I am going 
through.''
    Ms. CRAWLEY. Right.
    Mr. LEWIS OF GEORGIA. I like that idea that you have been 
hopeful and are looking to the future. You want things to be 
better for your children.
    Ms. Bezear, tell me what it is like--I do not understand. 
How can you live in New York City? It is a very expensive 
place. I think the Chairman raised the question. How can you 
live in New York City on what you are making?
    Ms. BEZEAR. As she said it, it is faith. Okay. You all make 
this totally--it is really a struggle.
    Mr. LEWIS OF GEORGIA. It is an everyday struggle.
    Ms. BEZEAR. An everyday struggle. I go through it every 
day. Again, I am going to work making sure I got things in my 
household, things like that. A phone is a necessity. I have to 
have a phone in my house. Okay. That is a necessity. I have to 
have that. As far as everything else, like for me to buy a new 
pair of sneakers, I do not buy that for myself because I cannot 
afford to do that for myself, okay? So, as I say, it is a 
struggle, and I am barely making it by. So, that is why I place 
so much emphasis on education because education is the key for 
all of us, for my children and her children and all our 
children.
    Mr. LEWIS OF GEORGIA. The two of you have been working. I 
wonder whether you have ever claimed the earned income tax 
credit when you have filed your taxes. You have?
    Ms. BEZEAR. Yes, I have.
    Ms. CRAWLEY. Yes.
    Mr. LEWIS OF GEORGIA. Other family members and neighbors 
are claiming it?
    Ms. CRAWLEY. I think so.
    Ms. BEZEAR. Yes. We do work like that in community voices, 
tell people about the earned income credit and stuff like that 
let them know what they are entitled to out there. Like a lot 
of people did not know about earned income credit. It just 
recently came out that they got earned income credit, so that 
is one thing we had. We had community voices. We had talked to 
them about the earned income credit and how to go about it, and 
let them know that they are entitled to this money because that 
money is out there.
    Mr. LEWIS OF GEORGIA. That is a very good thing to do.
    Mr. Chairman, you may be interested in knowing our 
Subcommittee is going to hold a hearing on earned income tax 
credit this afternoon.
    Chairman MCDERMOTT. Oh, good. Maybe they can stay around 
and listen, and they can get some good testimony about it.
    Mr. LEWIS OF GEORGIA. Thank you, Mr. Chairman.
    Chairman MCDERMOTT. Yes.
    Next, Mr. Camp.
    Mr. CAMP. Thank you very much, Mr. Chairman.
    I want to thank all of you for coming here to testify. It 
is not easy to come before a Committee of the Congress and talk 
about your life, but it really is helpful to us to give us some 
insight into what we can do best to help you and others that 
are similarly situated, and, I wanted to ask, if it is not too 
personal, one of the common themes we have seen about poverty 
is that often people do not finish high school, and Ms. Dodd, I 
think you said, if you had one thing you would do over, you 
would stay in school.
    What pressures--if you can just talk about, maybe not 
necessarily what you did, saw or faced, but what pressures are 
there that caused that to be such a big thing that so many 
students do not finish high school? We find that that is often 
a decision that has long-reaching consequences. If you could 
just, each of you, sort of talk about that, what sort of 
pressures, and Ms. Crawley, why don't we start with you.
    Ms. CRAWLEY. Okay. Well, for me, it was, of course, that my 
daughter was hit by a car, so I could not finish school. I 
finished high school, but if I could go back, I would go to 
college as soon as I finished high school, and I would not 
wait. I got a job at Vanderbilt, and I thought it was a pretty 
good job, and I got comfortable, and I got settled in, and I 
was not thinking that I would lose my job years later because I 
did not get a college degree.
    So, I would definitely finish college, but it is hard, and 
later on, when you have kids and a family, and of course, I did 
not know that I would be divorced with two kids. I just did not 
know that would happen.
    So, for me, I would definitely--it is just hard trying to 
raise kids and feed them because, when I had my kids, my life 
became them. I wanted them to have everything in life that I 
did not, and I want them to have such a better life than I do, 
so I always--right now, I try to look for a better school for 
them, so they are in Magna schools even though--I cannot afford 
private schools, so I try to do the next best thing.
    So, everything for me is just for them. I do everything for 
them so they can have a better life and a good life, and it is 
hard because there are a lot of things that they want, and I 
cannot get it for them because I cannot afford it, so----
    Mr. CAMP. All right. Thank you very much. Ms. Bezear.
    Ms. BEZEAR. Okay. Me? Okay.
    It was like--for me, it was like maybe just peer pressure. 
Okay. I dropped out. I came back after I thought about it. I 
seen what I was doing, and I knew, in order for me to get a 
job, I needed something better than just--I needed to get my 
GED, so I went back to school to get my GED, and so that is 
why, once again, I stress education because I want to be a role 
model for my daughter, so I cannot be a role model saying I 
dropped out of school and am staying home, so I chose to go 
back to school, to get a job, once again, to be a role model 
and let her see what I am doing so she could follow that and 
have a suitable and better life.
    Mr. CAMP. All right. Thank you.
    Mr. Noble.
    Mr. NOBLE. Yes. As far as education goes, there was a lot 
of pressure on me to go to school when I was in high school, 
and a situation occurred in my senior year of high school where 
my parents split up and where my father was not in the house 
and my brother got really sick, and I stopped going my senior 
year, but there was still a lot of pressure on me by my mom, 
and she wanted me to go back, and so I went back.
    I got my GED in 1978 here in the State of Maryland, and I 
got a job, and I worked for many years, and I took some classes 
at college, but then my drinking got progressively heavier, and 
I kind of lost interest. I just became interested in bringing 
home money and not improving my status, and eventually, it got 
so that my very life was in doubt because of my addiction.
    So, since I have been sober, I have been able to go back to 
college, take college courses. I have not been able to get a 
job because of the courses yet, but it has not hurt. I have 
been able to get the Pell grant, too.
    Mr. CAMP. All right. Thank you.
    Mr. Hawkins.
    Mr. HAWKINS. Well, I guess, for me, it was finances. 
College, school--going to school costs, so I guess, for me, it 
was like trying to find a job to actually have the money to go 
to college. Once I get situated, though, where I do find a good 
job to take care of my son, to get him situated, then I will go 
back to college to finish trying to pursue my dream.
    Mr. CAMP. All right. Ms. Dodd.
    Ms. DODD. For me, it was not peer pressure. I did 
everything because I wanted to do it. If I had just stayed in 
that Spanish class--I did not think that was a credit I needed 
to graduate. If I had stayed in that class just to see, I would 
have it. That was my only reason. I went to the twelfth grade. 
I did not have my Spanish credit to graduate, and that was the 
only reason, and by the time I was to go to summer school, they 
did not have Spanish as a class that I could pick up, so----
    Mr. CAMP. All right. Thank you.
    Thank you, Mr. Chairman.
    Chairman MCDERMOTT. Ms. Berkley.
    Ms. BERKLEY. Thank you, Mr. Chairman, and I also want to 
thank all of you for being here. This cannot be an easy thing 
to do, because I cannot imagine coming in front of a 
congressional Committee, a group of strangers looking at you, 
and sharing these experiences.
    I keep thinking every time I listen to your stories that if 
not for the grace of God--I came from an immigrant family. They 
could not speak English. My dad has a ninth-grade education, 
but the breaks came my way, and they just--so much of this has 
to do with luck and staying healthy and not having broken homes 
and being able to keep it together, and there are certain 
tipping points in all of our lives where it just tips, and 
there does not seem to be anything you can do about it, but I 
think that is the purpose of Government. Government is supposed 
to provide that safety net and not have anybody in this country 
fall through the cracks, and I think that is where we need to 
step up to the plate. I do not think this country can afford to 
lose a single one of our citizens to bad luck, bad fortune, bad 
breaks, and it is our responsibility to make sure everybody has 
the opportunity and the ability to--it is not only to reach 
that American dream, but just to be able to tap into whatever 
part there is of them to move them in a forward position and 
take care of our families.
    I am the mother of two kids, both of them in college right 
now. I know what it is like when they are asking you for 
things, and the tuition is beyond what you ever dreamed tuition 
could possibly be and knowing how important it is, yet, knowing 
you have also got to eat.
    So, when I meet with my welfare-to-work moms in my district 
of Las Vegas--and I have got a relatively wealthy district, and 
yet, there are so many of my own constituents who are just 
getting by or not getting by, but when I meet with my welfare-
to-work moms, what they tell me is--when I say, ``What are the 
two things that you need more than anything?''
    Obviously, they need good education and this and that, but 
what they need is child care to take care of their kids, so 
they can get out of the house, and transportation because it 
does not do you any good if you get the job training and you 
cannot get to work.
    So, I think one of the things that we should be considering 
as a Committee, as time goes on, is how we are going to provide 
people with child care so you can get out of the house, get 
your GED and get the job that you want, and you need to take 
care of that little one and transportation to get to work, and 
that is the very least that you should expect from your 
Government and that your Government should be able to provide 
to you.
    So, I thank you very much again for being here. You make me 
proud, and you make me embarrassed at the same time that this 
Nation has not done enough for its citizens, and I thank you 
for being here.
    Ms. BEZEAR. Thank you.
    Chairman MCDERMOTT. Mr. Porter will inquire.
    Mr. PORTER. Thank you, Mr. Chairman, and I, too, appreciate 
you all being here today.
    I am from the State of Nevada, and we have unique 
challenges as does every community. What I appreciate so much 
is the fact that you are here today so we can learn from you, 
and I need your help.
    What can we do to improve access? I know there are multiple 
Government agencies. There are different faith-based 
organizations, and I was in a meeting the other day in the 
Budget Committee where we look at the moneys being spent in 
this country, and we are spending about $600 billion, which is 
a lot of zeros--and I am not sure how many zeros--$600 billion 
a year on welfare programs. If you figure there are about 20 
million poor kids, all with a face, all with a family, all with 
individual challenges, we are spending somewhere between 
$20,000 and $30,000 per poor child a year across this country. 
How much of that is really going to the child? I am very 
frustrated and very concerned. That is a lot of money a year, 
and I am sure that children would like to see some more of that 
money. So, I guess my question is:
    What can we do as the Federal Government to help access, to 
make it easier so we can help you cut through layers and layers 
of red tape, whether it be from the Federal side and also from 
the faith-based side? I know, as deep-faithed myself and as, I 
believe, most everyone here does today, we depend a lot on our 
church, I am Catholic, and it is a great network, but what can 
we do to help you? What can you teach us so we can help you 
have better access to some of these programs? There is a lot of 
money out there that is going someplace, and it is not all 
going where it should go. So, that is my question.
    Ms. Crawley, would you have an idea?
    Ms. CRAWLEY. Sure, I think a smoother transition from like 
the Welfare to Work. If it was not such--when you start working 
and you are thinking, great, you get income, well, you have all 
of these other things that take your income immediately like 
child care--child care is so expensive--and then you have, 
like, child care and insurance. Like my insurance, they did let 
me keep it for 18 months.
    Well, it expires this year, and the insurance where I work 
is so expensive that I will not be able to afford it because it 
is like $200 a paycheck, and I do not make that much now, just 
$21,000, and I do not know how I will be able to afford it. So, 
if there were programs out there for people who are starting to 
work but still need some support from the Government, maybe 
insurance or some help with child care--maybe if the Government 
did not pay all of the child care or all of the insurance but 
would give us some help, those are the things that can kind of 
hold you back, because even though you are working a full-time 
job and you are making money, you are still having to spend so 
much money in all of those areas. You almost feel like you are 
not getting ahead.
    Mr. PORTER. So, child care is really where you need help?
    Ms. CRAWLEY. Yes.
    Ms. BEZEAR. Okay. Like she says, child care is a necessity. 
I think it is high job wages. The wage in New York is just too 
low. You cannot survive on--what is it? $7.00. We need higher 
wages, and they keep saying we have programs out here, okay, 
different programs. There are programs. A lot of people do not 
know about the programs. They are not accessible to these 
programs.
    Everybody does not have computers in their houses to find 
those different programs. Okay. There should be more job 
training and computer training so people will know how to find 
these programs. They say they are out there. They say, ``Well, 
do you have a computer at home?'' If you do not have a computer 
at home, you do not know how to find these different places. 
So, with me, I think it should be more job training, high 
living wages and more computer training for people who want to 
find out about different things to make their lives so they 
will not have to be such a struggle.
    Mr. PORTER. Thank you.
    Mr. Noble.
    Mr. NOBLE. Yes. I would say the job training, I agree with 
Ms. Bezear, what she just said, about the job training, and if 
there were a program that I could have gotten into when I 
realized that I could function, okay--again, that I did not 
have to drink and that I could function--I think if I had been 
directed into that program and they said, ``Look, we will teach 
you this, and then after you learn this, we will get you a 
job.'' I know that sounds simple, but I wish that that was the 
situation.
    Then another issue that is important to me is health care 
because, like I say, I have not had health care since 2005. I 
just had it up until then. At first, I was covered under the 
State social seniors services, and then I got--when I was 
awarded SSDI, I had health care, but then when that got cut 
off, I have not had health care.
    So, I have got to be doubly careful as to how I take care 
of myself. Of course, it is important all the time, and a 
couple times, I have gone to a local community clinic when I 
have had some real troubling significant colds, and I thought I 
may have had an ear infection, and so I went there, and those 
have come in really handy a couple times, and that is how I 
have been able to get by.
    Thank you.
    Mr. PORTER. Thank you. Mr. Hawkins.
    Mr. HAWKINS. Well, I feel like everyone should be treated 
equally. Everyone should be given a chance to learn a certain 
skill, to learn many things in their lives. I just feel--like I 
said before, as far as like you finding a job, I still feel 
like some of the wages are too low because it is like, okay, 
you have a place. You are renting a house. Half the time your 
check is not even enough to cover your gas and electric and 
your rent. So, I just feel like we just need assistance in a 
lot of areas.
    Mr. PORTER. Ms. Dodd.
    Ms. DODD. Yes, basically the same thing as everyone said. 
Child care is really a major part. That is the biggest issue. 
Like, actually, it is real high, so regardless like they said, 
whatever job that you do have, after your rent, gas and 
electric, your check is gone. With child care, you have to find 
a way to maintain that. You do have cover charges, expenses, 
late fees--oh, gosh--all in one bunch, yes.
    Chairman MCDERMOTT. Thank you very much. Mr. Davis.
    Mr. DAVIS. Thank you, Mr. Chairman.
    Ladies and gentlemen, Mr. Porter, my colleague from Nevada, 
and a number of my other colleagues, have raised the question 
of what Government can do, how Government can make certain 
programs work more efficiently. I was thinking, as I heard him 
ask the question, and as I heard others ask the question, one 
thing the Government can do is stop doing harm.
    One thing the Government can do is stop cutting programs 
that need to be sustained and that need more money. One thing 
the Government can do is to stop moving in the wrong direction, 
and I made some notes just to remind me, and I wanted to share 
some things with you that you probably are not aware of and 
that most people in the audience are not aware of.
    When I first came to the Congress in 2003, we spent about a 
year arguing over something--it is pretty amazing. We were 
arguing over whether families making less than $26,000 a year 
should get another $400 worth of tax credit for their children, 
and you would think that would not be a big argument. We were 
not allowed to even vote on it at first, and then we had to 
spend a year trying to push, and Mr. Rangel, the Chair of the 
Committee, worked very hard on this, and I worked on it. Mr. 
Rangel was kind enough to let this freshman Member from Alabama 
work with him on the issue. It took us a year to make it 
happen.
    There is something else you may not know. There was a vote 
in the last Congress, and the purpose of the vote was to save 
money to help do some of the things we had to do after Katrina, 
and you all may not know how the Congress saved some of the 
money. There was a decision made to go to 13 million families 
who were on Medicaid, a program for low-income people, it helps 
them get health care, and the Congress went to those 13 million 
people and said, ``You need to pay more money to go to the 
doctor. You need to do a higher co-pay,'' and it is estimated 
that 65,000 of those people will now fall off the program 
because they cannot make the co-pay.
    Well, in fact, I have got right here a copy of a document 
related to the President's budget that he submitted just last 
week, and I was looking through the summary that the Budget 
Committee prepared on what the President wants to do, and I 
noticed that, on pages 10 through 12, there are three pages' 
worth of cuts to everything from low-income energy assistance 
to raising copayments, again, for people on Medicaid.
    Later on in this document, it talks about the fact that, 
with 9 million children who do not have health insurance, the 
President does not want to put enough money on the table to 
cover even the ones we are already providing coverage for.
    Ms. Bezear, you talked about how much money it costs to go 
to school. There is a program called the ``Perkins Loan'' that 
helps a lot of families at junior colleges go to school, and 
the President wants to cut out the program all together, and I 
could go on and on and on. There are a lot of--I just do not 
want to let the institution off the hook.
    I am very proud of all of you for being here, and I 
certainly want to join in all of the nice things that people 
have said about you, but I do not want to let those of us 
sitting on this dais off the hook. I do not want to let this 
hearing go by without saying to you:
    As for everything that I have described to you, Congress 
votes on it. Congress gets to cast a vote, and I left an 
important one out. Even though there is no one here this 
directly affects, it appears, there was a vote in the Congress 
about 7 months ago that said that American citizens, children 
who were born in this country--if their parents came here 
illegally, there was a vote that would prevent them from 
getting food stamps any longer, and that just struck me as a 
somewhat bizarre choice because, as you know, if you are born 
here, you are a citizen, and you do not control where you are 
born, and I do not recall a complementary vote to abolish 
hunger with those kids.
    So, I just want to end my time by saying please do not have 
the illusion that these things just happen, that these choices 
get made. They are a function of real live people whom you 
elect to office, casting votes and making decisions and putting 
money in one pot as opposed to another pot, and I know this 
Chairman and the leadership of this Committee is committed to 
reversing that direction, and it is, in my opinion, high time 
that we reversed it.
    Thank you.
    Chairman MCDERMOTT. Thank you. Mr. Stark.
    Mr. STARK. Thank you, Mr. Chairman, and congratulations on 
your new position, one that I held back in the early seventies, 
and it was a proud time, and I want to thank the panel for 
joining us today and sharing some of your experiences.
    We are going to hear later--you might want to stick 
around--from some people who are going to suggest that you are 
not really poor. They are going to talk about the fact--I will 
bet all of you have a television. Just imagine that. You all 
have a telephone? Why is that? You have a garbage disposal? We 
did when I was a kid. My brother was the garbage disposal.
    How many of you have a dishwasher? We had a dishwasher in 
my home back in the thirties. I was it. So, I know about those 
expensive things that you can provide people that are supposed 
to suggest that you are not in poverty.
    I hope that we will not be so inhumane in treating people. 
I just want to point out to you--because you have all mentioned 
education, and we talked a year or 2 ago about the fact that, 
of all of the students who entered high school this past 
September in the United States, across the land, of those 
children who are not white, only half will ever graduate, and 
that has been going on for a number of years, and tell me, 
because you are struggling with this, what does a youngster--
let us say he or she drops out when they are about to be a 
sophomore.
    Maybe they have got eighth grade reading and math skills. 
What do they do? Will this young lady maybe get pregnant and 
really have no way to get an education and support? What does a 
young guy do?
    Mr. Hawkins, what does a young guy do? He drops out of high 
school. He is 15 or 16. What is there for him?
    Mr. HAWKINS. Nothing. Basically, nothing.
    Mr. STARK. Trouble, maybe?
    Mr. HAWKINS. Living on the streets.
    Mr. STARK. Yes. So, we have got a big job ahead of us, and 
you will help us just by reinforcing our commitment to try and 
do the right thing, and thank you so much for taking the time 
for being here. I appreciate it.
    Mr. Noble, I think this Committee and one of its other 
Subcommittees is going to demand parity for mental health care 
and Medicaid/Medicare and insurance so that we can expand 
treatment for people who need other than acute care treatment, 
and I hope that helps, too.
    Thanks, Mr. Chairman, for a very fascinating panel.
    Mr. WELLER. Mr. Chairman.
    Chairman MCDERMOTT. Yes, Mr. Weller.
    Mr. WELLER. Mr. Chairman, my good friend from Alabama, Mr. 
Davis, was sharing some examples of actions by this Congress 
over the last few years, and one statistic I would like to 
share with those on the panel--it maybe something you may not 
know--is today we spend about $600 billion providing needs-
based assistance to Americans. That is both at the State and 
Federal level.
    In 1996, when welfare reform was passed into law and passed 
by a Republican Congress, and signed into law by a Democratic 
President, I considered it a bipartisan accomplishment. The 
Federal Government spent a little over $268 billion in 
providing assistance to needs-based benefits for families. In 
2004, we invested $427 billion, so we increased funding over a 
period of almost 10 years by $160 billion in additional help to 
low-income families on needs-based benefits. So, I thought it 
was something you may not know as well.
    Thank you, Mr. Chairman.
    Chairman MCDERMOTT. Thank you, all of you, for coming.
    As Mr. Stark has said, we started with a panel like this 
because we wanted to hear some real people and hear what people 
actually on the ground deal with. So, thank you all for coming. 
It is difficult to sit and share your personal experiences with 
the pain that goes with it, but it is useful to us to know and 
for us to know as something to think about when we are working 
on law. So, thank you very much for coming.
    Our next panel is comprised of a number of experts on the 
whole question of poverty. The snow in northern New York made 
it impossible for one of our people to get here, Dr. Smeeding 
from Syracuse, but he is replaced by Dr. Burtless from the 
Brookings Institute.
    Chairman MCDERMOTT. Please take your seats up here at the 
table, and we will begin. We are facing four votes over in the 
Congress. It was supposed to start 5 minutes ago, but it has 
not moved, so we hope that we can get started with you, and get 
as much of you done before we have to run off. As you know, 
today is the day we are voting on the Iraq War, which has 
something to say about the--or we are not voting on it. We are 
going to talk about it for a few days but, ultimately, vote 
about it, and so it has made this a little bit difficult.
    Why don't we start with you, Dr. Burtless. Thank you for 
filling in on such short notice, and the floor is yours for 5 
minutes.

     STATEMENT OF GARY BURTLESS, THE BROOKINGS INSTITUTION

    Mr. BURTLESS. I am very honored to testify before this 
Subcommittee. As you said, I am an economist at the Brookings 
Institution. Tim Smeeding cannot be here, and I am a very 
imperfect substitute for him. Let me just briefly discuss three 
points that he raised in his prepared testimony.
    Where does the United States stand in the world poverty 
tables, both with respect to overall poverty in the country and 
with respect to child poverty?
    Second, what factors help to account for the relative 
standing of the United States in the poverty league standings?
    Finally, what can purposeful public policy do to alleviate 
measured poverty in a country? Tim here looks specifically at 
what the United Kingdom has done over the last decade.
    Let me pass over details of how poverty ought to be 
measured in an ideal world, and let us just talk about how we 
can measure poverty across countries with the statistics that 
are available to us. Let me say, parenthetically, that these 
statistics are available to us because of the hard work and 
energy of Tim Smeeding.
    The definition actually available to us measures relative 
poverty. How many people have, after taxes, cash and near cash 
incomes that place them below one-half the median income in a 
country? Median income is measured to adjust for differences 
in-household size, and it reflects the taxes that people have 
to pay, and it counts the cash and near cash benefits that they 
receive.
    This diagram shows overall poverty under this definition. 
Poverty is higher in the United States than it is in all but 
one of the other 20 countries in the graph. The only exception 
is Mexico, which is, by a very wide margin, the poorest country 
of the 21 in the table. The United States has a poverty rate 
overall of about 17 percent. The average poverty rate of all 21 
countries is a little less than 11 percent.
    How did we get so far above other advanced countries? The 
United States has an even worse relative performance when we 
look at the child poverty rate. Again, only one of the other 20 
countries has a child poverty rate above that in the United 
States, and again, it is Mexico. The average poverty rate among 
children in all 21 countries is a little less than 12 percent. 
In the United States, the child poverty rate is about 22 
percent.
    Question Number 2 is: What explains the relatively poor 
performance of the United States in the poverty league tables? 
Why do we have so much more poverty? Tim highlights two 
factors. One is the prevalence of low-paying jobs in the United 
States. A second factor is that the United States spends 
relatively little on the programs that would directly reduce 
poverty in working age households and, in particular, in 
households that contain children.
    This chart shows spending on cash and near cash public 
programs that provide transfers to non elderly households in 
these countries. It excludes spending on Medicaid and 
education, but it includes near cash benefits, for example, 
those on food stamps and housing assistance. It also includes 
tax benefits like the earned income credit.
    The United States is the second line from the bottom in 
this chart. Only Mexico spends less as a proportion of its 
national income. The United States over the era covered by this 
chart spent between about 2.8 percent and 3.8 percent a year, 
higher during recessions, less at the end of long expansions. 
The other English-speaking countries here--Canada, Australia, 
the United Kingdom--spent about twice as large a share of their 
national income, and Northern European countries spent about 3 
times the share of national income.
    The spending differences are refleced, as this chart shows, 
in how prevalent poverty is amongst people who are less than 65 
years old in a society. The countries that spend the smallest 
proportions of their national incomes on these kinds of direct 
poverty alleviation programs also have the highest rates of 
poverty amongst non elderly people in the population. The 
relationship can hardly be surprising. If public programs top 
up the cash and near cash incomes of the unemployed and the 
working poor, then fewer of them will be poor.
    What about a country that takes a very determined stand and 
says, ``Well, let us try to reduce child poverty in any way 
that we know how?'' Tim points out that the United Kingdom has 
an experience that sheds light on this question. In about 1997, 
about a decade ago, Prime Minister Blair and his government 
committed that nation to achieving a dramatic reduction in the 
British child poverty rate. This chart shows that using a 
variety of policies, including some that imitated earlier 
programs in the United States, Britain made great progress. Our 
earned income credit was imitated largely by the British. 
Britain was able to dramatically reduce the prevalence of child 
poverty so that now it is less than it is here in the United 
States.
    Thank you.
    Chairman MCDERMOTT. Thank you.
    [The prepared statement of Mr. Smeeding, as presented by 
Mr. Burtless follows:]
  Statement of Timothy M. Smeeding, Ph.D., Director of the Center for 
                  Policy Research, Syracuse University
I. Introduction
    Chairman McDermott and members of this Subcommittee, I thank you 
for the opportunity to testify before you. I sincerely applaud your 
willingness to examine the issue of poverty in the United States in 
comparative perspective. I hope my testimony is of great use to those 
on this panel and others who care about our most economically 
vulnerable families and disadvantaged children, especially.
    The United States has a long tradition of measuring income poverty 
and weighing the effectiveness, successes, and failures of government 
policies aimed at poverty reduction. But for the most part, 
examinations of United States domestic antipoverty policy are 
inherently parochial, for they are based on the experiences of only our 
nation in isolation from the others. The estimation of cross-nationally 
equivalent measures of poverty and the comparison of programs that help 
reduce poverty, provide a unique opportunity to compare poverty rates 
and the design and effectiveness of American social policy and 
antipoverty policy with the experiences of other nations. The 
Luxembourg Income Study (LIS) database, which undergirds this paper, 
contains the information needed to construct comparable poverty 
measures for more than 30 nations. It allows comparisons of the level 
and trend of poverty and inequality across several nations, along with 
considerable detail on the sources of market incomes and public polices 
that in large part shape these outcomes.
    In this paper we use cross-national comparisons made possible by 
the LIS to briefly examine America's experiences in fighting poverty in 
the face of substantial and rising economic inequality, in a cross-
national context. In so doing, we compare the effectiveness of United 
States antipoverty policies to those of similar nations elsewhere in 
the industrialized world. We attempt to answer the following questions:
    Do other countries have an ``official'' poverty line in the sense 
that the United States does, or do they define poverty in a sort of de 
facto sense based on eligibility for various government programs?
    How do poverty rates in other countries compare with the United 
States poverty rates?
    What are the big drivers of poverty in the United States compared 
to other countries, with low wages, low-skill immigrants, and large 
numbers of single-parent families being the most prominent candidates?
    We believe that there are lessons about antipoverty policy that can 
be learned from cross-national comparisons. While every nation has its 
own idiosyncratic institutions and polices, reflecting its values, 
culture, institutions, and history, wide differences in success and 
failure are evident from the comparisons that follow. And, there is 
evidence that such policies are becoming internationalized in their 
spread and evaluation (Banks, et. al. 2005; Francesconi and van der 
Klaauw 2007).
    We begin by reviewing international concepts and measures of 
poverty, as they relate to the main measures used in domestic United 
States discourse. We follow with a discussion of the relationship 
between policy differences and outcome differences among the several 
countries, and consider the implications of our analysis for 
antipoverty policy in the United States. While all nations value low 
poverty, high levels of economic self-reliance, and equality of 
opportunity for younger persons, they seem to differ dramatically in 
the extent to which they reach these goals. Most nations have 
remarkable similarities in the sources of national social concern: 
births outside of wedlock and lone parent families; older women living 
alone; high unemployment; immigration pressures; low wages; and the 
sustainability of social expenditures in the face of rapid population 
aging and rising medical care costs. But they also exhibit differences 
in the extent to which working age adults mix economic self-reliance 
(earned incomes), family support, and government support to avoid 
poverty. And, in such comparisons the United States does not always 
look very supportive of work or low-income families.
II. Cross-National Comparisons of Poverty and Inequality: Methodology 
        and Measurement
Who Measures Poverty and How?
    Differing national experiences in social transfer and antipoverty 
programs provide a rich source of information for evaluating the 
effectiveness of alternative social policies in fighting poverty. While 
most rich nations share a concern over low incomes, poverty measurement 
began as an Anglo-American social indicator. In fact, ``official'' 
measures of poverty (or measures of ``low-income'' status) exist in 
very few nations. Only the United States (U.S. Bureau of the Census 
2003b) and the United Kingdom (Department of Social Security 1996; 
Department of Work and Pensions 2005) have regular ``official'' poverty 
series. Statistics Canada (2004) publishes the number of households 
with incomes below a series of ``low-income cutoffs'' on an irregular 
basis, as does Australia.
    In Northern Europe and Scandinavia the debate centers instead on 
the level of income at which minimum benefits for social programs 
should be set and on the issue of ``social exclusion'' (Atkinson, 
Cantillon, and Marlier 2005). Northern European and Scandinavian 
nations do not calculate low income or poverty rates. Most recognize 
that their social programs already ensure a low poverty rate under any 
reasonable set of measurement standards (Bjorklund and Freeman 1997).
    While there is no international consensus on guidelines for 
measuring poverty, international bodies such as the United Nations 
Children's Fund (UNICEF), the United Nations Human Development Report 
(UNHDR), the Organization for Economic Cooperation and Development 
(OECD), the European Statistical Office (Eurostat), the International 
Labor Office (ILO), and the Luxembourg Income Study (LIS) have 
published several cross-national studies of the incidence of poverty in 
recent years. A large subset of these studies is based on LIS data.\1\
    For purposes of international comparisons, poverty is almost always 
a relative concept. A majority of cross-national studies define the 
poverty threshold as one-half of national median income. In this study, 
we use the 50 percent of median income to establish our national 
poverty lines. We could have selected 30 or 40 percent of national 
median income as our relative poverty threshold because it is closer to 
the ratio of the official United States poverty line to median United 
States household (pre-tax) cash income. This ratio was only 27-28 
percent in 2000, as compared to 50 percent in 1963 (Smeeding 2006; 
Appendix Table 1). However, we have decided to stay with the 
conventional 50 percent level in most of our analyses. Alternatively, 
the United Kingdom and the European Union have selected a poverty rate 
of 60 percent of the median income (Eurostat 2000, Atkinson et al. 
2002). Previous research suggests more or less the same results 
regardless of the measure chosen (Smeeding 2006).
    While the United States likes to think of itself using an 
``absolute'' poverty measure, there is no one absolute poverty measure. 
All poverty measures are, in some sense, relative and are chosen to be 
appropriate for the context in which they are used. The World Bank and 
the United Nations Millennium Development movement define poverty in 
Africa and Latin America using an income threshold of $1 or $2 per 
person per day, and in Central and Eastern Europe a threshold of $2 or 
$3 per day. In contrast, the absolute United States poverty line is six 
to nine times higher than these standards and the European poverty line 
is almost double the United States line as a percent of median income. 
While we do not provide absolute poverty comparisons below, they also 
show the United States as having amongst the highest levels of poverty 
amongst all rich nations (Smeeding, 2006; Rainwater and Smeeding, 
2004).
Other Measurement Issues
    Comparisons of poverty across nations with LIS are based on many 
choices. A poverty line, a measure of resources such as (market and 
disposable) incomes, and an equivalence scale to adjust for family 
size, are all important precursors to accurate cross-national 
measurement of poverty status.

      Poverty measurement is based on the broadest income 
definition that still preserves comparability across nations. The best 
current definition is disposable cash and near cash income (DPI) which 
includes all types of money income, minus direct income and payroll 
taxes and including all cash and near cash transfers, such as food 
stamps and cash housing allowances, and refundable tax credits such as 
the earned income tax credit (EITC).2,3 We use this income 
definition in the analyses which follow.
      For international comparisons of poverty, the 
``household'' is the only comparable income-sharing unit available for 
almost all nations. While the household is the unit used for 
aggregating income, the person is the unit of analysis. Household 
income is assumed to be equally shared among individuals within a 
household. Poverty rates are calculated as the percentage of all 
persons of each type who are members of households of each type with 
incomes below the poverty line. We calculate the poverty rate for all 
persons and for children (17 and under) using this same poverty line.
      Equivalence scales are used to adjust household income 
for differences in needs related to household size and other factors, 
such as the ages of household members. In the United States poverty 
literature, a set of equivalence scales is implicit in the official 
poverty lines, but these are neither consistent nor robust (Citro and 
Michael 1995). For our cross-national analysis of relative poverty 
rates, however, we use a consistent scale, which is much more commonly 
used in international analyses. After adjusting household incomes to 
reflect differences in household size, we compare the resulting 
adjusted incomes to the 50 percent of median poverty line. The 
equivalence scale used for this purpose, as in many cross-national 
studies, which include both children and elders, is a single parameter 
scale with a square-root-of-household-size scale factor.\4\

    We do not address either the well-being of poor in terms of 
hardships, or mobility in or out of poverty. Several recent cross-
national poverty studies suggest that mobility in and out of poverty is 
lower in the United States than in almost every other rich country 
(Bradbury, Jenkins, and Micklewright 2001; Goodin et al. 2001).
III. Data
    The data we use for this analysis are taken from the Luxembourg 
Income Study (LIS) database, which now contains almost 130 household 
income data files for 30 nations covering the period 1967 to 2002 
(www.lisproject.org). Using this data one can analyze both the level 
and trend in poverty and low incomes for a considerable period across a 
wide range of nations. Because we are computing the level of relative 
poverty, and real living standards for several major policy relevant 
groups, we have selected 13-21 nations for this paper, each with a 
recent 1999-2000 LIS database. One can find relative poverty rates for 
all of the 30 LIS countries just by going to the LIS website and 
looking at the ``key figures'' at: (http://www.lisproject.org/
keyfigures/povertytable.htm).
IV. Results: Level of Overall and Child Poverty
    Relative poverty rates in 21 nations are given in figures 1 and 2 
for all persons and for children. The overall poverty rate for all 
persons using the 50 percent poverty threshold varies from 5.4 percent 
in Finland to 20.2 percent in Mexico. The poverty rate is 17.0 percent 
in the United States, the second highest of all nations and the highest 
of all rich nations. The average rate of poverty is 10.8 percent across 
the 21 countries (Figure 1).
    Higher overall poverty rates are found as one might expect, in 
Mexico, but also in Anglo-Saxon nations (United States, Australia, 
Canada, Ireland, and the United Kingdom), and southern European nations 
(Greece, Spain, Italy) with a relatively high level of overall 
inequality. Still, Australian Canadian and British poverty are about 
12-13 percent and are, therefore, below the United States levels.


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]


    The lowest poverty rates are more common in smaller, well-
developed, and high-spending welfare states (Sweden, Finland) where 
they are about 5 or 6 percent. Middle level rates are found in major 
European countries, where social policies provide more generous support 
to single mothers and working women (through paid family leave, for 
example), and where social assistance minimums are high. For instance, 
the Netherlands, Austria, Belgium, and Germany have poverty rates that 
are in the 8 to 9 percent range, while France is at 7 percent. Even the 
former Soviet block nations of Estonia, Poland and Slovenia, and Taiwan 
have much lower poverty rates than does the United States.
    On average, child poverty is a slightly larger problem than is 
overall poverty in these nations, but the cross-national patterns are 
very similar (Figure 2). After Mexico, the United States child poverty 
rate is at 21.9 percent compared to the 11.8 percent average over these 
21 nations. European child poverty rates are lower and Anglo-Saxon 
rates higher among these nations, but the United States is more than 
4.0 percentage points higher than any other rich nation.


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]


    Moreover, note that the story is not one of poor immigrants, as two 
nations with substantially higher fractions of children born to 
foreigners, Canada and Australia, have child poverty rates that are 
both 14.9 percent, a full 7 percentage points less than the United 
States rate.
    We do not present trends in poverty rates here for any nations, but 
in many nations though not all, child poverty has risen since 2000. 
This is most certainly the case in the United States but not in the 
United Kingdom (see Section VI below).
V. Towards Explanations: Cross-National Spending Patterns, and Relation 
        of Spending and Pay to Poverty
    We have seen clearly different patterns of poverty in the Unites 
States relative to other nations. What explains these differences? In 
short, the explanations are related to two things: the amount of 
support we give to the poor especially the working poor, and the level 
of wages paid in the United States compared to other nations. 
Redistributive social expenditures vary greatly across nations. The 
available evidence indicates that social expenditures (health, 
education, cash and near cash support) as a fraction of total 
government spending in OECD nations, ranges from 0.67 in Australia to 
0.90 in Denmark and Sweden. That is, 67 to 90 percent of all government 
spending is made up of redistributive cash or in-kind benefits (Osberg, 
et. al. 2004). Thus, the topic of social expenditure is about most of 
what most governments actually do.
    We present the trend in non-elderly cash and near cash (food, 
housing) benefits for OECD countries back over the past 20 years, using 
data from the OECD (2004) in comparable format in Figure 3. Here 17 
OECD nations--all of the major nations except for the Central and 
Eastern Europeans--have been grouped into 6 clusters: Scandinavia and 
Finland (Finland, Norway, Sweden); Northern Europe (Belgium, Denmark, 
Netherlands); Central and Southern Europe (Austria, France Germany, 
Italy, Greece, Luxembourg, Spain); Anglo Saxony (Australia, United 
Kingdom and Canada); the United States and Mexico.


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]


    The Scandinavian and Northern Europeans follow similar patterns--
high levels of spending showing responsiveness to the recession of the 
early 1990s in Sweden and Finland, and a tapering after these events. 
The Central and Southern Europeans and the Anglo-Saxon nations show 
remarkably similar spending patterns, again with expenditures rising in 
the early 1990s, but overall at a level distinctly below that the other 
two groups. The United States is significantly below all these others 
and, by the late 1990s is spending at a level closer, in terms of a 
fraction of GDP per capita, to Mexico than to the other richer OECD 
nations.
    These figures illustrate the wide differences that one can find for 
both levels and trends in social spending, using figures that abstract 
from financing of health care, education and retirement for the 
elderly. They also correspond very closely to the measures of money and 
near-money income poverty used in the analytic literature in this area, 
including that presented above.
    A substantial fraction of the variance in non-elderly cross-
national poverty rates appears to be accounted for by the cross-
national variation in the incidence of low pay (Figure 4).


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]


    Because the United States has the highest proportion of workers in 
relatively poorly paid jobs,\5\ it also has the highest poverty rate, 
even among parents who work half time or more (Burtless, Rainwater, and 
Smeeding 2001; Smeeding 2006). On the other hand, other countries that 
have a significantly lower incidence of low-paid employment and also 
have significantly lower poverty rates than does the United States.
    But, the prevalence of low-pay workers is, in fact, not the only 
reliable predictor of poverty rates. While low pay is a good predictor 
of United States poverty rates, and while poorly-educated workers do 
not do well at keeping their families from poverty based on earnings 
alone, other factors, such as the antipoverty efforts of the 
government, are also important predictors of the poverty rate (Figure 
5). Here we see that higher social spending reduces poverty.


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]


    As a result of its low level of spending on social transfers to the 
non-aged, the United States again has a very high poverty rate. Even 
though social spending in general has an inverse correlation with 
poverty rates, different patterns of social spending can produce 
different effects on national poverty rates. Antipoverty and social 
insurance programs are in most respects unique to each country. There 
is no one kind of program or set of programs that are conspicuously 
successful in all countries that use them. Social insurance, universal 
benefits (such as child allowances), and social assistance transfer 
programs targeted on low-income populations are mixed in different ways 
in different countries. So, too, are minimum wages, worker preparation 
and training programs, work-related benefits (such as childcare and 
family leave), and other social benefits.
    The United States differs from most nations that achieve lower 
poverty rates because of its emphasis on work and self-reliance for 
working-age adults, regardless of the wages workers must accept or the 
family situation of those workers. For over a decade, United States 
unemployment has been well below the OECD average, and until recently 
American job growth has been much faster than the OECD average. The 
strong economy coupled with a few specific antipoverty devices (like 
the expanded EITC) has produced most of the United States overall and 
child poverty reduction in recent years, though it is decidedly below 
the effects found in other nations (Smeeding 2005; 2006). Simply put, 
The United States does not spend enough to make up for low levels of 
pay, and so we end up with a relatively higher poverty rate than do 
other nations.
VI. A Tale of Two Countries
    While acknowledging that the United States has greater poverty than 
other industrialized nations, many defenders of American economic and 
political institutions have argued that inequality plays a crucial role 
in creating incentives for people to improve their situations through 
saving, hard work, and investment in education and training Without the 
powerful signals provided by big disparities in pay and incomes, the 
economy would operate less efficiently and average incomes would grow 
less rapidly. In the long run, poor people might enjoy higher absolute 
incomes in a society where wide income disparities are tolerated than 
in one where law and social convention keep income differentials small 
(Welch 1999). According to this line of argument, wide income 
disparities may be in the best long-term interest of the poor 
themselves.\6\ But, of course, there is no evidence that this is true 
(Burtless and Jencks 2003), and indeed there is some good historical 
evidence that higher social spending produces higher rates of economic 
growth and higher social well-being (Lindert 2004).
    Our lower-income citizens' ``real'' incomes are at or below the 
incomes that most poor people receive in other rich countries that have 
less inequality (Smeeding 2005; 2006). The supposed efficiency 
advantages of high inequality have not accrued to low-income residents 
of the United States, at least so far. While the real incomes of 
families with children did rise in the latter 1990s (Blank and Schoeni 
2003) they fell again after 2000, and most of the gains have been 
captured by Americans much further up the income scale, producing a 
conspicuously wide gap between the incomes of the nation's rich and 
poor children, elders, and adults.
    In recent years, the United Kingdom and especially the United 
States economies have performed, in fact, better than many other 
economies where income disparities are smaller. Employment growth (even 
since 2001)has been relatively faster, joblessness lower, and economic 
growth higher than in many other OECD countries where public policy and 
social convention have kept income disparities low. Figure 6 compares 
child poverty in the United States using the same ``absolute'' or 
``real'' poverty standards--the United States official poverty line 
(about 38 percent of United States median income in 1997) with the 
United Kingdom poverty line set at 60 percent of United Kingdom median 
income in 1996-1997.



    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]


    In the United States we show official Census Bureau poverty 
estimates that reflect the current official United States income 
definition. Because United Kingdom incomes are about 67 percent of 
United States incomes in 1996, this turns out to be just about the same 
?real' poverty standard.\7\
    We noted earlier that these nations were very near the top ranked 
nations in terms of child poverty (Figure 2). We also note that child 
poverty in both nations began to fall without the help of policy from 
the mid to the late 1990's owing mainly to the strong wage growth and 
tight labor markets in both countries (Figure 6). But, then the 
patterns of child poverty beyond 2000 differ completely.
    Why so? In 1997, Prime Minister Blair announced his nation would 
rid itself of high child poverty, and he instituted a wide set of 
policies to reduce child poverty. In 1999, they began to be 
implemented. By 2000-2001, child poverty in the United Kingdom (15 
percent) was just about the same as in the United States measured 
against this same `real' resource level. But as we entered the 21st 
century, and when both economies--and especially United States economic 
growth--turned sour, the United Kingdom continued to have policy driven 
reductions in child poverty while the United States poverty decline 
stopped and even reversed. The poverty rate for United Kingdom children 
has fallen to 11 percent by 2004, while the official United States 
child poverty rate was 17.6 at percent in 2005 according to the United 
States Census estimates. The 2005 estimate for the United Kingdom are 
not available, but projections show an even lower child poverty rate 
for 2005 once these figures are released in April of this year
    Five years earlier, these low-income United Kingdom kids were worse 
off than were United States kids in real terms (Smeeding and Rainwater 
2004). The reason for their improvement is that they have a leader who 
has set a national goal of improving living standards, and eradicating 
child poverty in Britain over the next decade; and who has matched his 
political rhetoric with some large measure of real and continuing 
fiscal effort that has already had an important impact (Waldfogel, et 
al. 2006; Francesconi and van der Klaauw 2007). In Britain, Prime 
Minister Blair has spent an extra .9 percent of GDP for low-income 
families with children since 1999 (Hills 2003). Nine tenths of a 
percent of United States GDP is about $120 billion. This is 
substantially more than we now spend on the EITC, food stamps, child-
care support and TANF combined. The result of this spending in Britain 
is that child poverty rates in 2000 were 45 percent below their 1999 
level, while real living standards for these children and employment of 
these mothers also rose (United Kingdom, Department of Work and 
Pensions 2005; Francesconi and van der Klaauw 2007). The real 
consumption levels of these children also increased dramatically over 
this period (Waldfogel, et al. 2006).
VII. Summary and Conclusions
    As long as the United States relies almost exclusively on the job 
market to generate incomes for working-age families, changes in the 
wage distribution that affect the earnings of less skilled workers will 
inevitably have a big negative effect on poverty among children and 
prime-age adults. Welfare reform has pushed many low-income women into 
the labor market and they have stayed there as TANF roles continue to 
fall. Even with the $25.4 billion spent on TANF today, less than $10 
billion is in the form of cash assistance; the rest is now in the form 
of child care, transportation assistance, training and other services 
(Pear 2003). While the switch from cash to services has undoubtedly 
helped account for higher earnings among low-income parents, it has not 
helped move many of them from poverty. In fact, serious gaps still 
exist, especially in the childcare arena and in family leave policy
    Labor markets alone cannot reduce poverty because not all of the 
poor can be expected to ``earn'' their way out of poverty. Single 
parents with young children, disabled workers, and the unskilled all 
face significant challenges earning an adequate income, no matter how 
much they work. The relationship between antipoverty spending and 
poverty rates is of course complicated, but the evidence discussed 
above is very suggestive. United States poverty rates, especially 
amongst children, are high when compared with those in other 
industrialized countries. Yet United States economic performance has 
also been good compared with that in most other rich countries. As the 
British have demonstrated, carefully crafted public policy can 
certainly reduce poverty if the policy effort is made.
    Of course, the high direct and indirect costs of our child poverty 
are now widely recognized in public debate (Holzer, et al. 2007). The 
wisdom of expanding programs targeted at children and poor families 
depends on one's values and subjective views about the economic, 
political, and moral tradeoffs of poverty alleviation. It is hard to 
argue that the United States cannot afford to do more to help the poor; 
particularly those that also help low-skilled workers. But is has not 
done so, so far (Shapiro and Parrott 2003; Holzer, et al. 2007). If the 
nation is to be successful in reducing poverty, it will need to do a 
better job of combining work and benefits targeted to low-wage workers 
in low-income families (e.g., see Ellwood 2000; Danziger, Heflin, and 
Corcoran 2000). There is already evidence that such programs produce 
better outcomes for kids (Clark-Kauffman, Duncan, and Morris 2003; 
Francesconi and van der Klaauw 2007; Waldfogel, et al. 2006).
    Given the political disposition of the American public, a 5 percent 
overall relative poverty rate is not a plausible goal. A gradual 
reduction in the overall poverty rate from 17 percent overall and 21 
percent for children, to a level of 10-12 percent using the 50 percent 
of median standard is certainly feasible, however. Although this rate 
would represent a considerable achievement by the standards of the 
United States, it is worth remembering that a 12 percent overall 
poverty rate is higher than the average overall and average child 
poverty rates in the 21 nations examined here, and would put us just 
below the poverty levels of our Irish, Australian, British, and 
Canadian counterparts.
Endnotes
    \1\ See for UNICEF (2005), Bradbury and Jantti (2005) for the 
United Nations (1999); for the OECD, see Forster and Pellizzari (2005); 
for the European Union, see Eurostat (2000) and, for LIS, Jantti and 
Danziger (2000), Smeeding (2005, 2006), and Rainwater and Smeeding 
(2004).
    \2\ See Atkinson, Rainwater, and Smeeding (1995) and Canberra Group 
(2001) for more on this income definition and its robustness across 
nations. Note that the use of this ``LIS'' disposable income concept is 
not unique to LIS alone. Eurostat and OECD have independently made 
comparisons of income poverty and inequality across nations using 
identical or very similar measures of net disposable income.
    \3\ This income definition differs from the Census income 
definition used in most poverty studies. Still, the internationally 
comparable measure of income does not subtract work-related expenses or 
medical care spending. In particular, there is no account for provision 
of or costs of childcare. The EITC and similar refundable tax credits 
and nearcash benefits such as food stamps and cash housing allowances 
are included in this income measure, however, as are direct taxes paid.
    \4\ Formally, adjusted disposable income (ADPI) is equal to 
unadjusted household income (DPI) divided by household size (S) raised 
to an exponential value (e), ADPI = DPI/Se. We assume the value of e is 
0.5. To determine whether a household is poor under the relative 
poverty measure, we compare its ADPI to 50 percent of the national 
median ADPI. National median ADPI is calculated by converting all 
incomes into ADPI and then taking the median of this ``adjusted'' 
income distribution. The equivalence scale that we employ is robust, 
especially when comparing families of different size and structure 
(e.g., elders and children). See Atkinson, Rainwater, and Smeeding 
(1995) for detailed and exhaustive documentation of these 
sensitivities.
    \5\ There are no figures for low pay in the other nation studied 
here, especially none for Mexico.
    \6\ A lucid presentation and analysis of this viewpoint can be 
found in Okun (1975). See also Welch (1999).
    \7\ Notice that these estimates are entirely consistent with those 
presented in Figure 2 earlier for the United Kingdom 1999 and United 
States 2000, using the LIS data. The difference is that we can go 
beyond the LIS to later years now using these comparable figures fro 
these two nations alone.
References
    Alesina, Alberto, Edward Glaeser, and Sacerdote. 2005. ``Work and 
Leisure in the U.S. and Europe: Why So Different?'' NBER Working Paper 
No. 11278. Cambridge, MA: National Bureau of Economic Research. 
(April).
    Arjona, Roman; Maxime Ladaique, and Mark Pearson. 2001. ``Growth, 
Inequality, and Social Protection.'' Labour Market and Social Policy 
Occasional Paper No. 51. Paris: Organization for Economic Cooperation 
and Development.
    Atkinson, Anthony B., Lee Rainwater, and Timothy M. Smeeding. 1995. 
``Income Distribution in OECD Countries: Evidence from the Luxembourg 
Income Study (LIS).'' Social Policy Studies 18. Paris: Organization for 
Economic Cooperation and Development (October).
    Atkinson, Anthony, Bea Cantillon, Eric Marlier, and Brian Nolan. 
2002. Social Indicators: The EU and Social Inclusion. Oxford: 
University Press.
    Banks, James, Richard F. Disney, Alan Duncan, and John Van Reene. 
2005. ``The Internationalisation of Public Welfare.'' The Economic 
Journal 115(502) (March): C62-C81.
    Blank, Rebecca M., and Robert F. Schoeni. 2003. ``Changes in the 
Distribution of Children's Family Income over the 1990s.'' American 
Economic Review 93(2) (May): 304-308.
    Bradbury, Bruce, Stephen P. Jenkins, and John Micklewright. 2001. 
The Dynamics of Child Poverty in Industrialised Countries. Cambridge, 
UK: Cambridge University Press.
    Bradbury, Bruce, and Markus Jantti. 2005. ``Child Poverty, Labor 
Markets, and Public Policies across Industrialized Countries.'' 
Unpublished manuscript. Social Policy Research Centre, Sydney, 
Australia: University of New South Wales (March).
    Burtless, Gary, and Christopher Jencks. 2003. ``American Inequality 
and Its Consequences.'' In Henry J. Aaron, James M. Lindsay, and Pietro 
Nivola (eds.), Agenda for the Nation. Washington, DC: Brookings 
Institute.
    Canberra Group. 2001. Expert Group on Household Income Statistics: 
Final Report and Recommendations. Ottawa, Canada: Statistics Canada.
    Citro, Constance F., and Robert T. Michael. 1995. Measuring 
Poverty: A New Approach. Washington, DC: National Academy Press.
    Clark-Kaufmann, Elizabeth, Greg Duncan, and Pamela Morris. 2003. 
``How Welfare Policies Affect Child and Adolescent Achievement.'' 
American Economic Review 93(2) (May): 299-303.
    Danziger, Sheldon, Colleen M. Heflin, Mary E. Corcoran, Elizabeth 
Oltmans, and Hui-Chen Wang. 2002. ``Does It Pay to Move from Welfare to 
Work?'' Journal of Policy Analysis and Management 21(4): 671-692.
    Ellwood, David T. 2000. ``Anti-Poverty Policy for Families in the 
Next Century: From Welfare to Work--and Worries.'' Journal of Economic 
Perspectives 14(1) (Winter): 187-198.
    Eurostat. 2000. ``Recommendations of the Task Force on Statistics 
on Social Exclusion and Poverty.'' Luxembourg: European Statistical 
Office.
    Forster, Michael, and Michele Pellizzari. 2005. ``Trends and 
Driving Factors in Income Distribution and Poverty in the OECD Area.'' 
Social Policies Studies Division Paper No. 42. Paris: Organization for 
Economic Cooperation and Development (September).
    Francesconi, M., and W. van der Klaauw. 2007. ``The Socio-Economic 
Consequences of ``In--Work'' Benefit Reform for British Lone Mothers.'' 
Journal of Human Resources XLII: 1-29.
    Goodin, Robert E., Bruce Headey, Ruud Muffels, and Henk Jan Dirven. 
1999. The Real Worlds of Welfare Capitalism. Cambridge, UK: Cambridge 
University Press.
    Gottschalk, Peter, and Timothy M. Smeeding. 2000. ``Empirical 
Evidence on Income Inequality in Industrialized Countries.'' In Anthony 
B. Atkinson and Francois Bourguignon (eds.), Handbook of Income 
Distribution. New York: Elsevier-North Holland Publishers, pp. 261-308.
    Hills, John. 2003. ``The Blair Government and Child Poverty: An 
Extra One Percent for Children in the United Kingdom.'' In Isabel V. 
Sawhill (ed.), One Percent for the Kids: New Policies, Brighter Futures 
for America's Children. Washington, DC: Brookings Institution.
    Holzer, Harry, et al. 2007. ``The Economic sots of Growing up Poor 
in the United States.'' Center for American Progress: Washington, DC. 
(January).
    Jantti, Markus, and Sheldon Danziger. 2000. ``Income Poverty in 
Advanced Countries.'' In Anthony B. Atkinson and Francois Bourguignon 
(eds.), Handbook of Income Distribution. New York: Elsevier-North 
Holland Publishers.
    Lindert, Peter H. 2004. Growing Public: Volume 1, The Story: Social 
Spending and Economic Growth Since the Eighteenth Century. Cambridge, 
UK: Cambridge University Press.
    Okun, Arthur. 1975. Equity and Efficiency: the Big Trade-Off. 
Brookings Institution: Washington, DC.
    Organization for Economic Cooperation and Development. 2004. ``OECD 
Social Expenditure Database: 1980-1999.'' Paris: Organization for 
Economic Cooperation and Development at www.oecd.org.
    Organization for Economic Cooperation and Development. 2005. 
Employment Outlook.
    Paris: Organization for Economic Cooperation and Development at 
www.oecd.org.
    Osberg, Lars, Timothy M. Smeeding, and Jonathan Schwabish. 2004. 
``Income Distribution and Public Social Expenditure: Theories, Effects, 
and Evidence.'' In Kathryn Neckerman (ed.), Social Inequality. New 
York, NY: Russell Sage Foundation.
    Rainwater, Lee, and Timothy M. Smeeding. 2004. Poor Kids in a Rich 
Country: America's Children in Comparative Perspective. New York, NY: 
Russell Sage Foundation.
    Shapiro, Isaac, and Sharon Parrott. 2003. ``Are Policies That 
Assist Low-Income Workers Receiving Appropriate Priority?'' Washington, 
DC: Center on Budget and Policy Priorities (August).
    Smeeding, Timothy M. 2005. ``Government Programs and Social 
Outcomes: The United States in Comparative Perspective.'' In A. 
Auerbach, D. Card, and J. Quigley (eds.), Poverty, Public Policy, and 
the Distribution of Income. New York, NY: Russell Sage Foundation, 
forthcoming.
    Smeeding, Timothy M. 2006. ``Poor People in Rich Nations: The 
United States in Comparative Perspective.'' Journal of Economic 
Perspectives 20(1) (Winter): 69-90.
    Smeeding, Timothy M., Lee Rainwater, and Gary Burtless. 2001. 
``United States Poverty in a Cross-National Context.'' In Sheldon H. 
Danziger, and Robert H. Haveman (eds.), Understanding Poverty. New 
York, NY: Russell Sage Foundation; Cambridge, MA: Harvard University 
Press, pp. 162-189.
    United Nations Development Program. 2005. Human Development Report: 
Cultural Liberty in Today's Diverse World.  New York, NY: United 
Nations.
    United Kingdom Office of National Statistics and Department of Work 
and Pensions. 2006. Opportunity for All: Sixth Annual Report 2004. 
London, UK: Department of Work and Pensions.
    (http://www.dwp.gov.uk/ofa/reports/2004/pdf/report_04.pdf)
    UNICEF. 2005. Child Poverty in Rich Countries 2005. Innocenti 
Research Centre Report Card No. 6. Florence, Italy: UNICEF.
    (http://www.unicef-icdc.org/publications/pdf/repcard6e.pdf)
    U.S. Bureau of the Census. 2006. ``Money Income Poverty and Health 
Insurance in the United States, 2005.'' Series P-60. No. 278. 
Washington, DC. (August).
    Waldfogel, Jane, et. al. 2006. ``Family Expenditures Post Welfare 
Reform in the UK: Are Low Income Families Starting to Catch Up?'' 
Labour Economics 13: 721-746.
    Welch, Finis. 1999. ``In Defense of Inequality.'' American Economic 
Review, Papers and Proceedings 89(2): 1-17.

                                 

    Chairman MCDERMOTT. Our next witness is Mr. Berube. Did I 
pronounce it right.
    Mr. BERUBE. ``Bah-rue-bee.''
    Chairman MCDERMOTT. Berube.

STATEMENT OF ALAN BERUBE, FELLOW, METROPOLITAN POLICY PROGRAM, 
                   THE BROOKINGS INSTITUTION

    Mr. BERUBE. Thank you, Mr. Chairman and other Members of 
the Committee. My name is Alan Berube. I am a fellow also at 
the Brookings Institution, and I am Research Director for the 
Metropolitan Policy Program there. I am going to make three 
brief points in my oral testimony.
    First, a significant fraction of poor families in America 
live in environments of extreme concentrated poverty. Second, 
at the same time, the locus of U.S. poor and low-income 
populations is shifting toward the suburbs, and third, I think 
public policies can confront specific challenges to economic 
mobility that arise from this new geography of poverty.
    So, to begin, the Federal Government's definition of 
``poverty,'' as you all know, measures a family's resources 
against an assessment of its basic needs. For most Americans, 
though, I think the idea of poverty also elicits visions of 
inner cities, Appalachia, the Mississippi Delta, American 
Indian reservations. That is to say that poverty describes 
places as well as people, leading researchers to find 
concentrated poverty as the proportion of poor people who live 
in very poor neighborhoods, those where at least 40 percent of 
all individuals are below the poverty line, and in the words of 
one researcher, the measure identifies the poor who not only 
have to cope with their own poverty, but also that of those 
around them.
    Nationwide, about 1 in 10 poor individuals in 2000 lived in 
communities of such extreme poverty, and though that rate fell 
during the nineties, concentrated poverty remains widespread 
today as the example New Orleans made clear. Indeed, 48 of 50 
States and 46 of the Nation's 50 largest cities contained at 
least one area of concentrated poverty in 2000. In Fresno, 
California, for instance, nearly half of the poor residents of 
that city lived in extremely poor neighborhoods.
    Researchers have identified a series of problems arising 
from concentrated poverty, including worker disconnection from 
jobs and job networks, higher priced and lower quality local 
goods and services, local schools that are at greater risk for 
failure, negative health outcomes, and elevated costs for local 
governments to create municipal fiscal burdens.
    While these highly distressed urban and rural areas remain 
a significant feature of the U.S. poverty landscape worthy of 
our continued attention, recent decades have also seen a steady 
shift of the Nation's low-income populations toward suburbia.
    In a recent study that we conducted at Brookings, it found 
that, for the first time in 2005, a majority of poor residents 
in the Nation's 100 largest metropolitan areas actually lived 
in the suburbs. In fact, many cities such as Detroit, Los 
Angeles, Miami, and Washington, D.C. all have fewer residents 
living in poverty than their suburbs do.
    I know some might consider the suburban poor to have 
escaped the problems associated with inner city and remote 
rural poverty. Evidence suggests that they, too, face other 
unique challenges. First, many suburban, low-income families 
remain stuck on what some people call the ``wrong side of the 
region''--to the south, areas like Atlanta, to the east in 
regions like Washington, D.C.--and they face housing, education 
and transportation challenges not dissimilar from their inner 
city counterparts.
    Second, social services providers in most regions are still 
concentrated in central cities. Even smaller, often faith-
based, suburban providers struggle to serve growing numbers of 
local families in need, and third, low-income workers in the 
suburbs are often forced to double and triple up in single-
family housing due to a lack of affordable rental units there.
    In recent months, the issue of economic mobility in America 
has drawn new attention. I think that focus has been fueled by 
estimates that, for instance, only 20, perhaps 25 percent of 
children who were born into the bottom fifth of the Nation's 
income distribution will achieve at least a median income as 
adults. Most studies and evaluations conclude that 
neighborhoods, themselves, communities, have smaller effects on 
the economic mobility of the poor than do family 
characteristics.
    So, I think, therefore, public policies that foster healthy 
family environments and more equitable opportunities for 
children regardless of where they live, such as early education 
or labor market supports for disconnected adults, deserve 
primary consideration. Yet, I believe public policy can also 
confront particular challenges of place that may blunt the 
impact of more universal investments and mobility.
    First, targeted wage boosts can expand low-wage workers' 
neighborhood options, and an enhanced earned income tax credit, 
for instance, could make more housing in more neighborhoods 
affordable to working families, especially if a portion of the 
credit were delivered throughout the year. Second, programs 
that provide temporary support and training to low-income 
families, such as those funded under TANF and the Workforce 
Investment Act, should serve workers and employers across city 
and suburban lines.
    I think Congress could examine information sharing and 
incentives within these programs with an eye toward growing 
more high-performing regional institutions, workforce 
intermediaries--Project QUEST in San Antonio, WIRE-Net in 
Cleveland are a couple of examples.
    Third, participation gaps could be narrowed in key supports 
like the earned income and child tax credits, food stamps, 
subsidized health insurance especially for the suburban working 
poor where those gaps may be greater. Congress could require 
Federal agencies to more closely track participation in these 
programs, strengthen incentives to achieve higher participation 
rates and provide modest supports in nonprofits, such as the 
Center for Economic Progress in Chicago, that facilitate 
program involvement for working families.
    So, in closing, I would like to thank the Subcommittee for 
the opportunity to testify, and I look forward to your 
questions.
    Chairman MCDERMOTT. Thank you.
    [The prepared statement of Mr. Berube follows:]
    Statement of Alan Berube, Fellow, Metropolitan Policy Program, 
                       The Brookings Institution
    Mr. Chairman and other members of the Committee, thank you for the 
invitation to testify today on the changing geography of poverty in the 
United States and its implications for economic mobility and well-
being, the subject of recent research we have conducted at the 
Metropolitan Policy Program at the Brookings Institution.
    In this testimony, I will make three points regarding poverty, 
geography, and mobility in the United States.

      A significant fraction of poor families in America live 
in environments of extreme, concentrated poverty.
      At the same time, the locus of U.S. poor and low-income 
populations is shifting toward the suburbs, along with Americans in 
general.
      Each geographic setting provides both challenges and 
opportunities for promoting the economic mobility of low-income 
families, with attendant implications for public policy.
The enduring challenge of concentrated poverty
    The federal government's definition of poverty measures a family's 
resources against an assessment of its basic needs. For most Americans, 
though, the image of poverty entails more than these individual or 
family circumstances. It also elicits visions of inner cities, 
Appalachia, and American Indian reservations. That is, poverty 
describes places as well as people. What is more, poverty implies 
something about the local conditions faced by many poor individuals and 
families in these places: unsafe neighborhoods, failing schools, 
substandard housing, inadequate private services, and diminished 
community hope.
    Concentrated poverty represents the confluence of these two ideas 
of poverty in America. It concerns the tendency, in many corners of our 
country, for poor populations to be clustered into very poor 
communities. While Hurricane Katrina and its aftermath in the city of 
New Orleans motivated much of the recent focus on concentrated poverty 
and its effects, many poor Americans face the double burden of family 
and community distress in a wide variety of places, both urban and 
rural.
    As defined by Paul Jargowsky of the University of Texas-Dallas, the 
statistical measure of concentrated poverty expresses the proportion of 
poor people who live in neighborhoods where at least 40 percent of all 
individuals live below the poverty line. In his words, the measure 
identifies ``the poor who not only have to cope with their own poverty, 
but also that of those around them.''
    Nationwide, about one in ten individuals below the poverty line in 
2000 lived in communities of such extreme poverty. That rate fell 
during the 1990s, after roughly doubling between 1970 and 1990.\1\ The 
strong economy in the latter half of the decade, coupled with policy 
reforms that broke up the most severe concentrations of distressed 
inner-city housing, appear to have weakened the link between poverty 
and place in most major metropolitan areas.
---------------------------------------------------------------------------
    \1\ Paul Jargowsky, ``Stunning Progress, Hidden Problems: The 
Dramatic Decline of Concentrated Poverty in the 1990s'' (Washington: 
Brookings Institution, 2003).
---------------------------------------------------------------------------
    As the example of New Orleans made clear, however, a significant 
fraction of poor families--especially poor minorities--continue to live 
in areas of extreme poverty. Moreover, these pockets of distress can be 
found in every corner of the country. Indeed, 46 of the nation's 50 
largest cities contained at least one neighborhood that met the 40-
percent concentrated poverty threshold. At the moment, my program at 
Brookings is collaborating with the Federal Reserve System to study the 
causes and effects of concentrated poverty across America, in 
communities as varied as Rochester, NY; Miami, FL; the Mississippi 
Delta; McKinley County, NM; and Fresno, CA. Fresno was the only U.S. 
city with a higher degree of concentrated poverty than New Orleans 
before the storm, with almost half of its poor residents living in 
extreme-poverty neighborhoods.
    The forces that gave rise to these communities are numerous, 
diverse, and well-studied, including:

      The long-term economic decline of former urban 
manufacturing centers \2\ and rural areas that depended on agriculture 
and extraction industries;
---------------------------------------------------------------------------
    \2\ See, e.g., John Kasarda, ``Urban Industrial Transformation and 
the Underclass.'' Annals of the American Academy of Political and 
Social Science 501 (1989): 26--47.
---------------------------------------------------------------------------
      Suburbanization and out-migration of middle-class 
households from cities in the 1970s and 1980s; \3\
---------------------------------------------------------------------------
    \3\ See, e.g., Kathryn Nelson, ``Racial Segregation, Mobility, and 
Poverty Concentrations.'' Paper presented at the Annual Meeting of the 
Population Association of America (1991).
---------------------------------------------------------------------------
      Housing, lending, and land-use policies that reinforced 
patterns of racial and ethnic segregation; \4\
---------------------------------------------------------------------------
    \4\ See, e.g., Douglas Massey and Mitchell Eggers, ``The Ecology of 
Inequality: Minorities and the Concentration of Poverty, 1970-1980.'' 
American Journal of Sociology 95 (1990): 1153-1189; Rolf Pendall, 
Robert Puentes, and Jonathan Martin, ``From Traditional to Reformed: A 
Review of Land Use Regulations in the Nation's 50 Largest Metropolitan 
Areas'' (Washington: Brookings Institution, 2006); Margery Austin 
Turner, Susan J. Popkin, and G. Thomas Kingsley, ``Distressed Public 
Housing: What It Costs to Do Nothing'' (Washington: Urban Institute, 
2005); Glenn Canner, ``Redlining: Research and Federal Legislative 
Response.'' Staff Studies 121 (Board of Governors of the Federal 
Reserve System, 1982).
---------------------------------------------------------------------------
      New waves of lower-skilled immigrants and refugees to the 
U.S. in the latter part of the 20th century; \5\ and
---------------------------------------------------------------------------
    \5\ See, e.g., Audrey Singer, ``The Rise of New Immigrant 
Gateways'' (Washington: Brookings Institution, 2004).
---------------------------------------------------------------------------
      Secular trends in family formation that resulted in more 
children growing up in single-parent, single-earner households, 
especially in inner-city neighborhoods.\6\

    \6\ See, e.g., William Julius Wilson, When Work Disappears (New 
York: Alfred A. Knopf, 1996).

    The consequences of growing up and living in environments of 
extreme poverty may vary as widely as the factors themselves that gave 
rise to these communities. Nonetheless, researchers have identified a 
series of problems evident in most areas of high poverty that result 
from their concentrated economic disadvantage, and that affect not only 
the inhabitants of these neighborhoods, but their surrounding areas as 
---------------------------------------------------------------------------
well:

      Concentrations of lower-income households and less-
skilled workers lead the private sector to disinvest in these 
communities. In turn, fewer mainstream businesses compete for their 
purchases, raising prices for some basic goods and services. The 
disinvestment may also widen the ``spatial mismatch'' between workers 
in these neighborhoods and growing employment centers.\7\
---------------------------------------------------------------------------
    \7\ Keith Ihlanfeldt and Daniel Sjoquist, ``The Spatial Mismatch 
Hypothesis: A Review of Recent Studies and their Implications for 
Welfare Reform.'' Housing Policy Debate 9(4)(1998): 849-92; Matt 
Fellowes, ``From Poverty, Opportunity: Putting the Market to Work for 
Lower-Income Families'' (Washington: Brookings Institution, 2006).
---------------------------------------------------------------------------
      Low levels of labor force attachment may sever these 
areas from the informal networks that help workers find good jobs and 
advance in their careers. Some argue that these high levels of 
joblessness change community norms about work, so that children under-
invest in the education and training necessary for labor market 
success.\8\
---------------------------------------------------------------------------
    \8\ Philip Kasinitz and Jan Rosenberg, ``Missing the Connection: 
Social Isolation and Employment on the Brooklyn Waterfront.'' Social 
Problems 43(2)(1996): 180-196; Wilson, When Work Disappears.
---------------------------------------------------------------------------
      Even with the expanded school choice options available 
today, children who live in extremely poor urban neighborhoods 
generally attend neighborhood schools where nearly all the students are 
poor. This places students at greater risk for failure, as expressed by 
low standardized test results, grade retention, and high drop-out 
rates. These schools struggle to attract the best personnel, endure 
high rates of student mobility that frustrate classroom stability, and 
must operate additional systems to cope with disorder and the social 
welfare of their students.\9\
---------------------------------------------------------------------------
    \9\ Brian Jacob, ``The Challenges of Staffing Urban Schools.'' The 
Future of Children, forthcoming 2007; Ruth Lupton, ``Schools in 
Disadvantaged Areas: Recognizing Context and Raising Quality'' (London: 
LSE Centre for the Analysis of Social Exclusion, 2004).
---------------------------------------------------------------------------
      High-poverty areas generally exhibit higher crime rates, 
especially violent crime. In these neighborhoods, the social penalties 
for criminal activity may be lower, and reduced access to jobs and 
quality schools may lower the opportunity costs of crime.\10\
---------------------------------------------------------------------------
    \10\ Ingrid Ellen and Margery Austin Turner, ``Does Neighborhood 
Matter? Assessing Recent Evidence.'' Housing Policy Debate 8(4)(1997): 
833-866; Robert Sampson and William J. Wilson, ``Toward a Theory of 
Race, Crime, and Urban Inequality.'' In J. Hagan and R. Peterson, eds., 
Crime and Inequality (Stanford University Press, 1995).
---------------------------------------------------------------------------
      People in areas of extreme poverty experience negative 
health outcomes at much higher rates. This owes partly to the stress of 
being poor and marginalized, and partly to living in an environment 
with dilapidated housing and high crime. Researchers have associated 
the incidence of depression, asthma, diabetes, and heart ailments with 
living in these neighborhoods.\11\ Others have found that these 
neighborhoods may serve to increase the risk of premarital childbearing 
among young female residents, and decrease their rates of marriage.\12\
---------------------------------------------------------------------------
    \11\ Roberto Quercia and Lisa Bates, ``The Neglect of America's 
Housing: Consequences and Policy Responses.'' Working Paper 2002-02 
(University of North Carolina at Chapel Hill, 2002); Deborah Cohen et 
al., ``Neighborhood Physical Conditions and Health.'' Journal of 
American Public Health 93(3)(2003): 467-71.
    \12\ Scott Smith and Kyle Crowder, ``Neighborhood Effects on Family 
Formation: Concentrated Poverty and Beyond.'' American Sociological 
Review 64 (1999): 113-132.
---------------------------------------------------------------------------
      As research from municipal finance experts has shown, 
concentrations of poverty generate high costs for local governments. 
These higher costs appear in areas such as welfare, health, and public 
safety, and can divert resources from the provision of other public 
services and raise tax burdens on local businesses and non-poor 
residents.\13\
---------------------------------------------------------------------------
    \13\ Janet Pack, ``Poverty and Urban Public Expenditures.'' Urban 
Studies 35(11)(1998): 1995-2019; Pascale Joassart-Marcelli, Jennifer 
Wolch, and Juliet Musso, ``The Fiscal Consequences of Concentrated 
Poverty in a Metropolitan Region.'' The Annals of the Association of 
American Geographers 95(2)(2005): 336-356.
---------------------------------------------------------------------------
The suburbanization of poverty
    In keeping with these statistics on concentrated poverty, urban and 
rural visions of poverty in America tend to dominate popular 
perceptions and media accounts. Such viewpoints were well-supported in 
1970, when central cities and rural areas contained roughly four in 
five poor Americans.\14\
---------------------------------------------------------------------------
    \14\ U.S. Census Bureau, Historical Poverty Tables, Table 8: 
Poverty of People, by Residence.
---------------------------------------------------------------------------
    As described above, these areas remain a significant feature of the 
U.S. poverty landscape, especially the most distressed portions. Yet 
recent decades have seen a steady shift of the nation's overall low-
income population towards the dominant geography of American life 
today: suburbia.
    The findings from a recent study we conducted at the Brookings 
Institution amplify this shift.\15\ Focused on the nation's 100 largest 
metropolitan areas (home to two-thirds of U.S. population), the study 
found that between 1999 and 2005 the poverty rate in these areas rose 
overall, with similar increases in central cities and suburbs. In 2005, 
central-city residents remained about twice as likely as their suburban 
counterparts to live below the poverty line.
---------------------------------------------------------------------------
    \15\ Alan Berube and Elizabeth Kneebone, ``Two Steps Back: City and 
Suburban Poverty Trends, 1999-2005'' (Washington: Brookings 
Institution, 2006).
---------------------------------------------------------------------------
    As to the location of the overall poor population, however, the 
study found that in 2005, 52 percent of metropolitan residents living 
below the poverty line were found in suburbs, versus 48 percent in 
central cities. This signaled a notable tipping of poor populations 
towards the suburbs since 1999, when a bare majority of the 
metropolitan poor lived in cities.
    None of these findings discounts the continuing incidence of 
poverty in smaller cities, towns, and rural areas. But nationwide 
today, a plurality of poor Americans live in suburbs. And it certainly 
challenges conventional notions of poverty as solely an urban issue to 
find that cities like Detroit, Los Angeles, Miami, and Washington, D.C. 
all have fewer residents living below the poverty line than their 
suburbs do.
    This ``tipping'' did not occur overnight, of course, and is rooted 
in several broader changes in American society and metropolitan 
economies. Among the chief factors are:

      Population continues to suburbanize. Over the past 15 
years, suburbs of America's major metropolitan areas have grown roughly 
twice as fast as their central cities.\16\ The sheer scale and pace of 
suburban growth has absorbed a broader economic cross-section of the 
nation's population.
---------------------------------------------------------------------------
    \16\ Suburbs of major metropolitan areas grew by roughly 24 percent 
from 1990 to 2004, compared to 12 percent for their central cities. See 
William H. Frey, ``Metro America in the New Century: Metropolitan and 
Central City Demographic Shifts Since 2000'' (Washington: Brookings 
Institution, 2005).
---------------------------------------------------------------------------
      Employment is suburbanizing. Not surprisingly, jobs--
especially low-paying jobs--have followed people to the suburbs. In 
2002, more than half of all employment in metropolitan areas was 
located at least 10 miles from the downtown. Lower-wage industries like 
retail, hospitality, and personal services account for the bulk of job 
growth in many fast-growing suburbs.
      Immigrants are suburbanizing. In longstanding immigrant 
gateways like Boston, Chicago, and New York, newcomers to the United 
States most often started in central-city neighborhoods with their 
compatriots, eventually graduating to suburbia as they achieved middle-
class status. Today, immigrant populations are growing most rapidly in 
Sunbelt metro areas without a real history of immigration, like 
Atlanta, Charlotte, and Dallas. In these regions, lower-skilled 
newcomers are skipping the city altogether for jobs and residences in 
booming suburban areas.\17\
---------------------------------------------------------------------------
    \17\ See Singer, ``The Rise of New Immigrant Gateways.''
---------------------------------------------------------------------------
      Municipal distress is suburbanizing. Finally, in a number 
of older metropolitan areas, particularly those in the Northeast and 
Midwest, slow job growth, aging housing and infrastructure, and inner-
city problems have produced growing low-income populations in their 
``first suburbs.'' Along many dimensions, these places today look more 
urban than suburban.\18\
---------------------------------------------------------------------------
    \18\ Rob Puentes and David Warren, ``One-Fifth of the Nation: 
America's First Suburbs in Transition'' (Washington: Brookings 
Institution, 2006).

    As a newer phenomenon, suburban poverty and its effects have 
received much less attention from the research community. In some 
respects, the suburban poor might be considered to have ``made it,'' 
escaping or avoiding altogether the problems associated with inner-city 
or remote-rural poverty.
    Nonetheless, initial evidence suggests a few unique challenges 
associated with having a low income in the suburbs.
    First, a low-income family's move from the city to the suburbs does 
not always involve moving up on indicators of neighborhood quality. 
Many major metropolitan areas today see high-income households and 
higher-wage employment concentrate on one side of the region, while 
lower-income housing, limited job opportunities, and fiscal distress 
gather on the other side. These axes--from north to south in regions 
like Atlanta and Chicago, and from east to west in regions like St. 
Louis and Washington, DC--do not respect city/suburban boundaries. In 
this way, suburban low-income families stuck on the wrong side of the 
region can face similar challenges as their inner-city counterparts 
finding quality housing, decent schools for their children, and 
competitively-priced local goods and services. In particular, limited 
access to public transportation in the suburbs, or even reliable 
private transportation, may constrain their employment and child-care 
opportunities.\19\
---------------------------------------------------------------------------
    \19\ About 20 percent of the poor, and 12 percent of the near-poor 
(with incomes between 100 and 200 percent of the poverty line) live in 
households without access to an automobile. Alan Berube and Steven 
Raphael, ``Access to Cars in New Orleans'' (Washington: Brookings 
Institution, 2005).
---------------------------------------------------------------------------
    Second, suburban locations may impede families' access to the 
services and supports that help them weather temporary income losses. 
Research by Scott Allard at Brown University shows that social services 
providers remain concentrated in central-city neighborhoods, lagging 
the movement of important parts of their potential client base into the 
suburbs.\20\ Recent media coverage of suburban poverty increases has 
highlighted the stress placed on smaller, often faith-based providers 
in these communities from trying to serve burgeoning numbers of low-
income families.\21\ These access issues loom especially large for 
suburban areas in the Midwest and South where recent job losses have 
created pressing needs among formerly middle-income workers and 
families.
---------------------------------------------------------------------------
    \20\ Scott Allard, ``Access to Social Services: The Changing Urban 
Geography of Poverty and Social Services Provision'' (Washington: 
Brookings Institution, 2004).
    \21\ See, e.g., Diane Suchetka, ``Poverty Jumps in Suburbs of 
Cleveland.'' The Plain Dealer, December 7, 2006; Peg Tyre and Matthew 
Phillips, ``Poor Among Plenty.'' Newsweek, February 12, 2007.
---------------------------------------------------------------------------
    Third, whereas employment opportunities may be more plentiful for 
the working poor in fast-growing suburbs, appropriate housing is often 
scarce. Though these communities employ large numbers of low-wage 
workers, single-family owner-occupied housing, mostly for middle- and 
upper-income families, predominates. Exclusionary zoning laws in many 
suburban communities have limited the development of affordable rental 
housing there.\22\ As a result, families are doubling and tripling up 
in order to afford single-family housing, and confronting community 
opposition in the process.\23\ Research suggests a link between such 
overcrowded housing conditions and negative health outcomes for 
children and adults, and possibly children's educational performance as 
well.\24\
---------------------------------------------------------------------------
    \22\ Pendall, Puentes, and Martin, ``From Traditional to 
Reformed.''
    \23\ See, e.g., Audrey Singer, ``Reforming Immigration Policy'' 
(Washington: Brookings Institution, forthcoming 2007).
    \24\ UK Office of the Deputy Prime Minister, ``The Impact of 
Overcrowding on Health and Education: A Review of the Evidence and 
Literature.'' Housing Research Summary 210 (2004).
---------------------------------------------------------------------------
Geography and efforts to promote economic mobility
    A key focus of this hearing, and indeed social policy in general, 
concerns the prospects for economic mobility among poor and low-income 
families in the United States. On this question, Americans continue to 
express their faith in ours as a society of opportunity, with 80 
percent of those polled in a recent survey agreeing that: ``. . . it's 
still possible to start out poor in this country, work hard, and become 
rich.'' \25\
---------------------------------------------------------------------------
    \25\ See the ``Class Matters'' series at www.nytimes.com/
classmatters. The Times also reports that of the 400 Americans 
identified as the country's richest in 2005 by Forbes magazine, the 
majority--255--were not the inheritors of significant wealth. Nina 
Munk, ``Don't Blink. You'll Miss the 258th-Richest American.'' The New 
York Times, September 25, 2005.
---------------------------------------------------------------------------
    Yet recent research has called into question how well the United 
States lives up to this reputation. For instance, a recent study by 
researchers at the London School of Economics finds a far stronger 
relationship between fathers' and sons' earnings in the United States 
than in several northern European countries, Canada, and even 
stereotypically class-bound Britain.\26\ U.S. researchers' findings 
generally suggest that over the past 25 years, a child born into a low-
income family had about a 20- to 25-percent chance of earning above 
median income as an adult, and a less-than-5-percent chance of moving 
into the highest fifth of the income distribution.\27\
---------------------------------------------------------------------------
    \26\ Still, the researchers find a higher intergenerational partial 
earnings correlation in the U.S. (0.289) than in Britain (0.271).
    \27\ Chul-In Lee and Gary Solon, ``Trends in Intergenerational 
Income Mobility.'' NBER Working Paper 12007 (January 2006); Tom Hertz, 
``Trends in the Intergenerational Elasticity of Family Income in the 
United States.'' Industrial Relations 46(1)(2007): 22-50.
---------------------------------------------------------------------------
    Within generations as well, evidence points to low and possibly 
declining rates of upward mobility. One study finds that of families 
who started in the bottom fifth of the income distribution in 1988, 
more than half remained there in 1998, and fewer than one-quarter 
managed to achieve at least middle-income status by the end of the 
decade.\28\
---------------------------------------------------------------------------
    \28\ Katherine Bradbury and Jane Katz, ``Women's Labor Market 
Involvement and Family Income Mobility When Marriages End.'' New 
England Economic Review Q4 (2002): 41-74.
---------------------------------------------------------------------------
    As one recent paper has argued, however, evidence of low economic 
mobility does not, in itself, establish a case for nor guide 
interventions to help low-income families proceed up the economic 
ladder.\29\ Indeed, evidence on why economic status is relatively fixed 
across and within generations is critical for designing effective 
policies to ensure more equitable opportunities, especially for the 
poor.
---------------------------------------------------------------------------
    \29\ Christopher Jencks and Laura Tach, ``Would Equal Opportunity 
Mean More Mobility?'' In S. Morgan, D. Grusky, and G. Fields, eds., 
Mobility and Inequality: Frontiers of Research in Sociology and 
Economics. Stanford University Press, 2006.
---------------------------------------------------------------------------
    What role, then, might the geography of poverty and economic 
disadvantage play in shaping prospects for economic and social 
mobility? Few research studies examine this exact question.\30\ In 
general, most studies reinforce the conclusion of one seminal review of 
the ``neighborhood effects'' literature: ``Although the effects of 
neighborhood environment are found to be significant in many studies, 
they are consistently much smaller than the effects of family 
characteristics.''\31\
---------------------------------------------------------------------------
    \30\ One study finds a statistically significant but not strong 
correlation in eventual educational attainment between children who 
grew up in the same neighborhood. Gary Solon, Marianne E. Page, and 
Greg J. Duncan, ``Correlations Between Neighboring Children in Their 
Subsequent Educational Attainment.'' Review of Economics and Statistics 
82(3)(2000): 383-392.
    \31\ Ellen and Turner, ``Does Neighborhood Matter?'' p. 854.
---------------------------------------------------------------------------
    The Moving to Opportunity (MTO) program offers some recent research 
insights on the possible impacts of concentrated poverty. MTO was a 
five-city, federally-funded experiment to assist families living in 
high-poverty public housing to move to private rental housing in low-
poverty neighborhoods, and to examine the effects on those families. 
Parents offered the opportunity to move to low-income neighborhoods 
experienced significant improvements in mental health, and teenage 
girls experienced health, educational, and behavioral benefits, 
compared to their counterparts who were not offered the opportunity to 
move (and who, for the most part, remained in public housing). 
Conversely, the experiment did not produce significant employment and 
earnings gains for adults, or consistent educational performance gains 
for all children, versus what the comparison group experienced.\32\ The 
MTO findings highlight important negative influences that high-poverty 
environments may exert on their inhabitants, while bounding the 
economic gains that we might expect over the short- and medium-term 
from interventions to improve neighborhood conditions for the very 
poorest inner-city families.
---------------------------------------------------------------------------
    \32\ See generally, Jeffrey R. Kling, Jeffrey B. Liebman, and 
Lawrence F. Katz, ``Experimental Analysis of Neighborhood Effects.'' 
Econometrica 75(1)(2007): 83-119.
---------------------------------------------------------------------------
    The evidence thus implies that to improve economic and social 
mobility, public policy should first and foremost aim to provide 
incentives and supports that foster healthy family environments and 
more equitable opportunities for children regardless of where they 
live. In this respect, greater federal support for early education 
targeted to low-income children, policies designed to improve the labor 
market potential of disconnected young adults, and reforms to expand 
the reach and effectiveness of temporary supports like unemployment 
insurance, are well-founded and would have disproportionate benefits 
for low-income communities as well.
    At the same time, I believe that existing and expanded efforts can 
support economic mobility by confronting particular issues of place 
that could blunt the impact of more universal investments in low-income 
families. While many of these do not fall within the strict 
jurisdiction of the Subcommittee, they merit mention here as possible 
components of a broader anti-poverty strategy, and could include 
initiatives designed to:

      Expand neighborhood choice. The availability and cost of 
appropriate housing dictate the neighborhood opportunities available to 
lower-income families, and thus circumscribe in important ways their 
educational, employment, and health outcomes.\33\ According to the 
National Low Income Housing Coalition, a full-time worker needs to earn 
over $16 per hour in order to afford the average rent for a modest, 
two-bedroom house or apartment.\34\ Already, the federal Earned Income 
Tax Credit (EITC), by providing a substantial boost to the wages of 
low-income working families, reduces housing-cost burdens by an 
estimated 18 percent.\35\ Further targeted increases to the EITC, 
perhaps delivered throughout the year to help families meet monthly 
housing costs, could greatly expand quality neighborhood and housing 
options for families while maintaining the credit's focus on work. To 
ensure that the growing suburban poor have access to appropriate 
housing in quality neighborhoods, the Low Income Housing Tax Credit 
(LIHTC)--the nation's largest affordable housing production program--
could be recalibrated to deliver more affordable units in opportunity-
rich areas.\36\
---------------------------------------------------------------------------
    \33\ For an overview of this argument, see Xavier de Souza Briggs, 
``Politics and Policy: Changing the Geography of Opportunity.'' In The 
Geography of Opportunity: Race and Housing Choice in Metropolitan 
America (Washington: Brookings Institution, 2005).
    \34\ National Low Income Housing Coalition, Out of Reach 2006. The 
``housing wage'' in major metropolitan areas like San Francisco, 
Boston, and Washington was estimated to be far higher than the national 
average.
    \35\ Michael Stegman, Walter Davis, and Roberto Quercia, ``Tax 
Policy as Housing Policy: The EITC's Potential to Make Housing More 
Affordable for Working Families'' (Washington: Brookings Institution, 
2003).
    \36\ See, e.g., Bruce Katz and Margery Austin Turner, ``Rethinking 
U.S. Rental Housing Policy'' (Washington: Brookings Institution, 
forthcoming 2007).
---------------------------------------------------------------------------
      Serve families region-wide. Existing programs to provide 
temporary support and training to low-income families, such as those 
funded under the TANF block grant and the Workforce Investment Act, 
must now serve a more geographically dispersed population than ever 
before. The growth of suburban poverty renders critical strategies that 
engage low-income families throughout metropolitan areas, and that link 
workers to employment opportunities on a region-wide basis. In some 
states, regional workforce intermediaries have mounted a successful 
track record by identifying employer needs, often within selected 
industry growth sectors, and connecting less-skilled workers to the 
training needed to secure these jobs. Organizations like Project QUEST 
in San Antonio, WireNet in Cleveland, and the Wisconsin Regional 
Training Partnership work across jurisdictional lines to meet employer 
and worker needs, in recognition of the metropolitan nature of today's 
economy.\37\ Congress might consider an expanded role for information 
and incentives within these existing programs to seed the creation of 
more high-performing regional workforce intermediaries.
---------------------------------------------------------------------------
    \37\ See, e.g., Harry J. Holzer, ``Encouraging Job Advancement 
Among Low-Wage Workers: A New Approach'' (Washington: Brookings 
Institution, 2004).
---------------------------------------------------------------------------
      Promote participation in existing work supports. Finally, 
expanded efforts to connect low-wage workers and their families to 
existing in-work benefits for which they are eligible may address 
place-specific barriers as well. The Earned Income and Child Tax 
Credits, Food Stamps and other nutritional supports, and subsidized 
health insurance all crucially help to narrow the gap between wages and 
costs of living for low-income families. Yet informational deficits and 
geographical barriers--the trip to a downtown welfare office, for 
instance--may depress participation in these programs, especially among 
the suburban working poor.\38\ A series of Congressional actions could 
help ensure that more eligible families access these programs. First, 
appropriate federal agencies could be required to more closely and 
frequently track participation rates in these programs, including 
variability across states and metropolitan areas. Second, federal 
incentives to achieve higher participation among eligible families 
could be strengthened, at a minimum, to achieve parity with incentives 
designed to reduce program error. Third, Congress could consider direct 
support for a growing nationwide network of nonprofit organizations 
that conduct outreach and assist families in applying for tax credits 
and a growing array of other work supports.\39\
---------------------------------------------------------------------------
    \38\ One study finds evidence suggestive of lower participation 
rates in the EITC among immigrants in less-dense suburban communities 
than among their counterparts in central-city immigrant enclaves. Alan 
Berube, ``Tienes EITC? A Study of the Earned Income Tax Credit in 
Immigrant Communities'' (Washington: Brookings Institution, 2005).
    \39\ The National Community Tax Coalition acts as an umbrella 
organization for hundreds of organizations that conduct outreach and 
provide free tax assistance to low-income families each year. See  
www.tax-coalition.org

    In closing, I would like to thank the Subcommittee for the 
opportunity to testify today and applaud its work to probe the role of 
federal policy in promoting greater economic and social mobility for 
low-income families. Keeping in mind the evolving relationship between 
poverty and place, particularly as it affects Americans who live in 
areas of extreme local poverty, as well as the growing number of 
suburban poor, provides critical context and guidance for policy 
strategies to ensure greater equality of opportunity. I look forward to 
assisting the Subcommittee in this regard, and to answering your 
---------------------------------------------------------------------------
questions.

                                 

    Chairman MCDERMOTT. We are going to have to stop and go and 
vote. I am sorry. We will recess for, hopefully, about 30 
minutes. So, I hope that the witnesses can stay. We would love 
to talk to you again when we come back. We will be back 
probably around 12:15 or 12:20, something like that.
    So, we will recess for the moment. Thank you.
    [Recess.]
    Chairman MCDERMOTT. The hearing will come to order.
    We have to be out of here in 28 minutes. So, Ms. Blackwell, 
you are on.

STATEMENT OF ANGELA GLOVER BLACKWELL, ESQUIRE, FOUNDER AND CEO, 
                           POLICYLINK

    Ms. BLACKWELL. Thank you very much, Mr. Chairman and 
Committee Members. I am Angela Glover Blackwell, the CEO of 
PolicyLink, a national research and action institute that works 
very closely with local partners, finding solutions to poverty 
and inequity and inequality in America.
    For the past 18 months, we have been working in New 
Orleans, and we have been working there because our 
organization is known for thinking both about how to develop 
places so that they are attractive and work well and how to 
think about the people at the same time, the integration of the 
people and the place strategies.
    The work in New Orleans has really affirmed for us that so 
much of what we worry about in terms of poverty and opportunity 
was unveiled there both in terms of the suffering regarding 
poverty and the kind of solutions that we ought to be thinking 
about. As we witnessed as a nation what happened when Katrina 
hit New Orleans, we were struck by the fact that people were so 
sick, so isolated, so vulnerable, and so poor. I think the 
American people were shocked and ashamed of what they saw, and 
if you take it apart, you can see something very similar to 
that in cities all across America, because the relationship 
between the isolation and the absence of transportation that 
caused people to be so vulnerable when that hurricane hit is 
the same thing that causes people to be so vulnerable to 
poverty in other communities where they are isolated from jobs 
and the other supports that they need.
    What we saw in New Orleans was that where you live impacts 
opportunity enormously, including how healthy you are and how 
long you will live, and as we think about the importance of 
place in the context of poverty, what has been interesting, as 
was presented in the testimony right before, is that not only 
does place matter, but it is surprising the places where it is 
beginning to matter even more--older suburbs, suburban 
communities, where poverty is growing.
    As you think about that assertion that where you live 
impacts opportunity, what it is referring to is that it is 
absolutely your address that determines whether or not you get 
to go to a good school. Some communities have excellent schools 
available. Others have terrible schools. Your address 
determines whether or not you live in close proximity to jobs, 
as do many people who live in suburban areas with job centers. 
Your address affects your access to opportunity if you live in 
an urban area, an older suburb, a declining city with no real 
jobs around. Where you live determines whether or not you are 
going to have access to a job that may be distant in terms of 
whether or not there is any public transportation to be able to 
get you to jobs.
    One of the things that was interesting when you think about 
New Orleans is so many people asked, ``Well, why didn't people 
just get out?'' Well, not only was there not a good public 
transportation system, but of those people who were living in 
extreme poverty areas, 54 percent of them did not have cars. 63 
percent of the elderly who were poor did not have cars. So, 
this notion of not having a car and not having a reliable 
public transit system absolutely makes a difference in terms of 
access to opportunity.
    In thinking about strategies, I was interested in hearing 
the conversation with the first panel. Certainly, the earned 
income tax credit supports the families that are poor. Access 
to health insurance and high-quality care, access to child care 
are all important, and they are the basics, a living wage that 
allows families to be able to move out of poverty, but we also 
need to think about broader strategies.
    As to the whole notion of transportation, we have noticed 
that we need to have transportation systems that do not just go 
from city to suburb, because now, sometimes people need to go 
from suburb to suburb, and there is a wonderful program called 
Job Access and Reverse Commute (JARC) that does just that. This 
program has worked in many different States and many different 
communities. In fiscal year 2003, JARC funded 101 programs in 
35 States, and it is a perfect example of taking the reality of 
how where you live impacts opportunity and putting a program in 
place that allows people to be able to access jobs. If where 
you live impacts opportunity, we certainly want to connect 
people from poor communities to opportunity, but it is also 
important for low-income to people live in opportunity-rich 
communities. We really have not done enough with the low-income 
housing tax credit program to encourage States to put that 
affordable housing near good schools, near good transit and the 
other amenities that are so important for moving forward. Also, 
as we think about how to be able to make sure that the housing 
choice voucher program really works to connect people to 
opportunity, a program in Illinois--the housing opportunity tax 
incentive--encourages landlords in opportunity-rich 
communities--those with less than a 10 percent poverty rate--to 
rent to lower income people so they can live in communities 
with good schools and jobs, et cetera.
    One last thing I want to mention is that, too often, we 
only deal with the poverty issue through poverty programs. Our 
infrastructure investments, which we are talking about more and 
more--certainly, New Orleans has brought that into sharp 
relief. When we are spending dollars on infrastructure--levies, 
bridges, transportation--we can do two things. We can make 
communities where poor people live more economically 
competitive by investing in the infrastructure, but we can also 
make sure that job training programs and other supports connect 
low-income people to the jobs that are generated through 
infrastructure investments. We have to think expansively about 
poverty, not just poverty programs but all programs where we 
are spending government dollars that allow everybody to 
benefit.
    Thank you.
    Chairman MCDERMOTT. Thank you very much.
    [The prepared statement of Ms. Blackwell follows:]
Statement of Angela Glover Blackwell, Esq., Founder and CEO, PolicyLink
    Good Morning. I'm Angela Glover Blackwell, founder and CEO of 
PolicyLink. PolicyLink is a national nonprofit research and action 
institute that helps local and national organizations use policy to 
achieve economic and social equity. We are particularly concerned about 
the needs of people of color and people in low-income communities. I 
also co-chair a task force on poverty that is part of the Center for 
American Progress's National Initiative to End Poverty. I thank you all 
for this opportunity to speak about ending poverty by creating economic 
opportunity.
    Just about 18 months ago, one of the worst disasters in our 
nation's history unfolded quite literally in black and white: it was 
clear not only to the victims, but to all of us watching television 
footage that those hardest hit by Hurricane Katrina were black and 
poor. The American people were shocked by the picture of raw poverty 
and isolation that emerged in the storm's aftermath.
    Yet poverty in New Orleans and other Gulf Coast communities existed 
long before Katrina. In 2005, nearly one in four New Orleans residents 
lived in poverty. Though this figure is troublesome enough, it belies 
the racial disparities of the city's poverty (10 percent of whites were 
living in poverty compared with 30 percent of African Americans) and 
the reality that much of this poverty was concentrated.\1\ According to 
a Brookings Institution analysis of 2000 Census figures, over 37 
percent of poor New Orleans residents (and over 42 percent of poor 
African American residents) lived in ``extreme poverty'' 
neighborhoods--communities where more than 40 percent of residents were 
living below the poverty line,\2\ effectively isolated from good 
schools, decent jobs, and the economic and social networks that 
facilitate upward mobility. Imagine trying to support a family of four 
on $17,050, the federal poverty line in 2000. Now consider that for 
poor families in New Orleans' extreme poverty neighborhoods, the 
average household income was $9,640 below that threshold.\3\
---------------------------------------------------------------------------
    \1\ Based on figures from the 2005 American Community Survey, 
online at http://www.census.gov.
    \2\ Alan Berube and Bruce Katz, Katrina's Window: Confronting 
Concentrated Poverty Across America, (Washington, DC: Brookings 
Institution, 2005).
    \3\ Ibid.
---------------------------------------------------------------------------
    We are facing a crisis of income inequality, and though post-
hurricane images cast New Orleans as some supreme, unparalleled failure 
of the American dream, concentrated poverty is in fact pervasive 
nationwide. New Orleans had the second-highest concentrated poverty 
rate among large U.S. cities, but number one was Fresno, California, 
and many of our other cities--Atlanta, Cleveland, Philadelphia--were 
not far behind.\4\
---------------------------------------------------------------------------
    \4\ Ibid.
---------------------------------------------------------------------------
    My message is straightforward and elegant in its simplicity: The 
means exist to put an end to such stark levels of poverty in America. 
What we need is the will to do so. While poverty in America is indeed 
entrenched, there are many models available for providing economic 
opportunity to low-income people. Our existing safety net, which 
includes welfare, Social Security, unemployment, and similar programs, 
is an essential baseline that we must preserve and expand to ensure 
that everyone has the opportunity to participate and prosper, to 
support themselves, their families, and their communities. At the same 
time, we must build on these income supports with policies that fight 
poverty by investing in housing, transportation, and infrastructure.
    Our nation's legacy of poverty is long and complex, but one thing 
is clear: place matters. Where we live affects our access to 
transportation, jobs, good schools, affordable housing, resources like 
banks and parks, and enriching amenities like cultural institutions. 
Increasingly, place matters not just in our inner cities, but in the 
very suburbs that half a century ago began as idyllic enclaves of 
American middle-class life. The poverty rate in cities remains twice 
that in suburbs--and it is rising in nearly half of large cities and 
one third of suburbs--but the number of poor people in suburbs is now 
greater than in cities. This increase in poverty is especially 
challenging for suburbs that (perhaps unlike inner cities accustomed to 
struggling with poverty) lack social service infrastructure, public 
transportation to connect residents to jobs, and strong community 
organizing networks. At the same time, these suburbs have an 
opportunity to study the successes and challenges of urban poverty 
programs, and use the lessons of hindsight to craft more strategic 
policies.
    The rise of suburban poverty also means that poverty is not simply 
an urban concern: poverty is regional and requires regional solutions. 
Many of the traditional models no longer apply. Jobs, for example, have 
increasingly moved from central city business districts to suburbs, 
even to distant ``exurbs.'' Commuting patterns that were once 
predominantly suburb to city now include ``reverse commutes'' from city 
to suburb and, for a growing suburban population of new immigrants and 
low-income residents, suburb to suburb.
    One promising strategy for connecting low-income residents to 
regional job opportunities is Job Access and Reverse Commute (JARC), 
which provides grant money to states for programs that help welfare 
recipients and low-income workers access jobs and employment services. 
JARC has been widely and successfully tested in diverse communities 
across the United States. In fiscal year 2003, JARC funded 101 programs 
in 35 states, serving approximately 73,000 employment sites.\5\ So many 
residents are traveling from city to suburb, suburb to city or suburb 
to suburb for work and educational opportunities that we need to expand 
our approach to transit from building single ``lines'' to creating a 
comprehensive transit ``web'' to serve the region. The federal 
government must commit to scaling up programs like JARC to reach the 
millions of poor residents who are cut off from job opportunities due 
to lack of transportation and the spatial mismatch between jobs and 
affordable housing.
---------------------------------------------------------------------------
    \5\ Federal Transit Administration, FTA Fiscal Year 2003 
Apportionments, Allocations and Program Information: Notice of 
Supplemental Information, Changes and Corrections, retrieved from 
http://www.fta.dot.gov/grant_programs/4696_ENG_HTML.htm.
---------------------------------------------------------------------------
    Along with helping poor residents commute to jobs in neighborhoods 
throughout their region, we must strengthen programs and policies that 
help those living in concentrated poverty move into mixed-income 
communities already rich in jobs and other amenities. America's 
affordable housing crisis offers another opportunity for the federal 
government to partner with states to reduce poverty and promote 
economic mobility. There is tremendous potential--often untapped--for 
the Low Income Housing Tax Credit program to build affordable housing 
in opportunity-rich communities. The federal government should take an 
active role in encouraging states to use LIHTC funds to site affordable 
housing in communities that provide economic opportunity for low-income 
families, rather than clustering LIHTC projects in high-poverty areas.
    Additional tax credits could be offered to states willing to create 
models such as the Housing Opportunity Tax Incentive program in 
Illinois, which encourages landlords in non-poverty communities to 
accept Housing Choice Voucher program (formerly Section 8) tenants. 
Landlords in designated ``housing opportunity areas''--that is, 
communities with high job growth, a strong economic base, and a poverty 
rate of less than 10 percent--can receive a tax credit for renting to 
an HCV tenant. To avoid creating new concentrations of poverty, a 
maximum of two units or 20 percent of all units in any single property 
can qualify for the credit.\6\ A National Housing Trust Fund could do 
even more to increase the federal government's commitment to 
opportunity through housing.
---------------------------------------------------------------------------
    \6\ See Radhika Fox and Sarah Treuhaft, Shared Prosperity, Stronger 
Regions: An Agenda for Revitalizing America's Older Core Cities 
(Oakland, CA: PolicyLink, 2005).
---------------------------------------------------------------------------
    Transit oriented development is another way for low-income people 
to live in communities of opportunity. TODs are typically high-density, 
mixed-use, pedestrian-friendly developments located within a quarter 
mile of a transit station. By locating a mix of shops, housing, and 
office space around transit hubs, TOD reduces dependence on cars and 
promotes vibrant, walkable communities. When TOD is combined with 
affordable housing, low-income residents are connected to jobs, 
transit, and decent affordable housing. The federal government can 
support the creation of pools of tax credits as an incentive to TOD 
creation.
    Planners, policymakers, and public health officials are realizing 
that health, too, is impacted by where one lives--and has a symbiotic 
relationship with poverty. Ill health affects one's ability to earn a 
living, yet low-income neighborhoods with poor housing and 
environmental conditions and few resources further exacerbate health 
problems. Communities of opportunities, on the other hand, promote good 
health through clean air, neighborhood supermarkets that offer healthy 
food choices, and safe streets and parks where residents can walk, 
exercise, and play. We know there is an explosion in obesity rates in 
the country and we know that obesity is a factor in many life-
threatening diseases. But consider how few poor neighborhoods have 
access to supermarkets, farmers markets with fresh produce, or any 
options for purchasing groceries other than corner stores that 
primarily stock canned goods high in salt and sugar.
    One study found that middle and upper-middle income communities in 
Los Angeles County have 2.3 times as many supermarkets as low-income 
communities. The same study also reported that predominantly white 
communities have 3.2 times the supermarkets of predominantly black 
communities and 1.7 times those of predominantly Latino communities. 
Policies that attract supermarkets to underserved areas promote 
physical health by expanding fresh food choices and economic health by 
offering job opportunities.\7\
---------------------------------------------------------------------------
    \7\ In Rebecca Flournoy, Healthy Food, Healthy Communities: 
Improving Access and Opportunities Through Food Retailing (Oakland, CA: 
PolicyLink, 2005).
---------------------------------------------------------------------------
    Ending poverty also requires that we invest infrastructure dollars 
in a way that benefit creates housing, transportation, and job 
opportunities for low-income residents. Few people give much thought to 
infrastructure until a sinkhole opens up, track work interrupts daily 
commutes, or water mains break. Yet, infrastructure is the skeletal 
support of communities and regions--and all across America 
infrastructure is aging and in need of maintenance, upgrades, and new 
construction. Too often, poor people bear the brunt of solutions to 
infrastructure problems. Where are new schools built? Is more money 
spent on highways and less on public transit? Where are dollars 
allocated for upkeep of parks? Who benefits from infrastructure 
projects? Who pays? Who decides?
    Infrastructure investments that are made where low-income people 
live can help those communities become economically competitive. The 
process itself of building or maintaining infrastructure creates jobs. 
Transportation and telecommunications are infrastructure investments 
that can connect low-income communities and communities of color to 
jobs and resources throughout the region. But we must be intentional 
about maximizing the job creation potential of infrastructure 
investments through local hiring and job training programs with the 
potential to bring poor people into the workforce.
    The rebuilding of West Oakland, California, after 1989's Loma 
Prieta earthquake is an example of how the right kind of infrastructure 
investment and decision making can reshape the economic and social 
outcomes of a community. As a result of dedicated community organizing, 
a freeway in West Oakland was not rebuilt along the corridor that had 
so badly divided that neighborhood and choked it with vehicle 
emissions. Instead it was rerouted through industrial land in the 
adjacent Port of Oakland. Furthermore, groundbreaking agreements were 
established to promote local hiring and contracting on the construction 
of the new road.
    Poverty is multidimensional. The causes and the effects of poverty 
are myriad, but the solutions are multidemensional and when done right, 
multi-beneficial. For example, investing in the construction of a new 
hospital in a low-income community--when the project is tied to job 
training and local hiring priorities--delivers immediate construction 
jobs, eventual health services jobs, and long-term community-based 
healthcare. Creating tax credits or other incentives for affordable 
housing in mixed-income communities may bring poor families closer to 
job opportunities, and also offer their children the chance to attend 
high-quality, resource-rich public schools. A recent study from the 
Center on American Progress notes that although the typical argument is 
a moral one--reducing poverty is fair and just--there is, in fact an 
economic imperative to address childhood poverty.\8\ Childhood poverty 
results in adverse economic effects for the entire nation. The costs in 
lost productivity and economic output, and in increases in crime and 
health expenditures are ones we shouldn't have to pay, and won't if we 
seize this moment to finally invest the resources necessary to create 
true communities of opportunity--and offer everyone the possibility to 
participate and prosper in America.
---------------------------------------------------------------------------
    \8\ Harry J. Holzer, The Economic Costs of Poverty in the United 
States: Subsequent Effects of Children Growing Up Poor (Washington, DC: 
Center for American Progress, 2007).

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

    Chairman MCDERMOTT. Mr. Rector.

STATEMENT OF ROBERT RECTOR, SENIOR POLICY ANALYST, THE HERITAGE 
                           FOUNDATION

    Mr. RECTOR. Yes. I thank you so much for the opportunity to 
be here and speak today.
    I am going to present a somewhat different perspective on 
poverty. The first data I am going to go through comes from 
Government surveys from Department of Housing and Urban 
Development and from the Energy Department, from the 
Agriculture Department.
    If we were to take all of the 37 million poor people in the 
United States and kind of go to the median household, according 
to these surveys, ordinary people, when they hear the word 
``poverty,'' are thinking about malnutrition or a lack of 
housing, perhaps lacking clothes for your kids to wear--that is 
when you are surveying them--but in fact, the typical American 
defined as ``poor'' by the Government has a car, has air 
conditioning, has a refrigerator, has a stove, has a clothes 
washer/dryer, has a microwave, has two color televisions, has 
cable or satellite TV, a VCR, a DVD, and a stereo.
    Overall, his home is in good repair, according to HUD, and 
is not overcrowded. If you ask him, he will say that, during 
the previous year, he was able to obtain medical care for his 
family whenever he needed it, and by his own report, his family 
is not hungry and has not been hungry in the last 6 months and 
that he has had sufficient funds to meet all of his essential 
family needs. Now, there is a group at the bottom of the 
poverty population that would answer negative to some of those 
questions, but this is sort of the typical poor person in the 
United States.
    I will go through some numbers here very quickly. Very 
interestingly, 82 percent of poor Americans have air 
conditioning. I grew up in the South. We could not afford air 
conditioning when I was a boy. We treated it as a luxury. Over 
here, I think the most interesting one is close to two-thirds 
of all poor Americans in the United States have either cable or 
satellite TV. I am not saying that these people do not have to 
struggle to make ends meet, but they are also very far away 
from extreme deprivation as sometimes represented as their 
condition.
    Very interestingly, if you look at the housing of American 
poor people, we find that they have more housing space per 
square foot per person than does the average European, not poor 
Europeans, but the average person in Western Europe. They have 
more housing space than does that individual. Only about 5 
percent of poor people are overcrowded with less than one room 
per person. That is the normal definition for ``crowding.''
    Now, this is a very interesting chart. This is protein, and 
you can take any other nutriment you wanted to, but the little 
horizontal line is the recommended daily allowance. We have got 
poor kids and non poor kids and protein consumption. In almost 
every case, the protein consumption is twice the recommended 
daily allowance, and there is virtually no difference between 
the very affluent and the poor with respect to protein 
consumption. This is a measure of stuntedness. This is low-
income. Whether you are low for height, there is none in our 
country.
    Just move forward. Typically, in a typical month, 1 child 
in 400 in the United States skips one or more meals because the 
family lacks funds to buy food. That is regrettable, but it is 
only 1 child in 400.
    Now, if I can move forward a little bit more, this is the 
total expenditure on health, education and cash welfare in the 
United States and other countries according to the research of 
Tim Smeeding, who was to be here this morning, and he finds 
that total welfare benefits per household with children in the 
United States are actually higher than in any other nation in 
the world. Very interestingly, he, himself, said he was 
staggered by that piece of information.
    If I could just jump forward a bit more, it is important to 
recognize that 26 percent of all poor children in the United 
States are the children of immigrants, and close to 12 percent 
of all poor children are children of illegal immigrant parents. 
Over the last 20 years or so, we have imported 11 million high 
school dropouts from abroad, and they have made a staggering 
contribution to the poverty levels in this country. About 40 
percent of those individuals live in the United States and are 
poor as they live here. We will be unable to reduce poverty in 
the United States if we continue to have those record levels of 
very low-skill immigration, which we have had in the recent 
past.
    If we were to look at domestic-born individuals what we 
find are the major causes of poverty are a lack of work and a 
lack of marriage. If, in each poor family with children, a 
single parent family, if the mother were married to the father 
of that child, according to the data from Fragile Families, 75 
percent of those children would be immediately raised out of 
poverty by marriage. Also, the other major factor is that, 
although poor families do work, they work only about 800 hours 
a year, all right? They are working, but they are not working 
full time/full year.
    Our calculations using Census Bureau data say, if you took 
those poor families with children and raised the work level up 
to one adult working full time/full year, about 75 percent of 
those children would be raised out of poverty immediately.
    I think that both work and marriage are things where there 
is a potential consensus where we can all agree that those 
would have very strong anti poverty effects without undo 
expansion to the welfare system and without costly expansions 
of welfare, and those are the areas that I would suggest this 
Committee focus on as probably the most productive ways for 
reducing poverty in the future.
    Thank you so much.
    Chairman MCDERMOTT. Thank you.
    [The prepared statement of Mr. Rector follows:]
    Statement of Robert Rector, Senior Policy Analyst, The Heritage 
                               Foundation
    My name is Robert Rector. I am a Senior Research Fellow at The 
Heritage Foundation. The views I express in this testimony are my own, 
and should not be construed as representing any official position of 
The Heritage Foundation.
    Poverty is an important and emotional issue. Last year, the Census 
Bureau released its annual report on poverty in the United States 
declaring that there were 37 million poor persons living in this 
country in 2005, roughly the same level as the preceding year. To 
understand poverty in America, it is important to look behind these 
numbers--to look at the actual living conditions of the individuals the 
government deems to be poor.
    For most Americans, the word ``poverty'' suggests destitution: an 
inability to provide a family with nutritious food, clothing, and 
reasonable shelter. But only a small number of the 35 million persons 
classified as ``poor'' by the Census Bureau fit that description. While 
real material hardship certainly does occur, it is limited in scope and 
severity. Most of America's ``poor'' live in material conditions that 
would be judged as comfortable or well-off just a few generations ago. 
Today, the expenditures per person of the lowest-income one-fifth (or 
quintile) of households equal those of the median American household in 
the early 1970s, after adjusting for inflation.\1\
---------------------------------------------------------------------------
    \1\ Comparison of the average expenditure per person of the lowest 
quintile in 2001 with the middle quintile in 1973. Sources: U.S. 
Department of Labor, Bureau of Labor Statistics, Consumer Expenditure 
Survey: Integrated Diary and Interview Survey Data, 1972-73, Bulletin 
No. 1992, released in 1979, and U.S. Department of Labor, Bureau of 
Labor Statistics, Consumer Expenditures in 2001, Report No. 966, April 
2003. Figures adjusted for inflation by the personal consumption 
expenditure index.
---------------------------------------------------------------------------
    The following are facts about persons defined as ``poor'' by the 
Census Bureau, taken from various government reports:

      Forty-three percent of all poor households actually own 
their own homes. The average home owned by persons classified as poor 
by the Census Bureau is a three-bedroom house with one-and-a-half 
baths, a garage, and a porch or patio.
      Eighty-two percent of poor households have air 
conditioning. By contrast, 35 years ago, only 36 percent of the entire 
U.S. population enjoyed air conditioning.
      Only 6 percent of poor households are overcrowded. More 
than two-thirds have more than two rooms per person.
      The average poor American has more living space than the 
average individual living in Paris, London, Vienna, Athens, and other 
cities throughout Europe. (These comparisons are to the average 
citizens in foreign countries, not to those classified as poor.)
      Nearly three-quarters of poor households own a car; 30 
percent own two or more cars.
      Ninety-seven percent of poor households have a color 
television; over half own two or more color televisions.
      Seventy-eight percent have a VCR or DVD player; 62 
percent have cable or satellite TV reception.
      Seventy-three percent own microwave ovens, more than half 
have a stereo, and a more than a third have an automatic dishwasher.

    Overall, the typical American defined as poor by the government has 
a car, air conditioning, a refrigerator, a stove, a clothes washer and 
dryer, and a microwave. He has two color televisions, cable or 
satellite TV reception, a VCR or DVD player, and a stereo. He is able 
to obtain medical care. His home is in good repair and is not 
overcrowded. By his own report, his family is not hungry and he had 
sufficient funds in the past year to meet his family's essential needs. 
While this individual's life is not opulent, it is equally far from the 
popular images of dire poverty conveyed by the press, liberal 
activists, and politicians.
    As a group, America's poor are far from being chronically 
undernourished. The average consumption of protein, vitamins, and 
minerals is virtually the same for poor and middle-class children and, 
in most cases, is well above recommended norms. Poor children actually 
consume more meat than do higher-income children and have average 
protein intakes 100 percent above recommended levels. Most poor 
children today are, in fact, supernourished and grow up to be, on 
average, one inch taller and 10 pounds heavier that the GIs who stormed 
the beaches of Normandy in World War II.
    While the poor are generally well-nourished, some poor families do 
experience hunger, meaning a temporary discomfort due to food 
shortages. According to the U.S. Department of Agriculture (USDA), 13 
percent of poor families and 2.6 percent of poor children experience 
hunger at some point during the year. In most cases, their hunger is 
short-term. Eighty-nine percent of the poor report their families have 
``enough'' food to eat, while only 2 percent say they ``often'' do not 
have enough to eat.
    Of course, the living conditions of the average poor American 
should not be taken as representing all the poor. There is actually a 
wide range in living conditions among the poor. For example, over a 
quarter of poor households have cell phones and telephone answering 
machines, but, at the other extreme, approximately one-tenth have no 
phone at all. While the majority of poor households do not experience 
significant material problems, roughly a third do experience at least 
one problem such as overcrowding, temporary hunger, or difficulty 
getting medical care.
    While it is often argued that the U.S. devotes far fewer resources 
to social welfare spending than other rich nations, the facts show 
otherwise. Per household, social welfare benefits for families with 
children (including cash and near cash benefits, education, and health 
care) are higher in the United States than in any other nation. 
Further, economic inequality, as measured by the ratio of economic 
resources available to the least affluent decile compared to the median 
household, is not appreciably greater in the U.S. than most other rich 
nations once health care and education spending are included.\2\
---------------------------------------------------------------------------
    \2\ Irwin Garfinkel, Lee Rainwater, and Timothy Smeeding, ``A Re-
examinaiton of Welfare States and Inequality in Rich Nations: How In-
Kind Transfers and Indirect Taxes Change the Story,'' Journal of Policy 
Analysis, and Management, Volume 25, No. 4, 2006. A more detailed 
discussion of this issue is presented later in the text.
---------------------------------------------------------------------------
    The good news is that remaining poverty can readily be reduced 
further, particularly among children. There are two main reasons that 
American children are poor: Their parents don't work much, and fathers 
are absent from the home.
    In good economic times or bad, the typical poor family with 
children is supported by only 800 hours of work during a year: That 
amounts to 16 hours of work per week. If work in each family were 
raised to 2,000 hours per year--the equivalent of one adult working 40 
hours per week throughout the year--nearly 75 percent of poor children 
would be lifted out of official poverty.
    Father absence is another major cause of child poverty. Nearly two-
thirds of poor children reside in single-parent homes; each year, an 
additional 1.3 million children are born out of wedlock. If poor 
mothers married the fathers of their children, almost three-quarters 
would immediately be lifted out of poverty.
    While work and marriage are steady ladders out of poverty, the 
welfare system perversely remains hostile to both. Major programs such 
as food stamps, public housing, and Medicaid continue to reward 
idleness and penalize marriage. If welfare could be turned around to 
encourage work and marriage, remaining poverty would drop quickly.
    Finally, it is important to note the important role immigration 
plays in increasing poverty in the United States. Over the last twenty 
years, the U.S. has admitted an unprecedented stream of low skill 
immigrants, with over 11 million high school drop outs coming to reside 
in the U.S. both legally and illegally. This mass influx of low skill 
immigrants has led to dramatic a dramatic increase in the number of 
poor persons in the nation. Today, more than one in poor child in four 
in the U.S. is the child of first generation immigrant parents. Some 12 
percent of poor children in the U.S. are the children of illegal 
immigrant parents. The U.S. will be unable to make further progress 
against poverty as long as this flood of low skill immigration 
continues.\3\
---------------------------------------------------------------------------
    \3\ Robert Rector, ``Importing Poverty: Immigration and Poverty in 
the United States,'' Heritage Special Report, SR9., October 25, 2006.
---------------------------------------------------------------------------
What is Poverty?
    For most Americans, the word ``poverty'' suggests destitution: an 
inability to provide a family with nutritious food, clothing, and 
reasonable shelter. For example, the ``Poverty Pulse'' poll taken by 
the Catholic Campaign for Human Development in 2002 asked the general 
public the question: ``How would you describe being poor in the U.S.?'' 
The overwhelming majority of responses focused on homelessness, hunger 
or not being able to eat properly, and not being able to meet basic 
needs.\4\
---------------------------------------------------------------------------
    \4\ See Campaign for Human Development, Poverty Pulse, January 
2002, at www.usccb.org/cchd/povertyusa/povpulse.htm. Interestingly, 
only about 1 percent of those surveyed regarded poverty in the terms 
the government does: as having an income below a specified level.
---------------------------------------------------------------------------
    But if poverty means lacking nutritious food, adequate warm 
housing, and clothing for a family, relatively few of the 37 million 
people identified as being ``in poverty'' by the Census Bureau could be 
characterized as poor.\5\ While material hardship does exist in the 
United States, it is quite restricted in scope and severity. The 
average ``poor'' person, as defined by the government, has a living 
standard far higher that the public imagines.
---------------------------------------------------------------------------
    \5\ The Census Bureau defines an individual as poor if his or her 
household income falls below certain specified income thresholds. These 
thresholds vary by family size. In 2002, a family of four was deemed 
poor if their annual income fell below $18,556; a family of three was 
deemed poor if annual income was below $14,702. There are a number of 
problems with the Census Bureau's poverty figures: Census undercounts 
income, ignores assets accumulated in prior years, and disregards non-
cash welfare such as food stamps and public housing in its official 
count of income. However, the most important problem with Census 
figures is that, even if a family's income falls below the official 
poverty thresholds, the family's actual living conditions are likely to 
be far higher than the image most Americans have in mind when they hear 
the word ``poverty.''
---------------------------------------------------------------------------
Ownership of Property and Amenities Among the Poor
    Table 1 shows the ownership of property and consumer durables among 
poor households. The data are taken from the American Housing Survey 
for 2001, conducted by the U.S. Department of Housing and Urban 
Development and the Census Bureau, and the Residential Energy 
Consumption Survey conducted by the U.S. Department of Energy.\6\
---------------------------------------------------------------------------
    \6\ U.S. Department of Commerce and U.S. Department of Housing and 
Urban Development, American Housing Survey for the United States: 2001; 
U.S Department of Energy, Housing Characteristics, 2001, Appliances 
Tables, at www.eia.doe.gov/emeu/consumption.


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    As the table shows, some 43 percent of poor households own their 
own home. The typical home owned by the poor is a three-bedroom house 
with one-and-a-half baths. It has a garage or carport and a porch or 
patio and is located on a half-acre lot. The house was constructed in 
1967 and is in good repair. The median value of homes owned by poor 
households was $86,600 in 2001 or 70 percent of the median value of all 
homes owned in the United States.\7\
---------------------------------------------------------------------------
    \7\ U.S Department of Commerce and U.S. Department of Housing and 
Urban Development, American Housing Survey for the United States: 2001, 
Tables 3-1, 3-14.
---------------------------------------------------------------------------
    Some 73 percent of poor households own a car or truck; nearly a 
third own two or more cars or trucks. Over eighty percent have air 
conditioning; by contrast, 35 years ago, only 36 percent of the general 
U.S. population had air conditioning. Nearly three-quarters of poor 
households own microwaves; a third have automatic dishwashers.
    Poor households are well-equipped with modern entertainment 
technology. It should come as no surprise that nearly all (97 percent) 
of poor households have color TVs, but more than half actually own two 
or more color televisions. One-quarter own large-screen televisions, 78 
percent have a VCR or DVD player, and almost two-thirds have cable or 
satellite TV reception. Some 58 percent own a stereo. More than a third 
have telephone answering machines, while a quarter have personal 
computers. While these numbers do not suggest lives of luxury, they are 
notably different from conventional images of poverty.
Housing Conditions
    A similar disparity between popular conceptions and reality applies 
to the housing conditions of the poor. Most poor Americans live in 
houses or apartments that are relatively spacious and in good repair. 
As Chart 1 shows, 54 percent of poor households live in single-family 
homes, either unattached single dwellings or attached units such as 
townhouses. Another 36.4 percent live in apartments, and 9.6 percent 
live in mobile homes.\8\
---------------------------------------------------------------------------
    \8\ U.S. Department of Commerce and U.S. Department of Housing and 
Urban Development, American Housing Survey for the United States: 2001, 
p. 42.


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

Housing Space
    Both the overall U.S. population and the poor in America live, in 
general, in very spacious housing. As Table 2 shows, 70 percent of all 
U.S. households have two or more rooms per tenant. Among the poor, this 
figure is 68 percent.



    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    Crowding is quite rare; only 2.5 percent of all households and 5.7 
percent of poor households are crowded with more than one person per 
room.\9\ By contrast, social reformer Jacob Riis, writing on tenement 
living conditions around 1890 in New York City, described crowded 
families living with four or five persons per room and some 20 square 
feet of living space per person.\10\
---------------------------------------------------------------------------
    \9\ Ibid., p. 46.
    \10\ Jacob Riis, How the Other Half Lives (New York: Dover Press, 
1971), pp. 6, 41, 59.
---------------------------------------------------------------------------
    Housing space can also be measured by the number of square feet per 
person. The Residential Energy Consumption survey conducted by the U.S. 
Department of Energy shows that Americans have an average of 721 square 
feet of living space per person. Poor Americans have 439 square 
feet.\11\ Reasonably comparable international square-footage data are 
provided by the Housing Indicator Program of the United Nations Center 
for Human Settlements, which surveyed housing conditions in major 
cities in 54 different nations. This survey showed the United States to 
have by far the most spacious housing units, with 50 percent to 100 
percent more square footage per capita than city dwellers in other 
industrialized nations.\12\
---------------------------------------------------------------------------
    \11\ U.S. Department of Energy, Housing Characteristics 1993, 1995, 
pp. 46, 47. The figures in the text refer to total living space, 
including both heated and non-heated living space.
    \12\ United Nations Centre for Human Settlements and the World 
Bank, The Housing Indicators Program, Vol. II: Indicator Tables (New 
York: United Nations, 1993), Table 5.



    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    America's poor compare favorably with the general population of 
other nations in square footage of living space. The average poor 
American has more square footage of living space than does the average 
person living in London, Paris, Vienna, and Munich. Poor Americans have 
nearly three times the living space of average urban citizens in 
middle-income countries such as Mexico and Turkey. Poor American 
households have seven times more housing space per person than the 
general urban population of very-low-income countries such as India and 
China. (See Appendix Table A for more detailed information.)
    Some critics have argued that the comparisons in Table 3 are 
misleading.\13\ These critics claim that U.S. housing in general cannot 
be compared to housing in specific European cities such as Paris or 
London because housing in these cities is unusually small and does not 
represent the European housing stock overall. To assess the validity of 
this argument, Table 4 presents national housing data for 15 West 
European countries. These data represent the entire national housing 
stock in each of the 15 countries. In general, the national data on 
housing size are similar to the data on specific European cities 
presented in Table 3 and Appendix Table A.
---------------------------------------------------------------------------
    \13\ See Katha Pollitt, ``Poverty: Fudging the Numbers,'' The 
Nation, November 2, 1998. Pollitt argues that it is misleading to 
compare the living space of poor Americans nationwide to that of 
average citizens in major cities in other nations, since European 
cities, in particular, have small housing units that are not 
representative of their entire nations. However, the author of the 
United Nations Housing Indicators report asserts that, in most cases, 
the average housing size in major cities can be taken as roughly 
representative of the nation as a whole. A comparison of the data in 
Table 4 and Appendix Table A would appear to confirm this.
---------------------------------------------------------------------------
    As Table 4 shows, U.S. housing (with an average size of 1,875 
square feet per unit) is nearly twice as large as European housing 
(with an average size of 976 square feet per unit.) After adjusting for 
the number of persons in each dwelling unit, Americans have an average 
of 721 square feet per person, compared to 396 square feet for the 
average European.
    The housing of poor Americans (with an average of 1,228 square feet 
per unit) is smaller than that of the average American but larger than 
that of the average European (who has 976 square feet per unit). 
Overall, poor Americans have an average of 439 square feet of living 
space per person, which is as much as or more than the average citizen 
in most West European countries. (This comparison is to the average 
European, not poor Europeans.)


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

Housing Quality
    Of course, it might be possible that the housing of poor American 
households could be spacious but still dilapidated or unsafe. However, 
data from the American Housing Survey indicate that such is not the 
case. For example, the survey provides a tally of households with 
``severe physical problems.'' Only a tiny portion of poor households 
and an even smaller portion of total households fall into that 
category.
    The most common ``severe problem,'' according to the American 
Housing Survey, is a shared bathroom, which occurs when occupants lack 
a bathroom and must share bathroom facilities with individuals in a 
neighboring unit. This condition affects about 1 percent of all U.S. 
households and 2 percent of all poor households. About one-half of 1 
percent (0.5 percent) of all households and 2 percent of poor 
households have other ``severe physical problems.'' The most common are 
repeated heating breakdowns and upkeep problems.
    The American Housing Survey also provides a count of households 
affected by ``moderate physical problems.'' A wider range of households 
falls into this category--9 percent of the poor and nearly 5 percent of 
total households. However, the problems affecting these units are 
clearly modest. While living in such units might be disagreeable by 
modern middle-class standards, they are a far cry from Dickensian 
squalor. The most common problems are upkeep, lack of a full kitchen, 
and use of unvented oil kerosene or gas heaters as the primary heat 
source. (The last condition occurs almost exclusively in the South.)
Hunger and Malnutrition in America
    There are frequent charges of widespread hunger and malnutrition in 
the United States.\14\ To understand these assertions, it is important, 
first of all, to distinguish between hunger and the more severe problem 
of malnutrition. Malnutrition (also called undernutrition) is a 
condition of reduced health due to a chronic shortage of calories and 
nutriments. There is little or no evidence of poverty-induced 
malnutrition in the United States.
---------------------------------------------------------------------------
    \14\ See, for example, A Survey of Childhood Hunger in the United 
States (Washington, D.C.: Food Research Action Center, Community 
Childhood Hunger Identification Project, 1995) and ``1997 National 
Research Study,'' in Hunger 1997: The Faces and Facts (Chicago, Ill.: 
America's Second Harvest, 1997).
---------------------------------------------------------------------------
    Hunger is a far less severe condition: a temporary but real 
discomfort caused by an empty stomach. The government defines hunger as 
``the uneasy or painful sensation caused by lack of food.'' \15\ While 
hunger due to a lack of financial resources does occur in the United 
States, it is limited in scope and duration. According to the USDA, on 
a typical day, fewer than one American in 200 will experience hunger 
due to a lack of money to buy food.\16\ The hunger rate rises somewhat 
when examined over a longer time period; according to the USDA, some 
6.9 million Americans, or 2.4 percent of the population, were hungry at 
least once during 2002.\17\ Nearly all hunger in the United States is 
short-term and episodic rather than continuous.\18\
---------------------------------------------------------------------------
    \15\ U.S. Department of Agriculture, Household Food Security in the 
United States in 1995: Summary Report for the Food Security Measurement 
Project, 1997, p. 5.
    \16\ In all cases, the figures concerning hunger in this paper 
refer solely to hunger caused by a lack of funds to buy food and do not 
include hunger that is attributed to any other cause.
    \17\ Mark Nord, Margaret Andrews, and Steven Carlson, Household 
Food Security in the United States, 2002, U.S. Department of 
Agriculture, October 2003, p. 7. The numbers in the text were taken 
from Table 1 of the USDA publication. Many individuals reside in 
households where at least one family member but not all family members 
experienced hunger. This is particularly true among families with 
children where the adults are far more likely than the children to 
experience hunger. According to Table 1of Household Food Security in 
the United States, 2002, 9.3 million persons lived in a household where 
at least one household member experienced hunger; however, not all of 
these persons experienced hunger themselves. The number of persons who 
experienced hunger individually was lower: 6.8 million people, 
including 6.3 million adults and 567,000 children.
    \18\ The numbers of persons identified as hungry throughout this 
paper correspond to individuals that the USDA identifies as ``food 
insecure with hunger.'' The USDA also has a second, broader category: 
``food insecure without hunger.'' As the term implies, these 
individuals are not hungry. They may, however, at certain times in the 
year be forced to eat cheaper foods or a narrower range of foods than 
those to which they are ordinarily accustomed. According to the USDA, 
7.6 percent of all households were ``food insecure without hunger'' in 
2002. Food advocacy groups often inaccurately include the households 
that are ``food insecure without hunger'' in the count of households 
that are deemed hungry.
---------------------------------------------------------------------------
    Some 92 percent of those who experienced hunger in 2002 were 
adults, and only 8 percent were children. Overall, some 567,000 
children, or 0.8 percent of all children, were hungry at some point in 
2002. In a typical month, roughly one child in 400 skipped one or more 
meals because the family lacked funds to buy food.
    Not only is hunger relatively rare among U.S. children, but it has 
declined sharply since the mid-1990s. As Chart 2 shows, the number of 
hungry children was cut by a third between 1995 and 2002. According to 
the USDA, in 1995, there were 887,000 hungry children: by 2002, the 
number had fallen to 567,000.\19\
---------------------------------------------------------------------------
    \19\ Nord, Andrews, and Carlson, Food Security in the United 
States, 2002, p. 7. Additional data provided by USDA.


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    Overall, some 97 percent of the U.S. population lived in families 
that reported they had ``enough food to eat'' during the entire year, 
although not always the kinds of foods they would have preferred. 
Around 2.5 percent stated their families ``sometimes'' did not have 
``enough to eat'' due to money shortages, and one-half of 1 percent 
(0.5 percent) said they ``often'' did not have enough to eat due to a 
lack of funds. (See Chart 3.)
Hunger and Poverty
    Among the poor, the hunger rate was obviously higher: During 2002, 
12.8 percent of the poor lived in households in which at least one 
member experienced hunger at some point.\20\ Among poor children, 2.4 
percent experienced hunger at some point in the year.\21\ Overall, most 
poor households were not hungry and did not experience food shortages 
during the year.
---------------------------------------------------------------------------
    \20\ Nord, Andrews, and Carlson, Food Security in the United 
States, 2002, p. 16.
    \21\ Ibid., p. 17.
---------------------------------------------------------------------------
    When asked, some 89 percent of poor households reported they had 
``enough food to eat'' during the entire year, although not always the 
kinds of food they would prefer. Around 9 percent stated they 
``sometimes'' did not have enough to eat because of a lack of money to 
buy food. Another 2 percent of the poor stated that they ``often'' did 
not have enough to eat due to a lack of funds.\22\ (See Chart 3.)
---------------------------------------------------------------------------
    \22\ Calculated from USDA food security survey for 2001.


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
Poverty and Malnutrition
    It is widely believed that a lack of financial resources forces 
poor people to eat low-quality diets that are deficient in nutriments 
and high in fat. However, survey data show that nutriment density 
(amount of vitamins, minerals, and protein per kilocalorie of food) 
does not vary by income class.\23\ Nor do the poor consume higher-fat 
diets than do the middle class; the percentage of persons with high fat 
intake (as a share of total calories) is virtually the same for low-
income and upper-middle-income persons.\24\ Overconsumption of calories 
in general, however, is a major problem among the poor, as it is within 
the general U.S. population.
---------------------------------------------------------------------------
    \23\ C. T. Windham et al., ``Nutrient Density of Diets in the USDA 
Nationwide Food Consumption Survey, 1977-1978: Impact of Socioeconomic 
Status on Dietary Density,'' Journal of the American Dietetic 
Association, January 1983.
    \24\ Interagency Board for Nutrition Monitoring and Related 
Research, Third Report on Nutrition Monitoring in the United States 
(Washington, D.C.: U.S. Government Printing Office, 1995), p. VA 167.
---------------------------------------------------------------------------
    Examination of the average nutriment consumption of Americans 
reveals that age and gender play a far greater role than income class 
in determining nutritional intake. For example, the nutriment intakes 
of adult women in the upper middle class (with incomes above 350 
percent of the poverty level) more closely resemble the intakes of poor 
women than they do those of upper-middle-class men, children, or 
teens.\25\ The average nutriment consumption of upper-middle-income 
preschoolers, as a group, is virtually identical with that of poor 
preschoolers but not with the consumption of adults or older children 
in the upper middle class.
---------------------------------------------------------------------------
    \25\ U.S. Department of Agriculture, Food and Nutrient Intakes by 
Individuals in the United States, 1 Day, 1989-91, Nationwide Food 
Survey Report No. 91-2, 1995.
---------------------------------------------------------------------------
    This same pattern holds for adult males, teens, and most other age 
and gender groups. In general, children aged 0-11 years have the 
highest average level of nutriment intakes relative to the recommended 
daily allowance (RDA), followed by adult and teen males. Adult and teen 
females have the lowest level of intakes. This pattern holds for all 
income classes.
Nutrition and Poor Children
    Government surveys provide little evidence of widespread 
undernutrition among poor children; in fact, they show that the average 
nutriment consumption among the poor closely resembles that of the 
upper middle class. For example, children in families with incomes 
below the poverty level actually consume more meat than do children in 
families with incomes at 350 percent of the poverty level or higher 
(roughly $65,000 for a family of four in today's dollars).


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    Table 5 shows the average intake of protein, vitamins, and minerals 
as a percentage of the recommended daily allowance among poor and 
middle-class children at various age levels.\26\ The intake of 
nutriments is very similar for poor and middle-class children and is 
generally well above the recommended daily level. For example, the 
consumption of protein (a relatively expensive nutriment) among poor 
children is, on average, between 150 percent and 267 percent of the 
RDA.
---------------------------------------------------------------------------
    \26\ Ibid., Tables 10-1, 10-4. Table 4 in the present paper also 
provides the ``mean adequacy ratio'' for various groups. The mean 
adequacy ratio represents average intake of all the nutriments listed 
as a percent of RDA. However, in computing mean adequacy, intake values 
exceeding 100 percent of RDA are counted at 100, since the body cannot 
use an excess consumption of one nutriment to fill a shortfall of 
another nutriment.
---------------------------------------------------------------------------
    When shortfalls of specific vitamins and minerals appear (for 
example, among teenage girls), they tend to be very similar for the 
poor and the middle class. While poor teenage girls, on average, tend 
to underconsume vitamin E, vitamin B-6, calcium, phosphorus, magnesium, 
iron, and zinc, a virtually identical underconsumption of these same 
nutriments appears among upper-middle-class girls.
Poor Children's Weight and Stature
    On average, poor children are very well-nourished, and there is no 
evidence of widespread significant undernutrition. For example, two 
indicators of undernutrition among the young are ``thinness'' (low 
weight for height) and stuntedness (low height for age). These problems 
are rare to nonexistent among poor American children.
    The generally good health of poor American children can be 
illustrated by international comparisons. Table 6 provides data on 
children's size based on the World Health Organization (WHO) Global 
Data Base on Child Growth: Children are judged to be short or 
``stunted'' if their height falls below the 2.3 percentile level of 
standard height-to-age tables.\27\ Table 6 shows the percentage of 
children under age five in developing nations who are judged to be 
``stunted'' by this standard.
---------------------------------------------------------------------------
    \27\ The World Health Organization uses standard height-for-age 
tables developed by the National Center for Health Statistics at the 
Centers for Disease Control and Prevention of the U.S. Department and 
Health and Human Services.


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    In developing nations as a whole, some 43 percent of children are 
stunted. In Africa, more than a third of young children are affected; 
in Asia, nearly half.\28\ By contrast, in the United States, some 2.6 
percent of young children in poor households are stunted by a 
comparable standard--a rate only slightly above the expected standard 
for healthy, well-nourished children.\29\ While concern for the well-
being of poor American children is always prudent, the data overall 
underscore how large and well-nourished poor American children are by 
global standards.
---------------------------------------------------------------------------
    \28\ M. de Onis and J. P. Habicht, ``Anthropometric Reference Data 
for International Use: Recommendations from a World Health Organization 
Expert Committee,'' American Journal of Clinical Nutrition, 1996, pp. 
650-658.
    \29\ Calculation by the authors using National Health and Nutrition 
Evaluation Survey III data and WHO standard tables for shortness for 
age. Shortness for age is the result of genetic variation as well as 
nutritional factors. The World Health Organization standards assume 
that even in a very well-nourished population, 2.3 percent of children 
will have heights below the ``stunted'' cut-off levels due to normal 
genetic factors. Problems are apparent if the number of short children 
in a population rises appreciably above that 2.3 percent.
---------------------------------------------------------------------------
    Throughout this century, improvements in nutrition and health have 
led to increases in the rate of growth and ultimate height and weight 
of American children. Poor children have clearly benefited from this 
trend. Poor boys today at ages 18 and 19 are actually taller and 
heavier than boys of similar age in the general U.S. population in the 
late 1950s. Poor boys living today are one inch taller and some 10 
pounds heavier than GIs of similar age during World War II, and nearly 
two inches taller and 20 pounds heavier than American doughboys back in 
World War I.\30\
---------------------------------------------------------------------------
    \30\ Bernard D. Karpinos, ``Current Height and Weight of Youths of 
Military Age,'' Human Biology, 1961, pp. 336-364. Recent data on young 
males in poverty provided by the National Center for Health Statistics 
of the U.S. Department of Health and Human Services, based on the 
second National Health and Nutrition Examination Survey.
---------------------------------------------------------------------------
Poverty and Obesity
    The principal nutrition-related health problem among the poor, as 
with the general U.S. population, stems from the overconsumption, not 
underconsumption, of food. While overweight and obesity are prevalent 
problems throughout the U.S. population, they are found most frequently 
among poor adults. Poor adult men are slightly less likely than non-
poor men to be overweight (30.4 percent compared to 31.9 percent); but, 
as Chart 4 shows, poor adult women are significantly more likely to be 
overweight than are non-poor women (47.3 percent compared to 32 
percent).\31\
---------------------------------------------------------------------------
    \31\ Interagency Board for Nutrition Monitoring and Related 
Research, Third Report on Nutrition Monitoring, Vol. 2, p. VA 219.


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

Living Conditions and Hardships Among the Poor
    Overall, the living standards of most poor Americans are far higher 
than is generally appreciated. The overwhelming majority of poor 
families are well-housed, have adequate food, and enjoy a wide range of 
modern amenities, including air conditioning and cable television. Some 
70 percent of poor households report that during the course of the past 
year they were able to meet ``all essential expenses,'' including 
mortgage, rent, utility bills, and important medical care.\32\ (See 
Chart 5.)
---------------------------------------------------------------------------
    \32\ Calculated from U.S. Bureau of the Census, Survey of Income 
and Program Participation, Extended Measures of Well-being Module, 
1998.
---------------------------------------------------------------------------
    However, two caveats should be applied to this generally optimistic 
picture. First, many poor families have difficulty paying their regular 
bills and must scramble to make ends meet. For example, around one-
quarter of poor families are late in paying the rent or utility bills 
at some point during the year.
    Second, the living conditions of the average poor household should 
not be taken to represent all poor households. There is a wide range of 
living conditions among the poor; while more than a quarter of the poor 
have cell phones and answering machines, a tenth of the poor have no 
telephone at all. While most of America's poor live in accommodations 
with two or more rooms per person, roughly a tenth of the poor are 
crowded, with less than one room per person.


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    These points are illustrated in Table 7, which lists the financial 
and material hardships among poor households in 1998.\33\ During at 
least one month in the preceding year, some 20 percent of poor 
households reported they were unable to pay their fuel, gas, or 
electric bills promptly; around 4 percent had their utilities cut off 
at some point due to nonpayment. Another 13 percent of poor households 
failed, at some point in the year, to make their full monthly rent or 
mortgage payments, and 1 percent were evicted due to failure to pay 
rent. One in 10 poor families had their phones disconnected due to 
nonpayment at some time during the preceding year.
---------------------------------------------------------------------------
    \33\ Calculated from U.S. Bureau of the Census, Survey of Income 
and Program Participation, Extended Measures of Well-being Module, 
1998.


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    Overall, more than one-quarter of poor families experienced at 
least one financial difficulty during the year. Most had a late payment 
of rent or utility bills. Some 12 percent had phones or utilities cut 
off or were evicted.
    Poor households also experienced the material problems listed on 
Table 7.\34\ Some 14 percent lacked medical insurance and had a family 
member who needed to go to a doctor or hospital but did not go; 11 
percent experienced hunger in the household; and around 9 percent were 
overcrowded, with more than one person per room. Slightly less than 4 
percent of poor households experienced upkeep problems with the 
physical conditions of their apartments or homes, having three or more 
of the physical problems listed in Table 7.
---------------------------------------------------------------------------
    \34\ The Survey of Income and Program Participation, Extended 
Measures of Well-being Module also contains a question about whether 
members of the household needed to see a dentist but did not go. 
Because the question does not specify whether or not the failure to 
visit the dentist was due to an inability to pay, we did not include 
the question in this report.
---------------------------------------------------------------------------
Overall Hardship
    Altogether, around 58 percent of poor households experienced none 
of the financial or physical hardships listed in Table 7 These families 
were able to pay all their bills on time. They were able to obtain 
medical care if needed, were not hungry or crowded, and had few upkeep 
problems in the home. Another 20 percent of poor households experienced 
one financial or material problem during the year. Around 10 percent of 
poor households had two financial or material problems, while 12 
percent had three or more.
    The most common problem facing poor households was late payment of 
rent or utilities. While having difficulty paying monthly bills is 
stressful, in most cases late payment did not result in material 
hardship or deprivation. If late payment problems are excluded from the 
count, we find that two-thirds of poor households had none of the 
remaining problems listed in Table 7. Some 22 percent had one problem, 
and 12 percent had two or more problems.
    While it is appropriate to be concerned about the difficulties 
faced by some poor families, it is important to keep these problems in 
perspective. Many poor families have intermittent difficulty paying 
rent or utility bills but remain very well-housed by historic or 
international standards. Even poor families who are overcrowded and 
hungry, by U.S. standards, are still likely to have living conditions 
that are far above the world average.
Cross National Comparisons of Social Welfare Expenditures
    Studies that compare the size and effects of the U.S. social 
welfare system with welfare in other nations usually restrict the 
comparison to cash welfare transfers. This can be misleading. The 
difference between the U.S. and other rich nations is not so much in 
the level of spending but in the type of spending. Comparatively, the 
U.S. spends little on cash aid for the non-elderly but a great deal on 
education and medical care. As leading poverty scholars, Timothy 
Smeeding, Irv Garfinkel and Lee Rainwater write, ``studies that take 
account of only cash transfers are omitting about half of the total 
redistribution accomplished by welfare states. . . . Americans are 
small spenders on cash support but big spenders on education and 
especially health care.''\35\
---------------------------------------------------------------------------
    \35\ Garfinkel, et al, 2006, p. 905.
---------------------------------------------------------------------------
    The U.S. differs from other rich nations in another important 
respect. In European nations, government medical care programs cover 
the entire population, rich and poor; whereas, in the U.S., government 
directly funds the health care only of the elderly (through Medicare) 
and the poor (mainly through Medicaid). Consequently, European social 
welfare spending may appear large because their government health care 
programs cover everyone, while in the U.S., most working and middle 
class families receive health care through employer provided coverage. 
A meaningful comparison of expenditures thus must either include 
employer provided care or exclude European government expenditures on 
the non-elderly middle class.
    A third major difference between the U.S. and other rich nations is 
that those nations rely far more on regressive indirect taxes, such at 
the Value Added Tax, which fall heavily on consumers. These indirect 
taxes take back a significant portion of the cash welfare aid these 
societies give out. Since nations differ in the degree to which social 
welfare benefits are taxed, the best measure of comparison would be a 
comprehensive count of post tax benefits.
    The pioneering analysis of Garfinkel, Rainwater, and Smeeding 
provides the best comparison of social welfare spending in the U.S. and 
other countries and its effect on inequality. This analysis provides a 
comprehensive post tax count of social welfare spending including: 
government pension aid, cash and near cash welfare, public spending on 
primary and secondary education, and health care spending including 
employer provided coverage. Their analysis finds that the post tax 
value of social welfare spending in the U.S. equals around 25 percent 
of Gross Domestic Product (GDP) (about 4 to 5 percent points of this 
figure represents employer-provided health care). U.S. spending as a 
share of GDP is greater than the share in Australia, Canada and the 
Netherlands but less than other rich nations. The highest level of 
social welfare spending by this measure occurs in Belgium where social 
welfare spending is slightly more than 30 percent of GDP.\36\
---------------------------------------------------------------------------
    \36\ Ibid., p. 906
---------------------------------------------------------------------------
    However, social welfare spending as a share of GDP can be somewhat 
misleading since the U.S. has a substantially higher GDP per capita 
than most European nations. It is therefore possible for the U.S. to 
spend less on social welfare as a share of GDP while still having 
higher absolute spending per person. The analysis of Smeeding, et. al., 
finds this is the case. In fact, social welfare spending per capita is 
higher in the U.S. than in all the other rich nations studied except 
Sweden.\37\
---------------------------------------------------------------------------
    \37\ Irwin Garfinkel, Lee Rainwater, and Timothy Smeeding, ``Equal 
Opportunities for Children: Social Welfare Expenditures in the English-
speaking countries and Westen Europe,'' Focus, Vol. 23. no. 3, Spring 
2005, p. 19.
---------------------------------------------------------------------------
    With respect to social welfare spending on children, the picture is 
even more favorable for the U.S. In 2000, social welfare spending in 
the U.S. (including cash and near cash benefits, primary and secondary 
public education, and health care) averaged $23,982 for each household 
with children. This spending level exceeded all the other rich nations 
in the study; it was nearly twice the Australian level and almost 50 
percent higher than the level in France. Smeeding, Garfinkel, and 
Rainwater write, ``For those of us who cling to the notion that the 
United States welfare state is undersized, the absolute size of the 
United States total mean and median welfare state benefits per 
household with children--$22,259 [median] (or $23,982 mean)--is 
staggering once one includes health and education spending.'' \38\
---------------------------------------------------------------------------
    \38\ Irwin Garfinkel, Lee Rainwater, and Timothy Smeeding, 
``Welfare State Expenditures and the Distribution of Child 
Opportunities,'' Luxembourg Income Study Working Papers Series, No. 
379, June 2004, p 18.
---------------------------------------------------------------------------
    Their analysis also shows that the widespread belief that the U.S. 
is far more unequal than other nations is misplaced, at least with 
respect to the bottom half of the income distribution. If all 
households are arrayed in order from the lowest to the highest level of 
economic resources, the ratio of the income of household at the tenth 
percentile from the bottom to the income of the median household is 
called the P10/P50 ratio. Including all social welfare spending, the 
P10/P50 ratio in the U.S. is 53 percent. This is slightly higher than 
the ratios in Australia and Canada, and slightly lower than the ratios 
of European countries. The greatest equality by this measure is found 
in Sweden which has a P10/P50 ratio of 58 percent.\39\ Smeeding, et al, 
conclude that the equality of rich nations is very similar by this 
measure, and that cross national differences in the P10/P50 ratios of 
rich nations, including the U.S, are ``barely distinguishable.'' \40\ 
Finally, the fact that the U.S. is richer than the other nations in the 
comparison creates the possibility that the absolute economic resources 
devoted to U.S. households in the bottom decile may exceed the absolute 
resources of comparable households in European nations.
---------------------------------------------------------------------------
    \39\ Garfinkel, et al, 2006, p. 908.
    \40\ Ibid., p. 907.
---------------------------------------------------------------------------
    Smeeding, Garfinkel, and Rainwater conclude, ``what distinguishes 
the United States from other rich nations is not so much the overall 
level of spending or the degree of inequality of total resources at the 
bottom of the income distribution, but rather the kind of resources 
being transferred. Comparatively speaking, the United States spends 
enough on health care transfers to reduce the economic distance between 
low income families and average income families nearly as much as do 
other rich nations.'' \41\ The authors do question whether the far 
higher per capita medical spending levels in the U.S. actually 
translate into higher quality care compared to other nations and find 
that issue is, as yet, unresolved.\42\
---------------------------------------------------------------------------
    \41\ Ibid., p. 913.
    \42\ Ibid., p. 914.
---------------------------------------------------------------------------
Reducing Child Poverty
    The generally high living standards of poor Americans are good 
news. Even better is the fact that our nation can readily reduce 
remaining poverty, especially among children. To accomplish this, we 
must focus on the main causes of child poverty: low levels of parental 
work and high levels of single parenthood.
    In good economic times or bad, the typical poor family with 
children is supported by only 800 hours of work during a year: That 
amounts to 16 hours of work per week. If work in each family were 
raised to 2,000 hours per year--the equivalent of one adult working 40 
hours per week through the year--nearly 75 percent of poor children 
would be lifted out of official poverty.\43\
---------------------------------------------------------------------------
    \43\ Robert E. Rector and Rea S. Hederman, Jr., ``The Role of 
Parental Work in Child Poverty,'' Heritage Foundation Center for Data 
Analysis Report No. CDA03-01, January 27, 2003.


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    The decline in marriage is the second major cause of child poverty. 
Nearly two-thirds of poor children reside in single-parent homes; each 
year, an additional 1.3 million children are born out of wedlock. 
Increasing marriage would substantially reduce child poverty: If poor 
mothers married the fathers of their children, almost three-quarters 
would immediately be lifted out of poverty.\44\
---------------------------------------------------------------------------
    \44\ Robert E. Rector, Kirk A. Johnson, Ph.D., Patrick F. Fagan, 
and Lauren R. Noyes, ``Increasing Marriage Would Dramatically Reduce 
Child Poverty,'' Heritage Foundation Center for Data Analysis Report 
No. CDA03-06, May 20, 2003.
---------------------------------------------------------------------------
    In recent years, the United States has established a reasonable 
record in reducing child poverty. Successful anti-poverty policies were 
partially implemented in the welfare reform legislation of 1996, which 
replaced the old Aid to Families with Dependent Children (AFDC) program 
with a new program called Temporary Assistance to Needy Families 
(TANF).
    A key element of this reform was a requirement that some welfare 
mothers either prepare for work or get jobs as a condition of receiving 
aid. As this requirement went into effect, welfare rolls plummeted and 
employment of single mothers increased in an unprecedented manner. As 
employment of single mothers rose, child poverty dropped rapidly. For 
example, in the quarter-century before welfare reform, there was no net 
change in the poverty rate of children in single-mother families; after 
reform was enacted, the poverty rate dropped in an unprecedented 
fashion, falling from 53.1 percent in 1995 to 39.8 percent in 2001.\45\
---------------------------------------------------------------------------
    \45\ Robert Rector and Patrick F. Fagan, ``The Continuing Good News 
About Welfare Reform,'' Heritage Foundation Backgrounder No. 1620, 
February 6, 2003.
---------------------------------------------------------------------------
    In general, however, welfare reform has been limited in both scope 
and intensity. Even in the TANF program, over half the adult 
beneficiaries are idle on the rolls and are not engaged in activities 
leading to self-sufficiency. Work requirements are virtually 
nonexistent in related programs such as food stamps and public housing. 
Even worse, despite the fact that marriage has enormous financial and 
psychological benefits for parents and children, welfare reform has 
done little or nothing to strengthen marriage in low-income 
communities. Overall, the welfare system continues to encourage idle 
dependence rather than work and to reward single parenthood while 
penalizing marriage.
    If child poverty is to be substantially reduced, welfare must be 
transformed. Able-bodied parents must be required to work or prepare 
for work, and the welfare system should encourage rather than penalize 
marriage.
Conclusion
    The living conditions of persons defined as poor by the government 
bear little resemblance to notions of ``poverty'' held by the general 
public. If poverty is defined as lacking adequate nutritious food for 
one's family, a reasonably warm and dry apartment to live in, or a car 
with which to get to work when one is needed, then there are relatively 
few poor persons remaining in the United States. Real material hardship 
does occur, but it is limited in scope and severity.
    The typical American defined as ``poor'' by the government has a 
car, air conditioning, a refrigerator, a stove, a clothes washer and 
dryer, and a microwave. He has two color televisions, cable or 
satellite TV reception, a VCR or DVD player, and a stereo. He is able 
to obtain medical care. His home is in good repair and is not 
overcrowded. By his own report, his family is not hungry and he had 
sufficient funds in the past year to meet his family's essential needs. 
While this individual's life is not opulent, it is equally far from the 
popular images of dire poverty conveyed by the press, liberal 
activists, and politicians.
    But the living conditions of the average poor person should not be 
taken to mean that all poor Americans live without hardship. There is a 
wide range of living conditions among the poor. Roughly a third of poor 
households do face material hardships such as overcrowding, 
intermittent food shortages, or difficulty obtaining medical care. 
However, even these households would be judged to have high living 
standards in comparison to most other people in the world.
    Perhaps the best news is that the United States can readily reduce 
its remaining poverty, especially among children. The main causes of 
child poverty in the United States are low levels of parental work and 
high numbers of single-parent families. By increasing work and 
marriage, our nation can virtually eliminate remaining child poverty.


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    The Heritage Foundation is a public policy, research, and 
educational organization operating under Section 501(C)(3). It is 
privately supported, and receives no funds from any government at any 
level, nor does it perform any government or other contract work.
    The Heritage Foundation is the most broadly supported think tank in 
the United States. During 2004, it had more than 200,000 individual, 
foundation, and corporate supporters representing every state in the 
U.S. Its 2004 income came from the following sources:
    Individuals 56%
    Foundations 24%
    Corporations 4%
    Investment Income 11%
    Publication Sales and Other 5%
    The top five corporate givers provided The Heritage Foundation with 
2% of its 2004 income. The Heritage Foundation's books are audited 
annually by the national accounting firm of Deloitte & Touche. A list 
of major donors is available from The Heritage Foundation upon request.
    Members of The Heritage Foundation staff testify as individuals 
discussing their own independent research. The views expressed are 
their own, and do not reflect an institutional position for The 
Heritage Foundation or its board of trustees.

                                 

    Chairman MCDERMOTT. Dr. Bernstein.

STATEMENT OF JARED BERNSTEIN, DIRECTOR OF THE LIVING STANDARDS 
               PROGRAM, ECONOMIC POLICY INSTITUTE

    Dr. BERNSTEIN. Chairman McDermott and Representative 
Weller, I thank you for the opportunity to testify, and I 
sincerely applaud your willingness to examine these issues of 
great importance to those of us on the panel and to our most 
economically vulnerable families. It is a symbol of a just 
society that we engage in an accurate assessment of the extent 
of material need among our populations. Such an assessment 
serves multiple purposes.
    First, we want a tool that will tell us, given what we know 
about human needs and prevailing living standards, how many 
people lack the resources to meet their basic needs. Note that 
this framing introduces an absolute measure, meeting basic 
needs, but also a relative dimension, prevailing standards to 
the question of poverty measurement, and of course, we want to 
be able to assess the anti poverty effectiveness of market 
forces as well as or nonmarket interventions.
    It is widely agreed upon that our current poverty measure 
fails to meet these criteria and does so by a long shot. It 
does not provide an accurate picture of the extent of material 
deprivation, nor does it tell us how far the poor are falling 
behind relative to the rest of us, nor does it enable us to 
gauge the effectiveness of our anti-poverty initiatives. My 
written testimony stresses these key points.
    Our approach to measuring poverty is far outdated and fails 
to provide an accurate count of the extent that we need in 
America. Newer methods that correct many of the problems with 
the official measure show more people in poverty than the 37 
million officially poor. I recognize that this statement 
contradicts some of the data cited in the introductory 
statement by Representative Weller, and I am happy to revisit 
that.
    These improved methods, as implemented by the Census 
Bureau, should be adopted to replace the current official 
measure. The fact that the current measure is adjusted only for 
price changes and not for income growth in tandem with rising 
inequality has led to large and growing gaps between the 
officially poor and the rest of society. Even while today's 
poor have some goods that were out of reach of the poor in 
decades past, in relative terms, today's poor are increasingly 
left behind in the mainstream.
    Efforts to gauge the true cost of meeting an accurate basic 
living standard in today's economy yield income thresholds that 
are about twice that of the official poverty lines. Relative to 
prior years, a significantly larger share of poor children are 
living in families with working parents. The income constraints 
faced by these working parents underscore the need for an 
improved system of work supports, including subsidies for 
wages, health care, child care, housing, and transportation.
    Getting a little deeper into a critique of the official 
measure, these measures were developed in the mid-1960s based 
on data from the mid-1950s. Since they have been adjusted 
largely just for price changes but not for improvements in 
general living standards, they are ever less representative of 
relative deprivation. In fact, back in 1960, the official 
poverty threshold for a family of four was about half the 
median income for a four-person family. Today, at about 20,000 
for a family of four with two children, it is 30 percent of the 
four-person median and for half of the 30 percent of the median 
for a four-person family.
    Economist Adam Smith has recognized that, even if the poor 
are able to meet their fundamental needs for food and shelter 
in such a way as to sustain their lives, they can, by dint of 
the economic and the social distance between themselves and the 
rest of us, still experience deprivation that is harmful to 
society, but to this day, poverty analysts overlook this point, 
citing material gains made by the poor of today relative to 
those of the past.
    Two such analysts writing in 1999 noted that, by the 
standards 1971, many of today's core families might be 
considered members of the middle class. Another poverty analyst 
noted ``Poor people's physical and material well-being is now 
considerably better than it was in the late '60s. How else to 
explain why so many poor people now have color TVs, air 
conditioning in their own homes?''
    These comparisons are misleading. They implicitly freeze 
the well-being of the poor at a point in time, ignoring 
progress in technology, consumption, relative prices, and 
opportunities. In short, to ignore the relative economic 
distance between the poor and everyone else is to ensure that 
they will remain outside the mainstream. Yes, they will not 
starve. Many will be housed, and a large majority will watch TV 
in color, but they will still be separate and unequal relative 
to the majority.
    Just in the interest of time, I am going to finish up here. 
Most poor families have at least one worker. With welfare 
reform, income from work has become much more important to poor 
and near poor families. Many more children live in working poor 
families, and yet, even in the best of times, gaps are going to 
exist between what these working poor families can earn in the 
low-wage labor market and what they need to meet their basic 
needs as I have discussed. This implies an important role for 
work supports. I would be happy to say more about that in Q&A 
if it would be useful.
    Chairman MCDERMOTT. If we have time.
    [The prepared statement of Dr. Bernstein follows:]
 Statement of Jared Bernstein, Ph.D., Director of the Living Standards 
                   Program, Economic Policy Institute
    Chairman McDermott and members of this Subcommittee, I thank you 
for the opportunity to testify. I sincerely applaud your willingness to 
examine these issues of great importance to those on this panel and to 
our most economically vulnerable families.
    It is a symbol of a just society that we engage in an accurate 
assessment of the extent of material need among our population. Such an 
assessment serves multiple purposes.
    First, we want a measurement tool that will tell us, given what we 
know about human needs and prevailing living standards, how many people 
lack the resources to meet those needs. Policy makers may and do have 
different ideas about what should be done about such deficits, but all 
would presumably like an accurate count. Note that this framing of the 
concept introduces both an absolute (meeting basic needs) and a 
relative dimension (prevailing standards) to the question of poverty 
measurement.
    Second, since it implies underinvestment in the economic well-being 
of adults and, in particular, children, poverty can cause long-term 
harm to our economy and society. One recent estimate suggested that 
child poverty ultimately costs society half-a-trillion dollars in 
sacrificed productivity and ancillary costs each year (Holzer, 
2007).\1\ It is thus very much in our national interest to measure 
poverty's extent as accurately as we can.
---------------------------------------------------------------------------
    \1\ Henry Holzer, ``The Economic Costs of Child Poverty,'' 
Testimony before the U.S. House Committee on Ways and Means. U.S. House 
of Representatives, Washington, D.C. 24 January 2007, Accessed 8 Feb 
2007, .
---------------------------------------------------------------------------
    Third, we want to be able to assess the anti-poverty effectiveness 
of market forces and non-market interventions. When policy makers 
undertake initiatives to reduce the extent of economic deprivation, an 
accurate accounting of the effectiveness of such interventions is 
critical. All of us, whether we're members of this panel, taxpayers, 
voters, or the targets of these programs themselves, have a vested 
interest in their cost effectiveness. Are they accomplishing their 
goals? Are they doing so without creating unintended consequences that 
threaten to offset the gains? Are we getting the best possible ``bang 
for the buck?''
    It is widely agreed upon that the current poverty measure fails to 
meet these criteria, and does so by a long shot. It does not provide an 
accurate picture of the extent of material deprivation, it does not 
tell us how far the poor are falling behind relative to the rest of us, 
and it does not enable us to gauge the effectiveness of our antipoverty 
initiatives.
    As a British analyst who reviewed a quarter-century of our poverty 
debate summarized, ``The United States got itself the worst of all 
worlds--an increasingly mean measure of poverty that also suggested 
that U.S. social programs were not making a difference when they were'' 
\2\ (Glennerster, 2002).
---------------------------------------------------------------------------
    \2\ Howard Glennerster, ``United States Poverty Studies and Poverty 
Measurement: The Past Twenty-Five Years,'' Social Science Review, March 
2002.
---------------------------------------------------------------------------
    Key points in this testimony are:

      Our current approach to measuring poverty is far outdated 
and fails to provide an accurate count of the extent of need in 
America.
      Newer methods that correct many of the problems with the 
official measure show more people in poverty than the 37 million 
officially poor (12.6% of the population), including 13 million 
children. These methods should be adopted to replace the current, 
official measure.
      The fact that the current measure is adjusted only for 
price changes and not for income growth, in tandem with rising income 
inequality, has led to large and growing gaps between the officially 
poor and the rest of society. Even while today's poor have some goods 
that were out of reach of the poor in decades past, in relative terms, 
today's poor are increasingly left behind the mainstream.
      Efforts to gauge the true cost of meeting an adequate, 
basic living standard in today's economy yield income thresholds that 
are about twice that of the official poverty lines.
      Relative to prior years, a significantly larger share of 
poor children are living in families with working parents. The income 
constraints faced by these working parents underscore the need for 
increased work supports, including subsidies for wages, health care, 
child care, housing, and transportation.
Critique of the Official Poverty Measure
    The shortcomings of our poverty measure have been amply documented 
and I will only briefly review these critiques (see Bernstein, 2001, 
for a thorough review).\3\

    \3\ Jared Bernstein, ``Let the War on the Poverty Line Commence,'' 
The Foundation for Child Development Working Paper Series, June 2001.

      The official thresholds were developed in the mid-1960s 
based on data from the mid-1950s. Since then they have largely been 
adjusted only for price changes but not for improvements in general 
---------------------------------------------------------------------------
living standards.

    The original poverty thresholds were derived by poverty analyst 
Mollie Orshansky, who based the measure on research on food consumption 
of low-income families in the mid-1950s. Surveys from the mid-1950s 
also revealed that families spent about a third of their income on 
food, so she simply tripled the value of the ``economy food plan'' for 
a given family size.
    Amazingly, with very few changes, and with adjustments for 
inflation, the Orshansky measure remains the official poverty measure 
to this day. Food consumption represents a much smaller share of family 
budgets than was the case 50 years ago (its average share has fallen by 
about half),\4\ while housing, transportation, and health care, for 
example, comprise larger shares. Simply updating the official 
thresholds for this change alone would lead poverty thresholds (and 
poverty rates) to be much higher today.
---------------------------------------------------------------------------
    \4\ Bureau of Labor Statistics, ``At Issue: Tracking Changes in 
Consumers' Spending Habits,'' Monthly Labor Review, September 1999.
---------------------------------------------------------------------------
    One problem with the official approach is that as living standards 
rise for the rest of society, those deemed poor by an absolute 
threshold adjusted solely for price changes will fall behind the rest 
of us (this would not be the case with a relative measure, such as 50% 
of median income). Back in 1960, the official poverty threshold for a 
family of four was about half the median income for a four-person 
family. Today, at about $20,000 for a family of four with two children, 
it's around 30% of the four-person median.
    In an era with sharply growing income inequality, it is worth 
contemplating the importance of this development. Why should we be 
concerned if our poverty thresholds drift further below the income of 
the median household?
    The answer is that the concept of deprivation is not solely an 
absolute concept; it is a relative one as well. Economists since Adam 
Smith have recognized that even if the poor are able to meet their 
fundamental needs for food and shelter in such a way to sustain their 
lives, they can, by dint of the economic and social distance between 
themselves and the rest of us, still experience deprivation that is 
harmful to society.
    As Smith put it, over two hundred years ago:
    ``By necessaries I understand not only the commodities which are 
indispensably necessary for the support of life, but what ever the 
customs of the country renders it indecent for creditable people, even 
the lowest order, to be without. A linen shirt, for example, is, 
strictly speaking, not a necessary of life. The Greeks and Romans 
lived, I suppose, very comfortably, though they had no linen. But in 
the present times, through the greater part of Europe, a creditable 
day-laborer would be ashamed to appear in public without a linen shirt, 
the want of which would be supposed to denote that disgraceful degree 
of poverty which, it is presumed, nobody can well fall into, without 
extreme bad conduct. Custom, in the same manner, has rendered leather 
shoes a necessary of life in England.''\5\
---------------------------------------------------------------------------
    \5\ Adam Smith, 1776, ``Wealth of Nations.'' See, http://
www.adamsmith.org/smith/won/won-b5-c2-article-4-ss2.html, for context. 
John Cassidy provides this quote in his New Yorker article, Relative 
Deprivation, 4/3/06 (http://www.newyorker.com/printables/fact/
060403fa_fact).
---------------------------------------------------------------------------
    To this day, some poverty analysts overlook this point, citing 
material gains made by today's poor relative to those of the past. Two 
such analysts, for example, writing in 1999 noted that ``By the 
standards of 1971, many of today's poor families might be considered 
members of the middle class.''\6\
---------------------------------------------------------------------------
    \6\ W. Michael Cox and Richard Alm, as quoted by Cassidy, ibid.
---------------------------------------------------------------------------
    Poverty analyst Doug Besharov notes that ``. . . poor people's 
physical and material well-being is considerably better now than in the 
late '60s. How else to explain why so many poor now have color TV (93%) 
and air conditioning (50%), and own their own homes (46%)?''\7\
---------------------------------------------------------------------------
    \7\ Doug Besharov, ``Poor America,'' Wall Street Journal, 24, March 
2006.
---------------------------------------------------------------------------
    Such comparisons are misleading. They implicitly freeze the well-
being of the poor at a point-in-time, ignoring progress in technology, 
consumption, relative prices, and opportunities. In short, to ignore 
the relative economic distance between the poor and everyone else is to 
ensure that they will remain outside the mainstream. Yes, they will not 
starve, many will be housed, and a large majority will watch TV in 
color. But they will still be separate and unequal relative to the 
majority.
    Interestingly, as Fisher points out (2005), subjective measures--
responses from the public as to what it takes to make ends meet--
clearly support a relative component to measuring poverty. For each 1% 
increase in national income, these subjective measures grow by 0.6%-
1%.\8\ Much as Adam Smith recognized hundreds of years ago, when 
thinking about what constitutes a fair poverty threshold, we 
instinctively add a strong relative component. Implicitly, we want to 
prevent a growing gap between ourselves and the least well off among 
us. Our official poverty measure, however, allows this gap to grow.

    \8\ Gordon M. Fisher, ``Relative or Absolute: New Light on the 
Behavior of Poverty Lines Over Time,'' Newsletter of the Government 
Statistics Section and the Social Statistics Section of the American 
Statistical Association, Summer 1996: pp. 10-12.

      The official measure ignores the value of some publicly-
---------------------------------------------------------------------------
provided benefits that should be counted as income to their recipients.

    As measured by the Census Bureau, under rules established by the 
Office of Management and Budget, the official income measure in our 
poverty accounts is pretax, post-cash transfer. Thus, it includes the 
cash value of government transfers like welfare payments and Social 
Security, but omits, for example, the market value of food stamps or 
tax benefits like the Earned Income Tax Credit.
    These are salient omissions. By excluding such resources, we create 
two problems. First, we underestimate the actual resources accruing to 
low-income families, and second, we prevent ourselves from observing 
the anti-poverty impact of these initiatives.
    For these reasons, the omission of these benefits is widely agreed 
to be a significant problem with the current measure. There is, 
however, some disagreement about how to value of economic resources. 
For example, some analysts argue that we should also consider wealth 
and service flows from investments, such of the value of housing 
consumed by homeowners. Another controversial area, one of some 
magnitude, is whether to include the value of publicly provided health 
care, and if so, how to calculate it.

      The official thresholds fail to account for necessary 
expenses associated with work and medical care.

    The National Academy of Sciences (NAS), in their work seminal work 
on how we might improve our poverty measure, concluded that it made 
sense to subtract from income costs associated with work, largely child 
care and transportation. This adjustment is particularly germane in an 
era when anti-poverty policy is predicated on work in the paid labor 
market. Imagine, for example, a single parent who works full time, with 
earnings that lift her family above the poverty line. Yet, once we net 
out her child-care expenditures, she falls below that line. Such an 
example shows that the costs associated with climbing out of poverty 
can make the climb that much steeper. Similarly, if her out-of-pocket 
medical expenditures pushed her back below poverty, we would want to 
account for that spending as well, subtracting it from income before 
comparing her income to the poverty threshold (this too was a NAS 
recommendation).

      The official measure makes no adjustments for 
geographical variation in the cost of living.

    Though prices differ considerably by region, the official poverty 
measure makes no adjustments for the fact that the same level of income 
has greater buying power in one area of the country relative to 
another. Part of this omission stems from the lack of official inter-
area price deflators, though exciting progress is being made in this 
area (see Aten, 2006). Aten finds, for example, that prices in New York 
City in 2003 were about the same as those in San Diego, but about 50% 
higher than those in St. Louis.
    Political constraints are in play here too. Adjusting for inter-
area price differences, areas with relatively lower prices will find 
their poverty rates decrease compared to current measures, and this 
could lower anti-poverty benefits received by such areas (and vice-
versa, of course, for areas with higher prices), as a range of federal 
programs allocate their benefits based on formulae that depend on 
calculating numbers of people in poverty.
    There are numerous other concerns of a technical nature regarding 
the official measure. Poverty analysts have found arguably better 
equivalence scales--adjustments for the needs of families of different 
sizes and composition--than those used in the current measure. Also, 
and this one makes a big difference, many analysts argue that 
thresholds should be adjusted for prices using a different version of 
the consumer price index than the CPI-U, the current deflator used by 
Census. The alternative deflator most often referenced in these 
discussion is the CPI-RS, which incorporates in an historically 
consistent manner (back to 1978) all of the advances made by BLS in 
measuring inflation.
    In sum, I can firmly assert that a consensus exists among social 
scientists regarding the inadequacy of the current measure. To the 
extent we depend on it, we unnecessarily limit our knowledge of the 
magnitude and composition of the poor population, the impact of our 
programs, and our ability to reach those truly in need.
An Improved Measure
    An improved measure would correct these shortcomings. What's needed 
is a set of thresholds and an income measure that designates as poor 
those families whose members cannot adequately meet their basic needs, 
given what we know about human needs and prevailing living standards.
    It is critical in this measurement endeavor to avoid a piecemeal 
approach: our new measure must deal as comprehensively as possible with 
both a complete accounting of available resources on the income side, 
as well as expenses on the threshold side. Some analysts, for example, 
add near-cash benefits like food stamps, or tax benefits, like the 
EITC, to income, and show how this reduces poverty. This may be 
analytically useful way to isolate the impact of a particular program, 
but it is not an improved measure of poverty. Adjustments to the income 
side of the equation must be matched by adjustments to the thresholds.
    What would such a measure show? Since any poverty measure 
invariably involves normative decisions, there are lots of different 
measures. However, it is again widely agreed upon that the NAS 
recommendations deal successfully with many of the concerns raised 
above. We also benefit from the fact that poverty analysts at the 
Census Bureau have operationalized the NAS recommendations, creating 
numerous variants based on the NAS suggestions.\9\
---------------------------------------------------------------------------
    \9\ Some of this material was in Mishel, Bernstein, and Allegretto, 
2006. For a good discussion of the ongoing work at Census and BLS on 
these issues, see.
---------------------------------------------------------------------------
    The NAS measures have these advantages over the official measure:

      The NAS thresholds are based on actual expenditures on 
food, clothing, and shelter and thus reflect increases in living 
standards (though not to the extent of family budgets, as discussed 
below).
      The NAS income measure is after-tax, and thus reflects 
the poverty reduction effects of tax credits.
      They include non-cash benefits in income (though they do 
not include the value of publicly provided health care).
      They deduct some work expenses, like child care 
expenditures for working families, from income and subtract out-of-
pocket medical expenses, including premium payments.
      They factor in regional differences in cost-of-living.

    As noted, there are many variants to these measures, and the Census 
Bureau has generated a consistent time series back to 1999 of 12 
different NAS-based approaches. For example, some measures account for 
geographical differences while others do not.
    A fundamental question for this committee to consider is, relative 
to the official measure, do these improved measures generate lower or 
higher poverty rates? The answer, shown in Figure 1, is clear: the NAS 
measures are uniformly higher than the official measure.\10\ The Figure 
shows the range of the 12 measures, which is almost always above the 
official. On average over the period covered by the graph, the NAS 
rates are about one percentage point above the official rate, implying 
about 2.5 million more persons on the poverty rolls.
---------------------------------------------------------------------------
    \10\ This figure also appears in Bernstein and Sherman, 2006.


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    

    These measures also tend to change the composition of who is 
poor.\11\ Under the NAS because work expenses are subtracted from 
income, working poverty rises, especially among single parents facing 
child care costs. A similar treatment of out-of-pocket medical spending 
leads to higher poverty rates among the elderly. Because more transfers 
are counted as family resources, African-American poverty rates are 
lower under the NAS measures, though still much higher than those of 
whites.
---------------------------------------------------------------------------
    \11\ To compare the composition shift, rates must be standardized, 
as in this table.
---------------------------------------------------------------------------
A Relative Measure
    The NAS measure is a vast improvement in all the ways noted above, 
but it too is limited in the extent to which it captures relative 
differences between the poor and the rest of society. Another way to 
measure poverty--one with great intuitive appeal--tracks the poor while 
accounting for changes in prevailing income levels among the non-poor. 
Such measures are called ``relative,'' in that they set the poverty 
threshold as a percent of the median income, which moves each year, 
typically rising in nominal terms. (The NAS measure has a relative 
component, as the thresholds are keyed to changes in median consumption 
expenditures).
    The utility of this measure--and note that it is the norm in 
international comparisons--is that it shows how the poor or faring 
relative to middle income families, and thus speaks directly to the 
concept of ``relative deprivation.''
    The 1990s are a good example of the importance of this approach to 
poverty measurement. The tight job market, in tandem with a large 
expansion of the Earned Income Tax Credit, helped lead to significant 
reductions in a comprehensive poverty measure (i.e., one that includes 
such transfers as the EITC). But because median family income also grew 
quickly over this period, much less relative than absolute progress was 
achieved.
    Table 1 compares relative poverty to absolute poverty, using 
adjusted income measures much like those recommended by the NAS (the 
absolute poverty measure here is from unpublished tabulations provided 
by Wendell Primus). Absolute poverty fell fairly steeply in the 1990s, 
from 15.5% to 10% by this measure. But relative poverty fell only 
slightly, from 18.4% to 17.7%.

                                Relative and Absolute Poverty Measures, 1989-2004
----------------------------------------------------------------------------------------------------------------
                                                       Relative  (50% of    Absolute  (NAS
                                                            Median)             Style)        Difference Rel-Abs
----------------------------------------------------------------------------------------------------------------
1989                                                              18.4%               15.5%                2.9%
----------------------------------------------------------------------------------------------------------------
2000                                                              17.7%               10.0%                7.7%
----------------------------------------------------------------------------------------------------------------
2004                                                              18.5%               12.5%                6.0%
----------------------------------------------------------------------------------------------------------------
Changes
----------------------------------------------------------------------------------------------------------------
1989-2000                                                         -0.7%               -5.5%
----------------------------------------------------------------------------------------------------------------
2000-04                                                            0.8%                2.5%
----------------------------------------------------------------------------------------------------------------
Souce: State of Working America, 2006/07, Figure 6G. Absolute measure is unpublished, provided by Wendell
  Primus. Relative measure by author.

    The table shows that the poor made a great deal of ground in 
absolute terms: over the 1990s, as low-incomes rose in real terms, more 
families made it over the threshold. But the relative measure shows 
that low incomes grew at about the same rate as middle incomes, so the 
share of poor below half the median changed little over these years.
    In other words, the relative measure tracks social/economic 
distance between the poor and the middle-class in a way that absolute 
measures do not. As such, they quite directly reveal the impact of 
changes in inequality on poverty. The share of the population that is 
poor in relative terms has hovered around 18% since the mid-1980s, 
showing that by this benchmark, many more persons are poor in relative 
terms--their income is less than half the median--than in absolute 
terms. The fact that such a significant share of our population remains 
relatively distant from the mainstream is an important dimension of the 
poverty problem.
Family Budgets
    Though the official Orshansky poverty measure has gotten by far the 
most attention in this debate, budget analysts have a long history of 
measuring the amount of income needed to meet a basic standard. This 
work, under the rubric of family budgets, has generally been 
underutilized in the poverty debate, yet there is much we can learn 
from it about the income constraints facing American families today.
    In this work, economists (along with nutritionists, health care 
experts, etc.) have set out to tally the amount of income needed to 
meet a basic living standard, one where a generally accepted set of 
material needs is met. As Johnson et al noted, ``most budget standards 
have been calculated by building up a budget that would provide 
families with a modest, fair, or sufficient income.'' \12\ In our own 
work on basic needs budgets for working families, these needs included 
decent housing, an adequate diet, child care (when no parental 
caretaker is available), health care, transportation, and the money 
needed to pay taxes.\13\
---------------------------------------------------------------------------
    \12\ David S. Johnson et al, ``A Century of Family Budgets in the 
United States,'' Monthly Labor Review, May 2001.
    \13\ Bernstein et al, 1999.
---------------------------------------------------------------------------
    Obviously, criteria like ``modest,'' ``fair,'' and even 
``sufficient,'' are normative judgments, although, as noted above, 
family budgets are often based on expert opinion, such as when 
nutritionists recommend an adequate diet. But the committee should 
recognize that there is simply no ``right'' way to measure such 
concepts, including poverty. When we engage in this exercise, we 
balance a variety of needs, sensibilities, and political, if not 
existential considerations. We recognize that there is a distribution 
of well-being, and that it would be unreflective of realistic outcomes 
in a market economy to designate, say, everyone below the 80th, or even 
the 50th percentile of the income scale as ``poor.'' Yet, it would be 
unjust in an affluent, highly productive economy to label only those 
facing the most severe material deprivation as poor.
    Family budgets attempt to balance these extremes by recognizing 
that families who are unable to meet basic needs--and again, as Adam 
Smith pointed out, needs that derive in part from societal standards--
face a material disadvantage that government should recognize and 
address. In fact, such budgets continue to be used by the Department of 
Labor to set eligibility criteria for job training programs (Johnson et 
al, 2001).
    It is instructive that these budgets are well above poverty 
thresholds, usually in the range of two-times their value. For example, 
Johnson et al report a family budget for a married couple with two 
children of $36,550 in 1998; Allegretto (2005) reports a family budget 
for the same family type of just under $40,000 for 2004.\14\ In both 
cases, these budget levels are about twice the official poverty 
threshold for that family type. In fact, Allegretto's work shows that 
while about 9% of the family types she examines are officially poor, 
about 30% are below the family budget thresholds.
---------------------------------------------------------------------------
    \14\ Sylvia Allegretto, ``Basic Family Budgets: Working families' 
incomes often fail to meet living expenses around the U.S.,'' EPI 
Briefing Paper, 1 Sept. 2005. Accessed 8 Feb 2007.
---------------------------------------------------------------------------
    Does this finding imply that 30% are poor, or materially deprived 
in the sense that has been discussed in this testimony? No, for a 
number of reasons. First, the family budget standard is higher than the 
poverty standard. For example, some of the family budget assumptions 
would likely be considered too generous for the poverty debate. Much of 
this work uses HUD Fair Market Rents for housing costs, and these 
typically give the 40th percentile rent for currently available 
rentals. Child care costs are often based on qualified center-based 
care; health care includes some measure of non-group premium costs.\15\ 
The distinction between these two standards--poverty and family 
budgets--recalls the views of poverty measurement pioneer Mollie 
Orshansky, who viewed her original poverty thresholds as a measure of 
income inadequacy, not of income adequacy.\16\ Family budgets are 
closer to the latter.
---------------------------------------------------------------------------
    \15\ Ibid.
    \16\ Fisher, Gordon M. ``The Development and History of the U.S. 
Poverty Thresholds: A Brief Overview.'' Newsletter of the Government 
Statistics Section and the Social Statistics Section of the American 
Statistical Association. Winter 1997: pp. 6-7. Accessed 8 Feb 2007.
---------------------------------------------------------------------------
    Second, this research tends to deal only with the threshold side of 
the question, and not with the resource side. As such, it lacks the 
holistic quality of the NAS work.
    But it does provide a common sense benchmark that has had some 
considerable impact on the poverty analysis community. The logic of the 
family budget work is straightforward and commonsensical: if we take an 
objective look at what things cost, it takes an income well above the 
poverty threshold to make ends meet. This, and the fact that family 
budgets often correspond to roughly twice poverty have led many 
analysts to use twice-poverty as a benchmark.
    Moreover, there are important public programs that recognize this, 
including SCHIP, the public health insurance program for children. The 
vast majority of children living in families with incomes below twice 
poverty are eligible for the program. A moment's reflection suggests 
that this is a stark repudiation of the official poverty threshold. Our 
government itself, to our credit, obviously recognizes the inadequacy 
of the official measure as a criterion for setting eligibility for 
families in need.
Working Poverty
    In moving towards a more accurate approach to measuring poverty, 
the committee also needs to consider the increasingly important role of 
work among the poor and near poor. Though the share of the poor in the 
job market has not changed much over time, its composition has changed 
a great deal, with many more parents, especially single parents at 
work. It is also the case that low-income persons (family income below 
twice poverty) are working more hours than in the past, and, most 
importantly, a much larger share of their income derives from the labor 
market, including wage subsidies. Because more low-income parents 
(especially mothers) are working now than in the past, the share of 
children in working but poor families has climbed significantly.
    Most poor families have at least one worker: 61% of poor families 
had at least one worker in 2005 (4.6 million families); 71% of twice-
poor families have at least one worker (14.4 million).\17\ Figure 2 
shows that income from work (earnings plus the EITC) for low-income 
single mothers with at least two children rose from 45% of income in 
1979 to 72% in 2000 (comparison made at business cycle peaks; Mishel et 
al, 2006, Table 6.11). This increase is a function of the steep growth 
in both the share of single mothers at work in the paid labor market, 
and in their annual hours worked.
---------------------------------------------------------------------------
    \17\ Please refer to BLS tables, ``Families by Number of Working 
Family Members and Family Structure: 2005.''



    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    As noted, these trends have meant that more low-income children 
have working parents. This is evident in Figure 3 which shows the 
percent of poor children in families with a working parent, 1979-
2005.\18\ This share shot up in the 1990s, particularly among poor 
families with a single mother. Between the economic peaks of 1989 and 
2000, the share of poor children in homes with a working parent 
increased from 59 to 71 percent; for kids of single moms, the increase 
was from 42 to 61 percent, i.e., from a minority to a solid majority.
---------------------------------------------------------------------------
    \18\ Though this is my analysis of CPS data, the figure is based on 
work done by the Congressional Research Service.
---------------------------------------------------------------------------
    Note also the steady decline in the 2000s, driven again by 
employment trends of single mothers (married mothers' employment rates 
also fell over this period). The long jobless recovery and the weaker 
labor demand over the current recovery has been particularly damaging 
to these economically vulnerable families. As their labor market 
opportunities have diminished, their family poverty rates have gone up 
3.2 points, 2000-05, compared to 1.2 points for the overall family 
poverty rate. The problem for them relates closely to the observation 
that earnings, and benefits tied to earnings, have become much more 
important to the economic well-being of single-mother families.


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    In sum, recent experience has shown that these low-income working 
families depend on two forces to ensure that their living standards are 
rising. First, relative to more economically secure populations, they 
depend on tight labor markets and strong labor demand, compelling 
employers to provide the jobs and wage advancement they need.
    The second point links back to the measurement themes explored in 
this testimony. Even in the best of times, gaps will exist between what 
any working poor families can earn in the low-wage labor market and 
what they need to meet their basic needs, as discussed above. This 
implies an important role for work supports.
    Work supports are any publicly-provided resource that either boosts 
the earnings of low-income workers (like the EITC), or helps offset the 
cost of a family budget component, including subsidies for health care, 
child care, housing, and transportation. These supports play an 
important role in helping to close the needs gap, but their provision 
is not always guaranteed, and in the face of budget constraints, many 
states have cut back. At the federal level, the most recent budget 
offered by the president includes significant cuts in access to SCHIP--
the health coverage program for low-income children and an important 
work support for low-income workers whose jobs often fail to provide 
family coverage.
    Given evidence provided in this testimony regarding the extent of 
low-income work, and the material needs of these families, 
strengthening the nation's system of work supports would be a highly 
useful anti-poverty strategy.
Conclusion
    Ours is a nation with one of the strongest, most productive 
economies in the world. Yet considerable poverty exists amid the 
plenty. By the official measure, one that most consider inadequate to 
the task of accurately measure material need, 12.6% of our population, 
37 million persons, are poor. As I have argued, a more accurate measure 
would show a greater share of persons in need. While one should not be 
dismissive of the political constraints pushing back against changing 
the official measure, its time has passed, and I urge the committee to 
begin taking steps to replace it with a better alternative.
    As I have shown, such alternatives have been developed by a team of 
researchers at both the Census Bureau and BLS, implementing the seminal 
work of the National Academy of Sciences. The advances in poverty 
measurement made by these analysts have the potential to vastly improve 
our knowledge and understanding of who is poor.
    Of course, measurement is a means to an end, and this committee has 
shown great interest is taking steps to address poverty amid plenty. 
Given the sharp rise in the number of children in working poor 
families, I have stressed the importance of ensuring that these 
families have enough to not simply pass the poverty threshold, but to 
meet their basic needs, as shown in the family budget literature. To 
this end, work supports, including wage subsidies along with subsidies 
for other basic needs such as housing, health and child care, and 
transportation, have proved vital in closing the gap between what low-
income workers earn and what they need.
    I urge the committee to examine and strengthen this system. I urge 
members to fight back when components of the system are attacked, as 
with the inadequate funding of SCHIP in the president's most recent 
budget proposal, a change that could lead to lost health care coverage 
for over 600,000 children.\19\
---------------------------------------------------------------------------
    \19\ Deborah Weinstein, ``What's in the President's Budget for 
Human Needs?'' Coalition on Human Needs, 8 Feb 2007. Accessed 8 Feb 
2007.
---------------------------------------------------------------------------
    By updating our measurement tools and strengthening our system of 
supports for working but poor families, we can make important progress 
toward reconnecting the economic lives of the most vulnerable among us 
to that of the mainstream, a laudable goal indeed.

    The author thanks Ross Eisenbrey, Danielle Gao, Mark Greenberg, and 
James Lin for helpful comments and research support (Lin). Any mistakes 
are my own.
                                 ______
                                 
Bibliography
    Allegretto, Sylvia. ``Basic Family Budgets: Working families' 
incomes often fail to meet living expenses around the U.S.'' EPI 
Briefing Paper. 1 Sept. 2005.
    Bernstein, Jared. ``Let the War on the Poverty Line Commence.'' The 
Foundation for Child Development Working Paper Series. June 2001.
    Bernstein, Jared and Arloc Sherman. ``Poor measurement: New Census 
Report on Measuring Poverty Raises Concerns,'' Economic Policy 
Institute, 2006. http://www.epi.org/content.cfm/ib222.
    Besharov, Doug. ``Poor America.'' Wall Street Journal. 24, March 
2006.
    Bureau of Labor Statistics. ``At Issue: Tracking Changes in 
Consumers' Spending Habits.'' Monthly Labor Review. September 1999.
    Cassidy, John. ``Relatively Deprived: How Poor is Poor?'' The New 
Yorker. 3 April 2006.
    Fisher, Gordon M. ``Relative or Absolute: New Light on the Behavior 
of Poverty Lines Over Time.'' Newsletter of the Government Statistics 
Section and the Social Statistics Section of the American Statistical 
Association. Summer 1996: pp. 10-12.
    Fisher, Gordon M. ``The Development and History of the U.S. Poverty 
Thresholds: A Brief Overview.'' Newsletter of the Government Statistics 
Section and the Social Statistics Section of the American Statistical 
Association. Winter 1997: pp. 6-7.
    Glennerster, Howard. ``United States Poverty Studies and Poverty 
Measurement: The Past Twenty-Five Years.'' Social Science Review. March 
2002.
    Holzer, Henry. ``The Economic Costs of Child Poverty.'' Testimony 
before the U.S. House Committee on Ways and Means. U.S. House of 
Representatives. Washington, D.C. 24 January 2007.
    Johnson, David S., John M. Rogers, and Lucilla Tan. ``A Century of 
Family Budgets in the United States.'' Monthly Labor Review, May 2001.
    Mishel, Lawrence, Jared Bernstein, and Sylvia Allegretto. The State 
of Working America. Ithaca: Cornell University Press, 2007.
    Smith, Adam. Wealth of Nations. [1776] New York: Prometheus Books, 
1991.
    Weinstein, Deborah. ``What's in the President's Budget for Human 
Needs?'' Coalition on Human Needs. 8 Feb 2007.

                                 

    Chairman MCDERMOTT. I want to thank all of the panel. We 
will have time for one question apiece. Mr. Weller.
    Mr. WELLER. Well, thank you, Mr. Chairman.
    There is one question that I am going to ask be submitted 
for the record. Mr. Smeeding's testimony presented by Mr. 
Burtless calls for about $120 billion in additional welfare 
spending, and I would be interested in knowing the specifics in 
that and, of course, under the PAYGO rules, where we would get 
that? So, I will ask for that in writing.
    [The information follows:]

                                                  February 28, 2007
The Hon. Jerry Weller, Ranking Member
Subcommittee on Income Security and Family Support
Committee on Ways and Means
U.S. House of Representatives
Washington, DC 20515

Dear Representative Weller:

    I am writing in response to the questions you sent me on February 
23, 2007. Those questions were related to the testimony I gave in 
behalf of Professor Timothy Smeeding on February 13, 2007, to the 
Subcommittee on Income Security and Family Support.
    You asked specific questions regarding the policies adopted by the 
United Kingdom (U.K.) to reduce child poverty. Unfortunately, I am not 
an expert on British antipoverty policy. Professor Smeeding recommended 
two sources of information about those policies in the prepared 
testimony I delivered for him on February 13. One source, written by 
Jane Waldfogel and others, is ``Family Expenditures Post Welfare Reform 
in the UK: Are Low Income Families Starting to Catch Up?'' which 
appeared in Labour Economics in 2006. Another is by M. Francesconi and 
W. van der Klaauw, ``The Socio-Economic Consequences of `In-Work' 
Benefit Reform for British Lone Mothers,'' which appeared (or will 
appear) in the Journal of Human Resources in 2007. I think these two 
articles describe British policies more accurately than I am able to 
do.
    You also asked about the cost of adopting the U.K. policies here in 
the United States. Professor Smeeding estimated that the U.K. policies 
increased British spending by 0.9 percent of the U.K. gross domestic 
product. An equivalent change in public spending in the United States 
would amount to about $120 billion per year according to his estimates. 
This is more than the United States now spends on means tested cash and 
near-cash assistance programs that are targeted on families with 
children (the EITC, food stamps, child-care support, and TANF). I do 
not interpret Professor Smeeding to mean that the United States ought 
immediately to expand cash welfare programs by $120 billion a year. 
Instead, I think he was trying to give Members and other interested 
readers an impression of the scope and expense of the U.K. effort to 
reduce its child poverty rate. If the United States were to undertake a 
similarly ambitious program to reduce poverty among American youngsters 
and hoped to achieve an equally impressive result as has been achieved 
by the U.K., we should not be surprised if the price tag is high.
    Speaking for myself, I believe the United States could achieve 
noticeable reductions in child poverty by offering more generous earned 
income supplements to the working poor than are now provided by the 
EITC. In particular, I think it would be desirable to offer a more 
generous schedule of EITC benefits to low-income parents who can 
demonstrate they are working steadily in full-time jobs (jobs where the 
work schedule is 32 hours a week or longer). This kind of reform has 
the potential to increase the earned plus unearned incomes of low-wage 
parents while simultaneously encouraging many of them to find and 
remain employed in full-time jobs.
    There is no such thing as a free lunch. More public spending for 
child poverty requires either higher taxes or lower spending on other 
public programs. Like many voters, I have a favorite list of government 
programs where I think less spending is both possible and desirable. In 
this brief letter it seems impractical, however, to offer a persuasive 
justification for the items on that list.
    I hope you find these answers responsive.

            Very sincerely,

                                                      Gary Burtless
                               John C. and Nancy D. Whitehead Chair
                                                   Economic Studies

    Mr. Rector, several of Mr. Smeeding's charts suggest the 
relative poverty in the United States today mostly resembles 
that in Mexico, and I was wondering: Can you tell us how he 
arrives at that conclusion and then also compare U.S. spending 
on assistance of the poor with other countries?
    Mr. RECTOR. Yes. That is the problem with the relative 
poverty measure, okay, that, in fact, you can produce these 
charts that show that Mexico and the United States have 
effectively the same poverty rate when, in fact, the standard 
of living in the United States is five times higher, and so the 
bar for poverty in the United States is five times higher.
    In fact, poor people in the United States have upper middle 
class living standards by comparison to Mexico, and it is 
because what you are measuring there is inequality. You are not 
measuring poverty, and in his better days, Tim Smeeding 
actually acknowledges, well, there is a difference between 
poverty and inequality. They are not the same thing, but the 
relative poverty measure is simply measuring inequality. What 
is the standing of the bottom 10 percent compared to, say, the 
median household? In all of those comparisons, the United 
States is at a disadvantage because we are wealthier than 
European nations and certainly wealthier than Mexico. 
Therefore, the poverty standard in the United States is higher 
than it is in those other standards. Therefore, we have, by 
that measure, more poverty even though many of the poor people, 
according to that standard, will have higher incomes than, say, 
somebody in France who is judged not poor, okay?
    Now, you could say, even when you look at an absolute 
measure and judge everybody by the same standard, the United 
States still, in many cases, does not look that good or it 
looks worse than other European countries, but the difference 
is very small, and I would be happy to submit to the Committee 
standards that use an absolute measure that, in fact, show the 
United States has lower poverty overall when compared, say, to 
Sweden depending on how you do the measure once you put an 
equal bar, but the reality is that Sweden has an income that is 
about one-third lower than ours.
    Therefore, when you use a relative poverty measure, they 
essentially have an easier bar to pass. I think it does not 
tell you very much, and it certainly does not tell you about 
poverty. It does not tell you about physical deprivation. If 
you want to call this ``inequality,'' call it ``inequality.'' 
That is an accurate description of it. It is not a description 
of poverty.
    Mr. WELLER. Thank you, Mr. Chairman. I know time is short, 
and I will submit some additional questions in writing. Thank 
you.
    Chairman MCDERMOTT. Thank you.
    I just want to ask--I am frustrated because I have got a 
good panel here, and I would like to have them fight and figure 
out what we are really talking about here.
    Is it that we need to call it ``inequality,'' and then we 
can say inequality is okay or bad or good or is there really 
poverty, and how do you two answer--Mr. Rector says there is 
not any poverty in this country except a very small number of 
people way down at the bottom.
    What is the answer to that?
    Dr. BERNSTEIN. If I could make, as quick as I can, a couple 
of statements.
    First of all, I very strongly disagree, and I think most 
economists would disagree with the statement that poverty 
should only be measured on an absolute basis, dismissing an 
inequality sense. This is a quote from Adam Smith, I think a 
pretty good economist to quote in this context.
    ``By necessities, I understand not only the commodities 
which are indispensably necessary for the support of life, but 
whatever the customs of the country renders it indecent for 
credible people, even the lowest order, to be without.''
    It is the way they talked back then, but the point is that 
there has to be a relative standard that is embedded in the 
poverty measure so that we are also taking into account the 
material needs that are common, that are very much a part of 
the prevailing set of standards.
    Now, also getting to Mr. Rector's point about--I can show 
you absolute measures that give you different results, the 
National Academy of Sciences and the Census Bureau, as I 
mentioned, are doing a really top-notch job of implementing 
these recommendations. They spend years figuring out the best 
way to improve our poverty measures, taking into account 
everything you have heard about on this panel today, and as I 
submitted in my written testimony, when you look at their 
measures--and they have got twelve of them--and you take an 
average, you will find that poverty is about 1 point to 2 
points higher than the official measure. So, you can always 
cherry-pick and find a measure that shows you what you want, 
but this is a group of academics with no skin in the game, on 
either side of this debate in an ideological sense, coming 
forth with the best definitions that include both absolute and 
relative components.
    Ms. BLACKWELL. We should be fighting about the solutions, 
not about whether or not the problem exists. The first panel 
was really illustrative of what we see all across the country. 
We know that people lack the resources to be able to provide 
for their families in ways that I think we, as a people, think 
it means that they can live with dignity. Clearly, we have a 
poverty problem in America. We all saw how vulnerable people 
were when Hurricane Katrina hit New Orleans. We saw people who 
were poor, who were jobless, who were sick, who were isolated, 
who were at an extreme disadvantage.
    We actually have within our power the ability to do 
something--and Representative Weller made that very clear. We 
know what to do. We are not doing it. First, we need to make 
the investments that begin to pull people out of poverty, and 
then we need to make the investments that allow them to be able 
to thrive.
    Mr. BURTLESS. I think that Mr. Rector is right. If we had 
agreed on a ``poverty'' definition back in Abraham Lincoln's 
Administration, the United States' poverty thresholds would be 
very low. Poverty would be largely eliminated under a 
definition that we adopted in 1863. The standards that we 
currently have were developed based on U.S. consumption 
patterns in the fifties. Forty-five years has elapsed since 
then. If you ask Americans how they define ``poverty,'' they 
might have in mind poverty in Mexico or poverty in India, but 
you ask them ``how much does it take to get by in this country 
right now,'' the amount they mention has gone up, more or less, 
in line with the rate of increase in median income. Obviously, 
they usually mention a lower threshold than the median income 
in the country.
    So, most Americans do not have the attitude that if we beat 
poverty under a definition that would have been adopted in 1860 
or 1900 or 1950, we have licked the poverty problem.
    Chairman MCDERMOTT. So, is it fair to say, in summation, 
that you think Mr. Rector is saying we have licked poverty by a 
standard that was set in 1955 or 1960 somewhere and that that 
standard really is the problem, if we looked at a present day 
standard that made sense with today's economy, that then we 
have poverty? Is it?
    Mr. BURTLESS. I think the tip-off is saying, ``How rich 
America's poor people would look in Mexico!'' Mexico is a 
country with one-fifth the income of the United States. I do 
not think we would be proud to hear we have conquered poverty 
under a definition that would be adopted in Mexico, China, or 
India. That achievement would not represent a solution to 
America's poverty problem.
    Chairman MCDERMOTT. I am sorry. I have to bring this to an 
end because there is a Committee coming in here to talk about 
the earned income tax credit, which is part of this package.
    I want to thank you all very much for not only coming but 
staying until Mr. Weller and I could get back. You have made a 
real contribution to us, and we thank you for that. We will be 
in touch with you again. Thank you.
    [Whereupon, at 12:58 p.m., the hearing was adjourned.]
    [Submissions for the Record follow:]
       Statement of Americans For Fair Taxation, Conyers, Georgia
    Poverty levels have for the longest time been measured in terms of 
relative income, and not on accumulated wealth.This method of measuring 
becomes flawed when millionaires or those who have achieved their 
economic goals, drop from the income making scene.According to the 
poverty equation, individuals like Ted Turner, Bill Gates and others, 
would be officially lumped into the ``poverty level.''
    For this reason, income-earning Americans on the way up to meeting 
their financial goals, are labeled as ``greedy,'' or ``filthy rich'' 
monikers, while those with even greater means, are not.This has a 
negative effect on economic growth in the creation of jobs spurred on 
by the profits of high income earners. Overburdening this group has a 
negative impacton the economy and exacerbates the growth of outsourcing 
and the removal of jobs to the very people who most need them.
    The root culprit for the current and growing situation is our 
federal income tax system.It places undo burden on those that can help 
raise other individuals out of the poverty level, and at the same time, 
rewards those who have accumulated enough wealth to game the 
system.True tax reform such as H.R. 25, The Fair Tax, puts in place the 
very stimulus our economy and poverty level individuals need while 
placing the greater burden on those that can afford the tax.Removing 
our income tax system grows our economy by bringing manufacturing and 
other high paying jobs back on U.S. soil, and creates the income 
earnings potential to a far greater range of skill sets which puts many 
outsourced employees back to work.The problem of the rich getting 
richer while the poor get poorer is reversed, and a brighter economic 
future can be enjoyed by millions more American than our current course 
takes us.

                                 
              Statement of Child Welfare League of America
    The Child Welfare League of America (CWLA), representing public and 
private nonprofit, child-serving member agencies across the country, is 
pleased to submit testimony to the Subcommittee on Income Security and 
Family Support. We are pleased to submit our comments to the 
Subcommittee as we did with the full Ways and Means Committee last 
month. We recommend that statement for a more detailed analysis of the 
correlation between poverty and its significance to the child welfare 
system.
    This is an issue that requires more attention because there are far 
too many children and families struggling each and every day. As the 
wealthiest nation on earth we cannot be satisfied when we count 13 
million children below the official poverty line. We should be even 
less satisfied when we calculate the human cost behind these numbers. 
The attention of this subcommittee following on the hearings of several 
other congressional committees including the full Ways and Means 
Committee and the attention to this matter by Chairman McDermott is 
greatly appreciated and needed. We look forward to working with you on 
this and related issues in the coming months.
    Parents and other caregivers require certain economic resources to 
provide their children with proper nutrition, adequate housing, and 
sufficient health care. Although economic resources provide no 
guarantee of a child's healthy development or well-being, poverty is 
correlated with a wide range of negative outcomes that begin in 
childhood and can forever impact a child's future.\1\ Children raised 
in poverty are likely to experience more risks and have fewer 
protective factors and resources than children living above the poverty 
threshold.\2\
---------------------------------------------------------------------------
    \1\ Lieberman Research Worldwide. (1999, April). Assessing public 
opinion and perceptions regarding child abuse in America: Final report. 
Prepared for the Child Welfare League of America, Washington, DC.
    \2\ Parker, S., Greer, S., & Zuckerman, B. (1988). Double jeopardy: 
The impact of poverty on early child development. The Pediatric Clinics 
of North America, 35 (6), 1227-1240.
---------------------------------------------------------------------------
It Is Not A Values Deficit
    On January 26, 2006 the ABC Network focused some needed attention 
on the subject of poverty in our country. Through the broadcast of 
ABC's 20/20 and later on ABC's Nightline, the nation was presented not 
with statistics or arguments but human faces on poverty. It was made 
all the more compelling because it focused on children. By tracing the 
lives of one young person and two children we saw the impact of poverty 
on some of the families of Camden, New Jersey. There was one 
observation during that broadcast that we would commend to this 
subcommittee and indeed to all policy makers. It was a comment by 
Dalton Conley, a sociologist who was interviewed for the broadcast. His 
observation is of special significance and that sums up this problem in 
a phrase: ``There is a common perception that the problem with the poor 
folks in the United States is a problem with values. It's not a values 
deficit at all; it's really a resource deficit.''
    Some will want to ask why these poor families haven't made 
different choices in their lives that would presumably remove or keep 
them out of poverty. The response is as basic as this; children don't 
make choices, rather they are presented with their circumstances at 
birth.
    Many children raised in poverty begin their lives at a disadvantage 
because of inadequate prenatal care, poor maternal nutrition, or birth 
complications. They often also face a wide array of familial and other 
environmental obstacles, including low levels of parental education, 
increased levels of familial stress, poor social support, and limited 
community assistance. They may face the burden of unstable housing or 
homelessness. They may be growing up in a violent neighborhood. They 
may live in circumstances where pre-school and child care are not an 
option.
    Compared with other children, children living in poverty are more 
likely to experience difficulty in school and have a higher high school 
drop-out rate. Poverty during early childhood may be more damaging than 
poverty experienced later in life because much of the foundation for 
learning is built in the early years. Poor children score lower on 
measures of vocabulary, language skills, understanding of number 
concepts, organization, and self-regulation. In addition, children 
living in poverty are more likely to become teen parents, and, as 
adults, earn less and be unemployed more frequently.\3\
---------------------------------------------------------------------------
    \3\ Ibid.
---------------------------------------------------------------------------
    CWLA believes that as a country we must confirm our commitment to 
prevent child abuse and neglect and to support children who have been 
abused and neglected. A fundamental building block to reaching this 
goal is to tackle poverty head-on.
POVERTY AS A NATIONAL ISSUE
    In August 2005, for a brief moment, the nation's attention was 
focused squarely on the issue of poverty in America. Everyone's eyes 
were glued to their television screens as the levees broke in New 
Orleans, Louisiana, and significant tragedy unfolded. Images of 
individuals and families trapped by floodwaters and testimony of those 
mourning the loss of loved ones, homes, and personal belongings 
destroyed any ideas of poverty as merely an illusion. This attention 
was unfortunately fleeting, however, and the commitments that had been 
made to address the poverty issue quickly faded.
    In fact, if you were living in Washington, DC, on that August 2005 
day, you might have attended a forum hosted by the prestigious 
Brookings Institute that included a panel discussion interpreting the 
meaning of the new census data on poverty. As has been the case in 
other discussions and in other forums over the last several years, much 
of that discussion focused on how we measure poverty and whether or not 
it is as severe as some would argue. We will not continue that debate 
here because, in our view, poverty is severe and the United States is 
not doing enough to combat the issue.
    CWLA sees poverty as a serious matter that impacts individuals 
across the country and shapes the direction we are headed as a nation. 
Poverty touches on our economic preparedness, the effectiveness of our 
schools, the health of our nation, and--most significantly to CWLA--the 
welfare of our nation's children.
    In 2005, the national poverty rate stood at 13%.\4\ For children 
under the age of 18, the poverty rate was higher at 18%, which meant 
that approximately 12.8 million of our nation's children were being 
raised in poverty.\5\ For children under the age of 5, the percentage 
was even higher at 21%.\6\ One out of five children in the critical 
child developmental period of 0 through 5, then, live in poor 
conditions that will certainly affect their chances at future success 
and well-being.
---------------------------------------------------------------------------
    \4\ U.S. Census Bureau, 2005 American Community Survey. (2005). 
Data profiles: Selected economic characteristics. Retrieved January 23, 
2007, from http://factfinder.census.gov/servlet/ADPTable?_bm=y&-
geo_id=01000US&-qr_name=ACS_2005_EST_G00_DP3&-ds_name=&-redoLog=false&-
format. Washington, DC: Author.
    \5\ Ibid.
    \6\ Ibid.
---------------------------------------------------------------------------
THE POVERTY DEBATE CONTINUES
    We continue to have this debate about how serious poverty is in 
America. In a country where the average wedding costs $27,690, the 
equivalent of the poverty level for a family of six, we trivialize the 
debate and the significance of poverty when we measure how many poor 
families have televisions, video cassette recorders or cell phones. 
This type of analysis now used in 2007 is not unlike some of the debate 
in past discussions. In another decade some said that poverty was not 
real because, they argued, some welfare recipients owned Cadillacs. In 
reality far too many children will only realize a dream of a quality 
education, a safe neighborhood or a better income by watching it 
displayed in the latest situation comedy or reality show broadcast on 
their television.
    We are told how we can do better with the way we spend money and 
for that there is no doubt. No problem can be solved by merely throwing 
money at it, a truism that applies not just here with our domestic 
policies but can also apply when we carry out policies in other 
countries. But it is equally certain that too much money is not the 
problem. We hear a great deal about how we spend $600 billion in 
federal, state and local funds on anti-poverty programs but that figure 
is misleading since, for example, it takes into account our spending on 
Medicaid costs, a health insurance program.
    In 2005 national Medicaid spending totaled $305 billion. That 
figure calculates the cost of actual care not the cost of insurance 
premiums for the millions of people eligible for Medicaid. It counts a 
doctor's treatment or perhaps the average hospital stay of 4.6 days at 
an average cost of $20,455. The $305 billion is not spent on an anti-
poverty cash assistance program. Rather, 34 percent of it goes toward 
paying a person's long term care costs in a country that has neither a 
long term care policy nor an insurance program specifically designed 
for it. So it includes the average cost of a nursing home stay at 
$65,700 per year. To simply argue that $600 billion is a great deal of 
money is to miss out on what our current anti-poverty efforts consist 
of, not to mention that fact that we continue to fail to address the 
health care challenge this nation has.
POVERTY AND CHILD ABUSE
    According to the CWLA Standards of Excellence for Services for 
Abused or Neglected Children and Their Families, neglect is defined as 
``Failure of parents or other caregivers, for reasons not solely due to 
poverty, to provide the child with needed age-appropriate care, 
including food, clothing, shelter, protection from harm, supervision 
appropriate to the child's development, hygiene, education, and medical 
care.''
    In 2004, the most recent data available, an estimated 3 million 
children were reported as abused or neglected and received an 
assessment or screening to determine whether or not there was evidence 
of abuse or neglect. Approximately 872,000 children were substantiated 
as abused or neglected.\7\
---------------------------------------------------------------------------
    \7\ U.S. Department of Health and Human Services, Administration on 
Children, Youth, and Families. (2006). Child maltreatment 2004 (Table 
2-1). Retrieved January 23, 2007, from www.acf.hhs.gov/programs/cb/
pubs/cm04/index.htm. Washington, DC: U.S. Government Printing.
---------------------------------------------------------------------------
    Of the 872,000 substantiated cases of abuse or neglect, 62.4% of 
these children experienced neglect, 17.5% were physically abused, 9.7% 
were sexually abused, 7% were psychologically maltreated, and 2.1% were 
medically neglected. Nearly three-quarters (or 72.9%) of child victims 
age 0 to 3 years were neglected--higher than any other age category.\8\
---------------------------------------------------------------------------
    \8\ U.S. Department of Health and Human Services, Administration on 
Children, Youth, and Families. (2006). Child maltreatment 2004. 
Retrieved January 23, 2007, from www.acf.hhs.gov/programs/cb/pubs/cm04/
index.htm. Washington, DC: U.S. Government Printing.
---------------------------------------------------------------------------
    The U.S. Department of Health and Human Services is now working on 
the Fourth National Incidence Study (NIS) of Child Abuse and Neglect. 
The NIS is a congressionally mandated, periodic research effort to 
assess the incidence of child abuse and neglect in the United States. 
The NIS gathers information from multiple sources to estimate the 
number of children who are abused or neglected and to provide 
information about the nature and severity of the maltreatment, the 
characteristics of the children, perpetrators, and families, and the 
extent of changes in the incidence or distribution of child 
maltreatment since the previous NIS.
    In the third study issued in 1996, a significant correlation was 
found between the incidence of maltreatment and family income. It found 
that that 47% of children with demonstrable harm from abuse or neglect 
and 95.9% of endangered children came from families whose income was 
less than $15,000 per year.\9\
---------------------------------------------------------------------------
    \9\ Sedlack, A. J. & Broadhurst, D. D. (1996). Third national 
incidence study of child abuse and neglect: Final report. Washington, 
DC: U.S. Department of Health and Human Services.
---------------------------------------------------------------------------
    Children from families with annual incomes below $15,000 as 
compared to children from families with annual incomes above $30,000, 
were over 22 times more likely to experience some form of maltreatment 
that fit the study's harm standard and over 25 times more likely to 
suffer some form of maltreatment as defined by the endangerment 
standard.\10\ Children from families in the lowest income bracket were 
18 times more likely to be sexually abused, almost 56 times more likely 
to be educationally neglected, and over 22 times more likely to be 
seriously injured from maltreatment than children from higher income 
families.\11\
---------------------------------------------------------------------------
    \10\ Ibid.
    \11\ Ibid.
---------------------------------------------------------------------------
    The stress created by living in poverty may play a distinct role in 
child abuse and neglect.\12\ Parents who experience prolonged 
frustration in trying to meet their family's basic needs may be less 
able to cope with even normal childhood behavior problems. Those 
parents who lack social support in times of financial hardship may be 
particularly vulnerable. Parents who are experiencing problems with 
employment are frequently rated by child protective services staff as 
being at moderate to high risk of child maltreatment.\13\
---------------------------------------------------------------------------
    \12\ Gil, D. G. (1970). Violence against children. Cambridge, MA: 
Harvard University Press.
    \13\ English, D. (1994). Risk assessment: What do we know? Findings 
from three research studies on children reported to child protective 
services. In Center for Advanced Studies in Child Welfare and the 
Center for Urban and Regional Affairs, Children of the shadows--The 
state of children in neglecting families: Conference proceedings. 
Minneapolis, MN: University of Minnesota; National Research Council. 
(1993). Understanding child abuse and neglect. In G. B. Melton & F. D. 
Barry, Protecting children from abuse and neglect: Foundations for a 
new national strategy (pp. 132-134). New York: Guilford Press.
---------------------------------------------------------------------------
POVERTY AND KINSHIP AND FOSTER CARE
    These findings suggest that we could help alleviate the flow of 
children into other parts of the child welfare system by addressing the 
core issue of poverty. For those children who are in care, the 
challenges and the issue of poverty are no less significant. As of 
September 30, 2004, 509,662 children were in foster care in the United 
States.\14\ Foster care, when it is the most appropriate service for a 
child, should provide a child with protection, care, and nurturance for 
a temporary period of time while services are provided to the child's 
parents in order to deal with the problems that led to placement.
---------------------------------------------------------------------------
    \14\ Child Welfare League of America. (2006). Special tabulation of 
the Adoption and Foster Care Analysis Reporting System (AFCARS). 
Washington, DC: Author.
---------------------------------------------------------------------------
    When a child cannot remain in his or her own home, it is critical 
that the child welfare system work to provide that child with 
permanence. All children deserve to be a part of, or have a connection 
with, stability and families that are intended to be permanent. Family 
foster care and foster care services should emphasize safety and the 
well-being of children; recognize that the family is a fundamental 
foundation of child rearing; and acknowledge the importance of a 
comprehensive, child-centered, family-focused, culturally competent 
approach. To fulfill their vital role, then, public child welfare 
agencies need to ensure that children in care are protected and cared 
for and that they receive the services they need. The agency should 
also ensure that the families of the children in care receive services 
directed toward early reunification with their child or, as an 
alternative, another permanency goal.
    To meet these goals, it is clear that families must have the needed 
support to help foster children. According to the National Survey of 
America's Families (NSAF), only 39% of out-of-home care provider 
families have incomes that place them beyond 200% of the poverty level. 
Among all families--in-home, foster, and kinship--those involved with 
the child welfare system are five times more likely to have income at 
only 50% of the poverty level than families in the general 
population.\15\
---------------------------------------------------------------------------
    \15\ U.S. Department of Health and Human Services, Administration 
on Children, Youth, and Families. (2005). CPS sample component wave 1 
data analysis report. National survey of child and adolescent well-
being. Washington, DC: Author.
---------------------------------------------------------------------------
    Another significant and growing part of the child welfare system is 
the use of kinship care and kinship settings. By definition, kinship 
care is the full-time care, nurturing, and protection of children by 
relatives, members of their tribes, godparents, stepparents, or any 
adults who have a kinship bond with a child. This definition is 
designed to be inclusive and respectful of cultural values and ties of 
affection. Beyond its formal definition, what kinship care provides is 
an opportunity for a child to grow to adulthood in a familial 
environment. For many children, it is also a lifeline to a safe and 
productive future. It is, therefore, the type of care that we must 
nurture and promote in every way possible.
    Over six million children are living with a relative who serves as 
their caregiver, with approximately four-and-a-half million of these 
being grandparents. According to the last census, nearly two-and-a-half 
million grandparents report that they are primarily responsible for 
their grandchildren. The same census survey reveals that nearly 20% of 
these grandparents live in poverty.\16\
---------------------------------------------------------------------------
    \16\ S. Census Bureau. (2000). Census 2000 summary file 1: Table 
P28, relationship by household type for population under 18 Years. 
Available from www.factfinder.census.gov. Washington, DC: Author.
---------------------------------------------------------------------------
    When Congress enacted the Adoption and Safe Families Act (ASFA) in 
1997, it gave formal recognition to kinship placements as a permanency 
option even though that same act did not extend federal funding to 
these placements. The increased urgency that ASFA placed on the goal of 
permanency also influenced the increased use of kinship placements. 
These families are a vital support for millions of children and are a 
key to ensuring the safety and permanency, as well as the nurturing and 
well-being, of these children.
    According to an Urban Institute analysis,\17\ the poverty rate for 
children living in public kinship care or kinship care provided through 
the child welfare system is 18%. That is the same as the overall child 
poverty rate for children under 18%. For private kinship care--those 
kinship families not coming through the public child welfare system--
the poverty rate is 31%. When compared to non-kin foster parents, 
kinship families are much more likely to be low income (defined as 200% 
of the poverty level or lower), single, and older. In all instances, 
poverty certainly creates additional burdens and challenges for these 
families who have opened their homes and are providing a vital service 
to these children. If we continue to adhere to the goals of the federal 
Adoption and Safe Families Act and we recognize kinship placements as a 
permanency option as we should, we must provide accompanying federal 
financial support.
---------------------------------------------------------------------------
    \17\ Main, R., Macomber, J. E., & Geen, R. (2006). Trends in 
service receipt: Children in kinship care gaining ground. Washington, 
DC: Urban Institute.
---------------------------------------------------------------------------
YOUTH AFTER FOSTER CARE
    For too many older children in foster care the exit from the system 
will come only when they reach the age of 18. More than 22,000 young 
people leave foster care annually because they age out of the 
system.\18\ Although data is sometimes sparse, we know of common 
challenges for these young people from several studies. In one national 
survey, 25% of foster youth reported having been homeless at least one 
night in the two-and-a-half to four years after exiting foster 
care.\19\ In a national survey, only 54% of former foster youth had 
completed high school,\20\ and in another study, 3 in 10 of the 
nation's homeless adults reported a foster care history.\21\
---------------------------------------------------------------------------
    \18\ Child Welfare League of America. (2006). Special tabulation of 
the AFCARS. Washington, DC: Author.
    \19\ Cook, R. (1991). A national evaluation of title IV-E foster 
care independent living programs for youth. Rockville, MD: Westat Inc.
    \20\ Ibid.
    \21\ Roman, N. P. & Wolfe, N. (1995). Web of failure: The 
relationship between foster care and homelessness. Washington, DC: 
National Alliance to End Homelessness.
---------------------------------------------------------------------------
FOSTER CARE AND EDUCATION
    Children and youth in foster care are also challenged when it comes 
to education outcomes. Placement in out-of-home care may create issues 
around mobility and stability in a child's education arrangements. For 
example, a three-year study of youth aging out of care by Chapin Hall 
indicated that over one-third of young adults reported five or more 
school changes.\22\ Another study of the Chicago school system (also by 
Chapin Hall) indicated that over two-thirds of children and youth 
included in the study had switched schools shortly after their initial 
placement.\23\ This kind of instability, along with the challenges of 
poverty, creates greater barriers to successful education outcomes.
---------------------------------------------------------------------------
    \22\ Courtney, M. E., Terao, S., & Bost, N. (2004). Midwest 
evaluation of the adult functioning of former foster youth: Conditions 
of youth preparing to leave state care. Chicago: Chapin Hall Center for 
Children at the University of Chicago.
    \23\ Smithgall, C., Gladden, R. M., Howard, E., Goerge, R., & 
Courtney, M. (2004). Educational experiences of children in out-of-home 
care. Chicago: Chapin Hall Center for Children at the University of 
Chicago.
---------------------------------------------------------------------------
    In fact if you watch the ABC 20/20 report you see the genuine 
impact one of the children featured who attends kindergarten on the 
first day and walks in without every experiencing pre-school or even 
basic child care. He is challenged and indeed scared by his 
surroundings and although he knows his threes he is challenged when 
asked to name the three times a day when he eats.
    That kind of a start on life, that start on education can have a 
lasting effect and is not a question of choices that adults make but 
the reality of limited options a child is given.
    A 2001 Washington state study is typical of other research in its 
findings, which showed that youth in foster care attending public 
schools scored 16 to 20 percentile points below nonfoster youth in 
statewide standardized tests at grades three, six, and nine.\24\ Over 
one-third of young people in a Midwest Study had received neither a 
high school diploma nor a GED by age 19, compared to fewer than 10 
percent of their same-age peers in a comparable national sample.\25\ 
The Northwest Alumni Study found that of the foster care alumni 
studied, 42.7 percent completed some education beyond high school, 20.6 
percent completed any degree or certificate beyond high school, 16 
percent completed a vocational degree and 1.8 percent completed a 
bachelor's degree. This completion rate for a bachelor's degree 
compares to 24 percent among the general population of the same age as 
those surveyed in the study.\26\ CWLA believes that these results offer 
strong evidence that efforts to improve the education outcomes for 
these children and youth in foster care must be a part of our national 
strategy to improve education and to reduce poverty.
---------------------------------------------------------------------------
    \24\ Burley, M., & Halpern, M. (2001). Educational attainment of 
foster youth: Achievement and graduation outcomes for children in state 
care. Olympia, WA: Washington State Institute for Public Policy.
    \25\ Courtney, M.E., Dworsky, A., Ruth, G., Keller, T., Havlicek, 
J., & Bost, N. (2005). Evaluation of the adult functioning of former 
foster youth: Outcomes at age 19. Chicago, IL: Chapin Hall Center for 
Children at the University of Chicago.
    \26\ Pecora, P. Kessler, R., Williams, J., O'Brien, K., Downs C., 
English, D., White, J., Hiripi, E., White, C.R., Wiggins, T., & Holmes, 
K. (2005). Improving Family Foster Care: Findings from the Northwest 
Foster Care Alumni Study Alumni Study. Seattle, WA: Casey Family 
Programs.
---------------------------------------------------------------------------
HEALTH STATUS OF CHILDREN AND PARENTS
    Children and parents living in poverty are less likely to have 
access to adequate health and mental health care. The lack of 
comprehensive health services for both children and parents increases 
entry into the child welfare system and makes it more difficult for 
children in the system to attain long-term health, stability, and 
permanency.
    The first three years of life are crucial to a child's brain 
development and early mental health status.\27\ There are an astounding 
number of children living in poverty during this critical period. 
Moreover, the 2005 U.S. Census Survey reported 11.2% of children as 
uninsured, despite widespread eligibility for Medicaid or SCHIP.\28\ 
Lack of health insurance or limited health insurance coverage 
contributes needlessly to an increasing number of children in the child 
welfare system with an unmet health need as well as placement of 
children in the child welfare system solely to obtain essential mental 
health services.\29\ Increased access to health and mental health care 
improves a child's chance for permanency.\30\
---------------------------------------------------------------------------
    \27\ National Child Welfare Resource Center for Family Centered 
Practice. (2003). Family centered child welfare. Washington, DC: 
Author.
    \28\ DeNavas-Walt, C., Proctor, B., and Hill Lee, C. (2006). 
Income, Poverty, and Health Insurance Coverage in the United States: 
2005. Current Population Reports (pp. 60-231). Washington, DC: U.S. 
Government Printing Office.
    \29\ United States General Accounting Office. (2003, April). Child 
welfare and juvenile justice: Federal agencies could play a stronger 
role in helping states reduce the number of children placed solely to 
obtain mental health services. Report to Congressional Requesters (14). 
Washington, DC: Author.
    \30\ Vandivere, S., Gallagher, M., and Anderson Moore, K. (2004). 
Changes in children's well-being and family environments. Snapshots of 
America's Families III, No. 18. Washington, DC: Urban Institute.
---------------------------------------------------------------------------
    Poverty also correlates with increased rates of mental illness and 
substance abuse among parents,\31\ leaving them less ready to handle 
the stressors associated with raising children. The children of parents 
with substance abuse or mental health concerns are therefore more 
likely to be victims of abuse or neglect. Availability of comprehensive 
mental health care reduces caregiver stress and increases a child's 
chance for healthy development and stable placement.\32\ Helping 
children to overcome the obstacles created by the presence of poverty 
in their early lives means increasing services to address the mental 
health and substance abuse treatment needs of these children and their 
parents.
---------------------------------------------------------------------------
    \31\ DeBellis, M. D., Broussard, E. R., Herring, D. J., Wexler, S., 
Moritz, G., & Benitez, J. G. (2001). Psychiatric co-morbidity in 
caregivers and children involved in maltreatment: A pilot research 
study with policy implications. Child Abuse & Neglect 25 (7): 923-44. 
Chicago: The International Society for Prevention of Child Abuse and 
Neglect.
    \32\ McCarthy, J. (2003). Creating effective systems for mental 
health care and services. Best Practice Next Practice. Washington, DC: 
National Child Welfare Resource Center for Family Centered Practice.
---------------------------------------------------------------------------
CWLA POLICY GOALS
    For a list of some of our immediate recommendations we refer the 
subcommittee to our testimony submitted to the Ways and Means Committee 
on January 24, 2007. What we seek and we believe all policymakers seek, 
is to more fundamentally address the issue of poverty. We cannot be 
caught up in a battle of statistics of how well we are doing as a 
nation. Instead we need to focus on the children who face the reality 
of being born behind all the rest of us. There is no simple solution or 
silver bullet that can fix all this. There needs to be a comprehensive 
approach that addresses all of the challenges that a child in poverty 
inherits on his or her first day of life. That solution involves more 
than making different choices. It is as we quoted before, not a values 
deficit but a deficit of resources.

                                 
                    Statement of Lary Wayne Holland
    THE breakdown of the traditional family should be studied closely 
as a potential cause of poverty. The various States have begun to 
utilize the various programs under Title IV of the Social Security Act, 
including Part D, as a tool to generate revenue for growing 
bureaucracies instead of a tool to combat poverty by providing only to 
needy families.
    The way the current Title IV-D program is being administered by the 
many States has led to taxpayers funding the breakdown of the family by 
making the incentives greater for separation than the incentives for 
marriage and jointly raising children in a traditional setting.
    Finally, there is a direct link between increased taxation and 
poverty. ``Building a strong economy--and helping the poor--means 
keeping taxes and government spending low.'' (Source: Mathew Ladner, 
``Want to reduce poverty? Lower those tax rates.'' Christian Science 
Monitor [December 15, 2006].)

                                  
